EXHIBIT 10.1 [GRAPHIC OMITTED] DRAFT ALLEN & OVERY LLP AMENDED AND RESTATED FUNDING 1 LIQUIDITY FACILITY AGREEMENT PERMANENT FUNDING (NO. 1) LIMITED as Funding 1 and JPMORGAN CHASE BANK, N.A. as Funding 1 Liquidity Facility Provider and HALIFAX plc as...

                                                                   EXHIBIT 10.1

[GRAPHIC OMITTED]



DRAFT
                  XXXXX & XXXXX LLP




                  AMENDED AND RESTATED FUNDING 1
                  LIQUIDITY FACILITY AGREEMENT




                  PERMANENT FUNDING (NO. 1) LIMITED
                  as Funding 1


                  and


                  JPMORGAN CHASE BANK, N.A.
                  as Funding 1 Liquidity Facility Provider


                  and


                  HALIFAX plc
                  as Cash Manager


                  and


                  THE BANK OF NEW YORK
                  as Security Trustee


                  [22nd] June, 2005



                                    CONTENTS



CLAUSE                                                                      PAGE


                                                      
1.         Definitions and Interpretation.................................     1
2.         The Funding 1 Liquidity Facility...............................     2
3.         Purpose........................................................     4
4.         Conditions Precedent...........................................     4
5.         Drawdown.......................................................     6
6.         Repayment......................................................     7
7.         Cancellation...................................................     9
8.         Interest.......................................................    10
9.         Payments.......................................................    11
10.        Taxes..........................................................    13
11.        Market Disruption..............................................    15
12.        Increased Costs................................................    15
13.        Illegality.....................................................    16
14.        Representations and Warranties.................................    17
15.        Undertakings...................................................    20
16.        Default........................................................    21
17.        Fees...........................................................    21
18.        Enforcement and Subordination..................................    23
19.        Expenses.......................................................    24
20.        Stamp Duties...................................................    24
21.        Indemnities....................................................    25
22.        Evidence and Calculations......................................    26
23.        Amendments and Waivers.........................................    26
24.        Changes to the Parties.........................................    26
25.        Disclosure of Information......................................    28
26.        Set-Off........................................................    29
27.        Severability...................................................    29
28.        Counterparts...................................................    29
29.        Notices........................................................    29
30.        Third Party Rights.............................................    30
31.        Governing Law..................................................    30
32.        Submission to Jurisdiction.....................................    30

SCHEDULE

1.         Conditions Precedent Documents.................................    31
2.         Calculation of the Mandatory Liquid Asset Cost.................    32
3.         Form of Funding 1 Liquidity Facility Request...................    34
4.         Form of Novation Certificate...................................    35

Signatories...............................................................    38





THIS AMENDED AND RESTATED FUNDING 1 LIQUIDITY FACILITY AGREEMENT is dated
[22nd] June, 2005


BETWEEN:

(1)    PERMANENT FUNDING (NO. 1) LIMITED (registered number 4267660), whose
       registered office is 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (FUNDING 1);

(2)    JPMORGAN CHASE BANK, N.A., acting through its offices at 000 Xxxxxx Xxxx,
       Xxxxxx XX0X 0XX acting in its capacity as the Funding 1 Liquidity
       Facility Provider;

(3)    HALIFAX PLC, a public limited company incorporated under the laws of
       England and Wales whose registered office is at Xxxxxxx Xxxx, Xxxxxxx,
       Xxxx Xxxxxxxxx XX0 0XX acting in its capacity as Cash Manager; and

(4)    THE BANK OF NEW YORK, acting through its offices at 00xx Xxxxx, Xxx
       Xxxxxx Xxxxxx, Xxxxxx X00 0XX in its capacity as Security Trustee, which
       expression shall include such company and all other persons or companies
       for the time being acting as security trustee (or co-trustee) pursuant to
       the terms of the Funding 1 Deed of Charge.


WHEREAS:

(A)    The parties hereto entered into the Funding 1 Liquidity Facility
       Agreement (as amended and restated by this Agreement and from time to
       time, the FUNDING 1 LIQUIDITY FACILITY AGREEMENT) to assist Funding 1 in,
       among other things, (i) making Eligible Liquidity Facility Principal
       Repayments and (ii) meeting its interest payment liabilities in respect
       of relevant Term Advances from time to time.

(B)    Upon the terms and subject to the conditions set out in the Funding 1
       Liquidity Facility Agreement, the Funding 1 Liquidity Facility Provider
       agreed to make a Funding 1 Liquidity Facility available to Funding 1 on
       and subject to the terms set out in the Funding 1 Liquidity Facility
       Agreement.

(C)    The parties to the Funding 1 Liquidity Facility Agreement have agreed to
       amend and restate the terms of that Agreement as set out herein.


IT IS AGREED as follows:

1.     DEFINITIONS AND INTERPRETATION

1.1    DEFINITIONS

       The amended and restated master definitions and construction schedule
       signed by, amongst others, the parties to this Agreement and dated [22nd]
       June, 2005 (as the same may be amended, varied or supplemented from time
       to time with the consent of the parties to this Agreement) (the MASTER
       DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and specifically
       incorporated into this Agreement and, accordingly, the expressions
       defined in the Master Definitions and Construction Schedule (as so
       amended, varied or supplemented from time to time) shall, except where
       the context otherwise requires and save where otherwise defined herein,
       have the same meanings in this Agreement, including the Recitals hereto
       and this Agreement shall be construed in accordance with the
       interpretation provisions set out in Clause 2 of the Master Definitions
       and Construction Schedule.

                                        1



1.2    AMENDMENT AND RESTATEMENT

       This Agreement amends and restates the Funding 1 Liquidity Facility
       Agreement made on 14th June, 2002 as amended and restated on the 6th
       March, 2003, 25th November, 2003, 12th March, 2004, 22nd July, 2004, 18th
       November, 2004 and 23rd March, 2005 (the PRINCIPAL AGREEMENT). As of the
       date of this Agreement, any future rights or obligations (excluding such
       obligations accrued to the date of this Agreement) of a party under the
       Principal Agreement shall be extinguished and shall instead be governed
       by this Agreement.


1.3    SECURITY TRUSTEE

       The Security Trustee has agreed to become a party to this Agreement only
       for the purpose of taking the benefit of CLAUSES 2.3 (Extension), 5.1(B)
       (Funding 1 Liquidity Facility Loans), 5.2(A), (B) and (D) (Funding 1
       Liquidity Facility Stand-by Loans), 6.2 and 6.4 (Repayment), 14.1
       (Representations and warranties by Funding 1), 7.2 (Voluntary
       cancellation), 7.3 (Additional right of prepayment and cancellation), 14
       (Representations and warranties), 15.2 (Financial information), 18
       (Enforcement and Subordination), 24 (Changes to the Parties) and 29
       (Notices) and for agreeing amendments to this Agreement pursuant to
       CLAUSE 23 (Amendments and waivers) and for the better preservation and
       enforcement of its rights under the Funding 1 Deed of Charge and (without
       prejudice to the terms of the Funding 1 Deed of Charge), other than as
       specified above, the Security Trustee shall assume no obligations or
       liabilities whatsoever to the Funding 1 Liquidity Facility Provider or
       Funding 1 by virtue of the provisions of this Agreement.


2.     THE FUNDING 1 LIQUIDITY FACILITY

2.1    FACILITY

       Subject to the terms of this Agreement, the Funding 1 Liquidity Facility
       Provider grants to Funding 1 the Funding 1 Liquidity Facility. The
       Funding 1 Liquidity Facility may be utilised by way of Funding 1
       Liquidity Facility Loans and Funding 1 Liquidity Facility Stand-by Loans.


2.2 FACILITY LIMITS

       The aggregate principal amount of the Funding 1 Liquidity Facility Loans
       and the Funding 1 Liquidity Facility Stand-by Loans shall not at any time
       exceed the Funding 1 Liquidity Facility Commitment. The Funding 1
       Liquidity Facility Provider is not obliged to lend more than the Funding
       1 Liquidity Facility Commitment.

       Save as otherwise provided in the Agreement (including, for the avoidance
       of doubt, CLAUSE 7 (Cancellation)), if any of the following shall occur,
       the Funding 1 Liquidity Facility Commitment shall be reduced in the
       manner provided:

       (a)   if the First Issuer Intercompany Loan is repaid in full or is
             otherwise cancelled, the Funding 1 Liquidity Facility Commitment
             shall be reduced by the lesser of [GBP]60,000,000 and an amount
             which the Rating Agencies have confirmed will have no material
             adverse effect on the then current ratings of any Notes of any
             Issuer (or if the rating of any of the Notes of any Issuer has been
             downgraded, an amount which will not prevent the restoration of
             such rating); or

       (b)   if the Second Issuer Intercompany Loan is repaid in full or is
             otherwise cancelled, the Funding 1 Liquidity Facility Commitment
             shall be reduced by the lesser of [GBP]47,500,000 and an amount
             which the Rating Agencies have confirmed will have no material
             adverse effect on the then current ratings of any Notes of any
             Issuer (or if the rating of any of the Notes of

                                       2


             any Issuer has been downgraded, an amount which will not prevent
             the restoration of such rating); or

       (c)   if the Third Issuer Intercompany Loan is repaid in full or is
             otherwise cancelled, the Funding 1 Liquidity Facility Commitment
             shall be reduced by the lesser of [GBP]42,500,000 and an amount
             which the Rating Agencies have confirmed will have no material
             adverse effect on the then current ratings of any Notes of any
             Issuer (or if the rating of any of the Notes of any Issuer has been
             downgraded, an amount which will not prevent the restoration of
             such rating); or

       (d)   if the Fourth Issuer Intercompany Loan is repaid in full or is
             otherwise cancelled, the Funding 1 Liquidity Facility Commitment
             shall be reduced by an amount which the Rating Agencies have
             confirmed will have no material adverse effect on the then current
             ratings of any Notes of any Issuer (or if the rating of any of the
             Notes of any Issuer has been downgraded, an amount which will not
             prevent the restoration of such rating); or

       (e)   if the Fifth Issuer Intercompany Loan is repaid in full or is
             otherwise cancelled, the Funding 1 Liquidity Facility Commitment
             shall be reduced by an amount which the Rating Agencies have
             confirmed will have no material adverse effect on the then current
             ratings of any Notes of any Issuer (or if the rating of any of the
             Notes of any Issuer has been downgraded, an amount which will not
             prevent the restoration of such rating); or

       (f)   if the Sixth Issuer Intercompany Loan is repaid in full or is
             otherwise cancelled, the Funding 1 Liquidity Facility Commitment
             shall be reduced by an amount which the Rating Agencies have
             confirmed will have no material adverse effect on the then current
             ratings of any Notes of any Issuer (or if the rating of any of the
             Notes of any Issuer has been downgraded, an amount which will not
             prevent the restoration of such rating); or

       (g)   if the Seventh Issuer Intercompany Loan is repaid in full or is
             otherwise cancelled, the Funding 1 Liquidity Facility Commitment
             shall be reduced by an amount which the Rating Agencies have
             confirmed will have no material adverse effect on the then current
             ratings of any Notes of any Issuer (or if the rating of any of the
             Notes of any Issuer has been downgraded, an amount which will not
             prevent the restoration of such rating); or

       (h)   if the Eighth Issuer Intercompany Loan is repaid in full or is
             otherwise cancelled, the Funding 1 Liquidity Facility Commitment
             shall be reduced by an amount which the Rating Agencies have
             confirmed will have no material adverse effect on the then current
             ratings of any Notes of any Issuer (or if the rating of any of the
             Notes of any Issuer has been downgraded, an amount which will not
             prevent the restoration of such rating).


2.3    EXTENSION

(a)    Save as otherwise provided in this Agreement, Funding 1 (or the Security
       Trustee or the Cash Manager on its behalf) may deliver, not more than 30
       days and not less than 20 days before the end of the Funding 1 Liquidity
       Facility Commitment Period, to the Funding 1 Liquidity Facility Provider
       an irrevocable request in writing that the Funding 1 Liquidity Facility
       Commitment Period should be extended (an EXTENSION REQUEST) to a date
       that is not more than (subject to CLAUSE 2.3(D) below) 364 days starting
       from the last day of the then current Funding 1 Liquidity Facility
       Commitment Period.

(b)    If the Funding 1 Liquidity Facility Provider wishes to accept an
       Extension Request then the Funding 1 Liquidity Facility Provider shall,
       not more than 15 days after receipt of the Extension Request, deliver to
       Funding 1 an irrevocable notice (a NOTICE OF EXTENSION) that the Funding
       1 Liquidity Facility Provider has consented to the Extension Request.
       Failure to deliver such a Notice of

                                       3


       Extension within the 15-day time period referred to above shall be deemed
       to constitute a refusal to grant an extension of the Funding 1 Liquidity
       Facility Commitment Period.

