MASTER AGREEMENT

                               
(Multicurrency --- Cross Border)                                 Funding 2 SWAP

                                ISDA[REGISTER].



                 International Swap Dealers Association, Inc.

                               MASTER AGREEMENT

                           dated as of 6 October 2006

               HALIFAX PLC and PERMANENT FUNDING (NO. 2) LIMITED
                 and THE BANK OF NEW YORK AS SECURITY TRUSTEE
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows:--

1.       INTERPRETATION

(a)      DEFINITIONS. The terms defined in Section 14 and in the Schedule will
         have the meanings therein specified for the purpose of this Master
         Agreement.

(b)      INCONSISTENCY. In the event of any inconsistency between the
         provisions of the Schedule and the other provisions of this Master
         Agreement, the Schedule will prevail. In the event of any
         inconsistency between the provisions of any Confirmation and this
         Master Agreement (including the Schedule), such Confirmation will
         prevail for the purpose of the relevant Transaction.

(c)      SINGLE AGREEMENT. All Transactions are entered into in reliance on the
         fact that this Master Agreement and all Confirmations form a single
         agreement between the parties (collectively referred to as this
         "Agreement"), and the parties would not otherwise enter into any
         Transactions.

2.       OBLIGATIONS

(a)      GENERAL CONDITIONS.

         (i)     Each party will make each payment or delivery specified in
         each Confirmation to be made by it, subject to the other provisions of
         this Agreement.

         (ii)    Payments under this Agreement will be made on the due date for
         value on that date in the place of the account specified in the
         relevant Confirmation or otherwise pursuant to this Agreement, in
         freely transferable funds and in the manner customary for payments in
         the required currency. Where settlement is by delivery (that is, other
         than by payment), such delivery will be made for receipt on the due
         date in the manner customary for the relevant obligation unless
         otherwise specified in the relevant Confirmation or elsewhere in this
         Agreement.

         (iii)   Each obligation of each party under Section 2(a)(i) is subject
         to (1) the condition precedent that no Event of Default or Potential
         Event of Default with respect to the other party has occurred and is
         continuing, (2) the condition precedent that no Early Termination Date
         in respect of the relevant Transaction has occurred or been
         effectively designated and (3) each other applicable condition
         precedent specified in this Agreement.

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(b)      CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

(c)      NETTING.  If on any date amounts would otherwise be payable:--

         (i)     in the same currency; and

         (ii)    in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the
other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii)
above will not, or will cease to, apply to such Transactions from such date).
This election may be made separately for different groups of Transactions and
will apply separately to each pairing of Offices through which the parties make
and receive payments or deliveries.

(d)      DEDUCTION OR WITHHOLDING FOR TAX.

         (i)     GROSS-UP. All payments under this Agreement will be made
         without any deduction or withholding for or on account of any Tax
         unless such deduction or withholding is required by any applicable
         law, as modified by the practice of any relevant governmental revenue
         authority, then in effect. If a party is so required to deduct or
         withhold, then that party ("X") will:--

                 (1)     promptly notify the other party ("Y") of such
                 requirement;

                 (2)     pay to the relevant authorities the full amount
                 required to be deducted or withheld (including the full amount
                 required to be deducted or withheld from any additional amount
                 paid by X to Y under this Section 2(d)) promptly upon the
                 earlier of determining that such deduction or withholding is
                 required or receiving notice that such amount has been
                 assessed against Y;

                 (3)     promptly forward to Y an official receipt (or a
                 certified copy), or other documentation reasonably acceptable
                 to Y, evidencing such payment to such authorities; and

                 (4)     if such Tax is an Indemnifiable Tax, pay to Y, in
                 addition to the payment to which Y is otherwise entitled under
                 this Agreement, such additional amount as is necessary to
                 ensure that the net amount actually received by Y (free and
                 clear of Indemnifiable Taxes, whether assessed against X or Y)
                 will equal the full amount Y would have received had no such
                 deduction or withholding been required. However, X will not be
                 required to pay any additional amount to Y to the extent that
                 it would not be required to be paid but for:

                         (A)    the failure by Y to comply with or perform any
                         agreement contained in Section 4(a)(i), 4(a)(iii) or
                         4(d); or

                         (B)    the failure of a representation made by Y
                         pursuant to Section 3(f) to be accurate and true
                         unless such failure would not have occurred but for
                         (I) any action taken by a taxing authority, or brought
                         in a court of competent jurisdiction, on or after the
                         date on which a Transaction is entered into
                         (regardless of whether such action is

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                         taken or brought with respect to a party to this
                         Agreement) or (II) a Change in Tax Law.

