Document:

AMENDED AND RESTATED MASTER ISSUER CASH          EXHIBIT 4.9
                             MANAGEMENT AGREEMENT

                               21 NOVEMBER 2007

                          PERMANENT MASTER ISSUER PLC
                              (AS MASTER ISSUER)

                                      AND

                             BANK OF SCOTLAND PLC
                        (AS MASTER ISSUER CASH MANAGER)

                                      AND

                             THE BANK OF NEW YORK
                      (AS MASTER ISSUER SECURITY TRUSTEE)

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                                   CONTENTS

CLAUSE                                                                     PAGE

1.       Definitions and Interpretation.......................................1
2.       Appointment of Master Issuer Cash Manager............................2
3.       Master Issuer Cash Management Services...............................2
4.       Payments, Accounts, Ledgers..........................................3
5.       No Liability.........................................................9
6.       Costs and Expenses...................................................9
7.       Information..........................................................9
8.       Remuneration........................................................11
9.       Covenants of Master Issuer Cash Manager.............................11
10.      Non-Exclusivity.....................................................12
11.      Termination.........................................................12
12.      Further Assurance...................................................15
13.      New Notes...........................................................15
14.      Miscellaneous.......................................................15
15.      Confidentiality.....................................................16
16.      Notices.............................................................16
17.      Variation and Waiver................................................17
18.      No Partnership......................................................17
19.      Assignment..........................................................17
20.      Exclusion of Third Party Rights.....................................18
21.      Counterparts........................................................18
22.      Governing Law.......................................................18
23.      Submission to Jurisdiction..........................................18

SCHEDULE

1.       Master Issuer Cash Management Services..............................19
2.       Cash Management and Maintenance of Ledgers..........................21
3.       Form of Master Issuer Quarterly Report..............................30

Signatories..................................................................33

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THIS AMENDED AND RESTATED MASTER ISSUER CASH MANAGEMENT AGREEMENT (this
AGREEMENT) is made as a deed on 21 November 2007

BETWEEN:

(1)      PERMANENT MASTER ISSUER PLC (registered number 5922774), a public
         limited company incorporated under the laws of England and Wales,
         whose registered office is at 35 Great St. Helen's, London EC3A 6AP
         (the MASTER ISSUER);

(2)      BANK OF SCOTLAND PLC (registered number SC327000) (formerly The
         Governor and Company of the Bank of Scotland), a public limited
         company incorporated under the laws of Scotland whose registered
         office is at The Mound, Edinburgh, EH1 1YZ (acting in its capacity as
         the MASTER ISSUER CASH MANAGER); and

(3)      THE BANK OF NEW YORK, a New York banking corporation whose London
         branch address is at One Canada Square, London E14 5AL (acting in its
         capacity as the MASTER ISSUER SECURITY TRUSTEE, which expression shall
         include such company and all other persons and companies for the time
         being acting as security trustee under the Master Issuer Deed of
         Charge).

WHEREAS:

(A)      On the Initial Closing Date and on subsequent Closing Dates the Master
         Issuer will issue Notes constituted by the Trust Deed and/or on
         subsequent Advance Dates the Master Issuer will borrow Master Issuer
         Subordinated Loans pursuant to the Master Issuer Subordinated Loan
         Agreements and/or Master Issuer Start-Up Loans pursuant to the Master
         Issuer Start-up Loan Agreements. The Master Issuer will make the Rated
         Loan Tranches, the Subordinated Loan Tranches and the Start-Up Loan
         Tranches available to Funding 2 from the proceeds of the issue of the
         Notes, the Master Issuer Subordinated Loans and the Master Issuer
         Start-up Loans.

(B)      Halifax (then in its capacity as the Master Issuer Cash Manager)
         agreed to provide cash management services to the Master Issuer and
         the Master Issuer Security Trustee on the terms and subject to the
         conditions contained in the Master Issuer Cash Management Agreement.

(C)      On the Reorganisation Date, pursuant to the HBOS Group Reorganisation
         Act 2006, The Governor and Company of the Bank of Scotland was
         registered as a public company under the Companies Act 1985 and
         changed its name to Bank of Scotland plc and the business and all
         property and liabilities of Halifax (including its rights and
         obligations under the Master Issuer Cash Management Agreement) were
         transferred to Bank of Scotland.

(D)      The parties hereto have agreed to amend and restate the Master Issuer
         Cash Management Agreement on the date hereof as set out herein.

IT IS HEREBY AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      The master definitions and construction schedule signed by, amongst
         others, the parties to this Agreement and dated 21 November 2007 (as
         the same may be amended, varied or supplemented from time to time with
         the consent of the parties thereto) (the MASTER DEFINITIONS AND
         CONSTRUCTION SCHEDULE) and the amended and restated master issuer
         master definitions and construction schedule signed by, amongst
         others, the parties to this Agreement and dated 21 November 2007 (as
         the same may be amended, varied or supplemented from time to time)
         (the MASTER ISSUER MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) are
         expressly and specifically incorporated into this Agreement and,

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         accordingly, the expressions defined in the Master Definitions and
         Construction Schedule and the Master Issuer Master Definitions and
         Construction Schedule shall, except where the context otherwise
         requires and save where otherwise defined herein, have the same
         meanings in this Agreement, including the Recitals hereto, and this
         Agreement shall be construed in accordance with the interpretation
         provisions set out in Clause 3 of the Master Definitions and
         Construction Schedule and in Clause 3 of the Master Issuer Master
         Definitions and Construction Schedule.

1.2      This Agreement amends and restates the Master Issuer Cash Management
         Agreement dated 17 October 2006 (the PRINCIPAL AGREEMENT). As of the
         date of this Agreement, any future rights or obligations (excluding
         such rights and obligations accrued to the date of this Agreement) of
         a party to the Principal Agreement shall be extinguished and shall
         instead be governed by this Agreement.

2.       APPOINTMENT OF MASTER ISSUER CASH MANAGER

2.1      APPOINTMENT

         Until termination pursuant to Clause 11, the Master Issuer and the
         Master Issuer Security Trustee (according to their respective estates
         and interests) have appointed the Master Issuer Cash Manager as their
         lawful agent to provide the Master Issuer Cash Management Services set
         out in this Agreement. The Master Issuer Cash Manager has accepted
         such appointment on the terms and subject to the conditions of this
         Agreement.

2.2      DUTIES PRESCRIBED BY TRANSACTION DOCUMENTS

         For the avoidance of doubt and in connection with the powers conferred
         under Clause 2.1, save as expressly provided elsewhere in this
         Agreement, nothing in this Agreement shall be construed so as to give
         the Master Issuer Cash Manager any powers, rights, authorities,
         directions or obligations other than as specified in this Agreement or
         any of the other Master Issuer Transaction Documents.

2.3      APPOINTMENT CONDITIONAL UPON ISSUANCE OF NOTES

         The appointment pursuant to Clause 2.1 was conditional upon the issue
         of Notes on the Initial Closing Date and was effective upon and from
         the Initial Closing Date automatically without any further action on
         the part of any person PROVIDED THAT if the first issue of Notes had
         not occurred by 30 October 2006, or such later date as the Master
         Issuer and the Lead Managers may have agreed, this Agreement would
         have ceased to be of further effect.

3.       MASTER ISSUER CASH MANAGEMENT SERVICES

3.1      GENERAL

         The Master Issuer Cash Manager shall provide the services set out in
         this Agreement (including, for the avoidance of doubt, the Schedules)
         (the MASTER ISSUER CASH MANAGEMENT SERVICES).

3.2      APPROVALS AND AUTHORISATIONS

         The Master Issuer Cash Manager shall maintain, or procure the
         maintenance of, the approvals, authorisations, consents and licences
         required in connection with the business of the Master Issuer and
         shall prepare and submit, or procure the preparation and submission
         of, on behalf of the Master Issuer, all necessary applications and
         requests for any further approvals, authorisations, consents or
         licences which may be required in connection with the business of the
         Master Issuer and shall, so far as it is reasonably able to do so,
         perform the Master Issuer Cash Management Services in such a way as
         not to prejudice the continuation of any such approvals,
         authorisations, consents or licences.

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3.3      COMPLIANCE WITH TRANSACTION DOCUMENTS, ETC.

         The Master Issuer Cash Management Services shall include procuring (so
         far as the Master Issuer Cash Manager, using its reasonable
         endeavours, is able so to do) compliance by the Master Issuer with all
         applicable legal requirements and with the terms of the Master Issuer
         Transaction Documents, PROVIDED ALWAYS THAT the Master Issuer Cash
         Manager shall not lend or provide any sum to the Master Issuer and
         that the Master Issuer Cash Manager shall have no liability whatsoever
         to the Master Issuer, the Master Issuer Security Trustee or any other
         person for any failure by the Master Issuer to make any payment due
         under any of the Master Issuer Transaction Documents (other than to
         the extent arising from any failure by the Master Issuer Cash Manager
         to perform any of its obligations under any of the Master Issuer
         Transaction Documents).

3.4      LIABILITY OF MASTER ISSUER CASH MANAGER

(a)      The Master Issuer Cash Manager shall indemnify each of the Master
         Issuer and the Master Issuer Security Trustee on demand on an after
         Tax basis for any loss, liability, claim, expense or damage suffered
         or incurred by it in respect of the negligence, fraud or wilful
         default of the Master Issuer Cash Manager in carrying out its
         functions as Master Issuer Cash Manager under, or as a result of a
         breach by the Master Issuer Cash Manager of, the terms and provisions
         of this Agreement or such other Master Issuer Transaction Documents to
         which the Master Issuer Cash Manager is a party (in its capacity as
         such) in relation to such functions.

(b)      For the avoidance of doubt, the Master Issuer Cash Manager shall not
         be liable in respect of any loss, liability, claim, expense or damage
         suffered or incurred by the Master Issuer or the Master Issuer
         Security Trustee or any other person as a result of the proper
         performance of the Master Issuer Cash Management Services by the
         Master Issuer Cash Manager save to the extent that such loss,
         liability, claim, expense or damage is suffered or incurred as a
         result of any negligence, fraud or wilful default of the Master Issuer
         Cash Manager under, or as a result of a breach by the Master Issuer
         Cash Manager of, the terms and provisions of this Agreement or any of
         the other Master Issuer Transaction Documents to which the Master
         Issuer Cash Manager is a party (in its capacity as such) in relation
         to such functions.

4.       PAYMENTS, ACCOUNTS, LEDGERS

4.1      MASTER ISSUER TRANSACTION ACCOUNT

(a)      The Master Issuer Cash Manager hereby confirms that the Master Issuer
         Transaction Account has been established on or before the date of this
         Agreement and that the mandate in the agreed form applied to this
         Agreement from the Programme Date. The Master Issuer Cash Manager
         undertakes (to the extent to which the same is within its control in
         its capacity as Master Issuer Cash Manager) that from the Programme
         Date the Master Issuer Transaction Account has been and will continue
         to be operative and that the Master Issuer Cash Manager will not
         knowingly create or permit to subsist any Security Interest in
         relation to the Master Issuer Transaction Account other than as
         created under or permitted pursuant to the Master Issuer Deed of
         Charge.

(b)      The Master Issuer Cash Manager shall procure that the following
         amounts are paid into the Master Issuer Transaction Account:

                 (i)     all amounts of interest paid on the Loan Tranches;

                 (ii)    all repayments or prepayments of principal on the Loan
                         Tranches;

                 (iii)   all amounts received by the Master Issuer pursuant to
                         the Master Issuer Swap Agreements (excluding the
                         return or transfer of any Excess Swap Collateral as
                         set

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                         out in the relevant Master Issuer Swap Agreement and
                         in respect of each Master Issuer Swap Provider, prior
                         to the designation of an early termination date under
                         the relevant Master Issuer Swap Agreement and the
                         resulting application of the collateral by way of
                         netting or set-off, an amount equal to the value of
                         all collateral (other than Excess Swap Collateral)
                         provided by such Master Issuer Swap Provider to the
                         Master Issuer pursuant to the relevant Master Issuer
                         Swap Agreement (and any interest or distributions in
                         respect thereof)); and

                 (iv)    any other amounts whatsoever received by or on behalf
                         of the Master Issuer after the Programme Date,

         and the Master Issuer Cash Manager shall procure that all interest
         earned on the Master Issuer Transaction Account and all investment
         proceeds from and income and distributions arising from time to time
         in respect of Authorised Investments purchased from amounts standing
         to the credit of the Master Issuer Transaction Account are credited to
         such account.

(c)      Each of the payments into the Master Issuer Transaction Account
         referred to in Clause 4.1(b) shall be made forthwith upon receipt by
         the Master Issuer or the Master Issuer Cash Manager of the amount in
         question.

(d)      For the avoidance of doubt, as soon as reasonably practicable after
         becoming aware of the same, the Master Issuer Cash Manager may, and
         shall, withdraw Cash from the Master Issuer Transaction Account if,
         and to the extent that, such Cash was credited thereto in error and
         shall use its reasonable endeavours to ensure that such Cash is
         applied correctly thereafter.

(e)      The Master Issuer Cash Manager shall promptly notify each of the
         Master Issuer and the Master Issuer Security Trustee in writing of any
         additional account which supplements or replaces any account
         specifically referred to in the definition of the Master Issuer
         Transaction Account in the Master Issuer Master Definitions and
         Construction Schedule.

(f)      Each of the Master Issuer Cash Manager and the Master Issuer
         undertakes that, so far as it is able to procure the same, the Master
         Issuer Transaction Account and all instructions and mandates in
         relation thereto will continue to be operative and will not, save as
         permitted pursuant to the Master Issuer Bank Account Agreement, be
         changed without the prior written consent of the Master Issuer
         Security Trustee (such consent not to be unreasonably withheld or
         delayed). For the avoidance of doubt, the Master Issuer Cash Manager
         may change the authorised signatories in respect of any instructions
         or mandates without the prior written consent of the Master Issuer
         Security Trustee, in accordance with the terms of the Master Issuer
         Bank Account Agreement.

4.2      ADDITIONAL MASTER ISSUER ACCOUNTS AND MASTER ISSUER SWAP COLLATERAL
         ACCOUNTS

(a)      If established, the Master Issuer Cash Manager will not knowingly
         create or permit to subsist any Security Interest in relation to any
         Additional Master Issuer Account or any Master Issuer Swap Collateral
         Account other than as created under or permitted pursuant to the
         Master Issuer Deed of Charge.

(b)      The Master Issuer Cash Manager shall procure that the relevant amounts
         are paid into the applicable Master Issuer Account or applicable
         Master Issuer Swap Collateral Account and the Master Issuer Cash
         Manager shall procure that all interest earned on the relevant
         Additional Master Issuer Account or relevant Master Issuer Swap
         Collateral Account and all investment proceeds from and income and
         distributions arising from time to time in respect of Authorised
         Investments purchased from amounts standing to the credit of an
         Additional Master Issuer Account are credited to such account.

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(c)      Each of the payments into the Additional Master Issuer Account or any
         Master Issuer Swap Collateral Account referred to in Clause 4.2(b)
         shall be made forthwith upon receipt by the Master Issuer or the
         Master Issuer Cash Manager of the amount in question.

(d)      For the avoidance of doubt, as soon as reasonably practicable after
         becoming aware of the same, the Master Issuer Cash Manager may, and
         shall, withdraw Cash from an Additional Master Issuer Account or a
         Master Issuer Swap Collateral Account if, and to the extent that, such
         Cash was credited thereto in error and shall use its reasonable
         endeavours to ensure that such Cash is applied correctly thereafter.

(e)      The Master Issuer Cash Manager shall promptly notify each of the
         Master Issuer and the Master Issuer Security Trustee in writing of any
         additional account which is established pursuant to clause 3.1 or
         clause 3.3 of the Master Issuer Bank Account Agreement or any account
         established to replace or supplement such account.

(f)      Each of the Master Issuer Cash Manager and the Master Issuer
         undertakes that, so far as it is able to procure the same, the
         Additional Master Issuer Accounts and any Master Issuer Swap
         Collateral Accounts and all instructions and mandates in relation
         thereto will continue to be operative and will not, save as permitted
         pursuant to the Master Issuer Bank Account Agreement be changed
         without the prior written consent of the Master Issuer Security
         Trustee (such consent not to be unreasonably withheld or delayed). For
         the avoidance of doubt, the Master Issuer Cash Manager may change the
         authorised signatories in respect of any instructions or mandates
         without the prior written consent of the Master Issuer Security
         Trustee, in accordance with the terms of the Master Issuer Bank
         Account Agreement.

4.3      WITHDRAWALS

(a)      The Master Issuer Cash Manager may make withdrawals on behalf of the
         Master Issuer from a Master Issuer Account, as permitted by this
         Agreement, until such time as the Master Issuer Cash Manager receives
         a copy of a Note Acceleration Notice served on the Master Issuer, but
         shall not in carrying out its functions as Master Issuer Cash Manager
         under this Agreement otherwise make withdrawals from a Master Issuer
         Account.

(b)      Upon receipt of such a Note Acceleration Notice, no amount shall be
         withdrawn from the Master Issuer Accounts by the Master Issuer Cash
         Manager without the prior written consent of the Master Issuer
         Security Trustee.

4.4      CASH MANAGEMENT

         In administering the Master Issuer Accounts on behalf of the Master
         Issuer and the Master Issuer Security Trustee, the Master Issuer Cash
         Manager shall comply with the provisions of Schedule 2 prior to
         receipt by the Master Issuer Cash Manager of a copy of any Note
         Acceleration Notice served on the Master Issuer. Following service of
         a Note Acceleration Notice on the Master Issuer, the Master Issuer
         Security Trustee or any Receiver appointed by the Master Issuer
         Security Trustee will administer the Master Issuer Accounts in
         accordance with the terms of the Master Issuer Deed of Charge.

4.5      MASTER ISSUER LEDGERS

(a)      The Master Issuer Cash Manager shall open and maintain in the books of
         the Master Issuer the following ledgers:

                 (i)     the Master Issuer Revenue Ledger, which shall record
                         all Master Issuer Revenue Receipts (which shall
                         exclude any fees to be paid by Funding 2 on each
                         Funding 2

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                         Interest Payment Date under the terms of the Master
                         Intercompany Loan Agreement) (other than in respect of
                         any termination payment due by the Master Issuer in
                         respect of any Master Issuer Swap)) standing to the
                         credit of the Master Issuer Accounts from time to time
                         and a sub-ledger in respect of each Series and Class
                         of Notes, each Master Issuer Subordinated Loan and
                         each Master Issuer Start-Up Loan, which shall record
                         interest received in respect of each corresponding
                         Rated Loan Tranche funded by each such Series and
                         Class of Notes, interest received in respect of each
                         corresponding Subordinated Loan Tranche funded by each
                         such Master Issuer Subordinated Loan and interest and
                         principal received in respect of each corresponding
                         Start-Up Loan Tranche funded by each such Master
                         Issuer Start-Up Loan (respectively);

                 (ii)    the Master Issuer Principal Ledger, which shall record
                         all Master Issuer Principal Receipts standing to the
                         credit of the Master Issuer Accounts from time to time
                         and a sub-ledger in respect of each Series and Class
                         of Notes and each Master Issuer Subordinated Loan,
                         which shall record principal repayments in respect of
                         each corresponding Rated Loan Tranche funded by each
                         such Series and Class of Notes and each corresponding
                         Subordinated Loan Tranche funded by each such Master
                         Issuer Subordinated Loan; and

                 (iii)   the Master Issuer Swap Collateral Ledger (which shall
                         comprise of such sub-ledgers as the Master Issuer Cash
                         Manager considers appropriate), to record all
                         payments, transfers and receipts in connection with
                         Swap Collateral, including, without limitation:

                         (A)     the receipt of any Swap Collateral by the
                                 Master Issuer from the Master Issuer Swap
                                 Providers;

                         (B)     the receipt of any income or distributions in
                                 respect of such Swap Collateral;

                         (C)     the payment or transfer of all, or any part
                                 of, such Swap Collateral to the relevant
                                 Master Issuer Swap Provider; and

                         (D)     the payment or transfer of all, or any part
                                 of, such Swap Collateral to the relevant
                                 Master Issuer Accounts,

                 provided that the Master Issuer Swap Collateral Ledger (and
                 sub-ledgers) shall only be established in the event that any
                 Master Issuer Swap Provider pays or transfers Swap Collateral
                 to the Master Issuer in accordance with the relevant Master
                 Issuer Swap Agreement;

                 (iv)    the Master Issuer Expense Ledger, which shall record
                         payments of fees received from Funding 2 under the
                         Master Intercompany Loan and payments out in
                         accordance with the Master Issuer Pre-Enforcement
                         Revenue Priority of Payments;

                 (v)     the Master Issuer Note Ledger, which shall be divided
                         into segregated sub-ledgers each of which shall record
                         payments made under each Series and Class of Notes
                         (each of which shall be further divided into
                         sub-ledgers to record payments of interest and fees
                         and repayments and prepayments of principal made under
                         such Series and Class of Notes together with any
                         termination payment made by the Master Issuer in
                         respect of the corresponding Master Issuer Swap
                         (excluding any Master Issuer Swap Excluded Termination
                         Amount) ;

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                 (vi)    the Master Issuer Subordinated Loan Ledger, which
                         shall be divided into segregated sub-ledgers each
                         which shall record payments made under each Master
                         Issuer Subordinated Loan (each of which shall be
                         further divided into sub-ledgers to record payments of
                         interest and repayments and prepayments of principal
                         made under each Master Issuer Subordinated Loan); and

                 (vii)   the Master Issuer Start-Up Loan Ledger, which shall be
                         divided into segregated sub-ledgers each of which
                         shall record payments made under each Master Issuer
                         Start-up Loan (each of which shall be further divided
                         into sub-ledgers to record payments of interest and
                         repayments and prepayments of principal made under
                         such Master Issuer Start-up Loan).

(b)      The Master Issuer Cash Manager shall make credits and debits to the
         Master Issuer Ledgers in accordance with the provisions of paragraphs
         5 to 10 of Schedule 2 hereto.

4.6      TERMINATION

         If on or prior to the date of the earlier of (i) repayment in full of
         any Series and Class of Notes or (ii) the service of a Note
         Acceleration Notice on the Master Issuer, any of the Master Issuer
         Swaps related to such Series and Class are terminated, the Master
         Issuer Cash Manager (on behalf of the Master Issuer and the Master
         Issuer Security Trustee) shall purchase a replacement hedge (taking
         into account any early termination payment received from the relevant
         Master Issuer Swap Provider) in respect of such Series and Class of
         Notes, against, as appropriate:

         (a)     fluctuations in the relevant currency swap rate between
                 Dollars and Sterling or the possible variance between LIBOR
                 for three-month Sterling deposits and either:

                 (i)     LIBOR for one-month Dollar deposits (in relation to
                         any such Series and Class of Notes that are US Dollar
                         Notes and that are Money Market Notes); or

                 (ii)    LIBOR for three-month Dollar deposits (in relation to
                         any such Series and Class of Notes that are US Dollar
                         Notes and that are not Money Market Notes); or

         (b)     fluctuations in the relevant currency swap rate between Euro
                 and Sterling or the possible variance between LIBOR for
                 three-month Sterling deposits and either:

                 (i)     EURIBOR for one-month Euro deposits (in relation to
                         any such Series and Class of Notes that are the Euro
                         Notes and that are Money Market Notes); or

                 (ii)    EURIBOR for three-month Sterling deposits (in relation
                         to any such Series and Class of Notes that are the
                         Euro Notes and that are not Money Market Notes); or

         (c)     fluctuations in the relevant currency swap rate between the
                 Specified Currency and Sterling or the possible variance
                 between LIBOR for three-month Sterling deposits and either:

                 (i)     LIBOR for one-month deposits of the Specified Currency
                         (in relation to any such Series and Class of Notes of
                         the Specified Currency that are Money Market Notes);
                         or

                 (ii)    LIBOR for three-month deposits of the Specified
                         Currency (in relation to any such Series and Class of
                         Notes that are not Money Market Notes);

         in each case, on terms acceptable to the Rating Agencies and the
         Master Issuer and the Master Issuer Security Trustee and with a swap
         provider whom the Rating Agencies have previously confirmed in

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         writing to the Master Issuer and the Master Issuer Security Trustee
         will not cause the then current ratings of the Notes to be downgraded.