(c)    The Funding 1 Liquidity Facility Provider shall promptly notify the
       Security Trustee of each Extension Request and Notice of Extension
       received or delivered (or deemed delivered) by it.

(d)    The Funding 1 Liquidity Facility Provider is not obliged to agree to
       extend the Funding 1 Liquidity Facility Commitment Period and in no event
       may it be extended beyond the REPAYMENT DATE, being the earlier to occur
       of:

       (i)   the date when 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, the
             Sixth Issuer Intercompany Loan, the Seventh Issuer Intercompany
             Loan and the Eighth Issuer Intercompany Loan have been repaid or
             cancelled in full; and

       (ii)  the Funding 1 Interest Payment Date in June 2042 (unless the
             parties hereto agree to extend the provision of the Funding 1
             Liquidity Facility beyond such date).


3.     PURPOSE

(a)    Funding 1 (or the Cash Manager on behalf of Funding 1) may use each
       Funding 1 Liquidity Facility Loan only to meet a Funding 1 Liquidity
       Shortfall existing at that time, to the extent that it relates to payment
       obligations of Funding 1 arising in connection with the First Issuer
       Intercompany Loan Agreement, the Second Issuer Intercompany Loan
       Agreement, the Third Issuer Intercompany Loan Agreement, the Fourth
       Issuer Intercompany Loan Agreement, the Fifth Issuer Intercompany Loan
       Agreement, the Sixth Issuer Intercompany Loan, the Seventh Issuer
       Intercompany Loan or the Eighth Issuer Intercompany Loan. For the
       avoidance of doubt, the parties agree that the Funding 1 Liquidity
       Facility will be available notwithstanding that one or more (but not all)
       of the First Issuer Intercompany Loan Agreement, the Second Issuer
       Intercompany Loan Agreement, the Third Issuer Intercompany Loan
       Agreement, the Fourth Issuer Intercompany Loan Agreement, the Fifth
       Issuer Intercompany Loan Agreement, the Sixth Issuer Intercompany Loan,
       the Seventh Issuer Intercompany Loan or the Eighth Issuer Intercompany
       Loan may have been repaid in full or cancelled, subject to any reduction
       of the Funding 1 Liquidity Facility Commitment in accordance with CLAUSE
       2.2 (Facility Limits).

(b)    Funding 1 (or the Cash Manager on behalf of Funding 1) may use a Funding
       1 Liquidity Facility Stand-by Loan only to credit the Funding 1 Liquidity
       Facility Stand-by Account.

(c)    Without affecting the obligations of Funding 1 in any way, the Funding 1
       Liquidity Facility Provider is not bound to monitor or verify the
       application of any Funding 1 Liquidity Facility Drawing or any Funding 1
       Liquidity Facility Stand-by Drawing.


4.     CONDITIONS PRECEDENT

4.1    DOCUMENTARY CONDITIONS PRECEDENT

       The obligations of the Funding 1 Liquidity Facility Provider to Funding 1
       under this Agreement are subject to the condition precedent that the
       Funding 1 Liquidity Facility Provider has notified Funding 1 that it has
       received all of the documents set out in Schedule 1 and that each is in
       form and substance satisfactory to it.

                                        4



4.2 FURTHER CONDITIONS PRECEDENT

(a)    The obligation of the Funding 1 Liquidity Facility Provider to make a
       Funding 1 Liquidity Facility Loan or a Funding 1 Liquidity Facility
       Stand-by Loan available, is subject to the further conditions precedent
       that on both the date of the Funding 1 Liquidity Facility Request and the
       corresponding Funding 1 Liquidity Facility Drawdown Date:

       (i)   no Asset Trigger Event has occurred;

       (ii)  no Funding 1 Liquidity Facility Default is outstanding or would
             result from the making of the Funding 1 Liquidity Facility Loan or
             the Funding 1 Liquidity Facility Stand-by Loan; and

       (iii) in respect of Funding 1 Liquidity Facility Loans only, no or
             insufficient amounts are available for drawing from the Reserve
             Funds in order to pay the liabilities in respect of which the
             relevant Funding 1 Liquidity Facility Loan is to be applied.

(b)    The obligation of the Funding 1 Liquidity Facility Provider to make a
       Funding 1 Liquidity Facility Loan available for the purpose of a Funding
       1 Liquidity Revenue Shortfall is subject to the further conditions
       precedent that, on the Funding 1 Liquidity Facility Drawdown Date for
       that Funding 1 Liquidity Facility Loan, Funding 1 (or the Cash Manager on
       its behalf) provides confirmation to the Funding 1 Liquidity Facility
       Provider that:

       (i)   in respect of any Funding 1 Liquidity Facility Loan to assist the
             payment of interest on the relevant Term AA Advances, the debit
             balance on the relevant AA Principal Deficiency Sub-Ledger is not
             in an amount equal to or in excess of 50 per cent. of the principal
             amount outstanding of the relevant Term AA Advances;

       (ii)  in respect of any Funding 1 Liquidity Facility Loan to assist the
             payment of interest on the relevant Term A Advances, the debit
             balance on the relevant A Principal Deficiency Sub-Ledger is not in
             an amount equal to or in excess of 50 per cent. of the principal
             amount outstanding of the relevant Term A Advances; and

       (iii) in respect of any Funding 1 Liquidity Facility Loan to assist the
             payment of interest on the relevant Term BBB Advances, the debit
             balance on the relevant BBB Principal Deficiency Sub-Ledger is not
             in an amount equal to or in excess of 50 per cent. of the principal
             amount outstanding of the relevant Term BBB Advances.

(c)    The obligation of the Funding 1 Liquidity Facility Provider to make a
       Funding 1 Liquidity Facility Loan available for the purpose of a Funding
       1 Liquidity Principal Shortfall is subject to the further conditions
       precedent that:

       (i)   prior to the occurrence of a Trigger Event, the Funding 1 Liquidity
             Facility Provider is obliged only to pay:

             (A) the principal amount on any relevant Original Bullet Term
                 Advances when such amounts are due and payable; and

             (B) the principal amount on any relevant Original Scheduled
                 Amortisation Term Advances on their respective Final Repayment
                 Dates; and

       (ii)  following the occurrence of a Non-Asset Trigger Event but prior to
             the occurrence of an Asset Trigger Event, the Funding 1 Liquidity
             Facility Provider is obliged only to pay the

                                        5



             principal amount on the relevant Original Bullet Term Advances and
             the relevant Original Scheduled Amortisation Term Advances on their
             respective Final Repayment Dates,

       in each case as confirmed by Funding 1 (or the Cash Manager on its
       behalf) to the Funding 1 Liquidity Facility Provider in the Funding 1
       Liquidity Facility Request.


5.     DRAWDOWN

5.1    FUNDING 1 LIQUIDITY FACILITY LOANS

(a)    If, on the Business Day immediately preceding a relevant Funding 1
       Interest Payment Date, the Cash Manager determines that, on the relevant
       Funding 1 Interest Payment Date, a Funding 1 Liquidity Shortfall will
       arise, the Cash Manager will direct Funding 1 to make a Funding 1
       Liquidity Facility Drawing on the Business Day immediately preceding that
       Funding 1 Interest Payment Date, subject to the terms of this Agreement,
       for all or any of the purposes set out in CLAUSE 3 (Purpose) (as
       appropriate) and, subject to the limits set out in CLAUSE 2.2 (Facility
       limits), in an amount equal to the Funding 1 Liquidity Shortfall.

(b)    Funding 1 (or Cash Manager on behalf of Funding 1) will serve on the
       Funding 1 Liquidity Facility Provider a Funding 1 Liquidity Facility
       Request (substantially in the form set out in SCHEDULE 3 to this
       Agreement) for each Funding 1 Liquidity Facility Drawing, such request to
       be given by facsimile in accordance with CLAUSE 29 (Notices) of this
       Agreement to be received by the Funding 1 Liquidity Facility Provider not
       later than 10.00 a.m. on the Business Day immediately preceding the
       proposed Funding 1 Liquidity Facility Drawdown Date.

(c)    No Funding 1 Liquidity Facility Drawing may be made, or requested to be
       made, on or after the last day of the then current Funding 1 Liquidity
       Facility Commitment Period.


5.2    FUNDING 1 LIQUIDITY FACILITY STAND-BY LOANS

(a)    The Funding 1 Liquidity Provider shall, upon becoming aware of a Relevant
       Event, promptly notify Funding 1, the Security Trustee and the Cash
       Manager in writing of that fact.

(b)    If a Relevant Event occurs, Funding 1 (or the Security Trustee or the
       Cash Manager on behalf of Funding 1) may, subject to the terms of this
       Agreement, and after serving a Funding 1 Liquidity Facility Request on
       the Funding 1 Liquidity Facility Provider, make a Funding 1 Liquidity
       Facility Stand-by Loan equal to the undrawn portion of the Funding 1
       Liquidity Facility Commitment at that time. No Funding 1 Liquidity
       Facility Stand-by Drawing may be made or requested to be made after the
       end of the Funding 1 Liquidity Facility Commitment Period.

(c)    Upon making a Funding 1 Liquidity Facility Stand-by Loan, Funding 1 (or
       the Security Trustee or the Cash Manager on behalf of Funding 1) shall
       forthwith pay the Funding 1 Liquidity Facility Stand-by Loan into the
       Funding 1 Liquidity Facility Stand-by Account, which shall be an account
       with the Funding 1 Liquidity Facility Provider if the Relevant Event
       leading to the making of the Funding 1 Liquidity Facility Stand-by Loan
       is a Funding 1 Liquidity Facility Extension Refusal.

(d)    Subject to the terms of the Funding 1 Deed of Charge, interest earned on
       the Funding 1 Liquidity Facility Stand-by Account, together with any
       income derived from any Authorised Investments made in accordance with
       PARAGRAPH (e)(iii) below using amounts standing to the credit of the
       Funding 1 Liquidity Facility Stand-by Account from time to time, shall
       belong to and be for the account of Funding 1 (and Funding 1 shall be
       entitled to withdraw and retain such interest earned).

(e)    Amounts from time to time standing to the credit of the Funding 1
       Liquidity Facility Stand-by Account shall belong to Funding 1 and the
       Funding 1 Liquidity Facility Provider shall not have any


                                       6


       proprietary interest or Security Interest in such amounts save as arises
       under the Funding 1 Deed of Charge. Other than as referred to in
       PARAGRAPH (D) above, Funding 1 (or the Security Trustee or the Cash
       Manager on behalf of Funding 1) shall only make withdrawals from the
       Funding 1 Liquidity Facility Stand-by Account:

       (i)   in such circumstances and in such amount as it would otherwise have
             been able to make a Funding 1 Liquidity Facility Loan pursuant to
             CLAUSE 5.1 (Funding 1 Liquidity Facility Loans), provided that
             there shall be no requirement that the Funding 1 Liquidity Facility
             Drawdown Date falls on or before the end of the Funding 1 Liquidity
             Facility Commitment Period, where there has been a Funding 1
             Liquidity Facility Extension Refusal; or

       (ii)  in order to make a repayment of a Funding 1 Liquidity Facility
             Stand-by Loan in accordance with CLAUSE 6 (Repayment); or

       (iii) in order to invest funds standing to the credit of the Funding 1
             Liquidity Facility Stand-by Account in Authorised Investments (the
             nature and characteristics of which Authorised Investments Funding
             1 will notify to the Funding 1 Liquidity Facility Provider at the
             same time as making those investments).

(f)    Any withdrawal from the Funding 1 Liquidity Facility Stand-by Account
       under paragraphs 5.2(e)(i) above will be deemed to be a Funding 1
       Liquidity Facility Drawing and the amount withdrawn will be deemed to be
       a Funding 1 Liquidity Facility Loan.

(g)    The aggregate amount of the Funding 1 Liquidity Facility Stand-by Loans
       outstanding will be:

       (i)   reduced by the amount of any deemed Funding 1 Liquidity Facility
             Loans under paragraphs 5.2(e)(i) or (ii) above and any repayment or
             prepayment of all or any part of the Funding 1 Liquidity Facility
             Stand-by Loans; and

       (ii)  increased by the amount of any deemed Funding 1 Liquidity Facility
             Stand-by Loans under Sub-clause 6.3 (Repayment).