         (ii)    LIABILITY.  If:--

                 (1)     X is required by any applicable law, as modified by
                 the practice of any relevant governmental revenue authority,
                 to make any deduction or withholding in respect of which X
                 would not be required to pay an additional amount to Y under
                 Section 2(d)(i)(4);

                 (2)     X does not so deduct or withhold; and

                 (3)     a liability resulting from such Tax is assessed
                 directly against X,

         then, except to the extent Y has satisfied or then satisfies the
         liability resulting from such Tax, Y will promptly pay to X the amount
         of such liability (including any related liability for interest, but
         including any related liability for penalties only if Y has failed to
         comply with or perform any agreement contained in Section 4(a)(i),
         4(a)(iii) or 4(d)).

(e)      DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment obligation
will, to the extent permitted by law and subject to Section 6(c), be required
to pay interest (before as well as after judgment) on the overdue amount to the
other party on demand in the same currency as such overdue amount, for the
period from (and including) the original due date for payment to (but
excluding) the date of actual payment, at the Default Rate. Such interest will
be calculated on the basis of daily compounding and the actual number of days
elapsed. If, prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction, a party defaults in
the performance of any obligation required to be settled by delivery, it will
compensate the other party on demand if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.

3.       REPRESENTATIONS

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement) that:--

(a)      BASIC REPRESENTATIONS.

         (i)     STATUS. It is duly organised and validly existing under the
         laws of the jurisdiction of its organisation or incorporation and, if
         relevant under such laws, in good standing;

         (ii)    POWERS. It has the power to execute this Agreement and any
         other documentation relating to this Agreement to which it is a party,
         to deliver this Agreement and any other documentation relating to this
         Agreement that it is required by this Agreement to deliver and to
         perform its obligations under this Agreement and any obligations it
         has under any Credit Support Document to which it is a party and has
         taken all necessary action to authorise such execution, delivery and
         performance;

         (iii)   NO VIOLATION OR CONFLICT. Such execution, delivery and
         performance do not violate or conflict with any law applicable to it,
         any provision of its constitutional documents, any order or judgment
         of any court or other agency of government applicable to it or any of
         its assets or any contractual restriction binding on or affecting it
         or any of its assets;

         (iv)    CONSENTS. All governmental and other consents that are
         required to have been obtained by it with respect to this Agreement or
         any Credit Support Document to which it is a party have been obtained
         and are in full force and effect and all conditions of any such
         consents have been complied with; and

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         (v)     OBLIGATIONS BINDING. Its obligations under this Agreement and
         any Credit Support Document to which it is a party constitute its
         legal, valid and binding obligations, enforceable in accordance with
         their respective terms (subject to applicable bankruptcy,
         reorganisation, insolvency, moratorium or similar laws affecting
         creditors' rights generally and subject, as to enforceability, to
         equitable principles of general application (regardless of whether
         enforcement is sought in a proceeding in equity or at law)).

(b)      ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.

(c)      ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.

(d)      ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e)      PAYER TAX REPRESENTATION. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(e) is accurate
and true.

(f)      PAYEE TAX REPRESENTATIONS. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is accurate
and true.

4.       AGREEMENTS

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--

(a)      FURNISH SPECIFIED INFORMATION. It will deliver to the other party or,
in certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--

         (i)     any forms, documents or certificates relating to taxation
         specified in the Schedule or any Confirmation;

         (ii)    any other documents specified in the Schedule or any
         Confirmation; and

         (iii)   upon reasonable demand by such other party, any form or
         document that may be required or reasonably requested in writing in
         order to allow such other party or its Credit Support Provider to make
         a payment under this Agreement or any applicable Credit Support
         Document without any deduction or withholding for or on account of any
         Tax or with such deduction or withholding at a reduced rate (so long
         as the completion, execution or submission of such form or document
         would not materially prejudice the legal or commercial position of the
         party in receipt of such demand), with any such form or document to be
         accurate and completed in a manner reasonably satisfactory to such
         other party and to be executed and to be delivered with any reasonably
         required certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b)      MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to
maintain in full force and effect all consents of any governmental or other
authority that are required to be obtained by it with respect to this Agreement
or any Credit Support Document to which it is a party and will use all
reasonable efforts to obtain any that may become necessary in the future.

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(c)      COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d)      TAX AGREEMENT. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.

(e)      PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.