4.7      SWAP COLLATERAL

(a)      In the event that, pursuant to the terms of a Master Issuer Swap
         Agreement, a Master Issuer Swap Provider pays or transfers Swap
         Collateral to the Master Issuer, the Master Issuer Cash Manager shall:

                 (i)     if not already created, create the Master Issuer Swap
                         Collateral Ledger in the books of the Master Issuer so
                         as to record the amount and type of such Swap
                         Collateral and identify the relevant Master Issuer
                         Swap Agreement in respect of which it has been posted;

                 (ii)    upon receipt of such Swap Collateral, credit it to and
                         record the relevant details in the Swap Collateral
                         Ledger;

                 (iii)   to the extent that such Swap Collateral is in the form
                         of Cash, pay it into the relevant Master Issuer Swap
                         Collateral Cash Account; and

                 (iv)    to the extent that such Swap Collateral is in the form
                         of securities, arrange for it to be credited to the
                         relevant Master Issuer Swap Collateral Securities
                         Account.

(b)      Any such Swap Collateral shall not form part of the Master Issuer
         Available Funds provided that, if the terms of the relevant Master
         Issuer Swap Agreement permit such Swap Collateral to be applied in or
         towards satisfaction of the relevant Master Issuer Swap Provider's
         obligations under the relevant Master Issuer Swap Agreement, and in
         the event that such Swap Collateral is to be so applied, the Master
         Issuer Cash Manager shall:

                 (i)     where the relevant Swap Collateral is in the form of
                         Cash, transfer the relevant amount of Cash from the
                         relevant Master Issuer Swap Collateral Cash Account to
                         the Master Issuer Transaction Account; or

                 (ii)    where the relevant Swap Collateral is in the form of
                         securities, realise the Swap Collateral and pay the
                         amount of the net proceeds into the Master Issuer
                         Transaction Account,

         and, in each case, make the appropriate debits and credits to the
         Master Issuer Swap Collateral Ledger. Swap Collateral will form part
         of the Master Issuer Available Revenue Receipts on its transfer or
         payment into the Master Issuer Transaction Account in accordance with
         this Clause 4.7(b).

(c)      To the extent that, pursuant to the terms of the relevant Master
         Issuer Swap Agreement, Swap Collateral is to be transferred or paid to
         the relevant Master Issuer Swap Provider, the Master Issuer Cash
         Manager shall:

                 (i)     where the relevant Swap Collateral is in the form of
                         Cash, pay the relevant amount of Cash out of the
                         relevant Swap Collateral Cash Account to the Master
                         Issuer Swap Provider; or

                 (ii)    where the relevant Swap Collateral is in the form of
                         securities, transfer and deliver the Swap Collateral
                         to the Master Issuer Swap Provider,

         and, in each case, debit the Master Issuer Swap Collateral Ledger as
         appropriate.

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(d)      The terms of this Clause 4.7 shall prevail if and to the extent that
         they are inconsistent with the other paragraphs of this Clause 4.

4.8      NOTIFICATION TO MASTER ISSUER SWAP PROVIDERS

         As soon as practicable following the notification to the Note Trustee
         and the Noteholders of an early redemption of a Series and Class of
         Notes in accordance with Condition 5 of such Notes, the Master Issuer
         Cash Manager shall notify, as soon as is reasonably practicable, the
         relevant Master Issuer Swap Providers (being the Master Issuer Swap
         Providers who have entered into swap transactions with the Master
         Issuer relating to such Notes) of such redemption.

5.       NO LIABILITY

         Save as otherwise provided in this Agreement, the Master Issuer Cash
         Manager shall have no liability for the obligations of either the
         Master Issuer Security Trustee or the Master Issuer under any of the
         Transaction Documents or otherwise and nothing in this Agreement shall
         constitute a guarantee, or similar obligation, by the Master Issuer
         Cash Manager of either Funding 2, the Master Issuer Security Trustee
         or the Master Issuer in respect of any of them.

6.       COSTS AND EXPENSES

         Subject to and in accordance with the Master Issuer Pre-Enforcement
         Revenue Priority of Payments or, as the case may be, the Master Issuer
         Post-Enforcement Priority of Payments, the Master Issuer will on each
         Quarterly Interest Payment Date reimburse the Master Issuer Cash
         Manager for all out-of-pocket costs, expenses and charges (together
         with any amounts in respect of Irrecoverable VAT due thereon) properly
         incurred by the Master Issuer Cash Manager in the performance of the
         Master Issuer Cash Management Services including any such costs,
         expenses or charges not reimbursed to the Master Issuer Cash Manager
         on any previous Quarterly Interest Payment Date and the Master Issuer
         Cash Manager shall (if applicable) supply the Master Issuer with an
         appropriate VAT invoice issued by the Master Issuer Cash Manager or,
         if the Master Issuer Cash Manager has treated the relevant cost,
         expense or charge as a disbursement for VAT purposes, by the person
         making the supply.

7.       INFORMATION

7.1      USE OF I.T. SYSTEMS

(a)      The Master Issuer Cash Manager represents and warrants that as at the
         date hereof, in respect of the software which is to be used by the
         Master Issuer Cash Manager in providing the Master Issuer
         CashManagement Services, it has in place all necessary licences or
         consents from the respective licensor or licensors (if any) of such
         software.

(b)      The Master Issuer Cash Manager undertakes that it shall, for the
         duration of this Agreement, use reasonable endeavours to:

                 (i)     ensure that the licences or consents referred to in
                         paragraph (a) are maintained in full force and effect;
                         and

                 (ii)    except in so far as it would breach any other of its
                         legal obligations, grant to any person to whom it may
                         sub-contract or delegate the performance of all or any
                         of its powers and obligations under this Agreement or
                         to such person as the Master Issuer and the Master
                         Issuer Security Trustee elect as a substitute cash
                         manager in accordance with the terms of this Agreement
                         a licence to use any proprietary software together
                         with any updates which may be made thereto from time
                         to time.

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(c)      The Master Issuer Cash Manager shall use reasonable endeavours to
         maintain in working order the information technology systems used by
         the Master Issuer Cash Manager in providing the Master Issuer Cash
         Management Services.

(d)      The Master Issuer Cash Manager shall pass to any person to whom it may
         sub-contract or delegate the performance of all or any of its powers
         and obligations under this Agreement or to such person as the Master
         Issuer and the Master Issuer Security Trustee elect as a substitute
         cash manager in accordance with the terms of this Agreement the
         benefit of any warranties in relation to the software insofar as the
         same are capable of assignment.

7.2      BANK ACCOUNT STATEMENTS

         The Master Issuer Cash Manager shall take all reasonable steps to
         ensure that it receives a monthly bank statement in relation to each
         of the Master Issuer Accounts (subject to clause 6.3 of the Master
         Issuer Bank Account Agreement) and that it furnishes a copy of such
         statements to the Master Issuer and the Master Issuer Security
         Trustee, unless otherwise agreed.

7.3      ACCESS TO BOOKS AND RECORDS

         Subject to all applicable laws, the Master Issuer Cash Manager shall
         permit the Auditors of the Master Issuer and any other person
         nominated by the Master Issuer Security Trustee (to whom the Master
         Issuer Cash Manager has no reasonable objection) at any time during
         normal office hours upon reasonable notice to have access, or procure
         that such person or persons are granted access, to all books of record
         and account relating to the Master Issuer Cash Management Services
         provided by the Master Issuer Cash Manager and related matters in
         accordance with this Agreement.

7.4      STATUTORY OBLIGATIONS

         The Master Issuer Cash Manager will use its reasonable endeavours, on
         behalf of the Master Issuer, to prepare or procure the preparation of
         and file all reports, annual returns, financial statements, statutory
         forms and other returns which the Master Issuer is required by law to
         prepare and file. Subject to approval thereof by the directors of the
         Master Issuer, the Master Issuer Cash Manager shall cause such
         accounts to be audited by the Auditors and shall procure so far as it
         is able to do so that the Auditors shall make a report thereon as
         required by law and copies of all such documents shall be delivered to
         the Master Issuer Security Trustee, the Master Issuer and the Rating
         Agencies as soon as practicable after the end of each accounting
         reference period of the Master Issuer.

7.5      INFORMATION COVENANTS

(a)      The Master Issuer Cash Manager shall provide the Master Issuer, the
         Master Issuer Security Trustee, the Seller and the Rating Agencies
         with a quarterly report substantially in the form set out in Schedule
         3, or in such other form reasonably acceptable to the recipients
         thereof, in respect of the Master Issuer. Each such quarterly report
         shall be delivered to the Master Issuer, the Master Issuer Security
         Trustee, the Seller and the Rating Agencies by the last Business Day
         of the month in which each Interest Payment Date occurs.

(b)      The Master Issuer Cash Manager shall provide, or procure the provision
         of, to the Master Issuer, the Master Issuer Security Trustee and the
         Rating Agencies copies of any annual returns or financial statements
         referred to in Clause 7.4 as soon as reasonably practicable after the
         preparation thereof upon the request of any such person.

(c)      The Master Issuer Cash Manager shall notify the Rating Agencies in
         writing of the details of:

                 (i)     any material amendment to the Master Issuer
                         Transaction Documents;

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                 (ii)    the occurrence of a Note Event of Default; and

                 (iii)   any other information relating to the Master Issuer
                         Cash Manager as the Rating Agencies may reasonably
                         request in connection with its obligations under this
                         Agreement, PROVIDED THAT such request does not
                         adversely interfere with the Master Issuer Cash
                         Manager's day-to-day provision of the Master Issuer
                         Cash Management Services under the other terms of this
                         Agreement.

(d)      The Master Issuer Cash Manager shall, at the request of the Master
         Issuer Security Trustee, furnish the Master Issuer Security Trustee
         and the Rating Agencies with such other information relating to its
         business and financial condition as it may be reasonable for the
         Master Issuer Security Trustee to request in connection with this
         Agreement PROVIDED THAT the Master Issuer Security Trustee shall not
         make such a request more than once every three months unless, in the
         belief of the Master Issuer Security Trustee, a Master Intercompany
         Loan Event of Default, Note Event of Default or Master Issuer Cash
         Manager Termination Event (as defined in Clause 11.1) shall have
         occurred and is continuing or may reasonably be expected to occur and
         PROVIDED FURTHER THAT such request does not adversely interfere with
         the Master Issuer Cash Manager's day-to-day provision of the Master
         Issuer Cash Management Services under the other terms of this
         Agreement.

8.       REMUNERATION

8.1      FEE PAYABLE

         On each Quarterly Interest Payment Date, the Master Issuer shall pay
         to the Master Issuer Cash Manager for the Master Issuer Cash
         Management Services a cash management fee (which shall be inclusive of
         VAT) in arrear calculated in relation to each Interest Period the
         basis of the number of days elapsed and a 365 day year at the rate of
         0.025 per cent. per annum, on the aggregate Principal Amount
         Outstanding of the Notes and the Subordinated Loans as at the most
         recent anniversary of the Programme Date (or as otherwise agreed in
         writing between the Master Issuer, the Master Issuer Security Trustee
         and the Master Issuer Cash Manager from time to time).

8.2      PAYMENT OF FEE

         The cash management fee referred to in Clause 8.1 shall be paid to the
         Master Issuer Cash Manager in arrear on each Quarterly Interest
         Payment Date in the manner contemplated by and in accordance with the
         provisions of the Master Issuer Pre-Enforcement Revenue Priority of
         Payments or, as the case may be, the Master Issuer Post-Enforcement
         Priority of Payments.

9.       COVENANTS OF MASTER ISSUER CASH MANAGER

9.1      COVENANTS

         The Master Issuer Cash Manager hereby covenants with and undertakes to
         each of the Master Issuer and the Master Issuer Security Trustee that
         without prejudice to any of its specific obligations under this
         Agreement:

         (a)     it will devote all due skill, care and diligence to the
                 performance of its obligations and the exercise of its
                 discretions under this Agreement;

         (b)     it will comply with any proper directions, orders and
                 instructions which the Master Issuer or the Master Issuer
                 Security Trustee may from time to time give to it in
                 accordance with the provisions of this Agreement and, in the
                 event of any conflict, those of the Master Issuer Security
                 Trustee shall prevail;

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<PAGE>

         (c)     it will use its reasonable endeavours to keep in force all
                 licences, approvals, authorisations and consents which may be
                 necessary in connection with the performance of the Master
                 Issuer Cash Management Services and prepare and submit all
                 necessary applications and requests for any further approval,
                 authorisation, consent or licence required in connection with
                 the performance of the Master Issuer Cash Management Services;

         (d)     save as otherwise agreed with the Master Issuer and the Master
                 Issuer Security Trustee, it will provide free of charge to the
                 Master Issuer during normal office hours office space,
                 facilities, equipment and staff sufficient to fulfil the
                 obligations of the Master Issuer under this Agreement;

         (e)     it will not knowingly fail to comply with any legal
                 requirements in the performance of the Master Issuer Cash
                 Management Services;

         (f)     it will make all payments required to be made by it pursuant
                 to this Agreement on the due date for payment thereof for
                 value on such day without set-off (including, without
                 limitation, in respect of any fees owed to it) or
                 counterclaim; and

         (g)     it will not, without the prior written consent of the Master
                 Issuer Security Trustee, amend or terminate any of the Master
                 Issuer Transaction Documents save in accordance with their
                 terms.

9.2      DURATION OF COVENANTS

         The covenants of the Master Issuer Cash Manager in Clause 9.1 shall
         remain in force until this Agreement is terminated but without
         prejudice to any right or remedy of the Master Issuer or the Master
         Issuer Security Trustee arising from breach of any such covenant prior
         to the date of termination of this Agreement.

10.      NON-EXCLUSIVITY

         Nothing in this Agreement shall prevent the Master Issuer Cash Manager
         from rendering or performing services similar to those provided for in
         this Agreement to or for itself or other persons, firms or companies
         or from carrying on business similar to or in competition with the
         business of the Master Issuer or the Master Issuer Security Trustee.

11.      TERMINATION

11.1     MASTER ISSUER CASH MANAGER TERMINATION EVENTS

         If any of the following events (MASTER ISSUER CASH MANAGER TERMINATION
         EVENTS) shall occur:

         (a)     default is made by the Master Issuer Cash Manager in the
                 payment on the due date of any payment due and payable by it
                 under this Agreement and such default continues unremedied for
                 a period of three London Business Days after the earlier of
                 the Master Issuer Cash Manager becoming aware of such default
                 and receipt by the Master Issuer Cash Manager of written
                 notice from the Master Issuer or the Master Issuer Security
                 Trustee, as the case may be, requiring the same to be
                 remedied; or

         (b)     default is made by the Master Issuer Cash Manager in the
                 performance or observance of any of its other covenants and
                 obligations under this Agreement, which in the reasonable
                 opinion of the Master Issuer Security Trustee is materially
                 prejudicial to the interests of the Master Issuer Secured
                 Creditors and such default continues unremedied for a period
                 of twenty London Business Days after the earlier of the Master
                 Issuer Cash Manager becoming aware

                                      12

<PAGE>

                 of such default and receipt by the Master Issuer Cash Manager
                 of written notice from the Master Issuer Security Trustee
                 requiring the same to be remedied; or

         (c)     while the Master Issuer Cash Manager is the Seller, an
                 Insolvency Event occurs with respect to the Master Issuer Cash
                 Manager,

         then the Master Issuer Security Trustee may at once or at any time
         thereafter while such default continues by giving notice in writing to
         the Master Issuer Cash Manager terminate its appointment as Master
         Issuer Cash Manager under this Agreement with effect from a date (not
         earlier than the date of the notice) specified in the notice.

11.2     RESIGNATION OF MASTER ISSUER CASH MANAGER

         The appointment of the Master Issuer Cash Manager under this Agreement
         may be terminated upon the expiry of not less than 12 months' written
         notice of termination given by the Master Issuer Cash Manager to the
         Master Issuer and the Master Issuer Security Trustee PROVIDED THAT:

         (a)     the Master Issuer and the Master Issuer Security Trustee
                 consent in writing to such termination;

         (b)     a substitute cash manager shall be appointed, such appointment
                 to be effective not later than the date of such termination;

         (c)     such substitute cash manager has cash management experience
                 and is approved by the Master Issuer and the Master Issuer
                 Security Trustee;

         (d)     such substitute cash manager enters into an agreement
                 substantially on the same terms as this Agreement or on such
                 terms as are satisfactory to the Master Issuer and the Master
                 Issuer Security Trustee and the Master Issuer Cash Manager
                 shall not be released from its obligations under this
                 Agreement until such substitute cash manager has entered into
                 such new agreement and the rights of the Master Issuer under
                 such agreement are charged in favour of the Master Issuer
                 Security Trustee on terms satisfactory to the Master Issuer
                 Security Trustee; and

         (e)     the then current ratings (if any) of the Notes are not
                 adversely affected as a result thereof (unless otherwise
                 agreed by an Extraordinary Resolution of each Class of the
                 Noteholders).

11.3     EFFECT OF TERMINATION

(a)      On and after termination of the appointment of the Master Issuer Cash
         Manager under this Agreement pursuant to this Clause 11, all authority
         and power of the Master Issuer Cash Manager under this Agreement shall
         be terminated and be of no further effect and the Master Issuer Cash
         Manager shall not thereafter hold itself out in any way as the agent
         of the Master Issuer or the Master Issuer Security Trustee pursuant to
         this Agreement.

(b)      Upon termination of the appointment of the Master Issuer Cash Manager
         under this Agreement pursuant to this Clause 11, the Master Issuer
         Cash Manager shall:

                 (i)     forthwith deliver (and in the meantime hold on trust
                         for, and to the order of, the Master Issuer or the
                         Master Issuer Security Trustee, as the case may be) to
                         the Master Issuer or the Master Issuer Security
                         Trustee, as the case may be or as it shall direct in
                         writing, all books of account, papers, records,
                         registers, correspondence and documents in its
                         possession or under its control relating to the
                         affairs of or belongings of the Master Issuer or the
                         Master Issuer Security Trustee, as the case

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<PAGE>

                         may be, (if practicable, on the date of receipt) any
                         monies then held by the Master Issuer Cash Manager on
                         behalf of the Master Issuer or the Master Issuer
                         Security Trustee and any other assets of the Master
                         Issuer and the Master Issuer Security Trustee;

                 (ii)    take such further action as the Master Issuer or the
                         Master Issuer Security Trustee, as the case may be,
                         may reasonably direct at the expense of the Master
                         Issuer or the Master Issuer Security Trustee, as the
                         case may be (including in relation to the appointment
                         of a substitute cash manager), provided that the
                         Master Issuer Security Trustee shall not be required
                         to take or direct to be taken such further action
                         unless it has been indemnified or secured to its
                         satisfaction;

                 (iii)   provide all relevant information contained on computer
                         records in the form of magnetic tape, together with
                         details of the layout of the files encoded on such
                         magnetic tapes; and

                 (iv)    co-operate and consult with and assist the Master
                         Issuer or the Master Issuer Security Trustee or its
                         nominee, as the case may be (which shall, for the
                         avoidance of doubt, include any Receiver appointed by
                         it) for the purposes of explaining the file layouts
                         and the format of the magnetic tapes generally
                         containing such computer records on the computer
                         system of the Master Issuer or the Master Issuer
                         Security Trustee or such nominee, as the case may be.

11.4     NOTICE OF EVENT OF DEFAULT

         The Master Issuer Cash Manager shall deliver to the Master Issuer and
         the Master Issuer Security Trustee as soon as reasonably practicable
         but in any event within three London Business Days of becoming aware
         thereof a notice of any Master Issuer Cash Manager Termination Event
         or any Note Event of Default or any event which with the giving of
         notice or expiry of any grace period or certification, as specified in
         such Master Issuer Cash Manager Termination Event or Note Event of
         Default, would constitute the same.

11.5     GENERAL PROVISIONS RELATING TO TERMINATION

(a)      Termination of the appointment of the Master Issuer Cash Manager under
         this Agreement shall be without prejudice to the liabilities of the
         Master Issuer and the Master Issuer Security Trustee to the Master
         Issuer Cash Manager or vice versa incurred before the date of such
         termination. The Master Issuer Cash Manager shall have no right of
         set-off or any lien in respect of such amounts against amounts held by
         it on behalf of the Master Issuer or the Master Issuer Security
         Trustee.

(b)      This Agreement shall terminate at such time as the Master Issuer
         Secured Liabilities have been fully discharged.

(c)      On termination of the appointment of the Master Issuer Cash Manager
         under the provisions of this Clause 11, the Master Issuer Cash Manager
         shall be entitled to receive all fees and other moneys accrued up to
         (but excluding) the date of termination but shall not be entitled to
         any other or further compensation. The Master Issuer shall pay such
         moneys so receivable by the Master Issuer Cash Manager in accordance
         with the Master Issuer Pre-Enforcement Revenue Priority of Payments
         or, as the case may be, the Master Issuer Post-Enforcement Priority of
         Payments, on the dates on which they would otherwise have fallen due
         hereunder. Such termination shall not affect the Master Issuer Cash
         Manager's rights to receive payment of all amounts (if any) due to it
         from the Master Issuer other than under this Agreement.

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<PAGE>

(d)      Any provision of this Agreement which is stated to continue after
         termination of this Agreement shall remain in full force and effect
         notwithstanding termination.

12.      FURTHER ASSURANCE

12.1     CO-OPERATION, ETC.

         The parties to this Agreement 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 Agreement.

12.2     POWERS OF ATTORNEY

         Without prejudice to the generality of Clause 12.1, the Master Issuer
         and the Master Issuer Security Trustee shall upon request by the
         Master Issuer Cash Manager forthwith give to the Master Issuer Cash
         Manager such further powers of attorney or other written
         authorisations, mandates or instruments as are necessary to enable the
         Master Issuer Cash Manager to perform the Master Issuer Cash
         Management Services.

12.3     CHANGE OF MASTER ISSUER SECURITY TRUSTEE

         In the event that there is any change in the identity of the Master
         Issuer Security Trustee or an additional Master Issuer Security
         Trustee is appointed in accordance with the Master Issuer Deed of
         Charge, the existing Master Issuer Security Trustee, the new Master
         Issuer Security Trustee or the retiring Master Issuer Security
         Trustee, as the case may be, the Master Issuer Cash Manager and the
         Master Issuer shall execute such documents and take such actions as
         such of the existing Master Issuer Security Trustee, the new Master
         Issuer Security Trustee and/or the retiring Master Issuer Security
         Trustee, as applicable shall agree are reasonably necessary for the
         purpose of vesting in such new Master Issuer Security Trustee the
         rights and benefits of the Master Issuer Security Trustee under this
         Agreement and under the Master Issuer Deed of Charge and, if relevant,
         releasing the retiring Master Issuer Security Trustee from its future
         obligations hereunder or thereunder.

12.4     NO OBLIGATION ON MASTER ISSUER SECURITY TRUSTEE

         Nothing contained in this Agreement shall impose any obligation or
         liability on the Master Issuer Security Trustee to assume or perform
         any of the obligations of the Master Issuer or the Master Issuer Cash
         Manager under this Agreement or render it liable for any breach
         thereof.

13.      NEW NOTES

         On each occasion that the Master Issuer issues a new Series and Class
         of Notes, the Master Issuer Cash Manager, the Master Issuer and the
         Master Issuer Security Trustee shall execute such documents and take
         such action as may be necessary or required by the Rating Agencies for
         the purpose of including any Master Issuer Swap Provider and any other
         person who is required to execute an Accession Undertaking or any
         other Master Issuer Transaction Document relating to such new Series
         and Class of Notes to the Master Issuer Deed of Charge.

14.      MISCELLANEOUS

14.1     NO SET-OFF

         The Master Issuer Cash Manager agrees that it will not:

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<PAGE>

         (a)     set-off or purport to set-off any amount which either the
                 Master Issuer is or will become obliged to pay to it under
                 this Agreement against any amount from time to time standing
                 to the credit of or to be credited to any Master Issuer
                 Account; or

         (b)     make or exercise any claims or demands, any rights of
                 counterclaim or any other equities against or withhold payment
                 of any and all sums of money which may at any time and from
                 time to time be standing to the credit of any Master Issuer
                 Account.