5.3    PAYMENT OF PROCEEDS

       Subject to the other terms of this Agreement, the Funding 1 Liquidity
       Facility Provider shall make each Funding 1 Liquidity Facility Loan or
       Funding 1 Liquidity Facility Stand-by Loan available for Funding 1 on the
       relevant Funding 1 Liquidity Facility Drawdown Date and shall remit each
       Funding 1 Liquidity Facility Loan and Funding 1 Liquidity Facility Stand-
       by Loan to Funding 1 by noon on the relevant Funding 1 Liquidity Facility
       Drawdown Date or, if LIBOR is determined otherwise than in accordance
       with PARAGRAPH (A) of its definition, by 2.00 p.m. on the relevant
       Funding 1 Liquidity Facility Drawdown Date.


6.     REPAYMENT

6.1    Subject as provided below and subject to CLAUSE 7.2 (Voluntary
       Cancellation), CLAUSE 18 (Enforcement and Subordination) and CLAUSE 21.2
       (Other indemnities) on the earlier of:

       (i)   the immediately succeeding Funding 1 Interest Payment Date; and

       (ii)  the Repayment Date,

       Funding 1 shall repay the outstanding balance of the Funding 1 Liquidity
       Facility Loan, if any, from Funding 1 Available Principal Receipts (but
       only to the extent that the Funding 1 Liquidity Facility Loan has been
       made to meet Funding 1 Liquidity Principal Shortfalls (if any)) and from
       Funding 1

                                        7



       Available Revenue Receipts (but only to the extent that the Funding 1
       Liquidity Facility Loan has been made to meet Funding 1 Liquidity Revenue
       Shortfalls (if any)) as at the opening of business on such date.

6.2    Subject to the other terms of this Agreement, any amount repaid under
       paragraph 6.1 above may be re-borrowed and, other than on the Repayment
       Date, Funding 1 may repay a Funding 1 Liquidity Facility Loan for the
       purposes of paragraph 6.1 above by making a new Funding 1 Liquidity
       Facility Drawing by submitting a Funding 1 Liquidity Facility Request for
       a new Funding 1 Liquidity Facility Loan or, if a Relevant Event is
       outstanding, by making a deemed Funding 1 Liquidity Facility Loan or by
       rolling over an existing Funding 1 Liquidity Facility Loan.

6.3    Whilst a Relevant Event is outstanding, any amount due under paragraph
       6.1 above must be repaid by Funding 1 paying such amount into the Funding
       1 Liquidity Facility Stand-by Account and such payment will be deemed to
       be a Funding 1 Liquidity Facility Stand-by Drawing and the amount repaid
       will be deemed to be a Funding 1 Liquidity Facility Stand-by Loan.

6.4    The Funding 1 Liquidity Facility Stand-by Loans shall, subject to CLAUSE
       18 (Enforcement and Subordination), be repayable to the Funding 1
       Liquidity Facility Provider, together with accrued interest pursuant to
       CLAUSE 8 (Interest), on the earlier of:

       (a)   the Repayment Date;

       (b)   if the Relevant Event resulting in the making of the Funding 1
             Liquidity Facility Stand-by Drawing was a Funding 1 Liquidity
             Facility Downgrade Event, then the earliest of:

                (i)     the date on which the Funding 1 Liquidity Facility
                        Commitment is made unconditionally available to Funding
                        1 by a new liquidity facility provider following a
                        transfer of all the Funding 1 Liquidity Facility
                        Provider's rights and obligations under this Agreement
                        to a new liquidity facility provider which is a
                        Qualifying Lender and has the Requisite Ratings under
                        Sub-clause 24.4 (Transfers by the Funding 1 Liquidity
                        Facility Provider) or Sub-clause 24.5 (Assignments and
                        transfers required by Funding 1);

                (ii)    the date on which a new commitment is made
                        unconditionally available to Funding 1 by a new
                        liquidity facility provider which is a Qualifying Lender
                        and has the Requisite Ratings following the cancellation
                        of the Funding 1 Liquidity Facility Commitment in whole
                        by Funding 1 under Sub-clause 7.2 (Voluntary
                        cancellation); and

                (iii)   the date falling two Business Days after the date on
                        which the Liquidity Facility Provider has notified
                        Funding 1 and the Security Trustee that it again has the
                        Requisite Ratings, unless a Funding 1 Liquidity Facility
                        Extension Refusal occurred after the Funding 1 Liquidity
                        Facility Downgrade Event; or

       (c)   if the Relevant Event resulting in the making of the Funding 1
             Liquidity Facility Stand-by Drawing was a Funding 1 Liquidity
             Facility Extension Refusal, then the date on which a new commitment
             is made unconditionally available to Funding 1 by a new liquidity
             facility provider which is a Qualifying Lender and has the
             Requisite Ratings following the cancellation of the Funding 1
             Liquidity Facility Commitment in whole by Funding 1 under Sub-
             clause 7.2 (Voluntary cancellation).

                                        8



7.     CANCELLATION

7.1    AUTOMATIC CANCELLATION OF THE FUNDING 1 LIQUIDITY FACILITY COMMITMENT

       The Funding 1 Liquidity Facility Commitment shall be automatically
       cancelled at close of business on the last day of the Funding 1 Liquidity
       Facility Commitment Period.


7.2    VOLUNTARY CANCELLATION

(a)    Funding 1 may with the prior written consent of the Security Trustee and
       provided that:

       (i)   the Rating Agencies have confirmed that such cancellation will have
             no material adverse effect on the then current ratings of any of
             the Notes of any Issuer; or

       (ii)  if the ratings of any of the Notes of any Issuer has previously
             been downgraded that such cancellation will not prevent the
             restoration of such rating,

       without premium or penalty, cancel the undrawn and uncancelled part of
       the Funding 1 Liquidity Facility Commitment in whole or in part (but if
       in part, in multiples of not less than [GBP]50,000 unless the Funding 1
       Liquidity Facility Commitment is less than [GBP]50,000) at any time
       provided that it has given the Funding 1 Liquidity Facility Provider not
       less than seven London Business Days' prior notice (which notice Funding
       1 shall copy to the Security Trustee, the Cash Manager and to the Rating
       Agencies) stating the principal amount to be cancelled. During such seven
       Business Day period Funding 1 may not serve a Funding 1 Liquidity
       Facility Request purporting to draw all or any part of the amount the
       subject of such notice of such cancellation.

(b)    If a Relevant Event has occurred, Funding 1 may, without premium or
       penalty, by notice to the Funding 1 Liquidity Facility Provider (which
       notice Funding 1 shall copy to the Security Trustee and the Cash Manager)
       prepay any Funding 1 Liquidity Facility Loans and any Funding 1 Liquidity
       Facility Stand-by Loans, provided that:

       (i)   Funding 1 has given the Funding 1 Liquidity Facility Provider not
             less than 15 Business Days' notice (copied to the Security Trustee
             and the Rating Agencies);

       (ii)  Funding 1 has made arrangements for a new liquidity facility
             provider which is a Qualifying Lender and has the Requisite Ratings
             to enter into a new liquidity facility agreement on substantially
             the same terms as this Agreement; and

       (iii) the Funding 1 Liquidity Facility Provider has been repaid all
             amounts outstanding to it under this Agreement.

(c)    Funding 1 may also, without premium or penalty, by notice to the Funding
       1 Liquidity Facility Provider, cancel the whole of the Funding 1
       Liquidity Facility Commitment on the Repayment Date.


7.3    ADDITIONAL RIGHT OF PREPAYMENT AND CANCELLATION

       If:

       (a)   Funding 1 is required to pay to the Funding 1 Liquidity Facility
             Provider any additional amounts under CLAUSE 10 (Taxes); or

       (b)   Funding 1 is required to pay to the Funding 1 Liquidity Facility
             Provider any amount under CLAUSE 12 (Increased costs),

                                        9



       then, without prejudice to the obligations of Funding 1 under those
       Clauses, Funding 1 may, whilst the circumstances continue, give a notice
       of prepayment and cancellation to the Funding 1 Liquidity Facility
       Provider with a copy to the Security Trustee. On the date falling five
       London Business Days after the date of giving of the notice:

         (i)     Funding 1 shall prepay the Funding 1 Liquidity Facility Loans
                 and any Funding 1 Liquidity Facility Stand-by Loans; and

         (ii)    the Funding 1 Liquidity Facility Commitment shall be cancelled.


7.4    MISCELLANEOUS PROVISIONS

(a)    Any notice of prepayment and/or cancellation under this Agreement is
       irrevocable.

(b)    All prepayments under this Agreement shall be made together with accrued
       interest on the amount prepaid and, subject to CLAUSE 21 (Indemnities),
       without premium or penalty.

(c)    No prepayment or cancellation is permitted except in accordance with the
       express terms of this Agreement.

(d)    No amount of the Funding 1 Liquidity Facility Commitment cancelled under
       this Agreement may subsequently be reinstated except with the prior
       written consent of the Funding 1 Liquidity Facility Provider, Funding 1
       and the Security Trustee.


8.     INTEREST

8.1    INTEREST RATE (FUNDING 1 LIQUIDITY FACILITY LOANS)

       The rate of interest on each Funding 1 Liquidity Facility Loan for each
       Funding 1 Liquidity Facility Interest Period is the rate per annum
       determined by the Funding 1 Liquidity Facility Provider to be the
       aggregate of the applicable:

       (a)   Funding 1 Liquidity Facility Margin;

       (b)   LIBOR; and

       (c)   subject to CLAUSE 18 (Enforcement and Subordination), Mandatory
             Liquid Asset Cost.


8.2    INTEREST RATE (FUNDING 1 LIQUIDITY FACILITY STAND-BY LOANS)

       For so long as any amount is outstanding under the First Issuer
       Intercompany Loan, and without prejudice to CLAUSE 17.1(A) (Commitment
       Fee and Contingent Fee), the rate of interest on each Funding 1 Liquidity
       Facility Stand-by Loan shall be:

       (a)   in respect of a Funding 1 Liquidity Facility Stand-by Loan up to
             (and including) the first [GBP]60,000,000, the amount of interest
             payable will be determined in accordance with CLAUSE 8.1 (Interest
             rate (Funding 1 Liquidity Facility Loans)); and

       (b)   in respect of a Funding 1 Liquidity Facility Stand-by Loan equal to
             and in excess of [GBP]60,000,001, interest will not be payable on
             the amount in excess of [GBP]60,000,000.

       In the event that the First Issuer Intercompany Loan is repaid or is
       otherwise cancelled, interest will not be payable in respect of any part
       of a Funding 1 Liquidity Facility Stand-by Loan.

                                       10



8.3    DUE DATES

       Except as otherwise provided in this Agreement (including, without
       limitation, CLAUSE 6 (Repayment)), accrued interest on each Funding 1
       Liquidity Facility Loan and on each Funding 1 Liquidity Facility Stand-by
       Loan is payable by Funding 1 on each Funding 1 Interest Payment Date.


8.4    DEFAULT INTEREST

(a)    If Funding 1 fails to pay any amount payable by it under this Agreement,
       it shall forthwith on demand by the Funding 1 Liquidity Facility Provider
       pay interest on the overdue amount from the due date up to the date of
       actual payment, as well after as before judgment, at a rate (the DEFAULT
       RATE) determined by the Funding 1 Liquidity Facility Provider to be one
       per cent. per annum above the higher of:

       (i)   the rate on the overdue amount under CLAUSE 8.1 (Interest rate
             (Funding 1 Liquidity Facility Loans)) immediately before the due
             date (if of principal); and

       (ii)  the rate which would have been payable if the overdue amount had,
             during the period of non-payment, constituted a Funding 1 Liquidity
             Facility Drawing in the currency of the overdue amount for such
             successive Funding 1 Liquidity Facility Interest Periods of such
             duration as the Funding 1 Liquidity Facility Provider may determine
             (each a DESIGNATED INTEREST PERIOD).

(b)    The Default Rate will be determined on each Business Day or the first day
       of the relevant Designated Interest Period, as appropriate.

(c)    If LIBOR is to be determined in accordance with PARAGRAPH (B) of its
       definition and the Funding 1 Liquidity Facility Provider determines that
       deposits in the currency of the overdue amount are not at the relevant
       time being made available by the Reference Banks to leading banks in the
       London interbank market, the Default Rate will be determined by reference
       to the cost of funds to the Funding 1 Liquidity Facility Provider from
       whatever sources it reasonably selects.

(d)    Default interest will be compounded at the end of each Designated
       Interest Period.

(e)    This CLAUSE 8.4 shall not apply to amounts deferred as a result of the
       operation of CLAUSE 18 (Enforcement and Subordination).


8.5    NOTIFICATION OF RATES OF INTEREST

       The Funding 1 Liquidity Facility Provider shall promptly notify each
       relevant party of the determination of a rate of interest under this
       Agreement.


