CELF Final Prospectus

8/8/2019 CELF Final Prospectus

http://slidepdf.com/reader/full/celf-final-prospectus 1/265



ii

The “Prospectus” prepared pursuant to the Prospectus Regulations will be available from the websiteof the Financial Regulator (as defined herein) (www.ifsra.ie).

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITEDSTATES SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”) OR THESECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE NOTES (OTHER THAN THE ACCREDITED INVESTOR NOTES) WILLBE OFFERED: (A) OUTSIDE THE UNITED STATES TO PERSONS THAT ARE NOTU.S. PERSONS (AS DEFINED IN REGULATION S, “ U.S. PERSONS ”) IN OFFSHORETRANSACTIONS (AS DEFINED IN REGULATION S OF THE SECURITIES ACT,“OFFSHORE TRANSACTIONS ”) IN COMPLIANCE WITH REGULATION S(“REGULATION S ”) UNDER THE SECURITIES ACT AND (B) TO U.S. PERSONS, WHO AREBOTH “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A(“RULE 144A ”) UNDER THE SECURITIES ACT, “ QIBS ” OR “ QUALIFIED INSTITUTIONALBUYERS ”) IN RELIANCE OF RULE 144A AND “QUALIFIED PURCHASERS” (“ QPS ” OR “QUALIFIED PURCHASERS ”) FOR PURPOSES OF SECTION 3(C)(7) OF THE UNITEDSTATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “ INVESTMENTCOMPANY ACT ”). THE ACCREDITED INVESTOR NOTES WILL BE OFFERED(A) OUTSIDE THE UNITED STATES TO NON-U.S. PERSONS IN OFFSHORETRANSACTIONS AND (B) WITHIN THE UNITED STATES OR TO U.S. PERSONS WHO AREACCREDITED INVESTORS (AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT(“ACCREDITED INVESTORS ”) IN A TRANSACTION EXEMPT FROM REGISTRATIONUNDER THE SECURITIES ACT WHO ARE ALSO EITHER (X) QPS; (Y) KNOWLEDGEABLEEMPLOYEES (AS DEFINED IN RULE 3c-5 UNDER THE INVESTMENT COMPANY ACT(“KNOWLEDGEABLE EMPLOYEES ”), OR (Z) COMPANIES OWNED EXCLUSIVELY BYQUALIFIED PURCHASERS AND/OR KNOWLEDGEABLE EMPLOYEES (SUCH ENTITIES,QPS OR KNOWLEDGEABLE EMPLOYEES, ELIGIBLE ICA INVESTORS (“ ELIGIBLE ICAINVESTORS ”).

THE NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERREDOR DELIVERED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN ATRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THESECURITIES ACT. NEITHER THE ISSUER NOR THE POOL OF UNDERLYING ASSETSWILL BE REGISTERED UNDER THE INVESTMENT COMPANY ACT. INTERESTS IN THE

NOTES WILL BE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER. SEE “ PLAN OF DISTRIBUTION ” AND “ TRANSFER RESTRICTIONS ”. PROSPECTIVE PURCHASERS OF NOTES ARE HEREBY NOTIFIED THAT THE SELLERS OF THE NOTES MAY BE RELYINGON THE EXEMPTION FROM THE REGISTRATION PROVISIONS OF SECTION 5 OF THESECURITIES ACT PROVIDED BY SECTION 4(2) OF THE SECURITIES ACT, RULE 144A OFTHE SECURITIES ACT OR REGULATION S. EACH PURCHASER OF NOTES (OTHER THAN

THE ACCREDITED INVESTOR NOTES) OFFERED HEREBY IN MAKING ITS PURCHASEWILL BE DEEMED TO HAVE MADE, AND IN THE CASE OF THE ACCREDITED INVESTOR NOTES, WILL MAKE, CERTAIN ACKNOWLEDGEMENTS, REPRESENTATIONS ANDAGREEMENTS AS SET OUT HEREIN UNDER “ PLAN OF DISTRIBUTION ” AND “ TRANSFER

RESTRICTIONS ”. INTERESTS IN THE NOTES WILL BE SUBJECT TO CERTAINRESTRICTIONS ON TRANSFER. SEE “ PLAN OF DISTRIBUTION ” AND “ TRANSFER

RESTRICTIONS ”. IN RELATION TO THE ACCREDITED INVESTOR NOTES, NEITHER THEARRANGER NOR THE INITIAL PURCHASER/PLACEMENT AGENT HAS PROVIDED ANYSERVICES, CONSULTATION OR INFORMATION TO THE ACCREDITED INVESTOR

NOTEHOLDERS OR COMMUNICATED WITH THE ACCREDITED INVESTOR NOTEHOLDERS IN ANY WAY IN CONNECTION WITH THEIR PURCHASE OFACCREDITED INVESTOR NOTES AND HAS NOT ASSESSED THE SUITABILITY OF ANY

ACCREDITED INVESTOR NOTEHOLDERS. ______________________________



iii

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATIONFOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEWHAMPSHIRE REVISED STATUTES (THE “RSA”) WITH THE STATE OF NEWHAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED ORA PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES AFINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANYDOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING.NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTIONIS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THESECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS ORQUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BEMADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANYREPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

The Issuer accepts responsibility for the information contained in this Offering Memorandum (the“Offering Memorandum ”) (save for the information contained in the Sections of this OfferingMemorandum headed “ Description of the Collateral Administrator - General ” for which theCollateral Administrator is stated herein to be responsible and “ Description of the Collateral

Manager ” for which the Collateral Manager is stated herein to be responsible) and to the best of theknowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is thecase), such information is in accordance with the facts and does not omit anything likely to affect theimport of such information. The delivery of this Offering Memorandum at any time does not implythat the information herein is correct at any time subsequent to the date of this OfferingMemorandum.

The Collateral Administrator accepts responsibility only for the information contained in the Sectionof this Offering Memorandum headed “ Description of the Collateral Administrator - General ”. Tothe best of the knowledge and belief of the Collateral Administrator (which has taken all reasonablecare to ensure that such is the case), such information is in accordance with the facts and does notomit anything likely to affect the import of such information. The Collateral Administrator is notresponsible for, and accepts no responsibility for, the accuracy and completeness of any other information contained in this Offering Memorandum.

The Collateral Manager accepts responsibility only for the information contained in the Section of thisOffering Memorandum headed “ Description of the Collateral Manager ”. To the best of theknowledge and belief of the Collateral Manager (which has taken all reasonable care to ensure thatsuch is the case), such information is in accordance with the facts and does not omit anything likely toaffect the import of such information. The Collateral Manager is not responsible for, and accepts noresponsibility for, the accuracy and completeness of any other information contained in this OfferingMemorandum.

None of the Issuer (with respect to the Sections headed “ Description of the Collateral Administrator -General ” and “ Description of the Collateral Manager ”), the Arranger, the Initial Purchaser/PlacementAgent, the Trustee, the Corporate Services Provider, the Agents, the Collateral Administrator (save inrespect of the Section headed “ Description of the Collateral Administrator - General ”), the CollateralManager (save in respect of the Section headed “ Description of the Collateral Manager ”) or theInitial Asset Swap Counterparty has separately verified the information contained in this OfferingMemorandum and, accordingly, none of the Issuer (with respect to the Sections headed “ Descriptionof the Collateral Administrator - General ” and “ Description of the Collateral Manager ”), theArranger, the Initial Purchaser/Placement Agent, the Trustee, the Agents, the Collateral Administrator (save in respect of the Section headed “ Description of the Collateral Administrator - General ”), the

Corporate Services Provider, the Collateral Manager (save in respect of the Section headed“ Description of Collateral Manager ”) or the Initial Asset Swap Counterparty makes any



iv

representation, recommendation or warranty, express or implied, regarding the accuracy, adequacy,reasonableness or completeness of the information contained in this Offering Memorandum or in anyfurther notice or other document which may at any time be supplied in connection with the Notes or their distribution or accepts any responsibility or liability therefor. None of the Arranger, the InitialPurchaser/Placement Agent, the Trustee, the Agents, the Collateral Administrator, the CollateralManager, the Initial Asset Swap Counterparty or the Corporate Services Provider undertakes toreview the financial condition or affairs of the Issuer during the life of the arrangements contemplated

by this Offering Memorandum nor to advise any investor or potential investor in the Notes of anyinformation coming to the attention of the Trustee, the Collateral Administrator, the Arranger, theCollateral Manager, the Initial Asset Swap Counterparty, the Initial Purchaser/Placement Agent or theCorporate Services Provider which is not included in this Offering Memorandum.

This Offering Memorandum does not constitute an offer of, or an invitation by or on behalf of, theIssuer, the Arranger, the Initial Purchaser/Placement Agent or any Affiliate of the Arranger or theInitial Purchaser/Placement Agent to subscribe for, place with, or purchase, any of the Notes in any

jurisdiction to any Person to whom it is unlawful to make such an offer or invitation in such jurisdiction. In particular, the Notes are not being offered or sold to any Person in the UnitedKingdom except in circumstances which will not result in an offer to the public in the UnitedKingdom within the meaning of the Financial Services and Markets Act 2000 (the “ FSMA ”) (asamended) or otherwise than in accordance with such regulations and all other applicable laws.

The distribution of this Offering Memorandum and the offering of the Notes in certain jurisdictionsmay be restricted by law. In particular, this Offering Memorandum may only be communicated or caused to be communicated (within the meaning of Section 21 of the FSMA) in circumstances inwhich Section 21(1) of the FSMA does not apply to the Issuer. For a description of certain further restrictions on offers and sales of Notes and the distribution and issue of this Offering Memorandumand other documents, see “ Plan of Distribution ” and “ Transfer Restrictions ” below.

An investment in the Notes is only suitable for financially sophisticated investors who are capable of evaluating the merits and risks of such investment and who have sufficient resources to be able to bear any losses which may result from such investment.

Copies of this Offering Memorandum may be filed with and approved by the Financial Regulator asrequired by the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the “ ProspectusRegulations ”). Upon approval of this Offering Memorandum by the Financial Regulator, thisOffering Memorandum will be filed with the Irish Companies Registration Office in accordance withRegulation 38(1)(b) of the Prospectus Regulations.

Any individual intending to invest in any investment described in this document should consult his or her professional adviser and ensure that he or she fully understands all the risks associated withmaking such an investment and has sufficient financial resources to sustain any loss that may arisefrom it.

In connection with the issue and sale of the Notes, no Person is authorised to give any information or to make any representation not contained in this Offering Memorandum and, if given or made, suchinformation or representation must not be relied upon as having been authorised by or on behalf of theIssuer. The delivery of this Offering Memorandum at any time does not imply that the informationcontained in it is correct as at any time subsequent to its date.

The language of the Offering Memorandum is English. Certain legislative references and technicalterms have been cited in their original language in order that the correct technical meaning may beascribed to them under applicable law.

Unless otherwise specified or the context requires, references to “ Euro ”, “ euro ”, “ EUR ” and “ €” areto the currency introduced at the start of the third stage of European economic and monetary union

pursuant to the Treaty establishing the European Community, as amended, references to “ Sterling ”are to the lawful currency of the United Kingdom, references to “ Australian Dollars ” are to the



v

lawful currency of Australia, references to “ US Dollars ” and “ $” are to the lawful currency of theUnited States of America, references to “ Canadian Dollars ” are to the lawful currency of Canada,references to “ Danish Kroner ” are to the lawful currency of the Kingdom of Denmark, references to“Norwegian Kroner ” are to the lawful currency of the Kingdom of Norway, references to “ SwedishKronor ” are to the lawful currency of the Kingdom of Sweden, references to “ New ZealandDollars ” are to the lawful currency of New Zealand, references to “ Japanese Yen ” are to the lawfulcurrency of Japan and references to “ Swiss Francs ” are to the lawful currency of Switzerland. See“ Index of Defined Terms ” for details of the pages on which capitalised terms used herein are defined.

______________________________

Information as to Placement within the United States

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTEREDWITH, OR APPROVED BY, ANY UNITED STATES FEDERAL OR STATE SECURITIESCOMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOINGAUTHORITIES HAVE NOT PASSED UPON OR ENDORSED THE MERITS OF THISOFFERING OR THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANYREPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

THE ISSUER HAS NOT BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT.EACH PURCHASER OF AN INTEREST IN THE NOTES (OTHER THAN A NON-U.S. PERSONAS SUCH TERM IS DEFINED IN REGULATION S) WILL BE DEEMED TO HAVEREPRESENTED AND AGREED THAT IT IS (A) BOTH A QUALIFIED INSTITUTIONALBUYER AND A QUALIFIED PURCHASER IN THE CASE OF EACH PURCHASER OF NOTESOTHER THAN THE ACCREDITED INVESTOR NOTES OR (B) BOTH AN ACCREDITEDINVESTOR AND AN ELIGIBLE ICA INVESTOR IN THE CASE OF PURCHASERS OF THEACCREDITED INVESTOR NOTES AND WILL ALSO BE DEEMED TO HAVE MADE THEREPRESENTATIONS SET OUT IN “ TRANSFER RESTRICTIONS ” HEREIN. THE PURCHASER OF ANY BENEFICIAL INTEREST IN A NOTE, BY SUCH PURCHASE, AGREES THAT SUCHBENEFICIAL INTEREST IN, OR SUCH NOTE IS BEING ACQUIRED FOR ITS OWNACCOUNT AND NOT WITH A VIEW TO DISTRIBUTION AND MAY BE RESOLD, PLEDGEDOR OTHERWISE TRANSFERRED OR DELIVERED ONLY (1) TO THE ISSUER (UPONREDEMPTION THEREOF OR OTHERWISE), (2) IN RESPECT OF ANY NOTES OTHER THANTHE ACCREDITED INVESTOR NOTES TO A PERSON THE PURCHASER REASONABLYBELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT IS ALSO A QUALIFIEDPURCHASER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (3) TOA PERSON WHO IS BOTH AN ACCREDITED INVESTOR AND AN ELIGIBLE ICAINVESTOR, IN RESPECT OF THE ACCREDITED INVESTOR NOTES, OR (4) OUTSIDE THEUNITED STATES TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN RELIANCEON REGULATION S, IN EACH CASE IN COMPLIANCE WITH THE TRUST DEED AND ALLAPPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANYOTHER JURISDICTION. SEE “ TRANSFER RESTRICTIONS ”.