14.2     NO PETITION AND LIMITED RECOURSE

         Clauses 5.3 and 5.4 of the Master Issuer Deed of Charge shall also
         apply to this Agreement as if expressly incorporated herein.

15.      CONFIDENTIALITY

         During the continuance of this Agreement or after its termination,
         each of the Master Issuer, the Master Issuer Cash Manager and the
         Master Issuer Security Trustee shall use its best endeavours not to
         disclose to any person, firm or company any information relating to
         the business, finances or other matters of a confidential nature of
         any other party to this agreement of which it may exclusively by
         virtue of being party to the Transaction Documents have become
         possessed and shall use all reasonable endeavours to prevent any such
         disclosure as aforesaid, PROVIDED HOWEVER THAT the provisions of this
         Clause 15 shall not apply:

         (a)     to any information already known to the recipient otherwise
                 than as a result of entering into any of the Transaction
                 Documents;

         (b)     to any information subsequently received by the recipient
                 which it would otherwise be free to disclose;

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

         (d)     to any extent that the recipient is required to disclose the
                 same pursuant to any law or order of any court of competent
                 jurisdiction or pursuant to any direction, request or
                 requirement (whether or not having the force of law) of any
                 central bank or any governmental or other authority
                 (including, without limitation, any official bank examiners or
                 regulators);

         (e)     to the extent that the recipient needs to disclose the same
                 for determining the existence of, or declaring, a Note Event
                 of Default, or a Master Issuer Cash Manager Termination Event,
                 the protection or enforcement of any of its rights under any
                 of the Transaction Documents or in connection therewith or for
                 the purpose of discharging, in such manner as it thinks fit,
                 its duties under or in connection with such agreements in each
                 case to such persons as require to be informed of such
                 information for such purposes; or

         (f)     in relation to any information disclosed to the professional
                 advisers of the recipient or (in connection with a prospective
                 rating of any debt to be issued by the Master Issuer) to any
                 Rating Agency or any prospective new cash manager or Master
                 Issuer Security Trustee.

16.      NOTICES

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

                                      16

<PAGE>

         delivered thereafter or on a day which is not a Business Day 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 Master Issuer Cash Manager: to Bank of
                 Scotland plc, Halifax Division, Level 3, Lovell Park, 1 Lovell
                 Park Road, Leeds LS1 1NS (facsimile number +44 (0)113 235
                 7511) for the attention of the Head of Mortgage Securitisation
                 with a copy to Bank of Scotland plc, Treasury Division, 33 Old
                 Broad Street, London EC2N 1HZ (facsimile no. +44 (0) 20 7574
                 8303) for the attention of Head of Mortgage Securitisation and
                 Covered Bonds;

         (b)     in the case of the Master Issuer: to Permanent Master Issuer
                 PLC, 35 Great St. Helen's, London EC3A 6AP (facsimile number
                 +44 (0) 20 7398 6325) for the attention of the Directors with
                 a copy to Bank of Scotland plc, Halifax Division, Trinity Road
                 (LP/3/3/SEC), Halifax, West Yorkshire HX1 2RG (facsimile
                 number +44 (0)113 235 7511) for the attention of the Head of
                 Mortgage Securitisation; and

         (c)     in the case of the Master Issuer Security Trustee: to The Bank
                 of New York, One Canada Square, London E14 5AL (facsimile
                 number +44 (0) 20 7964 2533) for the attention of Corporate
                 Trust Administration - ABS/MBS,

         or to such other address or facsimile number or for the attention of
         such other person or entity as may from time to time be notified by
         any party to the others by written notice in accordance with the
         provisions of this Clause 16.

17.      VARIATION AND WAIVER

         No variation or waiver of this Agreement shall be effective unless it
         is in writing and signed by (or by some person duly authorised by)
         each of the parties. No single or partial exercise of, or failure or
         delay in exercising, any right under this Agreement shall constitute a
         waiver or preclude any other or further exercise of that or any other
         right.

18.      NO PARTNERSHIP

         It is hereby acknowledged and agreed by the parties that nothing in
         this Agreement shall be construed as giving rise to any partnership
         between any of the parties.

19.      ASSIGNMENT

19.1     ASSIGNMENT BY THE MASTER ISSUER

         The Master Issuer may not assign or transfer any of its rights and
         obligations under this Agreement without the prior written consent of
         each of the Master Issuer Security Trustee and the Master Issuer Cash
         Manager, except that the Master Issuer may assign its rights hereunder
         without such consent pursuant to the Master Issuer Deed of Charge.

19.2     NO ASSIGNMENT BY MASTER ISSUER CASH MANAGER

         The Master Issuer Cash Manager may not assign or transfer any of its
         rights and obligations under this Agreement without the prior written
         consent of the Master Issuer and the Master Issuer Security Trustee,
         such consent not to be unreasonably withheld or delayed.

                                      17

<PAGE>

20.      EXCLUSION OF THIRD PARTY RIGHTS

         A person who is not a party to this Agreement has no right under the
         Contracts (Rights of Third Parties) Act 1999 to enforce any term of
         this Agreement, but this does not affect any right or remedy of a
         third party which exists or is available apart from that Act.

21.      COUNTERPARTS

         This Agreement may be executed in any number of counterparts (manually
         or by facsimile) each of which, when executed and delivered, shall
         constitute an original, but all the counterparts shall together
         constitute but one and the same instrument provided, however, that
         this Agreement shall have no force or effect until it is executed by
         the last party to execute the same and shall be deemed to have been
         executed and delivered in the place where such last party executed
         this Agreement.

22.      GOVERNING LAW

         This Agreement is governed by, and shall be construed in accordance
         with, the laws of England and Wales.

23.      SUBMISSION TO JURISDICTION

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

IN WITNESS whereof the parties have caused this Agreement to be executed and
delivered as a deed the day and year first before written.

                                      18

<PAGE>

                                  SCHEDULE 1

                    MASTER ISSUER CASH MANAGEMENT SERVICES

The Master Issuer Cash Manager shall:

(a)      operate the Master Issuer Accounts and ensure that payments are made
         into and from such accounts in accordance with this Agreement, the
         Master Issuer Deed of Charge, the Master Issuer Bank Account Agreement
         and any other relevant Master Issuer Transaction Document, PROVIDED
         HOWEVER THAT nothing herein shall require the Master Issuer Cash
         Manager to make funds available to the Master Issuer to enable such
         payments to be made other than as expressly required by the provisions
         of this Agreement;

(b)      keep records for all taxation purposes (including, without limitation,
         those relating to VAT);

(c)      subject to any applicable law, assist the Auditors of the Master
         Issuer and provide such information to them as they may reasonably
         request for the purpose of carrying out their duties as auditors of
         the Master Issuer;

(d)      make all filings, give all notices and make all registrations and
         other notifications required in the day-to-day operation of the
         business of the Master Issuer or required to be given by the Master
         Issuer pursuant to the Master Issuer Transaction Documents;

(e)      arrange for all payments due to be made by the Master Issuer under any
         of the Master Issuer Transaction Documents, PROVIDED THAT such moneys
         are at the relevant time available to the Master Issuer and PROVIDED
         FURTHER THAT nothing herein shall constitute a guarantee by the Master
         Issuer Cash Manager of all or any of the obligations of the Master
         Issuer under any of the Master Issuer Transaction Documents;

(f)      without prejudice to the role of and in conjunction with the Master
         Issuer Corporate Services Provider under the Master Issuer Corporate
         Services Agreement, keep general books of account and records of the
         Master Issuer; provide accounting services, including reviewing
         receipts and payments, supervising and assisting in the preparation of
         interim statements and final accounts and supervising and assisting in
         the preparation of tax returns;

(g)      without prejudice to the role of and in conjunction with the Master
         Issuer Corporate Services Provider under the Master Issuer Corporate
         Services Agreement, provide or procure the provision of company
         secretarial and administration services to the Master Issuer including
         the keeping of all registers and the making of all returns and filings
         required by applicable law or by US or UK regulatory authorities,
         co-operate in the convening of board and general meetings and provide
         registered office facilities;

(h)      on behalf of the Master Issuer, PROVIDED THAT monies are at the
         relevant time available to the Master Issuer, pay all out-of-pocket
         expenses of the Master Issuer, incurred by the Master Issuer Cash
         Manager on behalf of the Master Issuer in the performance of the
         Master Issuer Cash Manager's duties hereunder including without
         limitation:

         (i)     all Taxes which may be due or payable by the Master Issuer;

         (ii)    all necessary filing and other fees in compliance with
                 regulatory requirements;

         (iii)   all legal and audit fees and other professional advisory fees;
                 and

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         (iv)    all communication expenses including postage, courier and
                 telephone charges;

(i)      with the prior written consent of the Master Issuer Security Trustee,
         invest monies standing from time to time to the credit of a Master
         Issuer Account in Authorised Investments, subject to the following
         provisions:

         (i)     any such Authorised Investment shall be made in the joint
                 names of the Master Issuer and the Master Issuer Security
                 Trustee;

         (ii)    any costs properly and reasonably incurred in making and
                 changing Authorised Investments will be reimbursed to the
                 Master Issuer Cash Manager and the Master Issuer Security
                 Trustee by the Master Issuer; and

         (iii)   all income and other distributions arising on, or proceeds
                 following the disposal or maturity of, Authorised Investments
                 shall be credited to the relevant Master Issuer Account.

         The Master Issuer Security Trustee and the Master Issuer Cash Manager
         shall not be responsible (save where any loss results from the Master
         Issuer Security Trustee's or the Master Issuer Cash Manager's, as the
         case may be, own fraud, wilful default or negligence or that of their
         respective officers or employees) for any loss occasioned by reason of
         any such Authorised Investments whether by depreciation in value or
         otherwise provided that such Authorised Investments were made in
         accordance with the above provisions;

(j)      (i)     if necessary, perform all currency conversions free of charge,
                 cost or expense at the relevant exchange rate; and

         (ii)    for the purposes of any calculations referred to in
                 sub-paragraph (i) above, any currency amounts used in or
                 resulting from such calculations will be rounded in accordance
                 with the relevant market practice;

(k)      make all returns and filings required to be made by the Master Issuer
         and provide or procure the provision of company secretarial and
         administration services to the Master Issuer;

(l)      arrange payment of all fees to the London Stock Exchange plc or, as
         applicable, the UK Listing Authority of the Financial Services
         Authority;

(m)      provide services in relation to Swap Collateral (including, without
         limitation, (i) in connection with the transfer, receipt,
         administration or holding of Swap Collateral, (ii) the making of
         calculations, determinations, communications or valuations (iii) the
         opening and maintenance of the Master Issuer Swap Collateral Accounts
         and the Master Issuer Swap Collateral Ledger and (iv) the entering
         into of Master Issuer Swap Collateral Ancillary Documents); and

(n)      provide the Master Issuer, Funding 2, the Master Issuer Security
         Trustee and the Rating Agencies with quarterly reports in relation to
         the Master Issuer.

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                                  SCHEDULE 2

                  CASH MANAGEMENT AND MAINTENANCE OF LEDGERS

1.       DETERMINATION

1.1      On each Note Determination Date, the Master Issuer Cash Manager shall
         determine each of the following in accordance with this paragraph 1:

         (a)     the amount of any Master Issuer Principal Receipts and Master
                 Issuer Revenue Receipts available as at the following
                 Quarterly Interest Payment Date; and

         (b)     the Principal Amount Outstanding of the Notes, the Pool
                 Factor, and the Note Principal Payment of the Notes in
                 accordance with the Conditions.

1.2      The Master Issuer Cash Manager shall determine and notify the Master
         Issuer, the Note Trustee, the Registrar and the Paying Agents on or
         prior to 11.00 a.m. (London time) on the last day of each Interest
         Period of any Additional Amount payable in respect of such Interest
         Period.

1.3      (a)     The Master Issuer Cash Manager may make all the determinations
                 referred to in paragraph 1.1 and paragraph 1.2 on the basis of
                 any reasonable and proper assumptions as the Master Issuer
                 Cash Manager considers appropriate (including, without
                 limitation, as to the amount of any payments to be made under
                 paragraph 3 below during the period from and including the
                 Note Determination Date to but excluding the next Quarterly
                 Interest Payment Date).

         (b)     The Master Issuer Cash Manager shall on request notify the
                 Master Issuer and the Master Issuer Security Trustee in
                 writing of any such other assumptions and shall take account
                 of any representations made by the Master Issuer and the
                 Master Issuer Security Trustee (as the case may be) in
                 relation thereto.

1.4      Each determination made in accordance with this paragraph 1 shall (in
         the absence of fraud, wilful default, negligence or manifest error) be
         final and binding on all persons.

2.       NOTIFICATION OF DETERMINATIONS

2.1      The Master Issuer Cash Manager will cause each determination of Master
         Issuer Available Funds to be notified forthwith to the Master Issuer.

2.2      The Master Issuer Cash Manager shall procure that the determinations
         and notifications required to be made pursuant to Condition 5.3 are
         made.

2.3      The Master Issuer Cash Manager will promptly notify the Master Issuer
         and each Calculation Agent (as defined in each of the Funding 2 Swap
         Agreement and each relevant Master Issuer Swap Agreement) of the
         relevant Note Principal Payment determined in accordance with
         paragraph 1.1(b) above.

3.       PRIORITY OF PAYMENTS FOR MASTER ISSUER REVENUE RECEIPTS

         Except for amounts due to third parties by the Master Issuer under
         item (b) below, amounts due to the Master Issuer Account Bank under
         item (c) below or amounts payable to any replacement swap provider
         using any termination payment received by the Master Issuer in respect
         of the corresponding Master Issuer Swap Agreement or amounts payable
         to a Master Issuer Swap Provider

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         (other than amounts pursuant to (i) below) using any premium recovered
         from any replacement swap provider, which will be paid when due, on
         each Quarterly Interest Payment Date, prior to the service of a note
         acceleration notice on the Master Issuer or until such time as there
         are no Master Issuer Secured Liabilities outstanding, the Master
         Issuer Cash Manager will apply Master Issuer Revenue Receipts in the
         following priority (in each case only if and to the extent that
         provisions of a higher priority have been made in full and to the
         extent that such withdrawal does not cause the Master Issuer
         Transaction Account to become overdrawn (the MASTER ISSUER
         PRE-ENFORCEMENT REVENUE PRIORITY OF PAYMENTS):

         (a)     firstly, without priority among them, but in proportion to the
                 respective amounts due, to pay amounts due to:

                 (i)     the Master Issuer Security Trustee, together with
                         interest and any amount in respect of VAT on those
                         amounts, and to provide for any amounts due or to
                         become due during the following interest period to the
                         Master Issuer Security Trustee under the Master Issuer
                         Deed of Charge;

                 (ii)    the Note Trustee, together with interest and any
                         amount in respect of VAT on those amounts, and to
                         provide for any amounts due or to become due during
                         the following interest period to the Note Trustee
                         under the Master Issuer Trust Deed; and

                 (iii)   the Agent Bank, the Paying Agents, the Registrar and
                         the Transfer Agent, together with interest and any
                         amount in respect of VAT on those amounts, and any
                         costs, charges, liabilities and expenses then due or
                         to become due during the following interest period to
                         the Agent Bank, the Registrar, the Transfer Agent and
                         the Paying Agents under the Master Issuer Paying Agent
                         and Agent Bank Agreement;

         (b)     secondly, to pay amounts due to any third party creditors of
                 the Master Issuer (other than those referred to later in this
                 priority of payments), which amounts have been incurred
                 without breach by the Master Issuer of the Transaction
                 Documents to which it is a party and for which payment has not
                 been provided for elsewhere and to provide for any of those
                 amounts expected to become due and payable during the
                 following interest period by the Master Issuer and to pay or
                 discharge any liability of the Master Issuer for corporation
                 tax on any chargeable income or gain of the Master Issuer;

         (c)     thirdly, without priority among them, but in proportion to the
                 respective amounts due, to pay amounts due to:

                 (i)     the Master Issuer Cash Manager, together with any
                         amount in respect of VAT on those amounts, and to
                         provide for any amounts due, or to become due to the
                         Master Issuer Cash Manager in the immediately
                         succeeding interest period, under the Master Issuer
                         Cash Management Agreement;

                 (ii)    the Master Issuer Corporate Services Provider,
                         together with VAT on those amounts, and to provide for
                         any amounts due, or to become due to the Master Issuer
                         Corporate Service Provider in the immediately
                         succeeding interest period under the Master Issuer
                         Corporate Services Agreement; and

                 (iii)   the Master Issuer Account Bank, together with VAT on
                         those amounts, and to provide for any amounts due, or
                         to become due to the Master Issuer Account Bank in the
                         immediately succeeding interest period under the
                         Master Issuer Bank Account Agreement;

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<PAGE>

         (d)     fourthly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each AAA Loan
                 Tranche (and, in respect of (ii) below, the amounts (if any),
                 excluding principal, received from the Master Issuer Swap
                 Provider(s) under the Master Issuer Swap Agreement(s) in
                 respect of the related Series and Class of Notes):

                 (i)     to pay the amounts due and payable to the relevant
                         Master Issuer Swap Provider(s) (if any) in respect of
                         the related Series and Class of Class A Notes
                         (including any termination payment but excluding any
                         Master Issuer Swap Excluded Termination Amount) in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreement; and

                 (ii)    to pay interest due and payable (if any) on the
                         related Series and Class of Class A Notes on such
                         Interest Payment Date;

         (e)     fifthly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each AA Loan
                 Tranche (and, in respect of (ii) below, the amounts (if any),
                 excluding principal, received from the Master Issuer Swap
                 Provider(s) under the Master Issuer Swap Agreement(s) in
                 respect of the related Series and Class of Notes):

                 (i)     to pay the amounts due and payable to the relevant
                         Master Issuer Swap Provider(s) (if any) in respect of
                         the related Series and Class of Class B Notes
                         (including any termination payment but excluding any
                         Master Issuer Swap Excluded Termination Amount) in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreement; and

                 (ii)    to pay interest due and payable (if any) on the
                         related Series and Class of Class B Notes on such
                         Interest Payment Date;

         (f)     sixthly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each A Loan Tranche
                 (and, in respect of (ii) below, the amounts (if any),
                 excluding principal, received from the Master Issuer Swap
                 Provider(s) under the Master Issuer Swap Agreement(s) in
                 respect of the related Series and Class of Notes):

                 (i)     to pay the amounts due and payable to the relevant
                         Master Issuer Swap Provider(s) (if any) in respect of
                         the related Series and Class of Class M Notes
                         (including any termination payment but excluding any
                         Master Issuer Swap Excluded Termination Amount) in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreement; and

                 (ii)    to pay interest due and payable (if any) on the
                         related Series and Class of Class M Notes on such
                         Interest Payment Date;

         (g)     seventhly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each BBB Loan
                 Tranche (and, in respect of (ii) below, the amounts (if any),
                 excluding principal, received from the Master Issuer Swap
                 Provider(s) under the Master Issuer Swap Agreement(s) in
                 respect of the related Series and Class of Notes):

                 (i)     to pay the amounts due and payable to the relevant
                         Master Issuer Swap Provider(s) (if any) in respect of
                         the related Series and Class of Class C Notes
                         (including any termination payment but excluding any
                         Master Issuer Swap Excluded Termination Amount) in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreement; and

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<PAGE>

                 (ii)    to pay interest due and payable (if any) on the
                         related Series and Class of Class C Notes on such
                         Interest Payment Date;

         (h)     eighthly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each BB Loan
                 Tranche (and, in respect of (ii) below, the amounts (if any),
                 excluding principal, received from the Master Issuer Swap
                 Provider(s) under the Master Issuer Swap Agreement(s) in
                 respect of the related Series and Class of Notes):

                 (i)     to pay the amounts due and payable to the relevant
                         Master Issuer Swap Provider(s) (if any) in respect of
                         the related Series and Class of Class D Notes
                         (including any termination payment but excluding any
                         Master Issuer Swap Excluded Termination Amount) in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreement; and

                 (ii)    to pay interest due and payable (if any) on the
                         related Series and Class of Class D Notes on such
                         Interest Payment Date;

         (i)     ninthly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each Subordinated
                 Loan Tranche to pay interest due and payable (if any) on the
                 related Master Issuer Subordinated Loan on such quarterly
                 Interest Payment Date;

         (j)     tenthly, without priority among them but in proportion to the
                 respective amounts due, to pay any Master Issuer Swap Excluded
                 Termination Payment due to a Master Issuer Swap Provider;

         (k)     eleventhly, from amounts received by the Master Issuer from
                 Funding 2 in respect of each Start-Up Loan Tranche, to pay all
                 amounts due and payable (if any) on the related Master Issuer
                 Start-Up Loan on such Quarterly Interest Payment Date; and

         (l)     twelfthly, the balance (if any) to the Master Issuer.

4.       PRIORITY OF PAYMENTS FOR MASTER ISSUER PRINCIPAL RECEIPTS

         Subject to Condition 5 of the Notes, until enforcement of the Master
         Issuer Security pursuant to the Master Issuer Deed of Charge or until
         such time as there are no Notes or Master Issuer Subordinated Loans
         outstanding, Master Issuer Principal Receipts will be applied as
         follows:

         (a)     the Class A Notes: from principal amounts received by the
                 Master Issuer from Funding 2 in respect of each AAA Loan
                 Tranche (and in respect of (ii) below, the principal amounts
                 received (if any) from the Master Issuer Swap Providers under
                 the relevant Master Issuer Swap Agreements in respect of the
                 related Series and Class of Notes):

                 (i)     to pay amounts due and payable (in respect of
                         principal) on such Interest Payment Date to the
                         relevant Master Issuer Swap Providers in respect of
                         the related Series and Class of Class A Notes in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreements; and

                 (ii)    to pay amounts due and payable in respect of principal
                         (if any) on such Interest Payment Date on the related
                         Series and Class of Class A Notes;

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<PAGE>

         (b)     the Class B Notes: from principal amounts received by the
                 Master Issuer from Funding 2 in respect of each AA Loan
                 Tranche (and in respect of (ii) below, the principal amounts
                 received (if any) from the Master Issuer Swap Providers under
                 the relevant Master Issuer Swap Agreements in respect of the
                 related Series and Class of Notes):

                 (i)     to pay amounts due and payable (in respect of
                         principal) on such Interest Payment Date to the
                         relevant Master Issuer Swap Providers in respect of
                         the related Series and Class of Class B Notes in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreements; and

                 (ii)    to pay amounts due and payable in respect of principal
                         (if any) on such Interest Payment Date on the related
                         Series and Class of Class B Notes;

         (c)     the Class M Notes: from principal amounts received by the
                 Master Issuer from Funding 2 in respect of each A Loan Tranche
                 (and in respect of (ii) below, the principal amounts received
                 (if any) from the Master Issuer Swap Providers under the
                 relevant Master Issuer Swap Agreements in respect of the
                 related Series and Class of Notes):

                 (i)     to pay amounts due and payable (in respect of
                         principal) on such Interest Payment Date to the
                         relevant Master Issuer Swap Providers in respect of
                         the related Series and Class of Class M Notes in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreements; and

                 (ii)    to pay amounts due and payable in respect of principal
                         (if any) on such Interest Payment Date on the related
                         Series and Class of Class M Notes;

         (d)     the Class C Notes: from principal amounts received by the
                 Master Issuer from Funding 2 in respect of each BBB Loan
                 Tranche (and in respect of (ii) below, the principal amounts
                 received (if any) from the Master Issuer Swap Providers under
                 the relevant Master Issuer Swap Agreements in respect of the
                 related Series and Class of Notes):

                 (i)     to pay amounts due and payable (in respect of
                         principal) on such Interest Payment Date to the
                         relevant Master Issuer Swap Providers in respect of
                         the related Series and Class of Class C Notes in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreements; and

                 (ii)    to pay amounts due and payable in respect of principal
                         (if any) on such Interest Payment Date on the related
                         Series and Class of Class C Notes;

         (e)     the Class D Notes: from principal amounts received by the
                 Master Issuer from Funding 2 in respect of each BB Loan
                 Tranche (and in respect of (ii) below, the principal amounts
                 received (if any) from the Master Issuer Swap Providers under
                 the relevant Master Issuer Swap Agreements in respect of the
                 related Series and Class of Notes):

                 (i)     to pay amounts due and payable (in respect of
                         principal) on such Interest Payment Date to the
                         relevant Master Issuer Swap Providers in respect of
                         the related Series and Class of Class D Notes in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreements; and

                 (ii)    to pay amounts due and payable in respect of principal
                         (if any) on such Interest Payment Date on the related
                         Series and Class of Class D Notes; and

         (f)     the Master Issuer Subordinated Loans: from principal amounts
                 received by the Master Issuer from Funding 2 in respect of
                 each Subordinated Loan Tranche to pay amounts due and

                                      25

<PAGE>

                 payable in respect of principal (if any) on such quarterly
                 Interest Payment Date on the related Master Issuer
                 Subordinated Loan;

         The amounts standing to the credit of any sub-ledger of the Master
         Issuer Principal Ledger (in respect of a Series and Class of Notes or,
         as applicable, Master Issuer Subordinated Loans) may only be applied
         by the Master Issuer Cash Manager to pay the principal amounts due (if
         any) in respect of such Series and Class of Notes or, as applicable,
         Master Issuer Subordinated Loan under the above Master Issuer
         Pre-Enforcement Principal Priority of Payments.