5.       EVENTS OF DEFAULT AND TERMINATION EVENTS

(a)      EVENTS OF DEFAULT. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:-

         (i)     FAILURE TO PAY OR DELIVER. Failure by the party to make, when
         due, any payment under this Agreement or delivery under Section
         2(a)(i) or 2(e) required to be made by it if such failure is not
         remedied on or before the third Local Business Day after notice of
         such failure is given to the party;

         (ii)    BREACH OF AGREEMENT. Failure by the party to comply with or
         perform any agreement or obligation (other than an obligation to make
         any payment under this Agreement or delivery under Section 2(a)(i) or
         2(e) or to give notice of a Termination Event or any agreement or
         obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
         with or performed by the party in accordance with this Agreement if
         such failure is not remedied on or before the thirtieth day after
         notice of such failure is given to the party;

         (iii)   CREDIT SUPPORT DEFAULT.

                 (1)     Failure by the party or any Credit Support Provider of
                 such party to comply with or perform any agreement or
                 obligation to be complied with or performed by it in
                 accordance with any Credit Support Document if such failure is
                 continuing after any applicable grace period has elapsed;

                 (2)     the expiration or termination of such Credit Support
                 Document or the failing or ceasing of such Credit Support
                 Document to be in full force and effect for the purpose of
                 this Agreement (in either case other than in accordance with
                 its terms) prior to the satisfaction of all obligations of
                 such party under each Transaction to which such Credit Support
                 Document relates without the written consent of the other
                 party; or

                 (3)     the party or such Credit Support Provider disaffirms,
                 disclaims, repudiates or rejects, in whole or in part, or
                 challenges the validity of, such Credit Support Document;

         (iv)    MISREPRESENTATION. A representation (other than a
         representation under Section 3(e) or (f)) made or repeated or deemed
         to have been made or repeated by the party or any Credit Support
         Provider of such party in this Agreement or any Credit Support
         Document proves to have been incorrect or misleading in any material
         respect when made or repeated or deemed to have been made or repeated;

         (v)     DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit
         Support Provider of such party or any applicable Specified Entity of
         such party (l) defaults under a Specified Transaction and, after
         giving effect to any applicable notice requirement or grace period,
         there occurs a liquidation of, an acceleration

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         of obligations under, or an early termination of, that Specified
         Transaction, (2) defaults, after giving effect to any applicable
         notice requirement or grace period, in making any payment or delivery
         due on the last payment, delivery or exchange date of, or any payment
         on early termination of, a Specified Transaction (or such default
         continues for at least three Local Business Days if there is no
         applicable notice requirement or grace period) or (3) disaffirms,
         disclaims, repudiates or rejects, in whole or in part, a Specified
         Transaction (or such action is taken by any person or entity appointed
         or empowered to operate it or act on its behalf);

         (vi)    CROSS DEFAULT. If "Cross Default" is specified in the Schedule
         as applying to the party, the occurrence or existence of (l) a
         default, event of default or other similar condition or event (however
         described) in respect of such party, any Credit Support Provider of
         such party or any applicable Specified Entity of such party under one
         or more agreements or instruments relating to Specified Indebtedness
         of any of them (individually or collectively) in an aggregate amount
         of not less than the applicable Threshold Amount (as specified in the
         Schedule) which has resulted in such Specified Indebtedness becoming,
         or becoming capable at such time of being declared, due and payable
         under such agreements or instruments, before it would otherwise have
         been due and payable or (2) a default by such party, such Credit
         Support Provider or such Specified Entity (individually or
         collectively) in making one or more payments on the due date thereof
         in an aggregate amount of not less than the applicable Threshold
         Amount under such agreements or instruments (after giving effect to
         any applicable notice requirement or grace period);

         (vii)   BANKRUPTCY. The party, any Credit Support Provider of such
         party or any applicable Specified Entity of such party:--

