Document:

<PAGE>

                                                                    Exhibit 10.3

                                                    Note Number:________________

                             Note Purchase Agreement

         The undersigned hereby agrees to purchase, at par, $ _______________ in
aggregate principal amount of the following securities (the "Securities") of The
Thaxton Group, Inc. (the "Company") offered pursuant to the Prospectus dated
_________ __, 2002 (as the same may be amended, modified or supplemented, the
"Prospectus"), receipt of which is hereby acknowledged:

Security:  ________________________________________

Term:    __________________________________________

Interest Rate:  ____________________________________

Registration Code:  ________________________________

The name(s) and address in which the Securities being purchased by the
undersigned are to be registered are as follows (all persons so named must
execute this Note Purchase Agreement):

____________________________________

____________________________________      Social Security or
                                          Employer I.D. No.  ___________________
____________________________________

____________________________________      Telephone Number  ____________________

Each of the undersigned hereby agrees that all Securities purchased hereby are
subject to all the terms and conditions including, without limitation,
subordination of the indebtedness evidenced thereby, as set forth in the
Prospectus, and the Indenture, dated as of February 17, 1998, between the
Company and The Bank of New York, as Trustee, as supplemented by the Board
Resolutions of the Company dated ________, 2002.

<PAGE>

================================================================================

THIS SECURITY IS NOT A SAVINGS ACCOUNT OR AN OBLIGATION OF AN INSURED DEPOSITORY
INSTITUTION AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
(FDIC).

================================================================================

By executing this Note Purchase Agreement, I (we), under penalty of perjury,
certify that: (1) the number shown on this form is my (our) correct taxpayer
identification number (T.I.N.) and (2) I (we) am (are) not subject to backup
withholding either because (a) I (we) am (are) exempt from backup withholding,
(b) I (we) have not been notified by the Internal Revenue Service that I (we) am
(are) subject to backup withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified me (us) that I (we) am (are)
no longer subject to backup withholding. (If you have been notified by the IRS
that you are subject to backup withholding, delete the language in (2) above.)

INTEREST ELECTION FOR 6, 12, 36 and 60 MONTH TERM NOTES (CHECK ONE)

1.  MONTHLY CHECK          _____              x_________________________________
2.  QUARTERLY CHECK        _____
3.  PAID AT MATURITY       _____              x_________________________________

                                              (This Note Purchase Agreement
                                              must be executed by all persons
                                              whose names appear on the
                                              Securities purchased hereby.)

                                              Date:_____________________________

Approval by Officer of                        Please note that if you have
The Thaxton Group, Inc.                       purchased a 1, 6, 12, 36 or 60
                                              month note, it will automatically
                                              renew as provided in the
_____________________________________         Prospectus and the note form
                                              unless you notify us that you
                                              desire to redeem the note.

Title________________________________

                                       2

<PAGE>

__________________________________

Title_____________________________

                                       3<PAGE>

                                                                    Exhibit 10.4

            [Form of Renewal Notice for Subordinated One Month Notes]

The Thaxton Group                                                         [Date]
1524 Pageland Highway                                Note No.             [####]
Lancaster, SC  29720                                 Maturity Value      $
                                                     Maturity Date        [Date]
                                                     New Maturity Date    [Date]

We are pleased to advise you that your subordinated note listed above will renew
at ____% per annum IF YOU DO NOT REDEEM IT WITHIN TEN DAYS AFTER THE MATURITY
DATE. Please call us at 1-888-THAXTON IF YOU WISH TO REDEEM YOUR NOTE, if you
would like to receive a copy of the prospectus or if you have any questions.

Thank you.

                  [Name of holder]
                  [Address of holder]<PAGE>

                                                                    Exhibit 10.5

     [Form of Renewal Notice for Subordinated 6, 12, 36 and 60 Month Notes]

The Thaxton Group                                                         [Date]
1524 Pageland Highway                                Note No.             [####]
Lancaster, SC  29720                                 Maturity Value       $
                                                     Maturity Date        [Date]
                                                     New Maturity Date    [Date]

We are pleased to advise you that your subordinated note listed above will renew
at ____% per annum IF YOU DO NOT REDEEM IT BY THE MATURITY DATE. Please call us
at 1-888-THAXTON IF YOU WISH TO REDEEM YOUR NOTE, if you would like to receive a
copy of the prospectus or if you have any questions.

Thank you.

                  [Name of holder]
                  [Address of holder]EXHIBIT 4.1

                              DATED NOVEMBER, 2002

                             HOLMES FUNDING LIMITED
                                   ("FUNDING")

                          HOLMES FINANCING (NO. 6) PLC
                              (the "SIXTH ISSUER")

                       JPMORGAN CHASE BANK, LONDON BRANCH
                            (the "SECURITY TRUSTEE")

                       JPMORGAN CHASE BANK, LONDON BRANCH
                               (the "AGENT BANK")

            --------------------------------------------------------
                                LOAN CONFIRMATION
                    SIXTH ISSUER INTERCOMPANY LOAN AGREEMENT
            ---------------------------------------------------------

                                  ALLEN & OVERY
                                     London

<PAGE>

                                    CONTENTS

CLAUSE                                                                      PAGE

1.    Interpretation.........................................................  1
2.    Intercompany Loan Terms and Conditions.................................  2
3.    The Sixth Issuer Term Advances.........................................  2
4.    Interest...............................................................  4
5.    Repayment..............................................................  6
6.    Certain Fees, Etc...................................................... 11
7.    Application of Certain Provisions...................................... 13
8.    Declaration of Trust................................................... 13
9.    Addresses.............................................................. 14

SCHEDULE

1.    Conditions Precedent in Respect of Drawdown............................ 16

SIGNATORIES.................................................................. 19

<PAGE>

THIS AGREEMENT is dated ___ November, 2002

BETWEEN:

(1)     HOLMES FUNDING LIMITED (registered in England and Wales No. 3982428)
        whose registered office is at Abbey National House, 2 Triton Square,
        Regents Place, London NW1 3AN ("FUNDING");

(2)     HOLMES FINANCING (NO. 6) PLC (registered in England and Wales No.
        4359738) whose registered office is at Abbey National House, 2 Triton
        Square, Regents Place, London NW1 3AN (the "SIXTH ISSUER");

(3)     JPMORGAN CHASE BANK, LONDON BRANCH, formerly known as The Chase
        Manhattan Bank, London Branch whose offices are at Trinity Tower, 9
        Thomas More Street, London E1W 1YT (the "SECURITY TRUSTEE" which
        expression shall include such person and all other persons for the time
        being acting as the security trustee or trustees pursuant to the Funding
        Deed of Charge); and

(4)     JPMORGAN CHASE BANK, LONDON BRANCH, formerly known as The Chase
        Manhattan Bank, London Branch whose offices are at Trinity Tower, 9
        Thomas More Street, London E1W 1YT (the "AGENT BANK" which expression
        shall include such person and all other persons for the time being
        acting as the agent bank pursuant to the Sixth Issuer Paying Agent and
        Agent Bank Agreement).