5.       USE OF LEDGERS

         The Master Issuer Cash Manager shall forthwith record monies received
         or payments made by it on behalf of the Master Issuer in the ledgers
         in the manner set out in this Agreement. If, at any time, the Master
         Issuer Cash Manager is in any doubt as to which ledger a particular
         amount should be credited or debited, it shall consult with the Master
         Issuer Security Trustee thereon.

         A debit item shall only be made in respect of any of the Master Issuer
         Ledgers, and the corresponding payment or transfer (if any) may only
         be made from the Master Issuer Accounts, to the extent that such entry
         does not cause the relevant ledger to have a debit balance.

6.       MASTER ISSUER REVENUE LEDGER

         The Master Issuer Cash Manager shall ensure that:

         (a)     the following amounts shall be credited to the Master Issuer
                 Revenue Ledger:

                 (i)     all interest and any other amount (not including
                         principal and fees), if any, paid by Funding 2 to the
                         Master Issuer under the terms of the Master
                         Intercompany Loan Agreement;

                 (ii)    all principal, if any, repaid by Funding 2 to the
                         Master Issuer with respect to any Start-up Loan
                         Tranche under the terms of the Master Intercompany
                         Loan Agreement;

                 (iii)   all interest received by the Master Issuer in respect
                         of the Master Issuer Accounts;

                 (iv)    all amounts received by the Master Issuer representing
                         income on any Issuer Authorised Investments;

                 (v)     all revenue amounts (including any early termination
                         payment which is to be used to acquire, if necessary,
                         a new currency or interest rate swap) received by the
                         Master Issuer under the Master Issuer Swap Agreements;

         (b)     any payment or provision made under paragraph 3 of this
                 Schedule 2 shall be debited to the Master Issuer Revenue
                 Ledger and the applicable sub-ledger; and

         (c)     the amounts received from Funding 2 in respect of interest due
                 on a Rated Loan Tranche shall be credited to a sub-ledger (in
                 respect of the Series and Class of Notes that funded such
                 Rated Loan Tranche) to the Master Issuer Revenue Ledger and
                 payments of interest in respect of such Series and Class of
                 Notes by the Master Issuer shall be debited to such
                 sub-ledger.

         (d)     the amounts received from Funding 2 in respect of interest due
                 on a Subordinated Loan Tranche shall be credited to a
                 sub-ledger (in respect of the Master Issuer Subordinated Loan

                                      26

<PAGE>

                 that funded such Subordinated Loan Tranche) to the Master
                 Issuer Revenue Ledger and payments of interest in respect of
                 such Master Issuer Subordinated Loan by the Master Issuer
                 shall be debited to such sub-ledger;

         (e)     the amounts received from Funding 2 in respect of interest due
                 on a Start-Up Loan Tranche shall be credited to a sub-ledger
                 (in respect of the Master Issuer Start-Up Loan that funded
                 such Start-Up Loan Tranche) to the Master Issuer Revenue
                 Ledger and payments of interest in respect of such Master
                 Issuer Start-Up Loan by the Master Issuer shall be debited to
                 such sub-ledger; and

         (f)     the amounts received from Funding 2 in respect of principal
                 due on a Start-Up Loan Tranche shall be credited to a
                 sub-ledger (in respect of the Master Issuer Start-Up Loan that
                 funded such Start-Up Loan Tranche) to the Master Issuer
                 Revenue Ledger and repayments of principal in respect of such
                 Master Issuer Start-Up Loan by the Master Issuer shall be
                 debited to such sub-ledger.

7.       MASTER ISSUER PRINCIPAL LEDGER

         The Master Issuer Cash Manager shall ensure that:

         (a)     all principal paid by Funding 2 to the Master Issuer under the
                 terms of the Master Intercompany Loan Agreement (except in
                 respect of any Start-Up Loan Tranche) shall be credited to the
                 Master Issuer Principal Ledger;

         (b)     any payment or provision made under paragraph 4 of Schedule 2
                 of the Master Issuer Deed of Charge shall be debited to the
                 Master Issuer Principal Ledger; and

         (c)     the amounts of principal received from Funding 2 in respect of
                 a Rated Loan Tranche shall be credited to a sub-ledger to the
                 Master Issuer Principal Ledger in respect of the Series and
                 Class of Notes which funded such Rated Loan Tranche and
                 repayments of principal in respect of such Series and Class of
                 Notes by the Master Issuer or on its behalf shall be debited
                 to such sub-ledger; and

         (d)     the amounts of principal received from Funding 2 in respect of
                 a Subordinated Loan Tranche shall be credited to a sub-ledger
                 to the Master Issuer Principal Ledger in respect of the Master
                 Issuer Subordinated Loan which funded such Subordinated Loan
                 Tranche and repayments of principal in respect of such Master
                 Issuer Subordinated Loan by the Master Issuer or on its behalf
                 shall be debited to such sub-ledger.

         The Master Issuer Cash Manager shall ensure that, prior to the
         enforcement of the Master Issuer Security, on each Quarterly Interest
         Payment Date, the amounts standing to the credit of any sub-ledger of
         the Master Issuer Principal Ledger (in respect of a Series and Class
         of Notes or Master Issuer Subordinated Loan, as the case may be) may
         only be applied by the Master Issuer Cash Manager to pay the principal
         amounts due (if any) in respect of such Series and Class of Notes or,
         such Master Issuer Subordinated Loan, as the case may be, under the
         Master Issuer Pre-Enforcement Principal Priority of Payments.

8.       MASTER ISSUER START-UP LOANS

         Prior to the service of a Note Acceleration Notice on the Master
         Issuer, on each Quarterly Interest Payment Date, the amounts standing
         to the credit of any sub-ledger of the Master Issuer Revenue Ledger in
         respect of amounts (excluding principal) of a Master Issuer Start-Up
         Loan may only be applied by the Master Issuer Cash Manager to pay
         interest, capitalised interest and other amounts due (except for
         principal) in respect of such Master Issuer Start-Up Loan and the
         amounts standing

                                      27

<PAGE>

         to the credit of any sub-ledger of the Master Issuer Revenue Ledger in
         respect of principal of a Master Issuer Start-Up Loan may only be
         applied by the Master Issuer Cash Manager to repay principal due in
         respect of such Master Issuer Start-Up Loan.

9.       RECORDS

         The Master Issuer Cash Manager shall ensure that a separate record is
         kept of any amount received from each of the Master Issuer Swap
         Providers pursuant to each of the Master Issuer Swap Agreements.

10.      MASTER ISSUER SWAP COLLATERAL LEDGER

         In connection with Swap Collateral the Master Issuer Cash Manager
         shall ensure that the appropriate debits and credits are made to the
         Master Issuer Swap Collateral Ledger in accordance with Clause 4.7
         (Swap Collateral).

11.      MASTER ISSUER EXPENSES LEDGER

         The Master Issuer Cash Manager shall ensure that:

         (a)     any fees paid by Funding 2 on each Funding 2 Interest Payment
                 Date under the terms of the Master Intercompany Loan Agreement
                 shall be credited to the Master Issuer Expenses Ledger; and

         (b)     any payment or provision of fees made under the Master Issuer
                 Priority of Payments using fees paid by Funding 2 under the
                 terms of the Master Intercompany Loan Agreement shall be
                 debited to the Master Issuer Expenses Ledger.

12.      MASTER ISSUER NOTE LEDGER

         The Master Issuer Cash Manager shall ensure that:

         (a)     The following amounts shall be debited on a sub-ledger to the
                 Master Issuer Note Ledger in respect of a Series and Class of
                 Notes:

                 (i)     all interest (not including principal), if any, paid
                         by the Master Issuer in respect of such Series and
                         Class of Notes under the terms and conditions of such
                         Series and Class of Notes; and

                 (ii)    all amounts of principal, if any, paid by the Master
                         Issuer in respect of such Series and Class of Notes
                         under the terms and conditions of such Series and
                         Class of Notes.

         (b)     The following amounts shall be credited on such sub-ledger to
                 the Master Issuer Note Ledger in respect of a Series and Class
                 of Notes.

                 (i)     the initial Principal Amount Outstanding of such
                         Series and Class of Notes; and

                 (ii)    all interest accrued in respect of such Series and
                         Class of Notes under the terms and conditions of such
                         Series and Class of Notes.

13.      MASTER ISSUER SUBORDINATED LOAN LEDGER

         The Master Issuer Cash Manager shall ensure that:

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<PAGE>

         (a)     The following amounts shall be debited on a sub-ledger to the
                 Master Issuer Subordinated Loan Ledger in respect of a Master
                 Issuer Subordinated Loan:

                 (i)     all interest (not including principal), if any, paid
                         by the Master Issuer in respect of such Master Issuer
                         Subordinated Loan under the terms and conditions of
                         such Master Issuer Subordinated Loan; and

                 (ii)    all amounts of principal, if any, paid by the Master
                         Issuer in respect of such Master Issuer Subordinated
                         Loan under the terms and conditions of such Master
                         Issuer Subordinated Loan.

         (b)     The following amounts shall be credited on such sub-ledger to
                 the Master Issuer Subordinated Loan Ledger in respect of a
                 Master Issuer Subordinated Loan.

                 (i)     the initial Principal Amount Outstanding of such
                         Master Issuer Subordinated Loan; and

                 (ii)    all interest accrued in respect of such Master Issuer
                         Subordinated Loan under the terms and conditions of
                         such Master Issuer Subordinated Loan.

14.      MASTER ISSUER START-UP LOAN LEDGER

         The Master Issuer Cash Manager shall ensure that:

         (a)     The following amounts shall be debited on a sub-ledger to the
                 Master Issuer Start-Up Loan Ledger in respect of a Master
                 Issuer Start-Up Loan:

                 (i)     all interest (not including principal), if any, paid
                         by the Master Issuer in respect of such Master Issuer
                         Start-Up Loan under the terms and conditions of such
                         Master Issuer Start-Up Loan; and

                 (ii)    all amounts of principal, if any, paid by the Master
                         Issuer in respect of such Master Issuer Start-Up Loan
                         under the terms and conditions of such Master Issuer
                         Start-Up Loan.

         (b)     The following amounts shall be credited on such sub-ledger to
                 the Master Issuer Start-Up Loan Ledger in respect of a Master
                 Issuer Start-Up Loan.

                 (i)     the initial Principal Amount Outstanding of such
                         Master Issuer Start-Up Loan; and

                 (ii)    all interest accrued in respect of such Master Issuer
                         Start-Up Loan under the terms and conditions of such
                         Master Issuer Start-Up Loan.

                                      29

<PAGE>

                                  SCHEDULE 3

                    FORM OF MASTER ISSUER QUARTERLY REPORT

PERMANENT MASTER ISSUER PLC

NOTES OUTSTANDING
PERIOD ENDED
ISSUE 200[*] NOTES

<TABLE>
<CAPTION>

                          SERIES [*]    SERIES [*]    SERIES [*]     SERIES [*]
                          CLASS A       CLASS A       CLASS A        CLASS A

<S>                       <C>           <C>           <C>            <C>
Moody's Current           Aaa           [Aaa          Aaa            Aaa
Rating
Fitch Current Rating      AAA           AAA           AAA            AAA
S&P Current Rating        AAA           AAA           AAA            AAA

Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note
Principal

Note Interest Margins
Step Up Dates
Step Up Margins

Interest Payment Cycle
Interest Payment Date
Next Interest Payment
Date
</TABLE>

<TABLE>
<CAPTION>

                          SERIES [*]    SERIES [*]    SERIES [*]     SERIES [*]
                          CLASS B       CLASS B       CLASS B        CLASS B

<S>                       <C>           <C>           <C>            <C>
Moody's Current           Aa3           Aa3           Aa3            Aa3
Rating
Fitch Current Rating      AA            AA            AA             AA
S&P Current Rating        AA            AA            AA             AA

Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note
Principal

Note Interest Margins
Step Up Dates
Step Up Margins

Interest Payment Cycle
Interest Payment Date
Next Interest Payment
Date
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                          SERIES [*]    SERIES [*]    SERIES [*]     SERIES [*]
                          CLASS M       CLASS M       CLASS M        CLASS M

<S>                       <C>           <C>           <C>            <C>
Moody's Current           A2            A2            A2             A2
Rating
Fitch Current Rating      A             A             A              A
S&P Current Rating        A             A             A              A

Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note
Principal

Note Interest Margins
Step Up Dates
Step Up Margins

Interest Payment Cycle
Interest Payment Date
Next Interest Payment
Date
</TABLE>

<TABLE>
<CAPTION>

                          SERIES [*]    SERIES [*]    SERIES [*]     SERIES [*]
                          CLASS C       CLASS C       CLASS C        CLASS C

<S>                       <C>           <C>           <C>            <C>
Moody's Current           Baa2          Baa2          Baa2           Baa2
Rating
Fitch Current Rating      BBB           BBB           BBB            BBB
S&P Current Rating        BBB           BBB           BBB            BBB

Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note
Principal

Note Interest Margins
Step Up Dates
Step Up Margins

Interest Payment Cycle
Interest Payment Date
Next Interest Payment
Date
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                          SERIES [*]    SERIES [*]    SERIES [*]     SERIES [*]
                          CLASS D       CLASS D       CLASS D        CLASS D

<S>                       <C>           <C>           <C>            <C>
Moody's Current Rating    Ba2           Ba2           Ba2            Ba2
Fitch Current Rating      BB            BB            BB             BB
S&P Current Rating        BB            BB            BB             BB

Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note
Principal

Note Interest Margins
Step Up Dates
Step Up Margins

Interest Payment Cycle
Interest Payment Date
Next Interest Payment
Date
</TABLE>

<PAGE>

                                  SIGNATORIES

MASTER ISSUER CASH MANAGER

EXECUTED as a DEED by             ) /S/ IAN STEWART
BANK OF SCOTLAND PLC              )
acting by its attorney            ) /S/ DAVID WILKINSON
in the presence of:               )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

MASTER ISSUER

EXECUTED as a DEED by             ) /S/ CLAUDIA WALLACE
PERMANENT                         )
MASTER ISSUER PLC                 ) /S/ HELENA WHITAKER
acting by                         )

Director

Director/Secretary

MASTER ISSUER SECURITY TRUSTEE

EXECUTED as a DEED                ) /S/ VINCENT GIRAUD
for and on behalf of              )
THE BANK OF NEW YORK              )
by its authorised signatory       )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

                                      33AMENDED AND RESTATED SERVICING AGREEMENT         EXHIBIT 4.10

                               21 NOVEMBER 2007

                             BANK OF SCOTLAND PLC
                            AS SERVICER AND SELLER

                                      AND

                      PERMANENT MORTGAGES TRUSTEE LIMITED
                             AS MORTGAGES TRUSTEE

                                      AND

                       PERMANENT FUNDING (NO. 1) LIMITED
                                 AS FUNDING 1

                                      AND

                       PERMANENT FUNDING (NO. 2) LIMITED
                                 AS FUNDING 2

                                      AND

                             THE BANK OF NEW YORK
         AS FUNDING 1 SECURITY TRUSTEE AND FUNDING 2 SECURITY TRUSTEE

<PAGE>

                                   CONTENTS

CLAUSE                                                                     PAGE

1.       Definitions and Interpretation.......................................2
2.       Appointment of Servicer..............................................3
3.       The Administration Services..........................................4
4.       Mortgages Trustee Variable Base Rate/Mortgages Trustee
         Tracker Rate.........................................................6
5.       Administration of Mortgages..........................................9
6.       No Liability........................................................13
7.       New Loans...........................................................13
8.       Product Switching and Further Advances..............................14
9.       Redemption of Mortgages.............................................14
10.      Powers of Attorney..................................................15
11.      Costs and Expenses..................................................15
12.      Information.........................................................16
13.      Remuneration........................................................17
14.      Insurances..........................................................18
15.      Halifax Insurance Policies..........................................18
16.      Buildings Policies..................................................18
17.      Title Deeds and Customer Files......................................19
18.      Data Protection.....................................................20
19.      Covenants of Servicer...............................................21
20.      Services Non-Exclusive..............................................22
21.      Termination.........................................................22
22.      Further Assurance...................................................25
23.      Miscellaneous.......................................................25
24.      Confidentiality.....................................................26
25.      Notices.............................................................27
26.      No Partnership......................................................28
27.      Assignment..........................................................28
28.      Change of Funding 1 Security Trustee and/or Funding 2
         Security Trustee....................................................28
29.      Amendments, waivers and consents....................................29
30.      Exclusion of Third Party Rights.....................................29
31.      Counterparts and Severability.......................................29
32.      Governing Law and Jurisdiction......................................29
33.      Process Agent.......................................................30

SCHEDULE

1.       The Services........................................................31
2.       Form of Investor Monthly Report.....................................32
3.       Minimum Servicing Standards.........................................33

Signatories..................................................................35

<PAGE>

THIS AMENDED AND RESTATED SERVICING AGREEMENT (this AGREEMENT) is made as a
deed on 21 November 2007

BETWEEN:

(1)      BANK OF SCOTLAND PLC (registered number SC327000), a public limited
         company incorporated under the laws of Scotland whose registered
         office is at The Mound, Edinburgh, EH1 1YZ (acting in its capacities
         as the SERVICER of the Loans and their Related Security, the SELLER
         and a BENEFICIARY);

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

(3)      PERMANENT FUNDING (NO. 1) LIMITED (registered number 4267660), a
         private limited company incorporated under the laws of England and
         Wales whose registered office is at 35 Great St. Helen's, London EC3A
         6AP (acting in its capacities as FUNDING 1 and a BENEFICIARY);

(4)      PERMANENT FUNDING (NO. 2) LIMITED (registered number 04441772), a
         private limited company incorporated under the laws of England and
         Wales whose registered office is at 35 Great St. Helen's, London EC3A
         6AP (acting in its capacities as FUNDING 2 and a BENEFICIARY); and

(5)      THE BANK OF NEW YORK, a New York banking corporation acting through
         its office at 48th Floor, One Canada Square, London E14 5AL (acting in
         its capacities as the FUNDING 1 SECURITY TRUSTEE, which expression
         shall include such company and all other persons or companies for the
         time being acting as security trustee (or co-trustee) pursuant to the
         terms of the Funding 1 Deed of Charge and the FUNDING 2 SECURITY
         TRUSTEE, which expression shall include such company and all other
         persons or companies for the time being acting as security trustee (or
         co-trustee) pursuant to the terms of the Funding 2 Deed of Charge).

WHEREAS:

(A)      Halifax (then in its capacity as the Servicer) carried on the business
         of, inter alia, administering mortgage loans secured on residential
         properties within England and Wales and Scotland.

(B)      By the Mortgage Sale Agreement, Halifax (then in its capacity as the
         Seller) sold certain mortgage loans it had originated to individual
         borrowers together with their Related Security to the Mortgages
         Trustee. The Mortgages Trustee held those mortgage loans as bare
         trustee for Funding 1 and Halifax (then in its capacity as the Seller)
         and, as of the Programme Date, Funding 2 pursuant to the terms of the
         Mortgages Trust Deed.

(C)      Halifax (then in its capacity as the Servicer) provided administration
         and management services to the Mortgages Trustee, the Seller, Funding
         1 and, as of the Programme Date, Funding 2 on the terms and subject to
         the conditions contained in the Servicing Agreement in relation to,
         inter alia, the Loans and their Related Security sold to the Mortgages
         Trustee by Halifax (then in its capacity as the Seller).

(D)      On the Reorganisation Date, pursuant to the HBOS Group Reorganisation
         Act 2006, The Governor and Company of the Bank of Scotland was
         registered as a public company under the Companies Act 1985 and
         changed its name to Bank of Scotland plc and the business and all
         property and liabilities

                                       1

<PAGE>

         of Halifax (including its business of administering loans and its
         rights and obligations under the Servicing Agreement) were transferred
         to Bank of Scotland.

(E)      The parties to the Servicing Agreement have agreed to further amend
         and restate the terms of the Servicing Agreement on the date hereof as
         set out herein.

IT IS HEREBY AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      The amended and restated master definitions and construction schedule
         signed by, amongst others, the parties to this Agreement and dated 21
         November 2007 (as the same may be amended, varied or supplemented from
         time to time with the consent of the parties to this Agreement) (the
         MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and
         specifically incorporated into this Agreement and, accordingly, the
         expressions defined in the Master Definitions and Construction
         Schedule (as so amended, varied or supplemented from time to time)
         shall, except where the context otherwise requires and save where
         otherwise defined herein, have the same meanings in this Agreement,
         including the Recitals hereto, and this Agreement shall be construed
         in accordance with the interpretation provisions set out in clause 3
         of the Master Definitions and Construction Schedule.

         For the purposes of this Agreement:

         COMMISSION means the United States Securities and Exchange Commission;

         REGULATION AB means Subpart 229.1100 - Asset Backed Securities
         (Regulation AB), 17 C.F.R. [SECTION][SECTION]229.1100-229.1123, as
         such may be amended from time to time, and subject to such
         clarification and interpretation as have been provided by the
         Commission in the adopting release (Asset-Backed Securities,
         Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (7
         January 2005)) or by the staff of the Commission, or as may be
         provided by the Commission or its staff from time to time;

         SARBANES-OXLEY CERTIFICATION has the meaning specified in Clause
         5.6(c);

         SERVICING CRITERIA means the "servicing criteria" set forth in Item
         1122(d) of Regulation AB; and

         SUBCONTRACTOR means any vendor, subcontractor or other person that is
         not responsible for the overall servicing (as "servicing" is commonly
         understood by participants in the mortgage-backed securities market)
         of the Loans and their Related Security but performs one or more
         discrete functions identified in Item 1122(d) of Regulation AB with
         respect to the Loans and their Related Security under the direction or
         authority of the Servicer.

1.2      Any reference in this Agreement to any discretion, power or right on
         the part of the Mortgages Trustee shall be exercised by the Mortgages
         Trustee only as directed by the Beneficiaries but subject in each case
         to the provisions Clause 16 of the Mortgages Trust Deed.

1.3      Save as expressly provided herein, any warranties or undertakings
         provided under this Agreement are made to each other party to this
         Agreement.

1.4      This Agreement amends and restates the Servicing Agreement made on 14
         June 2002 as amended and restated on 6 March 2003, 25 November 2003,
         12 March 2004, 22 July 2004, 18 November 2004, 23 March 2005, 22 June
         2005, 22 March 2006 and 17 October 2006 (the PRINCIPAL AGREEMENT). As
         of the date of this Agreement, any future rights or obligations
         (excluding such obligations accrued to the date of this Agreement) of
         a party under the Principal Agreement shall be extinguished and shall
         instead be governed by this Agreement.

                                       2

<PAGE>

2.       APPOINTMENT OF SERVICER

2.1      Subject to Clauses 2.4 and 4.3(e), and until termination pursuant to
         Clause 21, the Mortgages Trustee, the Seller and Funding 1 (according
         to their respective estates and interests) each hereby appoints the
         Servicer as its lawful agent on their respective behalf to administer
         the Loans and their Related Security, to provide certain other
         administration and management services and to exercise their
         respective rights, powers and discretions, and to perform their
         respective duties, under and in relation to the Loans and their
         Related Security. The Servicer in each case hereby accepts such
         appointment on the terms and subject to the conditions of this
         Agreement. The Funding 1 Security Trustee consents to the appointment
         of the Servicer on the terms of and subject to the conditions of this
         Agreement.

