Sixth Start-up Loan Agreement

DATED ___ NOVEMBER, 2002


HOLMES FUNDING LIMITED
as Funding


and


ABBEY NATIONAL PLC
as Sixth Start-up Loan Provider


and


JPMORGAN CHASE BANK, LONDON BRANCH
as Security Trustee


-----------------------------------------
SIXTH START-UP LOAN AGREEMENT
-----------------------------------------


ALLEN & OVERY
London
ICM:572252.2


CONTENTS


CLAUSE PAGE


1. Definitions and Interpretation.......................................1 2. The Facility.........................................................1 3. Interest.............................................................1 4. Repayment............................................................2 5. Acceleration.........................................................2 6. Payments and Limited recourse........................................3 7. Subordination and Security...........................................3 8. Notices..............................................................4 9. Taxes................................................................5 10. Remedies and Waivers.................................................5 11. Assignments and Transfer.............................................5 12. Funding Security Trustee as a Party..................................5 13. No Partnership.......................................................5 14. Variation............................................................6 15. Invalidity of any Provision..........................................6 16. Counterparts.........................................................6 17. Governing law........................................................6 18. Submission to Jurisdiction...........................................6


THIS SIXTH START-UP LOAN AGREEMENT is made on ___ November, 2002


BETWEEN:


(1) HOLMES FUNDING LIMITED (registered number 3982428), a private limited
company incorporated in England and Wales, whose registered office is at
Abbey National House, 2 Triton Square, Regents Place, London NW1 3AN
("FUNDING");


(2) ABBEY NATIONAL PLC, a public limited company incorporated under the laws
of England and Wales whose registered office is at Abbey National House,
2 Triton Square, Regents Place, London NW1 3AN (the "SIXTH START-UP LOAN
PROVIDER"); and


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


IT IS HEREBY AGREED as follows:


1. DEFINITIONS AND INTERPRETATION


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


2. THE FACILITY


The Sixth Start-up Loan Provider grants to Funding simultaneously with
the issue by the Sixth Issuer of the Sixth Issuer Notes and upon the
terms and subject to the conditions hereof, a sterling loan facility in
an aggregate amount of up to (pound)___ (___ pounds sterling) (the
amount so granted or such part of such amount as shall be outstanding
from time to time being referred to as the "ADVANCE") on the Sixth
Issuer Closing Date for the purpose of providing funding for Funding's
fees, costs and expenses in respect of the addition to Funding's Share
of the Trust Property and in respect of amounts payable by Funding under
the Sixth Issuer Intercompany Loan in relation to the issue of the Sixth
Issuer Notes, which shall be paid into the Funding Transaction Account.


3. INTEREST


3.1 The Advance and any interest capitalised pursuant to CLAUSE 3.4 will
bear interest from (and including) the Sixth Issuer Closing Date until
the Advance and all accrued interest thereon is repaid in full at a rate
of (i) until (but excluding) the Interest Payment Date falling in [April
2008], LIBOR for three-month sterling deposits plus ___ per cent. per
annum and (ii) from the


2


Interest Payment Date falling in [April 2008], LIBOR for three-month
sterling deposits plus ___ per cent. per annum. [For the first Interest
Period, LIBOR will be determined on the basis of a linear interpolation
between LIBOR for two-month and three-month sterling deposits.]


3.2 Subject to CLAUSES 6.2 and 6.3, interest on the Advance and any interest
capitalised pursuant to CLAUSE 3.4 will be payable in arrear on each
Interest Payment Date.


3.3 Interest shall be calculated by reference to any Interest Period on the
basis of the actual number of days elapsed and a 365 day year.


3.4 Any interest accrued in respect of an Interest Period but not paid on
the Interest Payment Date relating thereto shall be capitalised
forthwith.


4. REPAYMENT


4.1 Funding shall make repayments toward the Advance (including any interest
capitalised pursuant to CLAUSE 3.4) on each Interest Payment Date if,
and to the extent that, there are Funding Available Revenue Receipts
available therefore after making the payments and provisions referred to
in paragraphs (a) to (p) of the Funding Pre-Enforcement Revenue Priority
of Payments, until the Advance has been fully repaid.


4.2 The Cash Manager is responsible, pursuant to the Cash Management
Agreement, for determining the amount of Funding Available Revenue
Receipts as at any Intercompany Loan Determination Date and each
d ...