IT IS AGREED as follows:

1.      INTERPRETATION

1.1     The Amended and Restated Master Definitions and Construction Schedule
        signed for the purposes of identification by Allen & Overy and Slaughter
        and May on ___ November, 2002 (and as the same may be further amended,
        varied or supplemented from time to time with the consent of the parties
        hereto) and the Sixth Issuer Master Definitions and Construction
        Schedule signed for the purposes of identification by Allen & Overy and
        Slaughter and May on ___ November, 2002 are expressly and specifically
        incorporated into this Agreement and, accordingly, the expressions
        defined in the Amended and Restated Master Definitions and Construction
        Schedule and/or the Sixth Issuer Master Definitions and Construction
        Schedule (as so amended, varied or supplemented) shall, except where the
        context otherwise requires and save where otherwise defined herein, have
        the same meanings in this Agreement, including the Recitals hereto and
        this Agreement shall be construed in accordance with the interpretation
        provisions set out in CLAUSE 2 of the Amended and Restated Master
        Definitions and Construction Schedule and CLAUSE 2 of the Sixth Issuer
        Master Definitions and Construction Schedule. In the event of a conflict
        between the Amended and Restated Master Definitions and Construction
        Schedule and the Sixth Issuer Master Definitions and Construction
        Schedule, the Sixth Issuer Master Definitions and Construction Schedule
        shall prevail.

1.2     Unless the context otherwise requires, references in the Intercompany
        Loan Term and Conditions to:

        "Closing Date" means the ___ November, 2002;
        "Intercompany Loan" means the Sixth Issuer Intercompany Loan;
        "Intercompany Loan Agreement" means the Sixth Issuer Intercompany Loan
        Agreement;
        "Intercompany Loan Confirmation" means the Sixth Issuer Intercompany
        Loan Confirmation;

<PAGE>

                                       2

        "Issuer" means the Sixth Issuer;
        "Issuer Transaction Account" means the Sixth Issuer Sterling Account;
        "Liquidity Facility Agreement" means the Sixth Issuer Liquidity Facility
        Agreement;
        "Notes" means the Sixth Issuer Notes; and
        "Sixth Issuer Term Advances" has the meaning given in the Sixth Issuer
        Master Definitions and Construction Schedule.

2.      INTERCOMPANY LOAN TERMS AND CONDITIONS

        Each of the parties to this Agreement agree that the Intercompany Loan
        Terms and Conditions signed by Funding and the Security Trustee for the
        purposes of identification on 26th July, 2000, as amended by the
        Amendment Agreement to the Intercompany Loan Terms and Conditions made
        between Funding, Holmes Financing (No. 1) PLC, the Security Trustee and
        the Agent Bank on 29th November, 2000 and the Second Amendment Agreement
        to the Intercompany Loan Terms and Conditions made between Funding,
        Holmes Financing (No.1) PLC, Holmes Financing (No.2) PLC, Holmes
        Financing (No.3) PLC, the Security Trustee and the Agent Bank on 5th
        July 2001, and the provisions set out therein shall form part of this
        Agreement and shall be binding on the parties to this Agreement as if
        they had expressly been set out herein. References in this Agreement to
        "THIS AGREEMENT" shall be construed accordingly.

3.      THE SIXTH ISSUER TERM ADVANCES

3.1     SIXTH ISSUER TERM AAA ADVANCES

        On and subject to the terms of this Agreement, the Sixth Issuer grants
        to Funding a term loan which consists of the following sub loans:

        (a)     the series 1 term AAA advance in the maximum aggregate principal
                amount of (pound)[638,000,000] (the "SIXTH ISSUER SERIES 1 TERM
                AAA ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 1 Class A Sixth Issuer Notes;

        (b)     the series 2 term AAA advance in the maximum aggregate principal
                amount of (pound)[798,000,000] (the "SIXTH ISSUER SERIES 2 TERM
                AAA ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 2 Class A Sixth Issuer Notes;

        (c)     the series 3 term AAA advance in the maximum aggregate principal
                amount of (pound)[752,000,000] (the "SIXTH ISSUER SERIES 3 TERM
                AAA ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 3 Class A Sixth Issuer Notes;

        (d)     the series 4A1 term AAA advance in the maximum aggregate
                principal amount of (pound)[479,000,000] (the "SIXTH ISSUER
                SERIES 4A1 TERM AAA ADVANCE") and which corresponds to the
                principal amount upon issue of the Series 4 Class A1 Sixth
                Issuer Notes;

        (e)     the series 4A2 term AAA advance in the maximum aggregate
                principal amount of (pound)[299,000,000] (the "SIXTH ISSUER
                SERIES 4A2 TERM AAA ADVANCE") and which corresponds to the
                principal amount upon issue of the Series 4 Class A2 Sixth
                Issuer Notes; and

<PAGE>
                                       3

        (f)     the series 5 term AAA advance in the maximum aggregate principal
                amount of (pound)[750,000,000] (the "SIXTH ISSUER SERIES 5 TERM
                AAA ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 5 Class A Sixth Issuer Notes,

        and together the Sixth Issuer Series 1 Term AAA Advance, the Sixth
        Issuer Series 2 Term AAA Advance, the Sixth Issuer Series 3 Term AAA
        Advance, the Sixth Issuer Series 4A1 Term AAA Advance, the Sixth Issuer
        Series 4A2 Term AAA Advance and the Sixth Issuer Series 5 Term AAA
        Advance are referred to herein as the "SIXTH ISSUER TERM AAA ADVANCES".

3.2     SIXTH ISSUER TERM AA ADVANCES

        On and subject to the terms of this Agreement, the Sixth Issuer grants
        to Funding a term loan which consists of the following sub loans:

        (a)     the series 1 term AA advance in the maximum aggregate principal
                amount of (pound)[21,000,000] (the "SIXTH ISSUER SERIES 1 TERM
                AA ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 1 Class B Sixth Issuer Notes;

        (b)     the series 2 term AA advance in the maximum aggregate principal
                amount of (pound)[26,000,000] (the "SIXTH ISSUER SERIES 2 TERM
                AA ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 2 Class B Sixth Issuer Notes;

        (c)     the series 3 term AA advance in the maximum aggregate principal
                amount of (pound)[25,000,000] (the "SIXTH ISSUER SERIES 3 TERM
                AA ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 3 Class B Sixth Issuer Notes;

        (d)     the series 4 term AA advance in the maximum aggregate principal
                amount of (pound)[26,000,000] (the "SIXTH ISSUER SERIES 4 TERM
                AA ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 4 Class B Sixth Issuer Notes; and

        (e)     the series 5 term AA advance in the maximum aggregate principal
                amount of (pound)[25,000,000] (the "SIXTH ISSUER SERIES 5 TERM
                AA ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 5 Class B Sixth Issuer Notes,

        and together the Sixth Issuer Series 1 Term AA Advance, the Sixth Issuer
        Series 2 Term AA Advance, the Sixth Issuer Series 3 Term AA Advance, the
        Sixth Issuer Series 4 Term AA Advance and the Sixth Issuer Series 5 Term
        AA Advance are referred to herein as the "SIXTH ISSUER TERM AA
        ADVANCES".

