Document:

EXHIBIT 4.10

                             Dated 28 January 2004
                             ---------------------

                               NORTHERN ROCK PLC
                               as Administrator

                                    - and -

                       GRANITE FINANCE TRUSTEES LIMITED
                             as Mortgages Trustee

                                    - and -

                               NORTHERN ROCK PLC
                                   as Seller

                        GRANITE FINANCE FUNDING LIMITED
                                as Beneficiary

                                    - and -

                             THE BANK OF NEW YORK
                              as Security Trustee

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

                          FOURTH AMENDED AND RESTATED
                           ADMINISTRATION AGREEMENT

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

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

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                                   CONTENTS

Clause                                                             Page No.

1.    Definitions and Interpretation.......................................2

2.    Appointment of Administrator.........................................2

3.    The Administration Services..........................................3

4.    Interest Rates.......................................................6

5.    Administration of Mortgages..........................................9

6.    No Liability........................................................13

7.    New Mortgage Loans..................................................14

8.    Product Switching and Further Advances..............................14

9.    Redemption of Mortgages.............................................14

10.   Powers of Attorney..................................................15

11.   Costs and Expenses..................................................15

12.   Information.........................................................16

13.   Remuneration........................................................18

14.   Insurances..........................................................19

15.   Title Deeds.........................................................20

16.   Data Protection.....................................................21

17.   Covenants and Representations and Warranties of Administrator.......22

18.   Services Non-exclusive..............................................23

19.   Termination.........................................................23

20.   Further Assurances..................................................27

21.   Miscellaneous.......................................................27

22.   Confidentiality.....................................................28

23.   No Partnership......................................................29

24.   Assignment..........................................................29

25.   Security Trustee; Authorised Third Party............................30

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26.   New Intercompany Loan Agreements....................................30

27.   Non Petition Covenant; Limited Recourse.............................30

28.   Amendments and Waiver...............................................32

29.   Notices.............................................................32

30.   Third Party Rights..................................................33

31.   Execution in Counterparts; Severability.............................33

32.   Governing Law and Submission to Jurisdiction........................33

33.   Process Agent.......................................................34

34.   Appropriate Forum...................................................34

SCHEDULE 1  THE SERVICES..................................................35

SCHEDULE 2  FORM OF INVESTORS' QUARTERLY REPORT...........................36

SCHEDULE 3  ADMINISTRATOR REPRESENTATIONS AND WARRANTIES..................40

SCHEDULE 4   AUTHORISED THIRD PARTY.......................................42

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THIS FOURTH AMENDED AND RESTATED ADMINISTRATION AGREEMENT DATED 28 JANUARY
2004 AMENDS AND RESTATES THE ADMINISTRATION AGREEMENT DATED 26 MARCH 2001
BETWEEN:

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

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

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

(4)   GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
      limited company incorporated under the laws of Jersey but acting out of
      its branch office established in England (registered overseas company
      number FC022999 and branch number BR0051916) at 4 Royal Mint Court,
      London, EC3N 4HJ in its capacity as a Beneficiary; and

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

WHEREAS:

(A)   The Administrator carries on the business of, inter alia, administering
      mortgage loans secured on residential properties within the United
      Kingdom.

(B)   By the Mortgage Sale Agreement, the Seller has agreed to sell and assign
      the Mortgage Loans and Related Security comprised in the Mortgage
      Portfolio to the Mortgages Trustee. The Mortgages Trustee shall hold the
      Mortgage Portfolio together with any New Mortgage Portfolio on trust for
      Funding and the Seller pursuant to the terms of the Mortgages Trust
      Deed.

(C)   The Administrator is willing to administer the Mortgage Loans on behalf
      of the Mortgages Trustee and to provide certain other administration and
      management services to the Mortgages Trustee, the Seller and Funding on
      the terms and subject to the conditions contained in this Agreement in
      relation to, inter alia, the Mortgage Loans and Related Security sold
      and assigned to the Mortgages Trustee by the Seller.

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IT IS HEREBY AGREED as follows:

1.    Definitions and Interpretation

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

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

1.3   Schedules: For the avoidance of doubt, the parties hereto agree that the
      Schedules attached to this Agreement shall form a part of this
      Agreement, and the provisions of this Agreement shall be construed in
      accordance with such Schedules.

2.    Appointment of Administrator

2.1   Appointment: Subject to Clause 4.5 herein, and until termination
      pursuant to Clause 19 herein (Termination), the Mortgages Trustee hereby
      appoints the Administrator to administer the Mortgages Loans on its
      behalf, and each of the Mortgage Trustee, the Seller and Funding
      (according to their respective estates and interests) each hereby
      appoints the Administrator as its lawful agent on their respective
      behalves to provide certain other administration and management services
      and to exercise their respective rights, powers and discretions, and to
      perform their respective duties, under and in relation to the Mortgage
      Loans and their Related Security. The Administrator in each case hereby
      accepts such appointment on the terms and subject to the conditions of
      this Agreement. The Security Trustee consents to the appointment of the
      Administrator on the terms of and subject to the conditions of this
      Agreement.

2.2   Power and Authority: For the avoidance of doubt and in connection with
      the rights, powers and discretions conferred under Clause 2.1 herein,
      during the continuance of its appointment hereunder, the Administrator
      shall, subject to the terms and conditions of this Agreement, the
      Mortgage Conditions, the Mortgage Sale Agreement and the Mortgages Trust
      Deed, have the full power, authority and right to do or cause to be done
      any and all things which it reasonably considers necessary, convenient
      or incidental to the administration of the Mortgage Loans and their
      Related Security or the exercise of such rights, powers and discretions,
      provided however that neither the Mortgages Trustee nor Funding nor
      their respective directors shall be required or obliged at any time to
      enter into any transaction or to comply with any directions which the
      Administrator may give with respect to the operating and financial
      policies of the Mortgages Trustee or Funding and the Administrator
      hereby acknowledges that all powers to determine such policies
      (including the determination of whether or not any particular policy is
      for the benefit of the Mortgages Trustee or Funding) are, and shall at
      all times remain, vested, as the case may be, in the Mortgages Trustee
      and/or

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      Funding (and their respective directors) and none of the provisions of
      this Agreement shall be construed in a manner inconsistent with this
      proviso.

2.3   Appointment Conditional: The appointment pursuant to Clause 2.1 herein
      is conditional upon the issue of the First Issuer Notes having taken
      place and shall take effect upon and from the Initial Closing Date
      automatically without any further action on the part of any person
      PROVIDED THAT if the issue of the First Issuer Notes has not occurred by
      30 April 2001, or such later date as the First Issuer and the Lead
      Manager may agree, this Agreement shall cease to be of further effect.

3.    The Administration Services

3.1   General: The duty of the Administrator shall be to provide the services
      set out in this Agreement including Schedule 1 (the "Services").

3.2   Sub-contracts:

      (a)   The Administrator may sub-contract or delegate the performance of
            all or any of its powers and obligations under this Agreement,
            provided that (but subject to Clause 3.2(b) herein):

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

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

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

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

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

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

            (i)   to the engagement by the Administrator of:

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

                  (2)   any locksmith, builder or other contractor acting as
                        such in relation to a Mortgaged Property, in any such
                        case being a person or persons whom the Administrator
                        would be willing to appoint in respect of its own
                        mortgages in connection with the performance by the
                        Administrator of any of its obligations or functions
                        or in connection with the exercise of its powers under
                        this Agreement; or

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

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

      (d)   Notwithstanding any sub-contracting or delegation of the
            performance of the Administrator's obligations under this
            Agreement:

            (i)   the Administrator shall not thereby be released or
                  discharged from any liability hereunder;

            (ii)  the Administrator shall remain responsible for the
                  performance of the obligations of the Administrator under
                  this Agreement;

            (iii) the performance or non-performance or the manner of
                  performance of any sub-contractor or delegate of any of the
                  Services shall not affect the Administrator's obligations
                  under this Agreement;

            (iv)  any breach in the performance of the Services by any
                  sub-contractor or delegate shall, subject to the
                  Administrator being entitled for a period of twenty (20)
                  Business Days from receipt of notice of the breach to

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                  remedy such breach by any sub-contractor or delegate, be
                  treated as a breach of this Agreement by the Administrator;
                  and

            (v)   the Security Trustee shall have no liability for any act or
                  omission of the sub-contractor or delegate and shall have no
                  responsibility for monitoring or investigating the
                  suitability of any such sub-contractor or delegate.

3.3   Notices etc.

      (a)   Within fifteen (15) days after the Initial Closing Date, the
            Administrator will:

            (i)   on behalf of the Mortgages Trustee (at the direction of the
                  Beneficiaries or with their consent), give to third parties
                  such notices as any of the Beneficiaries are required to
                  give pursuant to the Mortgage Sale Agreement; and

            (ii)  submit for registration at the Companies Registry a duly
                  completed Form 395 and original executed copy of the First
                  Issuer Deed of Charge pursuant to Chapter 1 of Part XII of
                  the Companies Act 1985,

            and in each case, the Administrator shall take all reasonable
            steps to ensure the return by the relevant recipient of the
            duplicate notices of assignment by way of acknowledgement thereof.

(b)         Promptly upon request by Funding and the Security Trustee, the
            Administrator shall procure that any notices permitted to be given
            by the Mortgages Trustee under Clause 6.4 (Prior to Perfection) of
            the Mortgage Sale Agreement are so given by the Administrator on
            the Mortgages Trustee's behalf.

3.4   Liability of Administrator:

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

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

      (c)   Any indemnification under this Clause 3.4 in respect of loss
            suffered by the Beneficiaries shall be paid for by reducing the
            Seller Share of the Trust Property by an amount equal to the
            relevant loss incurred by the Beneficiaries

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            in accordance with Clause 8.5 (Adjustments to Trust Property) of
            the Mortgages Trust Deed and Schedule 2 to the Cash Management
            Agreement.

3.5   Perfection  of Mortgages  Trustee's  and  Beneficiaries'  Title to the
      Mortgage Loans

      Subject to Clause 6 of the Mortgage Sale Agreement:

      (a)   upon the receipt by the Seller of a written request from the
            Mortgages Trustee, Funding or the Security Trustee to execute
            transfers and/or assignments pursuant to Clause 6.2 of the
            Mortgage Sale Agreement, the Administrator shall execute or
            procure the execution of such transfers on behalf of the Seller or
            shall provide sufficient information to enable the Mortgages
            Trustee, Funding or the Security Trustee to do so; and

      (b)   upon the Seller being required to do so by the Mortgages Trustee,
            Funding or the Security Trustee pursuant to Clause 6.1 of the
            Mortgage Sale Agreement, the Administrator shall do all or any of
            the acts, matters or things referred to in Clauses 6.2 and 6.3 of
            the Mortgage Sale Agreement.

4.    Interest Rates

4.1   Determination of Interest Rates: Subject to the provisions of applicable
      law and regulations and any regulatory undertakings binding on the
      Administrator or the Issuer from time to time and subject to the
      following provisions of this Clause 4, the Mortgages Trustee and each of
      the Beneficiaries each hereby grants the Administrator full right,
      liberty and authority from time to time to determine:

      (a)   in accordance with the applicable Mortgage Conditions, Mortgage
            Terms and the Base Rate Pledge, the Standard Variable Rate and any
            other discretionary rates and margins applicable to the Mortgage
            Loans chargeable to Borrowers from time to time; and

      (b)   the Existing Borrowers' Re-Fix Rate in accordance with Clause 4.4
            herein.

      In exercising such right, liberty and authority the Administrator
      undertakes to each of the other parties to this Agreement that it shall
      not at any time set or maintain the Standard Variable Rate and any other
      discretionary rates and margins applicable to the Mortgage Loans at
      rates which are higher than the then prevailing equivalent rates offered
      by the Seller, unless the Administrator is required to do so pursuant to
      Clause 4.3 herein, and, subject to that requirement, that it shall not
      change the Standard Variable Rate and any other discretionary rates and
      margins applicable to the Mortgage Loans save for the same reasons as
      the Seller was entitled, under the Mortgage Conditions, to change the
      then prevailing equivalent rates offered by the Seller prior to the sale
      and assignment to the Mortgages Trustee of the Mortgage Loans comprised
      in the Mortgage Portfolio and their Related Security. Each of the Issuer
      and the Security Trustee shall be bound by any Mortgage Rates (including
      the Existing Borrowers' Re-Fix Rate) determined by the Administrator in
      accordance with this Clause 4.