FOR A DISCUSSION OF CERTAIN FACTORS REGARDING THE ISSUER AND THEOFFERED NOTES THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OFTHE OFFERED NOTES, SEE “ RISK FACTORS ”.

SEE “ PLAN OF DISTRIBUTION ” AND “ TRANSFER RESTRICTIONS ” FOR CERTAIN TERMSAND CONDITIONS OF THE OFFERING OF THE OFFERED NOTES HEREUNDER.

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWNEXAMINATION OF THE ISSUER AND THE TERMS OF THE NOTES AND THE OFFERINGTHEREOF DESCRIBED HEREIN, INCLUDING THE MERITS AND RISKS INVOLVED.

This Offering Memorandum has been prepared by the Issuer solely for use in connection with theoffering of the Notes described herein (the “ Offering ”). Each of the Issuer, the InitialPurchaser/Placement Agent and the Arranger reserves the right to reject any offer to purchase the



vi

Notes in whole or in part for any reason, or to sell less than the stated initial principal amount of anyClass of Notes offered hereby. This Offering Memorandum is personal to each offeree to whom it has

been delivered by the Issuer, the Arranger, the Initial Purchaser/Placement Agent or any Affiliatethereof and does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire the Notes. Distribution of this Offering Memorandum to any persons other thanthe offeree and those persons, if any, retained to advise such offeree with respect thereto isunauthorised and any disclosure of any of its contents, without the prior written consent of the Issuer,is prohibited, save as otherwise authorised under “ Tax Considerations – United States Taxation ”.Each prospective purchaser in the United States, by accepting delivery of this Offering Memorandum,agrees to the foregoing and to make no copies of this Offering Memorandum or any documentsrelated hereto.

Notwithstanding anything herein to the contrary, each offeree (and each employee, representative, or other agent of such offeree) may disclose to any and all other persons, without limitation of any kind,the tax treatment and tax structure of the transactions described herein (including the ownership anddisposition of the Notes) and all materials of any kind (including opinions or other tax analyses) thatare provided to the offeree relating to such tax treatment and tax structure. However, any suchinformation relating to the tax treatment or tax structure is required to be kept confidential to theextent reasonably necessary to comply with applicable federal or state laws. For the purposes of this

paragraph, the terms “tax treatment” and “tax structure” have the meaning given to such terms under United States Treasury Regulation Section 1.6011-4(c) and applicable state and local law.

______________________________

NOTICE TO RESIDENTS OF THE UNITED STATES

THE NOTES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE ANDMAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER APPLICABLEUNITED STATES FEDERAL AND STATE SECURITIES LAW.

______________________________

IN CONNECTION WITH THIS ISSUE, GOLDMAN SACHS INTERNATIONAL (THE“STABILISING MANAGER ”) (OR PERSONS ACTING ON BEHALF OF THE STABILISINGMANAGER) MAY OVER-ALLOT NOTES OR EFFECT TRANSACTIONS WITH A VIEW TOSUPPORTING THE MARKET PRICE OF THE NOTES AT A LEVEL HIGHER THAN THATWHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THESTABILISING MANAGER (OR PERSONS ACTING ON BEHALF OF THE STABILISINGMANAGER) WILL UNDERTAKE STABILISATION ACTION. ANY STABILISATION ACTIONMAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OFTHE TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF BEGUN MAY BE ENDED ATANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THEISSUE DATE OF THE NOTES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OFTHE NOTES. ANY STABILISATION ACTION OR OVER-ALLOTMENT MUST BECONDUCTED BY THE STABILISING MANAGER (OR PERSONS ACTING ON BEHALF OFTHE STABILISING MANAGER) IN ACCORDANCE WITH ALL APPLICABLE LAWS ANDRULES.

______________________________

AVAILABLE INFORMATION

The Issuer is not currently required to file periodic reports under Sections 13 or 15 of the UnitedStates Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) with the U.S. Securitiesand Exchange Commission. To permit compliance with Rule 144A in connection with resales andtransfers of Notes, the Issuer has agreed that, for so long as any of the Notes are “restricted securities”within the meaning of Rule 144(a)(3) under the Securities Act, the Issuer will provide to any holder or

beneficial owner of such restricted securities, or to any prospective purchaser of such restrictedsecurities designated by a holder or beneficial owner, upon the request of such holder, beneficial



vii

owner or prospective purchaser, the information required to be provided by Rule 144A(d)(4) under the Securities Act, if at the time of such request the Issuer is not a reporting company under Section 13 or Section 15(d) of the Exchange Act or exempt from reporting pursuant to Rule 12g3-2(b)under the Exchange Act.

______________________________

GENERAL NOTICE

EACH PURCHASER OF THE NOTES MUST COMPLY WITH ALL APPLICABLE LAWS ANDREGULATIONS IN FORCE IN EACH JURISDICTION IN WHICH IT PURCHASES, OFFERSOR SELLS SUCH NOTES OR POSSESSES OR DISTRIBUTES THIS OFFERINGMEMORANDUM AND MUST OBTAIN ANY CONSENT, APPROVAL OR PERMISSIONREQUIRED FOR THE PURCHASE, OFFER OR SALE BY IT OF SUCH NOTES UNDER THELAWS AND REGULATIONS IN FORCE IN ANY JURISDICTIONS TO WHICH IT IS SUBJECTOR IN WHICH IT MAKES SUCH PURCHASES, OFFERS OR SALES, AND NONE OF THEISSUER, THE ARRANGER, THE INITIAL PURCHASER/PLACEMENT AGENT, THE AGENTS,THE COLLATERAL ADMINISTRATOR, THE COLLATERAL MANAGER OR THE TRUSTEE(OR ANY OF THEIR AFFILIATES) SPECIFIED HEREIN SHALL HAVE ANYRESPONSIBILITY THEREFOR SPECIFIED HEREIN SHALL HAVE ANY RESPONSIBILITYTHEREFOR.

THE NOTES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE ANDMAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE UNITEDSTATES FEDERAL AND STATE SECURITIES LAWS. INVESTORS SHOULD BE AWARETHAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THISINVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

INTERNAL REVENUE SERVICE CIRCULAR 230 DISCLOSURE

PURSUANT TO INTERNAL REVENUE SERVICE CIRCULAR 230, WE HEREBY INFORMYOU THAT THE DESCRIPTION SET OUT HEREIN WITH RESPECT TO U.S. FEDERAL TAXISSUES WAS NOT INTENDED OR WRITTEN TO BE USED, AND SUCH DESCRIPTIONCANNOT BE USED, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING ANYPENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER UNDER THE U.S. INTERNALREVENUE CODE. SUCH DESCRIPTION WAS WRITTEN TO SUPPORT THE MARKETINGOF THE NOTES. THIS DESCRIPTION IS LIMITED TO THE U.S. FEDERAL TAX ISSUESDESCRIBED HEREIN. IT IS POSSIBLE THAT ADDITIONAL ISSUES MAY EXIST THATCOULD AFFECT THE U.S. FEDERAL TAX TREATMENT OF AN INVESTMENT IN THE

NOTES, OR THE MATTER THAT IS THE SUBJECT OF THE DESCRIPTION NOTED HEREIN,AND THIS DESCRIPTION DOES NOT CONSIDER OR PROVIDE ANY CONCLUSIONS WITHRESPECT TO ANY SUCH ADDITIONAL ISSUES. TAXPAYERS SHOULD SEEK ADVICEBASED ON THE TAXPAYER’S PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT

TAX ADVISER.



viii

TABLE OF CONTENTS

Page

Description of Terms .............................................................................................................................. 1 Risk Factors .......................................................................................................................................... 19

Conditions of the Notes ........................................................................................................................56 Use of Proceeds...................................................................................................................................139 Form of the Notes ...............................................................................................................................140 Description of the Portfolio ................................................................................................................143 Description of the Collateral Management Agreement ......................................................................171 Description of the Hedging Arrangements .........................................................................................177 Description of the Reports ..................................................................................................................181 Rating of the Class A Notes................................................................................................................187 Description of the Issuer .....................................................................................................................188 Description of the Collateral Administrator........................................................................................190 Description of the Collateral Manager................................................................................................192 Book-Entry Clearance Procedures......................................................................................................197 Tax Considerations .............................................................................................................................200 Certain Employee Benefit Plan Considerations..................................................................................217 Plan of Distribution.............................................................................................................................222 Transfer Restrictions...........................................................................................................................228 General Information............................................................................................................................250 Index of Defined Terms ......................................................................................................................252



1

DESCRIPTION OF TERMS

The following summary does not purport to be complete and is qualified in its entirety by reference tothe detailed information appearing elsewhere in this Offering Memorandum and related documentsreferred to herein. Terms used but not otherwise defined in this section shall have the meanings givento them in Condition 1 (Definitions) of the Conditions of the Notes. For a discussion of certain risk

factors to be considered in connection with an investment in the Notes, see “Risk Factors”.

The Issuer: CELF Partnership Loan Funding 2008-I Limited, a privatecompany with limited liability incorporated under the laws of Ireland and having its registered office at 85 Merrion Square,Dublin 2, Ireland and incorporated for the sole purpose of acquiring the Portfolio, issuing the Notes and engaging incertain related transactions.

The issued share capital of the Issuer is held in trust for charitable purposes. The Issuer will not have any assets other than the Portfolio and its rights under the Transaction

Documents, its rights under and in respect of the Balancestanding to the credit of any Account and certain other incidental rights and assets. The rights and assets of the Issuer referred to above (other than any and all amounts standing fromtime to time to the credit of the Irish Issuer Account (where the

paid up share capital of the Issuer and any Issuer Fee isdeposited) and its rights under the Corporate ServicesAgreement) will be pledged or assigned by way of security tothe Trustee and certain other parties as security for the Issuer’sobligations under the Notes.

Collateral Manager CELF Investment Advisors Limited, whose registered office is

at Lansdowne House, 57 Berkeley Square, London W1J 6ER.See “ Description of the Collateral Manager ” below.

Collateral Administrator: The Bank of New York Mellon, acting through its office at OneCanada Square, London E14 5AL.

Registrar: The Bank of New York (Luxembourg) S.A. acting through itsoffice at Aerogolf Center, 1A Hoehenhof, L-1736Senningerberg, Luxembourg

Custodian: The Bank of New York Mellon, acting through its office at OneCanada Square, London E14 5AL.

Account Bank: The Bank of New York Mellon, acting through its office at OneCanada Square, London E14 5AL.

Calculation Agent: The Bank of New York Mellon, acting through its office at OneCanada Square, London E14 5AL.

Principal Paying Agent: The Bank of New York Mellon, acting through its office at OneCanada Square, London E14 5AL.

Transfer Agent: BNY Financial Services plc acting through its office at 4thFloor, Hanover Building, Windmill Lane, Dublin 2, Ireland.

Initial Purchaser/Placement

Agent:

Goldman Sachs International acting through its office at

Peterborough Court, 133 Fleet Street, London EC4A 2BB.



2

Arranger: Goldman Sachs International acting through its office atPeterborough Court, 133 Fleet Street, London EC4A 2BB.

Trustee: BNY Corporate Trustee Services Limited (the “ Trustee ”),acting through its office at One Canada Square, LondonE14 5AL will be the trustee for the Noteholders.

The Notes: Pursuant to the Trust Deed, the Issuer will issue:

€800,000,000 Class A-1 Senior Secured Floating Rate Notesdue 2020 (the “ Class A-1 Notes ”);

€292,500,000 Class A-2a Senior Secured Floating Rate Notesdue 2020 (the “ Class A-2a Notes ”);

€32,500,000 Class A-2b Senior Secured Floating Rate Notesdue 2020 (the “ Class A-2b Notes ” and together with the ClassA-2a Notes, the “ Class A-2 Notes ” and the Class A-1 Notesand the Class A-2 Notes together the “ Class A Notes ”);

€360,848,000 Class S-1 Subordinated Notes due 2020 (the“Class S-1 Subordinated Notes ”); and

€14,152,000 Class S-2 Subordinated Notes due 2020 (the“Class S-2 Subordinated Notes ” and together with theClass S-1 Subordinated Notes, the “ Subordinated Notes ”),

together, the “ Notes ”.

Status of the Notes: Each Class of Notes will comprise limited recourse debtobligations of the Issuer. Payments of principal and interest (if any) on the Class A Notes will be allocated on a pro rata basisand will rank senior in right of payment to payments of

principal and interest on the Subordinated Notes on eachPayment Date provided however that in respect of the Class A-2

Notes, payments of interest and principal in respect of the ClassA-2a Notes will be paid in priority to the Class A-2b Notes.

Use of Proceeds: The Issuer will apply the net proceeds of the issue and offeringof the Notes:

(a) to pay any amounts due and payable under the ForwardSale Agreement;

(b) in payment of certain fees and expenses payable by theIssuer on the Issue Date equalling approximately €28,500,000; and

(c) the remainder to be deposited into the Unused ProceedsAccount.