3.3     SIXTH ISSUER TERM BBB ADVANCES

        On and subject to the terms of this Agreement, the Sixth Issuer grants
        to Funding a term loan which consists of the following sub loans:

        (a)     the series 1 term BBB advance in the maximum aggregate principal
                amount of (pound)[36,000,000] (the "SIXTH ISSUER SERIES 1 TERM
                BBB ADVANCE") and which

<PAGE>
                                       4

                corresponds to the principal amount upon issue of the Series 1
                Class C Sixth Issuer Notes;

        (b)     the series 2 term BBB advance in the maximum aggregate principal
                amount of (pound)[45,000,000] (the "SIXTH ISSUER SERIES 2 TERM
                BBB ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 2 Class C Sixth Issuer Notes;

        (c)     the series 3 term BBB advance in the maximum aggregate principal
                amount of (pound)[43,000,000] (the "SIXTH ISSUER SERIES 3 TERM
                BBB ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 3 Class C Sixth Issuer Notes;

        (d)     the series 4 term BBB advance in the maximum aggregate principal
                amount of (pound)[44,000,000] (the "SIXTH ISSUER SERIES 4 TERM
                BBB ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 4 Class C Sixth Issuer Notes; and

        (e)     the series 5 term BBB advance in the maximum aggregate principal
                amount of (pound)[43,000,000] (the "SIXTH ISSUER SERIES 5 TERM
                BBB ADVANCE") and which corresponds to the principal amount upon
                issue of the Series 5 Class C Sixth Issuer Notes,

        and together the Sixth Issuer Series 1 Term BBB Advance, the Sixth
        Issuer Series 2 Term BBB Advance, the Sixth Issuer Series 3 Term BBB
        Advance, the Sixth Issuer Series 4 Term BBB Advance and the Sixth Issuer
        Series 5 Term BBB Advance are referred to herein as the "SIXTH ISSUER
        TERM BBB ADVANCES".

3.4     TERM ADVANCE RATING

        The Term Advance Rating in respect of the Sixth Issuer Term AAA Advances
        shall be AAA/AAA/Aaa, the Term Advance Rating in respect of the Sixth
        Issuer Term AA Advances shall be AA/AA/Aa3 and the Term Advance Rating
        in respect of the Sixth Issuer Term BBB Advances shall be BBB/BBB/Baa2.

3.5     CONDITIONS PRECEDENT

        Save as the Sixth Issuer and the Security Trustee may otherwise agree,
        the Sixth Issuer Term Advances will not be available for utilisation
        unless the Security Trustee has confirmed to Funding that it or its
        advisers have received all the information and documents listed in
        Schedule 1 in form and substance satisfactory to the Security Trustee
        and the Sixth Issuer has acceded to the Funding Deed of Charge pursuant
        to the Fifth Deed of Accession.

4.      INTEREST

4.1     RATE OF INTEREST TO FIRST INTEREST PAYMENT DATE

        On the Closing Date the Agent Bank will determine the "INITIAL RELEVANT
        SCREEN RATE" (as defined below) in respect of each Sixth Issuer Term
        Advance at or about 11.00 a.m. (London time) on that date. If the
        Initial Relevant Screen Rate is unavailable, the Agent Bank will request
        the principal London office of each of the Reference Banks to provide
        the Agent Bank with its offered quotations to leading banks for
        two-month and three-month sterling deposits of (pound)10,000,000, in the
        London inter-bank market as at or about 11.00 a.m. (London time) on

<PAGE>
                                       5

        such Closing Date. The Term Advance Rates of Interest for the first
        Interest Period shall be the aggregate of (1) the Relevant Margin and
        (2) the Initial Relevant Screen Rate or, if the Initial Relevant Screen
        Rate is unavailable, the linear interpolation of the arithmetic mean of
        such offered quotations for [two-month] sterling deposits and the
        arithmetic mean of such offered quotations for [three-month] sterling
        deposits (rounded upwards, if necessary, to five decimal places).

        "INITIAL RELEVANT SCREEN RATE" means the linear interpolation of the
        arithmetic mean of the offered quotations to leading banks for
        [two-month] sterling deposits and the arithmetic mean of the offered
        quotations to leading banks for [three-month] sterling deposits (rounded
        upwards if necessary to five decimal places) displayed on the
        Dow-Jones/Telerate monitor at Telerate page number 3750.

4.2     TERM ADVANCE RATES OF INTEREST

        The Term Advance Rate of Interest payable on each Term Advance shall be
        LIBOR for three month sterling deposits as determined in accordance with
        CLAUSE 6 of the Intercompany Loan Terms and Conditions plus a "RELEVANT
        MARGIN" which shall be:

(a)     in respect of the Sixth Issuer Series 1 Term AAA Advance, a margin of
        ___ per cent. per annum;

(b)     in respect of the Sixth Issuer Series 2 Term AAA Advance, a margin of
        ___ per cent. per annum;

(c)     in respect of the Sixth Issuer Series 3 Term AAA Advance, a margin of
        ___ per cent. per annum up to (and including) the Interest Period ending
        in [April 2008] and thereafter ___ per cent. per annum;

(d)     in respect of the Sixth Issuer Series 4A1 Term AAA Advance, a margin of
        ___ per cent. per annum up to (and including) the Interest Period ending
        in [April 2008] and thereafter ___ per cent. per annum;

(e)     in respect of the Sixth Issuer Series 4A2 Term AAA Advance, a margin of
        ___ per cent. per annum up to (and including) the Interest Period ending
        in [October 2007] and thereafter ___ per cent. per annum;

(f)     in respect of the Sixth Issuer Series 5 Term AAA Advance, a margin of
        ___ per cent. per annum up to (and including) the Interest Period ending
        in [April 2008] and thereafter ___ per cent. per annum;

(g)     in respect of the Sixth Issuer Series 1 Term AA Advance, a margin of ___
        per cent. per annum up to (and including) the Interest Period ending in
        [April 2008] and thereafter ___ per cent. per annum;