4.2   Notification to Borrowers: The Administrator shall take all steps
      necessary pursuant to the relevant Mortgage Conditions or applicable law
      to bring each change in the

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      Standard Variable Rate and any other discretionary rate or margin
      applicable to the Mortgage Loans and any consequent changes in Monthly
      Payments to the attention of the relevant Borrowers and shall, as soon
      as reasonably practicable after any change in such rates, provide
      details of such changes to each of the Mortgages Trustee, the Security
      Trustee and the Beneficiaries, and shall, upon receipt of a request from
      any of such parties, notify such requesting party of any changes in the
      Monthly Payments in relation to the Mortgage Loans.

4.3   Interest Rate Shortfall:

      (a)   On each Payment Date the Administrator shall determine, having
            regard to:

            (i)   the income which Funding would expect to receive during the
                  next succeeding Interest Period;

            (ii)  the Mortgage Rates in respect of the Mortgage Loans which
                  the Administrator proposes to set under this Clause 4; and

            (iii) the other resources available to Funding including the
                  Funding Reserve Fund and amounts standing to the credit of
                  any Issuer Reserve Fund and/or any Issuer Liquidity Reserve
                  Fund,

            whether Funding would receive an amount of income during that
            Interest Period which when aggregated with the funds otherwise
            available to it is less than the amount which is the aggregate of
            (1) the amount of interest which will be payable by Funding in
            order to fund (whether by payment to a swap provider or otherwise)
            the amount of interest payable in respect of the Class A Notes of
            the First Issuer (and the highest ranking class of notes of any
            New Issuer, if any) and all amounts which rank in priority thereto
            on the Payment Date occurring at the end of such Interest Period,
            and (2) all other amounts payable by Funding which rank in
            priority to or pari passu with interest due on the First Issuer
            Intercompany Loan in respect of interest which is payable on the
            Class A Notes of the First Issuer (and any New Intercompany Loan,
            if any, in respect of interest which is payable by any New Issuer
            on the highest rated class of Notes issued by such New Issuer, if
            any) (the amount (if any) by which it is less being the "Interest
            Rate Shortfall").

      (b)   If the Administrator determines that there will be an Interest
            Rate Shortfall, it will within one (1) London Business Day of such
            determination give written notice thereof to the Mortgages
            Trustee, Funding and the Security Trustee of such Interest Rate
            Shortfall and of the Standard Variable Rate and other
            discretionary rates and margins applicable to the Mortgage Loans
            which would, in the Administrator's opinion, need to be set in
            order for no Interest Rate Shortfall to arise, having regard to
            the obligations of Funding under all Intercompany Loans.

      (c)   If the Mortgages Trustee, Funding and/or the Security Trustee
            notify the Administrator that, having regard to the obligations of
            Funding, the Standard Variable Rate and other discretionary rates
            and margins should be increased (which shall be the same rates as
            previously notified to the Mortgages Trustee, Funding and the
            Security Trustee in accordance with Clause 4.3(b)), the

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            Administrator, as agent for and on behalf of the Mortgages
            Trustee, shall take all steps which are necessary, including
            publishing any notice which is required in accordance with the
            Mortgage Terms, to effect such change in the applicable rates on
            the date(s) specified in the notice referred to in Clause 4.3(b)
            herein.

4.4   Existing Borrowers' Re-Fix Rate:

      (a)   The Administrator shall, in relation to each Fixed Rate Mortgage
            Loan, serve on the Seller as agent for and on behalf of, inter
            alia, the Mortgages Trustee and the Beneficiaries the notice
            referred to in Clause 8.6(a) of the Mortgage Sale Agreement sixty
            (60) days before the expiry of the initial fixed rate period (as
            defined in Clause 8.6(a) of the Mortgage Sale Agreement)
            applicable to that Fixed Rate Mortgage Loan.

      (b)   If Clause 8.6(b) of the Mortgage Sale Agreement applies to any
            Fixed Rate Mortgage Loan, the Administrator shall take all steps
            which are necessary to perform the obligations of the Seller and
            exercise the rights under such Clause.

      (c)   The Administrator shall, whenever Clause 8.6(c) of the Mortgage
            Sale Agreement applies to a Fixed Rate Mortgage Loan, determine
            (after consultation with the Basis Rate Swap Provider, the
            Currency Swap Provider, and any other swap provider the
            Administrator (acting reasonably) determines appropriate) the rate
            (and terms) upon which the Existing Borrowers' Re-Fix Rate should
            be set having regard to the interests of the Basis Rate Swap
            Provider and the Currency Swap Provider (except to the extent that
            the Administrator believes that the interests of either of the
            Basis Rate Swap Provider or the Currency Swap Provider are
            materially prejudicial to the interests of the Noteholders). The
            Administrator will give written notice of such determination
            within one Business Day thereof to the Mortgages Trustee and the
            Beneficiaries recommending what the Existing Borrowers' Re-Fix
            Rate should be and the terms at which it should be offered, having
            regard to the interests of the Basis Rate Swap Provider and the
            Currency Swap Provider (except to the extent that the
            Administrator believes that the interests of either of the Basis
            Rate Swap Provider or the Currency Swap Provider are materially
            prejudicial to the interests of the Noteholders). The
            Administrator will solicit quotations on rates from each of (i)
            the Mortgages Trustee, (ii) Funding, and (iii) other trustees for
            re-fixed mortgage loans in relation to other outstanding
            securitisations of the Seller (if any), and shall notify the
            Mortgages Trustee and the Beneficiaries as to the higher of (x)
            any rate provided by any of the parties in (i) through (iii)
            herein and (y) current rates for re-fixed mortgage loans (not
            included in any Mortgage Portfolio) in relation to other Mortgage
            Loans of the Administrator. If the Mortgages Trustee agrees in
            writing with such recommendation, or (whether or not it has
            received the Administrator's recommendation) requires alternative
            rates and/or terms (such agreement or requirement being the "EBRR
            Determination") the Administrator shall immediately notify the
            Seller and the First Issuer (and any New Issuer) of the EBRR
            Determination, and take all steps which are necessary to enable
            the First Issuer (and any New Issuer) to enter into the relevant
            swap agreement either with the Basis Rate Swap Provider or the
            Currency Swap Provider (or other swap provider whose appointment
            would not adversely affect the then

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            current ratings of the Notes) at the rate (and on the terms)
            required in accordance with the EBRR Determination (the "Required
            Rate and Terms"). Nothing in this Clause 4.4(c) shall prevent the
            Mortgages Trustee from setting the Existing Borrowers' Re-Fix Rate
            in accordance with its powers under the Mortgage Sale Agreement.

      (d)   If Clause 8.6 of the Mortgage Sale Agreement applies to any Fixed
            Rate Mortgage Loan, and the Seller fails to set the Existing
            Borrowers' Re-Fix Rate immediately upon being required to do so in
            accordance with the Required Rate and Terms or otherwise to
            perform its obligations under Clause 8.6(c) of the Mortgage Sale
            Agreement, the Administrator as attorney for the Mortgages Trustee
            and the Beneficiaries shall set the Existing Borrowers' Re-Fix
            Rate on the Required Rate and Terms.

4.5   Termination of Authority: The Mortgages Trustee and/or Funding and the
      Security Trustee may terminate the authority of the Administrator under
      Clauses 4.1 and 4.3 herein to determine either of the Mortgage Rate(s)
      or Existing Borrowers' Re-Fix Rate on or after the occurrence of a
      Termination Event pursuant to Clause 19 herein, in which case the
      Mortgages Trustee shall set the Mortgage Rate(s) or Existing Borrowers'
      Re-Fix Rate, as applicable, in accordance with this Clause 4.

5.    Administration of Mortgages

5.1   Collection of Payments:

      (a)   For the purposes of collecting amounts due from any Borrower under
            a Mortgage Loan, where such Borrower makes a Monthly Payment by
            way of Direct Debit the Administrator will, unless otherwise
            agreed in writing with the Beneficiaries:

            (i)   act as collecting agent for the Beneficiaries under the
                  Direct Debiting Scheme;

            (ii)  comply with the obligations on its part set out in the Bank
                  Account Agreement including, without limitation, the
                  specific provisions relating to the collection of monies set
                  out in Clause 4 of the Bank Account Agreement;

            (iii) comply in all material respects with the requirements from
                  time to time of the Direct Debiting Scheme; and;

            (iv)  using its reasonable endeavours, credit any Monthly Payment
                  made by a Borrower by way of Direct Debit to the relevant
                  Collection Account within one (1) London Business Day of
                  receipt (and in any event within three (3) London Business
                  Days of such receipt) into the relevant Collection Account.

      (b)   The Administrator may agree with a Borrower that the Direct
            Debiting Scheme shall not apply to Monthly Payments to be made by
            such Borrower, provided that (i) alternative payment arrangements
            are made which are intended to ensure the timely making of Monthly
            Payments due from the

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            Borrower to the Mortgages Trustee, and (ii) the change in
            arrangements was made at the instigation of the Borrower or by the
            Administrator in accordance with the procedures which would be
            adopted by a reasonable and prudent mortgage lender. The
            Administrator shall, using its reasonable endeavours, credit
            Monthly Payments made by a Borrower under an alternative payment
            arrangement as follows to the relevant Collection Account:

            (i)   by standing order, by close of business on the second (2nd)
                  London Business Day following the day on which such amount
                  is received or credited by the Administrator;

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

            (iii) in the case of any payment by check where a reference to the
                  relevant Borrower is not provided, by close of business on
                  the next London Business Day after notification from the
                  Operating Banks of the identity of the Borrower;

      (c)   provided however, that in any event the Administrator shall credit
            Monthly Payments made by a Borrower under an alternative payment
            arrangement within three (3) London Business Days of such receipt.

      (d)   The Administrator may, notwithstanding the proviso to Clause
            5.2(b) herein, agree such procedures for the payment by a Borrower
            of (i) overdue amounts and (ii) amounts payable on redemption of a
            Mortgage in whole or in part other than through the Direct
            Debiting Scheme as would be agreed by a reasonable and prudent
            mortgage lender.

      (e)   Where a Borrower permits a Direct Debit to be made to his bank
            account, the Administrator will endeavour to procure that such
            Borrower maintains a valid and effective mandate relating to such
            Direct Debit in relation to each Monthly Payment due from that
            Borrower, provided that in any case where a Borrower will not
            permit a Direct Debit to be made to his bank account the
            Administrator will endeavour to make alternative arrangements
            acceptable to a reasonable and prudent mortgage lender so that
            such Borrower nevertheless pays each Monthly Payment on the due
            date.

      (f)   In the event that the Bankers Automated Clearing System ceases to
            operate for any reason the Administrator will use reasonable
            endeavours to make alternative arrangements for the use of the
            back-up systems available to each Account Bank.

5.2   Administration and Enforcement of Mortgages:

      (a)   The Mortgages Trustee as trustee for the Beneficiaries hereby
            directs the Administrator to administer the Mortgage Loans
            comprised in the Mortgage

                                      10
<PAGE>

            Portfolio and carry out its specific obligations under this
            Agreement in accordance with the Administration Procedures.