Priorities of Payments: Prior to the enforcement of the security over the Collateral,Interest Proceeds, Principal Proceeds and CollateralEnhancement Obligation Proceeds will be applied in accordancewith the Interest Proceeds Priority of Payments, the PrincipalProceeds Priority of Payments and the Collateral EnhancementObligation Proceeds Priority of Payments, respectively, and,upon any redemption of the Notes pursuant to a written requestof the applicable classes of Noteholders pursuant to



3

Condition 7(b)(i) ( Redemption at the Option of theSubordinated Noteholders or the Holders of the ControllingClass ) or following the enforcement of the security over theCollateral, Interest Proceeds, Principal Proceeds and CollateralEnhancement Obligation Proceeds will be applied in accordancewith the Post-Acceleration Priority of Payments (in each case asdescribed in the Conditions).

Interest Payments: Interest in respect of the Notes of each Class will be first payable in arrear on 17 March 2009 and then will be payablesemi-annually in arrear on 17 September and 17 March of eachyear or, if any such day is not a Business Day, the immediatelyfollowing Business Day, at maturity and upon any redemptionof the Notes (each, a “ Payment Date ”).

The Class A-1 Notes, the Class A-2a Notes and the Class A-2b Notes will bear interest (an “ Interest Amount ”) calculated onthe basis of applicable EURIBOR + 1.65 per cent., 1.50 per cent. and 3.00 per cent., respectively. The rate of interest of theClass A Notes for the period from, and including, the Issue Dateto, but excluding, 17 March 2009 will be determined throughthe use of linear interpolation by reference to 6 monthEURIBOR and 9 month EURIBOR.

“EURIBOR ” means the rate determined in accordance withCondition 6(c)(i) ( Rate of Interest ) as applicable to six monthEuro deposits (or, in the case of the initial Due Period, asdetermined through the use of linear interpolation by referenceto 6 month Euro deposits and 9 month Euro deposits).

Subordinated Notes: The Subordinated Notes will not bear interest at a predetermined fixed or floating rate, but will beentitled to receive payments on an available funds basis on eachPayment Date out of Interest Proceeds, subject to prior

payments in accordance with the Interest Proceeds Priority of Payments of, inter alia , certain fees and expenses and interest

payable in respect of the Class A Notes on such Payment Date(an “ Interest Amount ”).

Consequences of Non-Paymentof Interest:

Class A Notes : Non-payment of an Interest Amount in respectof the Class A Notes shall (upon expiry of the five day grace

period) constitute an Event of Default (as defined in

“Conditions of the Notes ”) whereupon the security over theCollateral may become enforceable pursuant to Condition 11( Enforcement ).

Subordinated Notes : Non-payment of interest on theSubordinated Notes as a result of the non-availability of InterestProceeds will not constitute an Event of Default.

Redemption of the Notes: Subject to Condition 7 ( Redemption and Purchase ), principal payments on the Notes will be made in the followingcircumstances:

(a) on the Maturity Date (as defined below);

(b) on any Payment Date, upon the failure to satisfy any



4

Coverage Test on the related Determination Date untilsuch Coverage Test is satisfied provided however that the Class A Par Value Test shall only apply from theEffective Date and the Class A Interest Coverage Testshall only apply from the Determination Dateimmediately preceding the Payment Date falling on17 September 2009;

(c) on the Payment Date following the Effective Date andon each Payment Date thereafter to the extent required,in the event that an Effective Date Rating Event hasoccurred and such Effective Date Rating Event iscontinuing unremedied and unwaived on the secondBusiness Day prior to such Payment Date;

(d) on any Payment Date falling on or after expiry of the Non-Call Period, at the request in writing of the holdersof greater than 50.0 per cent. of the Principal AmountOutstanding of the Subordinated Notes (as evidenced

by duly completed Redemption Notices);

(e) on any Payment Date falling after the occurrence of aCollateral Tax Event, at the direction of the holders of at least 66 ⅔ per cent. of the Principal AmountOutstanding of the Subordinated Notes at such timeacting by Extraordinary Resolution (as evidenced byduly completed Redemption Notices) and provided that a substitution or relocation of the Issuer or other reasonable measures would fail to remedy a CollateralTax Event;

(f) upon the occurrence of a Note Tax Event, at thedirection of the holders of at least 66 ⅔ per cent. of thePrincipal Amount Outstanding of the Notes of theControlling Class at such time or the holders of at least66⅔ per cent. of the Principal Amount Outstanding of the Subordinated Notes at such time, in each case acting

by Extraordinary Resolution (each as evidenced by dulycompleted Redemption Notices) at such time, on anyPayment Date falling after the earlier to occur of:

(A) the date upon which the Issuer notifies the

Noteholders that it is not able to effect (1) asubstitution or (2) a change of tax residence, ineach case in accordance with Condition 9(b)(Substitution of Principal Obligor or Change inTax Residence ) and the terms of the TrustDeed, and

(B) the date which is 90 days from the date uponwhich the Issuer first becomes aware of a NoteTax Event ( provided that such 90-day periodshall be extended by a further 90-days in theevent that during the first 90-day period the

Issuer has notified the Noteholders that, basedon advice received by it, it expects that it shall



5

have changed its place of residence by the endof the second 90-day period);

(g) on any Payment Date during the Reinvestment Period atthe sole and absolute discretion of the CollateralManager (acting on behalf of the Issuer) followingwritten notification by the Collateral Manager to theIssuer and the Trustee that it has been unable, for a

period of 20 consecutive Business Days, to identify asufficient quantity of additional or Substitute CollateralDebt Obligations in which to invest or reinvestPrincipal Proceeds;

(h) in order to effect a refinancing of certain Notes inconnection with a Pricing Amendment. See“ Refinancing of Non-Consenting Noteholders’ Notes inconnection with Pricing Amendment ” below;

(i) following the expiry of the Reinvestment Period, oneach Payment Date out of Principal Proceeds inaccordance with the Priorities of Payments; and

(j) any time following an Event of Default which occursand is continuing and has not been cured. See“Condition 10 ( Events of Default )”.

The period from, and including, the Issue Date up to, butexcluding, the Determination Date immediately preceding thePayment Date falling on 17 September 2010 will constitute the“Non-Call Period ”.

Each Class of Notes will mature at their outstanding principalamount on 17 September 2020 or, if such day is not a BusinessDay, the immediately following Business Day (the “ MaturityDate ”), in each case, unless redeemed or repaid prior thereto.The average life of the Class A Notes is expected to be shorter than the number of years from the Issue Date until the MaturityDate. See “ Risk Factors – Average Life and Prepayment Considerations ”.

Redemption Prices: The Redemption Price applicable to the Class A-1 Notes, theClass A-2a Notes and the Class A-2b Notes will be equal to100.0 per cent. of the Principal Amount Outstanding thereof together with (i) interest accrued thereon to the date of redemption and (ii) any Make Whole Amount (if applicable).

The Redemption Price of each Subordinated Note will be anamount which is equal to such Subordinated Note’s pro ratashare (based on the percentage which the outstanding principalamount of such Subordinated Note bears to the PrincipalAmount Outstanding of all the Subordinated Notes immediately

prior to such redemption) of the aggregate proceeds of liquidation of the Collateral, or realisation of the securitythereover, remaining following redemption of the Class A Notesin full and payment of all other amounts required to be paid in

priority thereto in accordance with the Priorities of Payments.



6

Refinancing of Non-Consenting Noteholders’ Notes in Connectionwith Pricing Amendment

If on any date after the Issue Date (1) holders of at least 66 ⅔ per cent. of the Principal Amount Outstanding of the Subordinated

Notes and the Collateral Manager consent to a proposedamendment, modification, supplement or waiver of the

provisions of any Transaction Document relating to interest onthe Class A Notes (a “ Pricing Amendment ”), (2) any relevantholder(s) of Class A Notes whose consent is required to effectsuch Pricing Amendment under the Transaction Documents donot provide their consent thereto within fifteen Business Daysafter the request therefor is notified to such holder(s) inaccordance with Condition 16 ( Notices ) (each a“Non-Consenting Noteholder ”), (3) so long as the PricingAmendment has been approved by holders of at least 66 ⅔ per cent. of the Principal Amount Outstanding of the Subordinated

Notes and the Collateral Manager and, therefore, only lacks theconsent of the Non-Consenting Noteholders and (4) RatingAgency Confirmation has been obtained and a rating of the

Replacement Notes has been obtained from the Rating Agencycorresponding to the rating assigned by it to the Class A Notesof all such Non-Consenting Noteholders (the “ Non-ConsentingNotes ”), then the Issuer and the Trustee shall, if so directed bythe holders of at least 66 ⅔ per cent. of the Principal AmountOutstanding of the Subordinated Notes and the CollateralManager, effect a refinancing (a “ Non-Consenting NoteRefinancing ”) of the Non-Consenting Notes by the issuance of additional Class A Notes and respective principal amounts (the“Replacement Notes ”) to be purchased by a person or personsconsenting to such Pricing Amendment and otherwise eligibleunder the provisions of the Trust Deed to be a holder of such

Replacement Notes (each a “ Consenting Purchaser ”). See“ Risk Factors – Refinancing of Non-Consenting Noteholders’

Notes in Connection with Pricing Amendment ”.

Liquidation of Collateral: On or immediately prior to the Maturity Date of the Notes or inthe case of a redemption pursuant to Condition 7 ( Redemptionand Purchase ), the relevant Redemption Date, the CollateralManager, on behalf of the Issuer, will seek to assign, terminateor dispose of all or part of the Collateral Debt Obligation(s), asapplicable, in the Portfolio.

Fees Payable to the Collateral

Manager:Collateral Management Fee: Pursuant to the Collateral Management Agreement, the Issuer

shall pay to the Collateral Manager the Collateral ManagementFee, which shall be equal to:

(a) 0.175 per cent. per annum of the original aggregatePrincipal Amount Outstanding of the Notes (as of theIssue Date), on each Payment Date following the IssueDate up to and including the Payment Date falling inMarch 2012; and

(b) thereafter, 0.175 per cent. per annum of the Aggregate

Portfolio Balance of the Collateral Debt Obligations asat the beginning of the Due Period preceding the



7

applicable Payment Date,

in each case, (calculated on the basis of a 360 day year and thenumber of days elapsed in such Due Period) payable in arrear on each Payment Date in accordance with the applicablePriorities of Payments and together with any value added tax

payable in respect thereof whether payable to the CollateralManager or directly to the relevant tax authority.

Any Collateral Management Fees accrued but unpaid on thePayment Date on which it is due, or deferred by the CollateralManager in accordance with the applicable Priorities of Payments, will be added to the Collateral Management Fee onthe next occurring Payment Date and will accrue interest at therate of EURIBOR plus 2.0 per cent. per annum and shall be

payable pro rata to the Collateral Manager and any former collateral manager by reference to the period of time that suchentity was the “Collateral Manager”. See “ Description of theCollateral Management Agreement – Fees ”.

Make Whole Tax Event Fee: If the appointment of the Collateral Manager is terminated dueto the occurrence of a CM UK Tax Event, the CollateralManager will be paid a Make Whole Tax Event Fee equal to0.175 per cent. multiplied by the Aggregate Portfolio Balance(together with any value added tax payable in respect thereof (whether payable to the Collateral Manager or directly to therelevant tax authority)) as at the CM UK Tax Termination Date,

pursuant to, and subject to any relevant conditions in, theCollateral Management Agreement. See “ Description of theCollateral Management Agreement – Fees ”.

Make Whole Redemption Fee : In the event the Notes are redeemed in whole prior to thePayment Date falling on 17 March 2012, the CollateralManager will be paid a Make Whole Redemption Fee on theRedemption Date equal to the present value of the remainingCollateral Management Fees payable to the Collateral Manager

pursuant to the Collateral Management Agreement up to andincluding the Payment Date falling on 17 March 2012,calculated by reference to the original aggregate PrincipalAmount Outstanding of the Notes (as of the Issue Date) and asdetermined by the Collateral Administrator (together with anyvalue added tax payable in respect thereof (whether payable tothe Collateral Manager or directly to the relevant taxauthority)). See “ Description of the Collateral Management

Agreement – Fees ”.

Security for the Notes

General: The Notes are and will be secured limited recourse debtobligations of the Issuer, secured by the Issuer in favour of theTrustee by way of (amongst other things) a first fixed chargeand assignment by way of security over the Issuer’s portfolio of Collateral Debt Obligations and all cash and other property withrespect to the Collateral Debt Obligations. See “ Description of

the Portfolio ” below.



8

The Notes will also be secured by certain other assets (suchother assets, together with the Collateral Debt Obligations andthe Eligible Investments, being collectively referred to as the“Collateral ”) including (A) a first fixed charge over or asapplicable, an assignment by way of security of or over (a) allrights of the Issuer in respect of any Collateral EnhancementObligations, (b) all rights of the Issuer in respect of theAccounts (other than the FS Accrued Interest Account whichshall be charged in favour of GSCP and the CounterpartyDowngrade Securities Collateral Account and CounterpartyDowngrade Cash Collateral Account, which shall each becharged in favour of the Asset Swap Counterparty), (c) theIssuer’s rights against the Custodian under the AgencyAgreement and the Non-Euro Custody Account, (d) the Issuer’srights under each Asset Swap Agreement (including a first fixedcharge over any collateral provided thereunder), (e) the Issuer’srights under the other Transaction Documents, (f) all rights of

the Issuer to any money held by the Paying Agents for the payment of principal or interest on the Notes; and (B) a floatingcharge over the whole of the Issuer’s undertaking and assetsthat are not subject to any other security created under the TrustDeed or any other additional security document (subject tocertain excluded assets and rights). On the Issue Date, theIssuer, as pledgor, will also create security pursuant to a Belgianlaw pledge agreement in favour of the Trustee, as pledgee, inrespect of its right, title and interest in and to the Collateral DebtObligations, Exchanged Equity Securities, CollateralEnhancement Obligations and Eligible Investments from time totime held in Euroclear (the “ Euroclear Pledge Agreement ”).