2.2      Subject to Clauses 2.5 and 4.3(e) and, and until termination pursuant
         to Clause 21, Funding 2 (according to its estates and interests)
         hereby appoints the Servicer as its lawful agent on its behalf to
         administer the Loans and their Related Security, to provide certain
         other administration and management services and to exercise its
         rights, powers and discretions, and to perform its duties, under and
         in relation to the Loans and their Related Security. The Servicer
         hereby accepts such appointment on the terms and subject to the
         conditions of this Agreement. The Funding 2 Security Trustee consents
         to the appointment of the Servicer on the terms of and subject to the
         conditions of this Agreement.

2.3      For the avoidance of doubt and in connection with the rights, powers
         and discretions conferred under Clause 2.1 and Clause 2.2, during the
         continuance of its appointment hereunder, the Servicer shall, subject
         to the terms and conditions of this Agreement, the Mortgage
         Conditions, the Mortgage Sale Agreement and the Mortgages Trust Deed,
         have the full power, authority and right to do or cause to be done any
         and all things which it reasonably considers necessary, convenient or
         incidental to the administration of the Loans and their Related
         Security or the exercise of such rights, powers and discretions,
         provided however that neither the Mortgages Trustee, Funding 1 nor
         Funding 2 nor their respective directors shall be required or obliged
         at any time to enter into any transaction or to comply with any
         directions which the Servicer may give with respect to the operating
         and financial policies of the Mortgages Trustee, Funding 1 or Funding
         2 and the Servicer hereby acknowledges that all powers to determine
         such policies (including the determination of whether or not any
         particular policy is for the benefit of the Mortgages Trustee, Funding
         1 or Funding 2) are, and shall at all times remain, vested, as the
         case may be, in the Mortgages Trustee and/or Funding 1 and/or Funding
         2 (and their respective directors) and none of the provisions of this
         Agreement shall be construed in a manner inconsistent with this
         proviso.

2.4      The appointment pursuant to Clause 2.1 is conditional upon the issue
         of the First Issuer Notes having taken place and shall take effect
         upon and from the Initial Closing Date automatically without any
         further action on the part of any person PROVIDED THAT if the issue of
         the First Issuer Notes has not occurred by 14 June 2002, or such later
         date as the First Issuer and the Joint Lead Managers may agree, the
         appointment of the Servicer as agent of Funding 1 under Clause 2.1
         shall not take effect.

2.5      The appointment pursuant to Clause 2.2 is conditional upon the
         acquisition by Funding 2 from the Seller of a portion of the Seller's
         beneficial interest in the Mortgages Trust pursuant to the Seller
         Mortgages Trust Assignment Agreement and shall take effect upon and
         from the Programme Date automatically without any further action on
         the part of any person PROVIDED THAT if Funding 2 has not acquired
         from the Seller a portion of the Seller's beneficial interest in the
         Mortgages Trust by 17 October 2006, or such later date as the Seller
         and Funding 2 may agree, the appointment of the Servicer as agent of
         Funding 2 under Clause 2.2 shall not take effect.

                                       3

<PAGE>

3.       THE ADMINISTRATION SERVICES

3.1      GENERAL

(a)      The duty of the Servicer shall be to provide the services set out in
         this Agreement including Schedule 1 hereto (the SERVICES).

(b)      If and when the Servicer is requested to confirm or state the capacity
         in which it is administering and servicing the Loans, their Related
         Security and related matters pursuant to this Agreement by any
         Borrower or any third party not being a party to this Agreement and to
         whom the Servicer is obliged by law to disclose such information, the
         Servicer shall confirm or state that it is acting in its capacity as
         servicer of the Loans, their Related Security and related matters as
         agent for and on behalf of the Mortgages Trustee and the Beneficiaries
         and not on its own behalf.

3.2      SUB-CONTRACTS

(a)      The Servicer may sub-contract or delegate the performance of all or
         any of its powers and obligations under this Agreement, provided that
         such sub-contracting or delegation would not prevent the Servicer, the
         Mortgages Trustee, Funding 1 or Funding 2 from complying in all
         material respects with any law, statute, judgment, decree, order,
         licence, authorisation, rule, order and provided further that (subject
         to Clause 3.2(b)):

         (i)     the prior written consent of Funding 1, Funding 2, the Funding
                 1 Security Trustee and the Funding 2 Security Trustee to the
                 proposed arrangement (including, if Funding 1, Funding 2, the
                 Funding 1 Security Trustee and the Funding 2 Security Trustee
                 consider it necessary, approving any contract which sets out
                 the terms on which such arrangements are to be made) has been
                 obtained and written notification has been given to each of
                 the Rating Agencies;

         (ii)    where the arrangements involve the custody or control of any
                 Customer Files and/or Title Deeds relating to the Portfolio
                 for the purpose of performing any delegated Services the
                 sub-contractor or delegate has executed an acknowledgement in
                 form and substance acceptable to Funding 1, Funding 2, the
                 Funding 1 Security Trustee and the Funding 2 Security Trustee
                 to the effect that any such Customer Files and/or Title Deeds
                 are and will be held to the order of the Mortgages Trustee (as
                 trustee for the Beneficiaries);

         (iii)   where the arrangements involve or may involve the receipt by
                 the sub-contractor or delegate of monies belonging to the
                 Beneficiaries which, in accordance with this Agreement, are to
                 be paid into the Mortgages Trustee GIC Account, the
                 sub-contractor or delegate has executed a declaration in form
                 and substance acceptable to the Beneficiaries that any such
                 monies held by it or to its order are held on trust for the
                 Beneficiaries and will be paid forthwith into, as applicable,
                 the Mortgages Trustee GIC Account in accordance with the terms
                 of the Mortgages Trust Deed;

         (iv)    any such sub-contractor or delegate has executed a written
                 waiver of any Security Interest arising in connection with
                 such delegated Services (to the extent that such Security
                 Interest relates to the Portfolio or any amount referred to in
                 (iii) above);

         (v)     neither the Funding 1 Security Trustee, the Funding 2 Security
                 Trustee, the Mortgages Trustee, Funding 1 nor Funding 2 shall
                 have any liability for any costs, charges or expenses payable
                 to or incurred by such sub-contractor or delegate or arising
                 from the entering into, the continuance or the termination of
                 any such arrangement; and

         (vi)    any such sub-contractor or delegate shall have confirmed to
                 the Servicer, Funding 1, Funding 2, the Funding 1 Security
                 Trustee and the Funding 2 Security Trustee that it has,

                                       4

<PAGE>

                 and shall maintain, all requisite consents, authorisations,
                 approvals, licences, and orders, including without limitation
                 all authorisations under the FSMA, to enable it to fulfil its
                 obligations under or in connection with any such arrangement.

(b)      The provisos to Clause 3.2(a)(i), (ii) and (iii) shall not apply:

         (i)     to the engagement by the Servicer of:

                 (A)     any receiver, solicitor, insurance broker, valuer,
                         surveyor, accountant, estate agent, insolvency
                         practitioner, auctioneer, bailiff, sheriff officer,
                         debt counsellor, tracing agent, property management
                         agent, licensed conveyancer, qualified conveyancer or
                         other professional adviser acting as such; or

                 (B)     any locksmith, builder or other contractor acting as
                         such in relation to a Property,

                 in any such case being a person or persons whom the Servicer
                 would be willing to appoint in respect of its own mortgages in
                 connection with the performance by the Servicer of any of its
                 obligations or functions or in connection with the exercise of
                 its powers under this Agreement; or

         (ii)    to any delegation to any wholly-owned subsidiary of the Seller
                 or HBOS plc from time to time.

(c)      The Mortgages Trustee and/or Funding 1 and/or Funding 2 and the
         Funding 1 Security Trustee and the Funding 2 Security Trustee may by
         notice in writing require the Servicer to assign to the Mortgages
         Trustee any rights which the Servicer may have against any
         sub-contractor or delegate arising from the performance of services by
         such person relating to any matter contemplated by this Agreement and
         the Servicer acknowledges that such rights assigned to the Mortgages
         Trustee will be exercised by the Mortgages Trustee as trustee for the
         Beneficiaries subject to the terms of the Mortgages Trust Deed.

(d)      Notwithstanding any sub-contracting or delegation of the performance
         of its obligations under this Agreement, the Servicer shall not
         thereby be released or discharged from any liability hereunder and
         shall remain responsible for the performance of all of the obligations
         of the Servicer under this Agreement, and the performance or
         non-performance or the manner of performance of any sub-contractor or
         delegate of any of the Services shall not affect the Servicer's
         obligations under this Agreement and any breach in the performance of
         the Services by such sub-contractor or delegate shall, subject to the
         Servicer being entitled for a period of 20 London Business Days from
         receipt of any notice of the breach to remedy such breach by any
         sub-contractor or delegate, be treated as a breach of this Agreement
         by the Servicer.

3.3      NOTICES ETC.

(a)      Within 20 London Business Days of the Initial Closing Date, the
         Servicer will give notice (or procure that notice is given) by courier
         or by special delivery to HBOS Insurance (PCC) Guernsey Limited of the
         assignment to the Mortgages Trustee by the Seller of its interests in
         the Halifax Mortgage Re Limited MIG Policies pursuant to the
         Assignment of Halifax Mortgage Re Limited MIG Policies, which shall be
         held by the Mortgages Trustee absolutely as bare trustee for the
         Beneficiaries pursuant to the Mortgages Trust Deed, and the Servicer
         shall take all reasonable steps to ensure the return by the relevant
         recipient of the duplicate notices of assignment by way of
         acknowledgement thereof.

(b)      Promptly upon request by Funding 1, Funding 2, the Funding 1 Security
         Trustee and the Funding 2 Security Trustee, the Servicer shall procure
         that any notices permitted to be given by the Mortgages

                                       5

<PAGE>

         Trustee under clause 6.4 of the Mortgage Sale Agreement are so given
         by the Servicer on the Mortgages Trustee's behalf.

3.4      LIABILITY OF SERVICER

(a)      The Servicer shall indemnify each of the Mortgages Trustee and the
         Beneficiaries on demand on an after-tax basis for any loss, liability,
         claim, expense or damage suffered or incurred by any of them in
         respect of the negligence or wilful default of the Servicer in
         carrying out its functions as Servicer under this Agreement or the
         other Transaction Documents or as a result of a breach by the Servicer
         of the terms and provisions of this Agreement or the other Transaction
         Documents in relation to such functions.

(b)      For the avoidance of doubt, the Servicer shall not be liable in
         respect of any loss, liability, claim, expense or damage suffered or
         incurred by the Mortgages Trustee and/or the Beneficiaries and/or any
         other person as a result of the proper performance of the Services by
         the Servicer save where such loss, liability, claim, expense or damage
         is suffered or incurred as a result of any negligence or wilful
         default of the Servicer or as a result of a breach by the Servicer of
         the terms and provisions of this Agreement or the other Transaction
         Documents in relation to such functions.

(c)      Any indemnification under this Clause 3.4 in respect of loss suffered
         by the Beneficiaries while Bank of Scotland is Servicer shall be paid
         for by reducing the Seller Share of the Trust Property by an amount
         equal to the relevant loss incurred by the Beneficiaries in accordance
         with Clause 8.4 of the Mortgages Trust Deed and Schedule 2 to the Cash
         Management Agreement.

4.       MORTGAGES TRUSTEE VARIABLE BASE RATE/MORTGAGES TRUSTEE TRACKER RATE

4.1      The Mortgages Trustee and each of the Beneficiaries each hereby grants
         the Servicer full right, liberty and authority from time to time, in
         accordance with the relevant Mortgage Terms, to determine and set the
         Mortgages Trustee Variable Base Rate and any variable margin
         incorporated within the Mortgages Trustee Tracker Rate above the Bank
         of England repo rate applicable in relation to Tracker Rate Loans
         chargeable to Borrowers from time to time. In exercising such right,
         liberty and authority the Servicer undertakes to each of the other
         parties to this Agreement that it shall not at any time, without the
         prior consent of the Mortgages Trustee, Funding 1 and Funding 2, set
         or maintain the Mortgages Trustee Variable Base Rate at a rate which
         is higher than (although it may be lower than or equal to) the then
         prevailing Seller's Variable Base Rate, nor will it set or maintain a
         margin incorporated within the Mortgages Trustee Tracker Rate above
         the Bank of England repo rate in respect of any Tracker Rate Loan,
         which is higher than the margin above the Bank of England repo rate
         then applying to those Tracker Rate Loans beneficially owned by the
         Seller outside the Portfolio except in the limited circumstances
         described in this paragraph when the Mortgages Trustee will be
         entitled to do so. The Servicer will not at any time, without the
         prior consent of the Mortgages Trustee, Funding 1 and Funding 2, set
         or maintain:

         (a)     the Mortgages Trustee Variable Base Rate at a rate which is
                 higher than (although it may be lower than or equal to) the
                 then prevailing Seller's Variable Base Rate which applies to
                 loans beneficially owned by the Seller outside the Portfolio;

         (b)     the margin incorporated within the Mortgages Trustee Tracker
                 Rate in respect of any Tracker Rate Loan in the Portfolio
                 which, where the offer conditions for that Tracker Rate Loan
                 provide that the margin above the Bank of England repo rate
                 shall be the same as the margin above the Bank of England repo
                 rate applicable to all other loans having the same offer
                 conditions in relation to interest rate setting as that
                 Tracker Rate Loan, is higher or lower than the margin above
                 the Bank of England repo rate then applying to those Tracker
                 Rate Loans beneficially owned by the Seller outside the
                 Portfolio; and

                                       6

<PAGE>

         (c)     the margin incorporated within the Mortgages Trustee Tracker
                 Rate above the Bank of England repo rate in respect of any
                 other Tracker Rate Loan which is higher than the margin above
                 the Bank of England repo rate which would then be set in
                 accordance with the Seller's Policy from time to time in
                 relation to that Tracker Rate Loan,

         unless the Servicer is required to do so pursuant to Clause 4.3, and,
         subject to that requirement, that it shall not change the Mortgages
         Trustee Variable Base Rate nor the Mortgages Trustee Tracker Rate save
         for the same reasons as the Seller was entitled, under the Mortgage
         Conditions, to change the Seller's Variable Base Rate and the Seller's
         Tracker Rate prior to the sale to the Mortgages Trustee of the Loans
         comprised in the Portfolio and their Related Security. Each of the
         Mortgages Trustee and the Beneficiaries shall be bound by the
         Mortgages Trustee Variable Base Rate and the Mortgages Trustee Tracker
         Rate set in accordance with this Agreement.

4.2      The Servicer shall take the steps rendered necessary by the relevant
         Mortgage Terms and applicable law (including, without limitation, the
         Guidance Note on Interest Variation Terms issued by the Office of Fair
         Trading in February 2000 and the FSA's Statement of Good Practice on
         Fairness of Terms in Consumer contracts published May 2005 and any
         successor guideline or applicable additional guidelines) to bring each
         change in such rate or rates of interest to the attention of the
         relevant Borrowers, whether due to a change in the Mortgages Trustee
         Variable Base Rate or the Mortgages Trustee Tracker Rate or as a
         consequence of any provisions of the Mortgage Terms. All costs arising
         in relation to such a notification of a change in such rate or rates
         of interest shall be borne by the Servicer.

4.3      (a)     On each Calculation Date following a debit to the Funding 1
                 General Reserve Fund Ledger and/or the Funding 2 General
                 Reserve Fund Ledger and continuing until the debit balance is
                 eliminated, the Servicer shall determine, having regard to the
                 aggregate of:

                 (i)     the revenue which each of Funding 1 and Funding 2
                         would respectively expect to receive during the
                         Interest Period commencing on the next succeeding (in
                         the case of Funding 1) Funding 1 Interest Payment Date
                         and (in the case of Funding 2) Funding 2 Interest
                         Payment Date;

                 (ii)    the Mortgages Trustee Variable Base Rate, any variable
                         margins applicable in relation to any Tracker Rate
                         Loans and the Variable Mortgage Rates in respect of
                         the Loans which the Servicer proposes to set under
                         this Clause 4; and

                 (iii)   the other resources available to Funding 1 and Funding
                         2 including:

                         (A)     (in the case of Funding 1) the Funding 1 Swap
                                 Agreement, the Funding 1 Liquidity Facility,
                                 the General Reserve Fund and the Liquidity
                                 Reserve Fund; and

                         (B)     (in the case of Funding 2) the Funding 2 Swap
                                 Agreement and the Funding 2 General Reserve
                                 Fund,

                         whether:

                         I.      Funding 1 would receive an amount of revenue
                                 during that Interest Period which when
                                 aggregated with the funds otherwise available
                                 to Funding 1 is less than the amount which is
                                 the aggregate of (a) the amount of interest
                                 which will be payable in respect of the Term
                                 AAA Advances under the Intercompany Loan
                                 Agreements and all amounts ranking higher in
                                 priority to such amounts on the Funding 1
                                 Interest Payment Date falling at the end of
                                 that Interest Period and (b) the other senior
                                 expenses of Funding 1 which

                                       7

<PAGE>

                                 rank in priority thereto (the amount (if any)
                                 by which it is less being the FUNDING 1
                                 INTEREST RATE SHORTFALL); and

                         II.     Funding 2 would receive an amount of revenue
                                 during that Interest Period which when
                                 aggregated with the funds otherwise available
                                 to Funding 2 is less than the amount which is
                                 the aggregate of (a) the amount of interest
                                 which will be payable in respect of the AAA
                                 Loan Tranches under the Master Intercompany
                                 Loan Agreement and all amounts ranking higher
                                 in priority to such amounts falling at the end
                                 of that Interest Period and (b) the other
                                 senior expenses of Funding 2 which rank in
                                 priority thereto (the amount (if any) by which
                                 it is less being the FUNDING 2 INTEREST RATE
                                 SHORTFALL).

         (b)     If the Servicer determines that there will be either a Funding
                 1 Interest Rate Shortfall or a Funding 2 Interest Rate
                 Shortfall, it will within one London Business Day of such
                 determination give written notice thereof to the Mortgages
                 Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee
                 and the Funding 2 Security Trustee of such Funding 1 Interest
                 Rate Shortfall and/or Funding 2 Interest Rate Shortfall (as
                 the case may be) and of the Mortgages Trustee Variable Base
                 Rate and/or the Mortgages Trustee Tracker Rate which would
                 (taking into account the applicable Mortgage Conditions), in
                 the Servicer's reasonable opinion, need to be set in order for
                 no Funding 1 Interest Rate Shortfall and/or Funding 2 Interest
                 Rate Shortfall (as the case may be) to arise, having regard to
                 the date(s) (which shall be specified in the notice) on which
                 such change to the Mortgages Trustee Variable Base Rate and
                 the Mortgages Trustee Tracker Rate would take effect and at
                 all times acting in accordance with the standards of a
                 Reasonable, Prudent Mortgage Lender as regards the competing
                 interests of Borrowers with Mortgage Trustee Variable Base
                 Rate Loans and Borrowers with Mortgages Trustee Tracker Rate
                 Loans.

         (c)     If the Mortgages Trustee, Funding 1 and the Funding 1 Security
                 Trustee notify the Servicer that, having regard to the
                 obligations of Funding 1, the Mortgages Trustee Variable Base
                 Rate and/or the Mortgages Trustee Tracker Rate should be
                 increased but no notification is received by the Servicer
                 under Clause 4.3(d), the Servicer, as agent for and on behalf
                 of, inter alios, the Mortgages Trustee and the Beneficiaries,
                 shall take all steps which are necessary, including publishing
                 any notice which is required in accordance with the Mortgage
                 Terms, to effect such change in the Mortgages Trustee Variable
                 Base Rate and/or the Mortgages Trustee Tracker Rate on the
                 date(s) specified in the notice referred to in Clause 4.3(b).

         (d)     If the Mortgages Trustee, Funding 2 and the Funding 2 Security
                 Trustee notify the Servicer that, having regard to the
                 obligations of Funding 2, the Mortgages Trustee Variable Base
                 Rate and/or the Mortgages Trustee Tracker Rate should be
                 increased but no notification is received by the Servicer
                 under Clause 4.3(c), the Servicer, as agent for and on behalf
                 of, inter alios, the Mortgages Trustee and the Beneficiaries,
                 shall take all steps which are necessary, including publishing
                 any notice which is required in accordance with the Mortgage
                 Terms, to effect such change in the Mortgages Trustee Variable
                 Base Rate and/or the Mortgages Trustee Tracker Rate on the
                 date(s) specified in the notice referred to in Clause 4.3(b).

         (e)     If the Servicer receives notification from:

                 (i)     the Mortgages Trustee, Funding 1 and the Funding 1
                         Security Trustee in accordance with Clause 4.3(c); or

                                       8

<PAGE>

                 (ii)    the Mortgages Trustee, Funding 2 and the Funding 2
                         Security Trustee in accordance with Clause 4.3(d),

                 then the Servicer, as agent for and on behalf of the Mortgages
                 Trustee and the Beneficiaries, shall take all steps which are
                 necessary, including publishing any notice which is required
                 in accordance with the Mortgage Terms, to effect such change
                 in the Mortgages Trustee Variable Base Rate and/or the
                 Mortgages Trustee Tracker Rate on the date(s) specified in the
                 notice referred to in Clause 4.3(b).

         (f)     The Mortgages Trustee and/or Funding 1 and/or Funding 2 and/or
                 the Funding 1 Security Trustee and/or the Funding 2 Security
                 Trustee may terminate the authority of the Servicer under
                 Clause 4.1 and Clause 4.3 to determine the Mortgages Trustee
                 Variable Base Rate and the Mortgages Trustee Tracker Rate on
                 or after the occurrence of a Servicer Termination Event, in
                 which case the Mortgages Trustee shall set the Mortgages
                 Trustee Variable Base Rate and the Mortgages Trustee Tracker
                 Rate in accordance with this Clause 4.

5.       ADMINISTRATION OF MORTGAGES

5.1      DIRECT DEBITING SCHEME

(a)      For the purposes of collecting amounts due from Borrowers under the
         Loans and their Related Security comprised in the Portfolio in
         accordance with this Agreement the Servicer will unless otherwise
         agreed in writing with the Beneficiaries:

         (i)     act, or procure that another person approved in writing by the
                 Beneficiaries (such approval not to be unreasonably withheld)
                 (the THIRD PARTY COLLECTION AGENT) acts, as collection agent
                 for the Mortgages Trustee and the Beneficiaries under the
                 Direct Debiting Scheme and remains a member of the Direct
                 Debiting Scheme or any scheme which replaces the Direct
                 Debiting Scheme;

         (ii)    subject to Clauses 5.1(b) and 5.1(c), deliver to the Bankers
                 Automated Clearing System (BACS) or to the Account Bank such
                 instructions as may be necessary from time to time for the
                 debit of the account of each Borrower in respect of which
                 there is a direct debit mandate (the date of such delivery
                 being the D.D. Date) with the Monthly Payment due from such
                 Borrower, and for the amount of such Monthly Payment to be
                 credited to the Mortgages Trustee GIC Account on the day after
                 the D.D. Date or, if such day is not a London Business Day,
                 the following London Business Day unless the short-term
                 ratings of the Account Bank fall below A-1+ by S&P, P-1 by
                 Moody's or F1 by Fitch, in which case all further instructions
                 by the Servicer to debit the accounts of Borrowers that are
                 subject to direct debit bank mandates shall be made to another
                 bank which has a rating of at least A-1+ by S&P, P-1 by
                 Moody's or F1 by Fitch, or directly to the Mortgages Trustee
                 GIC Account;

         (iii)   subject to Clauses 5.1(b) and 5.1(c), deliver to the Account
                 Bank or BACS (as appropriate) instructions for the debit of
                 the account of each Borrower in respect of which there is a
                 direct debit mandate and the Monthly Payment due and owing
                 from such Borrower on the D.D. Date immediately preceding the
                 next succeeding Monthly Payment Date remains outstanding to
                 the extent that, on the date of presentation of such
                 instructions, such Monthly Payment has not been received in
                 full by the Servicer on behalf of the Mortgages Trustee and
                 where the instructions for the debit of the account of the
                 relevant Borrower for the Monthly Payment due and owing from
                 such Borrower was returned to the Servicer marked
                 "insufficient funds" within ten London Business Days of
                 receipt by the Servicer of any such returned instructions;

                                       9

<PAGE>

         (iv)    subject to Clauses 5.1(b) and 5.1(c), deliver to the Account
                 Bank or BACS (as appropriate) such other instructions for the
                 debit of the account of each Borrower in respect of which
                 there is a direct debit mandate in accordance with the Direct
                 Debiting Scheme as may be appropriate for the recovery of sums
                 due by such Borrower; and

         (v)     comply in all material respects with the requirements from
                 time to time of the Direct Debiting Scheme including "The
                 Originator's Guide and Rules to the Direct Debiting Scheme" as
                 amended from time to time,

         and take all such other steps as are reasonably appropriate, including
         in particular the preparation and administration of appropriate
         computer tapes in connection with BACS, to ensure that all monies
         received from Borrowers during banking hours on any particular day are
         credited on the next day to the Mortgages Trustee GIC Account.