9.     PAYMENTS

9.1    PLACE

       All payments by Funding 1 under this Agreement shall be made to the
       Funding 1 Liquidity Facility Provider's account at JPMorgan Chase Bank,
       N.A., Sort Code: 60-92-42, Account Reference: European Loans or to its
       account at such office or bank as it may notify to Funding 1 for this
       purpose.

                                       11



9.2    FUNDS

       Payments under this Agreement to the Funding 1 Liquidity Facility
       Provider shall be made for value on the due date at such times and in
       such funds as the Funding 1 Liquidity Facility Provider may specify to
       the party concerned as being customary at the time for the settlement of
       transactions in Sterling.


9.3    CURRENCY

(a)    Amounts payable in respect of costs, expenses, taxes and the like are
       payable in the currency in which they are incurred.

(b)    Any other amount payable under this Agreement is, except as otherwise
       provided in this Agreement, payable in Sterling.


9.4    CHANGE OF CURRENCY

(a)    If more than one currency or currency unit are at the same time
       recognised by the central bank of any country as the lawful currency of
       that country, then:

       (i)   any reference in the Funding 1 Liquidity Documents to, and any
             obligations arising under the Funding 1 Liquidity Documents in, the
             currency of that country shall be translated into, or paid in, the
             currency or currency unit of that country designated by the Funding
             1 Liquidity Facility Provider; and

       (ii)  any translation from one currency or currency unit to another shall
             be at the official rate of exchange recognised by the central bank
             for the conversion of that currency or currency unit into the
             other, rounded up or down by the Funding 1 Liquidity Facility
             Provider acting reasonably.

(b)    If a change in any currency of a country occurs, this Agreement will be
       amended to the extent the Funding 1 Liquidity Facility Provider specifies
       to be necessary to reflect the change in currency and to put the Funding
       1 Liquidity Facility Provider in the same position, so far as possible,
       that it would have been in if no change in currency had occurred.


9.5    SET-OFF AND COUNTERCLAIM

       All payments made by Funding 1 under this Agreement shall be made without
       set-off or counterclaim.


9.6    NON-BUSINESS DAYS

(a)    If a payment under this Agreement is due on a day which is not a London
       Business Day, the due date for that payment shall instead be the next
       London Business Day in the same calendar month (if there is one) or the
       preceding London Business Day (if there is not).

(b)    During any extension of the due date for payment of any principal under
       this Agreement interest is payable on the principal at the rate payable
       on the original due date.

                                       12



10.    TAXES

10.1   GROSS-UP

       Subject to CLAUSE 18 (Enforcement and Subordination) and CLAUSE 10.3
       (Qualifying Lender), all payments by Funding 1 under the Funding 1
       Liquidity Documents shall be made free and clear of and without deduction
       or withholding for or on account of any Taxes, except to the extent that
       Funding 1 is required by law to make payment subject to any such
       deduction or withholding for or on account of any Taxes. If any Tax or
       amount in respect of Tax is required by law to be deducted or withheld
       from any amounts payable or paid by Funding 1 under the Funding 1
       Liquidity Documents, subject to CLAUSE 18 (Enforcement and Subordination)
       the payment due from Funding 1 shall be increased to include such
       additional amounts as may be necessary to ensure that (after any
       deduction or withholding required including in respect of such additional
       amounts) the Funding 1 Liquidity Facility Provider receives a net amount
       equal to the full amount which would have been due had no deduction or
       withholding for or on account of any Taxes been required.


10.2   TAX RECEIPTS

       Subject to CLAUSE 18 (Enforcement and Subordination), all Taxes required
       by law to be deducted or withheld by Funding 1 from any amounts paid or
       payable under the Funding 1 Liquidity Documents shall be paid by Funding
       1 no later than when due and Funding 1 shall, within 30 days of making
       either the deduction or withholding for or on account of any Tax or the
       payment in respect of such deduction or withholding, deliver to the
       Funding 1 Liquidity Facility Provider evidence satisfactory to the
       Funding 1 Liquidity Facility Provider (acting reasonably) (including all
       relevant Tax receipts) that the payment has been duly remitted to the
       appropriate authority.


10.3   QUALIFYING LENDER

       Funding 1 shall not be required to pay an additional amount as referred
       to in CLAUSE 10.1 (Gross-up) above in respect of any deduction or
       withholding for or on account of any Taxes levied or imposed by the
       United Kingdom (or any taxing authority of or in the United Kingdom) from
       a payment of interest, if on the date on which the payment falls due:

       (a)   the payment could have been made to the Funding 1 Liquidity
             Facility Provider in the absence of a deduction or withholding for
             or on account of any Taxes if the Funding 1 Liquidity Facility
             Provider were a Qualifying Lender, but on that date the Funding 1
             Liquidity Facility Provider is not or has ceased to be a Qualifying
             Lender other than as a result of any change occurring after the
             date of this Agreement in (or in the interpretation, administration
             or application of) any law or regulation or applicable Double
             Taxation Treaty or any published practice or concession of any
             relevant Tax authority;

        (b)     (i)     the Funding 1 Liquidity Facility Provider is a
                        Qualifying Lender solely because it is a UK Non-Bank
                        Lender;

                (ii)    the Board of the United Kingdom Inland Revenue has given
                        (and not revoked) a direction (a DIRECTION) under
                        Section 349C ICTA (as that provision has effect on the
                        date of this Agreement) which relates to such payment
                        and Funding 1 has notified the Funding 1 Liquidity
                        Facility Provider of the precise terms of that notice;
                        and

                (iii)   the payment could have been made to the Funding 1
                        Liquidity Facility Provider without any deduction or
                        withholding for or on account of Tax in the absence of
                        that Direction;

                                       13



       (c)   the Funding 1 Liquidity Facility Provider is a Treaty Lender and
             Funding 1 is able to demonstrate that the additional amounts
             referred to in CLAUSE 10.1 (Gross-up) above would not have been
             required if the Funding 1 Liquidity Facility Provider had complied
             with its obligations under CLAUSE 10.6 (Treaty Lender) below.


10.4   REFUND OF TAX CREDITS

       If Funding 1 makes a payment under CLAUSE 10.1 (Gross-up) (a TAX PAYMENT)
       in respect of a payment to the Funding 1 Liquidity Facility Provider
       under this Agreement and the Funding 1 Liquidity Facility Provider
       determines that it has obtained a refund of Tax or obtained and used a
       credit against Tax on its overall net income (a TAX CREDIT) which the
       Funding 1 Liquidity Facility Provider determines to be attributable to
       that Tax Payment, then the Funding 1 Liquidity Facility Provider shall
       reimburse Funding 1 such amount as the Funding 1 Liquidity Facility
       Provider determines to be such proportion of that Tax Credit as will
       leave the Funding 1 Liquidity Facility Provider (after that
       reimbursement) in no better or worse position than it would have been in
       if no Tax Payment had been required. The Funding 1 Liquidity Facility
       Provider shall not be obliged to disclose to any party to this Agreement
       or otherwise any information regarding its Tax affairs and computations.


10.5   STATUS OF QUALIFYING LENDER

       If the Funding 1 Liquidity Facility Provider or replacement liquidity
       facility provider (as applicable) ceases, for whatever reason, to be a
       Qualifying Lender, it shall promptly notify Funding 1 in writing of that
       change in its status.


10.6   TREATY LENDER

       A Treaty Lender and Funding 1 shall co-operate in completing any
       procedural formalities necessary for Funding 1 to obtain authorisation to
       make payments under the Funding 1 Liquidity Documents free and clear of
       and without deduction or withholding for or on account of any Taxes
       levied or imposed by the United Kingdom or any taxing authority of or in
       the United Kingdom.


10.7   TAX INDEMNITY

(a)    Funding 1 shall (within three Business Days of demand by the Funding 1
       Liquidity Facility Provider (the PROTECTED PARTY)) pay to a Protected
       Party an amount equal to the loss, liability or cost which that Protected
       Party determines will be or has been (directly or indirectly) suffered
       for on and account of Tax by that Protected Party in respect of the
       Funding 1 Liquidity Documents.

(b)    PARAGRAPH (A) above shall not apply:

       (i)   with respect to any Tax assessed on a Protected Party:

             (A) under the law of the jurisdiction in which that Protected Party
                 is incorporated or, if different, the jurisdiction in which
                 that Protected Party is treated as resident for tax purposes;
                 or

             (B) under the law of the jurisdiction in which that Protected
                 Party's Facility Office is located in respect of amounts
                 received or receivable in that jurisdiction,

             if that Tax is imposed or calculated by reference to the net income
             received or receivable (but not any sum deemed to be received or
             receivable) by that Protected Party;

       (ii)  to the extent a loss, liability or cost:

                                       14


             (A) is compensated for by an increased payment under CLAUSE 10.1
                 (Gross-up); or

             (B) would have been compensated for by an increased payment under
                 CLAUSE 10.1 (Gross-up) but was not so compensated solely
                 because one of the exclusions in CLAUSE 10.3 (Qualifying
                 Lender) applied.


11.    MARKET DISRUPTION

(a)    If LIBOR is to be determined in accordance with PARAGRAPH (B) of its
       definition and a Reference Bank does not supply an offered rate by 1.00
       p.m. on a Funding 1 Liquidity Facility Drawdown Date, the applicable
       LIBOR shall, subject to PARAGRAPH (B) below, be determined on the basis
       of the quotations of the remaining Reference Bank(s).

(b)    If, in relation to any Funding 1 Liquidity Facility Drawing or proposed
       Funding 1 Liquidity Facility Drawing or Funding 1 Liquidity Facility
       Stand-by Drawing or proposed Funding 1 Liquidity Facility Stand-by
       Drawing:

       (i)   LIBOR is to be determined in accordance with PARAGRAPH (B) of its
             definition and no, or only one, Reference Bank supplies a rate for
             the purposes of determining the applicable LIBOR or the Funding 1
             Liquidity Facility Provider otherwise determines that adequate and
             fair means do not exist for ascertaining the applicable LIBOR; or

       (ii)  in the Funding 1 Liquidity Facility Provider's opinion:

             (A) matching deposits may not be available to it in the London
                 interbank market in the ordinary course of business to fund
                 that Funding 1 Liquidity Facility Loan or Funding 1 Liquidity
                 Facility Stand-by Loan for the relevant Funding 1 Liquidity
                 Facility Interest Period; or

             (B) the cost to it of matching deposits in the London interbank
                 market would be in excess of the relevant LIBOR,

       the Funding 1 Liquidity Facility Provider shall promptly notify Funding 1
       of the fact and that this CLAUSE 11 is in operation.

(c)    After any notification under PARAGRAPH (B) above, the Funding 1 Liquidity
       Facility Loan or Funding 1 Liquidity Facility Stand-by Loan, as the case
       may be, shall bear interest at the rate per annum equal to the sum of the
       applicable Funding 1 Liquidity Facility Margin, Mandatory Liquid Asset
       Cost and the cost to the Funding 1 Liquidity Facility Provider (expressed
       as a rate per annum) of funding the Funding 1 Liquidity Facility Loan or
       Funding 1 Liquidity Facility Stand-by Loan, respectively, by whatever
       means it reasonably determines to be appropriate.


12.    INCREASED COSTS

12.1   INCREASED COSTS

(a)    Subject to CLAUSE 12.2 (Exceptions) and CLAUSE 18 (Enforcement and
       Subordination), Funding 1 shall forthwith on demand by the Funding 1
       Liquidity Facility Provider pay the Funding 1 Liquidity Facility Provider
       the amount of any increased cost incurred by it as a result of:

       (i)   the introduction of, or any change in, or any change in the
             interpretation by any court or official authority or application
             of, any law or regulation or in the case of Tax, the introduction
             of or any change in or any change in the interpretation,
             administration or

                                       15



             application of any law or regulation or published practice or
             concession of any relevant tax authority (in each case occurring
             after the date of this Agreement);

       (ii)  compliance with any regulation made or modified after the date of
             this Agreement,

       including any law or regulation relating to change in currency of a
       country or reserve asset, special deposit, cash ratio, liquidity or
       capital adequacy requirements or any other form of banking or monetary
       control or in the case of taxation, any law, regulation, published
       practice or concession relating to Tax.

