Document:

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                                                                   Exhibit 10(h)

                             ALUMNI STOCK AGREEMENT

    This Alumni Stock Agreement ("Agreement") dated _____________, is made by
and between ______________ ("Alumni") and Science Applications International
Corporation, a Delaware corporation ("SAIC").

                                    RECITALS

    WHEREAS, Alumni was employed by SAIC until _______________ (the "Termination
Date"); and

    WHEREAS, as of the Termination Date, Alumni is at least 59 1/2 years old and
has been employed by SAIC or its affiliates for at least ten (10) years; and

    WHEREAS, pursuant to Article FOURTH of SAIC's Certificate of Incorporation,
SAIC has the right to repurchase all shares of SAIC Class A Common Stock owned
by Alumni which were issued after October 1, 1981 and all shares of SAIC Class A
Common Stock which Alumni has the right to obtain pursuant to SAIC's benefit
plans, option agreements or other contractual agreements at the time Alumni
terminated Alumni's employment with SAIC (the "Alumni Shares") at the Formula
Price in effect on the Termination Date; and

    WHEREAS, pursuant to Article FOURTH of SAIC's Certificate of Incorporation,
in order to exercise its right to repurchase the Alumni Shares, SAIC must
provide written notice to Alumni at Alumni's address of record within sixty (60)
days after the Termination Date; and

    WHEREAS, the parties hereto desire to extend the time of SAIC's right to
repurchase the Alumni Shares until sixty (60) days after Repurchase Date (as
defined herein); and

    WHEREAS, pursuant to Article FOURTH of SAIC's Certificate of Incorporation,
all transfers of SAIC Class A Common Stock require the prior written approval of
SAIC, other than sales in the limited market maintained by Bull, Inc.

    NOW, THEREFORE, the parties agree as follows:

    1. SAIC's right to repurchase the Alumni Shares shall be extended to sixty
(60) days after the Repurchase Date (the "Deferral Period"). For purposes of
this Agreement, the "Repurchase Date" is defined as (a) the five-year
anniversary of the Termination Date or (b) the date of death of Alumni,
whichever occurs first.

    2. In the event SAIC elects to exercise its right to repurchase the Alumni
Shares, SAIC shall provide written notice to Alumni at Alumni's address of
record within sixty (60) days after the earlier to occur of (a) the five-year
anniversary of the Termination Date or (b) the date notice of death of Alumni is
provided to SAIC, as the case may be.

    3. Such right of repurchase shall be at the Formula Price in effect on the
Repurchase Date.

    4. Payment for the repurchase of the Alumni Shares will be made by corporate
check.

    5. During the Deferral Period, all transfers of the Alumni Shares (other
than sales in the limited market) will be prohibited other than a) transfers to
charities, b) transfers to a trust for the benefit of Alumni or Alumni's family
in which the Alumni is a trustee and c) transfers to a joint account held solely
by the Alumni and Alumni's then current spouse. In the event of a transfer to a
charity, the charity will be required to enter into an agreement which provides
SAIC the right to repurchase such shares at any time. In the event of a transfer
to a family trust or to a joint account, the trustee(s) of the trust or the
spouse will be required to enter into an Alumni Agreement to cover the shares
being transferred.

    6. The parties acknowledge and agree that this Agreement only covers the
Alumni Shares and specifically does not cover any shares of SAIC Class A Common
Stock affiliated with Alumni's account (e.g., shares transferred to Alumni's
family members other than that set forth below) as of the Termination Date;
provided, however, shares held as of the Termination Date by a trust for the
benefit of Alumni or Alumni's family in which the Alumni is a trustee and shares

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<PAGE>
held as of the Termination Date in a joint account held solely by the Alumni and
Alumni's current spouse are eligible for deferral under a separate Alumni
Agreement entered into by the trustee(s) of such trust or the spouse.

    7. In the event that any Alumni Shares are required to be transferred to the
Alumni's former spouse or any other person as a result of the dissolution or
marriage or other reasons, such shares required to be transferred may not be
held for the remainder of the Deferral Period and will be subject to repurchase
by SAIC within sixty (60) days after SAIC receives written notice of the
requirement to transfer such shares ("Transfer Notice Date"). In the event SAIC
elects to exercise its right to repurchase the shares required to be
transferred, SAIC shall provide written notice to Alumni at Alumni's address of
record within sixty (60) days after the Transfer Notice Date. Such right of
repurchase shall be at the Formula Price in effect as of the date of the court
order or other document which requires the transfer of the Alumni Shares.
Payment for the repurchase of the shares required to be transferred will be made
by corporate check.

    8. Shares of stock which have been purchased by a stock purchase loan
guaranteed by SAIC are only eligible for deferral by the Alumni if the loan has
been paid off prior to the Termination Date.

    9. Except as specifically set forth herein, all other provision of SAIC's
Restated Certificate of Incorporation shall remain in full force and effect.

    10. This Agreement constitutes the final, complete and exclusive agreement
and understanding of the parties hereto in respect of the subject matter
contained herein, and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by an officer, employee or representative of any party hereto.

    11. This Agreement shall be deemed to have been entered into in the State of
California, and all questions of the validity, interpretation, or performance of
any of its terms or of any rights or obligations of the parties to this
Agreement shall be governed by California law.

    12. This Agreement may be amended, modified and supplemented only by written
agreement between the parties hereto which states that it is intended to be a
modification of this Agreement.

    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.

"SAIC"                        SCIENCE APPLICATIONS
                              INTERNATIONAL CORPORATION

                              By:
                                  --------------------------------------
                                    J. D. Heipt
                                    Corporate Executive Vice President
                                    and Secretary

                              Date:
                                    ------------------------------------

"Alumni"
                              ------------------------------------------
                                    Signature

                              ------------------------------------------
                                    Printed Name

                              Date:
                                    ------------------------------------

                                       2DATED 20 MARCH 2002

                         GRANITE FINANCE FUNDING LIMITED

                              THE BANK OF NEW YORK
                               as Security Trustee

                                     -and -

                                 CITIBANK, N.A.
                                  as Agent Bank

--------------------------------------------------------------------------------
                                 SECOND AMENDED
                     INTERCOMPANY LOAN TERMS AND CONDITIONS
--------------------------------------------------------------------------------

                           SIDLEY AUSTIN BROWN & WOOD
                              1 THREADNEEDLE STREET
                                 LONDON EC2R 8AW
                             TELEPHONE 020 7360 3600
                             FACSIMILE 020 7626 7937
                                  REF:528005V4

<PAGE>

                                    CONTENTS

CLAUSE                                                                  PAGE NO.
------                                                                  --------
1.  Interpretation..........................................................1

2.  The Intercompany Loans..................................................1

3.  Purpose.................................................................3

4.  Limited Recourse........................................................3

5.  Utilisation of the Intercompany Loans...................................4

6.  Interest................................................................5

7.  Repayment...............................................................6

8.  Prepayment..............................................................7

9.  Taxes...................................................................8

10. Illegality..............................................................8

11. Mitigation..............................................................9

12. Representations and Warranties of Funding...............................9

13. Covenants..............................................................11

14. Default................................................................14

15. Default Interest and Indemnity.........................................16

16. Payments...............................................................17

17. Entrenched Provisions..................................................18

18. Further Provisions.....................................................18

19. Redenomination.........................................................20

20. Governing Law..........................................................20

21. Submission to Jurisdiction.............................................20

22. Assignment.............................................................20

SCHEDULE 1 SCHEDULE 1NOTICE OF DRAWDOWN OF INTERCOMPANY LOAN...............21

SCHEDULE 2 SOLVENCY CERTIFICATE............................................22

SCHEDULE 3 FORM OF INTERCOMPANY LOAN CONFIRMATION..........................25

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THIS SECOND AMENDED INTERCOMPANY LOAN TERMS AND CONDITIONS DATED 20 MARCH 2002
FURTHER AMENDS AND RESTATES THE INTERCOMPANY LOAN TERMS AND CONDITIONS DATED 26
MARCH 2001

WHEREAS:

(A)  On 26 March 2001 Granite Mortgages 01-1 plc (the "FIRST ISSUER") shall make
     a loan to Granite Finance Funding Limited ("FUNDING") on the terms set out
     in these terms and conditions (the "INTERCOMPANY LOAN TERMS AND
     CONDITIONS") and the separate intercompany loan confirmation dated 26 March
     2001 (the "FIRST ISSUER INTERCOMPANY LOAN CONFIRMATION" and, together with
     the Intercompany Loan Terms and Conditions, the "FIRST ISSUER INTERCOMPANY
     LOAN AGREEMENT").

(B)  From time to time Funding may enter into new intercompany loan agreements
     with New Issuers which shall be made on the terms set out in these
     Intercompany Loan Terms and Conditions (as the same may be amended from
     time to time in the manner set out herein) and the relevant new
     intercompany loan confirmation (each a "NEW INTERCOMPANY LOAN CONFIRMATION"
     and, together with these Intercompany Loan Terms and Conditions, a "NEW
     INTERCOMPANY LOAN AGREEMENT").

(C)  References in these Intercompany Loan Terms and Conditions to an "ISSUER"
     shall refer to the First Issuer and any New Issuer from time to time.
     References in these Intercompany Loan Terms and Conditions to an
     "INTERCOMPANY LOAN AGREEMENT" shall refer to the First Issuer Intercompany
     Loan Agreement and any New Intercompany Loan Agreement entered into from
     time to time. References in these Intercompany Loan Terms and Conditions to
     an "INTERCOMPANY LOAN CONFIRMATION" shall refer to the First Issuer
     Intercompany Loan Confirmation and any New Intercompany Loan Confirmation
     entered into from time to time.

1.   INTERPRETATION

1.1. The provisions of the Master Definitions Schedule as amended and restated
     by (and appearing in Appendix 1 to) the Master Definitions Schedule Second
     Amendment and Restatement Deed made on 20 March 2002 between, among others,
     the parties hereto (as the same have been and may be amended, varied or
     supplemented from time to time with the consent of the parties hereto) are
     expressly and specifically incorporated into and shall apply to these
     Intercompany Loan Terms and Conditions. References in these Intercompany
     Loan Terms and Conditions to the Intercompany Loan Agreement shall include
     references to these Intercompany Loan Terms and Conditions as incorporated
     into the Intercompany Loan Agreement by way of reference and shall be
     construed accordingly.