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

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

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

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

5.3   Records: The Administrator shall keep and maintain records in relation
      to the Mortgage Portfolio, on a Mortgage Loan by Mortgage Loan basis,
      for the purposes of identifying amounts paid by each Borrower, any
      amount due from a Borrower and the balance from time to time outstanding
      on a Borrower's account and such other records as would be kept by a
      reasonable and prudent mortgage lender. Subject always to the
      restrictions and conditions set forth in Clause 16, the Administrator
      will provide such information to the Mortgages Trustee and/or Funding
      and/or the Security Trustee at any time upon reasonable notice, subject
      to the Administrator being reasonably capable of providing such
      information without significant additional cost and subject to the
      provisions of the Data Protection Act 1998 and other applicable
      legislation from time to time, and provided that no duty of confidence
      and no industry code of practice will or may be breached thereby.

5.4   Trust:

      (a)   If the Administrator, in carrying out its functions as
            Administrator under this Agreement, receives (including in its
            capacity as agent for the Mortgages Trustee as trustee for the
            Beneficiaries) any money whatsoever arising from the Mortgage
            Loans and their Related Security, which money belongs to the
            Mortgages Trustee (as trustee for the Beneficiaries) and is to be
            paid to the relevant Collection Account pursuant to this Agreement
            or any of the other Transaction Documents or otherwise, it will
            hold such monies on trust for the

                                      11
<PAGE>

            Mortgages Trustee and shall keep such money separate from all
            other monies held by the Administrator and shall, as soon as
            reasonably practicable and in any event within three (3) London
            Business Days of receipt of the same, pay the monies into the
            relevant Collection Account.

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

5.5   Together Connections Mortgage Loans and Connections Mortgage Loans:

      (a)   The Seller shall, upon request, use its reasonable endeavours to:

            (i)   provide the Mortgages Trustee, Funding and the Administrator
                  with such information (including, but not limited to
                  documentary information) in its possession; and

            (ii)  do such other acts and things,

            that the Mortgages Trustee, Funding and the Administrator may
            require in order for such parties to exercise their rights and
            comply with their obligations under the Together Connections
            Mortgage Loans and the Connections Mortgage Loans and under the
            Transaction Documents with respect to the administration of such
            Mortgage Loans.

      (b)   Each of the Mortgages Trustee, Funding and the Administrator
            shall, upon request, use their reasonable endeavours to:

            (i)   provide the Seller with such information (including, but not
                  limited to documentary information) in its possession; and

            (ii)  do such other acts and things,

            that the Seller may require in order for the Seller to, exercise
            its rights and comply with its obligations under the Together
            Connection Conditions and the Connection Conditions (where such
            rights and obligations are not required to be administered by the
            Mortgages Trustee, Funding or the Administrator under the
            Transaction Documents) and in respect of the products linked to
            the Together Connections Mortgage Loans and Connections Mortgage
            Loans.

      (c)   Any notice, letter or other communication:

            (i)   received or given by the Seller under the Together
                  Connection Conditions or the Connection Conditions shall be
                  copied by the Seller to the Administrator; and

            (ii)  received or given by the Mortgages Trustee, Funding or the
                  Administrator under the Together Connection Conditions or
                  the Connection Conditions shall be copied by such parties to
                  the Seller.

      (d)   The Administrator shall act in accordance with the instructions of
            the Seller in any matter where the powers, rights, obligations or
            commercial interests of the Seller under the Together Connection
            Conditions or the Connection

                                      12
<PAGE>

            Conditions or with respect to the products linked to the Together
            Connections Mortgage Loan or the Connections Mortgage Loan may be
            affected in a material manner. Such matters may include, but not
            limited to, the following:

            (i)   any request from a Borrower to amend the allocation of the
                  Together Connections Benefit or the Connections Benefit that
                  may accrue to such Borrower under the terms of the relevant
                  Together Connection Conditions or Connection Conditions;

            (ii)  any amendment to the Together Connection Conditions or the
                  Connection Conditions;

            (iii) except where the Administrator is required to act in
                  accordance with Clause 4.3 (Interest Rate Shortfall), the
                  determination or variation of the Connection Interest Rate
                  (provided that such rate shall not at any time be set at a
                  rate which is higher than the equivalent rate offered by the
                  Seller);

            (iv)  any change to the availability or amendment to the
                  eligibility of any product to be linked to a Together
                  Connections Mortgage Loan or a Connections Mortgage Loan;
                  and

            (v)   the termination of the Together Connection Conditions or the
                  Connection Conditions.

            In all other cases where the Administrator, on behalf of the other
            parties hereto is required to exercise its judgment or discretion
            in the application of the Together Connection Conditions or the
            Connection Conditions, the Administrator shall undertake the same
            in consultation with the Seller.

      (e)   The Seller shall not have any right to provide instructions to the
            Administrator in respect of any amendment to the Together
            Connection Conditions or Connection Conditions where such
            amendment will result in a Product Switch in respect of the
            applicable Together Connections Mortgage Loans or Connections
            Mortgage Loans unless the Seller has given confirmation in
            accordance with the terms of the Mortgage Sale Agreement that it
            has elected to repurchase such Together Connections Mortgage Loans
            or Connections Mortgage Loans.

6.    No Liability

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

6.2   No Guarantee to Mortgages Trustee or Beneficiaries: Save as otherwise
      provided in this Agreement, the Administrator shall have no liability
      for the obligations of the Mortgages Trustee or the Beneficiaries under
      any of the Transaction Documents or

                                      13
<PAGE>

      otherwise and nothing herein shall constitute a guarantee, or similar
      obligation, by the Administrator of the Mortgages Trustee or the
      Beneficiaries in respect of any of them.

7.    New Mortgage Loans

7.1   New Mortgage  Portfolio:  The Mortgage Portfolio may be augmented from
      time to time by the sale and  assignment to the  Mortgages  Trustee on
      any Distribution Date of a New Mortgage Portfolio by the Seller.

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

8.    Product Switching and Further Advances

8.1   Acceptance of Application: The Administrator shall not accept an
      application for a Further Advance or a Product Switch without first
      having received confirmation in writing from the Seller that the Seller
      would, if invited to do so by the Mortgages Trustee, purchase the
      relevant Mortgage Loan and its Related Security from the Mortgages
      Trustee.

8.2   Notification: Subject to complying with the terms of Clause 8.1 herein,
      where the Administrator accepts a Product Switch or a Further Advance,
      the Administrator shall then promptly notify the Seller and the
      Mortgages Trustee in writing.
8.3   Existing Borrowers Re-Fix Rate: Notwithstanding Clause 8.1 herein,
      whenever Clause 8.6 of the Mortgage Sale Agreement applies to a Fixed
      Rate Mortgage Loan, the Administrator may accept an application from a
      Borrower to set the Existing Borrowers' Re-Fix Rate, subject to the
      terms of Clause 4.4 herein.

8.4   Procedures: Subject to complying with the terms of Clauses 8.1 and 8.3
      herein, the Administrator may accept requests from Borrowers for Product
      Switches and Further Advances provided that the Administrator acts in
      accordance with its then procedure which would be acceptable to a
      reasonable and prudent mortgage lender.

9.    Redemption of Mortgages

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

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

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<PAGE>

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

10.   Powers of Attorney

10.1  Appointment: The Mortgages Trustee hereby appoints the Administrator as
      its attorney on its behalf, and in its own or the attorney's name, for
      the following purposes:

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

      (b)   executing all documents necessary for the purpose of releasing a
            Borrower in accordance with Clause 9 herein (Redemption of
            Mortgages);

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

      (d)   exercising its rights, powers and discretion under the Mortgages
            including the right to fix the rate of interest payable under the
            Mortgage Loans or any related rights (but subject, in relation to
            the right to set the interest rate under the Base Rate Pledge and
            the Existing Borrowers' Re-Fix Rate, to the limitations,
            conditions and qualifications set out in the Mortgage Sale
            Agreement and the powers of attorney executed pursuant to it),

      provided that, for the avoidance of doubt, these Powers of Attorney
      shall not authorise the Administrator to sell any of the Mortgage Loans
      and/or their Related Security comprised in the Mortgage Portfolio except
      as specifically authorised in the Transaction Documents. For the
      avoidance of doubt, neither the Mortgages Trustee nor Funding shall be
      liable or responsible for the acts of the Administrator or any failure
      by the Administrator to act under or in respect of these Powers of
      Attorney.

10.2  Appointments Irrevocable: The appointments contained in Clause 10.1
      herein shall be irrevocable unless and until following a Termination
      Event pursuant to Clause 19 herein (Termination) the Mortgages Trustee
      and/or Funding and the Security Trustee serves notice pursuant to Clause
      19 herein (Termination) to terminate the Administrator's appointment
      under this Agreement upon which the appointments contained in Clause
      10.1 herein shall be automatically revoked.

11.   Costs and Expenses

      The Mortgages Trustee will on each Distribution Date reimburse, in
      accordance with Clause 10.2(b) of the Mortgages Trust Deed, the
      Administrator for all out-of-pocket costs, expenses and charges
      (inclusive of any amounts in respect of Irrecoverable VAT due thereon)
      properly incurred by the Administrator in the performance of the
      Services including any such costs, expenses or charges not reimbursed to
      the Administrator on any previous Distribution Date and the
      Administrator shall supply

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<PAGE>

      the Mortgages Trustee with an appropriate VAT invoice issued by the
      person making the supply.

12.   Information

12.1  Maintenance of Records:

      (a)   The Administrator shall keep the Mortgage Loan Files relating to
            the Mortgage Portfolio in safe custody and shall take appropriate
            technical and organisational measures against the unauthorised or
            unlawful processing of personal data and against accidental loss
            or destruction of, or damage to, personal data. The Administrator
            shall maintain in an adequate form such records as are necessary
            to enforce each Mortgage comprised in the Mortgage Portfolio and,
            where relevant, any other Related Security. The Administrator
            shall keep the Mortgage Loan Files in relation to the Mortgage
            Portfolio in such a way that they can be distinguished from
            information held by the Administrator for its own behalf as
            mortgagee or heritable creditor or for other third persons.

      (b)   A duplicate of any computer records held by the Administrator
            which contains information relating to the Mortgage Loans and the
            Related Security shall be lodged by the Administrator on a
            quarterly basis in a location separate from that in which the
            original computer records are stored and in an environment
            conducive to the safe storage of electronic media and which allows
            the information to be stored in an incorruptible form, such
            records to be held to the order of the Mortgages Trustee and to be
            replaced by a revised duplicate as and when the original records
            are revised. The Administrator shall keep the Mortgages Trustee
            informed of the location of the Mortgage Loan Files and duplicate
            computer records.

12.2  Use of information technology  systems:

      (a)   The Administrator will use all reasonable endeavours to negotiate
            with the relevant parties so that any intellectual property rights
            not owned by it but used by it in connection with the performance
            of its obligations under this Agreement and in particular all
            software programmes used in connection with the Mortgage Loans and
            the Related Security therefor and their administration are
            licensed or sub-licensed to the Mortgages Trustee as trustee for
            the Beneficiaries so as to permit the Mortgages Trustee as trustee
            for the Beneficiaries to use such intellectual property rights
            only in connection with the administration of the Mortgage Loans
            free of charge for so long as any of the Mortgage Loans are
            outstanding. For the avoidance of doubt, the Administrator shall
            not be in breach of its obligations under this Agreement if such
            rights and/or software programmes are not so licensed or
            sub-licensed to the Mortgages Trustee as trustee for the
            Beneficiaries at any time after it has ceased to be the
            Administrator:

      (b)   If this Agreement is terminated, then for a period of six months
            following such termination (or such shorter period as may be
            necessary to allow the administration of the Mortgage Loans to be
            transferred to another person) the

                                      16
<PAGE>

            Administrator shall use reasonable endeavours to assist the
            Mortgages Trustee and/or the Beneficiaries and/or any substitute
            or successor Administrator to:

            (i)   establish and implement a computer system for administering
                  the Mortgage Loans; and

            (ii)  load the data held by the Administrator in relation to
                  Borrowers and the Mortgage Loans on to such computer system,

            and, prior to (i) and (ii) having taken place, the Administrator
            will provide all necessary access and assistance to the Mortgages
            Trustee and/or the Beneficiaries and/or the substitute
            Administrator in respect of its own intellectual property rights
            in relation to the administration of the Mortgage Loans.