(b)    In this Agreement INCREASED COST means:

       (i)   an additional cost incurred by the Funding 1 Liquidity Facility
             Provider or its holding company as a result of it having entered
             into, or performing, maintaining or funding its obligations under,
             the Funding 1 Liquidity Documents; or

       (ii)  that portion of an additional cost incurred by the Funding 1
             Liquidity Facility Provider or its holding company in making,
             funding or maintaining all or any advances comprised in a class of
             advances formed by or including the Funding 1 Liquidity Facility
             Loans or Funding 1 Liquidity Facility Stand-by Loan made or to be
             made under the Funding 1 Liquidity Documents as is attributable to
             it making, funding or maintaining those participations; or

       (iii) a reduction in any amount payable to the Funding 1 Liquidity
             Facility Provider or its holding company or the effective return to
             a Funding 1 Liquidity Facility Provider under this Agreement or (to
             the extent that it is attributable to this Agreement) on its
             capital, including any reduction in the effective return from the
             Funding 1 Liquidity Facility Margin or the commitment fee payable
             under CLAUSE 17 (Fees) of this Agreement; or

       (iv)  the amount of any payment made by the Funding 1 Liquidity Facility
             Provider or its holding company, or the amount of interest or other
             return foregone by the Funding 1 Liquidity Facility Provider,
             calculated by reference to any amount received or receivable by the
             Funding 1 Liquidity Facility Provider from any other Party under
             this Agreement.


12.2   EXCEPTIONS

       CLAUSE 12.1 (Increased costs) does not apply to any increased cost:

       (a)   to the extent compensated for by the payment of the Mandatory
             Liquid Asset Cost;

       (b)   to the extent compensated for by the operation of CLAUSE 10.7 (Tax
             Indemnity); or

       (c)   to the extent that any such increased cost is attributable to any
             deduction or withholding for or on account of any Tax required to
             be made by Funding 1.


13.    ILLEGALITY

       If it is or becomes unlawful in any jurisdiction for the Funding 1
       Liquidity Facility Provider to give effect to any of its obligations as
       contemplated by this Agreement or to fund or maintain any Funding 1
       Liquidity Facility Loan or Funding 1 Liquidity Facility Stand-by Loan,
       then:

       (a)   the Funding 1 Liquidity Facility Provider may notify Funding 1
             accordingly; and

       (b)   (i) subject to CLAUSE 18 (Enforcement and Subordination), Funding 1
                 shall forthwith prepay the Funding 1 Liquidity Facility Loans
                 or Funding 1 Liquidity Facility


                                       16


                 Stand-by Loan together with all interest and all other amounts
                 payable by it to the Funding 1 Liquidity Facility Provider
                 under this Agreement; and

                (ii)    the Funding 1 Liquidity Facility Commitment shall be
                        cancelled.


14.    REPRESENTATIONS AND WARRANTIES

14.1   REPRESENTATIONS AND WARRANTIES BY FUNDING 1

       Funding 1 makes the representations and warranties set out in this CLAUSE
       14.1 to the Funding 1 Liquidity Facility Provider and the Security
       Trustee:

       (a)   STATUS

             (i)   It is a limited liability company, duly incorporated and
                   validly existing under the laws of England and Wales; and


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

       (b)   POWERS AND AUTHORITY

             It has the power to enter into and perform, and has taken all
             necessary action to authorise the entry into, performance and
             delivery of, the Funding 1 Liquidity Documents to which it is or
             will be a party and the transactions contemplated by those Funding
             1 Liquidity Documents.

       (c)   LEGAL VALIDITY

             Each Funding 1 Liquidity 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 enforceable in
             accordance with its terms.

       (d)   NON-CONFLICT

             The entry into and performance by it of, and the transactions
             contemplated by, the Funding 1 Liquidity Documents do not and will
             not:

                (i)     result in the existence or imposition of nor oblige it
                        to create any Security Interest in favour of any person
                        (other than the Funding 1 Secured Creditors) over all or
                        any of its present or future revenues or assets;

                (ii)    conflict with any law or regulation or judicial or
                        official order;

                (iii)   conflict with its constitutional documents; or

             (iv)conflict with any document which is binding upon it or any of
                 its assets.

       (e)   NO DEFAULT

             No Liquidity Facility Default is outstanding or might result from
             the making of any Funding 1 Liquidity Facility Loan or Funding 1
             Liquidity Facility Stand-by Loan.

       (f)   AUTHORISATIONS

                                       17



             All authorisations required or desirable in connection with the
             entry into, performance, validity and enforceability of, and the
             transactions contemplated by, the Funding 1 Liquidity Documents
             have been obtained or effected (as appropriate) and are in full
             force and effect.

       (g)   LITIGATION

             No litigation, arbitration or administrative proceedings involving
             Funding 1 are current or, to its knowledge, pending or threatened,
             which might, if adversely determined, have a material adverse
             effect on the business or financial condition of Funding 1 or the
             ability of Funding 1 to perform its obligations under this
             Agreement.

       (h)   SECURITY INTERESTS

             None of the assets of Funding 1 is affected by any Security
             Interest, and Funding 1 is not a party to, nor is it or any of its
             assets bound by, any order, agreement or instrument under which
             Funding 1 is, or in certain events may be, required to create,
             assume or permit to arise any Security Interest, other than the
             Security Interests created by the Funding 1 Deed of Charge.

       (i)   NO OTHER BUSINESS

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

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

       (j)   OWNERSHIP

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

                (ii)    its shares are fully paid.

       (k)   GOOD TITLE AS TO ASSETS

             Funding 1 is and will remain the absolute beneficial owner of the
             Funding 1 Share and absolute legal and beneficial owner of all
             other assets charged or assigned by the Funding 1 Deed of Charge to
             which it is a party.

       (l)   TAX

                (i)     It is tax resident and legally domiciled in its
                        jurisdiction of incorporation; and

                (ii)    it has no branch, business establishment or other fixed
                        establishment outside the United Kingdom.

       (m)   FUNDING 1 DEED OF CHARGE

             The Funding 1 Deed of Charge creates, or will create when the
             Funding 1 Liquidity Facility Stand-by Account is opened and the
             Funding 1 Liquidity Facility Stand-By Deposit is credited to such
             account, a first priority Security Interest of the type described
             in the

                                       18



             Funding 1 Deed of Charge over the Funding 1 Liquidity Facility
             Stand-by Deposit in favour of the Security Trustee.

       For the avoidance of doubt, a breach by Funding 1 of any representation
       or warranty contained in this CLAUSE 14.1 or otherwise in this Agreement
       shall not entitle the Funding 1 Liquidity Facility Provider to terminate
       this Agreement or declare the Funding 1 Liquidity Facility Loans or the
       Funding 1 Liquidity Facility Stand-by Loans or any other amounts payable
       under this Agreement due and payable or to prevent any utilisation of the
       Funding 1 Liquidity Facility or the Stand-by Facility or any Funding 1
       Liquidity Facility Loan or Funding 1 Liquidity Facility Stand-by Loan
       being made.


14.2   REPRESENTATIONS AND WARRANTIES BY THE FUNDING 1 LIQUIDITY FACILITY
       PROVIDER

       The Funding 1 Liquidity Facility Provider makes the representations and
       warranties set out in this CLAUSE 14.2 to Funding 1 and the Security
       Trustee.

       (a)   STATUS

             It is duly incorporated with limited liability under the laws of
             the jurisdiction of its incorporation and is an authorised
             institution under the FSMA 2000.

       (b)   TAX STATUS

             It is a Qualifying Lender.

       (c)   POWERS AND AUTHORISATIONS

             The documents which contain or establish its constitution include
             provisions which give power, and all necessary corporate authority
             has been obtained and action taken, for it to sign and deliver, and
             perform the transactions contemplated in this Agreement and the
             agreements entered into in connection herewith and this Agreement
             and the agreements entered into in connection herewith constitute
             its valid, legal and binding obligations.

       (d)   RATING

             It has the Requisite Ratings (and will promptly notify both Funding
             1 and the Security Trustee of the occurrence of any downgrading by
             the Rating Agencies of any of its rated debt obligations to a level
             below the Requisite Ratings).

       (e)   NON-VIOLATION

             Neither the signing and delivery of this Agreement nor the
             performance of any of the transactions contemplated in it does or
             will contravene or constitute a default under, or cause to be
             exceeded any limit on the Funding 1 Liquidity Facility Provider or
             the powers of its directors imposed by or contained in (i) any law
             by which it or any of its assets is bound or affected, or (ii) any
             agreement to which it is a party or by which any of its assets is
             bound.


14.3   TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES

       The representations and warranties set out in this CLAUSE 14
       (Representations and warranties):

       (a)   are made on the date of this Agreement; and

                                       19



       (b)   save in respect of the representation and warranty of the Funding 1
             Liquidity Facility Provider given under CLAUSE 14.2(B) (Tax
             Status), are deemed to be repeated by the relevant Party on the
             date of each Funding 1 Liquidity Facility Request, each Funding 1
             Liquidity Facility Drawdown Date and each Funding 1 Interest
             Payment Date with reference to the facts and circumstances then
             existing.


15.    UNDERTAKINGS

15.1   DURATION

       The undertakings in this CLAUSE 15 remain in force from the date of this
       Agreement for so long as any amount is or may be outstanding under this
       Agreement or any Funding 1 Liquidity Facility Commitment is in force.


15.2   FINANCIAL INFORMATION

       Funding 1 shall supply to the Funding 1 Liquidity Facility Provider and
       the Security Trustee:

       (a)   as soon as the same are available (and in any case before the
             latest date for publication in accordance with the Companies Xxx
             0000, as amended), its audited accounts for that financial year
             which shall be in such form as will comply with relevant legal and
             accounting requirements for the time being; and

       (b)   promptly such other information as the Security Trustee may
             reasonably request.


15.3   INFORMATION -- MISCELLANEOUS

       Funding 1 shall supply to the Funding 1 Liquidity Facility Provider
       promptly, such further information in its possession or control regarding
       its financial condition and operations as it supplies to the Security
       Trustee, if the Funding 1 Liquidity Facility Provider so requests.


15.4   NOTIFICATION OF DEFAULT

       Funding 1 shall notify the Funding 1 Liquidity Facility Provider of any
       Funding 1 Liquidity Facility Default (and the steps, if any, being taken
       to remedy it) promptly upon its occurrence.


15.5   AUTHORISATIONS

       Funding 1 shall promptly:

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

       (b)   supply certified copies to the Funding 1 Liquidity Facility
             Provider of,

       any authorisation required under any law or regulation to enable it to
       perform its obligations under, or for the validity or enforceability of,
       any Funding 0 Xxxxxxxxx Xxxxxxxx.


00.0   XXXXXX XXXXXX ACTIVITIES

       Funding 1 will not engage in any activities in the United States
       (directly or through agents), will not derive any income from United
       States sources as determined under United States income tax principles,
       and will not hold any property if doing so would cause it to be engaged
       or deemed to be engaged in a trade or business within the United States
       as determined under United States income tax principles.

                                       20


16.    DEFAULT

16.1   FUNDING 1 LIQUIDITY FACILITY DEFAULT

       Each of the events set out in CLAUSES 16.2 (Non-Payment) to 16.4
       (Unlawfulness) (inclusive) is a Funding 1 Liquidity Facility Default
       (whether or not caused by any reason whatsoever outside the control of
       Funding 1 or any other person).


16.2   NON-PAYMENT

(a)    Subject to PARAGRAPH (B) below, Funding 1 does not pay within 3 London
       Business Days of the due date any amount payable by it under the Funding
       1 Liquidity Documents at the place at and in the currency in which it is
       expressed to be payable.

(b)    The Funding 1 Liquidity Facility Provider agrees that the non-payment of
       any Funding 1 Liquidity Subordinated Amounts shall only constitute a
       Funding 1 Liquidity Facility Default under PARAGRAPH (A) above in
       circumstances where Funding 1 has the requisite funds to pay such amounts
       in accordance with the Funding 1 Deed of Charge on the relevant due date
       and any such Funding 1 Liquidity Subordinated Amounts are not then paid.


16.3   INTERCOMPANY LOAN ACCELERATION NOTICE

       An Intercompany Loan Acceleration Notice is served or the Security
       Trustee having become bound to serve an Intercompany Loan Acceleration
       Notice fails to do so within 30 days of becoming so bound.


16.4   UNLAWFULNESS

       It is or becomes unlawful for Funding 1 to perform any of its obligations
       under the Funding 1 Liquidity Documents.


16.5   ACCELERATION

       On and at any time after the occurrence of a Funding 1 Liquidity Facility
       Default and subject to CLAUSE 18 (Enforcement and Subordination) and if
       such Funding 1 Liquidity Facility Default is continuing the Funding 1
       Liquidity Facility Provider may by notice to Funding 1:

       (a)   cancel the Funding 1 Liquidity Facility Commitment; and/or

       (b)   demand that all or part of the Funding 1 Liquidity Facility Loans
             or the Funding 1 Liquidity Facility Stand-by Loans, together with
             accrued interest, and all other amounts accrued under this
             Agreement be immediately due and payable, whereupon they shall
             become immediately due and payable; and/or

       (c)   demand that all or part of the Funding 1 Liquidity Facility Loans
             or the Funding 1 Liquidity Facility Stand-by Loans be payable on
             demand, whereupon they shall immediately become payable on demand.