2.   THE INTERCOMPANY LOANS

2.1  CONDITIONS PRECEDENT: Save as an Issuer and the Security Trustee may
     otherwise agree, a related Intercompany Loan will not be available for
     utilisation unless:

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     (a)  Funding and such Issuer have signed an Intercompany Loan Confirmation
          (generally in the form set out in Schedule 3 (Form of Intercompany
          Loan Confirmation) to these Intercompany Loan Terms and Conditions);

     (b)  the Issuer has confirmed to Funding (with a copy of such confirmation
          to the Security Trustee) that it or its advisers have received all of
          the information and documents listed in Schedule 1 to the Intercompany
          Loan Confirmation in form and substance satisfactory to the Issuer and
          such Issuer's advisers;

     (c)  the conditions set out in Clause 5.1 (Drawdown conditions relating to
          an Intercompany Loan) have been satisfied; and

     (d)  Funding has established in respect of any Issuer an Issuer Reserve
          Fund, Issuer Liquidity Reserve Fund or any other reserve fund or
          liquidity facility (and has established or procured the establishment
          of appropriate ledgers therefor), to the extent required by the Rating
          Agencies in connection with the drawing of an Intercompany Loan by
          Funding from an Issuer and the issuance of Notes by such Issuer.

2.2  NEW INTERCOMPANY LOAN AGREEMENTS: Funding may at any time, by written
     notice to the Security Trustee and the Rating Agencies, enter into a New
     Intercompany Loan Agreement with a New Issuer and borrow additional money
     thereunder (each a "NEW INTERCOMPANY LOAN"). Each New Intercompany Loan
     will be financed by the issue of New Notes by the New Issuer, and will only
     be permitted if the following conditions precedent are satisfied on the
     Drawdown Date:

     (a)  the New Issuer has satisfied the conditions precedent set forth in
          Clause 2.1 (Conditions precedent) hereof;

     (b)  the proceeds of the New Intercompany Loan are used by Funding in
          accordance with Clause 3.1 (Purpose and Application of the
          Intercompany Loan) hereof;

     (c)  each of the Rating Agencies confirms in writing to the Security
          Trustee that there will not, as a result of the New Issuer issuing any
          New Notes, be any adverse effect on (i) the then current ratings by
          the Rating Agencies of the existing Notes of any Issuer, the proceeds
          of which have been advanced to Funding pursuant to, inter alia, these
          Intercompany Loan Terms and Conditions;

     (d)  no Intercompany Loan Event of Default under any Intercompany Loan
          Agreement is continuing or unwaived at the relevant drawdown date;

     (e)  there is no debit balance on any Principal Deficiency Ledger as at the
          relevant date specified above;

     (f)  Funding entering into, as required by the Rating Agencies or
          otherwise, any additional agreements (including any new bank account
          agreement and any new guaranteed

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          investment contract agreement, if required, in relation to any New
          Issuer) as a result of entering into the New Intercompany Loan; and

     (g)  any other relevant conditions precedent specified in the Intercompany
          Loan Confirmation.

3.   PURPOSE

3.1  PURPOSE AND APPLICATION OF AN INTERCOMPANY LOAN: An Intercompany Loan shall
     be used by Funding either:

     (a)  to pay to the Mortgages Trustee Funding's Initial Contribution for the
          Funding Share in respect of any New Trust Property (which shall
          increase the Funding Share of the Trust Property); and/or

     (b)  to fund a Further Contribution to the Mortgages Trustee in order to
          increase the Funding Share of the existing Trust Property; and/or

     (c)  to refinance the existing debt of Funding, including any existing
          Intercompany Loan; and/or

     (d)  to fund or partly fund the Issuer Reserve Fund of the relevant Issuer.

3.2  APPLICATION OF AMOUNTS: Without prejudice to the obligations of Funding
     under this Clause 3, neither the Security Trustee nor any of the Funding
     Secured Creditors shall be obliged to concern themselves as to the
     application of amounts raised by Funding under an Intercompany Loan
     Agreement.

4.   LIMITED RECOURSE

4.1  RECOURSE LIMITED TO AVAILABLE FUNDS: Notwithstanding the terms of any other
     provision in any Intercompany Loan Agreement, each of the Issuer and the
     Security Trustee agree that the liability of Funding in respect of its
     obligations to repay principal and pay interest or any other amounts due
     under the relevant Intercompany Loan Agreement or for any breach of any
     other representation, warranty, covenant or undertaking of Funding under
     the relevant Intercompany Loan Agreement shall be limited to:

     (a)  in respect of amounts payable prior to the enforcement of the Funding
          Security:

          (i)  the amount of Funding Available Revenue Receipts in respect of
               interest, fees or other amounts (but excluding principal) payable
               by Funding to the relevant Issuer, but only to the extent of an
               amount of Funding Available Revenue Receipts remaining after
               paying amounts of a higher order of priority and providing for
               amounts payable pari passu therewith in accordance with, and
               subject to, the relevant Funding Pre-Enforcement Revenue Priority
               of Payments; and

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          (ii) the amount of Funding Available Principal Receipts in respect of
               principal payable by Funding to the relevant Issuer, but only to
               the extent of the amount of Funding Available Principal Receipts
               payable by Funding to such Issuer as determined by, and subject
               to, the rules set forth in the relevant Funding Pre-Enforcement
               Principal Priority of Payments; and

     (b)  in respect of amounts payable following enforcement of the Funding
          Security, amounts received or recovered by Funding, the Security
          Trustee or a Receiver appointed on behalf of the Security Trustee, but
          only to the extent of such amount thereof as remains after paying
          amounts of a higher order of priority and providing for amounts
          payable pari passu therewith in accordance with, and subject to, the
          Funding Post-Enforcement Priority of Payments,

     provided that the application of such amounts set forth in sub-clauses (a)
     and (b) above to the discharge of Funding's obligations under an
     Intercompany Loan Agreement shall be subject to the terms of the Funding
     Deed of Charge.

4.2  SHORTFALL ON FINAL REPAYMENT DATE: On the Final Repayment Date of an
     Intercompany Loan, the amount of interest and principal due and payable on
     such Intercompany Loan shall be an amount equal to the sum available to pay
     all outstanding interest and/or principal amounts due (including interest
     and principal amounts deferred and unpaid) on such Intercompany Loan after
     paying amounts of a higher order of priority in accordance with the
     relevant Funding Priority of Payments. To the extent that on the Final
     Repayment Date of an Intercompany Loan there is a shortfall between the
     amount available to Funding to pay such interest and principal on such
     Intercompany Loan and the amount of interest and principal due and payable
     on such Intercompany Loan, the Issuer agrees that Funding shall not be
     obliged to pay that shortfall to such Issuer and that any claim that such
     Issuer may otherwise have against Funding in respect of that shortfall will
     be extinguished.

5.   UTILISATION OF THE INTERCOMPANY LOANS

5.1  DRAWDOWN CONDITIONS RELATING TO AN INTERCOMPANY LOAN: Save as otherwise
     provided in the relevant Intercompany Loan Agreement, an Intercompany Loan
     will be made available by an Issuer to Funding on the relevant Closing Date
     if:

     (a)  the Notes have been issued by such Issuer and the subscription
          proceeds have been received by or on behalf of such Issuer;

     (b)  not later than 17.00 (London time) on such Closing Date (or such later
          time as may be agreed by Funding, such Issuer and the Security
          Trustee), such Issuer has received from Funding a Drawdown Notice
          requesting a drawing under an Intercompany Loan Agreement (with copy
          of such Drawdown Notice to the Security Trustee), receipt of which
          shall (subject to the terms of such Intercompany Loan Agreement and to
          the issue of the Notes by such Issuer) oblige Funding to borrow the
          whole of the amount requested in the Drawdown Notice on the date
          stated in the Drawdown Notice (which shall be the

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          Closing Date) upon the terms and subject to the conditions contained
          in such Intercompany Loan Agreement;

     (c)  Funding has confirmed in the relevant Drawdown Notice that:

          (i)  no Intercompany Loan Event of Default has occurred and is
               continuing unremedied (if capable of remedy) or unwaived or would
               result from the making of such Intercompany Loan;

          (ii) the representations set out in Clause 12 (Representations and
               warranties of Funding) are true on and as of the Closing Date by
               reference to the facts and circumstances then existing;

     (d)  the aggregate principal amount of such Intercompany Loan to be drawn
          on the Drawdown Date would not exceed the amount available for drawing
          under such Intercompany Loan Agreement as at the relevant Drawdown
          Date;

     (e)  a group income election has been made under Section 247 of the Income
          and Corporation Taxes Act 1988, as amended, in relation to Funding and
          such Issuer, provided that such election will only be required to the
          extent necessary in order that payments of interest can be made by
          Funding to an Issuer without there being a requirement to deduct
          income tax at source; and

     (f)  Funding has delivered to the Security Trustee a solvency certificate
          in form and substance satisfactory to the Security Trustee and
          substantially in the form set out in Schedule 2 to these Intercompany
          Loan Terms and Conditions.

5.2  SINGLE DRAWING OF THE INTERCOMPANY LOAN: Each Intercompany Loan will only
     be available for drawing in one amount by Funding on the Closing Date
     subject to satisfaction of the matters specified in Clause 2.1 (Conditions
     precedent) and Clause 5.1 (Drawdown conditions relating to an Intercompany
     Loan).

6.   INTEREST

6.1  INTEREST PERIODS: The first Interest Period will commence on (and include)
     the Drawdown Date of an Intercompany Loan and end on (but exclude) the
     first Payment Date falling thereafter. Each subsequent Interest Period
     shall commence on (and include) a Payment Date and end on (but exclude) the
     next following Payment Date.