(b)      The Servicer may agree with a Borrower that the Direct Debiting Scheme
         shall not apply to Monthly Payments to be made by such Borrower,
         provided, subject to Clause 5.1(d), that (i) alternative payment
         arrangements are made which are intended to ensure timely payment of
         Monthly Payments due from the Borrower to the Mortgages Trustee on
         behalf of the Beneficiaries, and (ii) the change in arrangements was
         made at the instigation of the Borrower or by the Servicer in
         accordance with the procedures which would be adopted by a Reasonable,
         Prudent Mortgage Lender.

(c)      The Servicer may, notwithstanding the proviso to Clause 5.1(b), agree
         such procedures for the payment by a Borrower of (i) overdue amounts
         and (ii) amounts payable on redemption of a Mortgage in whole or in
         part other than through the Direct Debiting Scheme as would be agreed
         by a Reasonable, Prudent Mortgage Lender.

(d)      The Servicer shall, notwithstanding the proviso to Clause 5.1(b), use
         its reasonable endeavours to credit Monthly Payments made by a
         Borrower under a payment arrangement other than the Direct Debiting
         Scheme to the Mortgages Trustee GIC Account as follows:

         (i)     where the Borrower pays by standing order, by close of
                 business on the second London Business Day following the day
                 on which such amount is received or credited by the Servicer;

         (ii)    where the Borrower pays by payment of cash, by transfer
                 payment from another account of the Seller or by cheque where
                 reference to the relevant Borrower is provided or payments are
                 made by way of paying-in book, by close of business on the
                 London Business Day which immediately follows the day on which
                 such amount is received or credited by the Servicer; and

         (iii)   where the Borrower pays by cheque where a reference to the
                 relevant Borrower is not provided, by close of business on the
                 next London Business Day after notification from the Seller of
                 the identity of the Borrower.

(e)      Where a Borrower permits a direct debit to be made to his bank
         account, the Servicer will endeavour to procure that such Borrower
         maintains a valid and effective mandate relating to such direct debit
         in relation to each Monthly Payment due from that Borrower, provided
         that in any case where a Borrower will not permit a direct debit to be
         made to his bank account the Servicer will endeavour to make
         alternative arrangements acceptable to a Reasonable, Prudent Mortgage
         Lender so that such Borrower nevertheless pays each Monthly Payment
         within the month in which it falls due.

(f)      If at any time the Servicer shall receive notice whether under the
         Direct Debiting Scheme or otherwise that any amount (or part thereof),
         which was paid in or credited pursuant to Clause 5.1 and which has
         been transferred to the Mortgages Trustee GIC Account has not been
         received as cleared

                                      10

<PAGE>

         funds or has otherwise been recalled, the Servicer shall notify the
         Cash Manager and instruct the Cash Manager forthwith to debit the
         Mortgages Trustee GIC Account and credit the relevant collection
         account for the whole or any part of such amount (such amount
         hereinafter referred to as the SHORTFALL) and, an amount equal to any
         costs which are irrecoverable by the Servicer from the relevant
         Borrower incurred by the Servicer as a result of such shortfall;
         PROVIDED THAT no debit from the Mortgages Trustee GIC Account for the
         credit of the collection accounts in respect of any shortfall may be
         made on or after a Calculation Date in respect of the relevant period
         between that Calculation Date and the next Distribution Date unless
         sufficient funds are available after providing or making provision for
         all payments to be made on the next succeeding Distribution Date.
         After that following Distribution Date the Mortgages Trustee shall
         transfer, or procure on its behalf the transfer, from the Mortgages
         Trustee GIC Account to the relevant collection account of an amount
         equal to such shortfall subject to it having sufficient funds
         available to it or the Servicer shall deduct an amount equal to such
         shortfall from payments otherwise due on a daily basis from the Seller
         to the Mortgages Trustee in respect of Principal Receipts and Interest
         Receipts received under the Loans.

5.2      ADMINISTRATION AND ENFORCEMENT OF MORTGAGES

(a)      The Mortgages Trustee and the Beneficiaries hereby direct the Servicer
         to administer the Loans comprised in the Portfolio and carry out its
         specific obligations under this Agreement in accordance with the
         Seller's Policy.

(b)      The Servicer will, in relation to any default by a Borrower under or
         in connection with a Loan or a Mortgage comprised in the Portfolio,
         comply with the Enforcement Procedures or, to the extent that the
         Enforcement Procedures are not applicable having regard to the nature
         of the default in question, take such action as is not materially
         prejudicial to the interests of the Mortgages Trustee (as trustee for
         the Beneficiaries) and the Beneficiaries under the relevant MIG
         Policy, provided that:

         (i)     the Servicer shall only become obliged to comply with the
                 Enforcement Procedures (to the extent applicable) or to take
                 action as aforesaid after it has become aware of the default;

         (ii)    it is acknowledged by the Beneficiaries that mortgage lenders
                 generally exercise discretion in pursuing their respective
                 enforcement procedures and that the Servicer may exercise such
                 discretion as would a Reasonable, Prudent Mortgage Lender in
                 applying the Enforcement Procedures to any particular
                 defaulting Borrower or taking action as aforesaid, provided
                 that in exercising such discretion the interest of Funding 1
                 and/or Funding 2 in the Portfolio is not materially
                 prejudiced; and

         (iii)   in any case where any of the Insurance Policies requires exact
                 compliance with certain enforcement procedures the Servicer
                 shall procure the prior written consent of the relevant
                 insurance company for any deviation by it from such
                 enforcement procedures.

5.3      RECORDS

         The Servicer shall keep and maintain records in relation to the
         Portfolio, on a Loan by Loan basis, for the purposes of identifying
         amounts paid by each Borrower, any amount due from a Borrower and the
         principal balance (and, if different, the total balance) from time to
         time outstanding on a Borrower's account and such other records as
         would be kept by a Reasonable, Prudent Mortgage Lender. The Servicer
         will provide such information to the Mortgages Trustee and/or Funding
         1 and/or Funding 2 and/or the Funding 1 Security Trustee and/or the
         Funding 2 Security Trustee or to their order at any time upon
         reasonable notice subject to the Servicer being reasonably capable of
         providing such information without significant additional cost and
         subject to the provisions of the Data Protection Act 1998 and other
         applicable legislation from time to time and provided that no duty of
         confidence and no industry code of practice will or may be breached
         thereby.

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<PAGE>

5.4      TRUST

(a)      If the Servicer in carrying out its functions as Servicer under this
         Agreement receives (including in its capacity as agent for the
         Mortgages Trustee and the Beneficiaries) any money whatsoever arising
         from the Loans and their Related Security, which money belongs to the
         Mortgages Trustee (as trustee for the Beneficiaries) and is to be paid
         to the Mortgages Trustee GIC Account pursuant to this Agreement or any
         of the other Transaction Documents or otherwise, it will hold such
         monies on trust for the Mortgages Trustee and shall, as soon as
         reasonably practicable and in any event within the time limits
         referred to in Clause 5.1, pay the monies into the Mortgages Trustee
         GIC Account.

(b)      All other sums received by the Servicer in respect of the Loans and
         their Related Security shall be held by the Servicer for itself.

5.5      ANNUAL SERVICER COMPLIANCE STATEMENT

         For so long as the Mortgages Trustee and/or Funding 1 and/or Funding 2
         and/or any Funding 1 Issuer and/or the Master Issuer is subject to the
         reporting requirements of Section 13(a) or 15(d) of the Exchange Act,
         the Servicer shall deliver to the Mortgages Trustee and/or Funding 1
         and/or Funding 2 (as applicable) a statement of compliance in the form
         and at a time sufficient to comply with the requirements of Item 1123
         of Regulation AB to the extent applicable; provided, however, that,
         with regard to any issuance by a Funding 1 Issuer of securities
         registered under the Securities Act with a Closing Date prior to 31
         December 2005, for so long as such Funding 1 Issuer is subject to the
         reporting obligations of Section 13 or 15(d) of the Exchange Act, the
         Servicer may, at the sole discretion of Funding 1, deliver to Funding
         1 at a time specified by Funding 1, in lieu of the foregoing, an
         officer's certificate with respect to each such Funding 1 Issuer in
         the form previously filed as Exhibit 99.1 to the annual report on Form
         20-F of such Funding 1 Issuer.

5.6      REPORT ON ASSESSMENT OF COMPLIANCE AND ATTESTATION

         For as long as the Mortgages Trustee and/or Funding I and/or Funding 2
         and/or any Funding 1 Issuer and/or the Master Issuer is subject to the
         reporting requirements of Section 13(a) or 15(d) of the Exchange Act,
         the Servicer shall:

         (a)     with respect to any securities issued after 31 December 2005,
                 deliver to the Mortgages Trustee and/or Funding 1 and/or
                 Funding 2 (as applicable) a report regarding the Servicer's
                 assessment of compliance with the Servicing Criteria during
                 the immediately preceding calendar year, in the form and at a
                 time sufficient to comply with the requirements of Rule 13a-18
                 or 15d-18 of the Exchange Act and Item 1122(a) of Regulation
                 AB, as applicable; and

         (b)     cause each Subcontractor determined by the Servicer to be
                 "participating in the servicing function" within the meaning
                 of Item 1122 of Regulation AB, to deliver to the Mortgages
                 Trustee and/or Funding 1 and/or Funding 2 (as applicable) a
                 report on assessment of compliance with applicable servicing
                 criteria in the form and at a time sufficient to comply with
                 the requirements of Rule 13a-18 or Rule 15d-18 of the Exchange
                 Act and Item 1122(a) of Regulation AB; and

         (c)     deliver or cause to be delivered to any person that will be
                 responsible for signing the certification (a SARBANES-OXLEY
                 CERTIFICATION) required by Rule 13a-14(d) or Rule 15d-14(d)
                 under the Exchange Act such certifications or information as
                 such person deems necessary to give the Sarbanes-Oxley
                 Certification.

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<PAGE>

5.7      INDEPENDENT AUDITORS' ATTESTATION REPORT

         The Servicer shall cause a registered public accounting firm to
         furnish an attestation report on assessment of compliance with the
         Servicing Criteria with respect to the Servicer or any affiliate
         thereof or any party or Subcontractor determined by the Servicer to be
         "participating in the servicing function" (within the meaning of Item
         1122 of Regulation AB) in the form and at a time sufficient to comply
         with the requirements of Rule 13a-18 or Rule 15d-18 of the Exchange
         Act and Item 1122(b) of Regulation AB, to the extent applicable;
         provided, however, that with regard to any issuance by a Funding 1
         Issuer of securities registered under the Securities Act with a
         Closing Date prior to 31 December 2005, for so long as such Funding 1
         Issuer is subject to the reporting obligations of Section 13 or 15(d)
         of the Exchange Act, the Servicer may, at the sole discretion of
         Funding 1, deliver to Funding 1 at a time specified by Funding 1, in
         lieu of the foregoing, a report of independent accountants with
         respect to each such Funding 1 Issuer in the form previously filed as
         Exhibit 99.2 to the annual report on Form 20-F of such Funding 1
         Issuer.

5.8      USE OF SUBCONTRACTORS

         The Servicer shall promptly upon request provide the Mortgages Trustee
         and/or Funding 1 and/or Funding 2 (as applicable) a written
         description (in form and substance satisfactory to the Mortgages
         Trustee and/or Funding 1 and/or Funding 2 (as applicable)) of the role
         and function of each Subcontractor utilised by the Servicer,
         specifying (a) the identity of each such Subcontractor, (b) which (if
         any) of such Subcontractors are "participating in the servicing
         function" within the meaning of Item 1122 of Regulation AB, and (c)
         which elements of the Servicing Criteria will be addressed in
         assessments of compliance provided by each Subcontractor identified
         pursuant to (b) above of this Clause 5.8. As a condition to the
         utilisation of any Subcontractor determined to be "participating in
         the servicing function" within the meaning of Item 1122 of Regulation
         AB, the Servicer shall cause any such Subcontractor used by the
         Servicer for the benefit of the Mortgages Trustee to comply with the
         provisions of Clause 5.6 of this Agreement to the same extent as if
         such Subcontractor were the Servicer. The Servicer shall be
         responsible for obtaining from each Subcontractor and delivering to
         the Mortgages Trustee any assessment of compliance and attestation
         required to be delivered by such Subcontractor under Clause 5.6, in
         each case as and when required to be delivered.

6.       NO LIABILITY

6.1      The Servicer shall have no liability for any obligation of a Borrower
         under any Loan comprised in the Portfolio or any Related Security and
         nothing herein shall constitute a guarantee, or similar obligation, by
         the Servicer of any Loan, Mortgage or any Borrower.

6.2      Save as otherwise provided in this Agreement, the Servicer shall have
         no liability for the obligations of the Mortgages Trustee or the
         Beneficiaries under any of the Transaction Documents or otherwise and
         nothing herein shall constitute a guarantee, or similar obligation, by
         the Servicer of the Mortgages Trustee or the Beneficiaries in respect
         of any of them.

7.       NEW LOANS

7.1      The Portfolio may be augmented from time to time by the sale to the
         Mortgages Trustee on any Sale Date of a New Portfolio by the Seller.

7.2      The sale of each New Portfolio to the Mortgages Trustee will in all
         cases be subject to the terms set out in the Mortgage Sale Agreement
         including, without limitation, the conditions set out in clause 4 of
         the Mortgage Sale Agreement and the representations and warranties set
         out in clause 8 of the Mortgage Sale Agreement.

                                      13

<PAGE>

8.       PRODUCT SWITCHING AND FURTHER ADVANCES

8.1      (a)     The Servicer shall not send an offer of a Further Advance or a
                 Home Cash Reserve Advance without first having received
                 confirmation in writing from the Seller save where the Seller
                 and the Servicer are both Bank of Scotland that the Seller
                 would, if so offered by the Mortgages Trustee, purchase the
                 relevant Loan and its Related Security from the Mortgages
                 Trustee.

         (b)     The Servicer shall not send an offer of a Product Switch
                 without first having received confirmation in writing from the
                 Seller save where the Seller and the Servicer are both Bank of
                 Scotland that the Seller would, if so offered by the Mortgages
                 Trustee, purchase the relevant Loan and its Related Security
                 from the Mortgages Trustee if on the immediately preceding
                 Distribution Date, the Seller is in breach of the conditions
                 referred to in clauses 4.2(a) to (q) inclusive of the Mortgage
                 Sale Agreement as if references therein to NEW LOANS and NEW
                 PORTFOLIO were references to the Loan which would result from
                 the implementation of such Product Switch and as if references
                 to SALE DATE were references to the date when the Seller and
                 relevant Borrower complete such Product Switch.

         (c)     For the avoidance of doubt, neither the Servicer nor the
                 Seller shall make an offer to a Borrower for a Further
                 Advance, a Home Cash Reserve Advance or a Product Switch if it
                 would result in any Funding 1 Issuer and/or the Master Issuer
                 and/or Funding 1 and/or Funding 2 and/or the Mortgages Trustee
                 arranging or advising in respect of, administering (servicing)
                 or entering into a regulated mortgage contract or agreeing to
                 carry on any of these activities, if the relevant Funding 1
                 Issuer and/or the Master Issuer and/or Funding 1, Funding 2
                 and/or the Mortgages Trustee would be required to do so.

8.2      Subject to complying with the terms of Clause 8.1, where the Servicer
         sends an offer of a Product Switch, a Further Advance or a Home Cash
         Reserve Advance, the Servicer shall then notify the Seller save where
         the Seller and the Servicer are both Bank of Scotland and the
         Mortgages Trustee in writing.

8.3      Notwithstanding Clause 8.2, subject to complying with the terms of
         Clause 8.1, the Servicer, on behalf of and as agent for the Seller may
         send an offer to Borrowers for Product Switches, Further Advances and
         Home Cash Reserve Advances provided that the Servicer acts in
         accordance with the then applicable procedure which would be
         acceptable to a Reasonable, Prudent Mortgage Lender.

8.4      For the avoidance of doubt, where the Servicer sends any offer
         contemplated by this Clause 8, it shall do so pursuant to its
         appointment under this Agreement.

9.       REDEMPTION OF MORTGAGES

9.1      Upon repayment in full of all sums secured by a Mortgage and/or other
         Related Security comprised in the Portfolio, the Servicer shall, and
         is hereby authorised by the Mortgages Trustee and the Beneficiaries to
         execute a receipt or discharge or relevant Land Registry Form DS1 of
         the Mortgage and any such other or further instrument or deed of
         satisfaction regarding such Mortgage and/or the Related Security as it
         considers to be necessary or advisable, to implement an Electronic
         Notification of Discharge to the Land Registry and to release the
         relevant Title Deeds to the person or persons entitled thereto.

9.2      The Servicer undertakes that prior to any actual release by it of the
         relevant Title Deeds it will take reasonable and appropriate steps to
         satisfy itself that the relevant Title Deeds are being released to the
         person or persons entitled thereto.

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9.3      The Servicer shall procure that if, upon completion of the Enforcement
         Procedures, an amount in excess of all sums due by the relevant
         Borrower is recovered or received, the balance, after discharge of all
         sums due by the Borrower, is paid to the person or persons next
         entitled thereto.

10.      POWERS OF ATTORNEY

10.1     For good and valuable consideration and as security for the interests
         of the Mortgages Trustee and the Beneficiaries hereunder, each of the
         Seller, the Mortgages Trustee and the Beneficiaries hereby appoints
         the Servicer as its attorney on its behalf, and in its own or the
         attorney's name, for the following purposes:

         (a)     executing all documents necessary for the purpose of
                 discharging a Mortgage comprised in the Portfolio which has
                 been repaid in full and any Related Security or for the sale
                 of a Property as Mortgagee;

         (b)     executing all documents and implementing all Electronic
                 Notifications of Discharge to the Land Registry necessary for
                 the purpose of releasing a Borrower in accordance with Clause
                 9;

         (c)     executing all documents and doing all such acts and things
                 which in the reasonable opinion of the Servicer are necessary
                 or desirable for the efficient provision of the Services
                 hereunder; and

         (d)     exercising its rights, powers and discretion under the
                 Mortgages including the right to fix the Mortgages Trustee
                 Variable Base Rate and the Mortgages Trustee Tracker Rate or
                 any related rights,

         provided that, for the avoidance of doubt, these Powers of Attorney
         shall not authorise the Servicer to sell any of the Loans and/or their
         Related Security comprised in the Portfolio except as specifically
         authorised in the Transaction Documents. For the avoidance of doubt,
         none of the Seller (where the Servicer is not Bank of Scotland), the
         Mortgages Trustee, Funding 1 nor Funding 2 shall be liable or
         responsible for the acts of the Servicer or any failure by the
         Servicer to act under or in respect of these Powers of Attorney.

10.2     The appointments contained in Clause 10.1 shall be irrevocable unless
         and until following a Servicer Termination Event the Mortgages Trustee
         and/or Funding 1 and/or Funding 2 and/or the Funding 1 Security
         Trustee and/or the Funding 2 Security Trustee serve notice pursuant to
         Clause 21 to terminate the Servicer's appointment under this Agreement
         upon which the appointments contained in Clause 10.1 shall be
         automatically revoked.

11.      COSTS AND EXPENSES

11.1     The Mortgages Trustee (on behalf of the Beneficiaries) will on each
         Distribution Date reimburse, in accordance with Clause 10.2 of the
         Mortgages Trust Deed, the Servicer for all out-of-pocket costs,
         expenses and charges (together with any amounts in respect of
         Irrecoverable VAT due thereon) properly incurred by the Servicer in
         the performance of the Services including any such costs, expenses or
         charges not reimbursed to the Servicer on any previous Distribution
         Date and the Servicer shall supply the Mortgages Trustee with a copy
         of an appropriate VAT invoice issued by the person making the supply.

11.2     The Servicer will use reasonable endeavours to recover from the
         relevant Borrowers all costs and expenses incurred by the Servicer
         which are properly recoverable from those Borrowers under the relevant
         Mortgage Conditions.

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12.      INFORMATION

12.1     MAINTENANCE OF RECORDS

(a)      Subject to Clause 18, the Servicer shall keep the Customer Files
         relating to the Portfolio in safe custody and shall take appropriate
         technical and organisational measures against the unauthorised or
         unlawful processing of personal data and against accidental loss or
         destruction of, or damage to, personal data. The Servicer shall
         maintain in an adequate form such records as are necessary to enforce
         each Mortgage comprised in the Portfolio and, where relevant, any
         other Related Security.

(b)      A duplicate of any computer records held by the Servicer which
         contains information relating to the Loans and the Related Security
         shall be lodged by the Servicer on a daily basis at the offices of the
         Seller at the Pudsey Data Centre or at such other locations selected
         by the Servicer, so long as such location is a location separate from
         that in which the original computer records are stored and in an
         environment conducive to the safe storage of electronic media, such
         records to be held to the order of the Mortgages Trustee and to be
         replaced by a revised duplicate as and when the original records are
         revised. The Servicer shall keep the Mortgages Trustee informed of the
         location of the Customer Files and duplicate computer records.

12.2     USE OF I.T. SYSTEMS

(a)      The Servicer covenants that at the date hereof in respect of the
         software which is used by the Servicer in providing the Services, it
         shall for the duration of this Agreement:

         (i)     ensure that it has in place all necessary licences and/or
                 consents from the respective licensor or licensors (if any) of
                 such software; and

         (ii)    except in so far as it would breach any other of its legal
                 obligations, grant to any person to whom it may sub-contract
                 or delegate the performance of all or any of its powers and
                 obligations under this Agreement and/or to such person as the
                 Mortgages Trustee and the Beneficiaries elect as a substitute
                 servicer in accordance with the terms of this Agreement a
                 licence to use any proprietary software together with any
                 updates which may be made thereto from time to time.

(b)      The Servicer shall use reasonable endeavours to maintain in working
         order the information technology systems used by the Servicer in
         providing the Services.

(c)      The Servicer shall pass to any person to whom it may sub-contract or
         delegate the performance of all or any of its powers and obligations
         under this Agreement and/or to such person as the Mortgages Trustee
         and the Beneficiaries elect as a substitute servicer in accordance
         with the terms of this Agreement the benefit of any warranties in
         relation to the software insofar as the same are capable of
         assignment.

12.3     ACCESS TO BOOKS AND RECORDS

         Subject to all applicable laws, the Servicer shall permit the
         Mortgages Trustee and/or Funding 1 and Funding 2 (and their respective
         auditors) and/or the Funding 1 Security Trustee and/or the Funding 2
         Security Trustee and any other person nominated by the Beneficiaries
         (to whom the Servicer has no reasonable objection) upon reasonable
         notice during normal office hours to have access, or procure that such
         person or persons are granted access, to all books of record and
         account (including, for the avoidance of doubt, the Title Deeds and
         Customer Files) relating to the administration of the Loans and their
         Related Security comprised in the Portfolio and related matters in
         accordance with this Agreement.

