Document:

EXHIBIT 4.2

                             Dated 26 January 2004
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                               NORTHERN ROCK PLC
                   as Seller, Cash Manager and a Beneficiary

                        GRANITE FINANCE FUNDING LIMITED
                         as Funding and a Beneficiary

                                    - and -

                       GRANITE FINANCE TRUSTEES LIMITED
                             as Mortgages Trustee

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                                EIGHTH AMENDED
                             MORTGAGES TRUST DEED

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

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                                   CONTENTS

Clause                                                              Page No.

1.    Definitions and Construction.........................................2

2.    Creation of Mortgages Trust..........................................2

3.    Conditions Precedent.................................................3

4.    Consideration........................................................5

5.    Increasing and Decreasing the Seller Share of the Trust Property.....8

6.    Increasing the Funding Share of the Trust Property...................9

7.    Initial Funding Share and Initial Seller Share......................11

8.    Adjustment of Funding Share Percentage and Seller Share Percentage..11

9.    Minimum Seller Share................................................24

10.   Distribution of Revenue Receipts....................................26

11.   Distribution of Principal Receipts..................................29

12.   Allocation of Losses................................................33

13.   Overpayments........................................................33

14.   Arrears.............................................................34

15.   Ledgers.............................................................34

16.   Fees and Expenses of the Mortgages Trustee..........................35

17.   Directions from Beneficiaries.......................................36

18.   Early Termination of the Mortgages Trust............................37

19.   Audit of Mortgage Loans constituting the Trust Property.............37

20.   Transfers...........................................................37

21.   Representations and Covenants.......................................38

22.   Power to Delegate...................................................39

23.   Powers of Investment................................................39

24.   Other Provisions regarding the Mortgages Trustee....................40

25.   No retirement of Mortgages Trustee..................................41

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26.   Termination.........................................................42

27.   Further Assurances..................................................42

28.   No Partnership or Agency............................................42

29.   Calculations........................................................42

30.   Confidentiality.....................................................42

31.   Perpetuity Period...................................................43

32.   Non Petition Covenant; Limited Recourse.............................43

33.   Amendments and Waiver...............................................45

34.   Notices.............................................................45

35.   Third Party Rights..................................................46

36.   Execution in Counterparts; Severability.............................46

37.   Governing Law and Submission to Jurisdiction........................47

SCHEDULE 1 REPRESENTATIONS AND WARRANTIES.................................48

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THIS EIGHTH AMENDED MORTGAGES TRUST DEED DATED 26 JANUARY 2004 FURTHER AMENDS
AND RESTATES THE MORTGAGES TRUST DEED DATED 26 MARCH 2001 BETWEEN:

(1)    NORTHERN ROCK PLC (registered number 03273685), a public limited
       company incorporated under the laws of England and Wales whose
       registered office is at Northern Rock House, Gosforth, Newcastle upon
       Tyne NE3 4PL, in its capacity as Seller, and in its capacity as Cash
       Manager and in its capacity as a Beneficiary;

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

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

WHEREAS:

(A)    The Mortgages Trustee wishes to declare the following trusts in respect
       of the Trust Property (being on the date of this Deed, the sum of
       (GBP)100 which monies have been received by, are presently held by
       the Mortgages Trustee or to its order).

(B)    The Mortgages Trustee (acting as principal and not as agent of any
       party) has agreed to hold the Trust Property as bare trustee for the
       Beneficiaries upon, with and subject to the trusts, powers and
       provisions of this Deed. The Mortgages Trustee will receive amounts
       arising from the Trust Property and will distribute such amounts for
       the benefit of the Beneficiaries of the Mortgages Trust. It will
       delegate certain tasks in relation to the Mortgages Trust to the
       Administrator and the Cash Manager.

(C)    The Seller carries on the business of, inter alia, originating
       residential mortgage loans to individual Borrowers in England and Wales
       and Scotland and of managing and administering such mortgage loans. The
       Seller intends to sell and assign from time to time portfolios of such
       mortgage loans to the Mortgages Trustee pursuant to the Mortgage Sale
       Agreement entered into on or about 26 March 2001, which mortgage loans
       shall be held by the Mortgages Trustee as bare trustee for the
       Beneficiaries upon, with and subject to the trusts, powers and
       provisions of this Deed.

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NOW THIS DEED WITNESSES:

1.     Definitions and Construction

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

2.     Creation of Mortgages Trust

2.1    Initial Trust Property: The Mortgages Trustee hereby declares itself as
       trustee of the Trust Property, being, upon execution of this Deed, the
       sum of (GBP)100 (one hundred pounds) (the "Initial Trust Property")
       which sum shall be held on trust by the Mortgages Trustee absolutely as
       to both capital and income for the benefit, as tenants in common
       (holding undivided beneficial interests), of the Seller as to the
       Initial Seller Share Percentage and Funding as to the Initial Funding
       Share Percentage. The Initial Trust Property shall be held by the
       Mortgages Trustee on the Mortgages Trust upon due execution of this
       Deed by all parties to it.

2.2    Closing Trust Property: Pursuant to the provisions of the Mortgage Sale
       Agreement, the Seller intends to sell and assign the Initial Mortgage
       Portfolio to the Mortgages Trustee on the Initial Closing Date, which
       Initial Mortgage Portfolio including all related rights and benefits
       shall form part of the Trust Property (the "Closing Trust Property").

2.3    New Trust Property: From time to time and pursuant to the Mortgage Sale
       Agreement, the Seller intends to sell and assign New Mortgage
       Portfolios to the Mortgages Trustee, which New Mortgage Portfolios
       including all related rights and benefits shall form part of the Trust
       Property (the "New Trust Property").

2.4    Other Trust Property:

       (a)  In accordance with this Deed, from time to time Funding and the
            Seller shall, subject to and in accordance with Clause 4
            (Consideration), Clause 5 (Increasing the Seller Share of the
            Trust Property) and/or Clause 6 (Increasing the Funding Share of
            the Trust Property) provide consideration to the Mortgages Trustee
            in the form of Contributions to be applied by the Mortgages
            Trustee as set out in this Deed. Any

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            Contribution so provided to the Mortgages Trustee shall, on receipt
            by the Mortgages Trustee and until it has been applied by the
            Mortgages Trustee in accordance with the terms of this Deed, form
            part of the Trust Property.

       (b)  Any Re-draws made under a Flexible Mortgage Loan which is included
            in the Trust Property will form part of the Trust Property.

       (c)  Amounts on deposit (and interest earned on such amounts) from time
            to time in the Mortgages Trustee Bank Accounts will form part of
            the Trust Property.

       (d)  (If the Seller subsequently decides to retain any Mortgage Loan
            which is the subject of a Further Advance within the Trust
            Property and/or to sell and assign the Further Advance to the
            Mortgages Trustee in accordance with the Mortgage Sale Agreement)
            any Further Advance made in respect of a Mortgage Loan in the
            Trust Property will also form part of the Trust Property.

       (e)  Any Permitted Replacement Mortgage Loan and its Related Security
            (including the rights under any related MIG Policy and other
            insurance policies arranged by the Seller, but excluding any Early
            Repayment Charge Receipts paid to the Seller) relating to a
            Permitted Product Switch effected in relation to a Mortgage Loan
            which forms part of the Trust Property will also form part of the
            Trust Property.

       (f)  The proceeds of sale of any Mortgage Loan and its Related Security
            forming part of the Trust Property pursuant to the Mortgage Sale
            Agreement or other proceeds of sale of any Trust Property will
            form part of the Trust Property.

       (g)  Any Further Draws under a Personal Secured Loan which is included
            in the Trust Property will also form part of the Trust Property.

2.5    Payments of Early Repayment Charges: Subject to and in accordance with
       the Mortgage Sale Agreement, the Mortgages Trustee will agree to pay to
       the Seller any Early Repayment Charge Receipts received by the Mortgage
       Trustee in respect of any Mortgage Loan included in the Initial
       Mortgage Portfolio or any New Mortgage Portfolio which the Seller sells
       and assigns to the Mortgages Trustee. Upon any such payment to the
       Seller, the benefit of such Early Repayment Charges will no longer form
       part of the Trust Property.

3.     Conditions Precedent

3.1    Trust Property: Subject to this Clause 3 (Conditions Precedent), the
       Mortgages Trustee shall hold the Trust Property as to both capital and
       income on trust absolutely for Funding (as to

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       the Funding Share) and for the Seller (as to the Seller Share) as
       tenants in common upon, with and subject to all the trusts, powers and
       provisions of this Deed (such that each Beneficiary shall have an
       undivided beneficial interest in the Trust Property). As used herein,
       "Trust Property" means the Initial Trust Property, the Closing Trust
       Property, any New Trust Property, (but excludes any Early Repayment
       Charge Receipts which have been paid to the Seller and any Mortgage
       Loans which have been repurchased by the Seller pursuant to the
       Mortgage Sale Agreement) and all other Trust Property referred to under
       Clause 2 (Creation of Mortgages Trust) less (a) any actual Losses in
       relation to Mortgage Loans and any actual redemptions occurring in
       respect of the Mortgage Loans as described in Clause 8.5 (Adjustments
       to Trust Property) and (b) distributions of principal made from time to
       time to the Beneficiaries.

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

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

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

       (c)  the satisfaction or waiver in accordance with the terms of the
            Mortgage Sale Agreement of the conditions to the sale and
            assignment of the Initial Mortgage Portfolio as set out in Clause
            2 (Sale and Purchase of Initial Mortgage Portfolio) and Clause 3
            (Initial Closing Date) of the Mortgage Sale Agreement;

       (d)  the payment by Funding to the Mortgages Trustee of Funding's
            Initial Contribution for the Initial Funding Share Percentage in
            accordance with Clause 4 (Consideration); and

       (e)  the payment by the Mortgages Trustee to the Seller of the Initial
            Purchase Price for the sale and assignment to the Mortgages
            Trustee of the Initial Mortgage Portfolio.

3.3    New Trust Property: Any New Trust Property shall be held by the
       Mortgages Trustee on the Mortgages Trust subject to the satisfaction or
       waiver in accordance with the terms of the Mortgage Sale Agreement of
       the conditions referred to in Clause 4 (Sale and Purchase of New
       Mortgage Loan Portfolios) of the Mortgage Sale Agreement for the
       transfer of New Mortgage Loan Portfolios to the Mortgages Trustee.

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4.     Consideration

4.1    Consideration provided by Seller: The Seller in its capacity as a
       Beneficiary shall provide consideration to the Mortgages Trustee for
       the Seller Share in the Trust Property:

       (a)  on the Initial Closing Date, by selling and assigning to the
            Mortgages Trustee the Initial Mortgage Portfolio upon payment by
            the Mortgages Trustee to the Seller of the Initial Purchase Price
            for the Initial Mortgage Portfolio in accordance with the terms of
            the Mortgage Sale Agreement;

       (b)  on each date after the Initial Closing Date on which (i) New
            Mortgage Loans are acquired by the Mortgages Trustee from the
            Seller in accordance with the Mortgage Sale Agreement and (ii) the
            consideration provided to the Seller for that sale is or includes
            the covenant of the Mortgages Trustee to hold the Trust Property
            on trust for Funding (as to the Funding Share) and the Seller (as
            to the Seller Share) in accordance with the terms of this Deed, by
            the sale on such date by the Seller of such New Mortgage Loans
            either for the payment by the Mortgages Trustee of the Initial
            Purchase Price paid on such date or (if no Initial Purchase Price
            is paid) without payment on such date; and

       (c)  on each date on which the Seller increases the Seller Share of the
            Trust Property in accordance with Clause 5 (Increasing and
            Decreasing the Seller Share of the Trust Property) below, the
            Seller will pay the consideration to the Mortgages Trustee
            specified in that Clause.

4.2    Consideration provided by Funding: Funding in its capacity as a
       Beneficiary shall provide consideration to the Mortgages Trustee for
       the Funding Share in the Trust Property:

       (a)  on the Initial Closing Date, by paying to the Mortgages Trustee
            the Initial Contribution in respect of the Closing Trust Property
            which shall be equal to (and from which the Mortgages Trustee
            shall or shall procure that the Cash Manager on its behalf shall
            pay) the Initial Purchase Price in respect of the Initial Mortgage
            Portfolio payable by the Mortgages Trustee to the Seller pursuant
            to the Mortgage Sale Agreement on such date;

       (b)  on each Distribution Date, by paying to the Mortgages Trustee a
            Deferred Contribution equal to the amount (if any) of:

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            (i)   Mortgages Trustee Available Revenue Receipts to which
                  Funding is entitled on such date in accordance with
                  paragraph (d) of Clause 10.2 (Distribution of Mortgages
                  Trustee Available Revenue Receipts); and

            (ii)  the amount of any Early Repayment Charge Receipts payable by
                  the Mortgage Trustee to the Seller under the Mortgage Sale
                  Agreement,

            (together the "Relevant Distribution") which shall be equal to
            (and from which the Mortgages Trustee shall or shall procure that
            the Cash Manager on its behalf shall pay) such amount of Deferred
            Purchase Price as is payable by the Mortgages Trustee to the
            Seller pursuant to the Mortgage Sale Agreement on such date. The
            parties to this Deed agree that on any Distribution Date the
            Relevant Distribution and the Deferred Contribution payable by
            Funding to the Mortgages Trustee shall be set off against each
            other such that as between the Mortgages Trustee and Funding no
            amount shall be payable in respect of such Relevant Distribution
            or such Deferred Contribution on such date and the Cash Manager on
            behalf of the Mortgages Trustee shall pay to the Seller (in
            satisfaction of the Mortgages Trustee's obligation to pay Deferred
            Purchase Price to the Seller under the Mortgage Sale Agreement)
            those funds which, were it not for such set-off, would have been
            payable to Funding as the Relevant Distribution;

       (c)  unless Funding has given notice to each relevant Previous Issuer
            of its intention to use the proceeds of a New Intercompany Loan to
            repay one or more of the Intercompany Loans from the Previous
            Issuers, and subject to Clause 6 (Increasing the Funding Share of
            the Trust Property) below, on each date after the Initial Closing
            Date on which (i) an amount of Initial Purchase Price is payable
            in respect of New Mortgage Loans which are sold and assigned by
            the Seller to the Mortgages Trustee on such date and (ii) Funding
            receives the net proceeds of a New Intercompany Loan from a New
            Issuer, by paying to the Mortgages Trustee an Initial Contribution
            in respect of such New Trust Property which shall be equal to (and
            from which the Mortgages Trustee shall or shall procure that the
            Cash Manager on its behalf shall pay) the Initial Purchase Price
            in respect of such New Mortgage Loans payable by the Mortgages
            Trustee to the Seller pursuant to the Mortgage Sale Agreement on
            such date;

       (d)  unless Funding has given notice to each relevant Previous Issuer
            of its intention to use the proceeds of a New Intercompany Loan to
            repay one or more of the

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            Intercompany Loans from the Previous Issuers subject to Clause 6
            (Increasing the Funding Share of the Trust Property) below, on
            each other date after the Initial Closing Date on which Funding
            receives the net proceeds of a New Intercompany Loan from a New
            Issuer, by paying to the Mortgages Trustee a Further Contribution
            in respect of the Funding Share of the Trust Property which shall
            be equal to (and from which the Mortgages Trustee shall or shall
            procure that the Cash Manager on its behalf shall pay) the Initial
            Consideration payable to the Seller in accordance with Clause 6.3
            (Initial Consideration); and

       (e)  following the Final Repayment Date of the latest maturing
            Intercompany Loan made by any Issuer to Funding and provided that
            there are no further claims outstanding under any Intercompany
            Loan or on such earlier date provided that all Intercompany Loans
            have either been repaid in full or there are no further claims
            outstanding under any Intercompany Loan, Funding will make a final
            payment of Deferred Contribution to the Mortgages Trustee (the
            "Final Deferred Contribution") in an amount equal to the aggregate
            amount standing to the credit of the Funding Bank Accounts
            (including any account established for the purposes of the Issuer
            Reserve Fund and/or the Issuer Liquidity Reserve Fund of any
            Issuer) after making any payments ranking in priority thereto,
            subject to and in accordance with the relevant Funding Priority of
            Payments. The Final Deferred Contribution shall be in an amount
            equal to (and from that Final Deferred Contribution the Mortgages
            Trustee shall or shall procure that the Cash Manager shall on its
            behalf pay) the final amount of Deferred Purchase Price payable by
            the Mortgages Trustee to the Seller pursuant to and in accordance
            with the Mortgage Sale Agreement.

4.3    Application by Mortgages Trustee:

       (a)  If the Mortgages Trustee receives any Initial Contribution,
            Deferred Contribution or the Final Deferred Contribution from
            Funding, the parties hereto direct the Mortgages Trustee to, and
            the Mortgages Trustee covenants that it shall, or shall procure
            that the Cash Manager on its behalf shall, pay such funds to the
            Seller in satisfaction of the Mortgages Trustee's obligation to
            make payment of the Initial Purchase Price or, as the case may be,
            Deferred Purchase Price in respect of the Initial Mortgage
            Portfolio or any New Mortgage Loans which are sold and assigned to
            the Mortgages Trustee by the Seller pursuant to the Mortgage Sale
            Agreement.

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       (b)  If the Mortgages Trustee receives a Further Contribution from any
            Beneficiary, the parties hereto direct the Mortgages Trustee to,
            and the Mortgages Trustee covenants that it shall, or shall
            procure that the Cash Manager on its behalf shall, distribute such
            funds to a Beneficiary or the Beneficiaries as required at the
            time and in the manner and otherwise in accordance with the terms
            of this Deed.

5.     Increasing and Decreasing the Seller Share of the Trust Property

5.1    Re-draws under Flexible Mortgage Loans:

       (a)  If, in respect of any Flexible Mortgage Loan which is in the Trust
            Property, the relevant Borrower requests a Cash Re-draw and the
            Administrator (on behalf of the Mortgages Trustee) grants such
            request pursuant to and in accordance with the terms of the
            Administration Agreement, the Seller as Beneficiary shall fund
            that Cash Re-draw in the Mortgages Trust by making payment to the
            Borrower, in accordance with the terms and conditions of the
            relevant Mortgage Loan, of the Cash Re-draw Amount. Upon payment
            by the Seller to the relevant Borrower of the Cash Re-draw Amount,
            the aggregate Current Balance of the Mortgage Loans constituting
            the Trust Property and the amount of the Seller Share of the Trust
            Property shall be increased by an amount equal to the Cash Re-draw
            Amount.

       (b)  If, in respect of any Flexible Mortgage Loan which is in the Trust
            Property, the relevant Borrower requests a Non-Cash Re-draw and
            the Administrator grants such request or the Administrator
            otherwise permits the relevant Borrower to take a Non-Cash Re-draw
            pursuant to and in accordance with the terms of the Administration
            Agreement, the Seller as Beneficiary shall fund such Non-Cash
            Re-draw in the Mortgages Trust by making payment to the Mortgages
            Trustee of a Further Contribution in an amount equal to the Unpaid
            Interest Amount in respect of such Non-Cash Re-draw. Upon payment
            by the Seller to the Mortgages Trustee of such Further
            Contribution, the aggregate Current Balance of the Mortgage Loans
            constituting the Trust Property and the Seller Share of the Trust
            Property shall be increased by an amount equal to the amount of
            the Further Contribution so made to the Mortgages Trustee. The
            parties agree that any such Further Contribution received by the
            Mortgages Trustee from the Seller will be treated as Revenue
            Receipts and will be distributed to the Beneficiaries on the
            immediately succeeding Distribution Date in accordance with Clause
            10 (Distribution of Revenue Receipts) below.

5.2    Further Advances: If at a future date the Seller elects not to purchase
       any Mortgage Loan

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       which becomes the subject of a Further Advance from the Mortgages
       Trustee, the Seller will be solely responsible for funding any such
       Further Advance and, subject to the provisions of this Deed, upon the
       making of such Further Advance by the Seller, the aggregate Current
       Balance of the Mortgage Loans constituting the Trust Property and the
       Seller Share of the Trust Property shall be increased by an amount
       equal to the amount of the Further Advance paid to the relevant
       Borrower.

5.3    Together Connections Mortgage Loans and Connections Mortgage Loans: If,
       in respect of any Together Connections Mortgage Loan or any Connections
       Mortgage Loan which is in the Trust Property, there has been a
       reduction in the outstanding balance of such Mortgage Loan from the
       relevant Borrower being allocated a portion of the Together Connections
       Mortgage Benefit or Connections Benefit (as the case may be) under such
       Mortgage Loan, the aggregate Current Balance of the Mortgage Loans
       constituting the Trust Property and the amount of the Seller Share of
       the Trust Property shall be decreased by an amount equal to the portion
       of the Together Connections Benefit or Connections Benefit (as the case
       may be) allocated to such Mortgage Loan.

5.4    Further Draws under Personal Secured Loans: If, in respect of any
       Personal Secured Loan in the Trust Property which permits Further
       Draws, the relevant Borrower requests a Further Draw and the
       Administrator grants such request, the Seller will as Beneficiary fund
       such Further Draw in the Mortgages Trust by making payment to the
       Borrower of the Further Draw in accordance with the terms and
       conditions of the relevant Personal Secured Loan. Upon payment by the
       Seller to the relevant Borrower of such Further Draw, the aggregate
       Current Balance of the Mortgage Loans constituting the Trust Property
       and the amount of the Seller Share of the Trust Property shall be
       increased by an amount equal to the amount of the Further Draw paid to
       the relevant Borrower.

6.     Increasing the Funding Share of the Trust Property

6.1    Conditions precedent: Subject as provided below, Funding may increase
       the Funding Share (as defined in Clause 7.1 (Initial Funding Share)
       below) of the Trust Property, subject to satisfaction of the following
       conditions precedent:

       (a)  no Event of Default under the Transaction Documents shall have
            occurred which is continuing at the relevant date;

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

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       (c)  the Rating Agencies have confirmed in writing to the Mortgages
            Trustee, the Security Trustee and each Issuer that the proposed
            increase in the Funding Share of the Trust Property would not
            adversely affect the then-current ratings by the Rating Agencies
            (or any of them) of the Notes issued by any Issuer;

       (d)  the New Notes have been issued by the New Issuer, the subscription
            proceeds received on behalf of such New Issuer and advanced by
            such Issuer to Funding pursuant to an Intercompany Loan Agreement
            (which proceeds Funding will pay to the Mortgages Trustee to
            increase the Funding Share of the Trust Property on the relevant
            date in accordance with Clause 6.2 (Completion));

       (e)  if necessary, each Issuer, including any New Issuer (if any) has
            entered into appropriate hedging arrangements;

       (f)  as of the last day of the immediately preceding Trust Calculation
            Period the aggregate Current Balance of Mortgage Loans in the
            Trust Property which were at such time in arrears for at least 3
            months is less than 4 per cent. of the aggregate Current Balance
            of all Mortgage Loans in the Trust Property at such time unless
            the Rating Agencies have confirmed that the then-current ratings
            of the Notes will not be adversely affected;

       (g)  as of the last day of the immediately preceding Trust Calculation
            Period the weighted average LTV ratio of Mortgage Loans in the
            Trust Property (after application of the LTV Test) on such date
            does not exceed the LTV ratio (based on the LTV Test) of Mortgage
            Loans in the Trust Property on the Initial Closing Date plus 0.25
            per cent.;

       (h)  each Issuer Reserve Fund is fully funded on the relevant date up
            to the relevant Issuer Reserve Required Amount; and

       (i)  as at the most recent Payment Date no deficiency was recorded on
            the Issuer Principal Deficiency Ledger of any Issuer,

       provided always that Funding shall not be entitled to increase the
       Funding Share after the Payment Date falling in January 2008 if the
       option to redeem the First Issuer Notes on the Payment Date in January
       2008 pursuant Condition 5 of the First Issuer Notes is not exercised.

6.2    Completion: Subject to satisfaction of the conditions precedent set out
       in Clause 6.1 (Conditions precedent) above, Funding shall pay to the
       Mortgages Trustee the consideration for such increase in the Funding
       Share in accordance with Clause 4 (Consideration).

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6.3    Initial Consideration: The parties hereto agree that Principal Receipts
       received by the Mortgages Trustee from Funding in payment of a Further
       Contribution in accordance with Clause 4 (Consideration) on any date on
       which Funding increases the Funding Share of the Trust Property shall
       be allocable and payable by the Mortgages Trustee to the Seller (in its
       capacity as a Beneficiary of the Mortgages Trust) as an Initial
       Consideration on such date whether or not such date is a Distribution
       Date. Any such Initial Consideration shall reduce the Seller Share of
       the Trust Property by the amount of the Initial Consideration.

7.     Initial Funding Share and Initial Seller Share

7.1    Initial Funding Share: The "Initial Funding Share" of the Trust
       Property shall be (pound)86.61 at the date of this Deed and
       (GBP)1,500,000,000 at the Initial Closing Date and the "Initial
       Funding Share Percentage" shall be the Initial Funding Share expressed
       as a percentage of the Trust Property at such date, that is to say,
       86.61 per cent. References herein to the "Funding Share" shall mean,
       prior to the first Distribution Date, the Initial Funding Share and
       thereafter shall mean the Current Funding Share (as defined below).

7.2    Initial Seller Share: The "Initial Seller Share" of the Trust Property
       shall be the sum which remains of the Trust Property after deduction of
       the Initial Funding Share. The Initial Seller Share of the Trust
       Property will be (GBP)13.39 at the date of this Deed and
       (GBP)232,000,000 at the Initial Closing Date and the "Initial Seller
       Share Percentage" shall be equal to 100 per cent. minus the Initial
       Funding Share Percentage, that is to say, 13.39 per cent. The amount of
       the Initial Seller Share and the Initial Seller Share Percentage on the
       Initial Closing will be determined immediately after the Initial
       Closing Date. References herein to the "Seller Share" shall mean, prior
       to the first Distribution Date, the Initial Seller Share and thereafter
       shall mean the Current Seller Share (as defined below).

7.3    Rounding of percentage shares: Except for the Initial Closing Date on
       which the Funding Share Percentage and the Seller Share Percentage
       shall be calculated to two decimal places, and unless otherwise agreed
       by the Beneficiaries, the Current Funding Share Percentage and the
       Current Seller Share Percentage shall be calculated to five decimal
       places.