(c)   Subject always to the restrictions and conditions set forth in Clause
      16, upon termination of the appointment of the Administrator under this
      Agreement, the Administrator shall forthwith deliver to the Mortgages
      Trustee and/or the Beneficiaries and/or the substitute Administrator all
      computer and data records in its possession or under its control
      relating to the affairs of or belonging to the Mortgages Trustee and the
      Beneficiaries and/or relating to the Mortgage Loans and the Related
      Security in a form agreeable to each of the Administrator, the Mortgages
      Trustee and/or the Beneficiaries and/or the substitute Administrator
      which accords with the standard practice of the electronic data
      processing industry at the time the event occurs.

(d)   The Administrator covenants that it will take no action, nor omit to
      take any action, the effect or likely effect of such action or omission
      will be to terminate any existing licence agreement in relation to any
      such intellectual property rights, provided that a licence agreement may
      be terminated if it is replaced by a substitute arrangement under which
      the intellectual property rights, including rights to computer software,
      are such that the services resulting therefrom are equivalent to the
      previous arrangement.

12.3  Access to Books and Records: Subject to all applicable laws, and subject
      always to the restrictions and conditions set forth in Clause 16, the
      Administrator shall permit the Mortgages Trustee and Funding (and their
      auditors) and the Security Trustee and any other person nominated by the
      Beneficiaries (to whom the Administrator has no reasonable objection)
      upon reasonable notice during normal office hours to have access, or
      procure that such person or persons are granted access, to all books of
      record and account (including, for the avoidance of doubt, the Title
      Deeds and Mortgage Loan Files) relating to the administration of the
      Mortgage Loans and the Related Security comprised in the Mortgage
      Portfolio and related matters in accordance with this Agreement.

12.4  Information Covenants:

(a)   The Administrator shall, within ten (10) Business Days following each
      Payment Date, provide the Mortgages Trustee, the Beneficiaries, the
      Rating Agencies, the Lead Manager, Bloomberg, L.P. (unless otherwise
      prohibited by law) and any other party as the Mortgages Trustee may
      direct with a report in,

                                      17
<PAGE>

      or substantially in, the form set out in Schedule 2 hereto (or such
      other form reasonably requested by the Mortgages Trustee and approved by
      the Beneficiaries and the Rating Agencies) and shall assist the Cash
      Manager in the production of quarterly reports substantially in the
      forms set out in Schedule 3 of the Cash Management Agreement.

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

(c)   The Administrator shall, at the request of Funding and the Security
      Trustee (where the Administrator is the Seller) and at the request of
      the Beneficiaries (where the Administrator is no longer the Seller),
      furnish Funding, the Security Trustee and/or the Beneficiaries (as
      appropriate) and the Rating Agencies with such other information
      relating to its business and financial condition as it may be reasonable
      for Funding, the Security Trustee and/or the Beneficiaries (as
      appropriate) to request in connection with the ratings of the First
      Issuer Notes and any New Notes and other matters contemplated by the
      Transaction, provided that Funding, the Security Trustee or the
      Beneficiaries (as is appropriate) shall not make such a request more
      than once every three months unless, in the belief of Funding, the
      Security Trustee or the Beneficiaries (as appropriate), an Intercompany
      Loan Event of Default or a Termination Event pursuant to Clause 19
      herein shall have occurred and is continuing or may reasonably be
      expected to occur.

13.   Remuneration

13.1  Administration   Fee:  The   Mortgages   Trustee   shall  pay  to  the
      Administrator for its Services  hereunder an  administration  fee (the
      "Administration Fee") (inclusive of VAT) which:

     (a)  shall be calculated in relation to each Trust Calculation Period on
          the basis of the number of days elapsed and a 365 day year (or, in
          the case of a Trust Calculation Period ending in a leap year, a 366
          day year) at the Administration Fee Rate, inclusive of VAT, on the
          aggregate amount of the Funding Share of the Trust Property as at
          close of business of such Trust Calculation Period; and

     (b)  shall be paid to the Administrator on each Distribution Date in the
          manner contemplated by and in accordance with the provisions of
          Clause 10 of the Mortgages Trust Deed.

13.2  Substitute or Successor Administrator: If a substitute or successor
      administrator shall be appointed under this Agreement with respect to
      any of the Mortgage Loans, the

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<PAGE>

      Mortgages Trustee shall set the Administration Fee Rate with such
      substitute or successor administrator at the time such substitute or
      successor administrator enters into an administration agreement.

14.   Insurances

14.1  Administration: The Administrator will administer the arrangements for
      insurance to which the Mortgages Trustee is a party or in which either
      the Seller or the Mortgages Trustee has an interest and which relate to
      the Mortgage Loans and the Mortgages comprised in the Mortgage Portfolio
      or the business of the Mortgages Trustee.

14.2  Action of Administrator: The Administrator shall not knowingly take or
      omit to take any action which would:

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

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

      (c)   invalidate any Insurance Policy.

14.3  Submission of Claims: The Administrator shall prepare and submit any
      claim under the Insurance Policies in accordance with the requirements
      of the relevant Insurance Policy and otherwise with the usual procedures
      undertaken by a reasonable and prudent mortgage lender on behalf of the
      Mortgages Trustee as trustee for the Beneficiaries and shall comply with
      the other requirements of the insurer under the relevant Insurance
      Policy.

14.4  Proceeds: The Administrator shall use its reasonable endeavours to
      credit to the relevant Collection Account all proceeds received from any
      claim made under each Insurance Policy in relation to any Mortgage Loan
      by close of business on the London Business Day which immediately
      follows the day on which such amounts are received or credited by the
      Administrator (and in any event within three (3) London Business Days of
      such receipt) and which is applied either in whole or in part in
      repayment of a Mortgage Loan.

14.5  MIG Policies:

      (a)   Without prejudice to Clause 3 herein, the Mortgages Trustee as
            trustee for the Beneficiaries acknowledges that the Administrator
            may settle or compromise claims on a Mortgage Loan by Mortgage
            Loan basis in respect of any MIG Policy in a manner consistent
            with its normal practice in respect of mortgage indemnity polices,
            provided that the Administrator shall not, without the prior
            written consent of the Mortgages Trustee, settle any claims or
            initiate any legal proceedings or other legal process in respect
            of a group of class of mortgages or in respect of the MIG Policies
            as a whole and provided further that each such MIG Policy and all
            proceeds thereof remains subject to the Funding Deed of Charge.

                                      19
<PAGE>

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

      (c)   Without prejudice to the rights of the Administrator under Clause
            14.5(b) herein, the Administrator shall, in administering the
            Mortgage Loans, ensure that the cover under any MIG Policy
            relating to any Mortgage is not adversely affected.

14.6  Buildings Policies:

      (a)   Upon receipt of notice that any Borrower whose Mortgage Loan is
            secured by a mortgage of a leasehold (or, in Scotland, a standard
            security of a long leasehold) Mortgaged Property has failed to
            make a payment when due of any sums due under the relevant lease
            in respect of the insurance of the property, the Administrator may
            debit such Borrower's account with the relevant amount which shall
            then be paid to the relevant landlord.

      (b)   If the Administrator becomes aware that a Borrower has failed to
            pay premiums due under any Buildings Policy, the Administrator
            shall take such action as would a reasonable and prudent mortgage
            lender with a view to ensuring that the relevant Mortgaged
            Property continues to be insured in accordance with the applicable
            Mortgage Terms or the Alternative Insurance Requirements.

14.7  Life Policies:

      (a)   The Administrator shall use its reasonable endeavours to ensure
            that upon maturity of a Life Policy or on the death of a Borrower,
            if earlier, all sums which it is agreed between the Seller and the
            relevant Borrower are due to be paid under the Life Policy are
            paid by the relevant insurance company in repayment of the
            Mortgage for which such Life Policy is collateral security and
            credited to the relevant Collection Account.

      (b)   If so requested by a Borrower the Administrator may, on behalf of
            the Beneficiaries, exercise its discretion as a reasonable and
            prudent mortgage lender to agree to the release of a Life Policy
            from the relevant legal or equitable charge granted by the related
            Borrower in favour of the Seller.

15.         Title Deeds

15.1  Custody: The Administrator shall keep the Title Deeds relating to the
      Mortgage Portfolio in safe custody and shall not without the prior
      written consent of the Mortgages Trustee and the Beneficiaries part with
      possession, custody or control of

                                      20
<PAGE>

      them otherwise than to a sub-contractor or delegate appointed pursuant
      to Clause 3.2 herein (Sub-Contracts) or to a solicitor, licensed or
      qualified conveyancer or authorised practitioner, subject to the usual
      undertaking to hold them to the order of the Seller (who in turn will
      hold them to the order of the Mortgages Trustee (as trustee for the
      Beneficiaries)) or to H.M. Land Registry or the Registers of Scotland
      or, upon redemption of the relevant Mortgage Loan, to the order of the
      Borrower.

15.2  Identification: The Title Deeds relating to the Mortgage Portfolio shall
      be kept in a manner such that a computer record is maintained of their
      location and they are identifiable and retrievable by reference to an
      account number and pool identifier and identifiable and distinguishable
      from the title deeds relating to other properties and mortgages in
      respect of which the Administrator is mortgagee or heritable creditor or
      administrator.

15.3  Access: The Administrator shall provide access, or procure that access
      is provided to, the Title Deeds relating to the Mortgage Portfolio to
      the Mortgages Trustee, the Beneficiaries and their respective agents at
      all reasonable times and upon reasonable notice. The Administrator
      acknowledges that the Title Deeds and Mortgage Loan Files relating to
      the Mortgage Portfolio in its possession, custody or control will be
      held to the order of the Mortgages Trustee (as trustee for the
      Beneficiaries) and that it has, in its capacity as Administrator, no
      beneficial interest therein and the Administrator (in its capacity as
      such but not in its capacity as a Beneficiary) irrevocably waives any
      rights or any Security Interest which it might have therein or to which
      it might at any time be entitled.

15.4  Delivery upon Termination: The Administrator shall, forthwith on the
      termination of the appointment of the Administrator pursuant to Clause
      19 herein (Termination), deliver the Title Deeds and Mortgage Loan Files
      to or to the order of the Mortgages Trustee or to such person as the
      Mortgages Trustee elects as a substitute administrator in accordance
      with the terms of this Agreement upon written request by the Mortgages
      Trustee made at any time on or after notice of, or on or after,
      termination of the appointment of the Administrator pursuant to Clause
      19 herein (Termination).

16.   Data Protection

      The Administrator represents that as at the date hereof the
      Administrator has and hereafter it will maintain on behalf of itself and
      on behalf of the Mortgages Trustee (as trustee for the Beneficiaries)
      all appropriate registrations, licences and authorities (if any)
      required under the Data Protection Act 1998 to enable each of them to
      perform their respective obligations under this Agreement. In addition
      to the foregoing and notwithstanding any of the other provisions of this
      Agreement, each of the Administrator and the Mortgages Trustee hereby
      agree and covenant as follows:

      (a)   that only non-"personal data" (as described in the Data Protection
            Act 1998) may be transferred by the Administrator to the Mortgages
            Trustee or any other entity located in Jersey (unless Jersey is
            declared an "approved state" by the European Commission, in which
            case the Administrator may transfer such personal data to the
            Mortgages Trustee in Jersey);

      (b)   that, to the extent that circumstances enable the Mortgages
            Trustee to exercise its right to demand that the Administrator
            transfer inter alia personal data to

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<PAGE>

            the Mortgages Trustee, the Administrator shall only transfer such
            personal data to an agent of the Mortgages Trustee that is located
            in the United Kingdom and maintains all appropriate registrations,
            licences and authorities (if any) required under the Data
            Protection Act 1998 (unless Jersey is declared an "approved state"
            by the European Commission, in which case the Administrator may
            transfer such personal data to the Mortgages Trustee in Jersey);

      (c)   that, to the extent that circumstances enable the Mortgages
            Trustee to exercise its right to demand that the Administrator
            transfer inter alia personal data to the Mortgages Trustee, the
            Administrator notify each Borrower that the Mortgages Trustee is a
            "data controller" (as defined in the Data Protection Act 1998) and
            provide each such Borrower with the address of the Mortgages
            Trustee;

      (d)   that the Administrator and the Mortgages Trustee will only use any
            data in relation to the Mortgage Loans and the related Borrowers
            for the purposes of administering and/or managing the Mortgage
            Portfolio, and will not sell such data to any third party or allow
            any third party to use such data other than in compliance with the
            conditions stated in this Clause 16 and for the sole purpose of
            administering and/or managing the Mortgage Portfolio;

      (e)   that the Mortgages Trustee will comply with the provisions of the
            Data Protection (Jersey) Law 1987 (as amended) and (so long as the
            provisions of the Data Protection Act 1998 do not conflict with
            the provisions of the Data Protection (Jersey) Law 1987) with the
            provisions of the Data Protection Act 1998 (as amended);

      (f)   that, upon the request of a Borrower, the Administrator will
            inform such Borrower that both the Administrator and the Mortgages
            Trustee are "data controllers" as described in the Data Protection
            Act 1998; and

      (g)   that both the Administrator and the Mortgages Trustee shall
            maintain a written record of their reasons for applying the Data
            Protection Order 2000 (as set forth under the Conditions under
            paragraph 3 of Part II of Schedule I of such Order).