See “ Condition 4(a) (Security )”.

The Portfolio: The Portfolio will consist of the Collateral Debt Obligations(including the Substitute Collateral Debt Obligations),Collateral Enhancement Obligations, Exchanged EquitySecurities and Eligible Investments held by or on behalf of theIssuer from time to time, as set out in the “ Description of thePortfolio ” below.

Acquisition of the Portfolio: The acquisition of Collateral Debt Obligations by, or on behalf of, the Issuer will take place during three periods: (a) on or prior to the Issue Date; (b) the period from the Issue Date up to but

excluding the Effective Date (such period being the “ InitialInvestment Period ”), by which time the Issuer shall haveacquired or committed to acquire an Aggregate PrincipalBalance of Collateral Debt Obligations equal to not less than theTarget Par Amount; and (c) the period from the Effective Dateup to but excluding the earliest of (i) the date falling at end of the Due Period preceding the Payment Date falling on17 September 2010, or, if such day is not a Business Day, theimmediately following Business Day, (ii) the date of theacceleration of the Notes pursuant to Condition 10(b)( Acceleration ) and (iii) the date on which the CollateralManager reasonably believes and notifies the Issuer, the Rating

Agency and the Trustee that it can no longer reinvest inadditional Collateral Debt Obligations in accordance with the



9

Reinvestment Criteria (the period from the Issue Date to theearliest of (i), (ii) and (iii) above, the “ Reinvestment Period ”).In certain limited circumstances, the Collateral Manager, on

behalf of the Issuer, may acquire further Collateral DebtObligations after the expiry of the Reinvestment Period.

Target Par Amount: On or before 5.00 p.m. (London Time) on the second BusinessDay immediately preceding the Effective Date, the CollateralManager will give notice to the Issuer, the Trustee, theCollateral Administrator and the Rating Agency as to the TargetPar Amount it has selected to be applicable as at the EffectiveDate. The Collateral Manager may, in its sole discretion, selectas the Target Par Amount an amount equal to(a) €1,481,250,000, (b) €1,488,000,000 or (c) €1,492,500,000.

Initial Portfolio: As of the Issue Date, the Issuer, or the Collateral Manager acting on its behalf, will have purchased or committed to

purchase an Aggregate Principal Balance of Senior SecuredLoans and/or Senior Secured Floating Rate Notes (the “ InitialPortfolio ”) of approximately €1,200,000,000 (the “ Initial ParAmount ”) pursuant to the Forward Sale Agreement.

Initial Investment Period: During the Initial Investment Period, the Collateral Manager,acting on behalf of the Issuer, shall use all reasonable efforts toselect and acquire, on behalf of the Issuer, additional CollateralDebt Obligations out of the Balance standing to the credit of theUnused Proceeds Account.

The Effective Date: The date falling on the earlier of: (a) the date designated for such purpose by the Collateral Manager by written notice to the

Trustee, the Issuer, the Collateral Administrator and S&P pursuant to the Collateral Management Agreement ( provided that the Effective Date Determination Requirements (as defined

below) shall be satisfied on such designated date) and (b) theday falling 8 calendar months after the Issue Date, shall be the“Effective Date ”. The “ Effective Date DeterminationRequirements ” are as follows:

(a) each of the Portfolio Profile Tests, the CollateralQuality Tests and the Class A Par Value Test beingsatisfied on such date; and

(b) the Issuer having entered into binding commitments toacquire Collateral Debt Obligations the AggregatePrincipal Balance of which equals or exceeds the TargetPar Amount by such date ( provided that , for the

purposes of determining the Aggregate PrincipalBalance as provided above, any repayments or

prepayments of Collateral Debt Obligations subsequentto the Issue Date (to the extent that such repayments or

prepayments have not been reinvested) shall bedisregarded and the Principal Balance of each CollateralDebt Obligation which is a Defaulted Obligation will beits S&P Collateral Value).

For the avoidance of doubt, the Issuer does not expect and is notrequired to satisfy the Collateral Quality Tests, Portfolio Profile



10

Tests and the Coverage Tests prior to the Effective Date.

Reinvestment in Collateral DebtObligations

Subject to the limits described in the Priorities of Payment,Principal Proceeds shall be used by the Issuer to purchaseSubstitute Collateral Debt Obligations meeting the EligibilityCriteria and the Reinvestment Criteria during the ReinvestmentPeriod.

Following expiry of the Reinvestment Period, only SaleProceeds from the sale of Credit Improved Obligations andCredit Impaired Obligations and Unscheduled PrincipalProceeds received after the Reinvestment Period may bereinvested by the Collateral Manager (acting on behalf of theIssuer) in one or more Substitute Collateral Debt Obligationsmeeting the Eligibility Criteria and Reinvestment Criteria. See“The Portfolio – Sale of Collateral Debt Obligations ” and “ ThePortfolio – Reinvestment of Collateral Debt Obligations ”.

Collateral Quality Tests,Portfolio Profile Tests andCoverage Tests

The Collateral Quality Tests, Portfolio Profile Tests andClass A Par Value Test must be satisfied as at the EffectiveDate. The Class A Interest Coverage Test will only apply onand after the Determination Date immediately preceding thePayment Date falling in September 2009. See “ Description of the Portfolio ”.

In addition, the Collateral Quality Tests, Portfolio Profile Testsand Coverage Tests must be satisfied after giving effect to the

purchase of any Substitute Collateral Debt Obligation after theEffective Date (or, in respect of the Class A Interest CoverageTest, on or after the Determination Date immediately preceding

the Payment Date falling in September 2009) or (subject tocertain specified exceptions) if not satisfied prior to such purchase, the relevant thresholds and amounts calculated pursuant thereto must be maintained or improved after givingeffect to such purchase. See “ Description of the Portfolio ”.

Collateral Quality Tests The “ Collateral Quality Tests ” will consist of each of thefollowing:

(a) so long as any Notes rated by S&P are Outstanding:

(i) as of the Effective Date and until the end of theReinvestment Period, the CDO Monitor Test;and

(ii) the S&P Minimum Weighted AverageRecovery Rate Test; and

(b) so long as any Notes are Outstanding:

(i) the Minimum Weighted Average Spread Test;and

(ii) the Weighted Average Maturity Test.



11

Portfolio Profile Tests The “ Portfolio Profile Tests ” will consist of each of thefollowing:

(a) at least 95.0 per cent. of the Aggregate PortfolioBalance must consist of Senior Secured Loans (whichterm, for the purposes of this paragraph (a), shallcomprise the aggregate of the Aggregate PrincipalBalance of the Senior Secured Loans and the Balancesstanding to the credit of the Principal Account and theUnused Proceeds Account, in each case as at therelevant Measurement Date);

(b) with respect to Senior Secured Loans and Senior Secured Floating Rate Notes, not more than 3.0 per cent. of the Aggregate Portfolio Balance may be theobligation of any single Obligor thereunder;

(c) not more than 20.0 per cent. of the Aggregate Portfolio

Balance may consist of Participations;(d) not more than 5.0 per cent. of the Aggregate Portfolio

Balance may consist of Collateral Debt Obligations thatare Fixed Rate Collateral Debt Obligations unlessRating Agency Confirmation has been obtained, inwhich case not more than 10.0 per cent.;

(e) not less than 95.0 per cent. of the Aggregate PortfolioBalance (unless Rating Agency Confirmation has beenobtained, in which case not less than 90.0 per cent.)may consist of Collateral Debt Obligations that areFloating Rate Collateral Debt Obligations (which term,for the purposes of this paragraph (e), shall comprisethe aggregate of the Aggregate Principal Balance of theFloating Rate Collateral Debt Obligations and theBalances standing to the credit of the Principal Accountand the Unused Proceeds Account, in each case as atthe relevant Measurement Date);

(f) not more than 5.0 per cent. of the Aggregate PortfolioBalance may consist of Senior Secured Floating Rate

Notes;

(g) not more than 30.0 per cent. of the Aggregate PortfolioBalance may consist of Non-Euro Obligations;

(h) not more than 20.0 per cent. of the Aggregate PortfolioBalance may consist of U.S. dollar denominatedCollateral Debt Obligations;

(i) not more than 5.0 per cent. of the Aggregate PortfolioBalance may consist of Collateral Debt Obligations that

pay interest less frequently than semi-annually;

(j) the limits specified in the Bivariate Risk Tabledetermined by reference to the S&P Ratings of Selling

Institutions are not exceeded;



12

(k) not more than 5.0 per cent. of the Aggregate PortfolioBalance may consist of Current Pay Obligations;

(l) not more than 5.0 per cent. of the Aggregate PortfolioBalance may consist of CCC Obligations, excludingDefaulted Obligations;

(m) not more than 10.0 per cent. of the Aggregate PortfolioBalance may consist of Covenant Lite Loans;

(n) not more than 5.0 per cent. of the Aggregate PortfolioBalance may consist of Unhedged Collateral DebtObligations; and

(o) not more than 5.0 per cent. of the Aggregate PortfolioBalance may consist of Unfunded Amounts and FundedAmounts under Delayed Drawdown Collateral DebtObligations and/or Revolving Obligations.

The percentage requirements applicable to different types of Collateral Debt Obligations specified in the Portfolio ProfileTests shall be determined by reference to the AggregatePrincipal Balance of such type of Collateral Debt Obligations,excluding Defaulted Obligations.

Obligations which are to constitute Collateral Debt Obligationsin respect of which the Issuer has entered into a bindingcommitment to purchase but which have not yet settled shall beincluded as Collateral Debt Obligations, and obligations inrespect of which the Issuer has entered into a bindingcommitment to sell but which have not yet settled shall not beincluded as Collateral Debt Obligations in the calculation of thePortfolio Profile Tests at any time as if such purchase or sale, asthe case may be, had been completed.

Coverage Tests The Coverage Tests will consist of the Class A Par Value Testand the Class A Interest Coverage Test.

The Class A Par Value Test will be satisfied on a MeasurementDate on or after the Effective Date and the Class A InterestCoverage Test will be satisfied on or after the DeterminationDate relating to the Payment Date falling in September 2009 if the corresponding Class A Par Value Ratio or Class A Interest

Coverage Ratio (as the case may be) is at least equal to the percentage specified in the table below in relation to thatCoverage Test:

Coverage Test and Ratio Percentage at which Test is

Satisfied Class A Par Value 124.0%Class A Interest Coverage 108.0%

Reinvestment DiversionThreshold:

During the Reinvestment Period, in the event that, after givingeffect to the payment of all amounts payable in respect of

paragraphs (A) through (I) (inclusive) of the Interest ProceedsPriority of Payments on any Determination Date during such

period, the Reinvestment Diversion Threshold has not been met,



13

then on the related Payment Date Interest Proceeds shall be paidto the Principal Account for the acquisition of additionalCollateral Debt Obligations in an amount equal to the lesser of (a) 50.0 per cent. of all remaining Interest Proceeds availablefor payment pursuant to paragraph (J) of the Interest ProceedsPriority of Payments and (b) the amount which, after givingeffect to the payment of all amounts payable in respect of

paragraphs (A) through (I) of the Interest Proceeds Priority of Payments, would be sufficient to cause the ReinvestmentDiversion Threshold to be met.

The “ Reinvestment Diversion Threshold ” means the thresholdwhich is met on any date of determination if the ReinvestmentDiversion Ratio is greater than or equal to 127.6 per cent.

Collateral EnhancementObligations:

Collateral Enhancement Obligations comprise options or warrants and any equity security received upon conversion,exchange or exercise of an option under, or otherwise in respectof a Collateral Debt Obligation, or any warrant or equitysecurity purchased as part of a unit with such Collateral DebtObligation (but in all cases, excluding, for the avoidance of doubt, the Collateral Debt Obligation), in each case, theacquisition of which will not result in the imposition of any

present or future, actual or contingent liabilities or obligationson the Issuer, other than those which may arise at its option.

Collateral Enhancement Obligations and any income or returngenerated thereby are not taken into account for the purposes of determining satisfaction of, or required to satisfy, any of theCoverage Tests, Portfolio Profile Tests or Collateral QualityTests.

Collateral Enhancement Obligations will be dealt with by or on behalf of the Issuer in accordance with the CollateralManagement Agreement.

Accounts: Prior to the Issue Date, the Issuer will establish the PaymentAccount, the Principal Account, the Interest Account, theUnused Proceeds Account, the Expense Reserve Account, theAsset Swap Termination Account, the FS Accrued InterestAccount, the Collateral Enhancement Account, the RevolvingReserve Account and the Counterparty Downgrade Cash

Collateral Account with the Account Bank and the CounterpartyDowngrade Securities Collateral Account, the Euroclear PledgeAccount and the Non-Euro Custody Account with theCustodian (each as defined in “ Conditions of the Notes ”, the“Accounts ”).

Eligible Investments: The balance standing to the credit of each Account (other thanthe Payment Account, the Asset Swap Termination Account,the Expense Reserve Account, the Euroclear Pledge Account,the FS Accrued Interest Account and the CounterpartyDowngrade Cash Collateral Account), from time to time, may

be invested by the Collateral Manager, acting on behalf of the

Issuer, in certain money market instruments satisfying thedefinition of “ Eligible Investments ”. See “ Description of



14

Collateral Management Agreement ”.