(h)     in respect of the Sixth Issuer Series 2 Term AA Advance, a margin of ___
        per cent. per annum up to (and including) the Interest Period ending in
        [April 2008] and thereafter ___ per cent. per annum;

(i)     in respect of the Sixth Issuer Series 3 Term AA Advance, a margin of ___
        per cent. per annum up to (and including) the Interest Period ending in
        [April 2008] and thereafter ___ per cent. per annum;

<PAGE>
                                       6

(j)     in respect of the Sixth Issuer Series 4 Term AA Advance, a margin of ___
        per cent. per annum up to (and including) the Interest Period ending in
        [April 2008] and thereafter ___ per cent. per annum;

(k)     in respect of the Sixth Issuer Series 5 Term AA Advance, a margin of ___
        per cent. per annum up to (and including) the Interest Period ending in
        [April 2008] and thereafter ___ per cent. per annum;

(l)     in respect of the Sixth Issuer Series 1 Term BBB Advance, a margin of
        ___ per cent. per annum up to (and including) the Interest Period ending
        in [April 2008] and thereafter ___ per cent. per annum;

(m)     in respect of the Sixth Issuer Series 2 Term BBB Advance, a margin of
        ___ per cent. per annum up to (and including) the Interest Period ending
        in [April 2008] and thereafter ___ per cent. per annum;

(n)     in respect of the Sixth Issuer Series 3 Term BBB Advance, a margin of
        ___ per cent. per annum up to (and including) the Interest Period ending
        in [April 2008] and thereafter ___ per cent. per annum;

(o)     in respect of the Sixth Issuer Series 4 Term BBB Advance, a margin of
        ___ per cent. per annum up to (and including) the Interest Period ending
        in [April 2008] and thereafter ___ per cent. per annum; and

(p)     in respect of the Sixth Issuer Series 5 Term BBB Advance, a margin of
        ___ per cent. per annum up to (and including) the Interest Period ending
        in [April 2008] and thereafter ___ per cent. per annum.

4.3     INTEREST PERIODS

        The first Interest Period shall commence on (and include) the Closing
        Date and end on (but exclude) the Interest Payment Date falling in
        [January 2003]. Each subsequent Interest Period shall commence on (and
        include) an Interest Payment Date and end on (but exclude) the following
        Interest Payment Date.

5.      REPAYMENT

5.1     REPAYMENT SUBJECT TO TERMS OF THE FUNDING DEED OF CHARGE

        The terms and provisions of this CLAUSE 5 are to be read subject to the
        provisions of Part II of Schedule 3 to the Funding Deed of Charge (as
        amended by the First Deed of Accession, the Second Deed of Accession,
        the Third Deed of Accession, the Fourth Deed of Accession and the Fifth
        Deed of Accession) and as the same may be further amended or varied from
        time to time in accordance with the terms of the Funding Deed of Charge.

5.2     REPAYMENT OF SIXTH ISSUER TERM AAA ADVANCES PRIOR TO A TRIGGER EVENT,
        ENFORCEMENT OF THE FUNDING SECURITY OR ENFORCEMENT OF THE SIXTH ISSUER
        SECURITY

        Prior to the occurrence of a Trigger Event, enforcement of the Funding
        Security or enforcement of the Sixth Issuer Security, Funding shall
        repay to the Sixth Issuer:

        (a)     the Sixth Issuer Series 1 Term AAA Advance pursuant to the Sixth
                Issuer Series 1 Term AAA Advance Repayment Schedule beginning on
                the Interest Payment Date

<PAGE>
                                       7

                falling in [July 2003] but if there are insufficient funds
                available to repay the Sixth Issuer Series 1 Term AAA Advance on
                theInterest Payment Date falling in [July 2003], then the
                shortfall shall be repaid on the subsequent Interest Payment
                Date falling in [October 2003] (together with any other amounts
                due on that Interest Payment Date on the Sixth Issuer Series 1
                Term AAA Advance) from Funding Available Principal Receipts
                until the Sixth Issuer Series 1 Term AAA Advance is fully
                repaid;

        (b)     the Sixth Issuer Series 2 Term AAA Advance on the Interest
                Payment Date falling in [April 2005] but if there are
                insufficient funds available to repay the Sixth Issuer Series 2
                Term AAA Advance on such Interest Payment Date, then the
                shortfall shall be repaid on subsequent Interest Payment Dates
                from Funding Available Principal Receipts until the Sixth Issuer
                Series 2 Term AAA Advance is fully repaid;

        (c)     the Sixth Issuer Series 3 Term AAA Advance on the Interest
                Payment Date falling in [April 2007] but if there are
                insufficient funds available to repay the Sixth Issuer Series 3
                Term AAA Advance on such Interest Payment Date, then the
                shortfall shall be repaid on subsequent Interest Payment Dates
                from Funding Available Principal Receipts until the Sixth Issuer
                Series 3 Term AAA Advance is fully repaid; and

        (d)     the Sixth Issuer Series 4 Term AAA Advances on the Interest
                Payment Date falling in [October 2007] but if there are
                insufficient funds available to repay the Sixth Issuer Series 4
                Term AAA Advances on such Interest Payment Date, then the
                shortfall shall be repaid on subsequent Interest Payment Dates
                from Funding Available Principal Receipts until the Sixth Issuer
                Series 4 Term AAA Advances are fully repaid.

5.3     REPAYMENT OF SIXTH ISSUER TERM AA ADVANCES PRIOR TO A TRIGGER EVENT, OR
        ENFORCEMENT OF THE FUNDING SECURITY OR ENFORCEMENT OF THE SIXTH ISSUER
        SECURITY

        (a)     Subject to CLAUSES 5.5 and 5.6 hereof, prior to the occurrence
                of a Trigger Event, enforcement of the Funding Security or
                enforcement of the Sixth Issuer Security, Funding shall repay to
                the Sixth Issuer:

                (i)     on each Interest Payment Date falling on or after the
                        Interest Payment Date on which the Sixth Issuer Series 1
                        Term AAA Advance is fully repaid, the Sixth Issuer
                        Series 1 Term AA Advance to the extent of Funding
                        Available Principal Receipts until the Sixth Issuer
                        Series 1 Term AA Advance is fully repaid;

                (ii)    on each Interest Payment Date falling on or after the
                        Interest Payment Date on which the Sixth Issuer Series 2
                        Term AAA Advance is fully repaid, the Sixth Issuer
                        Series 2 Term AA Advance to the extent of Funding
                        Available Principal Receipts until the Sixth Issuer
                        Series 2 Term AA Advance is fully repaid;

                (iii)   on each Interest Payment Date falling on or after the
                        Interest Payment Date on which the Sixth Issuer Series 3
                        Term AAA Advance is fully repaid, the Sixth Issuer
                        Series 3 Term AA Advance to the extent of Funding
                        Available Principal Receipts until the Sixth Issuer
                        Series 3 Term AA Advance is fully repaid;

                (iv)    on each Interest Payment Date falling on or after the
                        Interest Payment Date on which the Sixth Issuer Series 4
                        Term AAA Advances are fully repaid, the

<PAGE>
                                       8

                        Sixth Issuer Series 4 Term AA Advance to the extent of
                        Funding Available Principal Receipts until the Sixth
                        Issuer Series 4 Term AA Advance is fully repaid; and

                (v)     on each Interest Payment Date falling on or after the
                        Interest Payment Date on which the Sixth Issuer Series 5
                        Term AAA Advance is fully repaid, the Sixth Issuer
                        Series 5 Term AA Advance to the extent of Funding
                        Available Principal Receipts until the Sixth Issuer
                        Series 5 Term AA Advance is fully repaid.