17.   Covenants and Representations and Warranties of Administrator

17.1  Covenants: The Administrator hereby covenants with and undertakes to
      each of the Mortgages Trustee, the Beneficiaries and the Security
      Trustee that, without prejudice to any of its specific obligations
      hereunder, it will:

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

      (b)   provide the Services in such manner and with the same level of
            skill, care and diligence as would a reasonable and prudent
            mortgage lender;

                                      22
<PAGE>

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

      (d)   keep in force all licences, approvals, authorisations and consents
            which may be necessary in connection with the performance of the
            Services and prepare and submit all necessary applications and
            requests for any further approval, authorisation, consent or
            licence required in connection with the performance of the
            Services and in particular any necessary registrations under the
            Data Protection Act 1998;

      (e)   not knowingly fail to comply with any legal requirements in the
            performance of the Services;

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

      (g)   not without the prior written consent of the Mortgages Trustee
            amend or terminate any of the Transaction Documents save in
            accordance with their terms;

      (h)   forthwith upon becoming aware of any event which may reasonably
            give rise to an obligation of the Seller to repurchase any
            Mortgage Loan pursuant to Clause 8 of the Mortgage Sale Agreement,
            notify the Mortgages Trustee and the Beneficiaries in writing of
            such event;

17.2  Covenants to Survive: The covenants of the Administrator in Clause 17.1
      herein shall remain in force until this Agreement is terminated but
      without prejudice to any right or remedy of the Mortgages Trustee and/or
      the Seller and/or Funding arising from breach of any such covenant prior
      to the date of termination of this Agreement.

17.3  Representations and Warranties: The Administrator hereby makes the
      representations and warranties to each of the Mortgages Trustee, Funding
      and the Security Trustee that are specified on Schedule 3 hereto.

18.   Services Non-exclusive

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

19.   Termination

19.1  Termination Event: If any of the following events (each a "Termination
      Event") shall occur:

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<PAGE>

      (a)   default is made by the Administrator in the payment on the due
            date of any payment due and payable by it under this Agreement and
            such default continues unremedied for a period of five London
            Business Days after the Administrator becoming aware of such
            default;

      (b)   default is made by the Administrator in the performance or
            observance of any of its other covenants and material obligations
            under this Agreement or any of the other Transaction Documents,
            which , the Security Trustee having been informed thereof as
            specified below in this sub-clause, is materially prejudicial to
            the interests of the holders of the First Issuer Notes and any New
            Notes from time to time and such default continues unremedied for
            a period of twenty (20) days after the Administrator becoming
            aware of such default, provided however that where the relevant
            default occurs as a result of a default by any person to whom the
            Administrator has sub-contracted or delegated part of its
            obligations hereunder, such default shall not constitute a
            Termination Event if within such twenty (20) day period the
            Administrator replaces the relevant sub-contractor or delegate
            with an entity capable of remedying such default or alternatively
            indemnifies the Mortgages Trustee and the Beneficiaries against
            the consequences of such default;

      (c)   the Administrator at any time fails to obtain the necessary
            license or regulatory approval required by any UK mortgage
            regulatory regime which would be required in order to enable it to
            continue administering the Mortgage Loans; or

      (d)   the Administrator becomes subject to an Insolvency Event,

            then the Mortgages Trustee and/or Funding and the Security Trustee
            may at once or at any time thereafter while such default
            continues, by notice in writing to the Administrator, terminate
            its appointment as Administrator under this Agreement with effect
            from a date (not earlier than the date of the notice) specified in
            such notice. Upon termination of the Administrator, the Security
            Trustee shall use its reasonable endeavours to appoint a
            substitute Administrator that satisfies the conditions set forth
            in Clause 19.2(c), (d) and (e), provided that in the event the
            Security Trustee has not, having used reasonable endeavours,
            appointed a substitute Administrator, the Security Trustee shall
            have no liability to any person and, notwithstanding any other
            provision of the Transaction Documents, shall not itself be
            required to perform any duties of the Administrator.

19.2  Resignation: The Administrator may resign under this Agreement at any
      time following the expiry of not less than 12 months' notice of
      resignation given by the Administrator to the Mortgages Trustee and the
      Beneficiaries provided that:

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

      (b)   a substitute administrator is appointed by the Mortgages Trustee,
            Funding and the Security Trustee (and in the event of failure to
            agree, by the Security Trustee), such appointment to be effective
            not later than the date of such termination (and the Administrator
            shall notify the Rating Agencies in writing of the identity of
            such substitute administrator);

                                      24
<PAGE>

      (c)   if possible, such substitute administrator has experience of
            administering mortgages of residential property in England, Wales
            and Scotland and is approved by the Mortgages Trustee and the
            Beneficiaries;

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

      (e)   the then current ratings (if any) of the First Issuer Notes or any
            New Notes are not adversely affected as a result thereof, unless
            otherwise agreed by an Extraordinary Resolution (as defined in the
            Note Trust Deed) of the holders of the relevant class of Notes.

19.3  Termination of Authority: On and after resignation by, or termination of
      the appointment of, the Administrator under this Agreement pursuant to
      this Clause 19, all authority and power of the Administrator under this
      Agreement shall be terminated and be of no further effect and the
      Administrator shall not thereafter hold itself out in any way as the
      agent of the Mortgages Trustee and/or the Beneficiaries pursuant to this
      Agreement.

19.4  Delivery of Files: Upon resignation by, or termination of the
      appointment of, the Administrator under this Agreement pursuant to this
      Clause 19, the Administrator shall:

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

      (b)   take such further action as the Mortgages Trustee, Funding and the
            Security Trustee may reasonably direct at the expense of the
            Beneficiaries (including in relation to the appointment of a
            substitute administrator) provided that neither the Mortgages
            Trustee nor the Security Trustee shall be required to take or
            direct to be taken such further action unless it has been
            indemnified to its satisfaction;

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

      (d)   co-operate and consult with and assist the Mortgages Trustee,
            Funding, the Security Trustee and their nominees (which shall, for
            the avoidance of doubt, include any new administrator appointed by
            any of them) for the purposes of explaining the file layouts and
            the format of the magnetic tapes generally

                                      25
<PAGE>

            containing such computer records on the computer system of the
            Mortgages Trustee or such nominee.

19.5  Notification of Termination Event: The Administrator shall notify the
      Mortgages Trustee, the Security Trustee and the Beneficiaries as soon as
      reasonably practicable but in any event within five (5) days of becoming
      aware of any Termination Event or any event which with the giving of
      notice or lapse of time or certification would constitute the same. Such
      notification shall specify which event in Clause 19 occurred and was the
      cause of such Termination Event (or any event which with the giving of
      notice or lapse of time or certification would constitute a Termination
      Event), a description of the details of such Termination Event, and a
      reference to the provision in this Agreement or the other Transaction
      Documents which the Administrator has breached.

19.6  No Prejudice: Termination of this Agreement or the appointment of the
      Administrator under this Agreement shall be without prejudice to the
      liabilities of the Mortgages Trustee as trustee for the Beneficiaries to
      the Administrator or vice versa incurred before the date of such
      termination. The Administrator shall have no right of set-off or any
      lien in respect of such amounts against amounts held by it on behalf of
      the Mortgages Trustee.

19.7  Automatic Termination: This Agreement shall terminate at such time as
      the Mortgages Trustee has no further interest in any of the Mortgage
      Loans or the Mortgages which have been comprised in the Mortgage
      Portfolio.

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

19.9  Co-operation: Prior to termination of this Agreement, the Administrator,
      the Seller, the Mortgages Trustee and Funding shall co-operate to obtain
      the agreement of the Borrowers to a new bank mandate permitting the
      Mortgages Trustee to operate the Direct Debiting Scheme.

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

19.11 No Supervision: The Security Trustee shall not be obliged to monitor or
      supervise the performance by any substitute Administrator of its duties
      hereunder or in relation to the other Transaction Documents, nor shall
      the Security Trustee be responsible or liable for any act or omission of
      such substitute Administrator or for any loss caused thereby.

                                      26
<PAGE>

20.   Further Assurances

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

20.2  Powers of Attorney: Without prejudice to the generality of Clause 20.1
      herein, the Mortgages Trustee as trustee for the Beneficiaries shall
      upon request by the Administrator forthwith give to the Administrator
      such further powers of attorney or other written authorisations,
      mandates or instruments as are necessary to enable the Administrator to
      perform the Services.

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

20.4  No Obligations: Nothing herein contained shall impose any obligation or
      liability on the Mortgages Trustee to assume or perform any of the
      obligations of the Administrator hereunder or render it liable for any
      breach hereof.

21.   Miscellaneous

21.1  Insufficient Funds: Subject to Clause 21.2 herein, in the event that the
      funds available to the Mortgages Trustee on any Payment Date are not
      sufficient to satisfy in full the aggregate amount payable to the
      Administrator by the Mortgages Trustee on such Payment Date then the
      amount payable to the Administrator on such Payment Date shall be
      reduced by the amount of the shortfall and such shortfall shall (subject
      always to the provisions of this Clause 21) be payable on the
      immediately succeeding Payment Date.

21.2  Reduction of Fees: In the event that:

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

      (b)   after service of an Intercompany Loan Enforcement Notice and
            payment of all other prior claims,

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

21.3  Set-Off:  Each of the  Seller  and the  Administrator  agrees  that it
      will not:

      (a)   set off or purport to set off any amount which the Mortgages
            Trustee, Funding or each Issuer is or will become obliged to pay
            to it under any of the Transaction Documents against any amount
            from time to time standing to the

                                      27
<PAGE>

            credit of or to be credited to any Collection Account, the
            Mortgages Trustee Transaction Account, the Mortgages Trustee GIC
            Account, the Funding Transaction Account, the Funding GIC Account,
            any Funding (Issuer) GIC Account, any Issuer Transaction Account
            in any other account prior to transfer to any Collection Account,
            the Mortgages Trustee Transaction Account, the Mortgages Trustee
            GIC Account, the Funding Transaction Account, the Funding GIC
            Account, any Funding (Issuer) GIC Account or any Issuer
            Transaction Account, as appropriate; or

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

21.4  No Petition: The Administrator agrees that for so long as any First
      Issuer Notes and New Notes are outstanding it will not petition nor
      commence proceedings for the administration or winding up of the
      Mortgages Trustee or Funding or any Issuer nor participate in any ex
      parte proceedings with regard thereto.

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

21.6  No Prejudice: For the avoidance of doubt, neither Beneficiary shall be
      liable to pay any amounts due under Clauses 11 or 13 herein without
      prejudice to the obligations of the Mortgages Trustee in respect of such
      amounts.