8.     Adjustment of Funding Share Percentage and Seller Share Percentage

8.1    Effective Periods:

       (a)  Subject to Clause 8.1(b) below, the Cash Manager will (on behalf
            of the Mortgages Trustee and the Beneficiaries) recalculate the
            Funding Share, the Funding Share

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            Percentage, the Seller Share and the Seller Share Percentage in
            respect of each Trust Calculation Period on the Distribution Date
            occurring in such Trust Calculation Period, based on the aggregate
            Current Balance of the Mortgage Loans constituting the Trust
            Property (as adjusted from time to time) on the last day of the
            Trust Calculation Period immediately preceding such Distribution
            Date.

       (b)  Notwithstanding Clause 8.1(a) above, if during any Trust
            Calculation Period the Seller sells and assigns New Mortgage Loans
            to the Mortgages Trustee or if Funding pays a Further Contribution
            to the Mortgages Trustee to increase the Funding Share of the
            Trust Property, the recalculation of the Funding Share, the
            Funding Share Percentage, the Seller Share and the Seller Share
            Percentage made by the Cash Manager on the Distribution Date
            occurring in such Trust Calculation Period will be effective only
            in respect of the period beginning on (and including) the first
            day of such Trust Calculation Period and ending on (but excluding)
            the first Assignment Date or Funding Contribution Date, as
            applicable, to occur during such Trust Calculation Period (such
            period in respect of such Distribution Date, an "Interim
            Calculation Period"), based on the aggregate Current Balance of
            the Mortgage Loans constituting the Trust Property (as adjusted
            from time to time) on the last day of the Trust Calculation Period
            immediately preceding such Distribution Date.

       (c)  In addition to the foregoing, if during any Trust Calculation
            Period the Seller sells and assigns New Mortgage Loans to the
            Mortgages Trustee or if Funding pays a Further Contribution to the
            Mortgages Trustee to increase the Funding Share of the Trust
            Property, the Cash Manager will (on behalf of the Mortgages
            Trustee and the Beneficiaries) recalculate the Funding Share, the
            Funding Share Percentage, the Seller Share and the Seller Share
            Percentage on such Assignment Date or Funding Contribution Date,
            as applicable, in respect of the period beginning on (and
            including) such Assignment Date or Funding Contribution Date, as
            applicable, and ending on the last day of such Trust Calculation
            Period (and including such last day of such Trust Calculation
            Period) (each such period in respect of each Assignment Date or
            Funding Contribution Date, as applicable, an "Interim Calculation
            Period"), based on the aggregate Current Balance of the Mortgage
            Loans constituting the Trust Property (as adjusted from time to
            time) on such Assignment Date or Funding Contribution Date, as
            applicable.

The parties acknowledge and agree that the Mortgage Sale Agreement provides
that (a) the Seller may not sell and assign New Mortgage Loans to the
Mortgages Trustee during any Trust Calculation

                                      12
<PAGE>

Period prior to the Distribution Date in such Trust Calculation Period, and
(b) the Seller may only make one sale and assignment of New Mortgage Loans to
the Mortgages Trustee during any Trust Calculation Period.

8.2    Current Funding Share Percentage:

       (a)  On each Distribution Date (the "Relevant Distribution Date"), the
            "Current Funding Share Percentage" will be calculated by the Cash
            Manager in respect of the then-current Trust Calculation Period or
            related Interim Calculation Period, as applicable, for the purpose
            of calculating the distributions to be made from the Trust
            Property on the immediately succeeding Distribution Date, and such
            Current Funding Share Percentage will be an amount, expressed as a
            percentage (calculated to an accuracy of five decimal places
            (rounded upwards)), equal to:

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

       where,

       A    =    the Current Funding Share as calculated (a) on the later of
                 the Distribution Date, the Assignment Date or Funding
                 Contribution Date (if any) immediately preceding such
                 Relevant Distribution Date, or (b) in the case of the first
                 Distribution Date, the Initial Funding Share as at the
                 Initial Closing Date;

       B    =    the amount of any Principal Receipts distributed to Funding
                 on such Relevant Distribution Date in accordance with the
                 provisions described in Clause 11 (Distribution of Principal
                 Receipts) below;

       C    =    the amount of any Losses sustained on the Mortgage Loans
                 during the Trust Calculation Period immediately preceding
                 such Relevant Distribution Date and the amount of any
                 reductions occurring in respect of the Mortgage Loans as
                 described in paragraphs (a) through (e) of Clause 8.5
                 (Adjustments to Trust Property) (inclusive) below which have
                 been allocated to Funding in the Trust Calculation Period
                 ending on the Relevant Distribution Date (based on (a) the
                 Funding Share Percentage thereof calculated on the
                 Distribution Date immediately preceding such Relevant
                 Distribution Date (provided that the Seller had not sold and
                 assigned New Mortgage Loans to the Mortgages

                                      13
<PAGE>

                 Trustee or that Funding had not paid a Further Contribution
                 to the Mortgages Trustee in the Trust Calculation Period
                 immediately preceding such Relevant Distribution Date), or
                 (b) to the extent that the Seller had sold and assigned New
                 Mortgage Loans to the Mortgages Trustee or that Funding had
                 paid a Further Contribution to the Mortgages Trustee during
                 the Trust Calculation Period immediately preceding such
                 Relevant Distribution Date, the Weighted Average Funding
                 Share Percentage (as defined below) thereof calculated on
                 such Relevant Distribution Date prior to the distribution to
                 be made on such Relevant Distribution Date, or (c) in the
                 case of the first Distribution Date, the Initial Funding
                 Share Percentage);

       D    =    an amount equal to any Capitalised Arrears which have been
                 allocated to Funding during the Trust Calculation Period
                 immediately preceding such Relevant Distribution Date (based
                 on the Funding Share Percentage thereof calculated on the
                 Distribution Date immediately preceding such Relevant
                 Distribution Date or, in the case of the first Distribution
                 Date, the Initial Funding Share Percentage);

       G    =    the amount of the Mortgages Trustee Retained Principal
                 Receipts (if any) plus the aggregate Current Balance of all
                 the Mortgage Loans in the Trust Property as at the last day
                 of the Trust Calculation Period immediately preceding such
                 Relevant Distribution Date or, if applicable, on the relevant
                 Assignment Date or Funding Contribution Date, after making
                 the distributions, allocations and additions referred to in
                 (B), (C) and (D) above and after taking account of the
                 following (being "Trust Property Calculation Adjustments")
                 (i) any distribution of Principal Receipts to the Seller and
                 to Funding, (ii) the amount of any Losses allocated to the
                 Seller and to Funding, (iii) the adjustments referred to in
                 paragraphs (a) through (e) of Clause 8.5 (Adjustments to
                 Trust Property) (inclusive) below; (iv) the amount of any
                 other additions to or removals from the Trust Property during
                 such Trust Calculation Period, including without limitation,
                 any additions to the Trust Property resulting from Cash
                 Re-draws, Non-Cash Redraws and Further Draws by Borrowers
                 under Flexible Mortgage Loans which are in the Trust Property
                 or (if the Seller subsequently elects not to repurchase
                 Mortgage Loans which are the subject of Further Advances from
                 the Mortgages Trustee) Further Advances sold and assigned by
                 the Seller; but excluding the addition of mortgage loans on
                 an Assignment Date and any

                                      14
<PAGE>

                 Initial Contribution or Further Contribution made by Funding
                 during such Trust Calculation Period and (v) any reduction in
                 the outstanding principal balances of Together Connections
                 Mortgage Loans and Connections Mortgage Loans resulting from
                 Borrowers being allocated a portion of the related Together
                 Connections Benefit and Connections Benefit, respectively
                 under such Mortgage Loans.

       (b)  If during any Trust Calculation Period the Seller sells and
            assigns New Mortgage Loans to the Mortgages Trustee, the Cash
            Manager will recalculate the Current Funding Share Percentage on
            each such Assignment Date which is not also a Funding Contribution
            Date (the "Relevant Assignment Date") in respect of the related
            Interim Calculation Period, for the purposes of calculating the
            distributions to be made from the Trust Property on the
            immediately succeeding Distribution Date and determining the
            amount of losses to be allocated to Funding, and such Current
            Funding Share Percentage will be an amount, expressed as a
            percentage (calculated to an accuracy of five decimal places
            (rounded upwards)), equal to:

                             A + E
                             ----- x 100
                               H

       where,

       A =  the Current Funding Share as calculated on the Distribution Date
            immediately preceding such Relevant Assignment Date;

       E =  an amount equal to any Initial Contribution paid by Funding to the
            Mortgages Trustee on such Relevant Assignment Date in relation to
            the Funding Share of any New Mortgage Loans assigned to the
            Mortgages Trustee on such Relevant Assignment Date (which amount
            the Mortgages Trustee is required pursuant to Clause 4.3
            (Application by Mortgages Trustee) to pay to the Seller in
            satisfaction of the Mortgages Trustee's obligation to pay to the
            Seller the Initial Purchase Price in respect of New Mortgage Loans
            sold and assigned to the Mortgages Trustee on such Relevant
            Assignment Date); and

       H =  the amount of the Mortgages Trustee Retained Principal Receipts
            (if any), plus the aggregate Current Balance of all the Mortgage
            Loans in the Trust Property as at the Distribution Date
            immediately preceding such Relevant Assignment Date (after making
            the distributions, allocations and additions on that preceding
            Distribution Date), plus the aggregate Current Balance of the New
            Mortgage Loans sold

                                      15
<PAGE>

            and assigned to the Mortgages Trustee on such Relevant Assignment
            Date and after taking account of Trust Property Calculation
            Adjustments.

       (c)  If during any Trust Calculation Period Funding pays a Further
            Contribution to the Mortgages Trustee to increase the Funding
            Share of the Trust Property, the Cash Manager will recalculate the
            Current Funding Share Percentage on each such Funding Contribution
            Date (the "Relevant Funding Contribution Date") in respect of the
            related Interim Calculation Period, for the purposes of
            calculating the distributions to be made from the Trust Property
            and determining the amount of losses to be allocated to Funding on
            the immediately succeeding Distribution Date, and such Current
            Funding Share Percentage will be an amount, expressed as a
            percentage (calculated to an accuracy of five decimal places
            (rounded upwards)), equal to:

                              A + E + F
                              --------- x 100
                                  J

       where,

       A = the Current Funding Share as calculated on the Distribution Date
            immediately preceding such Relevant Funding Contribution Date;

       E = (1) if that Relevant Funding Contribution Date is also an
            Assignment Date, the amount of any Initial Contribution paid by
            Funding to the Mortgages Trustee on that Funding Contribution Date
            in respect of the Funding Share of any New Trust Property, and (2)
            in all other cases, zero;

       F =  an amount equal to any Further Contribution paid by Funding to the
            Mortgages Trustee on such Relevant Funding Contribution Date to
            increase Funding's beneficial interest in the Trust Property; and

       J =  the amount of the Mortgages Trustee Retained Principal Receipts
            (if any) plus the aggregate Current Balance of all the Mortgage
            Loans in the Trust Property as at the Distribution Date
            immediately preceding such Relevant Funding Contribution Date
            (after making the distributions, allocations and additions on that
            preceding Distribution Date) plus the aggregate Current Balance of
            the New Mortgage Loans sold and assigned to the Mortgages Trustee
            on that Relevant Assignment Date and after taking account of Trust
            Property Calculation Adjustments.

8.3    Weighted Average Funding Share Percentage: On any Distribution Date in
       respect to which

                                      16
<PAGE>

       (i) the Seller had sold and assigned New Mortgage Loans to the
       Mortgages Trustee, or (ii) Funding had paid a Further Contribution to
       the Mortgages Trustee to increase the Funding Share of the Trust
       Property, during the Trust Calculation Period immediately preceding
       such Distribution Date, the Cash Manager (on behalf of the
       Beneficiaries) will calculate (for the sole purpose of making the
       distributions to be made on such Distribution Date) the weighted
       average of the Current Funding Share Percentages that were calculated
       previously in respect of each Interim Calculation Period occurring in
       such immediately preceding Trust Calculation Period based on the amount
       of Revenue Receipts and Principal Receipts received and Losses
       sustained during each such Interim Calculation Period. The "Weighted
       Average Funding Share Percentage" for any such Distribution Date will
       be equal to:

       (a)  in respect of the distribution of Revenue Receipts to be made on
            such Distribution Date, an amount determined in accordance with
            the formula set forth below:

                           (A x B)+(C x D)

       where,

       A =  the related Current Funding Share Percentage for Interim
            Calculation Period 1;

       B =  the number of days in Interim Calculation Period 1 divided by the
            number of days in the Trust Calculation Period;

       C =  the related Funding Share Percentage for Interim Calculation
            Period 2; and

       D =  the number of days in Interim Calculation Period 2 divided by the
            number of days in the Trust Calculation Period;

       (b)  in respect of the distribution of Principal Receipts to be made on
            such Distribution Date, an amount determined in accordance with
            the formula set forth below:

                           (A x B)+(C x D)

      where,

       A =  the related Current Funding Share Percentage for Interim
            Calculation Period 1;

       B =  the number of days in Interim Calculation Period 1 divided by the
            number of days in the Trust Calculation Period;

                                      17
<PAGE>

       C =  the related Funding Share Percentage for Interim Calculation
            Period 2; and

       D =  the number of days in Interim Calculation 2 Period divided by the
            number of days in the Trust Calculation Period;

       (c)  in respect of the allocation of Losses to be made on such
            Distribution Date, an amount determined in accordance with the
            formula set forth below:

                               (A x B) + (C x D)

       where,

       A =  the Related Current Funding Share Percentage for Interim
            Calculation Period 1;

       B =  the number of days in Interim Calculation Period 1 divided by the
            number of days in the Trust Calculation Period;

       C =  the related Funding Share Percentage for Interim Calculation
            Period 2; and

       D =  the number of days in Interim Calculation Period 2 divided by the
            number of days in the Trust Calculation Period;

8.4    Current Funding Share:

       (a)  On each Distribution Date, the "Current Funding Share" will be
            calculated by the Cash Manager in respect of the then-current
            Trust Calculation Period or the related Interim Calculation
            Period, as applicable, and will be an amount equal to:

                               A - B - C + D

            where "A", "B", "C" and "D" have the meanings specified in Clause
            8.2(a) above.

       (b)  On each Assignment Date (which is not also a Funding Contribution
            Date), the Current Funding Share will be calculated by the Cash
            Manager in respect of the related Interim Calculation Period and
            will be an amount equal to:

                                    A + E

            where "A" and "E" have the meanings specified in Clause 8.2(b)
            above.

                                      18
<PAGE>

       (c)  On each Funding Contribution Date, the Current Funding Share will
            be calculated by the Cash Manager in respect of the related
            Interim Calculation Period and will be an amount equal to:

                                  A + E + F

            where "A", "E" and "F" have the meanings specified in Clause
            8.2(c) above.

8.5    Adjustments to Trust Property: If any of the following events has
       occurred during a Trust Calculation Period, then (subject to the Cash
       Manager receiving notice or otherwise being aware of the occurrence of
       the event) for the purposes of making the Trust Property Calculation
       Adjustments, the aggregate Current Balance of the Mortgage Loans
       constituting the Trust Property shall be reduced or, as the case may
       be, deemed to be reduced:

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

       (b)  a Mortgage Loan or (as applicable) its Related Security (i) is in
            breach of the Representations and Warranties in the Mortgage Sale
            Agreement as at the Initial Closing Date or, as the case may be,
            the relevant Assignment Date or (ii) is the subject of a Product
            Switch or a Further Advance or in respect of which the Borrower
            has accepted an offer by the Seller of a Personal Secured Loan in
            respect of which the Seller has elected to purchase the relevant
            Mortgage Loan or Mortgage Loans and Related Security, and in the
            case of (i) above the Seller fails to repurchase and in the case
            of (ii) above the Seller fails to purchase, the relevant Mortgage
            Loan or Mortgage Loans under the relevant Mortgage Account and
            their Related Security as required by the terms of the Mortgage
            Sale Agreement; in which event the aggregate Current Balance of
            the Mortgage Loans constituting the Trust Property shall be deemed
            to be reduced for the purposes of making the Trust Property
            Calculation Adjustments by an amount equal to the Current Balance
            of the relevant Mortgage Loan or Mortgage Loans under the relevant
            Mortgage Account (together with Arrears of Interest and Accrued
            Interest) which the Seller has failed to repurchase or purchase,
            as applicable; and/or

                                      19
<PAGE>

       (c)  the Security Trustee is notified that a Flexible Mortgage Loan or
            part thereof has been determined by a court judgment on the point
            or as a result of a determination by a relevant regulatory
            authority (whether or not in relation to an analogous flexible
            mortgage loan product of another UK mortgage lender):

            (i)   to be unenforceable; and/or

            (ii)  not to fall within the first ranking charge by way of legal
                  mortgage or first ranking standard security over the
                  relevant Mortgaged Property,

            and, in either case, such Flexible Mortgage Loan is not otherwise
            subject to the repurchase obligation under the Mortgage Sale
            Agreement, in which event, the aggregate Current Balance of the
            Mortgage Loans constituting the Trust Property shall be deemed to
            be reduced for the purposes of making the Trust Property
            Calculation Adjustments by an amount equal to that portion of the
            Current Balance of the Flexible Mortgage Loan which is so
            determined to be unenforceable or not to fall within the first
            ranking charge by way of legal mortgage or first ranking standard
            security over the relevant Mortgaged Property; and/or

       (d)  (i) in respect of breaches of Representations and Warranties in
            the Mortgage Sale Agreement, the Seller would be required to
            repurchase a Mortgage Loan and its Related Security and (ii) in
            respect of a Mortgage Loan subject to a Further Advance or a
            Product Switch or in respect of which the Borrower has accepted an
            offer by the Seller of a Personal Loan, the Seller elects to
            purchase the relevant Mortgage Loan or Mortgage Loans under the
            relevant Mortgage Account and their Related Security in accordance
            with the terms of the Mortgage Sale Agreement, but such Mortgage
            Loan and its Related Security are not capable of being repurchased
            or purchased, as applicable; in which event the aggregate Current
            Balance of the Mortgage Loans constituting the Trust Property
            shall be deemed to be reduced for the purposes of making the Trust
            Property Calculation Adjustments by an amount equal to the Current
            Balance of the relevant Mortgage Loan (together with Arrears of
            Interest and Accrued Interest) which is not capable of being
            repurchased or purchased, as applicable; and/or

       (e)  the Seller breaches any other material warranty under the Mortgage
            Sale Agreement and/or (for so long as it is the Administrator) the
            Administration Agreement, in which event the aggregate Current
            Balance of Mortgage Loans constituting the Trust Property shall be
            deemed for the purposes of making the Trust Property Calculation

                                      20
<PAGE>

            Adjustments to be reduced by an amount equivalent to all losses,
            costs, liabilities, claims, expenses and damages incurred by the
            Beneficiaries as a result of such breach.

      The reductions and deemed reductions set out in paragraphs (a), (b),
      (c), (d) and (e) of this Clause and any resulting loss shall, subject to
      Clause 9.1 (Initial Minimum Seller Share), be allocated on the relevant
      Distribution Date, Assignment Date or Funding Contribution Date (as
      applicable) first to the Seller Share of the Trust Property (or for the
      purposes of calculating the Seller Share of the Trust Property as the
      case may be) until the Seller Share is zero and thereafter shall be
      allocated to the Funding Share of the Trust Property. If at, or any time
      after the Initial Closing Date the Mortgages Trustee holds, or there is
      held to its order, or it receives, or there is received to its order,
      any property, interest, right or benefit relating to the whole or that
      portion of any Mortgage Loan and its Related Security which is or has
      been subject to any matter described in paragraphs (a) through (e) above
      and in respect of which the Seller Share of the Trust Property has been
      reduced or deemed reduced such property, interest, right or benefit will
      constitute a Revenue Receipt and the Mortgages Trustee will remit,
      assign or transfer the same to Funding (but only if and to the extent
      that the related reductions or deemed reductions were applied against
      the Funding Share of the Trust Property) and thereafter to the Seller,
      as the case may require, and until it does so or to the extent that the
      Mortgage Trustee is unable to effect such remittance, assignment or
      transfer, the Mortgages Trustee will hold such property, interest, right
      or benefit and/or the proceeds thereof upon trust absolutely for Funding
      and/or the Seller (separate from the Mortgages Trust), as the case may
      require.

8.6    Current Seller Share Percentage:

       (a)  On each Distribution Date, the "Current Seller Share Percentage"
            will be calculated by the Cash Manager in respect of the
            then-current Trust Calculation Period or the related Interim
            Calculation Period, as applicable, and the distributions to be
            made from the Trust Property on the immediately succeeding
            Distribution Date, and will be a percentage equal to:

                   100% - Current Funding Share Percentage

            where the Current Funding Share Percentage is calculated on such
            Distribution Date in accordance with Clause 8.2(a) above.

                                      21
<PAGE>

       (b)  On each Assignment Date, the Cash Manager will recalculate the
            Current Seller Share Percentage in respect of the related Interim
            Calculation Period and the distributions to be made from the Trust
            Property on the immediately succeeding Distribution Date and will
            be a percentage equal to:

                   100% - Current Funding Share Percentage

            where the Current Funding Share Percentage is as calculated on
            such Assignment Date in accordance with Clause 8.2(b) above.

       (c)  On each Funding Contribution Date, the Cash Manager will
            recalculate the Current Seller Share Percentage in respect of the
            related Interim Calculation Period and the distributions to be
            made from the Trust Property on the immediately succeeding
            Distribution Date and will be a percentage equal to:

                   100% - Current Funding Share Percentage

            where the Current Funding Share Percentage is as calculated on
            such Funding Contribution Date in accordance with Clause 8.2(c)
            above.

8.7    Weighted Average Seller Share Percentage: On any Distribution Date in
       respect to which (i) the Seller had sold and assigned New Mortgage
       Loans to the Mortgages Trustee, or (ii) Funding had paid a Further
       Contribution to the Mortgages Trustee to increase the Funding Share of
       the Trust Property, during the Trust Calculation Period immediately
       preceding such Distribution Date, the Cash Manager will calculate (for
       the sole purpose of making the distributions to be made on such
       Distribution Date) the weighted average of the Seller Share Percentages
       that were calculated previously in respect of the Revenue Receipts and
       Principal Receipts received, and Losses sustained, during each Interim
       Calculation Period occurring in such immediately preceding Trust
       Calculation Period and will be a percentage equal to:

       (a)  in respect of the distribution of Revenue Receipts to be made on
            such Distribution Date:

                   100% - Weighted Average Funding Share Percentage

            where such Weighted Average Funding Share Percentage is as
            calculated in Clause 8.3(a) above;

                                      22
<PAGE>

       (b)  in respect of the distribution of Principal Receipts to be made on
            such Distribution Date:

                   100% - Weighted Average Funding Share Percentage

            where such Weighted Average Funding Share Percentage is as
            calculated in Clause 8.3(b) above; and

       (c)  in respect of the allocation of Losses to be made on such
            Distribution Date:

                   100% - Weighted Average Funding Share Percentage

            where such Weighted Average Funding Share Percentage is as
            calculated in Clause 8.3(c) above.

8.8    Current Seller Share:

       (a)  On each Distribution Date, the "Current Seller Share" will be
            calculated by the Cash Manager in respect of the then-current
            Trust Calculation Period or the related Interim Calculation
            Period, as applicable, and will be an amount equal to:

  The aggregate amount of the Trust Property as at the Relevant Distribution
                         Date - Current Funding Share

            where "Current Funding Share" has the meaning given in Clause
            8.4(a) above.

       (b)  On each Assignment Date, the Current Seller Share will be
            calculated by the Cash Manager in respect of the related Interim
            Calculation Period and will be an amount equal to:

 The aggregate amount of the Trust Property as at the Relevant Assignment Date
                            - Current Funding Share

            where "Current Funding Share" has the meaning given in Clause
            8.4(b) above.

       (c)  On each Funding Contribution Date, the Current Seller Share will
            be calculated by the Cash Manager in respect of the Interim
            Calculation Period and will be an amount equal to:

     The aggregate amount of the Trust Property as at the Relevant Funding
                   Contribution Date - Current Funding Share

            where "Current Funding Share" has the meaning given in Clause
            8.4(c) above.

                                      23
<PAGE>

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

9.     Minimum Seller Share

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

9.2    Fluctuation of Minimum Seller Share on each Distribution Date:

      At the Initial Closing Date, the Minimum Seller Share will be
      (GBP)50,000,000. The amount of the Minimum Seller Share will be
      recalculated on each Distribution Date in accordance with the following
      formula:

                                       W + X + Y + Z

           where:

           W   =    100% of the sum of the average cleared credit balance of
                    all applicable accounts linked to Together Connections
                    Mortgage Loans and Connections Mortgage Loans in respect
                    of each calendar month or any part of any such calendar
                    month.

           X   =    2.0% of the aggregate Current Balance of all Mortgage
                    Loans comprised in the Trust Property as at the last day
                    of the immediately preceding Trust Calculation Period;

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

               p    =    8%;

               q    =    the sum of (i) the "Flexible Cash Re-Draw Capacity",
                         being an amount equal to the difference between (1)
                         the maximum amount of Cash Re-draws that Borrowers
                         may draw under Flexible Mortgage Loans included in
                         the Trust

                                      24
<PAGE>

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

               r    =    3; and

           Z   =    the aggregate Current Balance of (i) Re-Draws and (ii)
                    Personal Secured Loans in the Trust Property as at the
                    last day of the immediately preceding Trust Calculation
                    Period.

                                      25
<PAGE>

9.3    Recalculation of Minimum Seller Share following occurrence of
       exceptional events: The calculation of the Minimum Seller Share in
       accordance with Clause 9.2 (Fluctuation of Minimum Seller Share on each
       Distribution Date) above will be recalculated by the Cash Manager with
       the agreement of the parties hereto subject to the approval of the
       Rating Agencies if the Seller merges or otherwise combines its business
       with another bank or other financial institution so as to increase the
       risks associated with Borrowers holding deposits in Northern Rock
       accounts.