                 (l)     is dissolved (other than pursuant to a consolidation,
                 amalgamation or merger); (2) becomes insolvent or is unable to
                 pay its debts or fails or admits in writing its inability
                 generally to pay its debts as they become due; (3) makes a
                 general assignment, arrangement or composition with or for the
                 benefit of its creditors; (4) institutes or has instituted
                 against it a proceeding seeking a judgment of insolvency or
                 bankruptcy or any other relief under any bankruptcy or
                 insolvency law or other similar law affecting creditors'
                 rights, or a petition is presented for its winding-up or
                 liquidation, and, in the case of any such proceeding or
                 petition instituted or presented against it, such proceeding
                 or petition (A) results in a judgment of insolvency or
                 bankruptcy or the entry of an order for relief or the making
                 of an order for its winding-up or liquidation or (B) is not
                 dismissed, discharged, stayed or restrained in each case
                 within 30 days of the institution or presentation thereof; (5)
                 has a resolution passed for its winding-up, official
                 management or liquidation (other than pursuant to a
                 consolidation, amalgamation or merger); (6) seeks or becomes
                 subject to the appointment of an administrator, provisional
                 liquidator, conservator, receiver, trustee, custodian or other
                 similar official for it or for all or substantially all its
                 assets; (7) has a secured party take possession of all or
                 substantially all its assets or has a distress, execution,
                 attachment, sequestration or other legal process levied,
                 enforced or sued on or against all or substantially all its
                 assets and such secured party maintains possession, or any
                 such process is not dismissed, discharged, stayed or
                 restrained, in each case within 30 days thereafter; (8) causes
                 or is subject to any event with respect to it which, under the
                 applicable laws of any jurisdiction, has an analogous effect
                 to any of the events specified in clauses (l) to (7)
                 (inclusive); or (9) takes any action in furtherance of, or
                 indicating its consent to, approval of, or acquiescence in,
                 any of the foregoing acts; or

         (viii)  MERGER WITHOUT ASSUMPTION. The party or any Credit Support
         Provider of such party consolidates or amalgamates with, or merges
         with or into, or transfers all or substantially all its assets to,
         another entity and, at the time of such consolidation, amalgamation,
         merger or transfer:--

                 (l)     the resulting, surviving or transferee entity fails to
                 assume all the obligations of such party or such Credit
                 Support Provider under this Agreement or any Credit Support
                 Document to which it or its predecessor was a party by
                 operation of law or pursuant to an agreement reasonably
                 satisfactory to the other party to this Agreement; or
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                 (2)     the benefits of any Credit Support Document fail to
                 extend (without the consent of the other party) to the
                 performance by such resulting, surviving or transferee entity
                 of its obligations under this Agreement.

(b)      TERMINATION EVENTS. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the
event is specified pursuant to (v) below:--

         (i)     ILLEGALITY. Due to the adoption of, or any change in, any
         applicable law after the date on which a Transaction is entered into,
         or due to the promulgation of, or any change in, the interpretation by
         any court, tribunal or regulatory authority with competent
         jurisdiction of any applicable law after such date, it becomes
         unlawful (other than as a result of a breach by the party of Section
         4(b)) for such party (which will be the Affected Party):--

                 (l)     to perform any absolute or contingent obligation to
                 make a payment or delivery or to receive a payment or delivery
                 in respect of such Transaction or to comply with any other
                 material provision of this Agreement relating to such
                 Transaction; or

                 (2)     to perform, or for any Credit Support Provider of such
                 party to perform, any contingent or other obligation which the
                 party (or such Credit Support Provider) has under any Credit
                 Support Document relating to such Transaction;

         (ii)    TAX EVENT. Due to (x) any action taken by a taxing authority,
         or brought in a court of competent jurisdiction, on or after the date
         on which a Transaction is entered into (regardless of whether such
         action is taken or brought with respect to a party to this Agreement)
         or (y) a Change in Tax Law, the party (which will be the Affected
         Party) will, or there is a substantial likelihood that it will, on the
         next succeeding Scheduled Payment Date (l) be required to pay to the
         other party an additional amount in respect of an Indemnifiable Tax
         under Section 2(d)(i)(4) (except in respect of interest under Section
         2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount
         is required to be deducted or withheld for or on account of a Tax
         (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e))
         and no additional amount is required to be paid in respect of such Tax
         under Section 2(d)(i)(4) (other than by reason of Section
         2(d)(i)(4)(A) or (B));

         (iii)   TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
         next succeeding Scheduled Payment Date will either (1) be required to
         pay an additional amount in respect of an Indemnifiable Tax under
         Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
         6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has
         been deducted or withheld for or on account of any Indemnifiable Tax
         in respect of which the other party is not required to pay an
         additional amount (other than by reason of Section 2(d)(i)(4)(A) or
         (B)), in either case as a result of a party consolidating or
         amalgamating with, or merging with or into, or transferring all or
         substantially all its assets to, another entity (which will be the
         Affected Party) where such action does not constitute an event
         described in Section 5(a)(viii);

         (iv)    CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
         specified in the Schedule as applying to the party, such party ("X"),
         any Credit Support Provider of X or any applicable Specified Entity of
         X consolidates or amalgamates with, or merges with or into, or
         transfers all or substantially all its assets to, another entity and
         such action does not constitute an event described in Section
         5(a)(viii) but the creditworthiness of the resulting, surviving or
         transferee entity is materially weaker than that of X, such Credit
         Support Provider or such Specified Entity, as the case may be,
         immediately prior to such action (and, in such event, X or its
         successor or transferee, as appropriate, will be the Affected Party);
         or

         (v)     ADDITIONAL TERMINATION EVENT. If any "Additional Termination
         Event" is specified in the Schedule or any Confirmation as applying,
         the occurrence of such event (and, in such event, the Affected Party
         or Affected Parties shall be as specified for such Additional
         Termination Event in the Schedule or such Confirmation).
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(c)      EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also constitutes
an Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.