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12.4     INFORMATION COVENANTS

(a)      The Servicer shall, within ten (10) Business Days following each
         Distribution Date, provide the Mortgages Trustee, the Beneficiaries,
         each Manager and/or Dealer (if requested by such Manager or Dealer to
         do so) and the Rating Agencies (on the terms agreed with each of the
         Rating Agencies), monthly with a report in, or substantially in, the
         form set out in Schedule 2 and shall assist the Cash Manager in the
         production of quarterly reports substantially in the forms set out in
         Schedule 3 and Schedule 4 of the Cash Management Agreement.

(b)      The Servicer shall notify the Rating Agencies in writing of the
         details of (i) any material amendment to the Transaction Documents,
         (ii) any proposed material change in the valuation procedures or
         policies applied or to be applied in relation to Properties by it in
         connection with its mortgage business (details of which change may be
         included in a report provided under paragraph (a)) and (iii) any other
         information relating to its mortgage business and financial condition
         as the Rating Agencies may reasonably request in connection with the
         ratings of the Notes and other matters contemplated by the Transaction
         Documents, provided that such request does not adversely interfere
         with the Servicer's day to day provision of the Services under the
         other terms of this Agreement.

(c)      The Servicer shall, at the request of Funding 1, Funding 2, the
         Funding 1 Security Trustee and the Funding 2 Security Trustee (where
         the Servicer is the Seller) or at the request of the Beneficiaries
         (where the Servicer is no longer the Seller), furnish Funding 1,
         Funding 2, the Funding 1 Security Trustee, the Funding 2 Security
         Trustee and/or the Beneficiaries (as appropriate) and the Rating
         Agencies with such other information relating to its business and
         financial condition as it may be reasonable for Funding 1, Funding 2,
         the Funding 1 Security Trustee, the Funding 2 Security Trustee and/or
         the Beneficiaries (as appropriate) to request in connection with the
         ratings of the Notes and other matters contemplated by the Transaction
         Documents, provided that Funding 1, Funding 2, the Funding 1 Security
         Trustee, the Funding 2 Security Trustee or the Beneficiaries (as
         appropriate) shall not make such a request more than once every three
         months unless, in the belief of Funding 1, Funding 2, the Funding 1
         Security Trustee, the Funding 2 Security Trustee or the Beneficiaries
         (as appropriate) an Intercompany Loan Event of Default or a Master
         Intercompany Loan Event of Default (as appropriate) or a Servicer
         Termination Event shall have occurred and is continuing or may
         reasonably be expected to occur.

(d)      The Servicer shall make available to beneficial owners of the Notes,
         who have provided beneficial ownership certification as described
         herein, on a monthly basis a report containing information about the
         Loans in the Mortgages Trust.

13.      REMUNERATION

         The Mortgages Trustee (on behalf of the Beneficiaries) shall pay to
         the Servicer for its Services hereunder an administration fee (the
         ADMINISTRATION FEE) (inclusive of VAT) which:

         (a)     shall be calculated in relation to each Calculation Period on
                 the basis of the number of days elapsed and a 365 day year at
                 the rate of 0.05% per annum, inclusive of VAT, on the
                 aggregate amount of the Trust Property as at open of business
                 on the preceding Calculation Date, provided that where the
                 appointment of the Servicer is terminated pursuant to Clause
                 21 and a substitute servicer is to be appointed, the
                 Administration Fee may be calculated on different terms agreed
                 with such substitute servicer; and

         (b)     shall be paid to the Servicer in arrear on each Distribution
                 Date in the manner contemplated by and in accordance with the
                 provisions of Clause 10.2 of the Mortgages Trust Deed.

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14.      INSURANCES

14.1     The Servicer will administer the arrangements for insurance to which
         the Mortgages Trustee is a party or in which either the Seller or the
         Mortgages Trustee (on behalf of the Beneficiaries) has an interest and
         which relate to the Loans and the Mortgages comprised in the Portfolio
         or the business of the Mortgages Trustee. In particular, but without
         limitation, the Servicer shall promptly notify the Mortgages Trustee,
         the Beneficiaries, the Funding 1 Security Trustee and the Funding 2
         Security Trustee of the existence of any insurance policies to which
         the Seller is a party or in which it has an interest in addition to
         those specifically referred to in the definition of "HALIFAX INSURANCE
         POLICIES" in the Master Definitions and Construction Schedule.

14.2     The Servicer shall use its reasonable endeavours to credit to the
         Mortgages Trustee GIC Account all proceeds received from any claim
         made under any Insurance Policy in relation to any Loan or its Related
         Security by close of business on the London Business Day which
         immediately follows the day on which such amounts are received or
         credited by the Servicer and which is to be applied either in whole or
         in part in repayment of a Loan.

15.      HALIFAX INSURANCE POLICIES

15.1     The Servicer shall not knowingly take or omit to take any action which
         would:

         (a)     result in the avoidance or termination of any of the Halifax
                 Insurance Policies in relation to any Loans and Mortgages to
                 which any Halifax Insurance Policy applies; or

         (b)     reduce the amount payable on any claim made on behalf of the
                 Mortgages Trustee (as trustee for the Beneficiaries) under any
                 Halifax Insurance Policy; or

         (c)     invalidate any Halifax Insurance Policy.

15.2     The Servicer shall prepare and submit any claim under the Halifax
         Insurance Policies in accordance with the requirements of the relevant
         Halifax Insurance Policy and otherwise with the usual procedures
         undertaken by a Reasonable, Prudent Mortgage Lender on behalf of the
         Mortgages Trustee and the Beneficiaries and shall comply with the
         other requirements of the insurer under the relevant Halifax Insurance
         Policy.

15.3     If the Seller's Policy requires the Servicer to make a claim under the
         relevant MIG Policy and the Servicer has failed to make such a claim,
         then the Beneficiaries may direct the Mortgages Trustee on their
         behalf to direct the Servicer to make a claim or, in default thereof
         by the Servicer, the Beneficiaries may direct the Mortgages Trustee to
         itself make a claim under such policy and the Servicer shall, within
         ten London Business Days of receiving a written request from the
         Mortgages Trustee (as trustee for the Beneficiaries), provide the
         Mortgages Trustee with such information as the Mortgages Trustee may
         require to enable it to make a claim under the relevant MIG Policy.

16.      BUILDINGS POLICIES

16.1     The Servicer shall not knowingly take any action or omit to take any
         action which would result in the avoidance or termination of any
         applicable Buildings Policy or would reduce the amount payable on any
         claim thereunder.

16.2     Upon receipt of notice that any Borrower whose Loan is secured by a
         mortgage of or a standard security over a leasehold Property including
         a Property in Scotland held under a long lease has failed to make a
         payment when due of any sums due under the relevant lease in respect
         of the insurance of the property the Servicer may debit that
         Borrower's account with the relevant amount which shall

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<PAGE>

         then be paid to the landlord or to the relevant insurance company
         together with notice to the landlord.

16.3     If the Servicer becomes aware that a Borrower has failed to pay
         premiums due under any Buildings Policy, the Servicer shall take such
         action as would a Reasonable, Prudent Mortgage Lender with a view to
         ensuring that the relevant Property continues to be insured in
         accordance with the applicable Mortgage Terms or the Alternative
         Insurance Recommendations.

17.      TITLE DEEDS AND CUSTOMER FILES

17.1     The Servicer shall keep the Title Deeds, Customer Files and (where
         applicable) Insurance Policies and the receipt of notes of assignment
         relating to the Portfolio in safe custody and shall not without the
         prior written consent of the Mortgages Trustee and the Beneficiaries
         part with possession, custody or control of them otherwise than to a
         sub-contractor or delegate appointed pursuant to Clause 3.2 or to a
         solicitor, licensed conveyancer, qualified conveyancer or authorised
         practitioner, subject to the usual undertaking to hold them to the
         order of the Servicer (who in turn will hold them to the order of the
         Mortgages Trustee (as trustee for the Beneficiaries) or in the case of
         Scottish Loans, to the order of the Seller, in its capacity as trustee
         for the Mortgages Trustee (as trustee for the Beneficiaries) or to the
         Land Registry or Registers of Scotland or, upon redemption of the
         relevant Loan, to the order of the Borrower).

17.2     The Title Deeds and Customer Files relating to the Portfolio shall be
         kept in such manner so that a computer record is maintained of their
         location and they are identifiable and retrievable by reference to an
         account number and pool identifier and identifiable and
         distinguishable from the title deeds relating to other properties and
         mortgages and standard securities in respect of which the Servicer is
         mortgagee or heritable creditor or servicer. In the event of receipt
         by the Servicer of notice that the short-term, unsecured,
         unsubordinated and unguaranteed debt of the Servicer is rated less
         than A-1 by S&P and P-1 by Moody's and F1 by Fitch, the Servicer shall
         use reasonable endeavours to ensure that the Title Deeds are
         identified as distinct from the title deeds of other properties and
         mortgages and standard securities which do not form part of the
         Portfolio.

17.3     The Servicer shall provide access or procure that access is provided
         to the Title Deeds, Customer Files and other records relating to the
         administration of the Loans and Mortgages in the Portfolio to the
         Mortgages Trustee, the Beneficiaries, the Funding 1 Security Trustee,
         the Funding 2 Security Trustee and their respective agents at all
         reasonable times and upon reasonable written notice. The Servicer
         acknowledges that the Title Deeds and Customer Files relating to the
         Portfolio in its possession, custody or control will be held to the
         order of the Mortgages Trustee (as trustee for the Beneficiaries) or
         in the case of Scottish Loans, to the order of the Seller, in its
         capacity as trustee for the Mortgages Trustee (as trustee for the
         Beneficiaries), and that it has, in its capacity as Servicer, no
         beneficial interest therein and the Servicer (in its capacity as such
         but not in its capacity as a Beneficiary) irrevocably waives any
         rights or any Security Interest which it might have therein or to
         which it might at any time be entitled.

17.4     The Servicer shall, forthwith on the termination of the appointment of
         the Servicer pursuant to Clause 21, deliver the Title Deeds and
         Customer Files in its possession, custody or control or that of its
         sub-contractors or agents to or to the order of the Mortgages Trustee
         or to such person as the Mortgages Trustee elects as a substitute
         servicer in accordance with the terms of this Agreement upon written
         request by the Mortgages Trustee made at any time on or after notice
         of, or on or after, termination of the appointment of the Servicer
         pursuant to Clause 21.

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17.5     The Servicer undertakes that it will use all reasonable efforts to
         obtain as soon as reasonably practicable:

         (a)     the title number to each Property in respect of which a
                 Mortgage is registered at the Land Registry to the extent that
                 such title number does not appear in the Exhibit to the
                 Mortgage Sale Agreement (or, as the case may be, the Schedule
                 to the relevant New Portfolio Notice); and

         (b)     the title number to each Property in respect of which a
                 Mortgage is registered in the Land Register of Scotland to the
                 extent that such title number does not appear in the Schedule
                 to the relevant New Portfolio Notice.

18.      DATA PROTECTION

18.1     The Servicer and the Mortgages Trustee each represents that as at the
         date hereof it has and hereafter it will maintain all appropriate
         registrations, licences, consents and authorities (if any) required
         under the Data Protection Act 1998 together, with its ancillary
         legislation (the DATA PROTECTION ACT) to enable it to perform its
         respective obligations under this Agreement. In addition to the
         foregoing and notwithstanding any of the other provisions of this
         Agreement, each of the Servicer and the Mortgages Trustee hereby agree
         and covenant as follows:

         (a)     that only data that is not "personal data" (as defined in the
                 Data Protection Act) may be transferred by the Servicer to the
                 Mortgages Trustee or any other entity located in Jersey
                 (unless: (i) Jersey is determined, on the basis of Article
                 25(b) of Directive 95/46/EC, a third country which ensures an
                 adequate level of protection of "personal data" by the
                 European Commission or (ii) the Servicer and the Mortgages
                 Trustee have entered into a data transfer agreement in a form
                 approved by the EC Commission as meeting the requirements of
                 Article 26(2) of Directive 95/46/EC for the transfer of
                 personal data to third countries which do not ensure an
                 adequate level of protection (the STANDARD CONTRACTUAL
                 CLAUSES) in which case, subject to Clause 18.1(e), the
                 Servicer may transfer such personal data to the Mortgages
                 Trustee in Jersey);

         (b)     that if, at the date at which circumstances enable the
                 Mortgages Trustee to exercise its right to demand that the
                 Servicer transfer inter alia personal data to the Mortgages
                 Trustee, (i) Jersey has been determined, on the basis of
                 Article 25(b) of Directive 95/46/EC a third country which
                 ensures an adequate level of protection of personal data by
                 the European Commission or (ii) the Servicer and the Mortgages
                 Trustee have entered into the Standard Contractual Clauses
                 then, subject to the Clause 18.1(e), the Servicer shall
                 transfer the relevant personal data to the Mortgages Trustee
                 or to its order;

         (c)     that the Servicer will, if the Mortgages Trustee requires the
                 Servicer to do so, take all reasonable steps to notify each
                 Borrower that the Mortgages Trustee is a "data controller" (as
                 defined in the Data Protection Act) and provide each such
                 Borrower with such details as the Mortgage Trustee shall
                 reasonably request including but not limited to the Mortgages
                 Trustee's contact details for the purposes of the Data
                 Protection Act;

         (d)     that the Servicer and the Mortgages Trustee will only use any
                 data in relation to the Loans and the related Borrowers for
                 the purposes of administering and/or managing the Portfolio,
                 and will not sell such data to any third party or allow any
                 third party to use such data other than in compliance with the
                 Data Protection Act, the conditions stated in this Clause 18
                 and for the sole purpose of administering and/or managing the
                 Portfolio;

         (e)     that the Mortgages Trustee will comply with the provisions of
                 the Data Protection (Jersey) Law 2005 (as amended) or any law
                 which supersedes or replaces the Data Protection

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                 (Jersey) Law 2005 and (so long as the provisions of the Data
                 Protection Act do not conflict with the provisions of the Data
                 Protection (Jersey) Law 2005 (as amended) or any law which
                 supersedes or replaces the Data Protection (Jersey) Law 2005)
                 with the provisions of the Data Protection Act; and

         (f)     that the Mortgages Trustee shall maintain a written record of
                 its reasons for applying the Data Protection Order 2000/185
                 (as set forth under the Conditions under paragraph 3 of Part
                 II of Schedule I of the Data Protection Act).

18.2     The Servicer will use all reasonable endeavours to ensure that, in the
         event of the appointment of a sub-contractor in accordance with Clause
         3.2 such sub-contractor shall obtain and maintain all appropriate
         registrations, licences, consents and authorities required (including,
         without limitation, those required under the Data Protection Act), and
         comply with obligations equivalent to those imposed on the Servicer in
         this Clause 18, to enable it to perform its obligations.

19.      COVENANTS OF SERVICER

19.1     The Servicer hereby covenants with and undertakes to each of the
         Mortgages Trustee, the Beneficiaries, the Funding 1 Security Trustee
         and the Funding 2 Security Trustee that without prejudice to any of
         its specific obligations hereunder it will:

         (a)     administer the Loans and their Related Security as if the same
                 had not been sold to the Mortgages Trustee but had remained on
                 the books of the Seller;

         (b)     provide the Services in such manner and with the same level of
                 skill, care and diligence as would a Reasonable, Prudent
                 Mortgage Lender;

         (c)     comply with any proper directions, orders and instructions
                 which the Mortgages Trustee or the Beneficiaries may from time
                 to time give to it in accordance with the provisions of this
                 Agreement and, in the event of any conflict, those of the
                 Mortgages Trustee shall prevail;

         (d)     keep in force all licences, approvals, authorisations,
                 permissions and consents which may be necessary in connection
                 with the performance of the Services and prepare and submit on
                 a timely basis all necessary applications and requests for any
                 further approval, authorisation, consent, registration or
                 licence required in connection with the performance of the
                 Services and in particular any necessary registrations under
                 the Data Protection Act;

         (e)     save as otherwise agreed with the Mortgages Trustee and each
                 of the Beneficiaries, provide free of charge to the Mortgages
                 Trustee and the Beneficiaries, office space, facilities,
                 equipment and staff sufficient to fulfil the obligations of
                 the Mortgages Trustee and the Beneficiaries under this
                 Agreement;

         (f)     not knowingly fail to comply with any legal requirements in
                 the performance of the Services, including without limitation
                 any rules of the FSA in MCOB, ICOB or otherwise;

         (g)     make all payments required to be made by it pursuant to this
                 Agreement on the due date for payment thereof in sterling (or
                 as otherwise required under the Transaction Documents) in
                 immediately available funds for value on such day without
                 set-off (including, without limitation, in respect of any fees
                 owed to it) or counterclaim but subject to any deductions
                 required by law;

         (h)     not without the prior written consent of the Funding Security
                 Trustees amend or terminate any of the Transaction Documents
                 save in accordance with their terms; and

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         (i)     forthwith upon becoming aware of any event which may
                 reasonably give rise to an obligation of the Seller to
                 repurchase any Loan pursuant to the Mortgage Sale Agreement,
                 notify the Mortgages Trustee and the Beneficiaries in writing
                 of such event.

19.2     The covenants of the Servicer in Clause 19.1 shall remain in force
         until this Agreement is terminated but without prejudice to any right
         or remedy of the Mortgages Trustee and/or the Seller and/or Funding 1
         and/or Funding 2 and/or the Funding 1 Security Trustee and/or the
         Funding 2 Security Trustee arising from breach of any such covenant
         prior to the date of termination of this Agreement.

20.      SERVICES NON-EXCLUSIVE

         Nothing in this Agreement shall prevent the Servicer from rendering or
         performing services similar to those provided for in this Agreement to
         or for itself or other persons, firms or companies or from carrying on
         business similar to or in competition with the business of the
         Mortgages Trustee and the Beneficiaries.

21.      TERMINATION

21.1     If any of the following events (SERVICER TERMINATION EVENTS) shall
         occur:

         (a)     default is made by the Servicer in the payment on the due date
                 of any payment due and payable by it under this Agreement and
                 such default continues unremedied for a period of five London
                 Business Days after the earlier of the Servicer becoming aware
                 of such default and receipt by the Servicer of written notice
                 from Funding 1, Funding 2, the Funding 1 Security Trustee, the
                 Funding 2 Security Trustee and/or the Mortgages Trustee
                 requiring the same to be remedied; or

         (b)     default is made by the Servicer in the performance or
                 observance of any of its other covenants and obligations under
                 this Agreement, which in the reasonable opinion of either:

                 (i)     the Funding 1 Security Trustee is materially
                         prejudicial to the interests of Funding 1 and/or the
                         Funding 1 Issuers under the Intercompany Loans and/or
                         the interests of the holders of the Notes issued by a
                         Funding 1 Issuer from time to time; and/or

                 (ii)    the Funding 2 Security Trustee is materially
                         prejudicial to the interests of Funding 2 and/or the
                         Master Issuer under the Master Intercompany Loan
                         and/or any other Funding 2 Issuer under any New
                         Intercompany Loan and/or the interests of the holders
                         of the Notes issued by the Master Issuer or any other
                         Funding 2 Issuer from time to time,

                 and (in either case) such default continues unremedied for a
                 period of 20 London Business Days after becoming aware of such
                 default provided however that where the relevant default
                 occurs as a result of a default by any person to whom the
                 Servicer has sub-contracted or delegated part of its
                 obligations hereunder, such default shall not constitute a
                 Servicer Termination Event if, within such period of ten
                 London Business Days of receipt of such notice from Funding 1,
                 Funding 2, the Funding 1 Security Trustee and the Funding 2
                 Security Trustee, the Servicer terminates the relevant
                 sub-contracting or delegation arrangements and takes such
                 steps as Funding 1, Funding 2, the Funding 1 Security Trustee
                 and the Funding 2 Security Trustee may in their absolute
                 discretion specify to remedy such default or to indemnify the
                 Mortgages Trustee and the Beneficiaries against the
                 consequences of such default; or

         (c)     the occurrence of an Insolvency Event in relation to the
                 Servicer; or

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<PAGE>

         (d)     Funding 1 and Funding 2 are of the opinion, after due
                 consideration and acting reasonably, that the appointment of
                 the Servicer should be terminated,

         then the Mortgages Trustee and/or Funding 1, Funding 2, the Funding 1
         Security Trustee and the Funding 2 Security Trustee may at once or at
         any time thereafter while such default continues by notice in writing
         to the Servicer terminate its appointment as Servicer under this
         Agreement with effect from a date (not earlier than the date of the
         notice) specified in the notice. Upon termination of the Servicer as
         servicer under this Agreement, the Funding 1 Security Trustee and the
         Funding 2 Security Trustee shall use their reasonable endeavours to
         appoint a substitute servicer that satisfies the conditions set forth
         in Clauses 21.2(c), (d) and (e).

21.2     The appointment of the Servicer under this Agreement may be terminated
         upon the expiry of not less than 12 months' notice of termination
         given by the Servicer to the Mortgages Trustee, the Beneficiaries, the
         Funding 1 Security Trustee and the Funding 2 Security Trustee provided
         that:

         (a)     the Mortgages Trustee and the Beneficiaries consent in writing
                 to such termination;

         (b)     a substitute servicer shall be appointed, such appointment to
                 be effective not later than the date of such termination and
                 the Servicer shall notify the Rating Agencies in writing of
                 the identity of such substitute servicer;

         (c)     such substitute servicer has experience of administering
                 mortgages of and standard securities over residential property
                 in the United Kingdom and is approved by the Mortgages Trustee
                 and the Beneficiaries;

         (d)     such substitute servicer enters into an agreement
                 substantially on the same terms as the relevant provisions of
                 this Agreement and the Servicer shall not be released from its
                 obligations under the relevant provisions of this Agreement
                 until such substitute servicer has entered into such new
                 agreement; and

         (e)     the then current ratings (if any) of the Notes are not
                 adversely affected as a result thereof, unless otherwise
                 agreed by an Extraordinary Resolution of the holders of the
                 relevant series and class of Notes.

21.3     On and after termination of the appointment of the Servicer under this
         Agreement pursuant to this Clause 21, all authority and power of the
         Servicer under this Agreement shall be terminated and be of no further
         effect and the Servicer shall not thereafter hold itself out in any
         way as the agent of the Mortgages Trustee and/or the Beneficiaries
         pursuant to this Agreement.

21.4     Upon termination of the appointment of the Servicer under this
         Agreement pursuant to this Clause 21 (but subject to Clause 18.1(e)),
         the Servicer shall:

         (a)     forthwith deliver (and in the meantime hold on trust for, and
                 to the order of, the Mortgages Trustee) to the Mortgages
                 Trustee or as it shall direct the Customer Files, the Title
                 Deeds, all books of account, papers, records, registers,
                 correspondence and documents in its possession or under its
                 control relating to the affairs of or belonging to the
                 Mortgages Trustee (as trustee for the Beneficiaries) and the
                 Mortgages in the Portfolio and any other Related Security, (if
                 practicable, on the date of receipt) any monies then held by
                 the Servicer on behalf of the Mortgages Trustee and any other
                 assets of the Mortgages Trustee and the Beneficiaries;

         (b)     take such further action as the Mortgages Trustee, Funding 1,
                 Funding 2, the Funding 1 Security Trustee and the Funding 2
                 Security Trustee may reasonably direct at the expense of the
                 Beneficiaries (including in relation to the appointment of a
                 substitute servicer) provided

                                      23

<PAGE>

                 that the Mortgages Trustee shall not be required to take or
                 direct to be taken such further action unless it has been
                 indemnified to its satisfaction;

         (c)     provide all relevant information contained on computer records
                 in the form of magnetic tape, together with details of the
                 layout of the files encoded on such magnetic tapes;

         (d)     co-operate and consult with and assist the Mortgages Trustee,
                 Funding 1, Funding 2, the Funding 1 Security Trustee the
                 Funding 2 Security Trustee and their respective nominees
                 (which shall, for the avoidance of doubt, include any new
                 servicer appointed by any of them) for the purposes of
                 explaining the file layouts and the format of the magnetic
                 tapes generally containing such computer records on the
                 computer system of the Mortgages Trustee or such nominee; and

         (e)     permit the Mortgages Trustee, Funding 1, Funding 2, the
                 Funding 1 Security Trustee and the Funding 2 Security Trustee
                 upon request to have access at reasonable times to the Halifax
                 Insurance Policies.