6.2  DETERMINATION OF INTERCOMPANY LOAN INTEREST AMOUNT AND FEES:

     (a)  The Agent Bank shall, as soon as practicable after 11.00 a.m. (London
          time) on the Distribution Date immediately preceding the relevant
          Payment Date, determine and notify the relevant Issuer, Funding, the
          Cash Manager and the Security Trustee of the sterling amount (the
          "INTEREST AMOUNT") payable in respect of such Interest Period in
          respect of the Outstanding Principal Balance of the relevant
          Intercompany Loan. The Interest Amount payable to an Issuer in respect
          of such Issuer's related Intercompany

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          Loan on each Payment Date shall be equal to the amount of interest
          required by such Issuer on such Payment Date to fund (by payment to
          any Swap Provider or otherwise) the amount payable on such Payment
          Date by such Issuer on the outstanding Notes of such Issuer and
          certain other amounts as set forth in the relevant Intercompany Loan
          Confirmation.

     (b)  In addition to the foregoing, on each Payment Date or as and when
          required, in connection with the provision of an Intercompany Loan,
          Funding will pay additional fees to an Issuer calculated to be an
          amount equal to the amount required by such Issuer to pay or provide
          for all other amounts, if any, falling due on that Payment Date,
          including amounts payable by such Issuer as set forth in the relevant
          Intercompany Loan Confirmation; provided, however, that such fee shall
          not include amounts of interest and principal due on the Notes issued
          by such Issuer and tax that can be met out of such Issuer's profits.

     (c)  If the Agent Bank does not at any time for any reason determine the
          Interest Amount for any of the Intercompany Loans in accordance with
          paragraph (a) above, the Security Trustee shall (subject to it being
          indemnified to its satisfaction) determine the Interest Amount for
          each Intercompany Loan and any such determination shall be deemed to
          have been made by the Agent Bank.

     (d)  All notifications, opinions, determinations, certificates,
          calculations and decisions given, expressed, made or obtained for the
          purposes of this Clause 6, whether by the Agent Bank or the Security
          Trustee, shall (in the absence of wilful default, bad faith or
          manifest error) be binding on Funding, the relevant Issuer, the Cash
          Manager, the Agent Bank, the Security Trustee and (in such absence as
          aforesaid) no liability to Funding shall attach to such Issuer, the
          Agent Bank, the Security Trustee or the Cash Manager in connection
          with the exercise or non-exercise by them or any of them of their
          powers, duties and discretions hereunder.

     (e)  Notwithstanding the foregoing, Funding and each Issuer agree that, to
          the extent that such Issuer receives from Funding on any Payment Date
          an amount of interest and/or fees which such Issuer uses to credit the
          Principal Deficiency Ledger of such Issuer (but only to the extent of
          any deficiency resulting from (i) Losses on the Mortgage Loans that
          have been allocated by Funding to such Issuer, and (ii) the
          application of Funding Available Principal Receipts to fund any
          liquidity reserve fund of such Issuer, and not as a result of any
          other principal deficiency of such Issuer), such amount of interest
          and/or fees will be re-characterised as, and will constitute, a
          repayment of principal in respect of the Intercompany Loan of such
          Issuer, and will thereby reduce the Outstanding Principal Balance of
          such Intercompany Loan on such Payment Date by such amount.

6.3  PAYMENT ON PAYMENT DATES: Interest payable on each Intercompany Loan shall
     be payable on the Payment Dates specified in the Intercompany Loan
     Confirmation.

7.   REPAYMENT

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7.1  REPAYMENT OF INTERCOMPANY LOAN PRINCIPAL AMOUNT: The Principal Amount
     repayable to an Issuer in respect of such Issuer's related Intercompany
     Loan on each Payment Date shall equal the amount of principal required by
     such Issuer on such Payment Date to fund (by payment to any Swap Provider
     or otherwise) the amount repayable on such Payment Date by such Issuer on
     the outstanding Notes of such Issuer as set forth in the relevant
     Intercompany Loan Confirmation.

7.2  REPAYMENT ON PAYMENT DATES: Each Intercompany Loan shall be repaid on the
     Payment Dates specified in the related Intercompany Loan Confirmation.

7.3  RE-CHARACTERISATION AS PRINCIPAL: Funding and each Issuer agree that
     certain interest and fee amounts paid to an Issuer as set forth in Clause
     6.2(e) shall reduce the Outstanding Principal Balance repayable by Funding
     to such Issuer in respect of such Issuer's related Intercompany Loan.

7.4  ALLOCATION OF LOSSES: Save as otherwise provided herein, Funding and each
     Issuer agree that all Losses sustained on the Mortgage Loans during a Trust
     Calculation Period applied in reduction of the Funding Share of the Trust
     Property on the Distribution Date immediately succeeding such Trust
     Calculation Period pursuant to Clause 12 (Allocation of Losses) of the
     Mortgages Trust Deed shall be applied on such date in reducing the
     Outstanding Principal Balance repayable by Funding to any Issuer in respect
     of such Issuer's Intercompany Loan by an amount equal to:

                                     A X B
                                    -------
                                       C

     where,

     A  = the amount of such Losses applied in reduction of the Funding Share
          on the relevant Distribution Date;

     B  = the Outstanding Principal Balance of the Intercompany Loan on such
          Distribution Date; and

     C  = the aggregate Outstanding Principal Balances of the Intercompany
          Loans of all Issuers on such Distribution Date;

     and for the purposes of "B" and "C" above, the Outstanding Principal
     Balance of an Intercompany Loan shall be reduced by the Principal Amount
     Outstanding on such Distribution Date of any Special Repayment Notes issued
     by the related Issuer.

8.   PREPAYMENT

8.1  PREPAYMENT FOR TAXATION OR OTHER REASONS: If:

     (a)  Funding is required to withhold or deduct from any payment of
          principal or interest in respect of any Intercompany Loan any amount
          for or on account of Tax; or

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     (b)  the relevant Issuer is required to withhold or deduct from any payment
          of principal, interest or premium in respect of its Notes any amount
          for or on account of Tax; or

     (c)  an Intercompany Loan becomes illegal as described in Clause 10
          (Illegality);

     then, without prejudice to the obligations of Funding under Clause 10
     (Illegality) and subject to Clause 11 (Mitigation), the relevant Issuer may
     require Funding to prepay, on any Payment Date, having given not more than
     60 days and not less than 30 days' (or such shorter period as may be
     required by any relevant law in the case of any Intercompany Loan which
     becomes illegal pursuant to Clause 10 (Illegality)) prior written notice to
     the Issuer and the Note Trustee (or on or before the latest date permitted
     by the relevant law in the case of Clause 10 (Illegality)) and while the
     relevant circumstances continue, the related Intercompany Loan without
     penalty or premium but subject to Clause 15 (Default interest and
     indemnity), provided that such Issuer is able to repay its Notes on such
     Payment Date from funds received from repayment of such Intercompany Loan.

8.2  PREPAYMENT AT OPTION OF ISSUER: An Issuer, at its option, may require
     Funding to prepay the outstanding principal amount of an Intercompany Loan
     (together with any accrued interest) on any Payment Date on which such
     Issuer has decided to exercise its option, if any, to redeem in full the
     Notes issued by such Issuer. The Issuer shall give Funding not more than 60
     days' and not less than 30 days' prior written notice of such Issuer's
     decision to exercise its option to require Funding to prepay the relevant
     Intercompany Loan. Any prepayment by Funding will be made without penalty
     or premium but will be subject to Clause 15 (Default interest and
     indemnity).

8.3  APPLICATION OF MONIES: Each Issuer hereby agrees to apply any amounts
     received by way of prepayment pursuant to Clause 8.1 (Prepayment for
     taxation or other reasons) or Clause 8.2 (Prepayment at option of Issuer)
     in making prepayments under the relevant Notes issued by such Issuer.

9.   TAXES

9.1  NO GROSS UP: All payments by Funding under the Intercompany Loan Agreement
     shall be made without any deduction or withholding for or on account of,
     and free and clear of, any Taxes, except to the extent that Funding is
     required by law to make payment subject to any Taxes.

9.2  TAX RECEIPTS: All Taxes required by law to be deducted or withheld by
     Funding from any amounts paid or payable under an Intercompany Loan
     Agreement shall be paid by Funding when due and Funding shall, within 30
     days of the payment being made, deliver to the relevant Issuer evidence
     satisfactory to such Issuer (including all relevant Tax receipts) that the
     payment has been duly remitted to the appropriate authority.

10.  ILLEGALITY

     If, at any time, it is unlawful for an Issuer to make, fund or allow to
     remain outstanding an Intercompany Loan made by it under the related
     Intercompany Loan Agreement, then such Issuer

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     shall, promptly after becoming aware of the same, deliver to Funding, the
     Security Trustee and the Rating Agencies a certificate to that effect and
     if such Issuer so requires, Funding shall promptly to the extent necessary
     to cure such illegality prepay such Intercompany Loan subject to and in
     accordance with the provisions of Clause 8.1 (Prepayment for taxation or
     other reasons).

11.  MITIGATION

     If circumstances arise in respect of an Issuer which would, or would upon
     the giving of notice, result in:

     (a)  the prepayment of an Intercompany Loan pursuant to Clause 10
          (Illegality);

     (b)  a withholding or deduction from the amount to be paid by Funding on
          account of Taxes, pursuant to Clause 9 (Taxes),

          then, without in any way limiting, reducing or otherwise qualifying
          the obligations of Funding under this Agreement, such Issuer shall:

          (i)  promptly upon becoming aware of the circumstances, notify the
               Security Trustee, Funding and the Rating Agencies; and

          (ii) upon written request from Funding, take such reasonable steps as
               may be practical to mitigate the effects of those circumstances
               including (without limitation) the assignment by novation of the
               Intercompany Loan Agreement of such Issuer of all of such
               Issuer's rights under such Intercompany Loan Agreement to, and
               assumption by novation of all such Issuer's obligations under
               such Intercompany Loan Agreement by, another company, which is
               willing to participate in the relevant Intercompany Loan in its
               place and which is not subject to (a) and/or (b) above,

          provided that no such transfer or assignment and transfer by novation
          of such Intercompany Loan Agreement may be permitted unless the Rating
          Agencies confirm in writing to Funding and the Security Trustee that
          there will be no downgrading of the then current rating of the Notes
          issued by such Issuer as a result and Funding indemnifies such Issuer
          for any reasonable costs and expenses properly incurred as a result of
          such transfer or assignment.