10.    Distribution of Revenue Receipts

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

10.2   Distribution of Mortgages Trustee Available Revenue Receipts: Subject
       as provided in Clause 8.8 (Adjustments on Distribution Dates), on each
       Distribution Date the Cash Manager (at the direction of the Mortgages
       Trustee acting on behalf of the Beneficiaries at their direction and
       with their consent which is hereby given) will distribute Mortgages
       Trustee Available Revenue Receipts as follows:

       (a)  firstly, in no order of priority between them but in or towards
            satisfaction pro rata according to the respective amounts due of:

            (i)   any fees, costs, charges, liabilities and expenses then due
                  or to become due to the Mortgages Trustee under the
                  provisions of this Deed together with (if applicable) VAT
                  thereon (to the extent not already included) as provided
                  herein; and

            (ii)  any amounts due and payable by the Mortgages Trustee to
                  third parties in respect of the Mortgages Trust but only if
                  incurred without breach by the Mortgages Trustee of the
                  documents to which it is a party and payment has not been
                  provided for elsewhere;

                                      26
<PAGE>

       (b)  secondly, in no order of priority between them but in or towards
            satisfaction pro rata according to the respective amounts due of:

            (i)   any remuneration then due and payable to the Administrator
                  and any costs, charges, liabilities and expenses then due or
                  to become due to the Administrator under the provisions of
                  the Administration Agreement prior to the immediately
                  succeeding Distribution Date, in each case together with (if
                  applicable) VAT thereon (to the extent not already included)
                  as provided therein; and

            (ii)  any remuneration then due and payable to the Cash Manager
                  and any costs, charges, liabilities and expenses then due or
                  to become due to the Cash Manager under the provisions of
                  the Cash Management Agreement prior to the immediately
                  succeeding Distribution Date, in each case together with (if
                  applicable) VAT thereon (to the extent not already included)
                  as provided therein;

       (c)  thirdly, in no order of priority between them but in proportion to
            the respective amounts due, and subject to the proviso below, to
            allocate and pay Mortgages Trustee Available Revenue Receipts to:

            (i)   (subject as provided in Clause 8.8 (Adjustments on
                  Distribution Dates)) the Seller in an amount determined by
                  multiplying the total amount of the remaining Mortgages
                  Trustee Available Revenue Receipts by the Current Seller
                  Share Percentage of the Trust Property, as determined on the
                  immediately preceding Distribution Date or, in the case of
                  the first Distribution Date, immediately following the
                  relevant Closing Date, as of such Closing Date; and

            (ii)  (subject as provided in Clause 8.8 (Adjustments on
                  Distribution Dates)) Funding in an amount which is equal to
                  the lesser of:

                  (A)  an amount determined by multiplying the total amount of
                       the remaining Mortgages Trustee Available Revenue
                       Receipts by the Current Funding Share Percentage of the
                       Trust Property, as determined on the immediately
                       preceding Distribution Date or, in the case of the
                       first Distribution Date, the Initial Funding Share
                       Percentage); and,

                                      27
<PAGE>

                  (B)  the aggregate of the amounts to be applied on the
                       immediately succeeding Payment Date for Group 1 Issuers
                       and the immediately succeeding Payment Date for Group 2
                       Issuers as set forth under the Funding Pre-Enforcement
                       Revenue Priority of Payments or the Funding
                       Post-Enforcement Priority of Payments (but excluding
                       any principal amount due under any Intercompany Loan
                       (save that, for the avoidance of doubt, such exclusion
                       shall not apply in respect of any Funding Available
                       Revenue Receipts which are applied by an Issuer to
                       credit that Issuer's Principal Deficiency Ledger and
                       thereby reduce the principal payable under that
                       Issuer's Intercompany Loan) and any of Deferred
                       Contribution amount due under Item (P) of the Funding
                       Pre-Enforcement Revenue Priority of Payments and/or
                       Item (F) of the Funding Post-Enforcement Priority of
                       Payments), less all other amounts (not derived from the
                       distribution of Mortgages Trustee Available Revenue
                       Receipts under this Deed) which will constitute Funding
                       Available Revenue Receipts on the immediately
                       succeeding Payment Date such amount not to be less than
                       zero; and

       (d)  finally, to allocate to Funding but pay at the direction of
            Funding to the Seller an amount equal to YY - ZZ, where "YY" is
            the amount of the Mortgages Trustee Available Revenue Receipts and
            "ZZ" is the amount of such Mortgages Trustee Available Revenue
            Receipts applied and/or allocated under items (a) to (c) above,
            such amount to be in satisfaction of amounts of Deferred Purchase
            Price due to the Seller under the terms of the Mortgage Sale
            Agreement;

PROVIDED THAT if an Assignment Date or a Funding Contribution Date has
occurred during the Trust Calculation Period immediately preceding such
Distribution Date, then the Cash Manager will use (i) the Weighted Average
Seller Share Percentage (instead of the Current Seller Share Percentage) as
calculated pursuant to Clause 8.7(a) above in determining the amount of
Mortgages Trustee Available Revenue Receipts to distribute to the Seller
pursuant to Clause 10.2(c)(i) above, and (ii) the Weighted Average Funding
Share Percentage (instead of the Current Funding Share Percentage) as
calculated pursuant to Clause 8.3(a) above in determining the amount of
Mortgages Trustee Available Revenue Receipts to distribute to Funding pursuant
to Clause 10.2(c)(ii)(A) above.

                                      28
<PAGE>

11.    Distribution of Principal Receipts

11.1   Distribution of Principal Receipts prior to the occurrence of a Trigger
       Event: Subject as provided in Clause 8.8 (Adjustments on Distribution
       Dates), prior to the occurrence of a Trigger Event (and whether or not
       there has been an enforcement of the Funding Security or any Issuer
       Security), on each Distribution Date, the Cash Manager (at the
       direction of the Mortgages Trustee acting on behalf of the
       Beneficiaries at their direction and with their consent which is hereby
       given) shall, subject to the provisos below, allocate and distribute
       Mortgages Trustee Principal Receipts as follows:

       (a)  to the Seller an amount in respect of any Initial Consideration
            (if any) which is then allocable and payable to the Seller under
            Clause 6.3 (Initial Consideration) above;

       (b)  to Funding an amount in respect of each Issuer which is equal to
            the lesser of:

            (i)   the principal amount due on the Intercompany Loan of such
                  Issuer equal to the Controlled Amortisation Amounts due, if
                  any, on such Issuer's Payment Date immediately succeeding
                  such Distribution Date (in each case determined on the
                  assumption that the Issuer Reserve Requirement, the Issuer
                  Arrears Test and the Subordinated Principal Test are
                  satisfied on such date; that the Controlled Amortisation
                  Amount is the relevant amount as set forth in the tables
                  contained in Schedule 4 to the Current Issuer Cash
                  Management Agreement; and that the proviso appearing at the
                  end of such tables does not apply); and

            (ii)  an amount (not less than zero) equal to:

<TABLE>
<CAPTION>
<S>                                    <C>                                         <C>
                                       Current Funding Share Percentage as             Outstanding Principal Balance on
              Mortgages Trustee   x       calculated on the immediately       x        such Issuer's Intercompany Loan
              Principal Receipts            preceding Distribution Date            -----------------------------------------
                                                                                     Aggregate Outstanding Principal Balance
                                                                                       on all Intercompany Loans
</TABLE>

       (c)  to Funding an amount in respect of each Issuer towards any
            principal amount remaining which will be due and payable
            (following the payment to Funding set forth in (b) above) on such
            Issuer's immediately succeeding Payment Date under such Issuer's
            Intercompany Loan (in each case determined on the assumption that
            the Issuer Reserve Requirement, the Issuer Arrears Test and the
            Subordinated Principal Test are satisfied on such date; that the
            Controlled Amortisation Amount is the relevant amount as set forth
            in the tables contained in Schedule 4 to the Current Issuer

                                      29
<PAGE>

            Cash Management Agreement; and that the proviso appearing at the
            end of such tables does not apply) plus an amount equal to the
            amount which Funding will be required to apply on that Payment
            Date under item (1)(A) or (2)(A) of the Funding Pre-Enforcement
            Principal Priority of Payments (to the extent not already funded
            under (B)(1) of such priority of payments); and

       (d)  if such Distribution Date is not a Seller Share Event Distribution
            Date, all remaining Mortgages Trustee Principal Receipts to the
            Seller (as Beneficiary),

PROVIDED THAT in relation to (a) through (d) above the following rules (the
"Rules for the application of Mortgages Trustee Principal Receipts") shall
apply:

(1)    If the Notes of any Issuer have become immediately due and payable as a
       result of the service of a Note Enforcement Notice or if the
       Intercompany Loan of any Issuer (and the other Intercompany Loans of
       any other Issuers) have become immediately due and payable as a result
       of the service of an Intercompany Loan Enforcement Notice, principal
       payments in respect of the Intercompany Loan of that Issuer may be made
       in excess of any Controlled Amortisation Amount and paragraph (b)(i)
       above shall no longer apply in relation to that Issuer and, except
       following a Non-Asset Trigger Event, the amount of Mortgages Trustee
       Principal Receipts to be distributed to Funding in respect of that
       Issuer on that Distribution Date may not exceed the amount determined
       under paragraph (b)(ii) above.

(2)    If the Notes of any Issuer have become immediately due and payable as a
       result of the service of a Note Enforcement Notice or if the
       Intercompany Loan of any Issuer (and the other Intercompany Loans of
       any other Issuers) have become immediately due and payable as a result
       of the service of an Intercompany Loan Enforcement Notice, then for the
       purpose of calculating the amount in respect of that Issuer under
       paragraph (b)(ii) above, that amount may be reduced to the extent of
       any remaining amounts standing to the credit of the Issuer Reserve
       Ledger and/or the Issuer Liquidity Reserve Ledger (if any) for that
       Issuer which are to be utilised on the immediately succeeding Payment
       Date to repay principal on that Issuer's Intercompany Loan, but only to
       the extent that those amounts would not otherwise be payable on that
       Intercompany Loan on that Payment Date.

(3)    The amount of Mortgages Trustee Principal Receipts payable to Funding
       in respect of each Issuer on a Distribution Date will be reduced in
       proportion to the aggregate of the Issuer Available Revenue Receipts of
       that Issuer which are to be applied on the immediately succeeding
       Payment Date in reduction of deficiencies recorded on the Issuer
       Principal Deficiency Ledger of that Issuer, but only to the extent that
       the Issuer Available Revenue

                                      30
<PAGE>

       Receipts which are to be so applied on that Payment Date would not
       otherwise be payable as principal on the relevant Notes on that Payment
       Date.

(4)    For the purpose of determining the Mortgages Trustee Principal Receipts
       to be distributed to Funding in respect of the amount due on the
       Intercompany Loan of any Issuer under (b) and (c) above, the
       Outstanding Principal Balance of that Intercompany Loan shall be deemed
       to be reduced by the amount of:

       (a)  any deficiency recorded on the Issuer Principal Deficiency Ledger
            of that Issuer as at that Distribution Date, but only to the
            extent that such deficiency has arisen under a result of (i)
            Losses on the Mortgage Loans allocated by Funding to that Issuer
            and/or (ii) the application of Funding Available Principal
            Receipts to fund the Issuer Liquidity Reserve Fund of that Issuer
            but not as a result of any other principal deficiency of that
            Issuer; and

       (b)  the Outstanding Principal Balance as at such Distribution Date of
            any Special Repayment Notes issued by that Issuer.

(5)    Funding will not be entitled to receive and the Cash Manager shall
       procure that Funding does not receive any amount of Mortgages Trustee
       Principal Receipts from the Mortgages Trustee on a Distribution Date
       which is not required by Funding to repay principal falling due on any
       Intercompany Loan on the immediately succeeding Payment Date in order
       to fund payments of principal falling due on any Notes issued by any
       Issuer on that Payment Date.

(6)    The Mortgages Trustee will not distribute any Overpayment (other than a
       Capital Payment) in respect of any Non-Flexible Mortgage Loan until the
       first Distribution Date following December 31 of the year in which such
       Overpayment is received; provided that if a Borrower has made an
       Underpayment of principal in respect of such Non-Flexible Mortgage Loan
       following the Overpayment then the Mortgages Trustee will distribute
       principal in an amount up to the amount of such Underpayment (but not
       exceeding the amount of the Overpayment previously made) on the
       immediately succeeding Distribution Date.

(7)    If an Assignment Date or a Funding Contribution Date has occurred
       during the Trust Calculation Period immediately preceding a
       Distribution Date, then the Cash Manager shall use the Weighted Average
       Funding Share Percentage (instead of the Current Funding Share
       Percentage) as calculated pursuant to Clause 8.3(b) above in
       determining the amount of Mortgages Trustee Principal Receipts to be
       distributed to Funding in respect of each Issuer pursuant to Clause
       11.1(b)(ii) above.

                                      31
<PAGE>

(8)    On a Seller Share Event Distribution Date, the Cash Manager shall not
       distribute the remaining Mortgages Trustee Principal Receipts to the
       Seller and shall deposit all Mortgages Trustee Retained Principal
       Receipts in the Mortgages Trustee GIC Account and make a corresponding
       credit to the Mortgages Trustee Principal Ledger.

11.2   Distribution of Mortgages Trustee Principal Receipts on or after the
       occurrence of an Asset Trigger Event: On or after the occurrence of an
       Asset Trigger Event, the Cash Manager (at the direction of the
       Mortgages Trustee acting on behalf of the Beneficiaries at their
       direction and with their consent which is hereby given) shall, on each
       Distribution Date (including, if applicable, any Distribution Date on
       which an Asset Trigger Event occurs), allocate and distribute all
       Mortgages Trustee Principal Receipts as follows:

       (a)  if the immediately preceding Distribution Date was a Seller Share
            Event Distribution Date, all of the Mortgages Trustee Retained
            Principal Receipts to Funding; and then

       (b)  between Funding and the Seller, in no order of priority between
            them and pro rata according to the Funding Share Percentage of the
            Trust Property and the Seller Share Percentage of the Trust
            Property, respectively, until the Funding Share of the Trust
            Property is zero (and, for the avoidance of doubt, such payments
            may reduce the Seller Share to an amount less than the Minimum
            Seller Share),

      PROVIDED THAT if an Assignment Date or a Funding Contribution Date has
      occurred in the Trust Calculation Period immediately preceding any such
      Distribution Date, the Cash Manager will apply all Mortgages Trustee
      Principal Receipts after (a) above between Funding and the Seller pro
      rata according to the Weighted Average Funding Share Percentage (as
      calculated pursuant to Clause 8.3 above) and Weighted Average Seller
      Share Percentage (as calculated pursuant to Clause 8.7 above) for such
      Distribution Date until the Funding Share of the Trust Property is zero.

11.3   Distribution of Principal Receipts on or after the occurrence of a
       Non-Asset Trigger Event: On or after the occurrence of a Non-Asset
       Trigger Event and until the occurrence of an Asset Trigger Event, the
       Cash Manager (at the direction of the Mortgages Trustee acting on
       behalf of the Beneficiaries at their direction and with their consent
       which is hereby given) shall, on each Distribution Date (including, if
       applicable, any Distribution Date on which a Non-Asset Trigger Event
       occurs), apply all Mortgages Trustee Principal Receipts to Funding
       until the Funding Share of the Trust Property has been reduced to zero
       and shall thereafter, on each Distribution Date, apply all Mortgages
       Trustee Principal Receipts to the Seller.

                                      32
<PAGE>

12.    Allocation of Losses

12.1   Subject as provided otherwise herein (including Clause 8.4 (Adjustments
       to Trust Property) of this Deed), all Losses sustained on the Mortgage
       Loans (other than Personal Secured Loans) during a Trust Calculation
       Period shall be applied in reducing pro rata both the Funding Share and
       the Seller Share of the Trust Property on the Distribution Date
       immediately succeeding such Trust Calculation Period by multiplying the
       Losses sustained in such relevant Trust Calculation Period by the
       Current Funding Share Percentage (as calculated on the Distribution
       Date immediately preceding such Trust Calculation Period), until the
       Funding Share of the Trust Property is zero, PROVIDED THAT, if during
       the Trust Calculation Period immediately preceding a Distribution Date
       the Seller had sold and assigned New Mortgage Loans to the Mortgages
       Trustee, or if Funding paid a Further Contribution to the Mortgages
       Trustee to increase the Funding Share of the Trust Property such Losses
       shall be multiplied by the Weighted Average Funding Share Percentage
       (as calculated on such Distribution Date pursuant to Clause 8.3(c)
       above) rather than the Current Funding Share Percentage. The remainder
       of such Losses shall be allocated to the Seller.

12.2   All losses sustained during a Trust Calculation Period on Personal
       Secured Loans forming part of the Trust Property shall be applied to
       reduce the Seller Share of the Trust Property (including, for the
       avoidance of doubt, that portion of the Seller Share which represents
       the Minimum Seller Share) on the Distribution Date immediately
       succeeding such Trust Calculation Period until the Seller Share is zero
       and thereafter shall be applied to reduce the Funding Share of the
       Trust Property.

13.    Overpayments

13.1   Non-Flexible Mortgage Loans: The Mortgages Trustee shall not distribute
       to the Beneficiaries any Overpayment in respect of any Non-Flexible
       Mortgage Loan which does not constitute a Capital Payment until the
       first Distribution Date following 31st December of the year in which
       such Overpayment is received, save to the extent that any such
       Overpayment by a Borrower is applied in reduction of an Underpayment by
       such Borrower in respect of such Mortgage Loan prior to such date. Any
       such Overpayment shall be retained in the Mortgages Trustee GIC Account
       and the Cash Manager will maintain a separate ledger to record its
       receipt and subsequent payment from time to time. Where any such
       Overpayment has been made in error the Cash Manager and/or the
       Administrator will be authorised to refund the amount of such
       Overpayment to the relevant Borrower at any time prior to 31st December
       of the year in which such Overpayment was made.

                                      33
<PAGE>

13.2   Flexible Mortgage Loans: Overpayments in respect of any Flexible
       Mortgage Loan (including the amount of any Together Connections Benefit
       applied to the related Together Connections Mortgage Loans or any
       Connections Benefit applied to the related Connections Mortgage Loans)
       will not be retained in the Mortgages Trustee GIC Account but will be
       distributed to the Beneficiaries on the immediately succeeding
       Distribution Date as Principal Receipts.

14.    Arrears

       The aggregate Current Balance of the Mortgage Loans in the Mortgages
       Trust will be increased at any time by the amount in which the Mortgage
       Loans that have been sold and assigned to the Mortgages Trust are in
       arrears and those arrears have been capitalised. Such increase shall be
       allocated to the Beneficiaries at any time in proportion to their
       respective percentage shares in the Trust Property as determined in
       respect of the Trust Calculation Period or Interim Calculation Period,
       as the case may be, in which the arrears occur.

15.    Ledgers

       The Mortgages Trustee shall maintain, or shall procure that the Cash
       Manager shall maintain, the following Mortgages Trustee Ledgers:

       (a)  the Principal Ledger, which shall record (i) all receipts of
            Principal Receipts and distribution of the same to Funding and the
            Seller and (ii) any Mortgages Trustee Retained Principal Receipts;

       (b)  the Revenue Ledger, which shall record all receipts of Revenue
            Receipts and distribution of the same in accordance with this
            Deed;

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

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

       (e)  the Overpayments Ledger; which shall be divided into sub ledgers
            to record (i) Overpayments on Non-Flexible Mortgage Loans received
            into and paid out of the Mortgages Trustee GIC Account from time
            to time and (ii) Overpayments on Flexible Mortgage Loans;

                                      34
<PAGE>

       (f)  the Non-Flexible Underpayments Ledger; which shall record
            Underpayments on Non-Flexible Mortgage Loans from time to time;

       (g)  the Re-Draw Ledger, which shall be divided into sub ledgers to
            record (i) Cash Re-Draws made in respect of Flexible Mortgage
            Loans and (ii) Non-Cash Re-Draws made in respect of Flexible
            Mortgage Loans;

       (h)  the Contributions Ledger, which will be divided into sub ledgers
            to record (i) the making by Funding of Contributions to the
            Mortgages Trust, (ii) the making by the Seller of Contributions to
            the Mortgages Trust and the application of such Contributions by
            the Mortgages Trustee in payment to the Seller of (a) amounts of
            Initial Purchase Price for the sale of any New Mortgage Portfolio
            which is acquired by the Mortgages Trustee from the Seller under
            the provisions of the Mortgage Sale Agreement or (b) amounts of
            Deferred Purchase Price in accordance with the Mortgage Sale
            Agreement or (c) any Initial Consideration in accordance with this
            Deed; and

       (i)  the Further Draw Ledger, which shall record all Further Draws in
            relation to Personal Secured Loans.

16.    Fees and Expenses of the Mortgages Trustee

16.1   Remuneration: The Mortgages Trustee shall be entitled to charge and be
       remunerated for the work undertaken by it as trustee of the trusts
       created by this Deed. The remuneration shall be on such terms (if any)
       as the Mortgages Trustee may from time to time agree with the
       Beneficiaries in writing.

16.2   Expenses and Liabilities: Each Beneficiary shall indemnify the
       Mortgages Trustee from time to time with such regularity as is
       reasonably agreed between the parties, in respect of the Funding Share
       and the Seller Share, respectively, of the documentable costs, expenses
       and/or liabilities directly and properly incurred by the Mortgages
       Trustee in performing its obligations hereunder or otherwise in acting
       as trustee in accordance with the terms of this Deed and the other
       Transaction Documents to which the Mortgages Trustee is a party
       inclusive (if applicable) of any amounts in respect of Irrecoverable
       VAT incurred in respect of such costs and expenses.

                                      35
<PAGE>

17.    Directions from Beneficiaries

17.1   Administration Agreement and Cash Management Agreement: On the Initial
       Closing Date the Mortgages Trustee shall enter into the Administration
       Agreement and the Cash Management Agreement.

17.2   Directions from Beneficiaries: Subject to Clause 17.3 (No Breach)
       below, the Mortgages Trustee covenants with the Beneficiaries that the
       Mortgages Trustee shall take all necessary steps and do everything
       which both Funding and the Seller (acting together) may reasonably
       request or direct it to do in order to give effect to the terms of this
       Deed or the other Transaction Documents to which the Mortgages Trustee
       is a party; provided that at any time after the Funding Share has been
       reduced to zero the Mortgages Trustee shall not be required to act at
       the direction of both Funding and the Seller (acting together) and
       shall instead act in accordance with any direction given solely by the
       Seller.

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

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

       (a)  it shall have been directed to do so by the Beneficiaries or it is
            required to do so under any express provision of this Deed or the
            other Transaction Documents (but subject to Clause 17.2
            (Directions from Beneficiaries) in respect of conflict of
            directions); and

       (b)  it shall have been indemnified to its satisfaction against all
            liabilities, proceedings, claims and demands to which it may be or
            become liable and all costs, charges and expenses which may be
            incurred by it in connection therewith and the terms of such
            indemnity may include the provision of a fighting fund,
            non-recourse loan or other similar arrangement.

17.5   Covenant of the Mortgages Trustee: Subject to Clause 17.2 (Directions
       from Beneficiaries) the Mortgages Trustee covenants with each of the
       Seller and Funding to exercise all of its rights arising under or in
       respect of the Trust Property (including without limitation any rights
       of enforcement) for the benefit of and on behalf of the Beneficiaries.

                                      36
<PAGE>

18.    Early Termination of the Mortgages Trust

       Prior to its termination in accordance with Clause 26 (Termination),
       provided that all amounts due from Funding to the Funding Secured
       Creditors have been repaid in full, the Mortgages Trust constituted by
       this Deed may be terminated at the option of the Seller, following a
       request in writing by the Seller to the Mortgages Trustee (which shall
       be copied to Funding and the Cash Manager) at any time on or after the
       date on which all of the Intercompany Loans have been repaid in full or
       there is no further claim under any Intercompany Loan and the Funding
       Share of the Trust Property has been reduced to zero or such other date
       as may be agreed in writing between the Mortgages Trustee, Funding and
       the Seller.

19.    Audit of Mortgage Loans constituting the Trust Property

       If the long term, unsecured, unguaranteed and unsubordinated debt
       obligations of the Seller fall below A3 by Moody's then, if required by
       Moody's, the Beneficiaries shall appoint a firm of independent auditors
       (approved by the Rating Agencies) to determine whether the Mortgage
       Loans and their Related Security (or any part of them) constituting the
       Trust Property complied with the representations and warranties set out
       in Schedule 1 (Representations and Warranties) of the Mortgage Sale
       Agreement as at the date such Mortgage Loans were sold and assigned to
       the Mortgages Trustee. The costs of such independent auditors shall be
       borne by the Beneficiaries pro rata according to their respective
       current percentage shares in the Trust Property.

20.    Transfers

20.1   Funding shall not assign: Subject to the right of Funding to assign by
       way of security its right, title, benefit and interest in the Trust
       Property and/or under this Deed to the Security Trustee under the
       Funding Deed of Charge and subject to the right of the Security Trustee
       or a Receiver to sell the Funding Share of the Trust Property and/or
       such right and interest under this Deed following the service of an
       Intercompany Loan Enforcement Notice (which right is hereby conferred),
       Funding covenants with the Seller that it shall not, and shall not
       purport to, sell, assign, transfer, convey, charge, declare a trust
       over, create any beneficial interest in, or otherwise dispose of the
       Funding Share in the Trust Property, or any of Funding's rights, title,
       interest or benefit in any of the Mortgage Portfolio or the Trust
       Property.

20.2   Seller shall not assign: The Seller covenants with Funding that it
       shall not, and shall not purport to, sell, assign, transfer, convey,
       charge, declare a trust over, create any beneficial interest in, or
       otherwise dispose of the Seller Share in the Trust Property or any of
       the Seller's

                                      37
<PAGE>

       rights, title, interest or benefit in the Trust Property, other than
       pursuant to the Transaction Documents.

21.    Representations and Covenants

21.1   Representations: On the date hereof, each of the parties to this Deed
       makes the representations and warranties set out in Schedule 1
       (Representation and Warranties) to this Deed to each of the other
       parties hereto.