Non-Euro Obligations and AssetSwap Transactions:

The Collateral Manager, on behalf of the Issuer, may purchaseCollateral Debt Obligations which are Non-Euro Obligations,subject to the satisfaction of certain conditions set out in theCollateral Management Agreement. An Asset SwapTransaction must be entered into in respect of each Non-EuroObligation denominated in U.S. Dollars, Sterling, DanishKroner, Swedish Kronor, Norwegian Kroner or Swiss Francs(each such currency, an “ Approved Unhedged Currency ”)either (i) within 6 months of the settlement date of theacquisition thereof, or (ii) if, following the acquisition thereof,the Aggregate Principal Balance of all Unhedged CollateralDebt Obligations would be greater than 5.0 per cent. of theAggregate Portfolio Balance (for these purposes, taking intoconsideration 100 per cent. of the Principal Balance of Unhedged Collateral Debt Obligations), on the date of settlement thereof. An Asset Swap Transaction must be enteredinto in respect of each Non-Euro Obligation which is notdenominated in an Approved Unhedged Currency on the date of settlement thereof. Each Non-Euro Obligation included in theInitial Portfolio shall be the subject of an Asset SwapTransaction entered into on or prior to the Issue Date (and anysuch Asset Swap Transaction shall be effective from the IssueDate).

Any Asset Swap Transaction entered into by the Issuer must bewith an Asset Swap Counterparty that satisfies the applicableRequired Ratings.

Liquidity Facility: The Collateral Manager reserves the right to enter into aliquidity facility agreement on behalf of the Issuer after theIssue Date, subject to receipt of Rating Agency Confirmation,consent of the Secured Parties and amendment of theTransaction Documents.

Limited Recourse: The Notes are limited recourse obligations of the Issuer whichare payable solely out of amounts received by or on behalf of the Issuer in respect of the Collateral.

Withholding Tax: All payments of principal and interest in respect of the Notesshall be made free and clear of, and without withholding or

deduction for, any taxes, duties, assessments or governmentalcharges of whatever nature imposed, levied, collected, withheldor assessed by or within Ireland, or any political sub-division or any authority therein or thereof having power to tax, unless suchwithholding or deduction is required by law.

Rating: It is a condition to issuance that the Class A-1 Notes, theClass A-2a Notes and the Class A-2b Notes each receive arating from S&P of at least “AAA” as at the Issue Date.

The S&P rating assigned to the Class A Notes addresses thetimely payment of interest and the ultimate repayment of

principal. A credit rating is not a recommendation to buy, sellor hold securities and may be subject to revision, suspension or withdrawal at any time by the applicable rating agency. See



15

“ Rating of the Class A Notes ” and “ Risk Factors ”. TheSubordinated Notes being offered hereby will not be rated.

Authorised Denominations: The Regulation S Notes of each Class (other than theAccredited Investor Notes) will be issued in minimumdenominations of €100,000 and the Rule 144A Notes of eachClass will be issued in minimum denominations of €250,000and, in each case, in integral multiples of €1,000 in excessthereof. The Accredited Investor Notes will be issued inminimum denominations of €50,000 and integral multiples of

€1,000 in excess thereof.

If Definitive Certificates are issued in the limited circumstancesdescribed herein, the denominations of such DefinitiveCertificates will be determined by reference to the individualholdings of each relevant Noteholder on the Exchange Date,

provided that the Issuer may in its absolute discretion issueDefinitive Certificates in other denominations and provided

further that such denominations will not be lower than theminimum denominations for the Regulation S GlobalCertificates or the Rule 144A Global Certificates, as the casemay be, that such Definitive Certificates are replacing.

Form, Registration and Transferof the Notes:

The Regulation S Notes (other than the Accredited Investor Notes) sold outside the United States to non-U.S. Persons inreliance on Regulation S, will be represented on issue by

beneficial interests in one or more permanent global certificatesin fully registered form, without interest coupons or principalreceipts (each a “ Regulation S Global Certificate ”), whichwill be deposited on or about the Issue Date with, and registeredin the name of, The Bank of New York Depository (Nominees)Limited as nominee for The Bank of New York Mellon ascommon depositary for Euroclear and Clearstream,Luxembourg. Beneficial interests in a Regulation S GlobalCertificate may be held only through, and transfers thereof willonly be effected through, records maintained by Euroclear or Clearstream, Luxembourg at any time. See “ Form of the Notes ”and “ Book Entry Clearance Procedures ”. Interests in anyRegulation S Note may not at any time be held by any U.S.Person (as defined in Regulation S under the Securities Act).

The Regulation S Global Certificates will bear a legend andsuch Regulation S Global Certificates, or any interest therein,may not be transferred except in compliance with the transfer restrictions set out in such legend. See “ Transfer Restrictions ”.

The Rule 144A Notes sold in reliance on Rule 144A (or inrelation to the initial sale of the Class A-1 Notes, Section 4(2) of the Securities Act) within the United States to persons andoutside the United States to U.S. Persons, in each case, who areQIB/QPs will be represented on issue by one or more

permanent global certificates, in fully registered form withoutinterest coupons or principal receipts attached (each a“Rule 144A Global Certificate ”), which will be deposited on

or about the Issue Date with, and registered in the name of, TheBank of New York Depository (Nominees) Limited as nominee



16

for The Bank of New York Mellon as common depositary for Euroclear and Clearstream, Luxembourg. Beneficial interests ina Rule 144A Global Certificate may be held only through, andtransfers thereof will only be effected through, recordsmaintained by Euroclear or Clearstream, Luxembourg at anytime. See “ Form of the Notes ” and “ Book Entry ClearanceProcedures ”.

The Rule 144A Global Certificates will bear a legend and suchRule 144A Global Certificates, or any interest therein, may not

be transferred except in compliance with the transfer restrictionsset out in such legend. See “ Transfer Restrictions ”.

No beneficial interest in a Rule 144A Global Certificate may betransferred to a person who takes delivery thereof through aRegulation S Global Certificate unless the transferor providesthe Trustee with a written certification substantially in the formset out in the Trust Deed regarding compliance with certaintransfer restrictions. In addition, interests in any of theRegulation S Certificates may not at any time be held by anyU.S. Person. Any transfer of a beneficial interest in aRegulation S Global Certificate to a person who takes deliverythrough an interest in a Rule 144A Global Certificate is alsosubject to certification requirements substantially in the form setout in the Trust Deed and each purchaser thereof shall bedeemed to represent that such purchaser is a QualifiedPurchaser and a Qualified Institutional Buyer. See “ Form of the

Notes” and “Book Entry Clearance Procedures ”.

The Accredited Investor Notes of each Class, sold either (i) within the United States to persons or outside the UnitedStates to U.S. Persons who are both Accredited Investors andEligible ICA Investors or (ii) outside the United States tonon-U.S. Persons in Offshore Transactions in reliance onRegulation S, will each be represented on issue by one or moredefinitive certificates of such Class, in fully registered form,without interest coupons or principal receipts (each, an“Accredited Investor Definitive Certificate ” and together, the“Accredited Investor Definitive Certificates) which will beregistered in the name of the owner thereof or its nominee.

The Accredited Investor Definitive Certificates will bear alegend and such Accredited Investor Definitive Certificates, or any interest therein, may not be transferred except incompliance with the transfer restrictions set out in such legend.See “ Transfer Restrictions ”.

In addition, each investor acquiring an Accredited Investor Notewill be required to execute and deliver to the Issuer and theRegistrar an Accredited Investor Note Purchase Agreement (inthe case of initial purchasers) or a transfer certificate (in thecase of transferees) in the form attached as an exhibit to theTrust Deed which will contain representations and warranties tothe effect that such investor will not transfer such interest

except in compliance with the transfer restrictions set out in thelegend of such Accredited Investor Note and in the Trust Deed



17

(including the requirement that any subsequent transfereeexecute and deliver a transfer certificate in the form attached asan exhibit to the Trust Deed).

Except in the limited circumstances described herein, Notes indefinitive, certificated, fully registered form (each a “ DefinitiveCertificate ”) will not be issued in exchange for beneficialinterests in either the Regulation S Global Certificates or theRule 144A Global Certificates. See “ Form of the Notes –

Exchange for Definitive Certificates ”.

Transfers of interests in Global Certificates and the AccreditedInvestor Definitive Certificates are subject to certain restrictionsand must be made in accordance with the procedures set out inthe Trust Deed. See “ Form of the Notes, Initial Issue Notes ”,“ Book Entry Clearance Procedures ”. and “ Transfer

Restrictions ”. Each purchaser of Notes in making its purchasewill be required to make, or will be deemed to have made,certain acknowledgements, representations and agreements.See “ Transfer Restrictions ”.

The transfer of Notes in breach of certain of suchrepresentations and agreements will result in affected Notes

becoming subject to certain forced transfer provisions. TheTrust Deed provides that the Issuer may require the sale of any

Note that has been transferred in breach of certain of suchtransfer restrictions. See “ Risk Factors – Forced Transfer ”,“Transfer Restrictions ” and Condition 2(h) ( Forced Transfer of Certain Notes ).

Governing Law: The Notes and the Transaction Documents (save for theCorporate Services Agreement and the Euroclear PledgeAgreement) will be governed by and shall be construed inaccordance with English law. The Corporate ServicesAgreement is governed by and shall be construed in accordancewith Irish law. The Euroclear Pledge Agreement is governed byand shall be construed in accordance with Belgian law.

Listing: Application will be made to the Financial Regulator, ascompetent authority under the Prospectus Directive for thisOffering Memorandum to be approved. Application will bemade to the Irish Stock Exchange for the Notes to be admitted

to the Official List and trading on its regulated market. See“General Information ”.

Irish Listing Agent: A&L Listing Limited.

Tax Status: See “ Tax Considerations ”.

Certain Employee Benefit PlanConsiderations:

See “ Certain Employee Benefit Plan Considerations ” below.

Additional Issuances: Subject to certain conditions being met, the Replacement Notesmay be issued and sold to the Consenting Purchasers at the

Non-Consenting Notes Payment Amount, which shall be paid to

the order of the Trustee for the account of the Non-Consenting Noteholders. See above and Condition 7(j) ( Refinancing of



18

Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment ) and Condition 19 ( Additional Issuances ).

Noteholders should be aware that additional notes that aretreated for non-tax purposes as a single series with the original

Notes may be treated as a separate series for U.S. federalincome tax purposes. In such cases, the new notes may beconsidered to have been issued with OID (as defined in“Taxation – United States Federal Income Taxation – Interest on the Class A Notes ”), which may affect the market value of the original Notes since such additional notes may not bedistinguishable from the original Notes.



19

RISK FACTORS

An investment in the Notes of any Class involves certain risks, including risks relating to theCollateral securing such Notes and risks relating to the structure and rights of such Notes and therelated arrangements. Prospective investors should carefully consider the following factors, inaddition to the matters set forth elsewhere in this document, prior to investing in the Notes of anyClass. Terms used and not otherwise defined in this section shall have the meanings given to them inCondition 1 ( Definitions ) of the Conditions of the Notes.

1. GENERAL

1.1 General

It is intended that the Issuer will invest in Collateral Debt Obligations with certain risk characteristicsas described below and subject to the investment policies and restrictions and guidelines described in“ Description of the Portfolio ” herein. There can be no assurance that the Issuer’s investments will besuccessful, that its investment objectives will be achieved, that the holders of Notes will receive thefull amounts payable by the Issuer under the Notes or that they will receive any return on their

investment in the Notes. Prospective investors are therefore advised to review this entire OfferingMemorandum carefully and should consider, among other things, the factors set out below beforedeciding whether to invest in the Notes. Except as is otherwise stated below, such factors aregenerally applicable to all Classes of Notes, although the degree of certain risk associated with eachClass of Notes will vary according to its position in terms of the Priorities of Payments (seeCondition 3(c) ( Priorities of Payments ) below). In particular, payments in respect of the Class A

Notes are generally higher in the Priorities of Payments than those in respect of the Subordinated Notes.

None of the Initial Purchaser/Placement Agent, the Collateral Manager, the Arranger, the Agents, theCollateral Administrator or the Trustee undertakes to review the financial condition or affairs of theIssuer during the life of the arrangements contemplated by this Offering Memorandum nor to adviseany investor or potential investor in the Notes of any information coming to the attention of the InitialPurchaser/Placement Agent, the Collateral Manager, the Arranger, the Agents, the CollateralAdministrator or the Trustee which is not included in this Offering Memorandum. None of the Issuer,the Initial Purchaser/Placement Agent, the Arranger, the Agents, the Collateral Administrator or theTrustee undertakes to review the financial condition or affairs of the Collateral Manager.

1.2 Suitability

Prospective purchasers of the Notes of any Class should ensure that they understand the nature of such Notes and the extent of their exposure to risk, that they have sufficient knowledge, experienceand access to professional advisers to make their own legal, tax, accounting, regulatory and financialevaluation of the merits and risks of investment in such Notes and that they consider the suitability of such Notes as an investment in the light of their own circumstances and financial condition. In

particular, in relation to the Accredited Investor Notes, none of the Initial Purchaser/Placement Agent,the Issuer nor the Arranger has provided any services, consultation or information to the AccreditedInvestor Noteholders (or any of them) or communicated with the Accredited Investor Noteholders (or any of them) in any way in connection with their purchase of Accredited Investor Notes (other than,in the case of the Issuer, the publication of this Offering Memorandum) and has not assessed thesuitability of the Class S-2 Subordinated Notes as an investment for the Class S-2 Subordinated

Noteholders.