12.  REPRESENTATIONS AND WARRANTIES OF FUNDING

12.1 REPRESENTATIONS AND WARRANTIES: Funding makes the representations and
     warranties set out in this Clause 12 to each Issuer and the Security
     Trustee (as trustee for each of the Funding Secured Creditors).

12.2 STATUS:

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     (a)  It is a limited liability company duly incorporated, validly existing
          and registered under the laws of the jurisdiction in which it is
          incorporated, capable of being sued in its own right and not subject
          to any immunity from any proceedings; and

     (b)  it has the power to own its property and assets and to carry on its
          business as it is being conducted.

12.3 POWERS AND AUTHORITY: It has the power to enter into, perform and deliver,
     and has taken all necessary corporate and other action to authorise the
     execution, delivery and performance by it of, each of the Transaction
     Documents to which it is a party.

12.4 LEGAL VALIDITY: Each Transaction Document to which it is or will be a party
     constitutes or when executed in accordance with its terms will constitute,
     a legal, valid and binding obligation of Funding.

12.5 NON-CONFLICT: The execution by it of each of the Transaction Documents to
     which it is a party and the exercise by it of its rights and the
     performance of its obligations under such Transaction Documents including,
     without limitation, borrowing pursuant to the terms of an Intercompany Loan
     Agreement or granting any security contemplated by the Transaction
     Documents will not:

     (a)  result in the existence or imposition of, nor oblige it to create, any
          Security Interest in favour of any person (other than the Security
          Trustee for itself and on behalf of the other Funding Secured
          Creditors or as otherwise contemplated in the Transaction Documents)
          over all or any of its present or future revenues or assets;

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

     (c)  conflict with its constitutional documents; or

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

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

12.7 NO DEFAULT: No Intercompany Loan Event of Default is continuing unremedied
     (if capable of remedy) or unwaived or would result from the making of any
     Intercompany Loan.

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

12.9 REGISTRATION REQUIREMENTS: Except for due registration of the Funding Deed
     of Charge under Section 395 of the Companies Act 1985, it is not necessary
     that the Funding Deed of Charge or an Intercompany Loan Agreement be filed,
     recorded or enrolled with any authority or that,

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       except for registration fees payable at Companies Registry in respect of
       the Security Documents, any stamp, registration or similar tax be paid on
       or in respect thereof.

12.10  RANKING OF SECURITY: The security conferred by the Funding Deed of Charge
       constitutes a first priority security interest of the type described, and
       over the security assets referred to, in the Funding Deed of Charge and
       the Funding Charged Property is not subject to any prior or pari passu
       Security Interests.

12.11  NO OTHER BUSINESS:

       (a)    It has not traded or carried on any business since its date of
              incorporation or engaged in any activity whatsoever that is not
              incidental to or necessary in connection with any of the
              activities in which the Transaction Documents provide or envisage
              that it will engage; and

       (b)    it is not party to any material agreements other than the
              Transaction Documents.

12.12  OWNERSHIP:

       (a)    Its entire issued share capital is legally and beneficially owned
              and controlled by Holdings; and

       (b)    its shares are fully paid.

12.13  GOOD TITLE AS TO ASSETS: Subject to the Security Interests created under
       the Funding Deed of Charge, it is and will remain the absolute beneficial
       owner of the Funding Share and absolute legal and beneficial owner of all
       other assets charged or assigned by the Funding Deed of Charge to which
       it is a party.

12.14  TAX: It is incorporated in Jersey but is centrally managed and controlled
       from its branch office established in the UK (registered overseas company
       number FC022999 and branch number BR0051916).

12.15  REPETITION: The representations in this Clause 12 (Representations and
       Warranties of Funding) shall survive the execution of the Intercompany
       Loan Agreement and the making of each Intercompany Loan under the
       relevant Intercompany Loan Agreement, and shall be repeated by Funding on
       each Drawdown Date of each Intercompany Loan by reference to the facts
       and circumstances then existing.

13.    COVENANTS

13.1   DURATION: The undertakings in this Clause 13 (Covenants) shall remain in
       force from the date of the relevant Intercompany Loan Agreement for so
       long as any amount is or may be outstanding under such Intercompany Loan
       Agreement.

13.2   INFORMATION: Funding shall supply to the Security Trustee and the Rating
       Agencies:

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<PAGE>

       (a)    as soon as the same are available its audited accounts for that
              Financial Year; and

       (b)    promptly, such other information in connection with the matters
              contemplated by the Transaction Documents as the Security Trustee
              or the Rating Agencies may reasonably request.

13.3   NOTIFICATION OF DEFAULT: Funding shall notify the relevant Issuer and the
       Security Trustee of any Intercompany Loan Event of Default (and the
       steps, if any, being taken to remedy it) or any event which with the
       giving of notice or lapse of time or certification would constitute the
       same promptly upon Funding becoming aware of the occurrence of each
       Intercompany Loan Event of Default or such other event.

13.4   AUTHORISATIONS: Funding shall promptly:

       (a)    obtain, maintain and comply with the terms of; and

       (b)    upon request, supply certified copies to the Issuer and the
              Security Trustee of,

       any authorisation required under any law or regulation to enable it to
       perform its obligations under, or for the validity or enforceability of,
       any Transaction Document to which it is a party.

13.5   PARI PASSU RANKING: Funding shall procure that its obligations under the
       Transaction Documents do and will rank at least pari passu with all its
       other present and future unsecured obligations, except for obligations
       mandatorily preferred by law.

13.6   NEGATIVE PLEDGE: Funding shall not create or permit to subsist any
       security interest (including but not limited to any mortgage, standard
       security, charge (whether legal or equitable), assignment by way of
       security, pledge, lien, hypothecation or other security interest securing
       any obligation of any person (including, without limitation, any trust or
       arrangement having the effect of providing security)) over or in respect
       of any of its assets (unless arising by operation of law) other than as
       provided pursuant to the Transaction Documents.

13.7   DISPOSALS; MERGERS AND ACQUISITIONS: Funding shall not, either in a
       single transaction or in a series of transactions, whether related or not
       and whether voluntarily or involuntarily, sell, assign, transfer, lease
       or otherwise dispose of or grant any option over all or any part of its
       assets, properties or undertakings or any interest, estate, right, title
       or benefit therein, other than as provided for pursuant to the
       Transaction Documents. In addition to the foregoing:

       (a)    Funding shall not enter into any amalgamation, demerger, merger or
              reconstruction; and

       (b)    Funding shall not acquire any assets or business or make any
              investments other than as contemplated in the Transaction
              Documents.

13.8   LENDING AND BORROWING:

       (a)    Except as provided or contemplated under the Transaction
              Documents, Funding shall not make any loans or provide any other
              form of credit to any person.

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<PAGE>

       (b)    Funding shall not give any guarantee or indemnity to or for the
              benefit of any person in respect of any obligation of any other
              person or enter into any document under which Funding assumes any
              liability of any other person.

       (c)    Funding shall not incur any indebtedness in respect of any
              borrowed money other than under the Transaction Documents.

13.9   SHARES AND DIVIDENDS: Funding shall not:

       (a)    declare or pay any dividend or make any other distribution in
              respect of any of its shares other than in accordance with the
              Funding Deed of Charge;

       (b)    issue any further shares or alter any rights attaching to its
              issued shares as at the date hereof; or

       (c)    repay or redeem any of its share capital.

13.10  CHANGE OF BUSINESS:

       (a)    Funding shall not carry on any business or engage in any activity
              other than as contemplated by the Transaction Documents or which
              is not incidental to or necessary in connection with any of the
              activities in which the Transaction Documents provide or envisage
              that Funding will engage.

       (b)    Other than in respect of an Issuer, Funding shall not have any
              subsidiaries or subsidiary undertakings as defined in the
              Companies Act 1985, as amended.

       (c)    Funding shall not own any premises.

13.11  TAX:

       (a)    For so long as is necessary in order that payments of interest can
              be made by Funding to an Issuer without there being a requirement
              to deduct income tax at source, Funding shall join with each
              Issuer in making a group income election under section 247 of the
              Income and Corporation Taxes Act 1988 (as amended) in relation to
              any such payments as are referred to in section 247(4) of that Act
              and which are made under the relevant Intercompany Loan Agreement
              by Funding to the related Issuer and Funding will ensure that no
              steps will be taken (whether by act, omission or otherwise) by it
              which would reasonably be expected to lead to the revocation or
              invalidation of the aforementioned election. Funding shall
              immediately notify such Issuer and the Security Trustee if it
              becomes aware that the aforementioned election has ceased to be in
              full force and effect or if circumstances arise, of which it is
              aware, which would be reasonably likely to result in that election
              ceasing to be in full force and effect; and

       (b)    Funding shall not apply to become part of any group for the
              purposes of section 43 of the Value Added Tax Act 1994 (as
              amended) with an Issuer unless required to do so by law.

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<PAGE>

13.12  UNITED STATES ACTIVITIES: Funding will not engage in any activities in
       the United States (directly or through agents), will not derive any
       income from United States sources as determined under United States
       income tax principles and will not hold any property if doing so would
       cause it to be engaged or deemed to be engaged in a trade or business
       within the United States as determined under United States tax
       principles.

13.13  FUNDING LEDGERS: Funding shall maintain, or cause to be maintained, the
       Funding Ledgers in accordance with the Cash Management Agreement.

14.    DEFAULT

14.1   INTERCOMPANY LOAN EVENTS OF DEFAULT: Each of the events set out in Clause
       14.2 (Non-payment) to Clause 14.8 (Ownership) (inclusive) is an
       Intercompany Loan Event of Default (whether or not caused by any reason
       whatsoever outside the control of Funding or any other person).