21.2   Covenants of the Mortgages Trustee: Save with the prior written consent
       of or at the direction of the Beneficiaries or as provided in or
       envisaged by this Deed and/or the other Transaction Documents, the
       Mortgages Trustee shall not, so long as it is acting as Mortgages
       Trustee hereunder:

       (a)  Negative Pledge: create or permit to subsist any mortgage,
            standard security, pledge, lien, charge or other security interest
            whatsoever (unless arising by operation of law), upon the whole or
            any part of its assets (including any uncalled capital) or its
            undertakings (present or future) or (to the extent that it is
            within the control of the Mortgages Trustee) upon the whole or any
            part of the Trust Property;

       (b)  Disposal: transfer, sell, lend, part with or otherwise dispose of,
            or deal with, or grant any option or present or future right to
            acquire any of its assets or undertakings or (to the extent that
            it is within the control of the Mortgages Trustee) the Trust
            Property or any interest, estate, right, title or benefit therein
            or thereto or agree or attempt or purport to do so;

       (c)  Equitable Interest: knowingly permit any person other than the
            Beneficiaries to have any equitable or beneficial interest in any
            of its assets or undertakings or (to the extent that it is within
            the control of the Mortgages Trustee) the Trust Property or any
            interest, estate, right, title or benefit therein;

       (d)  Bank Accounts: have an interest in any bank account, other than as
            set out in the Transaction Documents.

       (e)  Restrictions on Activities: carry on any business other than as
            described in this Deed and the Transaction Documents;

       (f)  Borrowings: incur any indebtedness in respect of borrowed money
            whatsoever or give any guarantee or indemnity in respect of any
            such indebtedness;

                                      38
<PAGE>

       (g)  Merger: consolidate or merge with any other person or convey or
            transfer its properties or assets substantially or as an entirety
            to any other person;

       (h)  Premises or Employees: have any premises or employees or
            subsidiaries; or

       (i)  Further shares: issue any further shares;

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

       (k)  Conduct of affairs: take any management decisions or direct the
            conduct of its affairs in any Member State of the European Union,
            including holding any board meetings in any Member State of the
            European Union.

22.    Power to Delegate

22.1   Power to delegate: Subject to Clause 22.2 (No further appointments),
       the Mortgages Trustee may (notwithstanding any rule of law or equity to
       the contrary) delegate (revocably or irrevocably and for a limited or
       unlimited period of time) the performance of all or any of its
       obligations and the exercise of all or any of its powers under this
       Deed or imposed or conferred on it by law or otherwise to any person or
       body of persons fluctuating in number selected by it and any such
       delegation may be by power of attorney or in such other manner as the
       Mortgages Trustee may think fit and may be made upon such terms and
       conditions (including the power to sub-delegate) as the Mortgages
       Trustee may think fit.

22.2   No further appointments: Notwithstanding the provisions of Clause 22.1
       (Power to delegate), the Mortgages Trustee shall not appoint any agent,
       attorney or other delegate having power to act in respect of the Trust
       Property unless it is directed in writing to do so by the
       Beneficiaries. The appointment of any agent, attorney or other delegate
       hereunder above shall terminate immediately upon the occurrence of a
       Trigger Event.

23.    Powers of Investment

       The Mortgages Trustee may invest, and may appoint the Cash Manager to
       invest on its behalf, any amounts standing to the credit of the
       Mortgages Trustee Transaction Account in Authorised Investments. Save
       as expressly provided in this Deed, the Mortgages Trustee

                                      39
<PAGE>

       Guaranteed Investment Contract and the Bank Account Agreement, the
       Mortgages Trustee shall have no further or other powers of investment
       with respect to the Trust Property and (to the extent permitted by
       applicable law) the Trustee Act 2000 shall not nor shall any other
       provision relating to trustee powers of investment implied by statute
       or general law shall apply to the Mortgages Trust.

24.    Other Provisions regarding the Mortgages Trustee

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

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

24.3   No Implied Duties: The duties and obligations of the Mortgages Trustee
       under the Mortgages Trust shall be determined solely by the express
       provisions of this Deed (but without prejudice to the duties and
       obligations of the Mortgages Trustee under any of the other Transaction
       Documents). The Mortgages Trustee shall not be liable under this Deed
       except for the performance of such duties and obligations as shall be
       specifically set forth in this Deed. No implied covenants or
       obligations shall be read into this Deed against the Mortgages Trustee,
       and the permissible right of the Mortgages Trustee to do things set out
       in this Deed shall not be construed as a duty.

24.4   No Liability: Neither the Mortgages Trustee, Funding (in its capacity
       as a Beneficiary hereunder) nor the Seller (in its capacity as a
       Beneficiary hereunder) shall be liable to each other, in the absence of
       wilful default, gross negligence or breach of the terms of this Deed,
       in respect of any loss or damage which arises out of the exercise or
       attempted or purported exercise or failure to exercise any of their
       respective powers.

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

                                      40
<PAGE>

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

24.7   MIG Policies: The Mortgages Trustee is not required to maintain any MIG
       Policy with the then-current insurer and may contract for mortgage
       indemnity guarantee protection from any insurer then providing MIG
       insurance policies, subject to prior agreement with the Rating Agencies
       and confirmation that the then-current ratings by the Rating Agencies
       (or any of them) of the Notes issued by any Issuer would not be
       adversely affected.

25.    No retirement of Mortgages Trustee

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

25.2   No Replacement: Neither the Seller nor Funding shall at any time remove
       or purport to remove and/or replace the Mortgages Trustee as the
       trustee of the Mortgages Trust.

25.3   No Termination: Prior to the payment by Funding of all amounts owing
       under the Intercompany Loan Agreements and under the Transaction
       Documents, neither the Seller nor Funding shall at any time, except in
       accordance with the provisions of Clause 18 (Early Termination of the
       Mortgages Trust) and Clause 26 (Termination), terminate or purport to
       terminate the Mortgages Trust and, in particular, but without prejudice
       to the generality of the foregoing, the Seller and Funding shall not in
       reliance on their absolute beneficial interests in the Trust Property
       call for the transfer to them or vesting in them of the legal estate in
       all or any part of the Trust Property.

                                      41
<PAGE>

26.    Termination

       Subject to Clause 18 (Early Termination of the Mortgages Trust), the
       Mortgages Trust hereby constituted shall terminate upon the date upon
       which the Trust Property is zero.

27.    Further Assurances

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

28.    No Partnership or Agency

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

29.    Calculations

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

30.    Confidentiality

30.1   General Obligation of Confidentiality: Unless otherwise required by
       applicable law, and subject to Clause 30.2 (Exceptions) below, each of
       the parties agrees to maintain the confidentiality of this Deed in its
       communications with third parties and otherwise. None of the parties
       shall disclose to any person any information relating to the business,
       finances or other matters of a confidential nature of or relating to
       any other party to this Deed or any of the Transaction Documents which
       it may have obtained as a result of having entered into this Deed or
       otherwise.

30.2   Exceptions: The provisions of Clause 30.1 (General Obligation of
       Confidentiality) above shall not apply:

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

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

                                      42
<PAGE>

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

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

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

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

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

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

31.    Perpetuity Period

       The perpetuity period for the purposes of this Mortgages Trust Deed
       shall be the period of 80 years commencing on the date hereof.

32.    Non Petition Covenant; Limited Recourse

32.1   Non Petition Covenant: Each of the parties hereto hereby agrees that it
       shall not institute against either Funding or the Mortgages Trustee any
       winding-up, administration, insolvency or similar proceedings so long
       as any sum is outstanding under any Intercompany Loan Agreement of any
       Issuer or for two years plus one day since the last day on which any
       such sum was outstanding.

32.2   Limited Recourse: Each of the parties hereto agrees that:

       (a)  in relation to the Mortgages Trustee, any amount payable by the
            Mortgages Trustee to any other party to this Deed under this Deed
            not being an amount payable out of the Trust Property in
            accordance with the terms of this Deed shall only be payable to
            the

                                      43
<PAGE>

            extent that on that date the Mortgages Trustee has sufficient funds
            to pay such amount out of fees paid to it under this Deed; and

       (b)  in relation to Funding:

            (i)    only the Security Trustee may enforce the security created
                   in favour of the Security Trustee under the Funding Deed of
                   Charge in accordance with the provisions thereof;

            (ii)   notwithstanding any other provision of this Deed or any
                   other Transaction Document, no sum due or owing to any
                   party to this Deed from or by Funding under this Deed shall
                   be payable by Funding except to the extent that Funding has
                   sufficient funds available or (following enforcement of the
                   Funding Security) the Security Trustee has realised
                   sufficient funds from the Funding Security to pay such sum
                   subject to and in accordance with the relevant Funding
                   Priority of Payments and provided that all liabilities of
                   Funding required to be paid in priority thereto or pari
                   passu therewith pursuant to such Funding Priority of
                   Payments have been paid, discharged and/or otherwise
                   provided for in full; and

            (iii)  it shall not take any steps for the purpose of recovering
                   any amount payable by Funding or enforcing any rights
                   arising out of this Deed against Funding otherwise than in
                   accordance with the Funding Deed of Charge.

32.3   Corporate Obligations: To the extent permitted by law, no recourse
       under any obligation, covenant, or agreement of any person contained in
       this Deed shall be had against any shareholder, officer or director of
       such person as such, by the enforcement of any assessment or by any
       legal proceeding, by virtue of any statute or otherwise; it being
       expressly agreed and understood that this Deed is a corporate
       obligation of each person expressed to be a party hereto and no
       personal liability shall attach to or be incurred by the shareholders,
       officers, agents or directors of such person as such, or any of them,
       under or by reason of any of the obligations, covenants or agreements
       of such person contained in this Deed, or implied therefrom, and that
       any and all personal liability for breaches by such person of any of
       such obligations, covenants or agreements, either under any applicable
       law or by statute or constitution, of every such shareholder, officer,
       agent or director is hereby expressly waived by each person expressed
       to be a party hereto as a condition of and consideration for the
       execution of this Deed.

                                      44
<PAGE>

33.    Amendments and Waiver

33.1   Entire Agreement: This Deed sets out the entire agreement and
       understanding between the parties with respect to the subject matter of
       this Deed superseding all prior oral or written understandings other
       than the other Transaction Documents.

33.2   Amendments and Waiver: No amendment or waiver of any provision of this
       Deed nor consent to any departure by any of the parties therefrom shall
       in any event be effective unless the same shall be in writing and
       signed by each of the parties hereto. In the case of a waiver or
       consent, such waiver or consent shall be effective only in the specific
       instance and as against the party or parties giving it for the specific
       purpose for which it is given.

33.3   Rights cumulative: The respective rights of each of the parties to this
       Deed are cumulative and may be exercised as often as they consider
       appropriate. No failure on the part of any party to exercise, and no
       delay in exercising, any right hereunder shall operate as a waiver
       thereof, nor shall any single or partial exercise of any such right
       preclude any other or further exercise thereof or the exercise of any
       other right. The remedies in this Deed are cumulative and not exclusive
       of any remedies provided by law.

34.    Notices

       Any notices or other communication or document to be given or delivered
       pursuant to this Deed to any of the parties hereto shall be
       sufficiently served if sent by prepaid first class post, by hand or by
       facsimile transmission and shall be deemed to be given (in the case of
       facsimile transmission) when despatched or (where delivered by hand) on
       the day of delivery if delivered before 17.00 hours on a London
       Business Day or on the next London Business Day if delivered thereafter
       or (in the case of first class post) when it would be received in the
       ordinary course of the post and shall be sent:

       (a)  in the case of the Seller, to Northern Rock plc, Northern Rock
            House, Gosforth, Newcastle upon Tyne NE3 4PL (facsimile number
            0191 213 2203) for the attention of the Group Secretary;

       (b)  in the case of the Mortgages Trustee, to Granite Finance Trustees
            Limited, 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel
            Islands (facsimile number 01534-609333) for the attention of the
            Company Secretary (with a copy to the Seller in accordance with
            (a) above);

                                      45
<PAGE>

       (c)  in the case of Funding, to Granite Finance Funding Limited, 4
            Royal Mint Court, London EC3N 4HJ (facsimile number 020 7073 7874)
            for the attention of the Company Secretary (with a copy to the
            Seller in accordance with (a) above);

       (d)  in the case of the Security Trustee, to The Bank of New York, 48th
            Floor, One Canada Square, London E14 5AL (facsimile number 020
            7964 6399) for the attention of the Global Structured Finance
            (Corporate Trust);

       (e)  in the case of the Fitch Ratings Ltd, to Fitch Ratings Ltd, Eldon
            House, 2 Eldon Street, London EC2M 7UA (facsimile number 020 7417
            6262) for the attention of European Structured Finance
            Surveillance;

       (f)  in the case of Moody's, to Moody's, 1st Floor, 2 Minster Court,
            Mincing Lane, London EC3R 7XB (facsimile number 020 7772 5400) for
            the attention of Head of Monitoring Group, Structured Finance
            (with a copy to the Seller in accordance with (a) above);

       (g)  in the case of Standard & Poor's, to Standard & Poor's, Garden
            House, 18 Finsbury Circus, London EC2M 7NJ (facsimile number 020
            7826 3598) for the attention of Structured Finance Surveillance
            Group (with a copy to the Seller in accordance with (a) above),

       or to such other address or facsimile number or for the attention of
       such other person or entity as may from time to time be notified by any
       party to the others by fifteen days prior written notice in accordance
       with the provisions of this Clause 34.

35.    Third Party Rights

       A person who is not a party to this Deed may not enforce any of its
       terms under the Contracts (Rights of Third Parties) Act 1999, but this
       shall not affect any right or remedy of a third party which exists or
       is available apart from that Act.

36.    Execution in Counterparts; Severability

36.1   Counterparts: This Deed may be executed in any number of counterparts
       (manually or by facsimile) and by different parties hereto in separate
       counterparts, each of which when so executed shall be deemed to be an
       original and all of which when taken together shall constitute one and
       the same instrument.

36.2   Severability: Where any provision in or obligation under this Deed
       shall be invalid, illegal or

                                      46
<PAGE>

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

37.    Governing Law and Submission to Jurisdiction

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

37.2   Submission to Jurisdiction: Each of the parties hereto irrevocably
       agrees that the courts of England shall have jurisdiction to hear and
       determine any suit, action or proceeding, and to settle any disputes,
       which may arise out of or in connection with this Deed and, for such
       purposes, irrevocably submits to the jurisdiction of such courts.

37.3   Process Agent: The Mortgages Trustee irrevocably and unconditionally
       appoints Mourant & Co. Capital (SPV) Limited at 4 Royal Mint Court,
       London EC3N 4HJ or otherwise at its registered office for the time
       being as its agent for service of process in England in respect of any
       proceedings in respect of this Agreement and undertakes that in the
       event of Mourant & Co. Capital (SPV) Limited ceasing so to act it will
       appoint another person with a registered office in London as its agent
       for service of process.

37.4   Forum: Each of the parties hereto irrevocably waives any objection
       which it might now or hereafter have to the courts of England being
       nominated as the forum to hear and determine any Proceedings and to
       settle any disputes, and agrees not to claim that any such court is not
       a convenient or appropriate forum.

                                      47
<PAGE>

                                  SCHEDULE 1

                        REPRESENTATIONS AND WARRANTIES

1.     Status: It is duly incorporated and registered under the laws of the
       jurisdiction in which it is incorporated, capable of being sued in its
       own right and not subject to any immunity from any proceedings, and it
       has the power to own its property and assets and to carry on its
       business as it is being conducted.

2.     Powers and authority: It has the power to enter into, perform and
       deliver, and has taken all necessary corporate and other action to
       authorise the execution, delivery and performance by it of each of the
       Transaction Documents to which it is or will be a party, and each such
       Transaction Document has been duly executed and delivered by it.

3.     Legal validity: Each Transaction Document to which it is or will be a
       party constitutes or when executed in accordance with its terms will
       constitute its legal, valid and binding obligation.

4.     Non-conflict: The execution by it of each of the Transaction Documents
       to which it is a party and the exercise by it of its rights and the
       performance of its obligations under such Transaction Documents will
       not:

       (a)  conflict with any document which is binding upon it or any of its
            assets;

       (b)  conflict with its constitutional documents; or

       (c)  conflict with any law, regulation or official or judicial order of
            any government, governmental body or court, domestic or foreign,
            having jurisdiction over it.

5.     No litigation: It is not a party to any material litigation,
       arbitration or administrative proceedings and, to its knowledge, no
       material litigation, arbitration or administrative proceedings are
       pending or threatened against it.

6.     Consents and Licences: All governmental consents, licences and other
       approvals and authorisations required in connection with the entry
       into, performance, validity and enforceability of, and the transactions
       contemplated by, the Transaction Documents have been obtained or
       effected (as appropriate) and are in full force and effect.

                                      48EXHIBIT 4.3

                             Dated 28 January 2004

                               NORTHERN ROCK PLC

                                   as Seller

                       GRANITE FINANCE TRUSTEES LIMITED

                             as Mortgages Trustee

                        GRANITE FINANCE FUNDING LIMITED

                                    - and -

                             THE BANK OF NEW YORK

                              as Security Trustee

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

                                EIGHTH AMENDED
                            MORTGAGE SALE AGREEMENT

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

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

<PAGE>

                                   CONTENTS

Clause                                                                Page No.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       2
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       3
<PAGE>

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

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

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

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

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

WHEREAS:

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

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

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

IT IS HEREBY AGREED AS FOLLOWS:

1.     Definitions and Construction

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

                                       4
<PAGE>

2.     Sale and Purchase of Initial Mortgage Portfolio

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

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

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

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

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

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

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

3.     Initial Closing Date

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

                                       6
<PAGE>

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

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

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

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

4.     Sale and Purchase of New Mortgage Portfolios

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

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

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

                                       7
<PAGE>

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

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

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

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

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

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

                                       8
<PAGE>

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

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

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

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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

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

                                      11
<PAGE>

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

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

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

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<PAGE>

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

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

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

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

       (a)    a Trigger Event; and

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

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

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

                                      13
<PAGE>

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

5.     Trust of Monies

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

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

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

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

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

                                      14
<PAGE>

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

6.     Perfection of the Assignment

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

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

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

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

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

                                      15
<PAGE>

       (e)    the occurrence of an Insolvency Event in relation to the Seller;
              or

       (f)    notice in writing from the Seller to the Mortgages Trustee and
              Funding (with a copy to the Security Trustee) requesting such
              transfer.

6.2    Perfection: If an event set forth in any of paragraphs (a) to (f) of
       Clause 6.1 (Perfection Events) occurs and either the Mortgages Trustee
       or Funding (with the consent of the Security Trustee) or the Security
       Trustee so requests in writing, the Seller shall perfect the
       assignments as contemplated by and in accordance with this Clause 6
       (Perfection of the Assignment) in relation to all Mortgage Loans then
       in the Mortgage Portfolio and shall:

       (a)    deliver to the Mortgages Trustee all Title Deeds and (subject to
              receipt of up to date schedules) the transfers and assignations
              referred to in Clause 6.3 (Transfer Documents) duly executed by
              the Seller; and

       (b)    give formal notice of the transfers and assignations to the
              relevant Borrowers, insurers and other persons (all such notices
              being in such form or forms as may be required by the Mortgages
              Trustee or Funding (with the written consent of the Security
              Trustee) or the Security Trustee).

6.3    Transfer Documents: If an event set forth in any of paragraphs (a) to
       (f) of Clause 6.1 (Perfection Events) occurs, the transfers that the
       Seller is required to deliver are:

       (a)    transfers in the form set out in Part 1 of Schedule 2 (Form of
              Transfer (Registered Land - England and Wales)) of all the
              English Mortgages then in the Mortgage Portfolio secured (or
              intended to be secured) over English Properties which comprise
              registered land (including any English Property which is the
              subject of an application for first registration at the Land
              Registry);

       (b)    transfers in the form set out in Part 2 of Schedule 2 (Form of
              Transfer (Unregistered Land - England and Wales)) of all the
              English Mortgages then in the Mortgage Portfolio secured (or
              intended to be secured) over English Properties which comprise
              unregistered land (excluding any which is the subject of an
              application for first registration);

       (c)    assignations in the form set out in Part 3 of Schedule 2 (Form
              of Transfer (Land Register - Scotland)) of all the Scottish
              Mortgages then in the Mortgage Portfolio secured (or intended to
              be secured over Scottish Properties title to which is registered
              (or in the course of being registered) in the Land Register of
              Scotland;

       (d)    assignations in the form set out in Part 4 of Schedule 2 (Form
              of Transfer (Sasine Register - Scotland)) of all the Scottish
              Mortgages then in the Mortgage Portfolio secured (or intended to
              be secured) over Scottish Properties title to which is recorded
              (or in the course of being recorded) in the General Register of
              Sasines;

       (e)    transfers and assignations of the benefit of the Guarantees
              relating to any relevant Mortgage Loan in the form of the
              Assignment of Guarantees set out in Part 1 of Schedule 5
              (Assignment of Guarantees) in relation to Guarantees governed by

                                      16
<PAGE>

              English law and in the form of the Assignation of Guarantees set
              out in Part 2 of Schedule 5 (Assignation of Guarantees) in
              relation to Guarantees governed by Scots law; and

       (f)    transfers and assignations of the Related Security or any other
              property or security sold to the Mortgages Trustee under this
              Agreement in such form as the Mortgages Trustee or the Security
              Trustee may reasonably require.

       The Mortgages Trustee or Funding (with the consent of the Security
       Trustee) or the Security Trustee may require that the form of any
       transfer or assignation referred to in this Clause 6.3 be changed at
       any time to reflect changes in law or relevant registry practice or
       requirements.

6.4    Prior to Perfection: Prior to perfection pursuant to Clause 6.1
       (Perfection Events) and subject to Clause 7.3 (Seller Ratings) and
       Clauses 3.6 (Insurance) and 4.9 (Insurance) neither the Mortgages
       Trustee nor Funding nor the Security Trustee will:

       (a)    register or record itself at, or submit or require the
              submission of any notice, form, request or application to, or
              pay any fee for the registration or recording of, or the noting
              of any interest at, the Land Charges Department of H.M. Land
              Registry or in the Registers of Scotland or at H.M. Land
              Registry in relation to the Mortgages Trustee's and/or Funding's
              interests in the Mortgage Portfolio;

       (b)    give or require the giving of any notice to any Borrower,
              insurer or any other person of the assignment or assignation of
              that Borrower's Mortgage Loan and its Related Security or such
              other property as may be included in the Mortgage Portfolio to
              the Mortgages Trustee or the charge by Funding of Funding's
              beneficial interest in that Borrower's Mortgage Loan and its
              Related Security or such property to the Security Trustee
              pursuant to the Funding Deed of Charge; or

       (c)    send or require to be sent to any solicitor who has acted on
              behalf of the Seller in respect of any Mortgage with respect to
              which the Seller has not received a complete set of the Title
              Deeds a letter or other communication requiring such solicitor
              to hold such documents to the order of the Mortgages Trustee or
              the Security Trustee (as the case may be).

6.5    Further Assurance: The Seller shall, subject to the other provisions of
       this Clause 6 (Perfection of the Assignment), upon request do all such
       other deeds, assurances, agreements, instruments, acts and things as
       the Mortgages Trustee, Funding or the Security Trustee may require in
       order to give effect to the terms of this Agreement and the assignments
       and assignations contemplated herein.

7.     Undertakings

7.1    Administration: The Mortgages Trustee and Funding undertake that they
       will at all times (or will direct the Administrator at all times to)
       administer and enforce (and exercise their powers and rights and
       perform their obligations under) the Mortgage Loans comprised in the
       Mortgage Portfolio and their Related Security in accordance with the
       Administration Procedures (for so long as these exist and thereafter in
       accordance with such policies as would

                                      17
<PAGE>

       be applied by a reasonable, prudent mortgage lender in the conduct of
       its business).

7.2    Reimbursement of Borrower: The Seller hereby undertakes with the
       Mortgages Trustee and Funding that, in the event that any Borrower
       establishes that it has at any time prior to the Initial Closing Date
       or, as the case may be, the relevant Assignment Date, paid to the
       Seller any amounts in excess of sums due to the Seller as at the date
       of payment under the Mortgage Conditions applicable to that Mortgage
       Loan (other than any Overpayment made by a Borrower under Flexible
       Mortgage Loan) the Seller will reimburse the Borrower for such
       overpayment together with any interest, cost or other expense
       associated therewith. The Seller further agrees to hold the Mortgages
       Trustee and Funding harmless against any such claims and to indemnify
       the Mortgages Trustee and Funding on an after Tax basis in relation to
       any costs, expense, loss or other claim which may arise in connection
       therewith. Any payment made by the Seller to the Mortgages Trustee and
       Funding in discharge of the foregoing indemnity shall be regarded as a
       rebate of part of the Purchase Price of the relevant Mortgage Loan.