21.7  Termination: Notwithstanding any other provisions of this Agreement, all
      obligations to, and rights of, Funding under or in connection with this
      Agreement (other than its obligations under Clause 22 herein
      (Confidentiality)) shall automatically terminate upon the discharge in
      full of all amounts owing by it under any Intercompany Loan Agreement,
      provided that this shall be without prejudice to any claims in respect
      of such obligations and rights arising on or prior to such date.

22.   Confidentiality

      From the date of this Agreement and notwithstanding its termination,
      each of the Mortgages Trustee and the Beneficiaries shall use its best
      endeavours not to disclose to any person whatsoever any information
      relating to the business, finances or other matters of a confidential
      nature of any other party hereto of which it may by virtue of being
      party to the Transaction Documents have become possessed and shall use
      all reasonable endeavours to prevent any such disclosure as aforesaid,
      provided however that the provisions of this Clause 22 shall not apply:

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<PAGE>

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

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

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

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

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

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

23.   No Partnership

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

24.   Assignment

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

24.2  Agreement: The Administrator may not assign or transfer any of its
      rights or obligations under this Agreement (a) without the prior written
      consent of the Mortgages Trustee (as trustee for the Beneficiaries) and
      each of the Beneficiaries and (b) other than to a person who agrees to
      be bound by the provisions contained in Clause 5 of the Funding Deed of
      Charge as if such person had been named as an original party thereto in
      place of Northern Rock but without prejudice to their obligations under
      such Clause.

24.3  Assignment of Rights to Security Trustee: The Administrator acknowledges
      that Funding has assigned its rights under this Agreement to the
      Security Trustee pursuant

                                      29
<PAGE>

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

25.   Security Trustee; Authorised Third Party

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

25.2  No Assumption: It is hereby acknowledged and agreed that by its
      execution of this Agreement the Security Trustee shall not assume or
      have any of the obligations or liabilities of the Administrator, the
      Seller, Funding or the Mortgages Trustee under this Agreement.
      Furthermore, any liberty or power which may be exercised or any
      determination which may be made hereunder by the Security Trustee may be
      exercised or made in the Security Trustee's absolute discretion without
      any obligation to give reasons therefor, but in any event must be
      exercised or made in accordance with the provisions of the Funding Deed
      of Charge and Schedule 4 hereto.

25.3  Delegation: The Security Trustee may delegate the performance of all or
      any of its powers and obligations under all or any of the Operating
      Agreements pursuant to the terms of Schedule 4 of this Agreement and
      subject always to the provisions of the Funding Deed of Charge.

26.   New Intercompany Loan Agreements

      If Funding enters into a New Intercompany Loan Agreement, then the
      Administrator, the Seller, Funding, the Security Trustee and the
      Mortgages Trustee shall execute such documents and take such action as
      may be necessary or required by the Rating Agencies for the purpose of
      including the New Issuer, any Basis Rate Swap Provider, any Currency
      Swap Provider, any New Start-up Loan Provider and any other person who
      has executed an Accession Undertaking or any New Intercompany Loan
      Agreement in the Transaction Documents.

27.   Non Petition Covenant; Limited Recourse

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

                                      30
<PAGE>

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

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

      (b)   in relation to Funding:

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

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

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

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

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<PAGE>

28.   Amendments and Waiver

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

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

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

28.4  Variation or Waiver: No variation or waiver of this Agreement shall be
      made if the same would adversely affect the then current ratings of` any
      of the Notes.

29.   Notices

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

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

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

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

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

                                      32
<PAGE>

      (e)   in the case of Fitch, to Fitch Ratings Ltd., at Eldon House, 2
            Eldon Street, London EC2M 7UA (facsimile number 0207 7417 6262)
            for the attention of European Structured Finance Surveillance;

      (f)   in the case of Moody's, to Moody's Investors Services, Inc., at
            1st Floor, 2 Minster Court, Mincing Lane, London EC3R 7XB
            (facsimile number 0207 772 5400) for the attention of Jodi van
            Breda;

      (g)   in the case of S&P, to Standard & Poor's Ratings Services, a
            division of The McGraw-Hill Companies, Inc., at Garden House, 18
            Finsbury Circus, London EC2M 7NJ (facsimile number 0207-826-3598)
            for the attention of Andre Vollmann;

      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 or by any Rating Agency to the others by written notice in
      accordance with the provisions of this Clause 29. All notices served
      under this Agreement shall be simultaneously copied to the Security
      Trustee by the person serving the same.

30.   Third Party Rights

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

31.   Execution in Counterparts; Severability

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

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

32.   Governing Law and Submission to Jurisdiction

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

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

                                      33
<PAGE>

33.   Process Agent

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

34.   Appropriate Forum

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

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

                                      34
<PAGE>

                                  SCHEDULE 1

                                 THE SERVICES

In addition to the Services set out in the body of the Administration
Agreement, the Administrator shall:

(a)   keep records (written or computerised) and books of account for the
      Mortgages Trustee in relation to the Mortgage Loans comprised in the
      Mortgage Portfolio;

(b)   keep records for all taxation purposes and VAT;

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

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

(e)   provide a redemption statement to a Borrower or any person acting on the
      Borrower's behalf, in each case upon written request or otherwise at the
      discretion of the Administrator;

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

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

(h)   take all other action and do all other things which it would be
      reasonable to expect a reasonable and prudent mortgage lender to do in
      administering its mortgages;

(i)   keep a Mortgage Account for each Mortgage Loan which shall record all
      proceeds received in respect of that Mortgage Loan and all amounts
      debited to such Mortgage Account;

(j)   at its discretion, prepare and send on request an annual statement to
      Borrowers in relation to each calendar year in the agreed form; and

(k)   assist the Cash Manager in the preparation of a quarterly report
      substantially in the form set out in the Cash Management Agreement.

                                      35
<PAGE>

                                  SCHEDULE 2

                      FORM OF INVESTORS' QUARTERLY REPORT

Granite Finance Trustees Limited
Monthly Report

Date of Report [  ]

Mortgages

Number of Mortgages in Pool                                [  ]

Current Balance                                       (GBP)[  ]

Opening Trust Assets                                  (GBP)[  ]

Funding Share                                         (GBP)[  ]

Funding Share Percentage                                   [  ]%

Seller Share                                          (GBP)[  ]

Seller Share Percentage                                    [  ]%

Minimum Seller Share (Amount)                         (GBP)[  ]

Minimum Seller Share (% of Total)                          [  ]%

Arrears Analysis of Non Repossessed Mortgages

                         Number              Principal         Arrears

Less than [  ] month     [  ]                [  ]              [  ]

[  ] - [  ] months       [  ]                [  ]              [  ]

[  ] - [  ] months       [  ]                [  ]              [  ]

[  ] - [  ] months       [  ]                [  ]              [  ]

[  ] - [  ] months       [  ]                [  ]              [  ]

[  ] months +            [  ]                [  ]              [  ]

Total                    [  ]                [  ]              [  ]

                                      36
<PAGE>

Properties in Possession  Number             Principal          Arrears

Total                     [  ]               [  ]               [  ]

Properties in Possession
Number Brought Forward                                          [  ]

Repossessed                                                     [  ]

Sold                                                            [  ]

Number Carried Forward                                          [  ]

Average Time from                                               [  ]

Possession to Sale

Average Arrears at Sale                                         [  ]

Repossessed                                                     [  ]

MIG Claims Submitted                                            [  ]

MIG Claims Outstanding                                          [  ]

Average Time from Claim                                         [  ]
to Payment

Note: The arrears analysis and repossession information is as at close of
business for the report month

Substitution                            Number                    Principal

Substituted this period (this           [  ]                      [  ]
month)

Substituted to dated (since [  ])       [  ]                      [  ]

CPR Analysis                            Monthly                   Annualised

Current [  ] Month CPR Rate             [  ]%                     [  ]%

Previous [  ] Month CPR Rate            [  ]%                     [  ]%

Weighted Average Seasoning (by value)           [  ]

Average Loan Size                               [  ]

Weighted Average LTV (by value)                 [  ]%

                                      37
<PAGE>

Product Breakdown

Fixed Rate                              [  ]%

Flexible -Together                      [  ]%

LTV Levels Breakdown            Number                    Value

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ] - [  ]%                    [  ]                      [  ]

[  ]% +                         [  ]                      [  ]

Totals                          [  ]                      [  ]

NR Current Existing  Borrowers'                           [  ]
SVR

Effective Date of Change                                  [  ]

                                      38
<PAGE>

Notes       Outstanding            Rating               Reference Rate
                                   Moodys/S&P/Fitch

Series 1

A1          $ XXX,XXX,XXX          Aaa/AAA/AAA          X.XXX%         X.XX%

A2          $ XXX,XXX,XXX          Aaa/AAA/AAA          X.XXX%         X.XX%

B           $ XX,XXX,XXX           Aa3/AA/AA            X.XXX%         X.XX%

C           $ XX,XXX,XXX           Baa2/BBB/BBB         X.XXX%         X.XX%

Series 2

A           (GBP) XXX,XXX,XXX      Aaa/AAA/AAA          X.XXX%         X.XX%

B           (GBP) XX,XXX,XXX       Aa3/AA/AA            X.XXX%         X.XX%

C           (GBP) XX,XXX,XXX       Baa2/BBB/BBB         X.XXX%         X.XX%

Issuer Reserve Fund Requirement                                      (GBP)[  ]

Balance brought forward                                              (GBP)[  ]

Drawings this period

Reserve Fund Top-up this period*                                     (GBP)[  ]

Excess Spread                                                        (GBP)[  ]

Current Balance                                                      (GBP)[  ]

*Top-ups only occur at the end of each quarter.

Funding Reserve Balance                                              (GBP)[   ]

Funding Reserve %                                                         [   ]%

                                      39
<PAGE>

                                    SCHEDULE 3

                ADMINISTRATOR REPRESENTATIONS AND WARRANTIES

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

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

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

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

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

      (a)   result in the existence or imposition of, nor oblige it to create,
            any Security Interest in favour of any person over all or any of
            its present or future revenues or assets;

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

      (c)   conflict with its constitutional documents; or

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

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

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

7.    Solvency: No Insolvency Event has occurred in respect of the
      Administrator, and the Administrator is not insolvent.

                                      40
<PAGE>

8.    Financial Statements: The most recent financial statements of the
      Administrator:

      (a)   were prepared in accordance with accounting principles generally
            accepted in England and Wales consistently applied;

      (b)   disclose all liabilities (contingent or otherwise) and all
            unrealised and or anticipated losses of the Administrator; and

      (c)   save as disclosed therein, give a true and fair view of the
            financial condition and operations of the Administrator during the
            relevant financial year.

9.    No Adverse Change: Since the date as of which the most recent financial
      statements of the Administrator were stated to be prepared, there has
      been:

      (a)   no significant change in the financial position of the
            Administrator; and

      (b)   no material adverse change in the financial position or prospects
            of the Administrator.

10.   Ranking of Claims

       Under the laws of England and Wales in force as at the date of making
      this representation, claims against the Administrator under the
      Transaction Documents will rank at least pari passu with the claims of
      all its other unsecured and unsubordinated creditors, save those whose
      claims are preferred solely by any bankruptcy, liquidation or other
      similar laws of general application.

11.   Information in Prospectus and Offering Circular:

      (a)   All information in the Prospectus and the Offering Circular with
            regard to the Administrator, its business and its experience
            administering mortgage loans (including its arrears and
            repossession experience) are true and accurate in all material
            respects and not misleading in any material respect.

      (b)   Any opinions, predictions and intentions expressed in the
            Prospectus and/or the Offering Circular on the part of the
            Administrator are honestly held and not misleading in any material
            respect.

      (c)   Each of the Prospectus and the Offering Circular does not omit to
            state any material fact necessary to make such information,
            opinions, predictions or intentions not misleading in any material
            respect.

      (d)   The Administrator has made all proper inquiries to ascertain and
            to verify the foregoing.