14.2   NON-PAYMENT: Subject to Clause 4.1 (Recourse limited to available funds),
       Funding does not pay on the due date or for a period of five London
       Business Days after such due date any amount payable by it under any
       Intercompany Loan Agreement at the place at and in the currency in which
       it is expressed to be payable.

14.3   BREACH OF OTHER OBLIGATIONS: Funding does not comply in any material
       respect with any of its obligations under the Transaction Documents
       (other than those referred to in Clause 14.2 (Non-payment)) and such
       non-compliance, if capable of remedy, is not remedied promptly and in any
       event within twenty London Business Days of Funding becoming aware of the
       non-compliance or receipt of a notice from the Security Trustee requiring
       Funding's non-compliance to be remedied.

14.4   MISREPRESENTATION: A representation, warranty or statement made or
       repeated in or in connection with any Transaction Document or in any
       document delivered by or on behalf of Funding under or in connection with
       any Transaction Document is incorrect in any material respect when made
       or deemed to be made or repeated.

14.5   INSOLVENCY:

       (a)    An order is made or an effective resolution is passed for the
              winding up of Funding (except, in any such case, a winding-up or
              dissolution for the purpose of a reconstruction, amalgamation or
              merger the terms of which have been previously approved by the
              Security Trustee or as approved by an Extraordinary Resolution of
              the Class A Noteholders of all Issuers); or

       (b)    Except for the purposes of an amalgamation, merger or
              restructuring as described in (a) above, Funding ceases or
              threatens to cease to carry on all or a substantial part of its
              business or stops payment or threatens to stop payment of its
              debts or is deemed unable to pay its debts within the meaning of
              Section 123(a), (b), (c) or (d) of the Insolvency Act 1986 (as
              amended, modified or re-enacted) or becomes unable to pay its
              debts within the

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<PAGE>

              meaning of Section 132(2) of the Insolvency Act 1986 (as amended,
              modified or re-enacted); or

       (c)    Proceedings are otherwise initiated against Funding under any
              applicable liquidation, insolvency, composition, reorganisation or
              other similar laws (including, but not limited to, presentation of
              a petition for an administration order) and (except in the case of
              presentation of a petition for an administration order) such
              Proceedings are not, in the opinion of the Security Trustee being
              disputed in good faith with a reasonable prospect of success; or
              an administrative receiver or other receiver, liquidator or other
              similar official being appointed in relation to Funding or in
              relation to the whole or any substantial part of the undertaking
              or assets of Funding; or an encumbrancer taking possession of the
              whole or any substantial part of the undertaking or assets of
              Funding; or a distress, execution, diligence or other process
              being levied or enforced upon or sued out against the whole or any
              substantial part of the undertaking or assets of Funding and such
              possession or process (as the case may be) not being discharged or
              not otherwise ceasing to apply within 30 days; or Funding
              initiating or consenting to judicial proceedings relating to
              itself under applicable liquidation, insolvency, composition,
              reorganisation or other similar laws or making a conveyance or
              assignment for the benefit of its creditors generally.

14.6   UNLAWFULNESS: It is or becomes unlawful for Funding to perform any of its
       obligations under any Transaction Document.

14.7   THE FUNDING DEED OF CHARGE: The Funding Deed of Charge is no longer
       binding on or enforceable against Funding or effective to create the
       security intended to be created by it.

14.8   OWNERSHIP: The entire issued share capital of Funding ceases to be
       legally and beneficially owned and controlled by Holdings.

14.9   ACCELERATION: Upon the Security Trustee's receipt from an Issuer or other
       party to a Transaction Document of notice of the occurrence of an
       Intercompany Loan Event of Default which is continuing unremedied and/or
       has not been waived, the Security Trustee may by written notice to
       Funding (the "INTERCOMPANY LOAN ENFORCEMENT NOTICE") which is copied to
       each of the Funding Secured Creditors and the Mortgages Trustee:

       (a)    declare the relevant Intercompany Loan and all other Intercompany
              Loans to be immediately due and payable, whereupon the same shall,
              subject to Clause 14.10 (Repayment of Intercompany Loans on
              acceleration), become so payable together with accrued interest
              thereon and any other sums then owed by Funding under each
              relevant Intercompany Loan Agreement; and/or

       (b)    declare the relevant Intercompany Loan and all other Intercompany
              Loans to be due and payable on demand of the Security Trustee.

14.10  REPAYMENT OF INTERCOMPANY LOANS ON ACCELERATION: Upon the Security
       Trustee declaring all Intercompany Loans to be immediately due and
       payable pursuant to Clause 14.9(a)

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<PAGE>

       (Acceleration), the amount due and payable in respect of such
       Intercompany Loans shall be paid by Funding without penalty or premium
       but subject to Clause 15 (Default interest and indemnity).

15.    DEFAULT INTEREST AND INDEMNITY

15.1   DEFAULT LOAN INTEREST PERIODS: If any sum due and payable by Funding
       under an Intercompany Loan Agreement is not paid on the due date for
       payment in accordance with the relevant provision of such Intercompany
       Loan Agreement or if any sum due and payable by Funding under any
       judgment or decree of any court in connection with an Intercompany Loan
       Agreement is not paid on the date of such judgment or decree, the period
       beginning on such due date or, as the case may be, the date of such
       judgment or decree and ending on the date upon which the obligation of
       Funding to pay such sum (the balance thereof for the time being unpaid
       being herein referred to as an "UNPAID SUM") is discharged shall be
       divided into successive periods, each of which (other than the first)
       shall start on the last day of the preceding such period and the duration
       of each of which shall (except as otherwise provided in this Clause 15)
       be selected by the Security Trustee having regard to when such unpaid sum
       is likely to be paid.

15.2   DEFAULT INTEREST: During each such period relating to an unpaid sum as is
       mentioned in this Clause 15 an unpaid sum shall bear interest at the rate
       per annum which the relevant Issuer, acting reasonably, determines and
       certifies to Funding and the Security Trustee, will be sufficient to
       enable it to pay interest and other costs and indemnities on or in
       respect of any amount which such Issuer does not pay as a result of
       Funding's non-payment under the related Intercompany Loan Agreement, as a
       result of such unpaid sum not being paid to it.

15.3   PAYMENT OF DEFAULT INTEREST: Any interest which shall have accrued under
       Clause 15.2 (Default interest) in respect of an unpaid sum shall be due
       and payable and shall be paid by Funding at the end of the period by
       reference to which it is calculated or on such other date or dates as the
       Security Trustee may specify by written notice to Funding.

15.4   BROKEN PERIODS: Funding shall forthwith on demand indemnify an Issuer
       against any loss or liability that such Issuer incurs as a consequence of
       any payment of principal being received from any source otherwise than on
       a Payment Date or an overdue amount being received otherwise than on its
       due date.

15.5   FUNDING'S PAYMENT INDEMNITY: Funding undertakes to indemnify an Issuer:

       (a)    against any cost, claim, loss, expense (including legal fees) or
              liability together with any amount in respect of Irrecoverable VAT
              thereon (other than by reason of the negligence or wilful default
              by such Issuer) which it may sustain or incur as a consequence of
              the occurrence of any Intercompany Loan Event of Default or any
              default by Funding in the performance of any of the obligations
              expressed to be assumed by it in any of the Transaction Documents
              (other than by reason of negligence or wilful default on the part
              of such Issuer or prior breach by such Issuer of the terms of any
              of the Transaction Documents to which it is a party);

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       (b)    against any loss it may suffer as a result of its funding an
              Intercompany Loan requested by Funding under a related
              Intercompany Loan Agreement (which shall include the amounts
              referred to in Clause 6 of the related Intercompany Loan
              Confirmation) but not made; and

       (c)    against any other loss or liability (other than by reason of the
              negligence or default of such Issuer or breach by such Issuer of
              the terms of any of the Transaction Documents to which it is a
              party (except where such breach is caused by the prior breach of
              Funding) or loss of profit) it may suffer by reason of having made
              the related Intercompany Loan available or entering into the
              related Intercompany Loan Agreement or enforcing any security
              granted pursuant to the Funding Deed of Charge.

15.6   FUNDING'S WAIVERS: Funding undertakes to the Issuer that it will waive
       and abandon:

       (a)    any right which it has or may have at any time under the existing
              or future laws of Jersey, whether by virtue of the droit de
              discussion or otherwise, which requires that recourse be had to
              the assets of any other person before any claim is enforced
              against Funding in respect of Funding's obligations hereunder; and

       (b)    any right which it at any time has or may have under the existing
              or future laws of Jersey, whether by virtue of the droit de
              division or otherwise, which requires that any liability under the
              indemnity in Clause 15.5 above be divided or apportioned with any
              other person or reduced in any manner whatsoever.

16.    PAYMENTS

16.1   PAYMENT:

       (a)    Subject to Clause 4 (Limited Recourse), interest and principal
              shall be paid in sterling on the Intercompany Loans for value by
              Funding to the Issuer Transaction Account specified by the
              relevant Issuer in the relevant Intercompany Loan Confirmation on
              each Payment Date and the relevant irrevocable payment instruction
              for such payment shall be given by Funding by no later than noon
              to the Issuer Cash Manager under the Issuer Cash Management
              Agreement (with a copy to the relevant Issuer and the Security
              Trustee) on the Distribution Date immediately preceding the
              relevant Payment Date.

       (b)    On each date on which an Intercompany Loan Agreement requires any
              amount other than the amounts specified in Clause 16.1(a) to be
              paid by Funding under such Intercompany Loan Agreement, Funding
              shall, unless such Intercompany Loan Agreement specifies
              otherwise, make the same available to the related Issuer in
              accordance with the terms of such Intercompany Loan Agreement and
              by payment in sterling in immediately available, freely
              transferable, cleared funds to the Issuer Transaction Account
              specified in the related Intercompany Loan Confirmation or, if
              such Intercompany Loan Agreement specifies otherwise, to the
              relevant account or to such other account as such Issuer (with the
              prior consent of the Security Trustee) may notify to Funding for
              this purpose.