7.3    Seller Ratings: The Seller hereby undertakes with the Mortgages
       Trustee, Funding and the Security Trustee that if the long term
       unsecured, unsubordinated and unguaranteed debt obligations of the
       Seller cease to be assigned a long term credit rating:

       (a)    from Moody's of no lower than Baal or from Fitch of no lower
              than BBB , the Seller (unless Moody's or Fitch, as applicable,
              confirms that the then current ratings of the Notes will not be
              adversely affected) will deliver to the Mortgages Trustee,
              Funding, the Security Trustee (upon request) and the Rating
              Agencies details of the names and addresses of the Borrowers
              with Mortgage Loans then in the Mortgage Portfolio on computer
              diskette and a draft letter of notice to such Borrowers of the
              sale and assignment of those Mortgage Loans and the Related
              Security to the Mortgages Trustee in the form set out in
              Schedule 8 (Form of Notification to Borrowers); and

       (b)    from S&P of no lower than BBB-, from Moody's of no lower than
              Baa3 or from Fitch of no lower than BBB-, the Seller (unless
              S&P, Moody's and Fitch, as applicable, confirms that the
              then-current ratings of the Notes will not be adversely
              affected) shall within 10 Business Days of such cessation give
              notice of the sale and assignment effected by this Agreement
              (and, in the case of any Scottish Mortgage Loan, the making of
              the relevant Scottish Trust Deed) to each Borrower with a
              Mortgage Loan then in the Mortgage Portfolio in the form set out
              in Schedule 8 (Form of Notification to Borrowers) (and if the
              Seller fails to give such notice, then the Mortgages Trustee
              shall give such notice as the Seller's attorney under the power
              of attorney set out in Schedule 10 (Power of Attorney in favour
              of the Mortgages Trustee, Funding and the Security Trustee)),

       (c)    provided that, in respect of Clause 7.3(a), should the Seller be
              required as described in such Clause to provide the details of
              the names and addresses of Borrowers to the Mortgages Trustee
              and Funding, each of the Mortgages Trustee and Funding (to the
              extent, in respect of Funding, that such information is to be
              delivered to Funding other than at its United Kingdom branch
              office) hereby agrees to appoint an agent that is located in the
              United Kingdom and which maintains all appropriate

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<PAGE>

              registrations, notifications, licences and authorities (if any)
              required under the Data Protection Act 1998 to receive and
              maintain such information on its behalf, and under no
              circumstances shall either the Mortgages Trustee or Funding
              accept such information at its Jersey registered office or
              otherwise in Jersey (unless Jersey is declared an "approved
              state" by the European Commission, in which case such data may
              be delivered to the Mortgages Trustee and/or Funding at their
              respective Jersey offices).

7.4    Pending Perfection: The Seller undertakes to the Mortgages Trustee,
       Funding and the Security Trustee that, pending perfection under Clause
       6 (Perfection of the Assignment), the Seller:

       (a)    shall promptly notify the Mortgages Trustee, Funding and (upon
              request) the Security Trustee if it receives written notice of
              any litigation or claim calling into question in any material
              way the Seller's or the Mortgages Trustee's title to any
              Mortgage Loan comprised in the Mortgage Portfolio or its Related
              Security or if it becomes aware of any material breach of any of
              the Representations and Warranties or other obligations under
              this Agreement; and

       (b)    shall, if reasonably required so to do by the Mortgages Trustee,
              participate or join in and lend its name to and take such other
              steps as may reasonably be required by the Mortgages Trustee in
              relation to, any legal proceedings in respect of the Mortgage
              Loans and the Related Security to the extent necessary to
              protect, preserve and enforce the Seller's or the Mortgages
              Trustee's or Funding's or the Security Trustee's title to or
              interest in any Mortgage Loan or its Related Security provided
              that the Seller is reimbursed, subject to and in accordance with
              the relevant priority of payments under and in accordance with
              the Transaction Documents, by the Mortgages Trustee or Funding
              for the reasonable legal expenses and costs of such proceedings.

7.5    Responsibility of Seller: The Seller hereby further undertakes with the
       Mortgages Trustee and Funding that it is and at all times shall remain
       solely responsible for any Product Switches (other than a Re-Fixed
       Mortgage Loan), for funding any Cash Re-Draws made by a Borrower under
       a Flexible Mortgage Loan, for funding any request for any Further
       Advance made by a Borrower, for funding any request for any Further
       Draw under a Personal Secured Loan and for paying to the Mortgages
       Trustee from time to time an amount equal to the Unpaid Interest
       associated with any Non-Cash Re-Draw made by a Borrower under a
       Flexible Mortgage Loan. For the avoidance of doubt, neither the
       Mortgages Trustee nor Funding will be required to advance moneys to the
       Seller or to a Borrower in order to fund such a Re-Draw or Further
       Advance or Further Draw in any circumstances whatsoever.

7.6    Product Switches and Further Advances:

       (a)    Neither the Mortgages Trustee nor Funding shall (and each shall
              procure that its agents do not):

              (i)    issue to any Borrower any offer of a Further Advance; or

                                      19
<PAGE>

              (ii)   issue to any Borrower any offer of a Product Switch
                     (other than a Re-Fixed Mortgage Loan),

              without first having given notice in writing to the Seller
              seeking confirmation from the Seller that the Seller will
              repurchase the Mortgage Loan to which such offer relates from
              the Mortgages Trustee in accordance with the terms of this
              Agreement.

       (b)    If the Seller gives such confirmation to the Mortgages Trustee,
              the Mortgages Trustee (or its agents, including the
              Administrator, on its behalf) shall then issue to that Borrower
              the relevant offer referred to in paragraph (a) above and shall
              (in the case of any offer referred to in paragraph (a) above)
              then notify the Seller in writing as soon as the Mortgages
              Trustee has accepted the mortgage documentation completed by the
              Borrower in relation to such offer.

       (c)    The Mortgages Trustee shall not itself make any Further Advance
              or Product Switch (other than in relation to a Re-Fixed Mortgage
              Loan).

7.7    Standard Variable Rate: Subject to the provisions of Clause 7.9, the
       Seller covenants with and undertakes to the Mortgages Trustee, Funding
       and the Security Trustee that, where the Administrator determines on
       any date that there will be a Shortfall during the next succeeding
       Interest Period and notifies the Seller to such effect, the Seller
       shall take all steps which are necessary, including publishing any
       notice which is required in accordance with the Mortgage Conditions, to
       set the Standard Variable Rate and such other discretionary rates and
       margins applicable to the Mortgage Loans at such levels as may be
       notified to the Seller by the Mortgages Trustee, Funding or the
       Security Trustee (which rates shall be the same rates as previously
       notified to the Mortgages Trustee, Funding and the Security Trustee in
       accordance with Clause 4.3(b) of the Administration Agreement) as being
       the rates required in order for no Shortfall to arise.

7.8    Security Powers of Attorney: The Seller shall grant security powers of
       attorney to the Mortgages Trustee, Funding and the Security Trustee in
       the form set out in Schedule 10 (Power of Attorney in favour of the
       Mortgages Trustee, Funding and the Security Trustee) allowing any of
       the Mortgages Trustee, Funding and the Security Trustee and their
       delegates from time to time (inter alia) to set the Standard Variable
       Rate, such other discretionary rates and margins applicable to the
       Mortgage Loans and (save for the Security Trustee) the rate of (and
       terms relating to) the Existing Borrowers' Re-Fix Rate should the
       Seller fail to do so in accordance with its obligations under this
       Agreement, but only to the extent that such rates have been previously
       notified to the Mortgages Trustee, Funding and the Security Trustee in
       accordance with Clause 4.3(b) of the Administration Agreement. Nothing
       in this Clause 7.8 shall prevent the Seller (or any of its attorneys
       from time to time) from setting a higher Northern Rock Standard
       Variable Rate or higher rates for other discretionary rates and margins
       (or in the case of the Existing Borrowers' Re-Fix Rate setting a higher
       rate and imposing terms more advantageous to the Mortgages Trustee)
       than those to be set or required by the Mortgages Trustee, Funding and
       (other than in respect to an Existing Borrower's Re-Fix Rate) the
       Security Trustee.

7.9    Shortfall: Unless any of the Mortgages Trustee, Funding or the Security
       Trustee needs to do

                                      20
<PAGE>

       so to avoid a Shortfall, none of the Mortgages Trustee, Funding or the
       Security Trustee shall set the Standard Variable Rate and other
       discretionary rates and margins for Mortgage Loans which are in the
       Mortgages Trust (disregarding any discounts or additions to it) at
       rates higher than the then equivalent rates for mortgage loans which
       are not in the Mortgages Trust.

7.10   Forwarding of Notice: The Security Trustee undertakes, upon receipt of
       any notice as specified in Clause 8.5(c) of the Mortgages Trust Deed,
       to forward such notice to the Mortgages Trustee, Funding, the Seller
       and the Cash Manager in the manner set forth in Clause 20 within three
       (3) London Business Days of receipt thereof. The Security Trustee shall
       have no other obligation other than the foregoing following receipt of
       such notice.

8.     Warranties and Repurchase by the Seller

8.1    Representations and Warranties: The Seller makes the Representations
       and Warranties set out in Schedule 1 (Representations and Warranties)
       to each of the Mortgages Trustee, Funding and the Security Trustee:

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

       (b)    in relation to each New Mortgage Loan (other than Personal
              Secured Loans if specifically excluded from a Representation and
              Warranty) and its Related Security in a New Mortgage Portfolio,
              on the date of the service of the relevant New Mortgage
              Portfolio Notice and on the relevant Assignment Date;

       (c)    in the form set out in Part 2 of Schedule 1 (Representations and
              Warranties) in relation to the matters and at the dates set out
              therein; and

       (d)    in the form set out in Part 3 of Schedule 1 (Representations and
              Warranties) in relation to the matters and at the dates set out
              therein.

8.2    Reliance: The Seller acknowledges that the Representations and
       Warranties are made with a view to inducing the Mortgages Trustee,
       Funding and the Security Trustee either to enter into this Agreement
       and the other Transaction Documents to which each is a party or to
       agree to purchase the New Mortgage Loans and their Related Security
       comprised in each New Mortgage Portfolio, and that each of the
       Mortgages Trustee, Funding and the Security Trustee has entered into
       this Agreement and the other Transaction Documents to which it is a
       party in reliance upon the Representations and Warranties
       notwithstanding any information possessed or discoverable by the
       Mortgages Trustee, Funding and/or the Security Trustee. The Mortgages
       Trustee, Funding and the Security Trustee acknowledge that they have
       not entered into this Agreement in reliance upon any representation,
       warranty or undertaking other than those set out in this Agreement or
       upon any other enquiry, investigation or search whatsoever.

8.3    Remedies: The Mortgages Trustee's, Funding's and the Security Trustee's
       sole remedy in respect of a breach of any of the Representations and
       Warranties shall be to take action under this Clause 8 (Warranties and
       Repurchase by the Seller) or under Clause 8.4 (Adjustments to Trust
       Property) of the Mortgages Trust Deed. Furthermore, in respect of any
       actual or

                                      21
<PAGE>

       alleged breach of Clause 8.1 (Representations and Warranties), the
       Mortgages Trustee, Funding or the Security Trustee shall, as
       applicable:

       (a)    notify the Seller as soon as reasonably practicable following
              any claim or intimation of claim by any person of or arising
              from such actual or alleged breach and thereafter keep the
              Seller informed in relation to such claim or intimation;

       (b)    not settle or compromise any such claim made or intimated or
              otherwise do anything which may be prejudicial to the position
              of the Seller in relation thereto having regard to this
              Agreement, except pursuant to the written directions of the
              Seller or with the Seller's prior written approval, such
              directions and approval not to be unreasonably withheld; and

       (c)    comply with the Seller's reasonable directions as to answering,
              disputing, defending, compromising, settling, or otherwise in
              relation to the claim made or initiated (including without
              limitation the instruction of particular legal advisers), and if
              and to the extent required by the Seller, do such things as the
              Seller may reasonably require to enable and authorise the Seller
              or persons nominated by the Seller to answer, dispute, defend,
              compromise, settle or otherwise deal with any such claim or
              intimated claim, or mitigate loss or potential loss on behalf of
              the Mortgages Trustee, subject in each case to the Seller
              indemnifying the Mortgages Trustee, Funding and the Security
              Trustee against the consequences of complying with the Seller's
              directions and requirements.

8.4    Repurchase: Subject to Clause 8.14 (Repurchase Not Possible), in the
       event of a material breach of any of the Representations or Warranties
       in respect of any Mortgage Loan and/or its Related Security as at the
       Initial Closing Date or, as the case may be, the relevant Assignment
       Date, which could have a material adverse effect on the Mortgage Loan
       and/or its Related Security (having regard to, among other things,
       whether a loss is likely to be incurred in respect of the Mortgage Loan
       to which the breach relates after taking account of the likelihood of
       recoverability or otherwise of any sums under any applicable insurance
       policies), and further provided that:

       (a)    the Mortgages Trustee, Funding or the Security Trustee has given
              the Seller not less than 28 days' notice in writing;

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

       (c)    such breach, where capable of remedy, is not remedied to the
              satisfaction of Funding and the Security Trustee within the 28
              day period referred to in (a) (or such longer period as Funding
              and the Security Trustee may direct the Mortgages Trustee),

       then at Funding's (with the consent of the Security Trustee) or the
       Security Trustee's direction, the Mortgages Trustee may serve upon the
       Seller a notice in the form of the Loan Repurchase Notice whereupon the
       Seller will be required to repurchase (i) the relevant Mortgage Loan
       and its Related Security, (ii) any other Mortgage Loan secured or
       intended to be secured by that Related Security or any part of it and
       (iii) any other Mortgage Loan secured on the same

                                      22
<PAGE>

       Mortgaged Property as the relevant Mortgage Loan to which the breach
       relates in accordance with Clause 8.7 (Completion of Repurchase),
       provided, however, that the Security Trustee shall have no duty to
       provide any such notice to the Seller or consider granting its consent
       pursuant to this Clause 8.4 unless the Security Trustee has been
       notified by a party to a Transaction Document of such material breach
       of such Representation or Warranty which, in the opinion of such party
       (as communicated to the Security Trustee), could have a material
       adverse effect on the related Mortgage Loan and/or its Related
       Security, taking into account the considerations provided in this
       Clause 8.4, and further provided that prior to receipt of such notice
       the Security Trustee shall be entitled to assume that no such material
       breach has occurred.

8.5    Purchase of Product Switches, Further Advances and purchases relating
       to Personal Secured Loans: In the event of there being at any date in
       respect of any Mortgage Loan assigned to the Mortgages Trustee
       hereunder a PS/FA/PSL Event (other than a Mortgage Loan becoming a
       Re-Fixed Mortgage Loan, such PS/FA/PSL Event being dealt with under
       Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans)), the Seller may
       at any time serve notice in the form of the Loan Repurchase Notice on
       the Mortgages Trustee whereupon the Mortgages Trustee will be required
       to sell and to transfer to the Seller in accordance with Clause 8.7
       (Completion of Repurchase):

       (a)    any Mortgage Loan subject to a PS/FA/PSL Event, together with
              its Related Security;

       (b)    any other Mortgage Loan secured or intended to be secured by the
              Related Security referred to in (a) above or any part of it; and

       (c)    any other Mortgage Loan secured on the same Mortgaged Property
              that secures the Mortgage Loan subject to a PS/FA/PSL Event,
              together with its Related Security,

       each such Mortgage Loan to be identified in the Loan Repurchase Notice
       (any such Mortgage Loan or Mortgage Loans, a "PS/FA/PSL Mortgage
       Loan"), free from the Mortgages Trust and any right or interest that
       the Security Trustee may have in such PS/FA/PSL Mortgage Loan and its
       Related Security under the Funding Deed of Charge. Any PS/FA/PSL
       Mortgage Loan purchased by the Seller shall be released from the
       Mortgages Trust and shall no longer constitute Trust Property and shall
       be released from any right or interest that the Security Trustee may
       have had in such Mortgage Loan and its Related Security under the
       Funding Deed of Charge prior to such repurchase.

8.6    Repurchase of Fixed Rate Mortgage Loans

       (a)    Where a Mortgage Loan bears interest at a fixed rate for a
              certain period (the "initial fixed rate period"), after the
              expiry of which the Borrower is entitled to apply for a new
              fixed rate (whether or not subject to certain conditions), the
              Mortgages Trustee may by notice in writing to the Seller given
              at any time not more than 60 days before the expiry of that
              initial fixed rate period (which for the avoidance of doubt
              shall exclude any period of extension to which the relevant
              Borrower is entitled), offer to re-sell to the Seller that
              Mortgage Loan together with its Related Security if that
              Mortgage Loan becomes a Re-Fixed Mortgage Loan during the
              3-month period immediately following the end of that initial
              fixed rate period. The offer will be in

                                      23
<PAGE>

              writing in the form set out in Schedule 9 (Offer under Clause
              8.6 ) and will be signed by or on behalf of the Mortgages
              Trustee.

       (b)    The Seller may accept the offer made in accordance with
              paragraph (a) above on the date on which that Mortgage Loan
              becomes a Re-Fixed Mortgage Loan during the 3-month period
              immediately following the end of the initial fixed rate period
              relating to it, only by payment to the Mortgages Trustee of the
              consideration payable for the repurchase of the relevant
              Mortgage Loan and its Related Security in accordance with Clause
              8.7 (Completion of Repurchase).

       (c)    The parties hereto acknowledge that the effect of the payment to
              the Mortgages Trustee by the Seller of the consideration for the
              repurchase of the relevant Mortgage Loan and its Related
              Security in accordance with paragraph (b) above will be the
              assignment and transfer to the Seller of the beneficial
              ownership of, and all of the Mortgages Trustee's beneficial
              right, title, interest and benefit in and to, that Mortgage
              Loan, and completion of the repurchase shall be effected by the
              parties in accordance with Clause 8.7 (Completion of
              Repurchase).

       (d)    The Seller hereby covenants and undertakes that if it does not
              accept the offer made by the Mortgages Trustee in accordance
              with paragraph (b) above, then whether or not the Mortgage Loan
              becomes a Re-Fixed Mortgage Loan, it will set the Existing
              Borrowers' Re-Fix Rate applicable for the 3-month period
              immediately after expiry of the initial fixed rate period
              relating to that Mortgage Loan at a rate not less than that (and
              on terms not less advantageous to the Mortgages Trustee or
              Funding than those) notified from time to time to the Seller by
              the Mortgages Trustee, Funding or the Administrator as being
              required by the Mortgages Trustee or Funding.

8.7    Completion of Repurchase: Completion of any repurchase or re-transfer
       or purchase or transfer, as applicable, shall take place:

       (a)    in the case of any repurchase or re-transfer pursuant to Clause
              8.4 (Repurchase) or any purchase or transfer pursuant to Clause
              8.5 (Purchase of Product Switches, Further Advances and
              purchases relating to Personal Secured Loans) on the first
              London Business Day immediately following expiry of a period of
              10 days following the date of the service upon the Seller of the
              relevant Loan Repurchase Notice or at the Seller's earlier
              election; or

       (b)    in the case of any repurchase or re-transfer pursuant to Clause
              8.6 (Repurchase of Fixed Rate Mortgage Loans), immediately upon
              the Mortgage Loan becoming a Re-Fixed Mortgage Loan,

       whereupon, the Seller shall pay to the Mortgages Trustee an amount
       equal to the Current Balance of such Mortgage Loan or Mortgage Loans
       and any Related Security and all Arrears of Interest and Accrued
       Interest relating thereto as at the date of completion of such
       repurchase. The provisions of Clause 8.8 (Transfers), Clause 8.9
       (Documentation) and Clause 8.16 (Scottish Trust) shall apply to any
       such repurchase or re-transfer.

                                      24
<PAGE>

8.8    Transfers: On the date of completion of any repurchase of a Mortgage
       Loan and its Related Security in accordance with this Clause 8
       (Warranties and Repurchase by the Seller), the Mortgages Trustee and
       Funding shall at the cost of the Seller execute and deliver or cause
       their respective duly authorised attorneys to execute and deliver to
       the Seller:

       (a)    if perfection of the assignment and assignation to the Mortgages
              Trustee has occurred in accordance with Clause 6 (Perfection of
              the Assignment):

              (i)    if the relevant Mortgage is over Registered Land, a
                     transfer of such Mortgage to the Seller in the form of
                     the Registered Transfer; or

              (ii)   if the relevant Mortgage is over Unregistered Land, a
                     transfer to the Seller in the form of the Unregistered
                     Transfer; or

              (iii)  if the relevant Mortgage is a Scottish Mortgage, an
                     assignation to the Seller in the applicable form of
                     Scottish Transfer;

       (b)    a re-assignment or retrocession of the rights of the Mortgages
              Trustee in respect of the relevant Related Security each in a
              form reasonably acceptable to the Seller (which shall, in the
              case of the re-assignment of the Insurance Contracts, be
              substantially in the form of the Assignment of Insurance
              Contracts set out in Schedule 3 (Assignment of Insurance
              Contracts); and

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

8.9    Documentation: Upon any completion of the repurchase of any Mortgage
       Loan and its Related Security in accordance with this Clause 8
       (Warranties and Repurchase by the Seller) the Seller shall cease to be
       under any further obligation to hold any Title Deeds or other documents
       relating to such Mortgage Loan or Mortgage Loans and its Related
       Security to the order of the Mortgages Trustee and the Security Trustee
       and if the Mortgages Trustee or the Security Trustee then holds the
       Title Deeds, the Mortgages Trustee or, as the case may be, the Security
       Trustee shall forthwith return them to the Seller. Any such repurchase
       by the Seller of a Mortgage Loan or Mortgage Loans and its or their
       Related Security shall constitute a discharge and release of the Seller
       from any claims which the Mortgages Trustee and/or Funding or the
       Security Trustee may have against the Seller arising from the relevant
       Representation or Warranty in relation to that Mortgage Loan or
       Mortgage Loans and its or their Related Security only, but shall not
       affect any rights arising from a breach of any other express provision
       of this Agreement or any Representation or Warranty in relation to any
       other Mortgage Loan and other Related Security.

8.10   Notification: Forthwith after the Seller becomes aware of any event
       which may reasonably give rise to an obligation under Clause 8
       (Warranties and Repurchase by the Seller) to repurchase any Mortgage
       Loan it shall notify the Mortgages Trustee, Funding and the Security
       Trustee in writing thereof as soon as reasonably practicable.

8.11   No Prejudice: The terms of this Clause 8 (Warranties and Repurchase by
       the Seller) shall not prejudice the rights of the Mortgages Trustee or
       the Beneficiaries under the Mortgages

                                      25
<PAGE>

       Trust Deed.

8.12   Claims against Seller: If a breach of a Representation or Warranty
       arises in respect of any Mortgage Loan and (in either case) no
       repurchase requirement arises in respect of the Seller pursuant to this
       Clause 8 (Warranties and Repurchase by the Seller), neither the
       Mortgages Trustee, Funding nor the Security Trustee shall have any
       claim against the Seller in respect of, or in relation to, such breach
       of Representation or Warranty in relation to that Mortgage. For the
       avoidance of doubt, save as provided for in this Clause 8 (Warranties
       and Repurchase by the Seller), the Seller is not obliged to repurchase
       any other Mortgage Loan or its Related Security.

8.13   Assignment: If the Seller makes any payment to the Mortgages Trustee
       GIC Account (or as the Mortgages Trustee shall direct) in full
       satisfaction of any claim made by the Mortgages Trustee, Funding or the
       Security Trustee in relation to any Representation or Warranty set out
       in Schedule 1 (Representations and Warranties), the Mortgages Trustee,
       Funding or the Security Trustee, as the case may be, shall assign to
       the Seller such rights as they have against any third party which
       relate to such claim.

8.14   Repurchase Not Possible: If a Mortgage Loan has never existed, or has
       ceased to exist, such that it is not outstanding on the date on which
       it is due to be repurchased pursuant to this Clause 8 (Warranties and
       Repurchase by the Seller), the Seller shall not be obliged to
       repurchase the Mortgage Loan and the Related Security but shall instead
       indemnify the Mortgages Trustee, Funding and the Security Trustee
       against any loss suffered by reason of any Representation or Warranty
       relating to or otherwise affecting that Mortgage Loan being untrue or
       incorrect by reference to the facts subsisting at the date on which the
       relevant Representation or Warranty was given, provided that the amount
       of such indemnity shall not exceed the sum of (i) the Current Balance
       of the Mortgage Loan that would have been payable by the Borrower in
       respect of such Mortgage Loan on and after the relevant completion date
       for the repurchase in relation to such Mortgage Loan had the Mortgage
       Loan existed and complied with each of the Representations and
       Warranties set out Schedule 1 (Representations and Warranties) as at
       such date in relation to such Mortgage Loan and (ii) interest thereon
       from such relevant completion date at the weighted average yield of the
       Mortgage Loans.

8.15  Indemnity: The Seller shall indemnify the Mortgages Trustee against any
      loss suffered as a result of any Borrower exercising a Right of Set Off
      against the Mortgages Trustee provided that the amount of such indemnity
      in relation to any Mortgage Loan shall not exceed the sum of the Current
      Balance of that Mortgage Loan and interest payable by the Borrower under
      that Mortgage Loan as at the date that the Borrower exercises the Right
      of Set Off. In this clause "Right of Set Off" means any right of set off
      arising from a deposit of money made by the Borrower with the Seller or
      from any transaction between the Borrower and the Seller other than one
      relating to the Mortgage Loan.

8.16   Scottish Trust: Upon any completion of the repurchase or purchase by
       the Seller of any Scottish Mortgage Loan and its Related Security in
       accordance with this Clause 8 (Warranties and Repurchase by the Seller)
       such Scottish Mortgage Loan and its Related Security shall thereupon be
       released from the Scottish Trust and shall cease to form part of the
       Scottish

                                      26
<PAGE>

       Trust Property.

9.     Further Assurance

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

10.    Consequences of Breach

       Without prejudice to Clause 8 (Warranties and Repurchase by the
       Seller), the Mortgages Trustee, Funding and the Security Trustee
       severally acknowledge to and agree with the Seller, and the Security
       Trustee acknowledges to and agrees with Funding and the Mortgages
       Trustee, that the Seller shall have no liability or responsibility
       (whether, in either case, contractual, tortious or delictual, express
       or implied) for any loss or damage for or in respect of any breach of,
       or any act or omission in respect of, any of its obligations hereunder
       other than loss or damage directly (and not indirectly or
       consequentially) suffered by the Mortgages Trustee and/or Funding or
       the assets comprised in the Funding Security constituted by the Funding
       Deed of Charge by reason of such breach, act or omission. For this
       purpose (and without limiting the scope of the above exclusion in
       respect of indirect or consequential loss or damage) any loss or damage
       suffered by the Mortgages Trustee and/or Funding or such assets which
       would not have been suffered by it or such assets had the breach, act
       or omission in question not also been or given rise to an Event of
       Default or enforcement of the security constituted by the Funding Deed
       of Charge shall be treated as indirect or consequential loss or damage.

11.    Subordination

       The Seller agrees with the Mortgages Trustee, Funding and the Security
       Trustee that on the enforcement of any Mortgage any sums owed to the
       Seller by a Borrower secured under such Mortgage and the rights and
       remedies of the Seller in respect of the sums owed to the Seller shall
       at all times be subject and subordinated to any sums owed to the
       Mortgages Trustee by the Borrower and to the rights and remedies of the
       Mortgages Trustee in respect of such sums owed to the Mortgages Trustee
       by the Borrower.