21.5     The Servicer shall deliver to the Mortgages Trustee and the
         Beneficiaries as soon as reasonably practicable but in any event
         within five days of becoming aware thereof a notice of any Servicer
         Termination Event or any event which with the giving of notice or
         lapse of time or certification would constitute the same. Such
         notification shall specify which event in Clause 21 has occurred and
         was the cause of such Servicer Termination Event (or any event which
         the giving of notice or lapse of time or certification would
         constitute a Servicer Termination Event), a description of the details
         of such Servicer Termination Event, and, if relevant, a reference to
         the provision in this Agreement or the other Transaction Documents
         which the Servicer has breached.

21.6     Termination of this Agreement or the appointment of the Servicer under
         this Agreement shall be without prejudice to the liabilities of the
         Mortgages Trustee and the Beneficiaries to the Servicer or vice versa
         incurred before the date of such termination. The Servicer shall have
         no right of set-off or any lien in respect of such amounts against
         amounts held by it on behalf of the Mortgages Trustee.

21.7     This Agreement shall terminate at such time as Funding 1 and Funding 2
         have no further interest in any of the Loans or the Mortgages which
         have been comprised in the Portfolio.

21.8     On termination of the appointment of the Servicer under the provisions
         of this Clause 21, the Servicer shall be entitled to receive all fees
         and other monies accrued up to the date of termination but shall not
         be entitled to any other or further compensation. Such monies so
         receivable by the Servicer shall be paid by the Mortgages Trustee on
         the dates on which they would otherwise have fallen due hereunder. For
         the avoidance of doubt, such termination shall not affect the
         Servicer's rights to receive payment of all amounts (if any) due to it
         from the Mortgages Trustee other than under this Agreement.

21.9     Prior to termination of this Agreement, the Servicer, the Seller, the
         Mortgages Trustee, the Funding 1 Security Trustee, the Funding 2
         Security Trustee, Funding 1 and Funding 2 shall each co-operate to
         obtain the agreement of the Borrowers to a new bank mandate permitting
         the Mortgages Trustee to operate the Direct Debiting Scheme.

21.10    Any provision of this Agreement which is stated to continue after
         termination of the Agreement shall remain in full force and effect
         notwithstanding termination.

                                      24

<PAGE>

22.      FURTHER ASSURANCE

22.1     The parties hereto 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 Agreement.

22.2     Without prejudice to the generality of Clause 22.1, the Mortgages
         Trustee and the Beneficiaries shall upon request by the Servicer
         forthwith give to the Servicer such further powers of attorney or
         other written authorisations, mandates or instruments as are necessary
         to enable the Servicer to perform the Services.

22.3     In the event that there is any change in the identity of the Mortgages
         Trustee or an additional Mortgages Trustee is appointed, the remaining
         Mortgages Trustee and/or the retiring Mortgages Trustee, as the case
         may be, shall execute such documents with any other parties to this
         Agreement and take such actions as such new Mortgages Trustee may
         reasonably require for the purposes of vesting in such new Mortgages
         Trustee the rights of the Mortgages Trustee under this Agreement and
         releasing the retiring Mortgages Trustee from further obligations
         thereunder and while any Note remains outstanding shall give notice
         thereof to the Rating Agencies.

22.4     Nothing herein contained shall impose any obligation or liability on
         the Mortgages Trustee to assume or perform any of the obligations of
         the Servicer hereunder or render it liable for any breach thereof.

23.      MISCELLANEOUS

23.1     Subject to Clause 23.2, in the event that the funds available to the
         Mortgages Trustee on any Distribution Date are not sufficient to
         satisfy in full the aggregate amount payable to the Servicer by the
         Mortgages Trustee on such Distribution Date then the amount payable to
         the Servicer on such Distribution Date shall be reduced by the amount
         of the shortfall and such shortfall shall (subject always to the
         provisions of this Clause 23) be payable on the immediately succeeding
         Distribution Date.

23.2     In the event that:

         (a)     after redemption in full of the Intercompany Loans and the
                 Master Intercompany Loan; or

         (b)     after service of an Intercompany Loan Acceleration Notice
                 and/or Master Intercompany Loan Acceleration Notice and
                 payment of all other prior claims,

         the remaining sums available to the Mortgages Trustee or remaining
         proceeds of enforcement are insufficient to satisfy in full the
         outstanding fees or other claims of the Servicer, such fees shall be
         reduced by the amount of the deficiency.

23.3     Each of the Seller and the Servicer agrees that it will not:

         (a)     set off or purport to set off any amount which the Mortgages
                 Trustee, Funding 1, Funding 2, any Funding 1 Issuer or the
                 Master Issuer is or will become obliged to pay to it under any
                 of the Transaction Documents against any amount from time to
                 time standing to the credit of or to be credited to the
                 Mortgages Trustee GIC Account, the Funding 1 GIC Account, the
                 Funding 1 Transaction Account, the Funding 2 GIC Account, the
                 Funding 2 Transaction Account, any Funding 1 Issuer Account or
                 any Master Issuer Account or in any other account prior to
                 transfer to the Mortgages Trustee GIC Account, the Funding 1
                 GIC Account, the Funding 1 Transaction Account, the Funding 2
                 GIC Account, the Funding 2

                                      25

<PAGE>

                 Transaction Account, any Funding 1 Issuer Account or any
                 Master Issuer Account, as appropriate; or

         (b)     make or exercise any claims or demands, any rights of
                 counterclaim or any other equities against or withhold payment
                 of any and all sums of money which may at any time and from
                 time to time be standing to the credit of the Mortgages
                 Trustee GIC Account, the Funding 1 GIC Account, the Funding 1
                 Transaction Account, the Funding 2 GIC Account, the Funding 2
                 Transaction Account, any Funding 1 Issuer Account or any
                 Master Issuer Account.

23.4     The Servicer agrees that for so long as any Notes are outstanding it
         will not petition nor commence proceedings for the administration or
         winding up of the Mortgages Trustee, Funding 1, Funding 2, any Funding
         1 Issuer or the Master Issuer nor participate in any ex parte
         proceedings with regard thereto.

23.5     In relation to all sums due and payable by the Mortgages Trustee to
         the Servicer, the Servicer agrees that it shall have recourse only to
         sums paid to or received by (or on behalf of) the Mortgages Trustee
         pursuant to the provisions of the Mortgage Sale Agreement, the other
         Transaction Documents and in relation to the Mortgages.

23.6     For the avoidance of doubt, neither Beneficiary shall be liable to pay
         any amounts due under Clauses 11 and 13 without prejudice to the
         obligations of the Mortgages Trustee in respect of such amounts.

23.7     Notwithstanding any other provisions of this Agreement, all
         obligations to, and rights of (a) Funding 1 under or in connection
         with this Agreement (other than its obligations under Clause 24) shall
         automatically terminate upon the discharge in full of all amounts
         owing by it under any Intercompany Loan Agreement and (b) Funding 2
         under or in connection with this Agreement (other than its obligations
         under Clause 24) shall automatically terminate upon the discharge in
         full of all amounts owing by it under the Master Intercompany Loan
         Agreement and, provided that this shall be without prejudice to any
         claims in respect of such obligations and rights arising on or prior
         to such date.

24.      CONFIDENTIALITY

         During the continuance of this Agreement or after its termination,
         each of the Mortgages Trustee and the Beneficiaries shall use its best
         endeavours not to disclose to any person, firm or company whatsoever
         any information relating to the business, finances or other matters of
         a confidential nature of any other party hereto of which it may
         exclusively by virtue of being party to the Transaction Documents have
         become possessed and shall use all reasonable endeavours to prevent
         any such disclosure as aforesaid, provided however that the provisions
         of this Clause 24 shall not apply:

         (a)     to any information already known to the Mortgages Trustee or
                 the Beneficiaries otherwise than as a result of entering into
                 any of the Transaction Documents;

         (b)     to any information subsequently received by the Mortgages
                 Trustee or the Beneficiaries which it would otherwise be free
                 to disclose;

         (c)     to any information which is or becomes public knowledge
                 otherwise than as a result of the conduct of the Mortgages
                 Trustee or the Beneficiaries;

         (d)     to any extent that the Mortgages Trustee or the Beneficiaries
                 is required to disclose the same pursuant to any law or order
                 of any court or pursuant to any direction, request or
                 requirement

                                      26

<PAGE>

                 (whether or not having the force of law) of any central bank
                 or any governmental or other authority (including, without
                 limitation, any official bank examiners or regulators);

         (e)     to the extent that the Mortgages Trustee or the Beneficiaries
                 needs to disclose the same for determining the existence of,
                 or declaring, an Intercompany Loan Event of Default, a Master
                 Intercompany Loan Event of Default or a Servicer Termination
                 Event, the protection or enforcement of any of its rights
                 under any of the Transaction Documents or in connection
                 herewith or therewith or for the purpose of discharging, in
                 such manner as it thinks fit, its duties under or in
                 connection with such agreements in each case to such persons
                 as require to be informed of such information for such
                 purposes; or

         (f)     in relation to any information disclosed to the professional
                 advisers of the Mortgages Trustee or the Beneficiaries or (in
                 connection with the review of current ratings of the Notes or
                 with a prospective rating of any debt to be issued by any
                 Funding 1 Issuer or the Master Issuer) to any credit rating
                 agency or any prospective new Servicer or Mortgages Trustee.

25.      NOTICES

         Any notices to be given pursuant to this Agreement to any of the
         parties hereto shall be sufficiently served if sent by prepaid first
         class post, by hand or facsimile transmission and shall be deemed to
         be given (in the case of facsimile transmission) when despatched,
         (where delivered by hand) on the day of delivery if delivered before
         5.00 p.m. 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 Servicer: to Bank of Scotland plc, Halifax
                 Division, Level 3, Lovell Park, 1 Lovell Park Road, Leeds LS1
                 1NS (facsimile number +44 (0) 113 235 7511) for the attention
                 of Mortgage Securitisation Manager with a copy to Bank of
                 Scotland plc, Treasury Division, 33 Old Broad Street, London
                 EC2N 1HZ (facsimile number +44 (0)20 7574 8303) for the
                 attention of Head of Mortgage Securitisation and Covered
                 Bonds;

         (b)     in the case of the Mortgages Trustee: to Permanent Mortgages
                 Trustee Limited, 47 Esplanade, St. Helier, Jersey JE1 0BD
                 (facsimile number +44 (0) 1534 726391) for the attention of
                 the Secretary; with a copy to Bank of Scotland plc, Treasury
                 Division, 33 Old Broad Street, London EC2N 1HZ (facsimile
                 number +44 (0)20 7574 8303) for the attention of Head of
                 Mortgage Securitisation and Covered Bonds;

         (c)     in the case of the Seller: to Bank of Scotland plc, Halifax
                 Division, Level 3, Lovell Park, 1 Lovell Park Road, Leeds LS1
                 1NS (facsimile number +44 (0) 113 235 7511) for the attention
                 Mortgage Securitisation Manager with a copy to Bank of
                 Scotland plc, Treasury Division, 33 Old Broad Street, London
                 EC2N 1HZ (facsimile number +44 (0)20 7574 8303) for the
                 attention of Head of Mortgage Securitisation and Covered
                 Bonds;

         (d)     in the case of Funding 1: to Permanent Funding (No. 1)
                 Limited: to 35 Great St. Helen's, London EC3A 6AP (facsimile
                 number +44 (0)20 7398 6325) for the attention of the
                 Secretary; with a copy to Bank of Scotland plc, Treasury
                 Division, 33 Old Broad Street, London EC2N 1HZ (facsimile
                 number +44 (0)20 7574 8303) for the attention of Head of
                 Mortgage Securitisation and Covered Bonds;

         (e)     in the case of Funding 2: to Permanent Funding (No. 2)
                 Limited: to 35 Great St. Helen's, London EC3A 6AP (facsimile
                 number +44 (0)20 7398 6325) for the attention of the
                 Secretary; with a copy to Bank of Scotland plc, Treasury
                 Division, 33 Old Broad Street, London EC2N 1HZ (facsimile
                 number +44 (0)20 7574 8303) for the attention of Head of
                 Mortgage Securitisation and Covered Bonds; and

                                      27

<PAGE>

         (f)     in the case of the Funding 1 Security Trustee and the Funding
                 2 Security Trustee: to The Bank of New York, One Canada
                 Square, London E14 5AL (facsimile number + 44 (0)20 7964 2533,
                 for the attention of Corporate Trust Administration -
                 ABS/MBS),

         or to such other address or facsimile number or for the attention of
         such other person or entity as may from time to time be notified by
         any party to the others by written notice in accordance with the
         provisions of this Clause 25. All notices served under this Agreement
         shall be simultaneously copied to the Funding 1 Security Trustee and
         the Funding 2 Security Trustee by the person serving the same.

26.      NO PARTNERSHIP

         It is hereby acknowledged and agreed by the parties that nothing in
         this Agreement shall be construed as giving rise to any partnership
         between any of the parties.

27.      ASSIGNMENT

27.1     The Mortgages Trustee may not assign or transfer any of its rights or
         obligations under this Agreement without the prior written consent of
         each of the Beneficiaries.

27.2     The Servicer may not assign or transfer any of its rights and
         obligations under this Agreement without the prior written consent of
         the Mortgages Trustee (as trustee for the Beneficiaries) and each of
         the Beneficiaries.

27.3     The Servicer acknowledges that Funding 1 has assigned its rights under
         this Agreement to the Funding 1 Security Trustee pursuant to the
         Funding 1 Deed of Charge and acknowledges that pursuant to the terms
         of the Funding 1 Deed of Charge, Funding 1 has, inter alia, authorised
         the Funding 1 Security Trustee, prior to the Funding 1 Security
         becoming enforceable, to exercise, or refrain from exercising, all
         rights, powers, authorities, discretions and remedies under or in
         respect of the Transaction Documents, including this Agreement, in
         such manner as in its absolute discretion it shall think fit.

27.4     The Servicer acknowledges that Funding 2 has assigned its rights under
         this Agreement to the Funding 2 Security Trustee pursuant to the
         Funding 2 Deed of Charge and acknowledges that pursuant to the terms
         of the Funding 2 Deed of Charge, Funding 2 has, inter alia, authorised
         the Funding 2 Security Trustee, prior to the Funding 2 Security
         becoming enforceable, to exercise, or refrain from exercising, all
         rights, powers, authorities, discretions and remedies under or in
         respect of the Transaction Documents, including this Agreement, in
         such manner as in its absolute discretion it shall think fit.

28.      CHANGE OF FUNDING 1 SECURITY TRUSTEE AND/OR FUNDING 2 SECURITY TRUSTEE

28.1     If there is any change in the identity of the Funding 1 Security
         Trustee and/or the Funding 2 Security Trustee in accordance with the
         Funding 1 Deed of Charge and/or the Funding 2 Deed of Charge, the
         Servicer, the Seller, Funding 1, Funding 2 and the Mortgages Trustee
         shall execute such documents and take such action as the successor
         Funding 1 Security Trustee and/or the successor Funding 2 Security
         Trustee and the outgoing Funding 1 Security Trustee and/or the
         outgoing Funding 2 Security Trustee may reasonably require for the
         purpose of vesting in the successor Funding 1 Security Trustee and/or
         the successor Funding 2 Security Trustee the rights and obligations of
         the outgoing Funding 1 Security Trustee and/or the outgoing Funding 2
         Security Trustee under this Agreement and releasing the outgoing
         Security Trustee from its future obligations under this Agreement.

                                      28

<PAGE>

28.2     It is hereby acknowledged and agreed that by its execution of this
         Agreement neither the Funding 1 Security Trustee nor the Funding 2
         Security Trustee shall assume or have any of the obligations or
         liabilities of the Servicer, the Seller, Funding 1, Funding 2, the
         Mortgages Trustee or each other under this Agreement.

29.      AMENDMENTS, WAIVERS AND CONSENTS

29.1     Subject to Clause 2, 3 and 4 of the Controlling Beneficiary Deed (as
         applicable) and (in the case of Funding 1) Clause 25 of the Funding 1
         Deed of Charge and (in the case of Funding 2) Clause 12 of the Funding
         2 Deed of Charge, no amendment or waiver of any provision of this
         Agreement shall be effective unless the same shall be in writing and
         signed by (or by some person duly authorised by) each of the parties
         to this Agreement. In the case of a waiver, such waiver 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. No
         single or partial exercise of, or failure or delay in exercising, any
         right under this Agreement shall constitute a waiver or preclude any
         other or further exercise of that or any other right.

29.2     Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
         Security Trustee will each exercise all rights, powers, benefits
         and/or discretions conferred on it under this Agreement (including,
         without limitation, in giving its consent, approval or authorisation
         to any event, matter or thing requested hereunder) in accordance with
         Clauses 2, 3 and 4 of the Controlling Beneficiary Deed (as applicable)
         and (in the case of Funding 1) Clause 25 of the Funding 1 Deed of
         Charge and (in the case of Funding 2) Clause 12 of the Funding 2 Deed
         of Charge.

30.      EXCLUSION OF THIRD PARTY RIGHTS

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

31.      COUNTERPARTS AND SEVERABILITY

31.1     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.

31.2     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.

32.      GOVERNING LAW AND JURISDICTION

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

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

                                      29

<PAGE>

33.      PROCESS AGENT

         The Mortgages Trustee irrevocably and unconditionally appoints
         Structured Finance Management Limited of 35 Great St. Helen's, London
         EC3A 6AP 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 Structured Finance Management Limited
         ceasing so to act it will appoint another person with a registered
         office in London as its agent for service of process.

IN WITNESS WHEREOF the parties have caused this Agreement to be executed and
delivered as a deed the day and year first before written.

                                      30

<PAGE>

                                  SCHEDULE 1

                                 THE SERVICES

In addition to the Services set out in the body of the Servicing Agreement, the
Servicer shall:

(a)      keep records and books of account for the Mortgages Trustee in
         relation to the Loans and their Related Security comprised in the
         Portfolio;

(b)      keep records for all taxation purposes and Value Added Tax;

(c)      notify relevant Borrowers of any change in their Monthly Payments;

(d)      assist the auditors of the Mortgages Trustee and provide information
         to them upon reasonable request;

(e)      provide a redemption statement upon the request of a Borrower or the
         Borrower's solicitor, licensed conveyancer or qualified conveyancer;

(f)      notify relevant Borrowers of any other matter or thing which the
         applicable Mortgage Conditions or Offer Conditions require them to be
         notified of in the manner and at the time required by the relevant
         Mortgage Terms;

(g)      subject to the provisions of this Agreement (including without
         limitation Clause 5.2) take all reasonable steps to recover all sums
         due to the Mortgages Trustee including without limitation by the
         institution of proceedings and/or the enforcement of any Loan
         comprised in the Portfolio or any Related Security;

(h)      take all other action and do all other things which it would be
         reasonable to expect a Reasonable, Prudent Mortgage Lender to do in
         administering its loans and their related security; and

(i)      act as collection agent for the Mortgages Trustee under the Direct
         Debiting Scheme in accordance with the provisions of this Agreement.

                                      31

<PAGE>

                                  SCHEDULE 2

                        FORM OF INVESTOR MONTHLY REPORT

                                      32

<PAGE>

                                  SCHEDULE 3

                          MINIMUM SERVICING STANDARDS

1.       GENERAL SERVICING CONSIDERATIONS

         Policies and procedures are instituted to monitor any performance or
         other triggers and events of default in accordance with the
         transaction agreements.

2.       CASH COLLECTION AND ADMINISTRATION

(a)      Payments on pool assets are deposited into the appropriate custodial
         bank accounts - the Permanent Mortgages Trustee GIC account - no more
         than two business days after receipt.

(b)      Advances of funds or guarantees regarding collections, cash flows or
         distributions, and any interest or other fees charged for such
         advances, are made, reviewed and approved as specified in the
         transaction agreements.

(c)      The related accounts for the transaction, such as cash reserve
         accounts or accounts established as a form of overcollateralisation,
         are separately maintained (e.g. with respect to commingling of cash)
         as set forth in the transaction agreements.

(d)      Reconciliations are prepared on a monthly basis for all asset-backed
         securities related bank accounts, including custodial accounts and
         related bank clearing accounts - namely, the Permanent Mortgages
         Trustee GIC account, Permanent Funding (No. 1) GIC account, Permanent
         Funding (No. 2) GIC account, each Funding 1 Issuer's capital account,
         the Master Issuer's capital account, each Funding 1 Issuer's
         transaction account and the Master Issuer's transaction account. These
         reconciliations:

         (i)     Are mathematically accurate;

         (ii)    Are prepared within 30 calendar days after the bank statement
                 cut-off date;

         (iii)   Are reviewed and approved by someone other than the person who
                 prepared the reconciliation; and

         (iv)    Contain explanations for reconciling items. These reconciling
                 items are resolved within 90 calendar days of their original
                 identification.

3.       INVESTOR REMITTANCES

         Amounts due to investors are allocated and remitted in accordance with
         timeframes, distribution priority and other terms set forth in the
         transaction agreements.

4.       POOL ASSET ADMINISTRATION

(a)      The servicer has made reasonable endeavours to maintain collateral or
         security on pool assets.

(b)      Any additions, removals or substitutions to the asset pool are made,
         reviewed and approved in accordance with any conditions or
         requirements in the transaction agreements.

(c)      The servicer's records regarding the pool assets agree with the
         lender's records with respect to the unpaid principal balance.

                                      33

<PAGE>

(d)      Changes with respect to the terms or status of a pool asset (for
         example loan modifications or re-ageings) are made, reviewed and
         approved by authorised personnel in accordance with the transaction
         agreements and related pool asset documents.

(e)      Loss mitigation or recovery actions (e.g., foreclosures or
         repossessions) are initiated, conducted and concluded in accordance
         with the timeframes or other requirements established by the
         transaction agreements. Such programs include a hierarchy of workout
         procedures (e.g., forbearance plans, modifications and deeds in lieu
         of foreclosure, as applicable).

(f)      Records documenting collection efforts are maintained during the
         period a pool asset is delinquent in accordance with the transaction
         agreements. Such records are maintained on at least a monthly basis
         and describe the entity's activities in monitoring delinquent pool
         assets including, for example, phone calls, letters and payment
         rescheduling plans in cases where delinquency is deemed temporary
         (e.g., illness or unemployment).

(g)      Adjustments to interest rates or rates of return for pool assets with
         variable rates are computed based on the related pool asset documents.

(h)      Delinquencies, charge-offs and uncollectible accounts are recognised
         and recorded in accordance with the transaction agreements.

(i)      Any external enhancement or other support is maintained as set forth
         in the transaction agreements.

                                      34

<PAGE>

                                  SIGNATORIES

SERVICER AND SELLER

EXECUTED as a DEED by                        ) /S/ IAN STEWART
BANK OF SCOTLAND PLC                         ) /S/ DAVID WILKINSON
acting by its attorney                       )
in the presence of:                          )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

MORTGAGES TRUSTEE

EXECUTED as a DEED on behalf of              )
PERMANENT MORTGAGES                          ) /S/ ABU KAPADIA
TRUSTEE LIMITED,                             )
a company incorporated in Jersey,            )
Channel Islands, by                          )
being a person who,                          )
in accordance with the laws of that          )
territory is acting under the authority of   )
the company in the presence of:              )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

FUNDING 1

EXECUTED as a DEED by                        ) /S/ CLAUDIA WALLACE
PERMANENT FUNDING (NO. 1)                    )
LIMITED acting by two directors              ) /S/ HELENA WHITAKER

FUNDING 2

EXECUTED as a DEED by                        ) /S/ CLAUDIA WALLACE
PERMANENT FUNDING (NO. 2)                    )
LIMITED acting by two directors              ) /S/ HELENA WHITAKER

                                      35

<PAGE>

FUNDING 1 SECURITY TRUSTEE

EXECUTED as a DEED                           ) /S/ VINCENT GIRAUD
for and on behalf of                         )
THE BANK OF NEW YORK                         )
by its authorised signatory                  )
in the presence of:                          )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

FUNDING 2 SECURITY TRUSTEE

EXECUTED as a DEED                           ) /S/ VINCENT GIRAUD
for and on behalf of                         )
THE BANK OF NEW YORK                         )
by its authorised signatory                  )
in the presence of:                          )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

                                      36

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