        (b)     If on any Interest Payment Date amounts are due and payable
                under a Sixth Issuer Term AA Advance when amounts are also due
                and payable under a Sixth Issuer Term AAA Advance, then Funding
                shall apply Funding Available Principal Receipts to repay the
                Sixth Issuer Term AAA Advance in priority to any amounts due
                under any Sixth Issuer Term AA Advance.

        (c)     If on any Interest Payment Date amounts are due and payable
                under more than one Sixth Issuer Term AA Advance, then Funding
                shall apply Funding Available Principal Receipts to repay the
                Sixth Issuer Term AA Advances pro rata according to the
                respective amounts thereof.

5.4     REPAYMENT OF SIXTH ISSUER TERM BBB ADVANCES PRIOR TO A TRIGGER EVENT,
        ENFORCEMENT OF THE FUNDING SECURITY OR ENFORCEMENT OF THE SIXTH ISSUER
        SECURITY

        (a)     Subject to CLAUSES 5.5 and 5.6 hereof, prior to the occurrence
                of a Trigger Event, enforcement of the Funding Security or
                enforcement of the Sixth Issuer Security, Funding shall repay to
                the Sixth Issuer:

                (i)     on each Interest Payment Date falling on or after the
                        Interest Payment Date on which the Sixth Issuer Series 1
                        Term AA Advance is fully repaid, the Sixth Issuer Series
                        1 Term BBB Advance to the extent of Funding Available
                        Principal Receipts until the Sixth Issuer Series 1 Term
                        BBB Advance is fully repaid;

                (ii)    on each Interest Payment Date falling on or after the
                        Interest Payment Date on which the Sixth Issuer Series 2
                        Term AA Advance is fully repaid, the Sixth Issuer Series
                        2 Term BBB Advance to the extent of Funding Available
                        Principal Receipts until the Sixth Issuer Series 2 Term
                        BBB Advance is fully repaid;

                (iii)   on each Interest Payment Date falling on or after the
                        Interest Payment Date on which the Sixth Issuer Series 3
                        Term AA Advance is fully repaid, the Sixth Issuer Series
                        3 Term BBB Advance to the extent of Funding Available
                        Principal Receipts until the Sixth Issuer Series 3 Term
                        BBB Advance is fully repaid; (iv) on each Interest
                        Payment Date falling on or after the Interest Payment
                        Date on which the Sixth Issuer Series 4 Term AA Advance
                        is fully repaid, the Sixth Issuer Series 4 Term BBB
                        Advance to the extent of Funding Available Principal
                        Receipts until the Sixth Issuer Series 4 Term BBB
                        Advance is fully repaid; and

                (v)     on each Interest Payment Date falling on or after the
                        Interest Payment Date on which the Sixth Issuer Series 5
                        Term AA Advance is fully repaid, the

<PAGE>
                                       9

                        Sixth Issuer Series 5 Term BBB Advance to the extent of
                        Funding Available Principal Receipts until the Sixth
                        Issuer Series 5 Term BBB Advance is fully repaid.

        (b)     If on any Interest Payment Date amounts are due and payable
                under a Sixth Issuer Term BBB Advance when amounts are also due
                and payable under a Sixth Issuer Term AAA Advance and/or a Sixth
                Issuer Term AA Advance, then Funding shall apply Funding
                Available Principal Receipts to repay the Sixth Issuer Term AAA
                Advance and/or the Sixth Issuer Term AA Advance in priority to
                any amounts due under any Sixth Issuer Term BBB Advance.

        (c)     If on any Interest Payment Date amounts are due and payable
                under more than one Term BBB Advance, then Funding shall apply
                Funding Available Principal Receipts to repay the Term BBB
                Advances pro rata according to the respective amounts thereof.

5.5     DEFERRAL OF REPAYMENTS ON THE SIXTH ISSUER TERM AA ADVANCES AND THE
        SIXTH ISSUER TERM BBB ADVANCES FOLLOWING A PRINCIPAL DEFICIENCY

        Prior to the occurrence of a Trigger Event, enforcement of the Funding
        Security or enforcement of the Sixth Issuer Security, principal
        repayments on the Sixth Issuer Term BBB Advances and the Sixth Issuer
        Term AA Advances will be deferred in the circumstances set out in
        paragraph 2 of PART II of SCHEDULE 3 to the Funding Deed of Charge.

5.6     REPAYMENT OF SIXTH ISSUER TERM ADVANCES AFTER THE OCCURRENCE OF A
        NON-ASSET TRIGGER EVENT BUT PRIOR TO ENFORCEMENT OF THE FUNDING SECURITY
        OR THE SIXTH ISSUER SECURITY

        On and from the Interest Payment Date following the occurrence of a
        Non-Asset Trigger Event but prior to enforcement of the Funding Security
        or enforcement of the Sixth Issuer Security, Funding shall repay the
        Sixth Issuer Term Advances on each Interest Payment Date from Funding
        Available Principal Receipts in the manner set out in PART II of
        SCHEDULE 3 to the Funding Deed of Charge.

5.7     REPAYMENT OF Sixth ISSUER TERM ADVANCES AFTER THE OCCURRENCE OF AN ASSET
        TRIGGER EVENT BUT PRIOR TO ENFORCEMENT OF THE FUNDING SECURITY OR
        ENFORCEMENT OF THE SIXTH ISSUER SECURITY

        Following the occurrence of an Asset Trigger Event but prior to
        enforcement of the Funding Security or enforcement of the Sixth Issuer
        Security, Funding shall repay the Sixth Issuer Term Advances on each
        Interest Payment Date from Funding Available Principal Receipts in the
        manner set out in PART II of SCHEDULE 3 to the Funding Deed of Charge.