6.       EARLY TERMINATION

(a)      RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event
of Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, "Automatic Early Termination" is specified in the Schedule as applying
to a party, then an Early Termination Date in respect of all outstanding
Transactions will occur immediately upon the occurrence with respect to such
party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6)
or, to the extent analogous thereto, (8), and as of the time immediately
preceding the institution of the relevant proceeding or the presentation of the
relevant petition upon the occurrence with respect to such party of an Event of
Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto,
(8).

(b)      RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.

         (i)     NOTICE. If a Termination Event occurs, an Affected Party will,
         promptly upon becoming aware of it, notify the other party, specifying
         the nature of that Termination Event and each Affected Transaction and
         will also give such other information about that Termination Event as
         the other party may reasonably require.

         (ii)    TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality
         under Section 5(b)(i)(l) or a Tax Event occurs and there is only one
         Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
         Party is the Affected Party, the Affected Party will, as a condition
         to its right to designate an Early Termination Date under Section
         6(b)(iv), use all reasonable efforts (which will not require such
         party to incur a loss, excluding immaterial, incidental expenses) to
         transfer within 20 days after it gives notice under Section 6(b)(i)
         all its rights and obligations under this Agreement in respect of the
         Affected Transactions to another of its Offices or Affiliates so that
         such Termination Event ceases to exist.

         If the Affected Party is not able to make such a transfer it will give
         notice to the other party to that effect within such 20 day period,
         whereupon the other party may effect such a transfer within 30 days
         after the notice is given under Section 6(b)(i).

         Any such transfer by a party under this Section 6(b)(ii) will be
         subject to and conditional upon the prior written consent of the other
         party, which consent will not be withheld if such other party's
         policies in effect at such time would permit it to enter into
         transactions with the transferee on the terms proposed.

         (iii)   TWO AFFECTED PARTIES. If an Illegality under Section
         5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties,
         each party will use all reasonable efforts to reach agreement within
         30 days after notice thereof is given under Section 6(b)(i) on action
         to avoid that Termination Event.

         (iv)    RIGHT TO TERMINATE. If:--

                 (l)     a transfer under Section 6(b)(ii) or an agreement
                 under Section 6(b)(iii), as the case may be, has not been
                 effected with respect to all Affected Transactions within 30
                 days after an Affected Party gives notice under Section
                 6(b)(i); or

                 (2)     an Illegality under Section 5(b)(i)(2), a Credit Event
                 Upon Merger or an Additional Termination Event occurs, or a
                 Tax Event Upon Merger occurs and the Burdened Party is not the
                 Affected Party,

                 either party in the case of an Illegality, the Burdened Party
                 in the case of a Tax Event Upon Merger, any Affected Party in
                 the case of a Tax Event or an Additional Termination Event if
                 there is more than one

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                 Affected Party, or the party which is not the Affected Party
                 in the case of a Credit Event Upon Merger or an Additional
                 Termination Event if there is only one Affected Party may, by
                 not more than 20 days notice to the other party and provided
                 that the relevant Termination Event is then continuing,
                 designate a day not earlier than the day such notice is
                 effective as an Early Termination Date in respect of all
                 Affected Transactions.

(c)      EFFECT OF DESIGNATION.

         (i)     If notice designating an Early Termination Date is given under
         Section 6(a) or (b), the Early Termination Date will occur on the date
         so designated, whether or not the relevant Event of Default or
         Termination Event is then continuing.

         (ii)    Upon the occurrence or effective designation of an Early
         Termination Date, no further payments or deliveries under Section
         2(a)(i) or 2(e) in respect of the Terminated Transactions will be
         required to be made, but without prejudice to the other provisions of
         this Agreement. The amount, if any, payable in respect of an Early
         Termination Date shall be determined pursuant to Section 6(e).

(d)      CALCULATIONS.