17.    FEES

17.1   COMMITMENT FEE AND CONTINGENT FEE

(a)    Funding 1 shall (subject to CLAUSE 17.1(B) and (C) below and to CLAUSE 18
       (Enforcement and Subordination)) pay to the Funding 1 Liquidity Facility
       Provider a commitment fee computed at the

                                       21



       rate of 0.08 per cent. per annum on the undrawn, uncancelled amount of
       the Funding 1 Liquidity Facility Commitment during the period from the
       date of this Agreement up to and including the last day of the Funding 1
       Liquidity Facility Commitment Period.

(b)    In the event that a Funding 1 Liquidity Facility Stand-by Drawing is
       made, and for so long as any amount is outstanding under the First Issuer
       Intercompany Loan:

       (i)   in respect of a Funding 1 Liquidity Facility Stand-by Drawing up to
             (and including) the first [GBP]60,000,000, the Commitment Fee
             referred to in CLAUSE 17.1(A) (Commitment Fee and Contingent Fee)
             will not be payable and in its place Funding 1 will (subject to
             CLAUSE 18 (Enforcement and Subordination)) pay to the Funding 1
             Liquidity Facility Provider interest as determined in accordance
             with CLAUSE 8.1 (Interest rate (Funding 1 Liquidity Facility
             Loans)) and CLAUSE 8.2 (Interest rate (Funding 1 Liquidity Facility
             Stand-by Loans)); and

       (ii)  in respect of a Funding 1 Liquidity Facility Stand-by Drawing equal
             to and in excess of [GBP]60,000,001, the Commitment Fee referred to
             in CLAUSE 17.1(A) (Commitment Fee and Contingent Fee) will not be
             payable and in its place Funding 1 will (subject to CLAUSE 18
             (Enforcement and Subordination) pay to the Funding 1 Liquidity
             Facility Provider a contingent fee computed at the rate of 0.38 per
             cent. per annum on the amount of the Funding 1 Liquidity Facility
             Stand-by Drawing in excess of [GBP]60,000,000, together with, for
             the avoidance of doubt, any amount payable pursuant to CLAUSE
             17.1(B)(I) (Commitment Fee and Contingent Fee) with respect to a
             Funding 1 Liquidity Facility Stand-by Drawing up to (and including)
             the first [GBP]60,000,000, plus an amount equal to any interest
             received by Funding 1 on the Funding 1 Liquidity Facility Stand-by
             Account insofar as it relates to the amount in excess of
             [GBP]60,000,000.

(c)    In the event that the First Issuer Intercompany Loan is repaid or is
       otherwise cancelled and a Funding 1 Liquidity Stand-by Drawing is made,
       the Commitment Fee referred to in CLAUSE 17.1(A) (Commitment Fee and
       Contingent Fee) will not be payable and in its place Funding 1 will
       (subject to CLAUSE 18 (Enforcement and Subordination) pay to the Funding
       1 Liquidity Facility Provider a contingent fee computed at the rate of
       0.38 per cent. per annum on the amount of the Funding 1 Liquidity Stand-
       by Drawing, plus an amount equal to any interest received by Funding 1 on
       the Funding 1 Liquidity Facility Stand-by Account.

(d)    Subject to CLAUSE 18 (Enforcement and Subordination), the accrued
       commitment fee and contingent fee is payable quarterly in arrear on each
       Funding 1 Interest Payment Date. The accrued commitment fee and
       contingent fee is also payable to the Funding 1 Liquidity Facility
       Provider on the cancelled amount of the Funding 1 Liquidity Facility
       Commitment at the time the cancellation takes effect.


17.2   VAT

(a)    All payments to be made by Funding 1 under the Funding 1 Liquidity
       Documents are exclusive of VAT chargeable thereon and Funding 1 shall pay
       to the Funding 1 Liquidity Facility Provider a sum in respect of any VAT
       chargeable in respect of any supply made by the Funding 1 Liquidity
       Facility Provider for the purposes of VAT in connection with the Funding
       1 Liquidity Documents.

(b)    If VAT is chargeable on any supply made by the Funding 1 Liquidity
       Facility Provider to any other person in connection with a Funding 1
       Liquidity Document and Funding 1 is required by the terms of any Funding
       1 Liquidity Document to pay an amount equal to the consideration for such
       supply to the Funding 1 Liquidity Facility Provider, Funding 1 shall also
       pay to the Funding 1 Liquidity Facility Provider (in addition to and at
       the same time as paying such amount) an amount equal to the amount of
       such VAT.

                                       22


(c)    Where under the Funding 1 Liquidity Documents, Funding 1 is required to
       reimburse or indemnify the Funding 1 Liquidity Facility Provider against
       any costs, expenses (including legal fees), loss or liability or
       otherwise, such obligation to reimburse or indemnify shall extend to any
       VAT charged to the Funding 1 Liquidity Facility Provider on such costs,
       expenses (including legal fees) or in respect of such loss, liability or
       otherwise which is irrecoverable by the Funding 1 Liquidity Facility
       Provider.


18.    ENFORCEMENT AND SUBORDINATION

(a)    The Funding 1 Liquidity Facility Provider acknowledges to the Security
       Trustee that it is bound by the terms of the Funding 1 Deed of Charge
       and, in particular, confirms that no sum, whether in respect of principal
       or interest or otherwise relating to any Funding 1 Liquidity Facility
       Loan or any Funding 1 Liquidity Facility Stand-by Loan, shall be paid by
       Funding 1 except in accordance with the provisions of the Funding 1 Cash
       Management Agreement and the Funding 1 Deed of Charge unless and until
       all sums required by the Funding 1 Cash Management Agreement or the
       Funding 1 Deed of Charge, as the case may be, to be paid or provided for
       in priority thereto have been paid or discharged in full.

(b)    The Funding 1 Liquidity Facility Provider further agrees that only the
       Security Trustee may enforce the security created in favour of, inter
       alios, the Funding 1 Liquidity Facility Provider and the Security Trustee
       by the Funding 1 Deed of Charge and that the Funding 1 Liquidity Facility
       Provider shall not take any steps for the purpose of:

       (i)   recovering any debts whatsoever owing to it by Funding 1 save as
             provided for in accordance with the terms of the Funding 1 Deed of
             Charge (including, without limitation, by exercising any right of
             set-off); or

       (ii)  enforcing any rights arising out of this Agreement against Funding
             1; or

       (iii) procuring the winding-up, administration or liquidation of Funding
             1 in respect of any of its liabilities whatsoever,

       unless the Security Trustee, having become bound to serve an Intercompany
       Loan Acceleration Notice, fails to do so within 30 days of becoming so
       bound and that failure is continuing (in which case the Funding 1
       Liquidity Facility Provider shall be entitled to take any such steps and
       proceedings as it shall deem necessary other than (i) any legal
       proceedings for the winding-up of, or for an administration order or (ii)
       filing documents with the court for the appointment of an administrator
       or (iii) serving a notice of intention to appoint an administrator, in
       respect of Funding 1) provided that the Funding 1 Liquidity Facility
       Provider shall not be entitled to take any steps or proceedings pursuant
       to this Agreement which would contravene CLAUSES 5 to 9 of the Funding 1
       Deed of Charge.

(c)    Subject to PARAGRAPH (B) above, the Funding 1 Liquidity Facility Provider
       agrees to defer taking any action or proceedings against Funding 1 to
       recover any amounts payable by Funding 1 to the Funding 1 Liquidity
       Facility Provider under this Agreement except to the extent expressly
       permitted by the provisions of the Funding 1 Deed of Charge unless and
       until (then only to the extent that) Funding 1 has assets sufficient to
       meet such claim in full having taken into account all other liabilities
       (actual, contingent or prospective) of Funding 1 which under the Funding
       1 Deed of Charge rank pari passu with or in priority to its liabilities
       to the Funding 1 Liquidity Facility Provider under this Agreement,
       provided however that nothing in this PARAGRAPH (C) shall prevent the
       Funding 1 Liquidity Facility Provider from proving for the full amount
       owed to it by Funding 1 under this Agreement in the liquidation of
       Funding 1.

                                       23



(d)    Without prejudice to the other provisions of this CLAUSE 18, the Funding
       1 Liquidity Facility Provider covenants with the Security Trustee that
       if, whether in the liquidation of Funding 1 or otherwise (and
       notwithstanding the provisions of this CLAUSE 18), any payment (whether
       of principal, interest or otherwise) is received by it in respect of a
       Funding 1 Liquidity Facility Loan or a Funding 1 Liquidity Facility
       Stand-by Loan other than in accordance with CLAUSES 4 and 6 of the
       Funding 1 Cash Management Agreement and CLAUSES 7 and 8 of the Funding 1
       Deed of Charge, the amount so paid shall be received and held by the
       Funding 1 Liquidity Facility Provider upon trust for the Security Trustee
       and shall be paid over to the Security Trustee forthwith upon receipt
       provided however that this PARAGRAPH (D) shall have effect only to the
       extent that it does not constitute or create and is not deemed to
       constitute or create any mortgage, charge or other Security Interest of
       any kind.


19.    EXPENSES

19.1   INITIAL AND SPECIAL COSTS

       Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
       forthwith on demand pay the Funding 1 Liquidity Facility Provider the
       amount of all costs and expenses (including reasonable legal fees)
       incurred by it in connection with:

       (a)   the negotiation, preparation, printing and execution of:

             (i)     this Agreement and any other documents referred to in
                     this Agreement;

             (ii)    any other Funding 1 Liquidity Document (other than a
                     Novation Certificate) executed after the date of this
                     Agreement;

       (b)   any amendment, waiver, consent or suspension of rights (or any
             proposal for any of the foregoing) requested by or on behalf of
             Funding 1 or, in the case of CLAUSE 9.4 (Change of currency), the
             Funding 1 Liquidity Facility Provider and relating to a Funding 1
             Liquidity Document or a document referred to in any Funding 1
             Liquidity Document; and

(c)    any other matter, not of an ordinary administrative nature, arising out
       of or in connection with a Funding 1 Liquidity Document.


19.2   ENFORCEMENT COSTS

       Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
       forthwith on demand pay to the Funding 1 Liquidity Facility Provider the
       amount of all costs and expenses (including legal fees) incurred by it:

       (a)   in connection with the enforcement of, or the preservation of any
             rights under, any Funding 1 Liquidity Document; or

       (b)   in investigating any possible Funding 1 Liquidity Facility Default.


20.    STAMP DUTIES

Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall pay and
forthwith on demand indemnify the Funding 1 Liquidity Facility Provider against
any liability it incurs in respect of any United Kingdom stamp, registration
and similar tax which is or becomes payable in connection with the entry into,
performance or enforcement of any Funding 1 Liquidity Document.

                                       24



21.    INDEMNITIES

21.1   CURRENCY INDEMNITY

(a)    Subject to CLAUSE 18 (Enforcement and Subordination), if the Funding 1
       Liquidity Facility Provider receives an amount in respect of Funding 1's
       liability under the Funding 1 Liquidity Documents or if that liability is
       converted into a claim, proof, judgment or order in a currency other than
       the currency (the CONTRACTUAL CURRENCY) in which the amount is expressed
       to be payable under the relevant Funding 1 Liquidity Document:

       (i)   Funding 1 shall indemnify the Funding 1 Liquidity Facility Provider
             as an independent obligation against any loss or liability arising
             out of or as a result of the conversion;

       (ii)  if the amount received by the Funding 1 Liquidity Facility
             Provider, when converted into the contractual currency at a market
             rate in the usual course of its business, is less than the amount
             owed in the contractual currency, Funding 1 shall forthwith on
             demand pay to the Funding 1 Liquidity Facility Provider an amount
             in the contractual currency equal to the deficit; and

       (iii) Funding 1 shall forthwith on demand pay to the Funding 1 Liquidity
             Facility Provider on demand any exchange costs and taxes payable in
             connection with any such conversion.

(b)    Funding 1 waives any right it may have in any jurisdiction to pay any
       amount under the Funding 1 Liquidity Documents in a currency other than
       that in which it is expressed to be payable.