5.8     REPAYMENT OF SIXTH ISSUER TERM ADVANCES FOLLOWING ENFORCEMENT OF THE
        SIXTH ISSUER SECURITY BUT PRIOR TO ENFORCEMENT OF THE FUNDING SECURITY

        Following the enforcement of the Sixth Issuer Security pursuant to the
        terms of the Sixth Issuer Deed of Charge but prior to enforcement of the
        Funding Security, Funding shall apply Funding Available Principal
        Receipts on each Interest Payment Date as follows:

        (a)     firstly, pro rata and pari passu according to the respective
                amounts outstanding thereof, the Sixth Issuer Series 1 Term AAA
                Advance, the Sixth Issuer Series 2 Term AAA Advance, the Sixth
                Issuer Series 3 Term AAA Advance, the Sixth Issuer Series

<PAGE>
                                       10

                4 Term AAA Advances and the Sixth Issuer Series 5 Term AAA
                Advance until all such Sixth Issuer Term AAA Advances are fully
                repaid;

        (b)     secondly, pro rata and pari passu according to the respective
                amounts outstanding thereof, the Sixth Issuer Series 1 Term AA
                Advance, the Sixth Issuer Series 2 Term AA Advance, the Sixth
                Issuer Series 3 Term AA Advance, the Sixth Issuer Series 4 Term
                AA Advance and the Sixth Issuer Series 5 Term AA Advance until
                all such Sixth Issuer Term AA Advances are fully repaid; and

        (c)     thirdly, pro rata and pari passu according to the respective
                amounts outstanding thereof, the Sixth Issuer Series 1 Term BBB
                Advance, the Sixth Issuer Series 2 Term BBB Advance, the Sixth
                Issuer Series 3 Term BBB Advance, the Sixth Issuer Series 4 Term
                BBB Advance and the Sixth Issuer Series 5 Term BBB Advance until
                all such Sixth Issuer Term BBB Advances are fully repaid.

5.9     REPAYMENT FOLLOWING ENFORCEMENT OF THE FUNDING SECURITY

        Following the enforcement of the Funding Security pursuant to the terms
        of the Funding Deed of Charge, the Sixth Issuer Intercompany Loan shall
        be repaid in the manner described in PART III of SCHEDULE 3 to the
        Funding Deed of Charge (as the same shall be amended from time to time).

5.10    BULLET TERM ADVANCE AND SCHEDULED AMORTISATION TERM ADVANCES DEEMED TO
        BE PASS THROUGH TERM ADVANCES

(a)     Subject to the terms of PART II of SCHEDULE 3 to the Funding Deed of
        Charge, if a Trigger Event occurs, the Sixth Issuer Security is enforced
        or the Funding Security is enforced, then monies (if any) accumulating
        for the Sixth Issuer Series 1 Term AAA Advance, the Sixth Issuer Series
        2 Term AAA Advance, the Sixth Issuer Series 3 Term AAA Advance or the
        Sixth Issuer Series 4 Term AAA Advances will be available, on and from
        the date of the relevant occurrence, for application in accordance with
        CLAUSES 5.6, 5.7, 5.8 or 5.9 hereof (as applicable) (and for the
        avoidance of doubt, will not be available solely for repayment of the
        Sixth Issuer Series 1 Term AAA Advance and/or the Sixth Issuer Series 2
        Term AAA Advance and/or the Sixth Issuer Series 3 Term AAA Advance
        and/or the Sixth Issuer Series 4 Term AAA Advances, as applicable,
        subject to the terms of PART II of SCHEDULE 3 to the Funding Deed of
        Charge).

(b)     Subject to the terms of PART II of SCHEDULE 3 to the Funding Deed of
        Charge, if a Trigger Event occurs, the Funding Security is enforced or
        the Sixth Issuer Security is enforced, then (i) the Scheduled Repayment
        Dates of the Sixth Issuer Series 1 Term AAA Advance, the Sixth Issuer
        Series 2 Term AAA Advance, the Sixth Issuer Series 3 Term AAA Advance
        and the Sixth Issuer Series 4 Term AAA Advances will cease to apply and
        (ii) the Sixth Issuer Series 1 Term AAA Advance, the Sixth Issuer Series
        2 Term AAA Advance, the Sixth Issuer Series 3 Term AAA Advance and the
        Sixth Issuer Series 4 Term AAA Advances shall be deemed to be Payable
        Pass Through Term Advances.

5.11    ACKNOWLEDGEMENT OF FIRST ISSUER INTERCOMPANY LOAN, SECOND ISSUER
        INTERCOMPANY LOAN, THIRD ISSUER INTERCOMPANY LOAN, FOURTH INTERCOMPANY
        LOAN AND FIFTH ISSUER INTERCOMPANY LOAN

        The Sixth Issuer hereby acknowledges and agrees that Funding has entered
        into an intercompany loan agreement with Holmes Financing (No. 1) PLC
        (the "FIRST ISSUER") dated 26th July, 2000 (the "FIRST ISSUER
        INTERCOMPANY LOAN AGREEMENT"), an intercompany loan

<PAGE>
                                       11

        agreement with Holmes Financing (No. 2) PLC (the "SECOND ISSUER") dated
        29th November, 2000 (the "SECOND ISSUER INTERCOMPANY LOAN AGREEMENT"),
        an intercompany loan agreement with Holmes Financing (No. 3) PLC (the
        "THIRD ISSUER") dated 23rd May, 2001 (the "THIRD ISSUER INTERCOMPANY
        LOAN AGREEMENT"), an intercompany loan agreement with Holmes Financing
        (No.4) PLC (the "FOURTH ISSUER") dated 5th July, 2001 (the "FOURTH
        INTERCOMPANY LOAN AGREEMENT") and an intercompany loan agreement with
        Holmes Financing (No.5) PLC (the "FIFTH ISSUER") dated 8th November,
        2001 (the "FIFTH INTERCOMPANY LOAN AGREEMENT") and accordingly, the
        obligation of Funding to repay this Sixth Issuer Intercompany Loan, the
        First Issuer Intercompany Loan, the Second Issuer Intercompany Loan, the
        Third Issuer Intercompany Loan, the Fourth Intercompany Loan and the
        Fifth Intercompany Loan will depend on the Term Advance Ratings of the
        various Term Advances made to Funding under this Sixth Issuer
        Intercompany Loan Agreement, the First Issuer Intercompany Loan
        Agreement, the Second Issuer Intercompany Loan Agreement, the Third
        Issuer Intercompany Loan Agreement, the Fourth Issuer Intercompany Loan
        Agreement and the Fifth Issuer Intercompany Loan Agreement and the
        provisions of SCHEDULE 3 to the Funding Deed of Charge.