1.3 Limited Sources of Funds to Pay Expenses of the Issuer

The funds available to the Issuer to pay its expenses on any Payment Date are limited as provided inthe Priorities of Payments. In the event that such funds are not sufficient to pay the expenses incurred

by the Issuer, the ability of the Issuer to operate effectively may be impaired, and it may not be able to



20

defend or prosecute legal proceedings brought against it or which it might otherwise bring to protectits interests or be able to pay the expenses of legal proceedings against persons it has indemnified.

1.4 Net Proceeds Less than Aggregate Amount of the Notes

It is anticipated that the net proceeds received by the Issuer on the Issue Date from the issuance of the

Notes will be less than the aggregate principal amount outstanding of the Notes. Consequently, it is possible that on the Issue Date the Collateral will be insufficient to redeem the Notes upon theoccurrence of an Event of Default on or about that date.

2. RELATING TO THE NOTES

2.1 Recent Events in the CDO and Leveraged Finance Markets

In late 2006 the sub-prime mortgage loan market in the United States commenced a periodcharacterised by a large number of borrower defaults. Prior to the commencement of such period, asignificant volume of sub-prime mortgage loans had been securitised and, in turn, sub-prime mortgage

backed securities had been sold to Collateralised Debt Obligations (“ CDOs ”) of asset-backedsecurities (“ ABS”) and other investment funds. As a result of the deterioration of the U.S. sub-primemortgage loan market, CDOs of ABS and other investment funds that invested in U.S. sub-primemortgage-backed securities began experiencing significant losses which has triggered a series of events that has resulted in a crisis in the global credit markets. Among the sectors of the global creditmarkets that are experiencing particular difficulty due to the current crisis are the CDO and leveragedfinance markets, including CDO vehicles and other investment funds with little or no exposure tosub-prime mortgages.

There exist significant additional risks for the Issuer and investors as a result of the current crisis.These risks include, among others, (i) the likelihood that the Issuer will find it harder to sell any of itsassets in the secondary market, thus rendering it more difficult to dispose of Credit ImpairedObligations, Credit Improved Obligations or Defaulted Obligations, (ii) the possibility that, on or after the Issue Date, the price at which assets can be sold by the Issuer will have deteriorated from their effective purchase price and (iii) the increased illiquidity of the Notes as there is currently nosecondary trading in CDO securities. These additional risks may affect the returns on the Notes toinvestors.

In addition, the current crisis has stalled the primary and secondary markets for a number of financial products including leveraged loans. As a result, there exists a large volume of leveraged loans whichremain on the books of the relevant arranging banks that have not yet been sold to investors, includingCDOs of leveraged loans or other investment vehicles. This may reduce opportunities for the Issuer to purchase assets in the primary market. In addition, while it is anticipated that new loans enteredinto after the date of the onset of the liquidity crisis will have a different set of covenants imposed onthe relevant Obligors (as compared with those loans entered into prior to the onset of the liquiditycrisis), the ability of private equity sponsors and leveraged loan arrangers to effectuate new leveraged

buy-outs and the ability of the Issuer to make purchases of such assets may be partially or significantly limited to the secondary market. The impact of the crisis on the primary and secondarymarkets may adversely affect the ability of the Collateral Manager to perform its role in relation to thePortfolio and, ultimately, the returns on the Notes to investors.

While it is possible that the current crisis may soon alleviate for certain sectors of the global creditmarkets, there can be no assurance that the CDO or leveraged finance markets will recover at thesame time or to the same degree as such other recovering global credit market sectors.

2.2 Limited Liquidity and Restrictions on Transfer

In addition to the general liquidity issues currently affecting the market for notes representing

collateralised debt obligations similar to the Notes, there is currently no market for the Notesthemselves. Although the Initial Purchaser/Placement Agent has advised the Issuer that it intends tomake a market for the Notes, the Initial Purchaser/Placement Agent is not obliged to do so, and any



21

such market-making may be discontinued at any time without notice. There can be no assurance thatany secondary market for any of the Notes will develop or, if a secondary market does develop, that itwill provide the Noteholders with liquidity of investment or continue for the life of such Notes. Asreferred to above, as a result of the current crisis in the global credit markets there is at present little or no secondary trading in CDO securities.

In addition, no sale, assignment, participation, pledge or transfer of the Notes may be effected if,among other things, it would require any of the Issuer or any of its officers or directors to register under, or otherwise be subject to the provisions of, the Investment Company Act or any other similar legislation or regulatory action. Furthermore, the Notes will not be registered under the Securities Actor any U.S. state securities laws, and the Issuer has no plans, and is under no obligation, to register the

Notes under the Securities Act or any U.S state securities laws. The Notes are subject to certaintransfer restrictions and can be transferred only to certain transferees. See “ Plan of Distribution ” and“Transfer Restrictions ”. Such restrictions on the transfer of the Notes may further limit their liquidity.Consequently, a purchaser must be prepared to hold the Notes for an indefinite period of time or untilthe Maturity Date.

2.3 Limited Recourse Obligations

The Notes are limited recourse obligations of the Issuer and are payable solely from amounts receivedin respect of the Collateral Debt Obligations and other Collateral securing the Notes. Payments on the

Notes both prior to and following enforcement of the security over the Collateral are subordinated tothe prior payment of certain fees and expenses of, or payable by, the Issuer and to payment of

principal and interest on prior-ranking Classes of Notes.

Only the Trustee may pursue the remedies available under applicable law and under the Trust Deed toenforce the rights of the Transaction Creditors against the Issuer and no other Transaction Creditor shall be entitled to proceed directly against the Issuer in respect of such rights, unless the Trustee,having been bound to take steps and/or proceedings, fails to do so within a reasonable time and suchfailure is continuing.

None of the Collateral Manager, the Noteholders of any Class, the Initial Purchaser/Placement Agent,the Arranger, the Trustee, the Collateral Administrator, any Asset Swap Counterparty, any Agent or any Affiliates of any of the foregoing, or any other person or entity (other than the Issuer) will beobliged to make payments on the Notes of any Class. Consequently, Noteholders must rely solely ondistributions on the Collateral Debt Obligations and amounts received under other Collateral securingthe Notes for the payment of principal and interest thereon. There can be no assurance that thedistributions on the Collateral Debt Obligations and amounts received under other Collateral securingthe Notes will be sufficient to make payments on the Subordinated Notes after making payments onthe Class A Notes and certain other required amounts payable to other creditors ranking senior to or

pari passu with the Subordinated Notes pursuant to the Priorities of Payments. If distributions on theCollateral Debt Obligations and the other Collateral are insufficient to make payments on the Notes,

no other assets (and, in particular, no assets of the Collateral Manager, the Noteholders of any Class,the Initial Purchaser/Placement Agent, the Arranger, the Trustee, the Directors, any Asset SwapCounterparty, the Collateral Administrator, any Agent or any Affiliates of any of the foregoing andincluding, without limitation, the Irish Issuer Account and the rights of the Issuer under the CorporateServices Agreement) will be available for payment of the shortfall, and following realisation of theCollateral and the application of the proceeds thereof in accordance with the Priorities of Payments,the obligations of the Issuer to pay such shortfall shall be extinguished. Any such shortfall will be

borne first by the Subordinated Noteholders, and thereafter the Class A Noteholders of each Class (ona pari passu basis) provided however that in respect of the Class A-2 Notes, any shortfall shall be

borne first by the Class A-2b Noteholders and thereafter by the Class A-2a Noteholders, in each casein accordance with the Priorities of Payments.

In addition after all the related obligations of the Issuer have been paid in full, none of the Noteholders, the Trustee nor any other Secured Party (nor any other person acting on behalf of any of



22

them) shall be entitled at any time to institute against the Issuer, or join in any institution against theIssuer of, any bankruptcy, reorganisation, arrangement, insolvency, moratorium, controlledmanagement, winding-up, examinership or liquidation proceedings or any proceedings for theappointment of a liquidator, an examiner or administrator or receiver or a similar official, or other

proceedings under any applicable bankruptcy or similar law in connection with any obligations of theIssuer relating to the Notes, the Trust Deed or otherwise owed to the Noteholders or other SecuredParties, save for lodging a claim in the liquidation of the Issuer which is initiated by another party or taking proceedings to obtain a declaration or judgment as to the obligations of the Issuer, and no such

person shall have a claim arising in respect of the share capital of the Issuer.

2.4 Subordination

The Subordinated Notes will be fully subordinated to the Class A Notes provided however that inrespect of the Class A-2 Notes, the Class A-2b Notes will be subordinated to the Class A-2a Notes.Payments of principal and interest on the Notes are also subordinated to payment of certain expensesof the Issuer and amounts payable to other Secured Parties as specified in the Priorities of Payments.The risk of delays in payments or ultimate non-payment of principal and/or interest will be bornedisproportionately by the holders of the Subordinated Notes as compared to the holders of the Class A

Notes.

Payments on the Subordinated Notes both prior to and following enforcement of the security over theCollateral are subordinated to payments in respect of the Class A Notes ( provided however that withrespect to payments between the Class A2 Notes of each Class, any amounts will be paid to theClass A-2a Notes in priority to the Class A-2b Notes) and payment of certain fees and other amounts

payable by the Issuer in accordance with the Priorities of Payments. Interest on the Subordinated Notes will be paid on an available funds basis only, to the extent that there are Interest Proceedsavailable, on each Payment Date following payment of interest on the Class A Notes ( provided however that with respect to payments of interest between the Class A2 Notes, any amounts will be

paid to the Class A-2a Notes in priority to the Class A-2b Notes) whilst any such Notes remainOutstanding and the fees, expenses and other amounts set out in the Priorities of Payments.

In addition, any such payment shall be subject to the right of the Collateral Manager to transfer amounts which would otherwise have been payable on the Subordinated Notes to the CollateralEnhancement Account to be applied in the acquisition or exercise of rights under CollateralEnhancement Obligations and to the requirement that in the event that the Reinvestment DiversionThreshold is not satisfied during the Reinvestment Period the Collateral Manager will apply certainInterest Proceeds towards the acquisition of additional Collateral Debt Obligations so as to allow theReinvestment Diversion Threshold to be met.

Notwithstanding the above, Collateral Enhancement Obligation Proceeds (save for amountsrepresenting the Sale Proceeds in excess of the purchase price or exercise price of any CollateralEnhancement Obligation that is sold, which have been either (i) credited or (ii) transferred (pursuant

to Condition 3(j)(x) ( Collateral Enhancement Account )) to the Principal Account or the InterestAccount at the Collateral Manager’s discretion) may be distributed to the Subordinated Noteholders pursuant to the Collateral Enhancement Obligation Proceeds Priority of Payments. Unless credited or transferred to the Principal Account or Interest Account at the discretion of the Collateral Manager asdescribed above, the other Secured Creditors will not be entitled to receive any such CollateralEnhancement Obligations Proceeds.

In the event of any redemption in full pursuant to Condition 7(b)(i) ( Redemption at the Option of theSubordinated Noteholders or the Holders of the Controlling Class ) or acceleration of the Notes at therequest of the Controlling Class, the Notes of each Class (including the Subordinated Notes) will besubject to automatic redemption/acceleration and the Collateral may, in either case, be liquidated.Liquidation of the Collateral at such time or remedies pursued by the Trustee upon enforcement of the

security over the Collateral in such circumstances could be adverse to the interests of the Class A Noteholders of each Class and/or the Subordinated Noteholders of each Class, as the case may be. To



23

the extent that any losses are incurred by the Issuer in respect of any Collateral, such losses will be borne first by holders of the Subordinated Noteholders of each Class and then by the Class A Noteholders of each Class (on a pari passu basis) provided however that in relation to losses borne bythe Class A-2 Notes, such losses will be borne first by the Class A-2b Notes and thereafter by theClass A-2a Notes. Remedies pursued by the Trustee at the direction of the holders of the ControllingClass at any time could be adverse to the interests of the other Class of Notes. The Subordinated

Noteholders will not be able to exercise any remedies following an Event of Default unless the ClassA Notes have been redeemed and paid in full. The Subordinated Noteholders will not receive anydistribution until the Class A Notes and certain other amounts have been paid.

The Issuer’s ability to make payments of interest and principal in respect of the Subordinated Noteswill be constrained by the terms of the Class A Notes, by the level of distributions received in respectof the Portfolio and other Collateral securing the Notes (see “ Nature of the Collateral ” below). If distributions on the Portfolio and the other Collateral are insufficient to make payment on theSubordinated Notes, no other assets will be available for payment of such deficiency. See “ Limited

Recourse Obligations ” above. No interest may therefore be payable on the Subordinated Notes for anindefinite period of time to maturity.

The risk of delays in payments or ultimate non-payment of principal and/or interest will be bornedisproportionately by the holders of the Subordinated Notes as compared to the Class A Notes.

2.5 Subordination through Conflicts between Classes

Following the occurrence of an Event of Default, the Notes may be accelerated in accordance withCondition 10(b) ( Acceleration ) by the Trustee at its discretion, and shall at the direction of the holdersof at least 66 ⅔ per cent. of the Principal Amount Outstanding of the Notes of the Controlling Class atsuch time acting by Extraordinary Resolution.