                                      41
<PAGE>

                                  SCHEDULE 4

                            AUTHORISED THIRD PARTY

1.    Agreement to Allow Delegation

1.1.  The Seller and the Administrator agree (subject to the other provisions
      of this Schedule, including paragraph 2 (Appointment and Payment) and
      subject to the Funding Deed of Charge) that the Security Trustee may
      appoint or facilitate the appointment of an Authorised Third Party to
      implement, administer and carry out the duties and powers of the
      Security Trustee:

      (a) under the Seller's Power of Attorney;

      (b) in connection with and following a Completion Event; and

      (c) in connection with and following a Termination Event,

      (together the "Back-up Functions")

1.2.  Each of the Seller and the Administrator shall authorise the Authorised
      Third Party on their behalf and in their name or otherwise to sign or
      execute or make any alteration or addition or deletion in or to any
      agreements or documents or certificates or instructions or notices which
      they are entitled or required to give, receive, implement, transact or
      become a party to in relation to the Back-up Functions or for doing any
      other act or thing required to be done by them under or in connection
      with the Back-up Functions and otherwise generally to sign, seal and
      deliver any agreement, assurance, document, certificate, instruction or
      act which may be required by the Authorised Third Party acting in
      connection with the Back-up Functions.

2.    Appointment and Payment

      The appointment of the Authorised Third Party shall be on the terms and
      conditions as negotiated between the Security Trustee, the Seller and/or
      the Administrator (as the case may be) and such Authorised Third Party.
      The fees, costs and expenses payable to such Authorised Third Party
      shall be considered as part of the additional remuneration and expenses
      of the Security Trustee and therefore shall be payable in the manner
      contemplated by and in accordance with Clause 18 of the Funding Deed of
      Charge from funds that the Security Trustee receives in accordance with
      the Funding Priority of Payments as set forth in the Funding Deed of
      Charge.

3.    Delegation

3.1.  The Security Trustee shall use reasonable endeavours (in its opinion) to
      appoint in writing one or more persons to act as an Authorised Third
      Party in respect of the Back-up Functions (on any terms other than the
      power to appoint a delegate), and references in the Operating Agreements
      to the "Security Trustee" shall be construed accordingly and, unless the
      context does not permit, include any Authorised Third Party. Any such
      appointment of an Authorised Third Party may be revoked by the Security
      Trustee at any time.

                                      42
<PAGE>

3.2.  In the event that the Security Trustee has not, having used such
      reasonable endeavours, appointed such Authorised Third Party, the
      Security Trustee shall have no liability to any person and,
      notwithstanding any other provision of the Operating Agreements, shall
      not itself be required to perform any Back-up Functions or any other
      duties of the Seller or the Administrator either during the period it is
      seeking to appoint an Authorised Third Party or thereafter.

3.3.  As condition precedents to the appointment of the Authorised Third
      Party, the arrangements to be entered into between the Authorised Third
      Party and the Seller or Administrator (as the case may be) shall provide
      that (1) the Authorised Third Party shall make timely transfer of
      information to the Seller or Administrator (as appropriate); and (2) the
      Security Trustee shall provide any Authorised Third Party with a copy of
      the Operating Agreements and the Funding Deed of Charge and shall
      request such Authorised Third Party to confirm in writing to the Seller,
      the Administrator and the Security Trustee that it has read and
      understood the terms of this Agreement and the other Operating
      Agreements.

4.    Ratification

      Each of the Seller and the Administrator shall, upon the written request
      of the Security Trustee or such Authorised Third Party, ratify and
      confirm all documents, deeds, certificates, instructions, acts and
      things which the Security Trustee or such Authorised Third Party shall
      execute or do in the exercise of any of the powers conferred, or
      purported to be conferred, on him by this Agreement and the other
      Operating Agreements. The terms of appointment of the Authorised Third
      Party shall oblige the Authorised Third Party to provide information
      concerning its activities on a regular basis and on request to the
      Seller, Administrator, Funding and the Security Trustee.

5. Limitations on the Responsibility of the Security Trustee

      The Security Trustee shall not be obliged to monitor or supervise the
      performance by such Authorised Third Party of its duties hereunder or in
      relation to the Operating Agreements and shall not be responsible or
      liable for any act or omission of such Authorised Third Party or for any
      loss caused thereby, provided that if any party to a Transaction
      Document notifies the Security Trustee that an Authorised Third Party
      appointed by the Security Trustee is implementing, administering or
      carrying out the duties and powers of the Security Trustee in breach of
      the terms and conditions of the relevant Operating Agreement pursuant to
      which such duties and powers are to be performed, the Security Trustee
      shall use its reasonable endeavours to appoint or facilitate the
      appointment of a substitute Authorised Third Party to implement,
      administer and carry out such duties and powers. The terms of
      appointment of an Authorised Third Party and the Security Trustee's
      responsibilities in relation thereto as set out in this Schedule 4 shall
      apply to the appointment of a substitute Authorised Third Party. Nothing
      in this Schedule constitutes the Security Trustee in its role as
      specified in this schedule as trustee or fiduciary for any person. The
      Security Trustee shall assume, until it receives notice thereof pursuant
      to the relevant Operating Agreement, that no Back-up Trigger Event has
      occurred and until such time that it receives such notification and is
      first indemnified and/or secured to its satisfaction, is not entitled to
      take any action in respect of the Back-up Functions under the Operating
      Agreements.

                                      43
<PAGE>

6.    Exoneration

6.1.  Without limiting paragraph 6.2 below, the Security Trustee shall not be
      liable to any Person for any action taken or not taken by the Security
      Trustee or such Authorised Third Party under or in connection with the
      Operating Agreements, other than in respect of any loss, liability,
      claim, expense or damage suffered or incurred by such Person in respect
      of the gross negligence or wilful default of the Security Trustee or
      such Authorised Third Party in carrying out its functions under the
      relevant Operating Agreement.

6.2.  No Person may take any proceedings against any officer, employee or
      agent of the Security Trustee in respect of any claim it might have
      against the Security Trustee in respect of any act or omission of any
      kind by their officer, employee or agent.

                                      44
<PAGE>

                                EXECUTION PAGE

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

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

Name:

Title:

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

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

Name:

Title:

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

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

Name:

Title:

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

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

Name:

Title:

                                      45(Basis Rate Swap)
From:       Northern Rock plc
            Northern Rock House
            Gosforth
            Newcastle Upon Tyne
            NE3 4PL

To:         Granite Mortgages 03-1 plc
            Fifth Floor
            100 Wood Street
            London
            EC2V 7EX

Attention:  Securitisation Team, Risk Operations

To:         The Bank of New York
            One Canada Square
            48th Floor
            London
            E14 5AL

Attention:  Global Structured Finance (Corporate Trust)

                                                              28 January, 2004

Dear Sirs,

Confirmation - Issuer Basis Rate Swap

The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the
"Swap Transaction"). This letter constitutes a "Confirmation" as referred to
in the 1992 ISDA Master Agreement (Multicurrency-Cross Border) entered into
between us and both of you on the date hereof as amended and supplemented from
time to time (the "Agreement").

The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps & Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
shall prevail. Any terms not otherwise defined herein or in the Definitions
shall have the meanings given to them in the Master Definitions Schedule as
amended and restated by (and appearing in Appendix 1 to) the Master
Definitions Schedule Fourth Amendment Deed executed by, among others, the Note
Trustee on 27 January, 2003 and the Issuer Master Definitions Schedule signed
for the purposes of identification by Sidley Austin Brown & Wood and Allen &

                                      1
<PAGE>

Overy on 27 January, 2003 (as the same have been and may be amended, varied or
supplemented from time to time with the consent of the parties hereto). The
Issuer Master Definitions Schedule specified above shall prevail to the extent
that it conflicts with the Master Definitions Schedule. The following
expressions shall have the following meanings:

The term "Transaction" as used herein shall, for the purposes of the
Definitions, have the same meaning as "Swap Transaction".

Aggregate Issuer Amount means, in respect of a Payment Date, the aggregate of
the Issuer Amounts calculated in respect of the Swap Determination Periods
which end in the Interest Period relating to such Payment Date.

Aggregate Swap Provider Amount means, in respect of a Payment Date, the
aggregate of the Swap Provider Amounts calculated in respect of the Swap
Determination Periods which end in the Interest Period relating to such
Payment Date.

Average Fixed Rate Mortgage Loan Balance means, in respect of a Swap
Determination Period, an amount equal to the sum of the aggregate of the
outstanding current balances of the Fixed Rate Mortgage Loans at the start of
business on the first day of such Swap Determination Period as notified to the
Calculation Agent by the Cash Manager in accordance with the Cash Management
Agreement.

Average Flexible Mortgage Loan Balance means, in respect of a Swap
Determination Period, an amount equal to the sum of the aggregate of the
outstanding current balances of the Flexible Mortgage Loans at the start of
business on the first day of such Swap Determination Period as notified to the
Calculation Agent by the Cash Manager in accordance with the provisions of the
Cash Management Agreement.

Average Mortgage Loan Balance means, in respect of a Swap Determination
Period, the sum of the Average Fixed Rate Mortgage Loan Balance, the Average
Variable Rate Mortgage Loan Balance and the Average Flexible Mortgage Loan
Balance.

Average Variable Rate Mortgage Loan Balance means, in respect of a Swap
Determination Period, an amount equal to the sum of the aggregate of the
outstanding current balances of the Variable Rate Mortgage Loans at the start
of business on the first day of such Swap Determination Period as notified to
the Calculation Agent by the Cash Manager in accordance with the provisions of
the Cash Management Agreement.

Blended Rate means, in respect of a Swap Determination Period, a rate of
interest equal to the sum of (i) the Weighted Average Fixed Rate for such Swap
Determination Period multiplied by the Fixed Rate Ratio for such Swap
Determination Period; (ii) the Variable Rate Swap SVR for such Swap
Determination Period multiplied by the Variable Rate Ratio for such Swap
Determination Period and (iii) the Flexible Swap Rate for such Swap
Determination Period multiplied by the Flexible Ratio for such Swap
Determination Period.

                                      2
<PAGE>

Blended Spread means, in respect of a Swap Determination Period, a percentage
equal to the sum of (i) the Fixed Rate Spread for such Swap Determination
Period multiplied by the Fixed Rate Ratio for such Swap Determination Period;
(ii) the Variable Rate Spread for such Swap Determination Period multiplied by
the Variable Rate Ratio for such Swap Determination Period and (iii) the
Flexible Spread for such Swap Determination Period multiplied by the Flexible
Ratio for such Swap Determination Period.

Current Issuer means Granite Mortgages 03-1 plc.

Exchange Rate means:  For the Series 1 Notes:  GBP1.00: USD 1.6164
                      For the Series 2 Notes:  GBP1.00:  EUR 1.5176

Fixed Rate Mortgage Loans means those Mortgage Loans within the Mortgage
Portfolio from time to time which are subject to fixed rates of interest set
by reference to a pre-determined interest rate or series of interest rates for
a fixed period or periods or are subject to a maximum rate of interest (and
charge interest at the lesser of a variable rate and such maximum rate) for a
fixed period or periods (and shall, for the avoidance of doubt, exclude
Variable Rate Mortgage Loans and Flexible Mortgage Loans save for Flexible
Mortgage Loans which are, at the relevant time, subject to such fixed rates of
interest or such maximum rates of interest arrangements and shall also exclude
any Fixed Rate Mortgage Loans which have become Re-Fixed Mortgage Loans since
the immediately preceding Payment Date).

Fixed Rate Ratio means, in respect of a Swap Determination Period, the Average
Fixed Rate Mortgage Loan Balance divided by the Average Mortgage Loan Balance.

Fixed Rate Spread means 0.00% per annum or such other percentage amount as
Party A may notify to Party B and the Note Trustee in writing from time to
time in accordance with paragraph 5 of this Confirmation.