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16.2   ALTERNATIVE PAYMENT ARRANGEMENTS: If, at any time, it shall become
       impracticable (by reason of any action of any governmental authority or
       any change in law, exchange control regulations or any similar event) for
       Funding to make any payments under an Intercompany Loan Agreement in the
       manner specified in Clause 16.1 (Payment), then Funding shall make such
       alternative arrangements for the payment direct to the relevant Issuer of
       amounts due under such Intercompany Loan Agreement as are acceptable to
       the Security Trustee.

16.3   NO SET-OFF: Subject to the terms of the relevant Intercompany Loan
       Confirmation, all payments required to be made by Funding under an
       Intercompany Loan Agreement shall be calculated without reference to any
       set-off or counterclaim and shall be made free and clear of, and without
       any deduction for or on account of, any set-off or counterclaim.

17.    ENTRENCHED PROVISIONS

       Each of Funding, the Issuer and the Security Trustee acknowledge and
       agree that Funding may from time to time enter into New Intercompany Loan
       Agreements subject to the provisions of Clause 2 (The Intercompany Loans)
       of these Intercompany Loan Terms and Conditions. If Funding intends to
       enter into a New Intercompany Loan Agreement then the provisions of these
       Intercompany Loan Terms and Conditions may be varied (with the consent of
       the parties to these Intercompany Loan Terms and Conditions) in the
       Intercompany Loan Confirmation to the extent necessary to reflect the
       terms of that New Intercompany Loan PROVIDED THAT no variation shall be
       made to any of the following terms without the prior written consent of
       the Funding Secured Creditors and the Rating Agencies:

       (a)    the Payment Dates;

       (b)    Clause 4 (Limited Recourse);

       (c)    Clause 9 (Taxes); and

       (d)    Clause 18.5 (Security Trustee).

18.    FURTHER PROVISIONS

18.1   EVIDENCE OF INDEBTEDNESS: In any proceeding, action or claim relating to
       an Intercompany Loan Agreement a statement as to any amount due to the
       relevant Issuer under such Intercompany Loan Agreement which is certified
       as being correct by an officer of the Security Trustee shall, unless
       otherwise provided in such Intercompany Loan Agreement, be prima facie
       evidence that such amount is in fact due and payable.

18.2   AMENDMENTS AND WAIVER:

       (a)    Entire Agreement: Each Intercompany Loan Agreement sets out the
              entire agreement and understanding between the parties with
              respect to the subject matter of such Agreement superseding all
              prior oral or written understandings other than the other
              Transaction Documents.

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       (b)    Amendments and Waiver: Subject to Clause 17 (Entrenched
              Provisions), no amendment or waiver of any provision of an
              Intercompany Loan Agreement nor consent to any departure by any of
              the parties therefrom shall in any event be effective unless the
              same shall be in writing and signed by each of the parties hereto.
              In the case of a waiver or consent, such waiver or consent shall
              be effective only in the specific instance and as against the
              party or parties giving it for the specific purpose for which it
              is given.

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

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

18.4   NOTICES: Any notices or other communication or document to be given or
       delivered pursuant to an Intercompany Loan Agreement to any of the
       parties thereto 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 or (where
       delivered by hand) on the day of delivery if delivered before 17:00 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 post, and shall be sent to such addresses as
       are set out in the related Intercompany Loan Confirmation 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
       18.4.

18.5   SECURITY TRUSTEE:

       (a)    The Security Trustee shall have no responsibility for any of the
              obligations of an Issuer or any other party to an Intercompany
              Loan Agreements (other than itself). For the avoidance of doubt,
              the parties to an Intercompany Loan Agreement acknowledge that the
              rights and obligations of the Security Trustee under such
              Intercompany Loan Agreements are governed by the Funding Deed of
              Charge.

       (b)    As between the Security Trustee and the parties hereto any liberty
              or power which may be exercised or any determination which may be
              made hereunder by the Security Trustee may be exercised or made in
              the Security Trustee's absolute discretion without any obligation
              to give reasons therefor, but in any event must be exercised or
              made in accordance with the provisions of the Funding Deed of
              Charge.

18.6   COUNTERPARTS: An Intercompany Loan Agreement may be executed in any
       number of

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       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.

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

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

19.    REDENOMINATION

       Each obligation under this Agreement which has been denominated in
       sterling shall be redominated in Euro in accordance with applicable
       legislation passed by the European Monetary Union upon such redomination
       of the Notes.

20.    GOVERNING LAW

       Each Intercompany Loan Agreement is governed by, and shall be construed
       in accordance with, English law.

21.    SUBMISSION TO JURISDICTION

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

22.    ASSIGNMENT

       The parties hereto agree that an Intercompany Loan Agreement shall not be
       assigned to any third party PROVIDED THAT an Issuer may assign an
       Intercompany Loan Agreement or any of its rights, title, interest or
       benefit thereunder to the Note Trustee by way of security.

IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed on
the day and year appearing on page three.

                                       20

<PAGE>

                                   SCHEDULE 1

                SCHEDULE 1NOTICE OF DRAWDOWN OF INTERCOMPANY LOAN

From:  Granite Finance Funding Limited ("FUNDING")

To:    [   ] (the "ISSUER")

Copy:  The Bank of New York (the "SECURITY TRUSTEE")

Dear Sirs,

1.   We refer to the agreement between, inter alios, ourselves, the Issuer and
     the Security Trustee (as from time to time amended, varied, novated or
     supplemented (the "INTERCOMPANY LOAN AGREEMENT")) dated [ ] whereby an
     Intercompany Loan was made available to Funding. Terms defined in the
     Intercompany Loan Agreement shall have the same meaning in this notice.

2.   We hereby give you notice that, pursuant to the Intercompany Loan Agreement
     and upon the terms and subject to the conditions contained therein, we wish
     an Intercompany Loan to be made to us as follows:

     (a)  Amount:(pound)[    ] of which(pound)[    ] is to be retained by you by
          way of set off against our obligation to reimburse such amount to you
          on the Closing Date under Clause 6.1 (Fee for provision of the
          Intercompany Loan of the Intercompany Loan Confirmation).

     (b)  Drawdown Date: [           ]

3.   We confirm that no Intercompany Loan Event of Default has occurred and is
     continuing which has not been waived, or would result from the making of
     such Intercompany Loan.

4.   We confirm that the principal amount of the Intercompany Loan requested
     does not exceed the amount available under the Intercompany Loan Agreement
     as at [relevant Drawdown Date].

5.   The net proceeds of this drawdown should be credited to our account
     numbered [    ] with [   ].

Yours faithfully,

For and on behalf of
GRANITE FINANCE FUNDING LIMITED

                                       21

<PAGE>

                                   SCHEDULE 2

                              SOLVENCY CERTIFICATE

GRANITE FINANCE FUNDING LIMITED (the "COMPANY")

To:  [     ]

(the "ISSUER")

The Bank of New York (the "SECURITY TRUSTEE")

We, the undersigned, HEREBY CERTIFY that (i) having made all appropriate
searches and investigations of the Company's books and records and the Company's
accounts (both management and those required by law); and (ii) the officers of
the Company having duly considered the provisions of the insolvency laws of
Jersey, Channel Islands and the United Kingdom (including, without limitation,
the provisions of sections 123 and 238 to 242 (inclusive) and 423 of the UK
Insolvency Act 1986 (the "ACT")):

     (a)  an order has not been made or an effective resolution has not been
          passed for the winding up of the Company (except, in any such case, a
          winding-up or dissolution for the purpose of a reconstruction,
          amalgamation or merger the terms of which have been previously
          approved by the Security Trustee or as approved by an Extraordinary
          Resolution of the Class A Noteholders of all Issuers); or

     (b)  except for the purposes of an amalgamation, merger or restructuring as
          described in (a) above, the Company has not ceased or threatened to
          cease to carry on all or a substantial part of its business or has
          stopped payment or threatened to stop payment of its debts or has been
          deemed unable to pay its debts within the meaning of Section 123(a),
          (b), (c) or (d) of the Insolvency Act 1986 (as amended) or has become
          unable to pay its debts within the meaning of Section 132(2) of the
          Insolvency Act 1986 (as amended);

     (c)  to the best of our knowledge and belief Proceedings have not been
          otherwise initiated against the Company under any applicable
          liquidation, insolvency, composition, reorganisation or other similar
          laws (including, but not limited to, presentation of a petition for an
          administration order) and (except in the case of presentation of a
          petition for an administration order) such Proceedings are not, as far
          as we are aware in the opinion of the Security Trustee, being disputed
          in good faith with a reasonable prospect of success; and no
          administrative receiver or other receiver, liquidator or other similar
          official has been appointed in relation to the Company or in relation
          to the whole or any substantial part of the undertaking or assets of
          the Company; and no encumbrancer has

                                       22

<PAGE>

          taken possession of the whole or any substantial part of the
          undertaking or assets of the Company; and no distress, execution,
          diligence or other process has been levied or enforced upon or sued
          out against the whole or any substantial part of the undertaking or
          assets of the Company and such possession or process (as the case may
          be) has not been discharged or has not otherwise ceased to apply
          within 30 days; and the Company has not initiated or consented to
          judicial proceedings relating to itself under applicable liquidation,
          insolvency, composition, reorganisation or other similar laws and has
          not made a conveyance or assignment for the benefit of its creditors
          generally. No equivalent to any of the foregoing has occurred in or
          under the laws of any relevant jurisdiction;

     (d)  neither the entry into of the Transaction Documents to which it is a
          party nor the making of any drawing nor granting of security under the
          Transaction Documents to which it is a party would be a transaction at
          an undervalue within the meaning of section 238 of the Act, since the
          value of any consideration received by the Company as a result of such
          drawing and/or grant of security would not be significantly less than
          the value of any consideration provided by the Company under the
          Transaction Documents to which it is a party;

     (e)  the entry into of the Transaction Documents to which it is a party,
          any drawing made by the Company under or pursuant to the Transaction
          Documents to which it is a party, and any security granted by the
          Company under or pursuant to the Transaction Documents to which it is
          a party will be entered into or made, as the case may be, by the
          Company, in good faith and for the purpose of carrying on its
          business, and there are reasonable grounds for believing that such
          entry into of such Transaction Documents, such drawings and grants of
          security would benefit the Company; and

     (f)  in entering into the Transaction Documents to which it is a party,
          making a drawing under or pursuant to the Transaction Documents to
          which it is a party and/or granting security under or pursuant to the
          Transaction Documents to which it is a party the Company has no desire
          to give a preference to any person as contemplated by section 239 of
          the Act nor is it the purpose of the Company to put assets beyond the
          reach of a person who is making, or may at some time make, a claim
          against the Company or of otherwise prejudicing the interests of such
          a person in relation to the claim which he is making or may make.