12.    Non-Merger

       Any term of this Agreement to which effect is not given on the Initial
       Closing Date or on any Assignment Date (including in particular, but
       without limitation, the liability of the Seller under the
       Representations and Warranties and the provisions of Clause 4 (Sale and
       Purchase of New Mortgage Portfolios)) shall not merge and shall remain
       in full force and effect notwithstanding the sale and purchase
       contemplated by this Agreement.

13.    No Agency or Partnership

       It is hereby acknowledged and agreed by the parties that nothing in
       this Agreement shall be construed as giving rise to any relationship of
       agency, save as expressly provided herein, or

                                      27
<PAGE>

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

14.    Payments

       All payments to be made pursuant to this Agreement shall be made in
       sterling in immediately available funds without exercising or seeking
       to exercise any right of set-off as may otherwise exist and shall be
       deemed to be made when they are received by the payee and shall be
       accounted for accordingly unless failure to receive any payment is due
       to an error by the payee's bank.

15.    Assignment

15.1   Assignment: Subject always to the provisions of Clause 16 (Security
       Trustee), no party hereto shall be entitled to assign all or any part
       of its rights or obligations hereunder to any other party without the
       prior written consent of each of the other parties hereto (which shall
       not, if requested, be unreasonably withheld) save that Funding shall be
       entitled to assign by way of security all or any of its rights under
       this Agreement without such consent to the Security Trustee pursuant to
       the Funding Deed of Charge and the Security Trustee may at its sole
       discretion assign all or any of its rights under or in respect of this
       Agreement without such consent to any successor Security Trustee under
       the Funding Deed of Charge and may assign all of any part of the
       Funding Security upon an enforcement of the Funding Security in
       accordance with the Funding Deed of Charge.

15.2   Acknowledgement of Security Assignment: The Seller acknowledges that on
       the assignment pursuant to the Funding Deed of Charge by Funding to the
       Security Trustee of Funding's rights under this Agreement the Security
       Trustee may enforce such rights in the Security Trustee's own name
       without joining Funding in any such action (which right the Seller
       hereby waives) and the Seller hereby waives as against the Security
       Trustee any rights or equities in its favour arising from any course of
       dealing between the Seller and Funding.

16.    Security Trustee

16.1   Vesting of Rights: If there is any change in the identity of the
       security trustee in accordance with the Funding Deed of Charge, the
       Seller, the Mortgages Trustee and Funding shall execute such documents
       and take such action as the successor security trustee and the outgoing
       security trustee may require for the purpose of vesting in the
       successor security trustee the rights and obligations of the outgoing
       security trustee hereunder and releasing the outgoing security trustee
       from its future obligations under this Agreement and the Seller shall
       give notice thereof to the Rating Agencies.

16.2   No Assumption: It is hereby acknowledged and agreed that by its
       execution of this Agreement the Security Trustee shall not assume or
       have any of the obligations or liabilities of the Seller or Funding or
       the Mortgages Trustee hereunder. Furthermore, any liberty or power
       which may be exercised or any determination which may be made hereunder
       by the Security Trustee may be exercised or made in the Security
       Trustee's absolute discretion without any obligation to give reasons
       therefor, but in any event must be exercised or made in

                                      28
<PAGE>

       accordance with the provisions of the Funding Deed of Charge. Without
       prejudice to the generality of the foregoing, all references to the
       Security Trustee taking action in connection with any duty of the
       Seller shall also be read subject to Clause 25 and Schedule 4 of the
       Administration Agreement.

17.    New Intercompany Loans

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

       (a)    effecting any necessary changes to Clause 4 (Sale and Purchase
              of New Mortgage Portfolios);

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

       (c)    executing and delivering all documents required by Clause 4.4
              (Closing and Conditions Precedent) in relation to any New
              Mortgage Portfolio.

18.    Non Petition Covenant; Limited Recourse

18.1   Non Petition Covenant: Each of the parties hereto hereby agrees that it
       shall not institute against either Funding or the Mortgages Trustee any
       winding-up, administration, insolvency or similar proceedings so long
       as any sum is outstanding under any Intercompany Loan Agreement of any
       Issuer or for two years plus one day since the last day on which any
       such sum was outstanding.

18.2   Limited Recourse: Each of the parties hereto agrees that:

       (a)    in relation to the Mortgages Trustee, any amount payable by the
              Mortgages Trustee to any other party to this Agreement under
              this Agreement not being an amount payable out of the Trust
              Property in accordance with the terms of the Mortgages Trust
              Deed shall only be payable to the extent that on that date the
              Mortgages Trustee has sufficient funds to pay such amount out of
              fees paid to it under the Mortgages Trust Deed; and

       (b)    in relation to Funding:

              (i)    only the Security Trustee may enforce the security
                     created in favour of the Security Trustee under the
                     Funding Deed of Charge in accordance with the provisions
                     thereof;

              (ii)   notwithstanding any other provision of this Agreement or
                     any other Transaction Document, no sum due or owing to
                     any party to this Agreement from or by Funding under this
                     Agreement shall be payable by Funding except to the
                     extent that Funding has sufficient funds available or
                     (following

                                      29
<PAGE>

                     enforcement of the Funding Security) the Security Trustee
                     has realised sufficient funds from the Funding Security
                     to pay such sum subject to and in accordance with the
                     relevant Funding Priority of Payments and provided that
                     all liabilities of Funding required to be paid in
                     priority thereto or pari passu therewith pursuant to such
                     Funding Priority of Payments have been paid, discharged
                     and/or otherwise provided for in full; and

              (iii)  it shall not take any steps for the purpose of recovering
                     any amount payable by Funding or enforcing any rights
                     arising out of this Agreement against Funding otherwise
                     than in accordance with the Funding Deed of Charge.

18.3   Corporate Obligations: To the extent permitted by law, no recourse
       under any obligation, covenant, or agreement of any person contained in
       this Agreement shall be had against any shareholder, officer or
       director of such person as such, by the enforcement of any assessment
       or by any legal proceeding, by virtue of any statute or otherwise; it
       being expressly agreed and understood that this Agreement is a
       corporate obligation of each person expressed to be a party hereto and
       no personal liability shall attach to or be incurred by the
       shareholders, officers, agents or directors of such person as such, or
       any of them, under or by reason of any of the obligations, covenants or
       agreements of such person contained in this Agreement, or implied
       therefrom, and that any and all personal liability for breaches by such
       person of any of such obligations, covenants or agreements, either
       under any applicable law or by statute or constitution, of every such
       shareholder, officer, agent or director is hereby expressly waived by
       each person expressed to be a party hereto as a condition of and
       consideration for the execution of this Agreement.

19.    Amendments and Waiver

19.1   Entire Agreement: This Agreement sets out the entire agreement and
       understanding between the parties with respect to the subject matter of
       this Agreement superseding all prior oral or written understandings
       other than the other Transaction Documents.

19.2   Amendments and Waiver: No amendment or waiver of any provision of this
       Agreement nor consent to any departure by any of the parties therefrom
       shall in any event be effective unless the same shall be in writing and
       signed by each of the parties hereto. In the case of a waiver or
       consent, such waiver or consent shall be effective only in the specific
       instance and as against the party or parties giving it for the specific
       purpose for which it is given.

19.3   Rights cumulative: The respective rights of each of the parties to this
       Agreement are cumulative and may be exercised as often as they consider
       appropriate. No failure on the part of any party to exercise, and no
       delay in exercising, any right hereunder shall operate as a waiver
       thereof, nor shall any single or partial exercise of any such right
       preclude any other or further exercise thereof or the exercise of any
       other right. The remedies in this Agreement are cumulative and not
       exclusive of any remedies provided by law.

                                      30
<PAGE>

20.    Notices

       Any notices or other communication or document to be given or delivered
       pursuant to this Agreement to any of the parties hereto shall be
       sufficiently served if sent by prepaid first class post, by hand or by
       facsimile transmission and shall be deemed to be given (in the case of
       facsimile transmission) when despatched or (where delivered by hand) on
       the day of delivery if delivered before 17.00 hours on a London
       Business Day or on the next London Business Day if delivered thereafter
       or (in the case of first class post) when it would be received in the
       ordinary course of the post and shall be sent:

       (a)    in the case of the Seller, to Northern Rock plc, Northern Rock
              House, Gosforth, Newcastle upon Tyne NE3 4PL (facsimile number
              0191 213 2203) for the attention of the Group Secretary;

       (b)    in the case of the Mortgages Trustee, to Granite Finance
              Trustees Limited, 22 Grenville Street, St. Helier, Jersey JE4
              8PX, Channel Islands, (facsimile number 01534-609-333) for the
              attention of the Company Secretary;

       (c)    in the case of Funding, to Granite Finance Funding Limited, 4
              Royal Mint Court, London EC3N 4HJ, (facsimile number
              0207-332-6199) for the attention of the Company Secretary; and

       (d)    in the case of the Security Trustee, to The Bank of New York
              (London Branch), at One Canada Square, 48th Floor, London E14
              5AL (facsimile number 020-7964-6399) for the attention of
              Corporate Trust (Global Structured Finance),

       or to such other address or facsimile number or for the attention of
       such other person or entity as may from time to time be notified by any
       party to the others by fifteen days prior written notice in accordance
       with the provisions of this Clause 20.

21.    Third Party Rights

       A person who is not a party to this Agreement may not enforce any of
       its terms under the Contracts (Rights of Third Parties) Act 1999, but
       this shall not affect any right or remedy of a third party which exists
       or is available apart from that Act.

22.    Execution in Counterparts; Severability

22.1   Counterparts: This Agreement may be executed in any number of
       counterparts (manually or by facsimile) and by different parties hereto
       in separate counterparts, each of which when so executed shall be
       deemed to be an original and all of which when taken together shall
       constitute one and the same instrument.

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

                                      31
<PAGE>

23.    Governing Law and Submission to Jurisdiction

23.1   Governing Law: This Agreement is governed by, and shall be construed in
       accordance with, English law (PROVIDED THAT any terms of this Agreement
       which are particular to the law of Scotland shall be construed in
       accordance with Scots law).

23.2   Submission to Jurisdiction: Each of the parties hereto irrevocably
       agrees that the courts of England shall have jurisdiction to hear and
       determine any suit, action or proceeding, and to settle any disputes,
       which may arise out of or in connection with this Agreement and, for
       such purposes, irrevocably submits to the jurisdiction of such courts.

24.    Process Agent

       The Mortgages Trustee irrevocably and unconditionally appoints Mourant
       & Co. Capital (SPV) Limited at 4 Royal Mint Court, London EC3N 4HJ or
       otherwise at its registered office for the time being as its agent for
       service of process in England in respect of any proceedings in respect
       of this Agreement and undertakes that in the event of Mourant & Co.
       Capital (SPV) Limited ceasing so to act it will appoint another person
       with a registered office in London as its agent for service of process.

25.    Appropriate Forum

       Each of the parties hereto irrevocably waives any objection which it
       might now or hereafter have to the courts of England being nominated as
       the forum to hear and determine any Proceedings and to settle any
       disputes, and agrees not to claim that any such court is not a
       convenient or appropriate forum.

                                      32
<PAGE>

26.    Transaction Documents

       To the extent necessary to comply with the requirements of Section 2
       Law of Property (Miscellaneous Provisions) Act 1989, this Agreement
       incorporates by reference to them the Transaction Documents.

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

EXECUTED for and on behalf of                   )
NORTHERN ROCK PLC                               )
by:                                             )

------------------------------
Authorised Signatory

Title:
            -------------------

EXECUTED for and on behalf of                   )
GRANITE FINANCE TRUSTEES LIMITED                )
by:                                             )

------------------------------
Authorised Signatory

Name:

Title:

EXECUTED for and on behalf of                   )
GRANITE FINANCE FUNDING LIMITED                 )
by:                                             )

------------------------------
Authorised Signatory

Name:

Title:

                                      33
<PAGE>

EXECUTED for and on behalf of                   )
THE BANK OF NEW YORK                            )
by:                                             )

------------------------------
Authorised Signatory

Name:

Title:

                                      34
<PAGE>

                                  SCHEDULE 1
                        REPRESENTATIONS AND WARRANTIES

                                    Part 1

1.     The particulars of each Mortgage Loan and its related Mortgage in the
       Initial Mortgage Portfolio set out in Appendix A to this Agreement are
       complete, true and accurate in all material respects.

2.     Immediately prior to a Closing Date or an Assignment Date, as the case
       may be, subject to completion of any registration or recording which
       may be pending at H.M. Land Registry or the Registers of Scotland, the
       Seller was the absolute beneficial and legal owner of the Mortgages,
       the Related Security and the other property to be assigned and
       transferred by the Seller to the Mortgages Trustee under this Agreement
       at such Closing Date or such Assignment Date, as the case may be, and
       the Seller has not assigned (whether by way of absolute assignment or
       by way of security only), transferred, charged, disposed of or dealt
       with the benefit of any of the Mortgage Loans or their related
       Mortgages, any of the other rights relating thereto or any of the
       property, rights, titles, interests or benefits to be sold or assigned
       pursuant to this Agreement other than pursuant to this Agreement.

3.     With the exception of Personal Secured Loans, each Mortgage Loan and
       its related Mortgage and the Related Security constitutes a valid and
       binding obligation of the Borrower enforceable in accordance with its
       terms (save any terms which are not binding by virtue of the Unfair
       Terms in Consumer Contracts Regulations 1994 or the Unfair Terms in
       Consumer Contracts Regulations 1999) and each such related Mortgage and
       the Related Security secures the repayment of all advances, interest,
       costs and expenses payable by the relevant Borrower to the Seller in
       priority to any other charges registered against the relevant Mortgaged
       Property.

4.     At the time that it was made, each Mortgage Loan (other than Personal
       Secured Loans) complied in all respects with applicable laws and
       regulations including, without limitation, consumer protection, data
       protection and contract law.

5.     Subject to completion of any registration which may be pending at H.M.
       Land Registry or the Registers of Scotland, each Mortgage (other than a
       Mortgage in respect of a Personal Secured Loan) either constitutes, or
       will constitute, following registration at H.M. Land Registry (in
       England and Wales), a first ranking charge by way of legal mortgage or
       following registration or recording at the Registers in Scotland, a
       first ranking standard security over the relevant Mortgaged Property.

6.     Each relevant Mortgaged Property is located in England, Wales or
       Scotland.

7.     All steps necessary to perfect the Seller's title to each Mortgage Loan
       and its related Mortgage were duly taken at the appropriate time or are
       in the process of being taken with all due diligence.

8.     No lien or right of set-off or counterclaim (other than a Right of
       Set-off referred to in Clause 8.15 (Indemnity)) has been created or
       arisen between the Seller and any Borrower which

                                      35
<PAGE>

       would entitle such Borrower to reduce the amount of any payment
       otherwise due under the relevant Mortgage Loan save in relation to the
       Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair Terms
       in Consumer Contracts Regulations 1999 and save in relation to section
       75 of the Consumer Credit Act 1974.

9.     Prior to making a Mortgage Loan to a Borrower, the Seller instructed or
       required to be instructed on its behalf solicitors to carry out in
       relation to the relevant Mortgaged Property all investigations,
       searches and other actions that would have been undertaken by the
       Seller acting in accordance with standards consistent with those of a
       reasonable and prudent mortgage lender, lending to Borrowers in England
       and Wales (in respect of English Mortgage Loans) and Scotland (in
       respect of Scottish Mortgage Loans), when advancing money in an amount
       equal to such advance to an individual to be secured on a mortgaged
       property of the kind permitted under the Lending Criteria and a report
       on title was received by or on behalf of the Seller from such
       solicitors which, either initially or after further investigation
       revealed no material matter which would cause the Seller, acting
       reasonably, to decline the Mortgage Loan having regard to the Lending
       Criteria.

10.    In relation to each Mortgage the Borrower has a good and marketable
       title to the relevant Mortgaged Property.

11.    Prior to making a Mortgage Loan the relevant Mortgaged Property was
       valued by an independent valuer from the panel of valuers from time to
       time appointed by the Seller or by an employee valuer of the Seller,
       and the results of such valuation would be acceptable to a reasonable
       and prudent mortgage lender.

12.    Prior to making a Mortgage Loan, the nature and amount of such Mortgage
       Loan, the circumstances of the relevant Borrower and nature of the
       relevant Mortgaged Property satisfied the Lending Criteria in force at
       that time in all material respects.

13.    The exercise of any discretion by the Seller in the making of any
       Mortgage Loan has been consistent with the practice of a reasonable and
       prudent mortgage lender.

14.    Each Mortgage Loan and its related Mortgage has been made on the terms
       of the Standard Mortgage Documentation (so far as applicable) which has
       not been varied in any material respect, save for the making of the
       Base Rate Pledge.

15.    With the exception of agreements for Personal Secured Loans, no
       agreement for any Mortgage Loan (other than to the extent it relates to
       the funding of buildings insurance premiums) is or has ever been,
       wholly or partly regulated by the Consumer Credit Act 1974 (other than
       by Sections 137 to 140 of such Act) or constitutes an extortionate
       credit bargain under Sections 137 to 140 of such Act or, to the extent
       it is so regulated or partly regulated, all the requirements of the
       Consumer Credit Act have been met in full. No Mortgage Loan is, or has
       ever been, a linked transaction within Section 19 of the Consumer
       Credit Act.

16.    Interest on each Mortgage Loan: (a) is charged on the capital balance
       of each Mortgage Loan in accordance with the provisions of that
       Mortgage Loan and its related Mortgage; (b) is not in any event
       adjusted by reference to the principal amount due thereunder; (c) is
       payable

                                      36
<PAGE>

       monthly in advance; and (d) is calculated by reference to the Standard
       Variable Rate or the Bank of England Base Rate, subject to any
       applicable caps, discounts and fixed rates and the Base Rate Pledge;
       and (e) subject to (d) above, may be set by the Seller and its
       successors and assigns to that Mortgage Loan.

17.    No payment of interest (or in the case of Repayment Mortgage Loans,
       principal and interest) equivalent to an amount in excess of one
       month's instalment at the applicable rate in respect of a Mortgage Loan
       in the Initial Mortgage Portfolio was at any time during the 12 months
       before the relevant Closing Date or Assignment Date, as the case may
       be, in arrears.

18.    So far as the Seller is aware, no Borrower is in material breach of its
       Mortgage.

19.    So far as the Seller is aware, the underwriting, origination and
       completion of each Mortgage Loan is not the subject of fraud by any
       person (including, without limitation, the Borrower or any professional
       or third party employed or engaged on behalf of the Seller).

20.    As at the date of this Agreement, the first payment due has been paid
       by the relevant Borrower in respect of each Mortgage Loan and each
       Mortgage Loan was fully performing.

21.    Where any Borrower is or was entitled to repayment of any early
       repayment charge in respect of any mortgage previously held by the
       Borrower with the Seller, that repayment has been or will be made by
       the Seller.

22.    Except where a Mortgaged Property was at completion of the relevant
       Mortgage (or, where appropriate, in the case of self-build properties,
       at the date of completion of the relevant mortgaged property) covered
       by the Block Buildings Policy or a block buildings policy providing
       equivalent cover, the Seller took all reasonable steps to ensure that
       at the date of completion of the relevant Mortgage Loan each Mortgaged
       Property was:

       (a)    insured under a buildings policy either (i) in the joint names
              of the Borrower and the Seller or (ii) with the interest of the
              Seller noted thereon;

       (b)    insured under a Block Buildings Policy; or

       (c)    with respect to leasehold properties, insured by the relevant
              landlord with the Seller's approval,

       and in all cases against risks usually covered by a comprehensive
       buildings policy and to an amount not less than the full reinstatement
       cost of such Mortgaged Property as determined by an independent valuer
       or a valuer employed by the Seller.

23.    The Block Buildings Policy referred to above covers such fire and other
       commercial risks as would be required by the Seller acting in
       accordance with its normal standard for an amount not less than the
       full reinstatement value of the Properties covered by the Block
       Buildings Policy.

24.    The Insurance Contracts are in full force and effect and all premiums
       thereon due on or before the date of this Agreement have been paid in
       full and the Seller is not aware of any

                                      37
<PAGE>

       circumstances giving the insurer under the Insurance Contracts the
       right to avoid or terminate such policy in so far as it relates to the
       Mortgaged Properties or the Mortgage Loans. Where the Lending Criteria
       then in force required that a Mortgage Loan was covered by the
       Insurance Contract referred to in paragraph 1 of Schedule 4 (Insurance
       Contracts), that Mortgage Loan is covered by such Insurance Contract.

25.    To the extent that a Guarantee was required under the Lending Criteria
       in relation to a particular Mortgage Loan, that Guarantee constitutes
       the valid, binding and enforceable obligations of the guarantor
       thereunder (save to the extent that the Guarantee is not valid, binding
       or enforceable by virtue of the Unfair Terms in Consumer Contracts
       Regulations 1994 or the Unfair Terms in Consumer Contracts Regulations
       1999).

26.    If a Mortgaged Property is leasehold or long leasehold, written notice
       has been given to the landlord of the creation of the Mortgage.

27.    In relation to each English Mortgage, any person who at the date when
       the Mortgage Loan was made has been identified by the Borrower to the
       Seller as residing or about to reside in the relevant Mortgaged
       Property is either named as a joint Borrower or has signed a form of
       consent declaring that he or she agrees that any present or future
       rights or interests as he or she may have or acquire over or in respect
       of the relevant Mortgaged Property shall be postponed and made subject
       to the rights, interests and remedies of the Seller under the relevant
       Mortgage and that he or she shall not claim any such rights or
       interests against the Seller. In relation to each Scottish Mortgage,
       all necessary MHA Documentation has been obtained to as to ensure that
       neither the relevant Mortgage nor the relevant Mortgaged Property is
       subject to or affected by any statutory right of occupancy.

28.    No Borrower was under 18 years of age at the time of completion of the
       relevant Mortgage Loan.

29.    No Mortgage Loan has a final maturity beyond January 2039.

30.    The Seller has procured that full and proper accounts, books and
       records have been kept showing clearly all material transactions,
       payments, receipts and proceedings relating to that Mortgage Loan and
       its Mortgage and all such accounts, books and records are up to date
       and in the possession of the Seller or held to its order (subject to
       the provisions of the Mortgages Trust Deed).

31.    The origination and collection practices employed by the Seller with
       respect to the Mortgage Loans have been, in all respects, legal and
       consistent with the practice of a reasonable and prudent mortgage
       lender.

32.    The Seller has not received written notice of any litigation or claim
       calling into question in any material way its title to any Mortgage
       Loan and its Mortgage or the value of any security. The Seller is not
       engaged in any litigation, and no litigation is pending or threatened
       by the Seller, against any person in connection with any report,
       valuation, opinion, certificate, consent or other statement of fact or
       opinion given in connection with any Mortgage Loan received by the
       Seller in connection with the origination of any Mortgage Loan.

                                      38
<PAGE>

33.    In respect of any Mortgaged Property which is subject to a second or
       subsequent mortgage or standard security, the Seller has first priority
       for the full amount of the Mortgage Loan (other than in respect of a
       Personal Secured Loan) and all costs, fees and expenses relative
       thereto.

34.    Subject to completion of any registration or recording which may be
       pending at the H.M. Land Registry or the Registers of Scotland, all
       Property Deeds and Mortgage Loan Files are held by, or to the order of,
       the Seller.

35.    Each Borrower is a natural person, and no Borrower is at present an
       employee or an officer of the Seller.

36.    All Mortgage Loans were originated by or on behalf of the Seller in the
       ordinary course of the Seller's residential secured lending activities.
       No Mortgage Loan was acquired by the Seller subject to any discount and
       no Mortgage Loan has been written down by the Seller in its accounts.

37.    The Mortgage Loans and their related Mortgages contain no obligations
       on the part of the Seller to make any further advances, and all costs,
       fees and expenses incurred in making, closing or registering the
       Mortgage Loans and the Related Security have been paid in full.

38.    All formal approvals, consents and other steps necessary to permit a
       legal or equitable or beneficial transfer or a transfer of servicing
       away from the Seller of the Mortgage Loans and their related Mortgages
       to be sold under this Agreement whenever required under the Transaction
       Documents have been obtained or taken and there is no requirement in
       order for the transfer to be effective to notify the Borrower before,
       on or after any equitable or beneficial transfer or before any legal
       transfer of the Mortgage Loans and their related Mortgages.

39.    So far as the Seller is aware, none of the terms in any Mortgage Loan
       and its related Mortgage are unfair terms within the meaning of the
       Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair Terms
       in Consumer Contracts Regulations 1999 in any material respect save
       those which impose Early Repayment Charges.

40.    The Seller has confirmed to all relevant Borrowers that where any
       Mortgage Loan provides that where any Early Repayment Charge is payable
       at any time when the interest rate payable under that Mortgage Loan is
       equal to or set by reference to the Standard Variable Rate (including
       without limitation where the Mortgage Loan provides for a capped or
       discounted rate), the interest rate payable under that Mortgage Loan
       will be no more than 1.99 per cent. above the Bank of England's base
       rate.

41.    In relation to a Right to Buy Mortgage Loan:

(a)    in the case of each English Mortgage Loan the Seller was at the time of
       origination of that Mortgage Loan an approved lending institution
       within the meaning given to that expression in the Housing Act 1985;

       (b)    the original advance was made to the person exercising the right
              to buy; and

                                      39
<PAGE>

       (c)    the original advance was made for the purposes of enabling the
              recipient thereof to purchase the relevant Mortgaged Property.

       For the purpose of this paragraph 41, "Right to Buy Mortgage Loan"
       means (i) in relation to an English Mortgage Loan, a Mortgage Loan in
       respect of which the "right to buy" provisions of the Housing Act 1985
       apply (other than any Mortgage Loan in respect of which the period
       during which the statutory charge referred to in section 156 of that
       Act would have existed, had the relevant circumstances applied, has
       expired) and (ii) in relation to a Scottish Mortgage Loan, a Mortgage
       Loan in respect of which the "right to buy" provisions of the Housing
       (Scotland) Act 1987 apply (other than any Mortgage Loan in respect of
       which the period during which the seller's standard security referred
       to in section 72 of that Act remains in effect has expired).