21.2   OTHER INDEMNITIES

       Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
       forthwith on demand indemnify the Funding 1 Liquidity Facility Provider
       against any loss or liability which that Funding 1 Liquidity Facility
       Provider incurs as a consequence of:

       (a)   the operation of CLAUSE 16.5 (Acceleration) or if the loss or
             liability is caused by Funding 1 making a payment other than in
             accordance with CLAUSE 9 (Payments);

       (b)   any payment of principal or an overdue amount being received from
             any source otherwise than on its Funding 1 Interest Payment Date
             and, for the purposes of this PARAGRAPH (B), the Funding 1 Interest
             Payment Date of an overdue amount is the last day of each
             Designated Interest Period (as defined in CLAUSE 8.4 (Default
             interest)); or

       (c)   (other than by reason of negligence or default by the Funding 1
             Liquidity Facility Provider) a Funding 1 Liquidity Facility Loan or
             a Funding 1 Liquidity Facility Stand-by Loan not being made after
             Funding 1 has delivered a Funding 1 Liquidity Facility Request for
             that Funding 1 Liquidity Facility Loan or Funding 1 Liquidity
             Facility Stand-by Loan; or

       (d)   any reasonable costs, including legal fees, which the Funding 1
             Liquidity Facility Provider may sustain or incur as a consequence
             of any default by Funding 1 in the performance of any of the
             obligations expressed to be assumed by it in this Agreement.

       Funding 1's liability in each case includes any loss of margin or other
       loss or expense on account of funds borrowed, contracted for or utilised
       to fund any amount payable under any Funding 1 Liquidity Document, any
       amount repaid or prepaid or any Funding 1 Liquidity Facility Loan or
       Funding 1 Liquidity Facility Stand-by Loan.

                                       25



22.    EVIDENCE AND CALCULATIONS

22.1   ACCOUNTS

       Accounts maintained by the Funding 1 Liquidity Facility Provider in
       connection with this Agreement are prima facie evidence of the matters to
       which they relate.


22.2   CERTIFICATES AND DETERMINATIONS

       Any certification or determination by the Funding 1 Liquidity Facility
       Provider of a rate or amount under this Agreement is, in the absence of
       manifest error, conclusive evidence of the matters to which it relates.


22.3   CALCULATIONS

       Interest (including any applicable Mandatory Liquid Asset Cost) and the
       fee payable under CLAUSE 17.1 (Commitment fee and contingent fee) accrue
       from day to day and are calculated on the basis of the actual number of
       days elapsed and a year of 365 days or, if market practice dictates, 360
       days.


23. AMENDMENTS AND WAIVERS

23.1   PROCEDURE

       Subject to CLAUSE 25 of the Funding 1 Deed of Charge (Supplemental
       Provisions Regarding the Security Trustee), any term of the Funding 1
       Liquidity Documents may be amended or waived with the written agreement
       of Funding 1, the Security Trustee and the Funding 1 Liquidity Facility
       Provider.


23.2   WAIVERS AND REMEDIES CUMULATIVE

       The rights of the Funding 1 Liquidity Facility Provider under the Funding
       1 Liquidity Documents:

       (a)   may be exercised as often as necessary;

       (b)   are cumulative and not exclusive of its rights under the general
             law; and

       (c)   may be waived only in writing and specifically.

       Delay in exercising or non-exercise of any such right is not a waiver of
       that right.


24. CHANGES TO THE PARTIES

24.1   TRANSFERS BY FUNDING 1

       Funding 1 may not assign, transfer, novate or dispose of any of, or any
       interest in, the Funding 1 Liquidity Facility Commitment and/or rights
       and/or obligations under this Agreement except that Funding 1 may assign
       its rights under this Agreement to the Security Trustee pursuant to the
       Funding 1 Deed of Charge.


24.2   TRANSFER BY THE SECURITY TRUSTEE

       The Security Trustee may assign its rights under this Agreement to any
       successor security trustee or trustees under the Funding 1 Deed of
       Charge.

                                       26



24.3   TRANSFERS BY THE CASH MANAGER

       The Cash Manager may assign its rights under this Agreement to any
       successor Cash Manager under the Cash Management Agreement.


24.4   TRANSFERS BY THE FUNDING 1 LIQUIDITY FACILITY PROVIDER

(a)    The Funding 1 Liquidity Facility Provider may, subject to the following
       provisions of this Sub-clause, at any time assign or transfer (including
       by way of novation) any of its rights and obligations under this
       Agreement to a new liquidity facility provider which is a Qualifying
       Lender (save that the Funding 1 Liquidity Facility Provider may assign or
       transfer to a liquidity facility provider who is not at the time of the
       proposed assignment or transfer a Qualifying Lender if, as a matter of
       law, no Tax Payment or Increased Cost will be payable by Funding 1
       immediately after such proposed assignment or transfer) and has the
       Requisite Ratings (the NEW LIQUIDITY FACILITY PROVIDER).

(b)    The consent of Funding 1 and the Security Trustee is required for any
       assignment or transfer unless:

       (i)   the New Liquidity Facility Provider is an Affiliate of the Funding
             1 Liquidity Facility Provider; or

       (ii)  a Funding 1 Liquidity Facility Default is outstanding (in which
             case no consent is required from Funding 1 or the Security
             Trustee).

(c)    The consent of Funding 1 and the Security Trustee must not be
       unreasonably withheld or delayed. Funding 1 and the Security Trustee will
       be deemed to have given their consent fourteen days after Funding 1 and
       the Security Trustee are given notice of the request unless it is
       expressly refused by Funding 1 or the Security Trustee within that time.
       Upon such consent being given (or deemed given), Funding 1 and the
       Security Trustee will take such steps as are reasonably required by the
       Funding 1 Liquidity Facility Provider to effect the assignment or
       transfer, including the execution of the transfer certificate referred to
       in paragraph (d) below.

(d)    A transfer of obligations will be effective only if the Funding 1
       Liquidity Facility Provider and the New Liquidity Facility Provider
       deliver to Funding 1 and the Security Trustee a duly completed
       certificate, substantially in the form of Schedule 4 (Form of Novation
       Certificate) and each of Funding 1 and the Security Trustee executes the
       certificate to confirm its consent to the transfer. On the transfer
       becoming effective in this manner the Funding 1 Liquidity Facility
       Provider will be released from its obligations under this Agreement to
       the extent that they are transferred to the New Liquidity Facility
       Provider.

(e)    Nothing in this Agreement restricts the ability of the Funding 1
       Liquidity Facility Provider to sub-contract an obligation if the Funding
       1 Liquidity Facility Provider remains primarily liable under this
       Agreement for that obligation.


24.5   ASSIGNMENTS AND TRANSFERS REQUIRED BY FUNDING 1

(a)    If:

       (i)   Funding 1 is, or will be, required to pay to the Funding 1
             Liquidity Facility Provider a Tax Payment or an Increased Cost or a
             Relevant Event has occurred; and

       (ii)  Funding 1 has not cancelled the Funding 1 Liquidity Facility
             Commitment in whole pursuant to CLAUSE 7.2 (Voluntary and
             Cancellation),

                                       27



       then Funding 1 may by notice to the Funding 1 Liquidity Facility
       Provider, require the Funding 1 Liquidity Facility Provider to novate (at
       the cost of Funding 1) its rights and obligations under this Agreement to
       a new liquidity facility provider which is a Qualifying Lender and has
       the Requisite Ratings in such manner as is required by Funding 1 and
       approved by the Security Trustee.

(b)    A condition precedent to any novation by the Funding 1 Liquidity Facility
       Provider under this CLAUSE 24.5, is that the Funding 1 Liquidity Facility
       Provider has been repaid all amounts outstanding to it under this
       Agreement.

(c)    A novation will be effective only if the Funding 1 Liquidity Facility
       Provider and the New Liquidity Facility Provider deliver to Funding 1 and
       the Security Trustee a duly completed certificate, substantially in the
       form of Schedule 4 (Form of Novation Certificate) and each of Funding 1
       and the Security Trustee executes the certificate to confirm its consent
       to the transfer. On the transfer becoming effective in this manner the
       Funding 1 Liquidity Facility Provider will be released from its
       obligations under this Agreement to the extent that they are transferred
       to the New Liquidity Facility Provider.

(d)    If there is any conflict between Funding 1's rights under paragraph (a)
       above and the Funding 1 Liquidity Facility Provider's rights under Sub-
       clause 24.4 (Transfers by the Funding 1 Liquidity Facility Provider),
       then the views of Funding 1 will prevail with the result that if each of
       Funding 1 and the Funding 1 Liquidity Facility Provider had selected a
       New Liquidity Facility Provider, or wished to adopt a different approach
       under paragraph (a) above or Sub-clause 24.4, as appropriate, the
       selection and/or the approach to be adopted will be that selected or
       adopted (as the case may be) by Funding 1.


24.6   COSTS RESULTING FROM CHANGE OF LIQUIDITY FACILITY PROVIDER OR FACILITY
       OFFICE

       If:

       (a)   the Funding 1 Liquidity Facility Provider assigns or transfers any
             of its rights and obligations under the Funding 1 Liquidity
             Documents under Sub-clause 24.4 (Transfers by the Funding 1
             Liquidity Facility Provider) or changes its facility office; and

       (b)   as a result of circumstances existing at the date the assignment,
             transfer or change occurs, Funding 1 would be obliged to pay a Tax
             Payment or an Increased Cost,

       then, unless the assignment, transfer or change is made by the Funding 1
       Liquidity Facility Provider to mitigate any circumstances giving rise to
       the Tax Payment, Increased Cost or a right to be prepaid and/or cancelled
       by reason of illegality, Funding 1 is only obliged to pay that Tax
       Payment or Increased Cost to the same extent that it would have been
       obliged to make such a payment to the Funding 1 Liquidity Facility
       Provider if no assignment, transfer or change had occurred.


25.    DISCLOSURE OF INFORMATION

       The Funding 1 Liquidity Facility Provider may disclose to any person with
       whom it is proposing to enter, or has entered into, any kind of transfer,
       participation or other agreement in relation to this Agreement:

       (a)   a copy of any Funding 1 Liquidity Document; and

       (b)   any information which the Funding 1 Liquidity Facility Provider has
             acquired under or in connection with any Funding 1 Liquidity
             Document,

       if that person undertakes to Funding 1 and the Security Trustee to keep
       the information confidential.

                                       28


26.    SET-OFF

(a)    The Funding 1 Liquidity Facility Provider undertakes with Funding 1 and
       the Security Trustee not to exercise or claim any right of set-off or
       combination or consolidation of accounts in respect of any account of
       Funding 1 with the Funding 1 Liquidity Facility Provider and/or interest
       accruing on amounts in any such account or any part of such account in or
       towards, or conditionally upon satisfaction of any liabilities to the
       Funding 1 Liquidity Facility Provider of Funding 1 or itself in any other
       capacity whatsoever or any other person.

(b)    In the event that the Funding 1 Liquidity Facility Provider (in breach of
       its undertaking in PARAGRAPH (A) above) exercises any right of set-off or
       combination or consolidation of accounts, the Funding 1 Liquidity
       Facility Provider shall pay to Funding 1 such additional amount so that
       the net amount received by Funding 1 will equal the full amount which
       would have been received by it if the Funding 1 Liquidity Facility
       Provider had not exercised or claimed such right of set-off or
       combination or consolidation of accounts.


27.    SEVERABILITY

       If a provision of any Funding 1 Liquidity Document is or becomes illegal,
       invalid or unenforceable in any jurisdiction, that shall not affect:

       (a)   the legality, validity or enforceability in that jurisdiction of
             any other provision of the Funding 1 Liquidity Documents; or

       (b)   the legality, validity or enforceability in other jurisdictions of
             that or any other provision of the Funding 1 Liquidity Documents.


28.    COUNTERPARTS

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


29.    NOTICES

29.1   GIVING OF NOTICES

       Any notice, communication or demand made under or in connection with this
       Agreement shall be in writing and shall be delivered personally, or by
       post, fax or cable to the addresses given in CLAUSE 29.2 (Addresses for
       notices) or at such other address as the recipient may have notified to
       the other party in writing. Proof of posting or despatch of any notice or
       communication shall be deemed to be proof of receipt:

       (a)   in the case of a letter, on the third business day after posting;
             and

       (b)   in the case of a facsimile on the business day of despatch.