5.12    ACKNOWLEDGEMENT OF NEW INTERCOMPANY LOANS

        The Sixth Issuer hereby acknowledges and agrees that from time to time
        Funding may enter into New Intercompany Loans with New Issuers and that
        the obligation of Funding to repay this Sixth Issuer Intercompany Loan,
        the First Issuer Intercompany Loan, the Second Issuer Intercompany Loan,
        the Third Issuer Intercompany Loan, the Fourth Issuer Intercompany Loan,
        the Fifth Issuer Intercompany Loan and any New Intercompany Loan will
        depend on the Term Advance Rating of the individual Term Advances made
        to Funding under any of this Sixth Issuer Intercompany Loan, the First
        Issuer Intercompany Loan, the Second Issuer Intercompany Loan, the Third
        Issuer Intercompany Loan, the Fourth Issuer Intercompany Loan and the
        Fifth Issuer Intercompany Loan and the provisions of Schedule 3 to the
        Funding Deed of Charge. The Sixth Issuer further acknowledges and agrees
        that PARTS I, II and III OF SCHEDULE 3 to the Funding Deed of Charge
        will be amended to reflect the entry by Funding into New Intercompany
        Loans and related agreements from time to time and agrees to execute
        such documents as are necessary or required by the Rating Agencies or
        otherwise for the purpose of including the New Issuer, any New Funding
        Swap Provider, any New Start-up Loan Provider or any other person who
        has executed an Accession Undertaking in the Transaction Documents.

6.      CERTAIN FEES, ETC.

6.1     FEE FOR PROVISION OF SIXTH ISSUER TERM ADVANCES

        Funding shall (except in the case of payments due under paragraphs (c),
        (e), (g) and (k) below, which shall be paid when due) on each Interest
        Payment Date pay to the Sixth Issuer for same day value to the Sixth
        Issuer Sterling Account a fee for the provision of the Sixth Issuer Term
        Advances. Such fee shall be an amount or amounts in the aggregate equal
        to the following:

        (a)     the fees, costs, charges, liabilities and expenses and any other
                amounts due and payable to the Sixth Issuer Security Trustee
                pursuant to the Sixth Issuer Deed of Charge together with
                interest thereon as provided therein;

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

<PAGE>
                                       12

        (c)     the reasonable fees and expenses of any legal advisers,
                accountants and auditors appointed by the Sixth Issuer and
                properly incurred in their performance of their functions under
                the Transaction Documents which have fallen due;

        (d)     the fees, costs and expenses due and payable to the Paying
                Agents, the Swiss Paying Agents, the Registrar, the Transfer
                Agent and the Agent Bank pursuant to the Sixth Issuer Paying
                Agent and Agent Bank Agreement and the Sixth Issuer Swiss Paying
                Agent and Agent Bank Agreement, as applicable;

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

        (f)     all amounts of interest, commitment fees and other sums due
                (including any indemnity payment) or overdue to the Sixth Issuer
                Liquidity Facility Provider under the terms of the Sixth Issuer
                Liquidity Facility Agreement and/or the fees, costs, liabilities
                and expenses incurred or paid by the Sixth Issuer in connection
                with it entering into any replacement liquidity facility;

        (g)     the fees, costs, charges, liabilities and expenses due and
                payable to the Sixth Issuer Account Banks, pursuant to the Sixth
                Issuer Bank Account Agreement (if any);

        (h)     the fees, costs, charges, liabilities and expenses due and
                payable to the Sixth Issuer Cash Manager, pursuant to the Sixth
                Issuer Cash Management Agreement;

        (i)     any termination payment due and payable by the Sixth Issuer to
                any Sixth Issuer Swap Provider, pursuant to any Sixth Issuer
                Swap Agreement;

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

        (k)     an amount equal to "G" where G is calculated as follows:

                G = (A - D - H) or, if such calculation is less than zero, then
                G shall be zero

                where,

                A =     0.01 per cent of the interest amounts paid by Funding to
                        the Sixth Issuer on the Sixth Issuer Term Advances on
                        the immediately preceding Interest Payment Date;

                D =     E - F

                        where,

                        E =     the interest amounts (which excludes those fee
                                amounts in this CLAUSE 6.1) paid by Funding to
                                the Sixth Issuer on the Sixth Issuer Term
                                Advances on the immediately preceding Interest
                                Payment Date; and

<PAGE>
                                       13

                        F =     amounts paid by the Sixth Issuer under
                                paragraphs (e) to (h) of the Sixth Issuer
                                Pre-Enforcement Revenue Priority of Payments on
                                the immediately preceding Interest Payment Date;
                                and

                H =     the cumulative aggregate of (D - A) as calculated on
                        each previous Interest Payment Date. If such cumulative
                        aggregate of (D - A) is less than zero, then H shall be
                        zero;

        (l)     any other amounts due or overdue by the Sixth Issuer to third
                parties including the Rating Agencies and the amounts paid by
                the Sixth Issuer under the Subscription Agreements and the
                Underwriting Agreement (excluding, for these purposes, the
                Noteholders) other than amounts specified in paragraphs (b) to
                (k) above; and

        (m)     if on any Interest Payment Date there are Sixth Issuer Principal
                Receipts remaining in the Sixth Issuer Bank Accounts, an amount
                equal to the difference between (i) the interest that would be
                earned by the Sixth Issuer on such Sixth Issuer Principal
                Receipts remaining in the Sixth Issuer Bank Accounts during the
                next succeeding Interest Period and (ii) the interest that would
                be payable by the Sixth Issuer applying the weighted average
                rate of interest payable on the relevant Sixth Issuer Currency
                Swap Agreement due for repayment at the end of that Interest
                Period to such Sixth Issuer Principal Receipts remaining in the
                Sixth Issuer Bank Accounts,

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

6.2     SET-OFF

        Funding and each of the other parties to the Sixth Issuer Intercompany
        Loan Agreement agree that the Sixth Issuer shall be entitled to set-off
        those amounts due and payable by Funding pursuant to this CLAUSE 6 on
        the Closing Date against the amount to be advanced by the Sixth Issuer
        to Funding by way of the Sixth Issuer Term Advances on the Closing Date.

7.      APPLICATION OF CERTAIN PROVISIONS

        The provisions set out in CLAUSE 4.2 (Limited Recourse) of the
        Intercompany Loan Term and Conditions shall apply to:

        (a)     the Sixth Issuer Term AA Advances; and

        (b)     the Sixth Issuer Term BBB Advances.

8.      DECLARATION OF TRUST

        The Sixth Issuer declares the Security Trustee, and the Security Trustee
        hereby declares itself, trustee of all the covenants, undertakings,
        rights, powers, authorities and discretions in, under or in connection
        with this Agreement for the Sixth Issuer Secured Creditors in respect
        of the

<PAGE>
                                       14

        Sixth Issuer Secured Obligations owed to each of them respectively upon
        and subject to the terms and conditions of the Sixth Issuer Deed of
        Charge.