         (i)     STATEMENT. On or as soon as reasonably practicable following
         the occurrence of an Early Termination Date, each party will make the
         calculations on its part, if any, contemplated by Section 6(e) and
         will provide to the other party a statement (l) showing, in reasonable
         detail, such calculations (including all relevant quotations and
         specifying any amount payable under Section 6(e)) and (2) giving
         details of the relevant account to which any amount payable to it is
         to be paid. In the absence of written confirmation from the source of
         a quotation obtained in determining a Market Quotation, the records of
         the party obtaining such quotation will be conclusive evidence of the
         existence and accuracy of such quotation.

         (ii)    PAYMENT DATE. An amount calculated as being due in respect of
         any Early Termination Date under Section 6(e) will be payable on the
         day that notice of the amount payable is effective (in the case of an
         Early Termination Date which is designated or occurs as a result of an
         Event of Default) and on the day which is two Local Business Days
         after the day on which notice of the amount payable is effective (in
         the case of an Early Termination Date which is designated as a result
         of a Termination Event). Such amount will be paid together with (to
         the extent permitted under applicable law) interest thereon (before as
         well as after judgment) in the Termination Currency, from (and
         including) the relevant Early Termination Date to (but excluding) the
         date such amount is paid, at the Applicable Rate. Such interest will
         be calculated on the basis of daily compounding and the actual number
         of days elapsed.

(e)      PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs,
the following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss", and a
payment method, either the "First Method" or the "Second Method". If the
parties fail to designate a payment measure or payment method in the Schedule,
it will be deemed that "Market Quotation" or the "Second Method", as the case
may be, shall apply. The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be subject to any
Set-off.

         (i)     EVENTS OF DEFAULT. If the Early Termination Date results from
         an Event of Default:--

                 (1)     First Method and Market Quotation. If the First Method
                 and Market Quotation apply, the Defaulting Party will pay to
                 the Non-defaulting Party the excess, if a positive number, of
                 (A) the sum of the Settlement Amount (determined by the
                 Non-defaulting Party) in respect of the Terminated
                 Transactions and the Termination Currency Equivalent of the
                 Unpaid Amounts owing to the Non-defaulting Party over (B) the
                 Termination Currency Equivalent of the Unpaid Amounts owing to
                 the Defaulting Party.

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<PAGE>

                 (2)     First Method and Loss. If the First Method and Loss
                 apply, the Defaulting Party will pay to the Non-defaulting
                 Party, if a positive number, the Non-defaulting Party's Loss
                 in respect of this Agreement.

                 (3)     Second Method and Market Quotation. If the Second
                 Method and Market Quotation apply, an amount will be payable
                 equal to (A) the sum of the Settlement Amount (determined by
                 the Non-defaulting Party) in respect of the Terminated
                 Transactions and the Termination Currency Equivalent of the
                 Unpaid Amounts owing to the Non-defaulting Party less (B) the
                 Termination Currency Equivalent of the Unpaid Amounts owing to
                 the Defaulting Party. If that amount is a positive number, the
                 Defaulting Party will pay it to the Non-defaulting Party; if
                 it is a negative number, the Non-defaulting Party will pay the
                 absolute value of that amount to the Defaulting Party.

                 (4)     Second Method and Loss. If the Second Method and Loss
                 apply, an amount will be payable equal to the Non-defaulting
                 Party's Loss in respect of this Agreement. If that amount is a
                 positive number, the Defaulting Party will pay it to the
                 Non-defaulting Party; if it is a negative number, the
                 Non-defaulting Party will pay the absolute value of that
                 amount to the Defaulting Party.

         (ii)    TERMINATION EVENTS. If the Early Termination Date results from
         a Termination Event:--

                 (l)     One Affected Party. If there is one Affected Party,
                 the amount payable will be determined in accordance with
                 Section 6(e)(i)(3), if Market Quotation applies, or Section
                 6(e)(i)(4), if Loss applies, except that, in either case,
                 references to the Defaulting Party and to the Non-defaulting
                 Party will be deemed to be references to the Affected Party
                 and the party which is not the Affected Party, respectively,
                 and, if Loss applies and fewer than all the Transactions are
                 being terminated, Loss shall be calculated in respect of all
                 Terminated Transactions.