                                       29



29.2   ADDRESSES FOR NOTICES

       The addresses referred to in this CLAUSE 29 (Notices) are as follows:

       (a)   in the case of Funding 1, to Permanent Funding (No. 1) Limited at
             00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (facsimile number +44 (0) 20
             7398 6325) for the attention of the Secretary with a copy to HBOS
             Treasury Services plc, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX
             (facsimile no. x00 (0) 00 0000 0000) for the attention of Head of
             Mortgage Securitisation and Covered Bonds;

       (b)   in the case of the Cash Manager, to Halifax plc at Xxxxxxx Xxxx,
             Xxxxxxx, Xxxx Xxxxxxxxx XX0 0XX (LP/3/3/SEC) (facsimile number +44
             (0) 113 235 7511) for the attention of Head of Mortgage
             Securitisation with a copy to HBOS Treasury Services plc, 00 Xxx
             Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile no. x00 (0) 00 0000 0000)
             for the attention of Head of Mortgage Securitisation and Covered
             Bonds;

       (c)   in the case of the Security Trustee, to The Bank of Xxx Xxxx, Xxx
             Xxxxxx Xxxxxx, Xxxxxx X00 0XX (facsimile number + 44 (020) 7964
             6061/6399) for the attention of Corporate Trust Services; and

       (d)   in the case of the Funding 1 Liquidity Facility Provider, to
             JPMorgan Chase Bank, N.A., 000 Xxxxxx Xxxx, Xxxxxx XX0X 0XX
             (facsimile no. x00 00 0000 0000/5311) for the attention of European
             Loans,

       or to such other address or facsimile number or for the attention of such
       other person or entity as may from time to time be notified by any party
       to the others by written notice in accordance with the provisions of this
       CLAUSE 29.


30.    THIRD PARTY RIGHTS

       A person who is not a party to this Agreement has no right under the
       Contracts (Rights of Third Parties) Xxx 0000 to enforce any term of this
       Agreement, but this does not affect any right or remedy of a third party
       which exists or is available apart from that Act.


31.    GOVERNING LAW

       This Agreement is governed by and construed in accordance with English
       law.


32.    SUBMISSION TO JURISDICTION

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

This Agreement has been entered into on the date stated at the beginning of
this Agreement.

                                       30



                                   SCHEDULE 1

                         CONDITIONS PRECEDENT DOCUMENTS

1.     A copy of the memorandum and articles of association and certificate of
       incorporation of Funding 1.

2.     A copy of a resolution of the board of directors of Funding 1:

       (a)   approving the terms of, and the transactions contemplated by, this
             Agreement and resolving that it execute this Agreement;

       (b)   authorising a specified person or persons to execute this Agreement
             on its behalf; and

       (c)   authorising a specified person or persons, on its behalf, to sign
             and/or despatch all other documents and notices to be signed and/or
             despatched by it under or in connection with this Agreement.

3.     A specimen of the signature of each person authorised by the resolution
       referred to in PARAGRAPH 2 above.

4.     A certificate of an authorised signatory of Funding 1 certifying that
       each copy document specified in this SCHEDULE 1 is correct, complete and
       in full force and effect as at a date no earlier than the date of this
       Agreement.

5.     The Transaction Documents.

6.     Confirmation from Xxxxxxxx Chance LLP as legal counsel to the Security
       Trustee that they have received, on behalf of the Security Trustee, a
       transaction legal opinion from Xxxxx & Overy LLP.

                                       31



                                   SCHEDULE 2

                 CALCULATION OF THE MANDATORY LIQUID ASSET COST

(a)    For the purposes of PARAGRAPH (A) of the definition of Mandatory Liquid
       Asset Cost, the Mandatory Liquid Asset Cost for a Funding 1 Liquidity
       Facility Loan or a Funding 1 Liquidity Facility Stand-by Loan for its
       Funding 1 Liquidity Facility Interest Period is the rate determined by
       the Funding 1 Liquidity Facility Provider (rounded upward, if necessary,
       to four decimal places) calculated in accordance with the following
       formulae:

       BY+S(Y -- Z)+Fx(0.01)
       ----------------------% per annum = Mandatory Liquid Asset Cost
          100 -- (B+S)

       where on the day of application of the formula:

       B     is the percentage of the Funding 1 Liquidity Facility Provider's
             eligible liabilities (in excess of any stated minimum) which the
             Bank of England requires the Funding 1 Liquidity Facility Provider
             to hold on a non-interest-bearing deposit account in accordance
             with its cash ratio requirements;

       Y     is the applicable LIBOR for that Funding 1 Liquidity Facility
             Provider;

       S     is the percentage of the Funding 1 Liquidity Facility Provider's
             eligible liabilities which the Bank of England requires the Funding
             1 Liquidity Facility Provider to place as a special deposit;

       Z     is the lower of Y and the interest rate per annum paid by the Bank
             of England on special deposits; and

       F     is the charge payable by the Funding 1 Liquidity Facility Provider
             to the Financial Services Authority under the fees rules (but, for
             this purpose, calculated by the Funding 1 Liquidity Facility
             Provider on a notional basis as being the average of the fee
             tariffs within fee block Category A1 (Deposit acceptors) of the
             fees rules, applying any applicable discount and ignoring any
             minimum fee required under the fees rules) and expressed in pounds
             per [GBP]1 million of the tariff base of the Funding 1 Liquidity
             Facility Provider.

(b)    For the purposes of this Schedule 2:

       (i)   ELIGIBLE LIABILITIES and SPECIAL DEPOSITS have the meanings given
             to them at the time of application of the formula under or pursuant
             to the Bank of Xxxxxxx Xxx 0000 or by the Bank of England; and

       (ii)  FEE BASE means the then current rules on periodic fees in the
             Supervision Manual of the FSA Handbook; and

       (iii) TARIFF BASE has the meaning given to it in the fees rules.

(c)    In the application of the formula, B, Y, S and Z are included in the
       formula as figures and not as percentages, e.g. if B = 0.5% and Y = 15%,
       BY is calculated as 0.5 x 15. A negative result obtained by subtracting Z
       from Y is taken as zero.

(d)    (i)   Each formula is applied on the first day of the relevant Funding 1
             Liquidity Interest Period.

                                       32



       (ii)  Each rate calculated in accordance with the formula is, if
             necessary, rounded upward to four decimal places.

       (iii) If the formula produces a negative percentage, the percentage shall
             be taken as zero.

(e)    If the Funding 1 Liquidity Facility Provider determines, after
       consultation with Funding 1 that a change in circumstances has rendered,
       or will render, the formula inappropriate, the Funding 1 Liquidity
       Facility Provider shall notify Funding 1 of the manner in which the
       Mandatory Liquidity Asset Cost will subsequently be calculated. The
       manner of calculation so notified by the Funding 1 Liquidity Facility
       Provider shall, in the absence of manifest error, be binding on all the
       parties.

                                       33



                                   SCHEDULE 3

                  FORM OF FUNDING 1 LIQUIDITY FACILITY REQUEST

To:    JPMorgan Chase Bank, N.A. as Funding 1 Liquidity Facility Provider

Copy:  The Bank of New York (as Security Trustee)

From:  Permanent Funding (No. 1) Limited

                                                                        Date:[ ]



                        PERMANENT FUNDING (NO. 1) LIMITED

   [GBP][__,000,000] FUNDING 1 LIQUIDITY FACILITY AGREEMENT (AS AMENDED AND/OR
                           RESTATED FROM TIME TO TIME)

1.     We wish to borrow a Funding 1 Liquidity [Facility Drawing/Facility Stand-
       by Drawing] as follows:

       (a)   Funding 1 Liquidity Facility Drawdown Date: [             ]

       (b)   Funding 1 Liquidity Facility

       (c)   Amount: [GBP][             ]

       (d)   Payment Instructions: [             ]**

       (e)   Term of Funding 1 Liquidity [Facility Drawing/Facility Stand-by
             Drawing]: [             ]

2.     We confirm that each condition specified in CLAUSE 4.2 (Further
       conditions precedent) is satisfied on the date of this Funding 1
       Liquidity Facility Request.

3.     We confirm that the Funding 1 Liquidity Facility Drawing is to be used
       for one of the purposes specified in CLAUSE 3 (Purpose).

By:

PERMANENT FUNDING (NO. 1) LIMITED
Authorised Signatory




----------
**This will  be the Funding 1  Liquidity Facility Stand-by Account if  this is a
  Funding 1 Liquidity Facility Stand-by Drawing.

                                       34



                                   SCHEDULE 4

                          FORM OF NOVATION CERTIFICATE

To:    [The Bank of New York] (as Security Trustee)

From:  [THE EXISTING FUNDING 1 LIQUIDITY FACILITY PROVIDER] and
       [THE NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER]

                                                                 Date: [       ]



                        PERMANENT FUNDING (NO. 1) LIMITED

   [GBP][__,000,000] FUNDING 1 LIQUIDITY FACILITY AGREEMENT AS AMENDED AND/OR
                           RESTATED FROM TIME TO TIME)
                                 (The AGREEMENT)

       We refer to [CLAUSE 24.4 (Transfers by Funding 1 Liquidity Facility
       Provider]/[Clause 24.5 (Assignments and transfers required by Funding
       1)].

1.     We JPMorgan Chase Bank, N.A. (the EXISTING FUNDING 1 LIQUIDITY FACILITY
       PROVIDER) and [     ] (the NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER)
       agree to the Existing Funding 1 Liquidity Facility Provider and the New
       Funding 1 Liquidity Facility Provider novating all the Existing Funding 1
       Liquidity Facility Provider's FUNDING 1 LIQUIDITY Facility Commitment (or
       part) and/or rights and obligations referred to in the Schedule in
       accordance with [CLAUSE 24.4 (Transfers by Funding 1 Liquidity Facility
       Provider]/[CLAUSE 24.5 (Assignments and transfers required by Funding
       1)]. Terms used but not defined herein have the meaning assigned to them
       in the Agreement.

2.     The specified date for the purposes of [CLAUSE 24.4 (Transfers by Funding
       1 Liquidity Facility Provider]/[CLAUSE 24.5 (Assignments and transfers
       required by Funding 1)] is [date of novation].

3.     The New Funding 1 Liquidity Facility Provider makes the representations
       and warranties to be made by it in accordance with CLAUSE 14
       (Representations and warranties) as at [date of novation].

4.     The Existing Funding 1 Liquidity Facility Provider is not responsible to
       a New Funding 1 Liquidity Facility Provider for:

       (a)   the execution, genuineness, validity, enforceability or sufficiency
             of any Funding 1 Liquidity Document or any other document;

       (b)   the collectibility of amounts payable under any Funding 1 Liquidity
             Document; or

       (c)   the accuracy of any statements (whether written or oral) made in or
             in connection with any Funding 1 Liquidity Document.

5.     The New Funding 1 Liquidity Facility Provider confirms to the Existing
       Funding 1 Liquidity Facility Provider and the other Finance Parties that
       it:

       (a)   has made its own independent investigation and assessment of the
             financial condition and affairs of each of Funding 1 and its
             related entities in connection with its participation in this
             Agreement and has not relied exclusively on any information
             provided to it by the Existing Funding 1 Liquidity Facility
             Provider in connection with any Funding 1 Liquidity Document; and

                                       35



       (b)   will continue to make its own independent appraisal of the
             creditworthiness of each of Funding 1 and its related entities
             while any amount is or may be outstanding under this Agreement or
             any Funding 1 Liquidity Facility Commitment is in force.

6.     Nothing in any Funding 1 Liquidity Document obliges the Existing Funding
       1 Liquidity Facility Provider to:

       (a)   accept a re-transfer from a New Funding 1 Liquidity Facility
             Provider of the Funding 1 Liquidity Facility Commitment and/or
             rights and/or obligations assigned, transferred or novated under
             this Clause; or

       (b)   support any losses incurred by the New Funding 1 Liquidity Facility
             Provider by reason of the non-performance by Funding 1 of its
             obligations under this Agreement or otherwise.

7.     The address for notices of the New Funding 1 Liquidity Facility Provider
       for the purposes of CLAUSE 29.2 (Addresses for notices) is set out in the
       Schedule to this Novation Certificate.

8.     This Novation Certificate is governed by English law.

                                       36



                                  THE SCHEDULE

    FUNDING 1 LIQUIDITY FACILITY COMMITMENT AND RIGHTS AND OBLIGATIONS TO BE
                                     NOVATED

[insert relevant details]

[NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER]

[Address for notices]

                                                  
[Existing Funding 1           [New Funding 1 Liquidity  [SECURITY TRUSTEE]
Liquidity Facility Provider]  Facility Provider]


By:                           By:                       By:
Date:                         Date:                     Date:



                                       37



                                   SIGNATORIES

FUNDING 1


SIGNED by                             )

for and on behalf of                  )

PERMANENT FUNDING (NO. 1) LIMITED     )


FUNDING 1 LIQUIDITY FACILITY
PROVIDER

SIGNED by                             )

for and on behalf of                  )

JPMORGAN CHASE BANK, N.A.             )


CASH MANAGER

SIGNED by                             )

for and on behalf of                  )

HALIFAX PLC                           )


SECURITY TRUSTEE

SIGNED by                             )

for and on behalf of                  )

THE BANK OF NEW YORK                  )

                                       38