Flexible Mortgage Loans means those Mortgage Loans within the Mortgage
Portfolio that typically incorporate features that give the borrower options
(which may be subject to certain conditions) to, among other things, make
further drawings on the mortgage loan account, and/or to overpay or underpay
interest and principal in a given month and/or to take a payment holiday (and
shall, for the avoidance of doubt, exclude: (i) Flexible Mortgage Loans which
are, at the relevant time, subject to fixed rates of interest set by reference
to a pre-determined interest rate or series of interest rates for a fixed
period or are subject to a maximum rate of interest (and charge interest at
the lesser of a variable rate and such maximum rate) for a fixed period or
periods (which shall, for such fixed period, constitute Fixed Mortgage Loans);
and (ii) Variable Rate Mortgage Loans ).

Flexible Ratio means, in respect of a Swap Determination Period, the Average
Flexible Mortgage Loan Balance divided by the Average Mortgage Loan Balance.

Flexible Spread means 1.55% per annum or such other percentage amount as Party
A may notify to Party B and the Note Trustee in writing from time to time in
accordance with paragraph 5 of this Confirmation.

                                      3
<PAGE>

Flexible Swap Rate means, in respect of a Swap Determination Period, a rate of
interest equal to the Variable Rate Swap SVR for such Swap Determination
Period minus the weighted average of the discounts charged to borrowers of
Flexible Mortgage Loans as at the start of business on the first day of such
Swap Determination Period (the weighted average being calculated by reference
to the then outstanding current balances of such Flexible Mortgage Loans as at
that date), as determined by the Cash Manager in accordance with the
provisions of the Cash Management Agreement.

Funding means Granite Finance Funding Limited.

Interest Period means in relation to the Current Issuer Notes a period from
(and including) a Payment Date (or in respect of the first Interest Period,
the Closing Date) to (but excluding) the next following (or first) Payment
Date.

Issuer Amount means, in respect of a Swap Determination Period, an amount in
Sterling equal to the amount produced by applying the Blended Rate for the
Swap Determination Period to the Notional Amount, such amount to be calculated
by the Calculation Agent on the basis of the actual number of days in such
Swap Determination Period, divided by 365.

Monthly Calculation Date means the twentieth day of each calendar month or, if
such day is not a Business Day, the next succeeding Business Day.

Monthly Calculation Period means, in respect of any Swap Provider Amount
and/or any Issuer Amount, the period from (and including) the Closing Date to
(but excluding) the next following Monthly Calculation Date and thereafter
from (and including) one Monthly Calculation Date to (but excluding) the next
Monthly Calculation Date.

Mortgage Portfolio has the meaning given to such term in the Master
Definitions Schedule.

Notes means the Current Issuer Notes.

Notional Amount means in respect of any Swap Determination Period an amount in
Sterling equal to (a) the aggregate Principal Amount Outstanding of the Notes
(converted to GBP at the applicable Exchange Rate in the case of Notes
denominated in USD or in EUR) on the Payment Date occurring in the Swap
Determination Period (or, if none, on the Payment Date immediately preceding
such Swap Determination Period), or in respect of the Swap Determination
Periods ending in the first Interest Period, the aggregate Principal Amount
Outstanding of the Notes on the Closing Date (converted into GBP at the
applicable Exchange Rate in the case of Notes denominated in USD or EUR) minus
(b) the balance of the Principal Deficiency Ledger on such Payment Date as
determined after taking account of any changes made on such date to the
balance of the Principal Deficiency Ledger (converted to GDP at the applicable
Exchange Rate in the case of the Principal Deficiency Ledger entries in USD or
in EUR) minus (c) the aggregate outstanding principal balance on such Payment
Date of any Fixed Rate Mortgage Loans which have become Re-Fixed Mortgage
Loans since such Payment Date.

                                      4
<PAGE>

Payment Date means the twentieth day of January, April, July and October in
each year or, if such day is not a Business Day, the next succeeding Business
Day, beginning in April 2003.

Principal Deficiency Ledger means the Issuer Principal Deficiency Ledger of
such name maintained for the Current Issuer by the Cash Manager pursuant to
the Current Issuer Cash Management Agreement.

Reference Lenders means Abbey National plc, Alliance & Leicester plc, Woolwich
plc, HBOS plc, Lloyds TSB Bank plc, National Westminster Bank Plc and Bradford
and Bingley plc (or their respective successors) and such additional or
replacement residential mortgage lenders as shall be determined by the
Calculation Agent and Reference Lender means any one of them.

Swap Determination Date means the first Business Day of any calendar month.

Swap Determination Period means the period from (and including) the Closing
Date to (but excluding) the first Swap Determination Date and thereafter from
(and including) one Swap Determination Date to (but excluding) the next Swap
Determination Date.

Swap Provider Amount means, in respect of a Swap Determination Period, an
amount in Sterling which is equal to the amount produced by applying a rate
equal to the Three Month LIBOR applicable to the Interest Period in which such
Swap Determination Period ends plus the Blended Spread for the Swap
Determination Period to the Notional Amount, such amount to be calculated by
the Calculation Agent on the basis of the actual number of days in the Monthly
Calculation Period in which such Swap Determination Period ends, divided by
365.

Three Month LIBOR means, in respect of an Interest Period, the London
Interbank Offered Rate for three-month Sterling deposits for such Interest
Period (as determined by the Agent Bank in accordance with Condition 4 of the
Current Issuer Notes and notified to the parties on the Payment Date on which
the relevant Interest Period began); provided however that for the first
Interest Period such rate shall be interpolated as set forth in Condition 4.

Variable Rate Mortgage Loans means those Mortgage Loans within the Mortgage
Portfolio from time to time which are subject to a rate of interest which at
any time may be varied in accordance with the relevant Mortgage Conditions
(and shall, for the avoidance of doubt, exclude Fixed Rate Mortgage Loans and
Flexible Mortgage Loans).

Variable Rate Ratio means, in respect of a Swap Determination Period, the
Average Variable Rate Mortgage Loan Balance divided by the Average Mortgage
Loan Balance.

Variable Rate Spread means 1.75% per annum or such other percentage amount as
Party A may notify to Party B and the Note Trustee in writing from time to
time in accordance with paragraph 5 of this Confirmation.

                                      5
<PAGE>

Variable Rate Swap SVR means, in respect of a Swap Determination Period, the
rate equal to the average of the standard variable rates or their equivalent
charged to existing borrowers on residential mortgage loans as published from
time to time as at the start of business on the first day of such Swap
Determination Period after excluding the highest and lowest rate, of the
Reference Lenders, as determined by the Cash Manager in good faith and
notified to the Calculation Agent from time to time in accordance with the
Cash Management Agreement.

Weighted Average Fixed Rate means, in respect of a Swap Determination Period,
the rate equal to the weighted average of the fixed rates of interest charged
to borrowers of Fixed Rate Mortgage Loans as at the start of business on the
first day of such Swap Determination Period (the weighted average being
calculated by reference to the then outstanding current balances of such Fixed
Rate Mortgage Loans as at that date) as notified by the Cash Manager to the
Calculation Agent in accordance with the provisions of the Cash Management
Agreement.

1.   This Confirmation supplements, forms part of, and is subject to, the
     Agreement. All provisions contained in the Agreement govern this
     Confirmation except as expressly modified below.

2.   The terms of the Transaction to which this Confirmation relates are as
     follows:

<TABLE>
<CAPTION>
<S>                          <C>
     Party A:                Northern Rock plc

     Party B:                Granite Mortgages 03-1 plc

     Trade Date:             22 January 2003

     Effective Date:         27 January 2003

     Termination Date:       The earlier of (i) the Payment Date falling in January 2043
                             and (ii) the date on which the outstanding principal balance
                             of the Notes is reduced to zero.

     Business Day centers
     for all Payments:       London

     Calculation of
     Amounts:                On the Swap Determination Date immediately preceding each
                             Payment Date, the Calculation Agent shall calculate the
                             Aggregate Swap Provider Amount for such Payment Date and the
                             Aggregate Issuer Amount for such Payment Date, and forthwith
                             notify Party A, Party B, the Cash Manager and the Current
                             Issuer Cash Manager of the amounts so determined and of the
                             net amount determined as set out below.

                                            6
<PAGE>

                             Notwithstanding any other provision of this Confirmation, if
                             on any date (i) additional Mortgage Loans are added to the
                             Mortgage Portfolio or (ii) Funding draws down a new
                             intercompany loan (any such date, a "New Loan Date"), then
                             the Calculation Agent may make any adjustments it deems
                             appropriate to the Average Fixed Rate Mortgage Loan Balance,
                             the Average Flexible Mortgage Loan Balance, the Average
                             Variable Rate Mortgage Loan Balance and the Weighted Average
                             Fixed Rate for the Swap Determination Period in which such
                             New Loan Date occurs in order to reflect the addition of such
                             Mortgage Loans.

     Payments:               If in relation to any Payment Date:

                             (i)    the Aggregate Swap Provider Amount for such Payment
                                    Date exceeds the Aggregate Issuer Amount for such
                                    Payment Date, Party A shall pay the amount of such
                                    excess to Party B on such Payment Date;

                             (ii)   the Aggregate Issuer Amount for such Payment Date
                                    exceeds the Aggregate Swap Provider Amount for such
                                    Payment Date, Party B shall pay the amount of such
                                    excess to Party A on such Payment Date;

                             (iii)  the Aggregate Swap Provider Amount for such Payment
                                    Date is equal to the Aggregate Issuer Amount for
                                    such Payment Date, no amount shall be due and payable
                                    by either party hereunder in relation to such
                                    Payment Date.

     Calculation Agent:      Northern Rock plc acting in its capacity of Administrator
                             pursuant to the Administration Agreement or of Cash Manager
                             pursuant to the Cash Management Agreement, as the case may
                             be.
</TABLE>

3.  Account Details:

    Payments to Party A:     Bank:             Northern Rock plc
                             Account Name:     Northern Rock Group
                                               Treasury
                             Sort Code:        30-00-59
                             Reference:        Granite Mortgages 03-1 plc

                                            7
<PAGE>

    Payments to Party B:     Bank:             Citibank N.A.
                             Account Name:     Granite Mortgages 03-1 plc
                             Account Number:   10131598
                             Sort Code:        18-50-08
                             Reference:        Northern Rock plc

4.  Notice Details:

    Party A:                 Northern Rock plc

    Address:                 Northern Rock House
                             Gosforth
                             Newcastle upon Tyne
                             NE3 4PL

    Facsimile Number:        0191-279-4694

    Attention:               Treasury Settlements Manager

    Party B:                 Granite Mortgages 03-1 plc

    Address:                 Fifth Floor
                             100 Wood Street
                             London
                             EC2V 7EX

    With a copy to:          Northern Rock plc
                             Northern Rock House
                             Gosforth
                             Newcastle upon Tyne
                             NE3 4PL

    Facsimile Number:        0191-279-4694

    Attention:               Keith M. Currie

    With a copy to the
    Note Trustee:            The Bank of New York

    Address:                 One Canada Square
                             48th Floor
                             London
                             E14 5AL

    Facsimile Number:        0207 964 6262

    Attention:               Global Structured Finance
                             (Corporate Trust)

                                            8
<PAGE>

5.   Notwithstanding any other provision of this Confirmation, if on any date
     Funding draws down a new intercompany loan, then to reflect prevailing
     market conditions, provided the Rating Agencies have confirmed the then
     current ratings by the Rating Agencies of the existing Notes of any
     Issuer, Party A may, by notice in writing to Party B and to the Note
     Trustee on such date, make any adjustments it deems appropriate to the
     Fixed Rate Spread, the Floating Rate Spread and the Variable Rate Spread
     (or any of them) for the Swap Determination Period in which such date
     occurs and for all Swap Determination Periods occurring after such date.

                                      9
<PAGE>

Yours faithfully,

NORTHERN ROCK PLC

By:

Name:

Title:

Confirmed as of the date first written:

GRANITE MORTGAGES 03-1 PLC

By:

Name:

Title:

THE BANK OF NEW YORK
  as Note Trustee

By:

Name:

Title:

                                      10

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