                 (2)     Two Affected Parties. If there are two Affected
                 Parties:--

                         (A)    if Market Quotation applies, each party will
                         determine a Settlement Amount in respect of the
                         Terminated Transactions, and an amount will be payable
                         equal to (I) the sum of (a) one-half of the difference
                         between the Settlement Amount of the party with the
                         higher Settlement Amount ("X") and the Settlement
                         Amount of the party with the lower Settlement Amount
                         ("Y") and (b) the Termination Currency Equivalent of
                         the Unpaid Amounts owing to X less (II) the
                         Termination Currency Equivalent of the Unpaid Amounts
                         owing to Y; and

                         (B)    if Loss applies, each party will determine its
                         Loss in respect of this Agreement (or, if fewer than
                         all the Transactions are being terminated, in respect
                         of all Terminated Transactions) and an amount will be
                         payable equal to one-half of the difference between
                         the Loss of the party with the higher Loss ("X") and
                         the Loss of the party with the lower Loss ("Y").

                 If the amount payable is a positive number, Y will pay it to
                 X; if it is a negative number, X will pay the absolute value
                 of that amount to Y.

         (iii)   ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
         Termination Date occurs because "Automatic Early Termination" applies
         in respect of a party, the amount determined under this Section 6(e)
         will be subject to such adjustments as are appropriate and permitted
         by law to reflect any payments or deliveries made by one party to the
         other under this Agreement (and retained by such other party) during
         the period from the relevant Early Termination Date to the date for
         payment determined under Section 6(d)(ii).

         (iv)    PRE-ESTIMATE. The parties agree that if Market Quotation
         applies an amount recoverable under this Section 6(e) is a reasonable
         pre-estimate of loss and not a penalty. Such amount is payable for the

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<PAGE>

         loss of bargain and the loss of protection against future risks and
         except as otherwise provided in this Agreement neither party will be
         entitled to recover any additional damages as a consequence of such
         losses.

7.       TRANSFER

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--

(a)      a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and

(b)      a party may make such a transfer of all or any part of its interest in
any amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be
void.

8.       CONTRACTUAL CURRENCY

(a)      PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such tender results
in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered into
the Contractual Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect of this Agreement, the party required
to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in the
Contractual Currency so received exceeds the amount in the Contractual Currency
payable in respect of this Agreement, the party receiving the payment will
refund promptly the amount of such excess.

(b)      JUDGMENTS. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is
rendered (i) for the payment of any amount owing in respect of this Agreement,
(ii) for the payment of any amount relating to any early termination in respect
of this Agreement or (iii) in respect of a judgment or order of another court
for the payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such
party. The term "rate of exchange" includes, without limitation, any premiums
and costs of exchange payable in connection with the purchase of or conversion
into the Contractual Currency.

(c)      SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the
party to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of
this Agreement.

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<PAGE>

(d)      EVIDENCE OF LOSS. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.

9.       MISCELLANEOUS

(a)      ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

(b)      AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by
an exchange of telexes or electronic messages on an electronic messaging
system.

(c)      SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d)      REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e)      COUNTERPARTS AND CONFIRMATIONS.

         (i)     This Agreement (and each amendment, modification and waiver in
         respect of it) may be executed and delivered in counterparts
         (including by facsimile transmission), each of which will be deemed an
         original.

         (ii)    The parties intend that they are legally bound by the terms of
         each Transaction from the moment they agree to those terms (whether
         orally or otherwise). A Confirmation shall be entered into as soon as
         practicable and may be executed and delivered in counterparts
         (including by facsimile transmission) or be created by an exchange of
         telexes or by an exchange of electronic messages on an electronic
         messaging system, which in each case will be sufficient for all
         purposes to evidence a binding supplement to this Agreement. The
         parties will specify therein or through another effective means that
         any such counterpart, telex or electronic message constitutes a
         Confirmation.

(f)      NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power
or privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g)      HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10.      OFFICES; MULTIBRANCH PARTIES

(a)      If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it had entered into the
Transaction through its head or home office. This representation will be deemed
to be repeated by such party on each date on which a Transaction is entered
into.

(b)      Neither party may change the Office through which it makes and
receives payments or deliveries for the purpose of a Transaction without the
prior written consent of the other party.

(c)      If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.

                                      12

<PAGE>

11.      EXPENSES

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.

12.      NOTICES

(a)      EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--

         (i)     if in writing and delivered in person or by courier, on the
         date it is delivered;

         (ii)    if sent by telex, on the date the recipient's answerback is
         received;

         (iii)   if sent by facsimile transmission, on the date that
         transmission is received by a responsible employee of the recipient in
         legible form (it being agreed that the burden of proving receipt will
         be on the sender and will not be met by a transmission report
         generated by the sender's facsimile machine);

         (iv)    if sent by certified or registered mail (airmail, if overseas)
         or the equivalent (return receipt requested), on the date that mail is
         delivered or its delivery is attempted; or

         (v)     if sent by electronic messaging system, on the date that
         electronic message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b)      CHANGE OF ADDRESSES. Either party may by notice to the other change
the address, telex or facsimile number or electronic messaging system details
at which notices or other communications are to be given to it.