Terms defined in the Master Definitions Schedule signed for the purposes of
identification by Brown & Wood and Clifford Chance Limited Liability Partnership
on 26 March 2001 shall have the same respective meanings when used in this
Certificate.

DATED [        ]

Signed for and on behalf of Granite Finance Funding Limited

------------------------------------
Director

                                       23

<PAGE>

------------------------------------
Director/Secretary

                                       24

<PAGE>

                                   SCHEDULE 3

                     FORM OF INTERCOMPANY LOAN CONFIRMATION

                                       25

<PAGE>

                         GRANITE FINANCE FUNDING LIMITED

                                       [O]
                                  as [O] Issuer

                              THE BANK OF NEW YORK
                               as Security Trustee

                                 CITIBANK, N.A.
                                  as Agent Bank

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

                                LOAN CONFIRMATION
                           INTERCOMPANY LOAN AGREEMENT

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

                                    Dated [O]

<PAGE>

                                    CONTENTS

CLAUSE                                                                PAGE NO.
------                                                                --------

1.  Interpretation...................................................   26

2.  Intercompany Loan Terms and Conditions...........................   27

3.  The First Issuer Intercompany Loan...............................   27

4.  Interest.........................................................   27

5.  Repayment........................................................   28

6.  Certain Fees, etc................................................   28

7.  Additional Covenants.............................................   29

8.  Declaration of Trust.............................................   30

9.  Addresses........................................................   30

    SCHEDULE 1  CONDITIONS PRECEDENT IN RESPECT OF DRAWDOWN .........   32

                                       i

<PAGE>

THIS AGREEMENT is dated [O] between:

(1)  GRANITE FINANCE FUNDING LIMITED (registered number 79308) a private limited
     liability company incorporated under the laws of Jersey, but acting out of
     its branch office established in England (registered overseas company
     number FC022999 and branch number BR0051916) at 4th Floor, 35 New Bridge
     Street, Blackfriars, London EC4V 6BW ("FUNDING");

(2)  [O] (registered in England and Wales No. [O]) a public limited company
     incorporated under the laws of England and Wales whose registered office is
     at Fifth Floor, 100 Wood Street, London EC2V 7EX (the "[O] ISSUER");

(3)  THE BANK OF NEW YORK, whose offices are at One Canada Square, 48th Floor,
     London E14 5AL (the "SECURITY TRUSTEE" which expression shall include such
     person and all other persons for the time being acting as the security
     trustee or trustees pursuant to the Funding Deed of Charge); and

(4)  CITIBANK, N.A., acting through its offices at 5 Carmelite Street, London
     EC4Y 0PA (the "AGENT BANK" which expression shall include such person for
     the time being acting as the agent bank pursuant to the Paying Agent and
     Agent Bank Agreement).

IT IS AGREED as follows:

1.   INTERPRETATION

1.1  GENERAL INTERPRETATION: The Master Definitions Schedule and the [O] Issuer
     Master Definitions Schedule signed for the purposes of identification by
     [O] on [O] (as the same may be amended, varied or supplemented from time to
     time with the consent of the parties hereto) are expressly and specifically
     incorporated into this Agreement and, accordingly, the expressions defined
     in the Master Definitions Schedule and/or the [O] Issuer Master Definitions
     Schedule (as so amended, varied or supplemented) shall, except where the
     context otherwise requires and save where otherwise defined herein, have
     the same meanings in this Agreement, including the Recitals hereto, and
     this Agreement shall be construed in accordance with the interpretation
     provisions set out in Clause 2 (Interpretation and Construction) of the
     Master Definitions Schedule and the [O] Issuer Master Definitions Schedule.
     In the event of a conflict between the Master Definitions Schedule and the
     [O] Issuer Master Definitions Schedule, the [O] Issuer Master Definitions
     Schedule shall prevail.

1.2  SPECIFIC TERMS: Unless the context otherwise requires, references in the
     Intercompany Loan Terms and Conditions to:

     "CLOSING DATE" shall mean the Initial Closing Date;

     "INTERCOMPANY LOAN" shall mean the [O] Issuer Intercompany Loan;

     "INTERCOMPANY LOAN AGREEMENT" shall mean the [O] Issuer Intercompany Loan
     Agreement;

     "INTERCOMPANY LOAN CONFIRMATION" shall mean the [O] Issuer Intercompany
     Loan Confirmation;

                                       26

<PAGE>

     "ISSUER" shall mean the [O] Issuer;

     "ISSUER TRANSACTION ACCOUNT" shall mean the [O] Issuer Transaction Account;
     and

     "NOTES" shall mean the [O] Issuer Notes.

2.   INTERCOMPANY LOAN TERMS AND CONDITIONS

     Each of the parties to this Agreement agrees that the Intercompany Loan
     Terms and Conditions signed by Funding, the Security Trustee and the Agent
     Bank for the purposes of identification on [O] and the provisions set out
     therein shall form part of this Agreement and shall be binding on the
     parties to this Agreement as if they had been expressly set out herein.
     References in this Agreement to "THIS AGREEMENT" shall be construed
     accordingly.

3.   THE [O] ISSUER INTERCOMPANY LOAN

3.1  GRANT OF [O] ISSUER INTERCOMPANY LOAN: On and subject to the terms of this
     Agreement, the [O] Issuer hereby grants to Funding a loan in the maximum
     principal amount of (pound)[O], which amount corresponds to the principal
     amount upon issue of the [O] Issuer Notes.

3.2  CONDITIONS PRECEDENT: Save as the [O] Issuer may otherwise agree, the [O]
     Issuer Intercompany Loan will not be available for utilisation unless the
     [O] Issuer has confirmed to Funding (with a copy of such confirmation to
     the Security Trustee) that it or its advisers have received all the
     information and documents listed in Schedule 1 in form and substance
     satisfactory to the [O] Issuer.

4.   INTEREST

4.1  PAYMENT SUBJECT TO TERMS OF THE [O] ISSUER CASH MANAGEMENT AGREEMENT: The
     terms and conditions of this Clause 4 are to be read in conjunction with
     the provisions of Part 3 of Schedule 2 to the [O] Issuer Cash Management
     Agreement, as the same may be amended or varied from time to time in
     accordance with the provisions thereof.

4.2  PAYMENT OF INTEREST: Subject to Clause 4 of the Intercompany Loan Terms and
     Conditions, on each Payment Date Funding will pay to the [O] Issuer an
     amount of interest equal to the amount of interest required by the [O]
     Issuer on such Payment Date (or such other date on which an amount of
     interest is payable by the [O] Issuer) to fund (by payment to any Swap
     Provider or otherwise) the amount payable by the [O] Issuer on such Payment
     Date (or such other date on which an amount of interest is payable by the
     [O] Issuer) on the [O] Issuer Notes and certain other amounts (including an
     amount equal to the [O] Issuer's retained profit) as specified in and in
     accordance with the [O] Issuer Priority of Payments as calculated by the
     [O] Issuer Cash Manager on the Distribution Date that immediately precedes
     such Payment Date and communicated by the [O] Issuer Cash Manager to the
     Agent Bank by the close of business on such Distribution Date.

4.3  INTEREST PERIODS: The first Interest Period shall commence on (and include)
     the Initial Closing Date and end on (but exclude) the Payment Date falling
     in July 2001. Each subsequent Interest Period shall commence on (and
     include) a Payment Date and end

                                       27

<PAGE>

     on (but exclude) the following Payment Date.

5.   REPAYMENT

5.1  PAYMENT SUBJECT TO TERMS OF THE [O] ISSUER CASH MANAGEMENT AGREEMENT: The
     terms and conditions of this Clause 5 are to be read in conjunction with
     the provisions of Part 4 of Schedule 2 to the [O] Issuer Cash Management
     Agreement, as the same may be amended or varied from time to time in
     accordance with the provisions thereof.

5.2  REPAYMENT: Subject to Clause 4 of the Intercompany Loan Terms and
     Conditions, on each Payment Date Funding will repay to the [O] Issuer an
     amount of principal equal to the amount of principal required by the [O]
     Issuer on such Payment Date (or such other date on which an amount of
     principal is payable by the [O] Issuer) to fund (by payment to any Swap
     Provider or otherwise) the amount payable by the [O] Issuer on such Payment
     Date (or such other date on which an amount of principal is payable by the
     Issuer on the [O] Issuer Notes) on the [O] Issuer Notes, as determined by
     the [O] Issuer Cash Manager under the terms of the [O] Issuer Cash
     Management Agreement on the Distribution Date that immediately precedes
     such Payment Date and communicated by the [O] Issuer Cash Manager to the
     Agent Bank by the close of business on such Distribution Date.

5.3  ACKNOWLEDGEMENT OF NEW INTERCOMPANY LOANS: The [O] Issuer hereby
     acknowledges and agrees that from time to time Funding may enter into New
     Intercompany Loans with New Issuers and that the obligation of Funding to
     repay this [O] Issuer Intercompany Loan will rank pari passu with the
     obligations of Funding to repay any such New Intercompany Loan.