9.      ADDRESSES

        The addresses referred to in CLAUSE 18.4 of the Intercompany Loan Terms
        and Conditions are as follows:

        THE SECURITY TRUSTEE:

        For the attention of: Manager, Trust Administration

        Address:              Trinity Tower, 9 Thomas More Street, London E1W
                              1YT

        Facsimile:            (44) 20 7777 5410

        THE SIXTH ISSUER:

        For the attention of: Securitisation Team, Business Relationship
                              Management

        Address:              Holmes Financing (No. 6) PLC c/o Abbey House
                              (AAM 126), 201 Grafton Gate East, Milton Keynes,
                              MK9 1AN

        Facsimile:            (44) 1908 343 019

        FUNDING:

        For the attention of: Securitisation Team, Business Relationship
                              Management___

        Address:              Holmes Funding Limited c/o Abbey House (AAM 126),
                              201 Grafton Gate East, Milton Keynes, MK9 1AN

        Facsimile:            (44) 1908 343 019

        RATING AGENCIES:

        MOODY'S:

        Address:              2 Minster Court
                              Mincing Lane
                              London EC3R 7XB

        For the attention of: Nick Lindstrom

        Telephone:            (44) 20 7621 9068

        Facsimile:            (44) 20 7772 5400

<PAGE>
                                       15

        S&P:

        Address:              Garden House
                              18 Finsbury Circus
                              London EC2M 7BP

        For the attention of: Structured Finance Surveillance Group

        Telephone:            (44) 20 7826 3800

        Facsimile:            (44) 20 7826 3598

        FITCH:

        Address:              Eldon House
                              2 Eldon Street
                              London EC2M 7UA

        For the attention of: European Structured Finance

        Telephone:            (44) 20 7417 4222

        Facsimile:            (44) 20 7417 6262

<PAGE>
                                       16

                                   SCHEDULE 1

                   CONDITIONS PRECEDENT IN RESPECT OF DRAWDOWN

1.      AUTHORISATIONS

        (a)     A copy of the memorandum and articles of association,
                certificate of incorporation and certificate of incorporation on
                change of name of Funding.

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

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

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

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

2.      SECURITY

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

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

        (c)     Security Power of Attorney for Funding.

3.      LEGAL OPINION

        Legal opinions of:

        (a)     Allen & Overy, English legal advisers, addressed to the Security
                Trustee;

        (b)     Slaughter and May, English legal advisers to the Seller, the
                Sixth Issuer and Funding, addressed to the Security Trustee;

        (c)     Cleary, Gottlieb, Steen & Hamilton, U.S. legal advisers to the
                Seller, the Sixth Issuer and Funding, addressed to the Security
                Trustee;

        (d)     Niederer Kraft & Frey, Swiss legal advisers to the Security
                Trustee, the Sixth Issuer and Funding, addressed to the Security
                Trustee; and

        (e)     Tods Murray WS, Scottish legal advisors, addressed to the
                Security Trustee.

<PAGE>
                                       17

4.      TRANSACTION DOCUMENTS

        Duly executed copies of:

        (a)     the Servicing Agreement;

        (b)     the Mortgages Trust Deed;

        (c)     the Abbey Deed and Power of Attorney;

        (d)     the Funding Deed of Charge (including the First Deed of
                Accession, the Second Deed of Accession, the Third Deed of
                Accession, the Fourth Deed of Accession and the Fifth Deed of
                Accession);

        (e)     the Funding Swap Agreement (including the Deed of Amendment);

        (f)     the Corporate Services Agreement;

        (g)     the Funding Liquidity Facility Agreement (including the
                Amendment Agreement to the Funding Liquidity Facility
                Agreement);

        (h)     the First Intercompany Loan Agreement, the Second Intercompany
                Loan Agreement, the Third Intercompany Loan Agreement, the
                Fourth Intercompany Loan Agreement, the Fifth Intercompany Loan
                Agreement and the Sixth Intercompany Loan Agreement;

        (i)     the Cash Management Agreement (including the Amendment Agreement
                to Cash Management Agreement);

        (j)     the Bank Account Agreement;

        (k)     the Funding Guaranteed Investment Contract;

        (l)     the First Start-up Loan Agreement, the Second Start-up Loan
                Agreement, the Third Start-up Loan Agreement, the Fourth
                Start-up Loan Agreement, the Fifth Start-up Loan Agreement and
                the Sixth Start-up Loan Agreement;

        (m)     the Mortgage Sale Agreement;

        (n)     the Scottish Trust Deed (in relation to Scottish Loans assigned
                to the Mortgages Trustee on the Sixth Issuer Closing Date);

        (o)     the Seller Power of Attorney;

        (p)     the Insurance Acknowledgements;

        (q)     the Sixth Issuer Deed of Charge;

        (r)     the Sixth Issuer Cash Management Agreement;

        (s)     the Currency Swap Agreements;

        (t)     the Sixth Issuer Liquidity Facility Agreement;

<PAGE>
                                       18

        (u)     the Sixth Issuer Bank Account Agreement;

        (v)     the Sixth Issuer Post-Enforcement Call Option Agreement;

        (w)     the Sixth Issuer Corporate Services Agreement;

        (x)     the Sixth Issuer Trust Deed;

        (y)     the Sixth Issuer Global Notes;

        (z)     the Sixth Issuer Paying Agent and Agent Bank Agreement;

        (aa)    the Sixth Issuer Swiss Paying Agent and Agent Bank Agreement;

        (bb)    the Mortgages Trustee Guaranteed Investment Contract; and

        (cc)    the Amended and Restated Master Definitions and Construction
                Schedule, the First Issuer Master Definitions and Construction
                Schedule, the Second Issuer Master Definitions and Construction
                Schedule, the Third Issuer Master Definitions and Construction
                Schedule, the Fourth Issuer Master Definitions and Construction
                Schedule, the Fifth Issuer Master Definitions and Construction
                Schedule and the Sixth Issuer Master Definitions and
                Construction Schedule.

5.      BOND DOCUMENTATION

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

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

6.      MISCELLANEOUS

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

<PAGE>
                                       19

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

FUNDING

SIGNED for and on behalf of                            )
HOLMES FUNDING LIMITED                                 )

SIXTH ISSUER

SIGNED for and on behalf of                            )
HOLMES FINANCING (NO. 6) PLC                           )

SECURITY TRUSTEE

SIGNED for and on behalf of                            )
JPMORGAN CHASE BANK,                                   )
LONDON BRANCH                                          )

AGENT BANK

SIGNED  for and on behalf of                           )
JPMORGAN CHASE BANK,                                   )
LONDON BRANCH                                          )

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