42.    The loyalty discount applicable to certain Mortgage Loans after seven
       years will not apply to any such Mortgage Loans during any period when
       the interest rate is fixed.

43.    The Seller has paid to the relevant Borrower the full amount of the
       cashback payment in relation to any Cashback Mortgage Loan, either upon
       completion of the relevant Mortgage Loan or, if subsequent to
       completion, prior to the assignment of such Mortgage Loan to the
       Mortgages Trustee.

44.    No Mortgage Loan has a Current Balance of more than (pound)500,000.

45.    Each English Mortgage Loan and its Related Security in the Mortgage
       Portfolio was made not earlier than 1 July 1995 and each Scottish
       Mortgage Loan and its Related Security in the Mortgage Portfolio was
       made not earlier than 1 July 2001.

46.    Each Mortgage Loan was originated by the Seller in pounds sterling and
       is denominated in pounds sterling (or originated and denominated in
       euro at any time when the euro has been adopted as the lawful currency
       of the United Kingdom) and is currently repayable in pounds sterling.

47.    The Seller's Lending Criteria are consistent with the criteria that
       would be used by a reasonable and prudent mortgage lender.

48.    The Seller is not aware of any material claim outstanding under any of
       the Buildings Policies relating to a Mortgaged Property.

49.    No Mortgage Loan has an LTV greater than 95 per cent. In relation to
       Personal Secured Loans, the combined LTV of the maximum amount of
       credit provided under a Personal Secured Loan and the other Mortgage
       Loans secured on the same property is not greater than 95 per cent.

50.    Each Mortgage Loan (other than a Personal Secured Loan) has been made
       for one of the following purposes:

       (a)    the purchase of land; or

                                      40
<PAGE>

       (b)    the provisions of dwellings or business premises on any land; or

       (c)    the alteration, enlarging, repair or improvement of a dwelling
              or business premises on any land provided the creditor is the
              creditor under (i) an agreement by which the debtor is provided
              with credit for any of the purposes in (a) or (b) above or (ii)
              an agreement refinancing an agreement under which the debtor is
              provided with credit for any of the purposes in (a) or (b)
              above; or (iii) a debtor-creditor agreement secured by any land
              mortgage or standard security to refinance any existing
              indebtedness of the debtor, whether to the creditor or another
              person, under any agreement by which the debtor was provided
              with credit for any of the purposes in (a) and (b) above.

                                      41
<PAGE>

                                    Part 2

1.     In respect of each of the Preliminary Prospectus as of its date (except
       insofar as the information contained therein has been amended,
       supplemented or deleted in the Prospectus) and the Prospectus as at the
       date thereof:

       (a)    each of them contained all information with respect to the
              Seller, the Initial Mortgage Portfolio and to the Notes which
              was material in the context of the issue and offering of the
              Notes (including all information required by English law);

       (b)    the statements contained in each of them relating to the Seller
              and the Initial Mortgage Portfolio were in every material
              particular true and accurate and not misleading;

       (c)    the opinions and intentions expressed in each of them with
              regard to the Seller and the Initial Mortgage Portfolio were
              honestly held, were reached after considering all relevant
              circumstances and were based on reasonable assumptions;

       (d)    there were no other facts in relation to the Seller, the Initial
              Mortgage Portfolio or the Notes the omission of which would, in
              the context of the issue and offering of the Notes, make any
              statement in either of them misleading; and

       (e)    all reasonable enquiries had been made by the Seller to
              ascertain such facts and to verify the accuracy of all such
              information and statements.

2.     The Seller has not acquired or owned or possessed any rights in the
       Mortgages Trustee or Funding such that it would "control" the Mortgages
       Trustee or Funding within the meaning of section 416 ICTA 1988.

       There is not any "connection" (within the meaning of section 87 Finance
       Act 1996) between either the Mortgages Trustee or Funding,
       respectively, and any Borrower.

                                      42
<PAGE>

                                    Part 3

The Seller makes the following representations and warranties to each of the
Mortgages Trustee, Funding and the Security Trustee:

1.     Status: It is a public limited company duly incorporated, validly
       existing and registered under the laws of the jurisdiction in which it
       is incorporated, capable of being sued in its own right and not subject
       to any immunity from any proceedings, and it has the power to own its
       property and assets and to carry on its business as it is being
       conducted.

2.     Powers and authority: It has the power to enter into, perform and
       deliver, and has taken all necessary corporate and other action to
       authorise the execution, delivery and performance by it of each of the
       Transaction Documents to which it is or will be a party, and each such
       Transaction Document has been duly executed and delivered by it.

3.     Legal validity: Each Transaction Document to which it is or will be a
       party constitutes or when executed in accordance with its terms will
       constitute its legal, valid and binding obligation.

4.     Non-conflict: The execution by it of each of the Transaction Documents
       to which it is a party and the exercise by it of its rights and the
       performance of its obligations under such Transaction Documents will
       not:

       (a)    result in the existence or imposition of, nor oblige it to
              create, any Security Interest in favour of any person over all
              or any of its present or future revenues or assets save for any
              which are created under or pursuant to the Funding Deed of
              Charge;

       (b)    conflict with any document which is binding upon it or any of
              its assets;

       (c)    conflict with its constitutional documents; or

       (d)    conflict with any law, regulation or official or judicial order
              of any government, governmental body or court, domestic or
              foreign, having jurisdiction over it.

5.     No litigation: It is not a party to any material litigation,
       arbitration or administrative proceedings and, to its knowledge, no
       material litigation, arbitration or administrative proceedings are
       pending or threatened against it.

6.     Consents and Licences: All governmental consents, licences and other
       approvals and authorisations required in connection with the entry
       into, performance, validity and enforceability of, and the transactions
       contemplated by, the Transaction Documents have been obtained or
       effected (as appropriate) and are in full force and effect.

                                      43
<PAGE>

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

                                      44
<PAGE>

                                    Part 1

           FORM OF TRANSFER (REGISTERED LAND - ENGLAND AND WALES)

                 In the form of H.M. Land Registry Form TR4

                                      45
<PAGE>

                                    Part 2

          FORM OF TRANSFER (UNREGISTERED LAND - ENGLAND AND WALES)

This Transfer of Mortgages is made on [ ] between NORTHERN ROCK PLC
(registered number 3273685) whose registered office is at Northern Rock House,
Gosforth, Newcastle upon Tyne NE3 4PL (hereinafter called the "Transferor") of
the one part and GRANITE FINANCE TRUSTEES LIMITED (registered number 79309)
whose registered office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX,
Channel Islands (hereinafter called the "Transferee") of the other part.

WHEREAS:

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

(B)    By a mortgage sale agreement dated 26 March 2001 made between inter
       alios the Transferor and the Transferee (as amended, restated, varied,
       supplemented or novated from time to time), the Transferor has agreed
       to sell and the Transferee has agreed to buy all right, title, interest
       and benefit (both present and future) in and under the Mortgages for
       the consideration hereinafter mentioned.

NOW THIS DEED WITNESSETH as follows:

1.     In consideration of the sums payable and the other consideration under
       the Agreement by the Transferee (receipt of which is hereby
       acknowledged) the Transferor with full title guarantee hereby transfers
       unto the Transferee all right, title, interest and benefit (both
       present and future) in and under the Mortgages including for the
       avoidance of doubt:

       (i)    the right to demand, sue for, recover, receive and give receipts
              for all principal moneys payable or to become payable under the
              Mortgages or the unpaid part thereof and the interest due or to
              become due thereon; and

       (ii)   the benefit of all securities for such principal moneys and
              interest, the benefit of all consents to mortgage signed by
              occupiers of the Properties, and the benefit of and the right to
              sue on all covenants with the Transferor in each Mortgage and
              the right to exercise all powers of the Transferor in relation
              to each Mortgage; and

       (iii)  all the estate and interest in the Properties vested in the
              Transferor subject to redemption or cesser; and

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

                                      46
<PAGE>

IN WITNESS of which NORTHERN ROCK PLC has caused this Transfer to be executed
and delivered as a deed on the date which appears first above.

EXECUTED under THE COMMON SEAL of               )
NORTHERN ROCK PLC                               )
affixed by order of the Board of Directors      )
in the presence of:                             )

------------------------------
Authorised Signatory

Name:

Title:

------------------------------
Authorised Signatory

Name:

Title:

[Alternative methods of executing as a deed will be acceptable if effective]

                                      47
<PAGE>

                                    Part 3

                FORM OF TRANSFER (LAND REGISTER - SCOTLAND)

We, NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(Registered Number 3273685) and having our Registered Office at Northern Rock
House, Gosforth, Newcastle upon Tyne NE3 4PL (the Transferor) CONSIDERING THAT
in terms of a Mortgage Sale Agreement among us the Transferor, GRANITE FINANCE
TRUSTEES LIMITED, incorporated under the law of Jersey (Registered Number
79309) and having its Registered Office at 22 Grenville Street, St Helier,
Jersey JE4 8PX, Channel Islands (the Transferee) and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgage Sale Agreement) we have sold our whole right, title and interest
in and to the Standard Securities and others hereinafter mentioned to the
Transferee NOW THEREFORE we the Transferor IN CONSIDERATION of the sums
payable in terms of and in implement pro tanto of the Mortgage Sale Agreement
HEREBY ASSIGN to the Transferee as trustee under and in terms of the Mortgages
Trust Deed among us, the Transferor, the Transferee and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgages Trust Deed) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:

1      the Standard Securities granted by the respective parties whose names
       are specified in Column 3 of the Schedule annexed and executed as
       relative hereto in favour of us the Transferor for all sums due and to
       become due, to the extent of all sums now due and which may at any time
       or times hereafter become due under the said Standard Securities,
       registered said Standard Securities in the Land Register under the
       Title Number specified in the relative entry in Column 4 of the said
       Schedule on the date specified in the relative entry in Column 5 of the
       said Schedule; and

2      the whole rights and interest of us the Transferor in and under all and
       any personal bonds, credit agreements or agreements for loan (however
       constituted) secured by the said Standard Securities and granted by or
       entered into with the said respective parties whose names are specified
       in Column 3 of the said Schedule, together with all sums, present and
       future, due thereunder and all other rights, interests and benefits
       pertaining thereto:

With interest from and also arrears and accumulations of interest due and
unpaid as at [                  ]: And we grant warrandice: IN WITNESS WHEREOF
these presents typewritten on this [and the preceding] page are together with
the Schedule annexed hereto executed at [                  ] on the
[         ] day of [         ] as follows:

SUBSCRIBED for and on behalf of the
said
NORTHERN ROCK PLC

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

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

                                      48
<PAGE>

             Schedule referred to in the foregoing Assignation by
                               Northern Rock plc
                 in favour of GRANITE FINANCE TRUSTEES LIMITED

      1           2              3                4               5

 Account No.   Address     Borrowers Full   Title Number  Registration Date
                               Names

                                      49
<PAGE>

                                    Part 4

               FORM OF TRANSFER (SASINE REGISTER - SCOTLAND)

We, NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(Registered Number 3273685) and having our Registered Office at Northern Rock
House, Gosforth, Newcastle upon Tyne NE3 4PL (the Transferor) CONSIDERING THAT
in terms of a Mortgage Sale Agreement among us the Transferor, GRANITE FINANCE
TRUSTEES LIMITED, incorporated under the law of Jersey (Registered Number
79309) and having its Registered Office at 22 Grenville Street, St Helier,
Jersey JE4 8PX, Channel Islands (the Transferee) and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgage Sale Agreement) we have sold our whole right, title and interest
in and to the Standard Securities and others hereinafter mentioned to the
Transferee NOW THEREFORE we the Transferor IN CONSIDERATION of the sums
payable in terms of and in implement pro tanto of the Mortgage Sale Agreement
HEREBY ASSIGN to the Transferee as trustee under and in terms of the Mortgages
Trust Deed among us, the Transferor, the Transferee and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgages Trust Deed) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:

1      the Standard Securities granted by the respective parties whose names
       are specified in Column 3 of the Schedule annexed and executed as
       relative hereto in favour of us the Transferor for all sums due and to
       become due, to the extent of all sums now due and which may at any time
       or times hereafter become due under the said Standard Securities,
       recorded said Standard Securities in the Register for the County
       specified in the relative entry in Column 4 of the said Schedule on the
       date specified in the relative entry in Column 5 of the said Schedule;
       and

2      the whole rights and interest of us the Transferor in and under all and
       any personal bonds, credit agreements or agreements for loan (however
       constituted) secured by the said Standard Securities and granted by or
       entered into with the said respective parties whose names are specified
       in Column 3 of the said Schedule, together with all sums, present and
       future, due thereunder and all other rights, interests and benefits
       pertaining thereto:

With interest from and also arrears and accumulations of interest due and
unpaid as at [                  ]: And we grant warrandice: IN WITNESS WHEREOF
these presents typewritten on this [and the preceding] page are together with
the Schedule annexed hereto executed at [                  ] on the
[         ] day of [                  ] as follows:

SUBSCRIBED for and on behalf of the
said
NORTHERN ROCK PLC

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

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

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

                                      50
<PAGE>

   Schedule referred to in the foregoing Assignation by Northern Rock PLC
               in favour of Granite Finance Trustees Limited

      1          2              3               4                5

 Account No.  Address    Borrowers Full      County        Recording Date
                              Names

                                      51
<PAGE>

                                  SCHEDULE 3
                       ASSIGNMENT OF INSURANCE CONTRACTS

THIS ASSIGNMENT is made by way of deed on [         ]

BETWEEN

NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL ("Northern Rock");
and

GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands
(the "Mortgages Trustee")

WHEREAS

(A)    By a mortgage sale agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time "Mortgage Sale Agreement")
       and made between Northern Rock, as Seller, the Mortgages Trustee,
       Granite Finance Funding Limited ("Funding") and The Bank of New York,
       as security trustee (the "Security Trustee"), certain mortgages and
       standard securities (the "Mortgages") and the loans secured thereby
       were agreed to be transferred to the Mortgages Trustee.

(B)    Northern Rock has the benefit of the Insurance Contracts, as defined in
       the Master Definitions Schedule dated 26 March 2001 (as amended,
       varied, supplemented or novated from time to time) which relate to the
       Mortgages and the mortgaged properties upon which they are secured (the
       "Mortgaged Properties") as well as to certain mortgages and properties
       in which the Mortgages Trustee have no interest.

(C)    This Assignment is supplemental to the Mortgage Sale Agreement.

NOW THIS DEED WITNESSETH as follows:

In further consideration of the sums and the other consideration referred to
in the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee absolutely all the estate and interest in
the Insurance Contracts including the rights to receive the proceeds of any
claim to the extent only that such estate, interest, and rights relate to the
Mortgaged Properties and/or the Mortgages, to hold the same unto the Mortgages
Trustee absolutely.

                                      52
<PAGE>

IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be
executed and delivered as a Deed or the date which first appears above.

EXECUTED under THE COMMON SEAL of               )
NORTHERN ROCK PLC                               )
affixed by order of the Board of Directors      )
in the presence of:                             )

------------------------------
Authorised Signatory

Name:

Title:

------------------------------
Authorised Signatory

Name:

Title:

                                      53
<PAGE>

<TABLE>
<CAPTION>

                                      SCHEDULE 4
                                  INSURANCE CONTRACTS

Policy number          Insurer                  Policy name/type        Date of Policy

<S>                   <C>                      <C>                     <C>
1. NR 9501             Northern Rock Mortgage   Mortgage Indemnity      18.07.1996
                       Indemnity Company
                       Limited

2.(a)BL-HHS            AXA General Insurance    Supercover              01.01.1997
                       Limited                  Buildings and
                                                Contents

(b)DR-FHH              AXA General Insurance    Superchoice             01.01.1997
                       Limited                  Buildings and
                                                Contents

(c)DR-SGD              AXA General Insurance    Supercover Gold         01.11.1999
                       Limited                  Buildings and
                                                Contents

(d)AG112/Z1413248      AXA General Insurance    Contingency             18.10.1999
                       Limited Insurance

(e)AG112/Z1413256      AXA General Insurance    Properties in           18.10.1999
                       Limited Possession

(f)BL-BBR              AXA General Insurance    Cover Me                18.12.2000
                       Limited                  Buildings and
                                                Contents

</TABLE>

                                          54
<PAGE>

                                  SCHEDULE 5
                                    Part 1
                           ASSIGNMENT OF GUARANTEES

THIS ASSIGNMENT is made by way of deed on [         ]

BETWEEN:

NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL ("Northern Rock");
and

GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands
(the "Mortgages Trustee")

WHEREAS:

(A)    By a mortgage sale agreement dated 26 March 2001 ( as amended, varied,
       supplemented or novated from time to time the "Mortgage Sale
       Agreement") and made between Northern Rock, the Mortgages Trustee,
       Granite Finance Funding Limited and The Bank of New York, certain
       mortgages (the "Mortgages") were agreed to be transferred and assigned
       to the Mortgages Trustee.

(B)    Northern Rock has the benefit of the Guarantees as defined in the
       Master Definitions Agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time) which relate to certain of
       the Mortgages.

(C)    This Assignment is made pursuant to the Mortgage Sale Agreement.

NOW THIS DEED WITNESSETH as follows:

In further consideration of the sums and the other consideration referred to
in the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee all its right, title, interest and benefit
(both present and future) in the Guarantees relating to the Mortgages the
subject of a Transfer of even date herewith including for the avoidance of
doubt:

(i)    the benefit of and the right to sue on all covenants with and
       undertakings to Northern Rock in each Guarantee and the right to
       exercise all powers of Northern Rock in relation to each Guarantee; and

(ii)   all the estate and interest in the Guarantees vested in Northern Rock;

to hold the same unto the Mortgages Trustee absolutely.

IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be
executed and delivered as a deed on the date which first appears above.

                                      55
<PAGE>

EXECUTED under THE COMMON SEAL of               )
NORTHERN ROCK PLC                               )
affixed by order of the Board of Directors      )
in the presence of:                             )

------------------------------
Authorised Signatory

Name:

Title:

------------------------------
Authorised Signatory

Name:

Title:

[Alternative methods of executing as a deed will be acceptable if effective]

                                      56
<PAGE>

                                    Part 2

                           ASSIGNATION OF GUARANTEES

ASSIGNATION

by

NORTHERN  ROCK PLC,  incorporated  in England  (Registered  Number  3273685)
whose  Registered  Office is at  Northern  Rock House,  Gosforth,  Newcastle
upon Tyne NE3 4PL (Northern Rock);

in favour of

GRANITE FINANCE TRUSTEES LIMITED, incorporated in Jersey (Registered Number
79309) whose Registered Office is at 22 Grenville Street, St Helier, Jersey
JE4 8PX, Channel Islands (the "Mortgages Trustee")

WHEREAS:

(A)    By a mortgage sale agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time, the "Mortgage Sale
       Agreement") and made between Northern Rock, the Mortgages Trustee,
       Granite Finance Funding Limited and The Bank of New York, certain
       mortgage loans and their related security (the "Mortgages") were agreed
       to be transferred and assigned to the Mortgages Trustee;

(B)    Northern Rock has the benefit of the Guarantees as defined in the
       Master Definitions Agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time) which relate to certain of
       the Mortgages;

(C)    This Assignation is made pursuant to the Mortgage Sale Agreement;

NOW THEREFORE the parties hereby AGREE as follows:

1      Assignation

       Northern Rock hereby assigns to the Mortgage Trustee with absolute
       warrandice its whole right, title, benefit and interest, present and
       future, in and to the Guarantees governed by Scots law and detailed in
       the Schedule hereto (the "Scottish Guarantees") relating to the
       Mortgages including for the avoidance of doubt the benefit of and the
       right to sue on all obligations and undertakings to Northern Rock in
       each Scottish Guarantee and the right to exercise all powers of
       Northern Rock in relation to each Scottish Guarantee.

                                      57
<PAGE>

2      Intimation

       Northern Rock hereby undertakes to the Mortgages Trustee that it will,
       within fourteen days of the execution of this deed, serve a notice of
       assignation by recorded delivery post in such form as the Mortgage
       Trustee shall approve upon each of the Guarantors pursuant to each
       Scottish Guarantee.

3      Governing Law

       This deed shall be governed by Scots law and the parties hereto submit
       to the non-exclusive jurisdiction of the Scottish courts.

IN WITNESS WHEREOF these presents consisting of this and the preceding page
together with the Schedule annexed hereto are executed as follows:

SUBSCRIBED for and on behalf of the
said
NORTHERN ROCK PLC

at ..............................       ..................................

on ..............................       ..................................

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

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

SUBSCRIBED for and on behalf of the
said
GRANITE FINANCE TRUSTEES LIMITED

at ..............................       ..................................

on ..............................       ..................................

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

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

                                      58
<PAGE>

     Schedule referred to in the foregoing Assignation of Guarantees by
      Northern Rock PLC in favour of Granite Finance Trustees Limited

                            [Details of Guarantees]

                                      59
<PAGE>

                                  SCHEDULE 6
                         NEW MORTGAGE PORTFOLIO NOTICE

                                                    Dated [                  ]

1.     It is hereby agreed for the purpose of this notice the "Principal
       Agreement" shall mean the Mortgage Sale Agreement dated 26 March 2001
       made between (1) NORTHERN ROCK PLC (the "Seller"), (2) GRANITE FINANCE
       TRUSTEES LIMITED (the "Mortgages Trustee") (3) GRANITE FINANCE FUNDING
       LIMITED ("Funding") and (4) THE BANK OF NEW YORK (the "Security
       Trustee"), as the same may be amended, varied, supplemented or novated
       from time to time.

2.     Save where the context otherwise requires, words and expressions in
       this notice shall have the same meanings respectively as when used in
       the Principal Agreement.

3.     In accordance with and subject to Clause 4.1 (Agreement to Assign) of
       the Principal Agreement, upon receipt by the Seller of the duplicate of
       this notice signed by the Mortgages Trustee, there shall exist between
       the Seller and the Mortgages Trustee an agreement (the "Agreement for
       Sale") for the sale and assignment by the Seller to the Mortgages
       Trustee of the New Mortgage Loans and the Related Security more
       particularly described in the Schedule hereto (other than any New
       Mortgage Loans and their Related Security which have been redeemed in
       full prior to the next following Assignment Date). Completion of such
       sale shall take place, subject to the provisions of the Principal
       Agreement, on [               ] (the "Assignment Date").

4.     The Seller hereby confirms that the conditions required to be fulfilled
       pursuant to Clause 4.2 (Conditions to Effecting an Assignment of New
       Mortgage Loans) of the Principal Agreement have been fulfilled [/save
       for conditions ( ) ( ) and ( )]

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

Signed for and on behalf of                     )
NORTHERN ROCK PLC                               )
by:                                             )

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

[On duplicate

We hereby acknowledge receipt of the New Mortgage Portfolio Notice dated [
], and confirm [that the conditions set out in paragraph ( ) ( ) and ( ) of
Clause 4.2 (Conditions to Effecting an Assignment of New Mortgage Loans) have
been waived and] the sale and assignment of the New Mortgage Loans as set out
in that notice.

                                      60
<PAGE>

Signed for and on behalf of                     )
GRANITE FINANCE TRUSTEES LIMITED                )
by:                                             )

------------------------------]

                                      61
<PAGE>

                                   Schedule

1              2                       3                         4

Account No.    Property Address        Name(s)                   Date of
                                                                 Mortgage
                                                                 Completion

                                      62
<PAGE>

                                  SCHEDULE 7
                            LOAN REPURCHASE NOTICE

                                                    Dated [                  ]

1.     We refer to the Mortgage Sale Agreement dated 26 March 2001 (as
       amended, varied, supplemented or novated from time to time the
       "Principal Agreement") made between (1) NORTHERN ROCK PLC (the
       "Seller"), (2) GRANITE FINANCE TRUSTEES LIMITED (the "Mortgages
       Trustee") (3) GRANITE FINANCE FUNDING LIMITED ("Funding") and (4) THE
       BANK OF NEW YORK (the "Security Trustee").

2.     Save where the context otherwise requires, words and expressions in
       this notice shall have the same meanings respectively as when used in
       the Principal Agreement.

3.     We hereby send this notice pursuant to and in accordance with Clause
       [8.4 (Repurchase)/8.5 (Purchase of Product Switches, Further Advances
       and purchases relating to Personal Secured Loans)]* of the Principal
       Agreement, upon receipt of which you as [the Seller/the Mortgages
       Trustee]* will be required to [repurchase from us/re-sell to
       us/purchase from us/sell to us]* the Mortgage Loan(s) and Related
       Security set out in the attached schedule in accordance with the terms
       of Clause 8 (Repurchase) of the Principal Agreement on [insert date].

Signed for and on behalf of                     )
[GRANITE FINANCE TRUSTEES                       )
LIMITED/NORTHERN ROCK PLC]                      )
by:                                             )

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

* Delete as appropriate

                                      63
<PAGE>

                                   Schedule

1              2                       3                         4

Account No.    Property Address        Name(s)                   Date of
                                                                 Mortgage
                                                                 Completion

                                      64
<PAGE>

                                  SCHEDULE 8
                       FORM OF NOTIFICATION TO BORROWERS

[To:      Borrower]

Dear Sirs,

Northern Rock

Account No.[                  ]

We hereby notify you that on [        ] 2001, Northern Rock agreed to sell your
mortgage to Granite Finance Trustees Limited.