13.      GOVERNING LAW AND JURISDICTION

(a)      GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b)      JURISDICTION. With respect to any suit, action or proceedings relating
to this Agreement ("Proceedings"), each party irrevocably:--

         (i)     submits to the jurisdiction of the English courts, if this
         Agreement is expressed to be governed by English law, or to the
         non-exclusive jurisdiction of the courts of the State of New York and
         the United States District Court located in the Borough of Manhattan
         in New York City, if this Agreement is expressed to be governed by the
         laws of the State of New York; and

         (ii)    waives any objection which it may have at any time to the
         laying of venue of any Proceedings brought in any such court, waives
         any claim that such Proceedings have been brought in an inconvenient
         forum and further waives the right to object, with respect to such
         Proceedings, that such court does not have any jurisdiction over such
         party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the

                                      13

<PAGE>

time being in force) nor will the bringing of Proceedings in any one or more
jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

(c)      SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it and on
its behalf, service of process in any Proceedings. If for any reason any
party's Process Agent is unable to act as such, such party will promptly notify
the other party and within 30 days appoint a substitute process agent
acceptable to the other party. The parties irrevocably consent to service of
process given in the manner provided for notices in Section 12. Nothing in this
Agreement will affect the right of either party to serve process in any other
manner permitted by law.

(d)      WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

14.      DEFINITIONS

As used in this Agreement:--

"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).

"AFFECTED PARTY" has the meaning specified in Section 5(b).

"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"APPLICABLE RATE" means:--

(a)      in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b)      in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable, the Default Rate;

(c)      in respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and

(d)      in all other cases, the Termination Rate.

"BURDENED PARTY" has the meaning specified in Section 5(b).

"CHANGE IN TAX LAW" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.

"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

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<PAGE>

"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).

"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified
as such in this Agreement.

"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.

"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

"DEFAULTING PARTY" has the meaning specified in Section 6(a).

"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.

"ILLEGALITY" has the meaning specified in Section 5(b).

"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to such
recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).

"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority)
and "LAWFUL" and "UNLAWFUL" will be construed accordingly.

"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for
performance with respect to such Specified Transaction.

"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading position (or any gain
resulting from any of them). Loss includes losses and costs (or gains) in
respect of any payment or delivery required to have been made (assuming
satisfaction of each applicable condition precedent) on or before the relevant
Early Termination Date and not made, except, so as to avoid duplication, if
Section 6(e)(i)(l) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a
party's legal fees and out-of-pocket expenses referred to under Section 11. A
party will determine its Loss as of the relevant Early Termination Date, or, if
that is not reasonably practicable, as of the earliest date thereafter as is
reasonably practicable. A party may (but need not) determine its Loss by
reference to quotations of relevant rates or prices from one or more leading
dealers in the relevant markets.

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<PAGE>

"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition
precedent) by the parties under Section 2(a)(i) in respect of such Terminated
Transaction or group of Terminated Transactions that would, but for the
occurrence of the relevant Early Termination Date, have been required after
that date. For this purpose, Unpaid Amounts in respect of the Terminated
Transaction or group of Terminated Transactions are to be excluded but, without
limitation, any payment or delivery that would, but for the relevant Early
Termination Date, have been required (assuming satisfaction of each applicable
condition precedent) after that Early Termination Date is to be included. The
Replacement Transaction would be subject to such documentation as such party
and the Reference Market-maker may, in good faith, agree. The party making the
determination (or its agent) will request each Reference Market-maker to
provide its quotation to the extent reasonably practicable as of the same day
and time (without regard to different time zones) on or as soon as reasonably
practicable after the relevant Early Termination Date. The day and time as of
which those quotations are to be obtained will be selected in good faith by the
party obliged to make a determination under Section 6(e), and, if each party is
so obliged, after consultation with the other. If more than three quotations
are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation
will be the quotation remaining after disregarding the highest and lowest
quotations. For this purpose, if more than one quotation has the same highest
value or lowest value, then one of such quotations shall be disregarded. If
fewer than three quotations are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or group of Terminated
Transactions cannot be determined.

"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.

"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).

"OFFICE" means a branch or office of a party, which may be such party's head or
home office.

"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.

"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or
to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city.

"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is locat