In the event of any acceleration of the Notes following the occurrence of an Event of Default,liquidation of the Collateral at such time or the remedies pursued upon enforcement of the security of the Collateral at such time by the Trustee could be adverse to the interests of the holders of theClasses of Notes which rank junior in terms of priority to the Controlling Class directing suchenforcements. Such remedies, or actions taken pursuant to such other voting rights, could be adverseto the interests of the holders of the Classes of Notes not entitled to vote, and the holders of the Notesof a given Class entitled to vote at any time will have no obligation to consider the effect of any suchvote on the holders of any other Classes of Notes.

In connection with the exercise of its trusts, powers, duties and discretions (including but not limitedto those referred to in the Conditions) the Trustee shall have regard to the interests of each Class of

Noteholders as a Class and shall not have regard to the consequences of such exercise for individual Noteholders of such Class and the Trustee shall not be entitled to require, nor shall any Noteholder beentitled to claim, from the Issuer, the Trustee or any other Person any indemnification or payment inrespect of any tax consequence of any such exercise upon individual Noteholders except to the extentalready provided for in Condition 8 ( Payments ).

The Trust Deed provides that in the event of any conflict of interest between the holders of theClass A Notes and the Subordinated Notes, the interests of the holders of the Class A Notes will

prevail. In the event that the Trustee receives conflicting or inconsistent requests from two or moregroups of holders of the Controlling Class, each representing less than the majority of the PrincipalAmount Outstanding of the Controlling Class, the Trustee shall give priority to the group which holdsthe greater amount of Notes Outstanding of such Class. The Trust Deed provides further that theTrustee will act upon the directions of the holders of the Controlling Class in such circumstances, andshall not be obliged to consider the interests of the holders of any other Class of Notes. SeeCondition 14(e) ( Entitlement of the Trustee and Conflicts of Interest ).



24

2.6 Amount and Timing of Payments

Payments of interest and principal on the Subordinated Notes will only be made to the extent thatthere are Interest Proceeds and Principal Proceeds available for such purpose in accordance with thePriorities of Payments. No interest or principal may therefore be payable on the Subordinated Notesfor an unlimited period of time, to maturity or at all.

Investment in the Notes of any Class involves a degree of risk arising from fluctuations in the amountand timing of receipt of the principal and interest on the Collateral Debt Obligations by or on behalf of the Issuer and the amounts of the claims of creditors of the Issuer ranking in priority to the holdersof each Class of the Notes. In particular, prospective purchasers of such Notes should be aware thatthe amount and timing of payments of the principal and interest on the Collateral Debt Obligationswill depend upon the detailed terms of the documentation relating to each of the Collateral DebtObligations and on whether or not any Obligor thereunder defaults in its obligations.

2.7 Average Life and Prepayment Considerations

The Maturity Date of the Notes is 17 September 2020 (subject to adjustment for Business Days).

However, the average life of each Class of the Notes is expected to be shorter than the number of years to their Maturity Date. Average life refers to the average amount of time that will elapse fromthe date of issue of each Class of Notes until each Euro of the outstanding principal amount of such

Note will be paid to the holder thereof.

The average lives of each Class of the Notes will be determined by the amount and frequency of principal repayments in respect of such Class, which are dependent upon, among other things, theamount of any payments received at or in advance of the scheduled maturity of Collateral DebtObligations (whether through sale, maturity, redemption, default or other liquidation or disposition).The actual average lives and actual maturities of each Class of the Notes will be affected by thefinancial condition of each of the Obligors of the underlying Collateral Debt Obligations and thecharacteristics of such loans or securities, including the existence and frequency of exercise of anyoptional, mandatory or special redemption features, the prevailing level of interest rates, theredemption price, the actual default rate, the actual level of recoveries on any Defaulted Obligationsand the frequency of tender or exchange offers for such Collateral Debt Obligations. In particular,loans are generally repayable at par and a high proportion of loans could be repaid. Substantially allof the Collateral Debt Obligations are expected to be subject to optional redemption or prepayment bythe Obligors of such loans thereunder. Any disposition of a Collateral Debt Obligation may changethe composition and characteristics of the Collateral Debt Obligations and the rate of paymentthereon, and, accordingly, may affect the actual average lives of each Class of the Notes.

The ability of the Collateral Manager, acting on behalf of the Issuer, to reinvest any PrincipalProceeds in the manner described under “ Description of the Portfolio - Management of the Portfolio ”

below and the decisions made regarding whether or not to reinvest such proceeds will also affect theaverage lives of the Notes. The average lives of the Notes may also be affected by any of the

provisions of the Conditions relating to the optional, mandatory or special redemption of the Notes prior to the Maturity Date.

2.8 Mandatory Redemption

The Notes may be subject to mandatory redemption in certain circumstances, including upon breachof any Coverage Test, to the extent required to procure that such Coverage Test would be satisfied if recalculated following such redemption. In such circumstances, the Classes of Notes will beredeemed in accordance with the Note Payment Sequence (subject, in each case, to payment of all

prior ranking amounts due and payable by the Issuer pursuant to the Priorities of Payments).

Any such mandatory redemption of the Notes may result in a reduction in the amount of Interest

Proceeds and Principal Proceeds available to pay Noteholders, including a reduction in the level of returns payable to the Subordinated Noteholders.



25

2.9 Optional Redemption and Volatility of Portfolio Market Value

A form of liquidity for the Subordinated Notes is the optional redemption provision set out inCondition 7(b)(i) ( Redemption at the Option of the Subordinated Noteholders or the Holders of theControlling Class ). There can be no assurance however that such optional redemption provision will

be capable of exercise in accordance with the conditions set out in Condition 7(b)(ii) ( Conditions toOptional Redemption ). An optional redemption of the Notes could require the Collateral Manager toliquidate Collateral Debt Obligations more rapidly than would otherwise be desirable, which couldadversely affect the realised value of such Collateral Debt Obligations. The market value of theCollateral Debt Obligations may fluctuate, with, among other things, changes in prevailing interestrates, foreign exchange rates, general economic conditions, the conditions of financial markets(particularly the markets for Senior Secured Loans and the continuing impact of the liquidity crisis (asdescribed above)), European and international political events, events in the home countries of theObligors under the Collateral Debt Obligations or the countries in which their assets and operationsare based, developments or trends in any particular industry and the financial condition of suchObligor. Moreover, increased volatility of the financial markets as well as the illiquidity of theleveraged loan market may result in uncertainties and affect the market value of the Collateral DebtObligations in the Portfolio relative to their original purchase prices. The secondary market for senior loans is still limited. A decrease in the market value of the Portfolio would adversely affect theamount of proceeds which could be realised upon liquidation of the Portfolio and ultimately theability of the Issuer to redeem the Subordinated Notes pursuant to the right of optional redemption setout in Condition 7(b)(i) ( Redemption at the Option of the Subordinated Noteholders or the Holders of the Controlling Class ) due to the threshold requirements set out therein. There can be no assurancethat, upon any such redemption, the proceeds realised would permit any payment on the Subordinated

Notes after required payments are made in respect of the Class A Notes and the other creditors of theIssuer which rank in priority to the holders of the Subordinated Notes pursuant to the Post-Acceleration Priority of Payments.

2.10 Volatility of the Subordinated Notes

The Issuer will utilise a high degree of investment leverage. The use of leverage is a speculativeinvestment technique which increases the risk to the holders of the Subordinated Notes. In certainscenarios, the Notes may not be paid in full and the Subordinated Notes may be subject to a partial or a 100 per cent. loss of invested capital. The Subordinated Notes represent the most junior securities ina leveraged capital structure. As a result, any deterioration in performance of the asset portfolio,including defaults and losses, a reduction of realised yield or other factors, will be borne first byholders of the Subordinated Notes and then by the holders of the Class A Notes (on a pari passu

basis) provided however that in relation to any reduction affecting the holders of the Class A-2 Notes,any such reduction will be borne first by the holders of the Class A-2b Notes and thereafter by theholders of the Class A-2a Notes.

2.11 Future Rating of the Class A Notes Not Assured and Limited in Scope

A security rating is not a recommendation to buy, sell or hold securities and may be subject torevision, suspension or withdrawal by the Rating Agency at any time. Credit ratings represent arating agency’s opinion regarding the credit quality of an asset but are not a guarantee of such quality.There is no assurance that the ratings accorded to the Class A Notes will remain for any given periodof time or that the rating will not be lowered or withdrawn entirely by the Rating Agency if, in its

judgement, circumstances in the future so warrant. In the event that a rating initially assigned to aClass of the Class A Notes is subsequently lowered for any reason, no person or entity is required to

provide any additional support or credit enhancement with respect to such Notes and the market valueof such Notes is likely to be adversely affected.

2.12 Withholding Tax on the Notes

No withholding tax will be payable on payments of interest under the Notes while the Notes are listedon the Irish Stock Exchange and the Issuer is able to take advantage of the Irish Quoted Eurobond



26

exemption because the Notes are either held in a recognised clearing system or interest is paid througha non-Irish paying agent. See “Tax Considerations –Ireland Taxation”.

In the event that any withholding tax or deduction for tax is payable on payments of interest on the Notes, the holders of the Notes will not be entitled to receive grossed-up amounts to compensate for such withholding tax and no Event of Default shall occur as a result of any such withholding or deduction.

In the event of the occurrence of a Note Tax Event pursuant to which any payment on the Notes of any Class becomes subject to any withholding tax or deduction on account of tax, the Notes may beredeemed in whole but not in part at the direction of the holders of at least 66 ⅔ per cent. of thePrincipal Amount Outstanding of the Notes of the Controlling Class at such time or the holders of atleast 66⅔ per cent. of the Principal Amount Outstanding of the Subordinated Notes at such time, ineach case, acting by Extraordinary Resolution and subject to certain conditions including a thresholdtest pursuant to which determination is made as to whether the anticipated proceeds of liquidation of the security over the Collateral would be sufficient to pay all amounts due and payable on the Notes insuch circumstances in accordance with the Post-Acceleration Priority of Payments.

2.13 Fixed and Floating Charges under English law In certain circumstances under English law a charge which is expressed to be a fixed charge may takeeffect as a floating charge. The question of whether a fixed charge will be considered by the Englishcourts as such would depend, among other things, on whether the Trustee has, under the Trust Deedand the other agreements to which it is a party, the requisite degree of control over the Issuer’s abilityto deal with the relevant assets and their proceeds and, if so, whether such control is exercised by theTrustee in practice. English case law is unclear as to the degree of control that is required for a chargeto be considered a fixed charge and it is only possible in certain limited circumstances to state withcertainty that a fixed charge has been created. If any of the charges which purport to be fixed chargesare in fact held to be floating charges, the claims of the Trustee for itself, the Noteholders and other

beneficiaries under the relevant charge would, on winding up of the Issuer in an English court, be

subject to claims which are given priority over a floating charge by law. However, the Issuer hascovenanted in the Trust Deed not to create any such subsequent security interests (other than those permitted under the Trust Deed) without the consent of the Trustee.

2.14 Resolutions, Amendments and Waivers

Decisions may be taken by Noteholders by way of Ordinary Resolution or Extraordinary Resolution,in each case, either acting together or, to the extent specified in any applicable Transaction Document,as a Class of Noteholders acting independently. Such Resolutions can be effected either at a dulyconvened meeting of the applicable Class of Noteholders or by the applicable Class of Noteholdersresolving in writing. Meetings of the Noteholders may be convened by the Issuer, the Trustee or byone or more Noteholders holding not less than ten per cent. in aggregate Principal AmountOutstanding of the Notes of a particular Class, subject to certain conditions including minimum notice

periods.

The Trustee may, in its discretion, determine that any proposed Ordinary Resolution or ExtraordinaryResolution affects only the holders of one or more Classes of Notes, in which event the requiredquorum and minimum percentage voting requirements of such Ordinary Resolution or ExtraordinaryResolution may be determined by reference only to the holders of that Class or Classes of Notes.

In the event that a meeting of Noteholders is called to consider a Resolution, determination as towhether the requisite number of Notes has been voted in favour of such Resolution will be determined

by reference to the percentage which the Notes voted in favour represent of the total amount of Notesheld or represented by any person or persons entitled to vote which are present at such meeting andnot by the aggregate original Principal Amount Outstanding of all such Notes which are entitled to bevoted in respect of such Resolution. This means that a lower percentage of Noteholders may pass aResolution which is put to a meeting of Noteholders than would be required for a Written Resolution



27

in respect of the same matter. There are however quorum provisions which provide that a minimumnumber of Noteholders representing a minimum amount of the aggregate Principal AmountOutstanding of the applicable Class or Classes of Notes be present at any meeting to consider anExtraordinary Resolution or Ordinary Resolution. In the case of an Extraordinary Resolution, this istwo or more persons holding or representing not less than 50 per cent. of the aggregate PrincipalAmount Outstanding of each Class of Notes (or the relevant Class or Classes only, if applicable) andin the case of an Ordinary Resolution this is two or more persons holding or representing not less than10 per cent. of the aggregate Principal Amount Outstanding of each Class of Notes (or the relevantClass or Classes only, if applicable. Such quorum provisions still, however, require considerablylower thresholds than would be required for a Written Resolution. In addition, in the event that aquorum requirement is not satisfied at any meeting, lower quorum thresholds will apply at anymeeting previously adjourned for want of quorum as set out in Condition 14(b) ( Decisions and

Meetings of Noteholders ) and in the Trust Deed.