[Additional text will be allowed with Mortgages Trustee's and Security
Trustee's consent]

Yours faithfully,

Northern Rock plc

                                      65
<PAGE>

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

To:   Northern Rock plc
      Northern Rock House
      Gosforth
      Newcastle upon Tyne
      NE3 4PL

From: Granite Finance Trustees Limited
      22 Grenville Street
      St Helier
      Jersey
      Channel Islands
      JE4 8PX

Date: [                  ]

Pursuant to Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans) of the
mortgage sale agreement dated 26 March 2001 made between (1) Northern Rock
plc, (2) Granite Finance Funding Limited, (3) Granite Finance Trustees Limited
and (4) The Bank of New York (as amended, varied, supplemented or novated from
time to time the "Agreement") we hereby offer to re-sell to you the Mortgage
Loan(s) together with their Related Security, details of which are set out in
the attached print out, if such Mortgage Loan(s) become Re-Fixed Mortgage
Loans within 3 months of the expiry of the relevant initial fixed rate periods
applicable to that/those Mortgage Loans. If you wish to do so, please accept
this offer by payment to us of the consideration for the repurchase of the
relevant Mortgage Loan(s) and Related Security in accordance with Clause 8.6
(Repurchase of Fixed Rate Mortgage Loans) of the Agreement if such Mortgage
Loan(s) become Re-Fixed Mortgage Loans within 3 months of the expiry of the
relevant initial fixed rate periods applicable to that/those Mortgage Loans.
Capitalised terms used in this notice and not defined herein have the meanings
given to them in the Agreement.

Signed by or on behalf of                       )
GRANITE FINANCE TRUSTEES LIMITED                )
as Seller                                       )
[acting as its attorney NORTHERN ROCK PLC:]     )

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

                                      66
<PAGE>

                                  SCHEDULE 10

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

THIS DEED OF POWER OF ATTORNEY is made on the [o] by:

(1)    NORTHERN ROCK PLC whose registered office is at Northern Rock House,
       Gosforth, Newcastle upon Tyne NE3 4PL (registered number 3273685) in
       its capacity as Seller,

in favour of each of:

(2)    GRANITE FINANCE TRUSTEES LIMITED whose registered office is at 22
       Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands
       (registered number 79309) in its capacity as Mortgages Trustee;

(3)    GRANITE FINANCE FUNDING LIMITED, acting out of its branch office
       established in England (registered overseas company number FC022999 and
       branch number BR005916) at 4 Royal Mint Court, London EC3N 4HJ and

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

WHEREAS:

(A)    By virtue of a mortgage sale agreement (the "Mortgage Sale Agreement")
       dated 26 March 2001 and as subsequently amended, and made between (1)
       the Seller, (2) the Mortgages Trustee (3) Funding and (4) the Security
       Trustee, provision was made for the execution by the Seller of this
       Power of Attorney.

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

NOW THIS DEED WITNESSETH:

1.     The Seller irrevocably and by way of security for the performance of
       the covenants, conditions and undertakings on the part of the Seller
       contained in the Mortgage Sale Agreement and the Administration
       Agreement HEREBY APPOINTS each of Funding, the Mortgages Trustee and
       the Security Trustee (each an "Attorney") and any receiver and/or
       administrator appointed from time to time in respect of Funding and/or
       the Mortgages Trustee or their assets severally to be its true and
       lawful attorney for the Seller and in the Seller's name or otherwise to
       do any act, matter or thing which any Attorney considers necessary for

                                      67
<PAGE>

       the protection or preservation of that Attorney's interest in the
       Mortgage Loans, the Mortgages, the Mortgage Deeds and their Related
       Security or which ought to be done under the covenants, undertakings
       and provisions contained in the Mortgage Sale Agreement including
       (without limitation) any or all of the following that is say:

       (a)    to exercise its rights, powers and discretions under the
              Mortgage Loans, the Mortgages, the Mortgage Deeds and the
              Related Security including the right to fix the rate or rates of
              interest payable under the Mortgage Loans in accordance with the
              terms thereof (including whilst such Mortgage Loans subsist and
              subject to the consent of the Mortgages Trustee being given to
              the setting of such rates, setting the Standard Variable Rate of
              the Seller, such other discretionary rates and margins
              applicable to the Mortgage Loans and (other than in respect of
              the Security Trustee) the rate of (and terms relating to) the
              Existing Borrowers' Re-Fix Rate in the circumstances referred to
              in Clause 4 (Interest Rates) of the Administration Agreement
              provided that nothing in this Clause shall prevent the Seller
              (or any of its attorneys from time to time) from setting higher
              rates (and in the case of the Existing Borrowers' Re-Fix Rate,
              imposing terms more advantageous to the Mortgages Trustee) than
              those set or to be set or required or to be required by the
              Mortgages Trustee or Funding under this power of attorney;

       (b)    to exercise all the powers exercisable by the Seller by reason
              of its remaining for the time being the registered owner at H.M.
              Land Registry or registered or recorded heritable creditor in
              the Registers of Scotland of any of the Mortgage Loans, the
              Mortgages, the Mortgage Deeds and the Related Security and in
              particular, but without prejudice to the generality of the
              foregoing, to make Further Advances to Borrowers;

       (c)    to demand, sue for and receive all moneys due or payable under
              the Mortgage Loans, the Mortgages, the Mortgage Deeds and the
              Related Security or any such collateral security or related
              rights;

       (d)    to execute, sign, seal and deliver (using the company seal of
              the Seller where appropriate) a conveyance, assignation or
              transfer of the Mortgage Loans, the Mortgages, the Mortgage
              Deeds and the Related Security or any of them to the Mortgages
              Trustee and its successors in title or other person or persons
              entitled to the benefit thereof;

       (e)    to execute, sign, seal and deliver (using the company seal of
              the Seller where appropriate) a conveyance, assignment,
              assignation or transfer of the Related Security or any item
              comprised therein (to the extent only that such item or items
              relate to the Mortgage Loans) to the Mortgages Trustee and its
              successors in title or other person or persons entitled to the
              benefit thereof or entitled to be registered or recorded at H.M.
              Land Registry or the Registers of Scotland as proprietor or
              heritable creditor thereof (as the case may be);

       (f)    to discharge the Mortgages or the Related Security or any of
              them and to sign, seal, deliver and execute such receipts,
              releases, surrenders, instruments and deeds as may

                                      68
<PAGE>

              be required or advisable in order to discharge the relevant
              Mortgaged Property or Properties from the Mortgages or any of
              them; and

       (g)    to do every other act or thing which the Seller is obliged to do
              under the Mortgage Sale Agreement or which that Attorney may
              otherwise consider to be necessary proper or expedient for fully
              and effectually vesting or transferring the interests sold
              thereunder in the Mortgage Loans, the Mortgages, the Mortgage
              Deeds and their Related Security or any or each of them and/or
              the Seller's estate right and title therein or thereto in the
              Mortgages Trustee and its successors in title or other person or
              persons entitled to the benefit thereof (as the case may be) in
              the same manner and as fully and effectually in all respects as
              the Seller could have done.

2.     Each Attorney shall have the power by writing under its hand by an
       officer of the Attorney from time to time to appoint a substitute who
       shall have power to act on behalf of the Seller as if that substitute
       shall have been originally appointed Attorney by this deed (including,
       without limitation, the power of further substitution) and/or to revoke
       any such appointment at any time without assigning any reason therefor.

3.     The laws of England shall apply to this deed and the interpretation
       thereof and to all acts of the Attorney carried our or purported to be
       carried out under the terms hereof.

4.     The Seller hereby agrees at all times hereafter to ratify and confirm
       whatsoever the said Attorney or its attorneys shall lawfully do or
       cause to be done in and concerning the Mortgage Loans, the Mortgages or
       the Mortgage Deeds or their Related Security by virtue of this deed.

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

EXECUTED under THE COMMON SEAL of               )
NORTHERN ROCK PLC                               )
affixed in the presence of:                     )

------------------------------
Authorised Signatory

Name:

Title:

------------------------------
Authorised Signatory

Name:

Title:

                                      69
<PAGE>

                                  SCHEDULE 11

                          FORM OF SCOTTISH TRUST DEED

DECLARATION OF TRUST

among

NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(registered number 3273685), having its registered office at Northern Rock
House, Gosforth, Newcastle upon Tyne NE3 4PL (in its capacity as seller of the
Mortgage Loans, the "Seller" and, in its capacity as a beneficiary of the
Mortgages Trust, the "Seller Beneficiary");

GRANITE FINANCE TRUSTEES LIMITED, incorporated under the laws of Jersey
(registered number 79309), and having its registered office at 22 Grenville
Street, St. Helier, Jersey, JE4 8PX, Channel Islands (the "Mortgages
Trustee"); and

GRANITE FINANCE FUNDING LIMITED, incorporated under the laws of Jersey
(registered number 79308), but acting out of its branch office established in
England (registered overseas company number FC022999 and branch number
BR005916) at 4 Royal Mint Court, London EC3N 4HJ ("Funding" and, in its
capacity as a beneficiary of the Mortgages Trust, the "Funding Beneficiary"
and, together with the Seller Beneficiary, the "Beneficiaries" and each a
"Beneficiary").

WHEREAS:

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

(B)    In terms of the Mortgages Trust Deed entered into among the Seller,
       Funding and the Mortgages Trustee dated 26 March 2001 (as amended,
       restated, varied, supplemented or novated from time to time, the
       "Mortgages Trust Deed") and the Mortgages Trust constituted in terms
       thereof the Mortgages Trustee holds the Trust Property on trust for the
       Beneficiaries;

(C)    In terms of the Mortgage Sale Agreement entered into among the Seller,
       the Mortgages Trustee, Funding and the Security Trustee dated 26 March
       2001 (as amended, restated, varied, supplemented or novated from time
       to time, the "Mortgage Sale Agreement") the Seller has agreed to sell
       and assign the Scottish Trust Property to the Mortgages Trustee to be
       held thereafter by the Mortgages Trustee under and in terms of the
       Mortgages Trust; and

(D)    In implementation of Clause 4.4 of the Mortgage Sale Agreement and
       pending the taking of legal title to the Scottish Trust Property by the
       Mortgages Trustee, the Seller has undertaken to grant this deed;

NOW THEREFORE the parties HEREBY AGREE and DECLARE as follows:

                                      70
<PAGE>

1      Interpretation

In this deed:-

1.1    Words and expressions defined in the Master Definitions Schedule as
       amended and restated by (and appearing in Appendix 1 to) the Master
       Definitions [ ] Amendment and Restatement Deed made on [ ] between,
       among others, the parties hereto (as the same have been and may be
       further amended , restated, varied or supplemented from time to time
       with the consent of the parties thereto) shall, except where the
       context otherwise requires and save where otherwise defined herein,
       have the same meanings in this deed, including the recitals hereto, and
       this deed shall be construed in accordance with the interpretation
       provisions set out in Clause 2 thereof; and

1.2    "Scottish Trust Property" shall mean the Scottish Mortgage Loans and
       the Scottish Mortgages and other Related Security relative thereto
       brief particulars of which are detailed in the schedule annexed and
       executed as relative hereto, together with:

       a)     all principal sums (including all Further Advances, Further
              Draws and Re-Draws), interest and expenses, present or future,
              comprised therein and secured thereby and the right to demand,
              recover, receive and give receipts for the same;

       b)     the Seller's whole right and interest in the Mortgaged
              Properties secured by the said Scottish Mortgages;

       c)     all rights of action of the Seller against any person in
              connection with any report, valuation, opinion, certificate,
              consent or other statement of fact or opinion given in
              connection with any of the said Scottish Mortgage Loans and
              their Related Security;

       d)     all powers and remedies for enforcing the said Scottish Mortgage
              Loans and their Related Security and all proceeds resulting
              therefrom; and

       e)     all other monies, rights, interests, benefits and others
              pertaining thereto or deriving therefrom, including the benefit
              and proceeds of any insurance policy pertaining thereto.

2      Declaration of Trust

       The Seller hereby DECLARES that from and after the date hereof it holds
       and, subject to Clause 9 (Termination of Trust) hereof, shall
       henceforth hold the Scottish Trust Property and its whole rights,
       title, benefit and interest, present and future, therein and thereto in
       trust absolutely for the Mortgages Trustee and its assignees (whether
       absolutely or in security) whomsoever.

3      Intimation

       The Seller hereby intimates to the Mortgages Trustee the coming into
       effect of the trust hereby declared and created and the Mortgages
       Trustee by its execution hereof immediately subsequent to the execution
       of this Deed by the Seller acknowledges such intimation.

                                      71
<PAGE>

4      Dealings with Trust Property and Negative Pledge

       The Seller warrants and undertakes to the Mortgages Trustee that:

       4.1    as at the date hereof, it holds (subject to any pending
              registration or recording in the Registers of Scotland) legal
              title to the Scottish Trust Property unencumbered by any fixed
              or floating charge or other Security Interest;

       4.2    it shall not create or agree to create any fixed or floating
              charge or other Security Interest over or which may attach to or
              affect the whole or any part of the Scottish Trust Property or
              otherwise dispose of the same at any time when such property or
              part thereof remains subject to the trust hereby created; and

       4.3    it shall deal with the Scottish Trust Property (including
              without limitation the calculation and setting of any interest
              rate applicable thereto) in accordance with the provisions of
              the Transaction Documents and the specific written instructions
              (if any) of the Mortgages Trustee or its foresaids and shall
              take, subject to Clause 9 (Termination of Trust) hereof, any
              such action as may be necessary (including without limitation
              the raising or defending of any proceedings in any court of law
              whether in Scotland or elsewhere) to secure or protect the title
              to the Scottish Trust Property but only in accordance with the
              specific written instructions (if any) of the Mortgages Trustee
              or its foresaids.

5      Change of Trustee

       Except with the prior written consent of the Mortgages Trustee or its
       foresaids and (for so long as each retains any right or interest in the
       Scottish Trust Property) Funding and the Security Trustee, the Seller
       shall not be entitled to resign office as a trustee or assume a new
       trustee or trustees under this Deed.

6      Power of Beneficiary

       6.1    The Mortgages Trustee, as beneficiary hereunder, shall have the
              right in the circumstances stated in Clause 6 (Perfection of the
              Assignment) of the Mortgage Sale Agreement to complete its title
              to the Scottish Trust Property or any part thereof or to call
              upon the Seller to execute and deliver to the Mortgages Trustee
              or its foresaids valid assignations and transfers (including
              where applicable Scottish Transfers) of the Scottish Trust
              Property or any part thereof, and that notwithstanding the
              winding-up of the Seller or the administration of the Seller, or
              the appointment of any receiver to all or any part of the
              Scottish Trust Property.

       6.2    Without prejudice to the generality of Clause 6.1, the Seller
              undertakes to the Mortgages Trustee and binds and obliges itself
              that, upon the occurrence of any one of the events specified in
              Clause 6.1(a) to (f) of the Mortgage Sale Agreement, it will
              within five London Business Days of such occurrence provide such
              information as is necessary to enable the Mortgages Trustee to
              complete Scottish Transfers (including all schedules and
              annexures thereto) in relation to the whole of the Scottish
              Mortgages comprised within the Scottish Trust Property.

                                      72
<PAGE>

       6.3    For further assuring the said rights and powers specified in
              this Clause 6, the Seller has granted a power of attorney in
              favour of the Mortgages Trustee, Funding and the Security
              Trustee substantially in the form set out in Schedule 10 to the
              Mortgage Sale Agreement.

7      Mortgages Trustee Declaration of Trust

       7.1    The Mortgages Trustee by its said execution of this Deed hereby
              DECLARES that its whole right, title and beneficial interest in
              and to the Scottish Trust Property in terms of this Deed are and
              shall be held (to the extent not already so held) by the
              Mortgages Trustee under and in terms of the Mortgages Trust and
              all monies received or held by the Mortgages Trustee relating
              thereto or deriving therefrom have been and shall be comprised
              in the Trust Property as defined in the Mortgages Trust Deed and
              shall be subject to and administered by the whole terms and
              conditions of the Mortgages Trust Deed and the Administration
              Agreement.

       7.2    Each of the Seller, the Seller Beneficiary, Funding and the
              Funding Beneficiary hereby acknowledge, accept and agree to the
              declaration constituted by and the whole other terms and
              conditions of the foregoing Clause 7.1.

8      Mortgages Trust Intimation

       The Mortgages Trustee hereby intimates to the Beneficiaries of the
       Mortgages Trust, the declaration of trust made in terms of Clause 7
       hereof and the Beneficiaries of the Mortgages Trust by their respective
       executions of this Deed acknowledge such intimation.

9      Termination of Trust

       If at any time during the subsistence of the trust hereby declared and
       created:

       9.1    full legal title to any part or parts of the Scottish Trust
              Property is taken by the Mortgages Trustee or its foresaids in
              accordance with the provisions of Clause 6 (Perfection of the
              Assignment) of the Mortgage Sale Agreement (which in the case of
              any Scottish Mortgage shall be constituted by the registration
              or recording of the title thereto in the Registers of Scotland);
              or

       9.2    any Scottish Mortgage Loan and Related Security comprised within
              the Scottish Trust Property has been repurchased by the Seller
              pursuant to Clauses 8.4 to 8.6 (inclusive) of the Mortgage Sale
              Agreement; or

       9.3    any such Scottish Mortgage Loan and Related Security has been
              redeemed in full and therefore no longer forms part of the
              Mortgage Portfolio; then

       the trust hereby declared and created shall (but only when the relevant
       events or transaction have been completed irrevocably, validly and
       full) ipso facto fall and cease to be of effect in respect of such part
       or parts of the Scottish Trust Property but shall continue in full
       force and effect in respect of the whole remainder (if any) of the
       Scottish Trust Property.

                                      73
<PAGE>

10     Variation

       This Deed and the trust hereby declared and created shall not be varied
       in any respect without the consent in writing of the Mortgages Trustee
       or its foresaids and (for so long as each retains any right or interest
       in the Scottish Trust Property) Funding and the Security Trustee.

11     Governing Law

11.1   This Deed shall be governed by, and construed in accordance with, Scots
       law, other than Clauses 7 and 8 hereof which shall be governed by, and
       construed in accordance with, English law.

11.2   The parties hereto submit to the non-exclusive jurisdiction of the
       Scottish courts so far as not already subject thereto and waive any
       right or plea of forum non conveniens in respect of such jurisdiction.

12     Registration

       The parties consent to the registration of this deed for preservation.

IN WITNESS WHEREOF these presents consisting of this and the preceding [four]
pages together with the Schedule hereto are subscribed by the Seller, the
Mortgages Trustee and Funding as follows:

As Seller and as Seller Beneficiary:

SUBSCRIBED by
NORTHERN ROCK PLC
acting by:

......................   Director          .....................      Director
(Print Full Name)                               (Signature)

......................   Director/         .....................      Director/
(Print Full Name)        Secretary              (Signature)         Secretary

all together at
on

                                      74
<PAGE>

As Mortgages Trustee:

SUBSCRIBED by
GRANITE FINANCE TRUSTEES LIMITED
acting by:

......................   Director          .....................      Director
(Print Full Name)                               (Signature)

......................   Director/         .....................      Director/
(Print Full Name)        Secretary              (Signature)         Secretary

all together at
on

As Funding and as Funding Beneficiary:

SUBSCRIBED by
GRANITE FINANCE FUNDING LIMITED
acting by:

......................   Director          .....................      Director
(Print Full Name)                               (Signature)

......................   Director/         .....................      Director/
(Print Full Name)        Secretary              (Signature)         Secretary

all together at
on

                                      75
<PAGE>

This is the Schedule to the foregoing Scottish Trust Deed between Northern
Rock PLC, Granite Finance Trustees Limited and Granite Finance Funding
Limited

                Scottish Mortgage Loans and Related Security

   1                   2                        3                  4

Account No.    Property Address        Borrower Name(s)          Date of
                                                                 Mortgage
                                                                 Completion

                                      76
<PAGE>

                                  SCHEDULE 12

                              LENDING CRITERIA /1/

General

To proceed with obtaining a Mortgage Loan, each prospective Borrower completes
an application form which includes information with respect to the applicant's
income from all sources, current employment details, bank account information
(where the Borrower has a bank account), current mortgage information (if
applicable) and certain other personal information. A credit reference agency
search is made against each Borrower at their current address and, if
necessary, former addresses, in all cases which will give details of any
public information which includes county court judgements and details of any
bankruptcy.

Employment details

The Seller operates the following policy in respect of the verification of
Borrower income details. Under this policy, Borrowers are categorised as
either "employed" or "self-employed" by the Seller.

Proof of income for employed prospective Borrowers may be established by:

(a)    two current cumulative monthly payslips or, if paid weekly, the last
       three consecutive payslips; or

(b)    Form P60, or employer's reference, with evidence of continued
       employment.

Proof of income for self-employed prospective Borrowers may be established by:

(a)    a letter from the Borrower's accountant in acceptable form; or

(b)    acceptable confirmation of self-employment which might include any of a
       tax return, accountant's letter or a trade invoice, together with a
       certificate from the Borrower as to income.

For certain Mortgage Loan products, particularly those that may involve larger
maximum loan amounts or higher loan to value ("LTV") ratios, the Seller
generally will require an acceptable accountant's letter or audited accounts.

Income Capacity

The following maximum income multiples are applied in determining the amount
of the Mortgage Loan:

(a)    Single applicant- 3.50 times gross income for all Mortgage Loans (other
       than Together Mortgage Loans); 3.80 times gross income for Together
       Mortgage Loans.

--------
/1/ These Lending Criteria apply to Mortgage Loans other than Personal Secured
Loans.

                                      77
<PAGE>

(b)    Joint applicants - a sum equal to: (1) the higher of 2.75 times the
       joint gross income of the applicants (3.00 times joint gross income for
       Together Mortgage Loans), or 3.50 times the highest earning applicant's
       gross income (3.80 times the highest joint gross income for Together
       Mortgage Loans) plus (2) the gross income of the other applicant.

Valuation

The Seller requires that a valuation of the Mortgaged Property be obtained
either from its in-house valuation department or from an independent firm of
professional valuers selected from a panel of approved valuers. Details of
professional indemnity insurance held by panel valuers are kept by the Seller.
All valuations of Properties are reviewed by the person underwriting the
Mortgage Loan and/or the valuation team.

Property Types

The Seller applies the criteria set out below in determining the eligibility
of Properties to serve as security for Mortgage Loans. Under these criteria,
eligible property types include freehold, heritable and leasehold houses,
leasehold and heritable flats and mixed commercial and residential use
properties where there is a separate entrance for the residential part of the
Mortgaged Property. In the case of a Mortgage Loan secured by a leasehold
property, the Seller requires that the unexpired term of the lease be at least
30 years from the end of the agreed mortgage term, with a minimum remaining
term of 50 years from the beginning of the mortgage term.

Certain property types falling outside the criteria may be considered on a
case by case basis. However, certain property types will not be considered for
the purposes of providing security for a Mortgage Loan. The types of property
falling within this category comprise freehold flats (in England and Wales),
shared ownership or shared equity schemes and properties of non-standard
construction of a type considered to be defective.

Loan Amount

Generally, the maximum loan amount is (pound)500,000, but this varies
according to the application in question. In exceptional cases, this limit may
be exceeded.

Term

Each Mortgage Loan must have an initial term of between 7 and 30 years (in the
case of a Together Mortgage Loan, a Together Connections Mortgage Loan and a
Connections Mortgage Loan) or between 7 and 35 years in the case of all other
Mortgage Loans.

Age of applicant

All Borrowers in respect of non-Together Mortgage Loans must be aged 18 or
over. All Borrowers in respect of Together Mortgage Loans must be aged 21 or
over. There are no maximum age limits.

                                      78
<PAGE>

Discretion to lend outside Lending Criteria

On a case-by-case basis, and within approved limits as detailed in the
Seller's lending policy, the Seller may have determined that, based upon
compensating factors, a prospective Borrower who did not strictly qualify
under its lending criteria warranted an underwriting exception. Compensating
factors may include, but are not limited to, a low LTV ratio, stable
employment and time in residence at the applicant's current residence.

Maximum Loan To Value

For Mortgage Loans up to (pound)250,000, the maximum LTV ratio permitted is 95
per cent. of the current market value of the Mortgaged Property determined by
the valuation. For Mortgage Loans up to (pound)400,000 the maximum LTV ratio
permitted is 90 per cent. of the current market value of the Mortgaged
Property determined by relevant valuation. For Mortgage Loans of over
(pound)400,000 the maximum LTV ratio permitted is 85 per cent. of the current
market value of the Mortgaged Property determined by valuation.

                                      79
<PAGE>

<TABLE>
<CAPTION>

                                         SCHEDULE 13

                                    STANDARD DOCUMENTATION

Doc No.          Document                                                Period in Use

<S>             <C>                                                     <C>
1.               (a) NRBS Mortgage Offer - General Conditions            01/07/95 to 31/12/95

                 (b)NRBS Mortgage Offer - General Conditions             01/01/96 to 30/11/96

                 (c)NRBS Mortgage Offer - General Conditions             01/12/96 to 30/09/97

2.               NRBS Mortgage Deed                                      01/07/95 to 30/09/97

3.               NRBS Mortgage Conditions Booklet 1995                   01/07/95 to 30/09/97

4.               (a)NR plc Mortgage Offer - General Conditions           01/10/97 to 31/12/97

                 (b)NR plc Mortgage Offer - General Conditions           01/12/97 to 31/12/97

                 (c)NR plc Mortgage Offer - General Conditions           01/01/98 to 31/05/98

                 (d)NR plc Mortgage Offer - General Conditions           01/06/98 to 31/12/98

                 (e)NR plc Mortgage Offer - General Conditions           01/01/99 to present

5.               NRBS/NR plc Transitional Mortgage Deed                  01/07/97 to 01/10/97

6.               NR plc Mortgage Deed                                    01/10/97 to present

7.               NR plc Mortgage Conditions 1997                         01/10/97 to present

8.               NR plc "Together" Mortgage Deed                         01/04/99 to present

9.               Discounted Mortgage Brochures

10.              Discounted Mortgage Special Conditions

11.              Cashback Mortgage Brochures

12.              Cashback Mortgage Special Conditions

13.              Fixed Rate Mortgage Brochures

14.              Fixed Rate Mortgage Special Conditions

15.              Together Mortgage Brochures

16.              Together Mortgage Special Conditions

</TABLE>

                                             80
<PAGE>

<TABLE>
<CAPTION>

                                                           APPENDIX A
                                              THE INITIAL MORTGAGE LOAN PORTFOLIO

Account No            Property Address            Name of Borrower(s)        Date of Mortgage Completion        Current Balance

<S>                  <C>                         <C>                        <C>                                <C>

</TABLE>

                                                               81

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