6.   CERTAIN FEES, ETC.

6.1  FEE FOR PROVISION OF [O] ISSUER INTERCOMPANY LOAN: In addition to the
     interest and principal payments to be made by Funding under Clauses 4 and
     5, respectively, on each Payment Date (or, in respect of the payment to be
     made as set forth in (a) below, on the Drawdown Date) or on any other date
     on which the [O] Issuer notifies Funding, Funding shall pay to the [O]
     Issuer for same day value to the [O] Issuer Transaction Account a fee for
     the provision of the [O] Issuer Intercompany Loan (except that in the case
     of payments due under paragraphs (c), (e), (f) and (j) below, such payments
     shall be paid when due). Such fee shall be an amount or amounts in the
     aggregate equal to the following:

     (a)  the amount payable on the Drawdown Date as previously communicated to
          Funding by the [O] Issuer;

     (b)  the fees, costs, charges, liabilities and expenses and any other
          amounts due and payable to the Note Trustee pursuant to the [O] Issuer
          Trust Deed, the [O] Issuer Trust Deed or any other Transaction
          Document, together with interest thereon as provided therein;

     (c)  the reasonable fees and expenses of any legal advisers, accountants
          and auditors appointed by the [O] Issuer and properly incurred in
          their

                                       28

<PAGE>

          performance of their functions under the Transaction Documents which
          have fallen due;

     (d)  the fees, costs and expenses due and payable to the Paying Agents and
          the Agent Bank pursuant to the Paying Agent and Agent Bank Agreement
          and the fees, costs and expenses due and payable to the Transfer
          Agent, the Registrar and the Note Depository;

     (e)  any amounts due and payable by the [O] Issuer to the Inland Revenue in
          respect of the [O] Issuer's liability to United Kingdom corporation
          tax (insofar as payment is not satisfied by the surrender of group
          relief or out of the profits, income or gains of the [O] Issuer and
          subject to the terms of the [O] Issuer Deed of Charge) or any other
          Taxes payable by the [O] Issuer;

     (f)  the fees, costs, charges, liabilities and expenses due and payable to
          the [O] Issuer Account Bank pursuant to the [O] Issuer Bank Account
          Agreement (if any);

     (g)  the fees, costs, charges, liabilities and expenses due and payable to
          the [O] Issuer Cash Manager pursuant to the [O] Issuer Cash Management
          Agreement;

     (h)  any termination payment due and payable by the [O] Issuer to a [O]
          Issuer Swap Provider pursuant to a [O] Issuer Swap Agreement;

     (i)  the fees, costs, charges, liabilities and expenses due and payable to
          the Corporate Services Provider pursuant to the Corporate Services
          Agreement; and

     (j)  any other amounts due or overdue by the [O] Issuer to third parties
          including the Rating Agencies and the amounts paid by the [O] Issuer
          under the Subscription Agreement and the Underwriting Agreement
          (excluding, for these purposes, the Noteholders) other than amounts
          specified in paragraphs (b) to (j) above,

     together with, (i) in respect of taxable supplies made to the [O] Issuer,
     any amount in respect of any VAT or similar tax payable in respect thereof
     against production of a valid tax invoice; and (ii) in respect of taxable
     supplies made to a person other than the [O] Issuer, any amount in respect
     of any Irrecoverable VAT or similar tax payable in respect thereof (against
     production of a copy of the relevant tax invoice), and to be applied
     subject to and in accordance with the provisions of the [O] Issuer
     Pre-Enforcement Revenue Priority of Payments in the [O] Issuer Cash
     Management Agreement.

6.2  SET-OFF: Funding and each of the other parties to the Intercompany Loan
     Agreement agree that the [O] Issuer shall be entitled to set-off those
     amounts due and payable by Funding pursuant to this Clause 6 on the Initial
     Closing Date against the amount to be advanced by the [O] Issuer to Funding
     under the [O] Issuer Intercompany Loan on the Initial Closing Date.

                                       30

<PAGE>

7.   ADDITIONAL COVENANTS

     Funding undertakes to establish the [O] Issuer Liquidity Reserve Fund, and
     an appropriate ledger therefor, on behalf of the [O] Issuer should the
     long-term, unsecured, unsubordinated and unguaranteed debt obligations of
     the Seller cease to be rated at least A3 by Moody's or A- by Fitch (unless
     Moody's or Fitch, as applicable, confirms the then current ratings of the
     [O] Issuer Notes will not be adversely affected by such ratings downgrade).
     Any such [O] Issuer Liquidity Reserve Fund and the [O] Issuer Liquidity
     Reserve Ledger shall be established and maintained in accordance with the
     provisions of the Cash Management Agreement.

8.   DECLARATION OF TRUST

     The [O] Issuer declares the Security Trustee, and the Security Trustee
     hereby declares itself, trustee of all the covenants, undertakings, rights,
     powers, authorities and discretions in, under or in connection with this
     Agreement for the Funding Secured Creditors in respect of the Funding
     Secured Obligations owed to each of them respectively upon and subject to
     the terms and conditions of the Funding Deed of Charge.

9.   ADDRESSES

     The addresses referred to in Clause 18.4 (Notices) of the Intercompany Loan
     Terms and Conditions are as follows:

     THE SECURITY TRUSTEE:

     For the attention of:           [O]

     Address:                        [O]

     Facsimile:                      [O]

     THE [O] ISSUER:

     For the attention of:           [O]

     Address:                        [O]

     Telephone:                      [O]

     Facsimile:                      [O]

     FUNDING:

     For the attention of:           [O]

     Address:                        [O]

     Telephone:                      [O]

     Facsimile:                      [O]

                                       30

<PAGE>

     RATING AGENCIES:

     MOODY'S:                        [O]

     For the attention of:           [O]

     Telephone:                      [O]

     Facsimile:

     S&P:                            [O]

     For the attention of:           [O]

     Telephone:                      [O]

     Facsimile:

     FITCH:                          [O]

     For the attention of:           [O]

     Telephone:                      [O]

     Facsimile:

IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed on
the day and year appearing on page 1.

                                       31

<PAGE>

                                   SCHEDULE 1

                   CONDITIONS PRECEDENT IN RESPECT OF DRAWDOWN

1.   AUTHORISATIONS

     (a)  A copy of the memorandum and articles of association and certificate
          of incorporation of Funding.

     (b)  A copy of a resolution of the board of directors of Funding
          authorising the entry into, and the execution and performance of, each
          of the Transaction Documents to which Funding is a party and
          authorising specified persons to execute those on its behalf.

     (c)  A certificate of a director of Funding certifying:

          (i)  that each document delivered under this paragraph 1 of Schedule 1
               is correct, complete and in full force and effect as at a date no
               later than the date of the Intercompany Loan Agreement and
               undertaking to notify the [O] Issuer (with a copy of such
               certification to the Security Trustee) if that position should
               change prior to the Drawdown Date; and

               (ii) as to the identity and specimen signatures of the directors
                    and signatories of Funding.

2.   SECURITY

     (a)  The Funding Deed of Charge duly executed by the parties thereto.

     (b)  Duly completed bank account mandates in respect of the Funding GIC
          Account and the Funding Transaction Account.

     (c)  Security Power of Attorney for Funding.

3.   LEGAL OPINION

     Legal opinions of:

     (a)  [O], English legal advisers to the Seller, the [O] Issuer and Funding,
          addressed to the Security Trustee; and

     (b)  [O], U.S. legal advisers to the Seller, the [O] Issuer and Funding,
          addressed to the Security Trustee.

4.   TAX

     Evidence of a group income election made under section 247 of the Income
     and Corporation Taxes Act 1988 in relation to Funding and the [O] Issuer.

                                       32

<PAGE>

5.   TRANSACTION DOCUMENTS

     Duly executed copies of:

     (a)  the [O] Issuer Deed of Charge;

     (b)  the [O] Issuer Trust Deed;

     (c)  the Cash Management Agreement;

     (d)  the Global Notes;

     (e)  the Corporate Services Agreement;

     (f)  the Currency Swap Agreements;

     (g)  the Basis Rate Swap Agreements;

     (h)  the Bank Account Agreement;

     (i)  the Master Definitions Schedule and the [O] Issuer Master Definitions
          Schedule;

     (j)  the Paying Agent and Agent Bank Agreement;

     (k)  the Start-up Loan Agreement;

     (l)  the Mortgage Sale Agreement;

     (m)  the Mortgages Trust Deed;

     (n)  the Administration Agreement;

     (o)  the Mortgages Trustee Guaranteed Investment Contract;

     (p)  the Funding Guaranteed Investment Contract;

     (q)  the Funding ([O] Issuer) Guaranteed Investment Contract;

     (r)  the Post Enforcement Call Option Agreement;

     (s)  the Subscription Agreement;

     (t)  the Underwriting Agreement;

     (u)  the Seller Power of Attorney;

     (v)  the Funding Deed of Charge;

     (w)  the Depository Agreement;

     (x)  the [O] Issuer Cash Management Agreement;

                                       33

<PAGE>

     (y)  the Funding ([O] Issuer) Bank Account Agreement; and

     (z)  the [O] Issuer Bank Account Agreement.

6.   BOND DOCUMENTATION

     (a)  Confirmation that the [O] Issuer Notes have been issued and the
          subscription proceeds received by the [O] Issuer; and

     (b)  Copy of the Prospectus and the Offering Circular.

7.   MISCELLANEOUS

     Solvency certificates from Funding signed by two directors of Funding in or
     substantially in the form set out in Schedule 2 (Solvency Certificate) to
     the Intercompany Loan Terms and Conditions.

                                       34

<PAGE>

                                 EXECUTION PAGE

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

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

Name:

Title:
EXECUTED for and on behalf of                                        )
GRANITE MORTGAGES 01-1 PLC                                           )
by:                                                                  )

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

Name:

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

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

Name:

Title:

                                       35

<PAGE>

EXECUTED for and on behalf of                                        )
CITIBANK, N.A.                                                       )
by:                                                                  )

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

                                       36

<PAGE>

                                 EXECUTION PAGE

Executed on 26 March 2001 for the purposes of identification by:

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

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

Name:

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

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

Name:

Title:

EXECUTED for and on behalf of                                        )
CITIBANK, N.A.                                                       )
by:                                                                  )

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

                                       37

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