Certain entrenched rights relating to the Conditions of the Notes including the currency thereof,Payment Dates applicable thereto, the Priorities of Payments, the provisions relating to quorums andthe percentages of votes required for the passing of an Extraordinary Resolution, cannot be amendedor waived by Ordinary Resolution but require an Extraordinary Resolution. It should however benoted that amendments may still be effected and waivers may still be granted in respect of such

provisions in circumstances where not all Noteholders agree with the terms thereof and anyamendments or waivers once passed in accordance with the provisions of the Conditions of the Notesand the provisions of the Trust Deed will be binding on all such dissenting Noteholders. In additionto the Trustee’s right to agree to changes to the Transaction Documents of a formal, minor or technical nature or to correct a manifest error, or to changes which, in its opinion, are not materially

prejudicial to the interests of the Noteholders of any Class without the consent of the Noteholders,modifications may also be made and waivers granted in respect of certain other matters, subject to the

prior consent of the Trustee but without the consent of the Noteholders as set out in Condition 14(c)( Modification and Waiver ).

2.15 Enforcement Rights Following an Event of Default

Following the occurrence of an Event of Default the Trustee may, at its discretion, and shall, at theinstruction of the holders of at least 66 ⅔ per cent. of the Principal Amount Outstanding of the Notesof the Controlling Class acting by Extraordinary Resolution at such time, give notice to the Issuer thatthe Notes are to be immediately due and payable following which the security over the Collateralshall become enforceable and may be enforced either by the Trustee, at its discretion, or if so directed

by the Controlling Class acting independently by Extraordinary Resolution, provided however that the Notes shall not become so due and payable and the security over the Collateral may not be soaccelerated and enforced unless the Trustee is directed by the holders of the Controlling Class acting

by Extraordinary Resolution at such time, and in each case, the Trustee shall be indemnified and/or otherwise secured to its satisfaction against all liabilities, proceedings, claims and demands to which itmay thereby become liable and all costs, charges and expenses which may be incurred in connectiontherewith.

The requirements described above could result in the Controlling Class being unable to procureenforcement of the security over the Collateral in circumstances in which they desire suchenforcement and may also result in enforcement of such security in circumstances where the proceedsof liquidation thereof would be insufficient to ensure payment in full of all amounts due and payablein respect of the Classes of Notes in accordance with the Priorities of Payments and/or at a time whenenforcement thereof may be adverse to the interests to certain Classes of Notes and, in particular, theSubordinated Notes.



28

2.16 Refinancing of Non-Consenting Noteholders’ Notes in Connection with PricingAmendment may Result in a Shorter Holding Period than Expected

Any Non-Consenting Noteholder with respect to a Pricing Amendment of the provisions of the TrustDeed that relates to interest on the Class A Notes held by it and which requires the consent of one or more Noteholders may have their Class A Notes refinanced and Replacement Notes issued to aConsenting Purchaser at the Non-Consenting Notes Payment Amount, resulting in a shorter holding

period than expected at the time of investment in the Class A Notes and potentially resulting in avaried return on the reinvestment of such proceeds. See Condition 7(j) ( Refinancing of

Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment ).

3. RELATING TO THE COLLATERAL

3.1 The Portfolio

The decision by any prospective holder of Notes to invest in such Notes should be based, among other things (including, without limitation on the identity of the Collateral Manager), on the InitialPortfolio, the Eligibility Criteria which any Substitute Collateral Debt Obligation would be required to

satisfy at the time of purchase or when the Issuer enters into a binding commitment to purchase, asdisclosed in this Offering Memorandum, and on the Portfolio Profile Tests, Collateral Quality Testsand Coverage Tests that the Portfolio is required to satisfy as at the Effective Date (or, in respect of the Class A Interest Coverage Test, as at the Determination Date immediately preceding the PaymentDate falling in September 2009) and (save as described herein) thereafter. Although the CollateralManager is required to determine in accordance with the Collateral Management Agreement that eachCollateral Debt Obligation satisfies the Eligibility Criteria, this Offering Memorandum does notcontain any information regarding the individual Collateral Debt Obligations on which the Notes will

be secured from time to time. Purchasers of any of the Notes will not have an opportunity to evaluatefor themselves the relevant economic, financial and other information regarding the investments to bemade by the Issuer and, accordingly, will be dependent upon the judgement and ability of theCollateral Manager in carrying out its obligations pursuant to the Collateral Management Agreement.

No assurance can be given that the Issuer will be successful in obtaining suitable investments or that,if such investments are made, the objectives of the Issuer will be achieved.

Neither the Issuer nor the Initial Purchaser/Placement Agent has made any investigation into theCollateral Debt Obligations or Obligors of the Collateral Debt Obligations and prospective purchasersmay not rely on such parties having made any such investigations. The value of the Portfolio mayfluctuate from time to time (as a result of substitution or otherwise) and none of the Issuer, theTrustee, the Initial Purchaser/Placement Agent, the Arranger, the Custodian, the Collateral Manager,the Collateral Administrator, any Asset Swap Counterparty, any Agent or any of their Affiliates areunder any obligation to maintain the value of the Collateral Debt Obligations at any particular level.

None of the Issuer, the Trustee, the Initial Purchaser/Placement Agent, the Arranger, the Custodian,the Collateral Manager, the Collateral Administrator, any Asset Swap Counterparty, any other Agent

or any of their Affiliates has any liability to the Noteholders as to the amount or value of, or anydecrease in the value of, the Collateral Debt Obligations from time to time.

Pursuant to the Forward Sale Agreement, the Collateral Manager is required to verify and validatethat the purchase price payable by the Issuer in respect of each Collateral Debt Obligation in theInitial Portfolio, the subject of the Forward Sale Agreement, as at its Inclusion Date, is not anoff-market price in its reasonable opinion as a market participant (this being the Collateral Manager’ssole obligation under the Forward Sale Agreement) and, pursuant to the Collateral ManagementAgreement, the Collateral Manager may determine whether in its opinion Collateral Debt Obligationshave become Defaulted Obligations, Credit Impaired Obligations or Credit Improved Obligations andto take certain limited actions in respect thereof.



29

3.2 Nature of Non-Investment Grade Collateral; Defaults

The Issuer will invest in a portfolio of Collateral Debt Obligations consisting of, at the time of acquisition, predominantly Senior Secured Loans, all of which will have greater credit and liquidityrisk than investment grade sovereign or corporate bonds or loans. The Collateral is subject to credit,liquidity and interest rate risks.

The market value of the Collateral Debt Obligations will generally fluctuate with, amongst other things, changes in prevailing interest rates, general economic conditions, the condition of certainfinancial markets, international political events, developments or trends in any particular industry andthe financial condition of the borrowers or issuers, as the case may be, of the Collateral DebtObligations. The lower rating of below investment grade loans reflects a greater possibility thatadverse changes in the financial condition of an issuer or in general economic conditions or both mayimpair the ability of the relevant borrower or issuer, as the case may be, to make payments of

principal or interest. Such investments may be speculative. See “ Description of the Portfolio ”.

A decrease in the market value of the Collateral Debt Obligations would adversely affect the SaleProceeds that could be obtained upon the sale of the Collateral Debt Obligations and could,

ultimately, affect the ability of the Issuer to effect an optional redemption of the Notes or pay the principal of the Notes upon a liquidation of the Collateral Debt Obligations following the occurrenceof an Event of Default.

Due to the fact that Subordinated Notes represent a leveraged investment in the underlying CollateralDebt Obligations, it is anticipated that changes in the market value of the Subordinated Notes will begreater than changes in the market value of the underlying Collateral Debt Obligations.

The offering of the Notes has been structured so that the Notes can withstand certain assumed lossesrelating to defaults on the underlying Collateral Debt Obligations. See “ Rating of the Class A Notes ”.There is no assurance that actual losses will not exceed such assumed losses. If any losses exceedsuch assumed levels, payments on the Notes could be adversely affected by such defaults. To theextent that a default occurs with respect to any Collateral Debt Obligation securing the Notes and theIssuer sells or otherwise disposes of such Collateral Debt Obligation, it is likely that the proceeds of such sale or disposition will be less than the unpaid principal and interest thereon.

The financial markets periodically experience substantial fluctuations in prices for senior securedloans and senior unsecured loans and limited liquidity for such obligations. No assurance can bemade that the conditions giving rise to such price fluctuations and limited liquidity will not occur,subsist or become more acute following the Issue Date. During periods of limited liquidity and higher

price volatility, the Issuer’s ability to acquire or dispose of Collateral Debt Obligations at a price andtime that the Issuer deems advantageous may be impaired. As a result, in periods of rising market

prices, the Issuer may be unable to participate in price increases fully to the extent that it is either unable to dispose of Collateral Debt Obligations whose prices have risen or to acquire Collateral DebtObligations whose prices are on the increase; the Issuer’s inability to dispose fully and promptly of

positions in declining markets will conversely cause its net asset value to decline as the value of unsold positions is marked to lower prices. A decrease in the market value of the Collateral DebtObligations would also adversely affect the proceeds of sale that could be obtained upon the sale of the Collateral Debt Obligations and could ultimately affect the ability of the Issuer to pay in full or redeem the Notes. For the purpose of this paragraph “Non-Emerging Market Country” shall have themeaning given to it in the section of this Offering Memorandum entitled “ Description of the Portfolio

– Eligibility Criteria ”.

3.3 The Target Par Amount

The Issuer has entered into a binding commitment to acquire Collateral Debt Obligations by enteringinto the Forward Sale Agreement with GSCP in an Aggregate Principal Amount equal to

€1,200,000,000. For the purposes of the descriptions of the Portfolio contained in this OfferingMemorandum, any Collateral Debt Obligation which the Issuer has committed to purchase pursuant to



30

the Forward Sale Agreement but the transfer of which has not been completed as at the Issue Date has been included. No assurance can be given that the transfer to the Issuer of some or all of suchCollateral Debt Obligations will be completed or in what time scale following the Issue Date suchtransfer will occur. Some or all of such Collateral Debt Obligations may prepay or become DefaultedObligations prior to transfer thereof to the Issuer. No assurance can be given that it would not have

been possible for the Issuer to acquire the Collateral Debt Obligations at prices which were lower thanthose required to be paid by it pursuant to the Forward Sale Agreement. In particular, as referred tounder “ Recent Events in the CDO and Leveraged Finance Markets ” above, the secondary market for leveraged loans at the time of entry by the Issuer into the Forward Sale Agreement was volatile.

In addition, the prices paid for such Collateral Debt Obligations may be greater or less than the marketvalue thereof on the Issue Date. Events occurring between the date of the Issuer first committing toacquire a Collateral Debt Obligation under the Forward Sale Agreement and on or prior to the IssueDate, including changes in prevailing interest rates, prepayments of principal, developments or trendsin any particular industry, changes in the financial condition of the Obligors of Collateral DebtObligations, the timing of purchases prior to the Issue Date and a number of other factors beyond theIssuer’s control, including the condition of certain financial markets, general economic conditions andinternational political events, could adversely affect the market value of the Collateral DebtObligations acquired prior to the Issue Date. To the extent that any losses are suffered on suchCollateral Debt Obligations held by the Issuer, such losses will be borne by the Noteholders,

beginning with the holders of the Subordinated Notes as the most junior Class.

As of the Effective Date, the Issuer is required to have acquired, or entered into binding commitmentsto acquire, Collateral Debt Obligations the Aggregate Principal Balance of which equals or exceedsthe Target Par Amount, provided that , for such purpose, any repayments or prepayments of anyCollateral Debt Obligations subsequent to the Issue Date (to the extent that such repayments or

prepayments have not been reinvested) shall be disregarded and the Principal Balance of a CollateralDebt Obligation which is a Defaulted Obligation will be its S&P Collateral Value. Pursuant to theCollateral Management Agreement, the Collateral Manager may, in its sole discretion, select as theTarget Par Amount an amount equal to either (a) €1,481,250,000, (b) €1,488,000,000 or (c) €1,492,500,000.

3.4 Considerations Relating to the Initial Investment Period

During the Initial Investment Period, the Issuer, or the Collateral Manager on its behalf, will seek toacquire additional Collateral Debt Obligations in order to satisfy each of the Coverage Tests,Collateral Quality Tests, Portfolio Profile Tests and the Target Par Amount requirement as at theEffective Date (or, in respect of the Class A Interest Coverage Test, as at the Determination Dateimmediately preceding the Payment Date falling in September 2009). See “ Description of thePortfolio ”. The ability to satisfy such tests and such requirement will depend on a number of factors

beyond the control of the Issuer and the Collateral Manager, including the availability of obligationsthat satisfy the Eligibility Criteria and other Portfolio-related requirements in the primary andsecondary loan markets, the condition of the financial markets, general economic conditions andinternational political events. Therefore, there can be no assurance that such tests and requirementswill be met. To the extent it is not possible to purchase such additional Collateral Debt Obligations,the level of income receivable by the Issuer on the Collateral and therefore its ability to meet itsinterest payment obligations under the Notes, together with the weighted average lives of the Notes,may be adversely affected. In addition, the ability of the Issuer to enter into additional Asset SwapTransactions upon the acquisition of Non-Euro Obligations will also depend upon a number of factorsoutside the control of the Collateral Manager, including its ability to identify a suitable Asset SwapCounterparty with whom the Issuer may enter into additional Asset Swap Transactions. Any failure

by the Issuer to acquire such additional Collateral Debt Obligations and/or enter into requiredadditional Asset Swap Transactions could result in the non-confirmation or downgrade or withdrawal

by the Rating Agency of its Initial Ratings of the Class A Notes. Such downgrade or withdrawal mayresult in the redemption of the Notes and therefore reduce the leverage ratio of the Subordinated



31

Notes to the Class A Notes which could adversely affect the level of returns to the holders of theSubordinated Notes.

3.5 Collateral Reinvestment Provisions

During the Reinvestment Period and, to the limited extent described more fully herein, after the

Reinvestment Period, the Collateral Manager (acting on behalf of the Issuer) may dispose of certainCollateral Debt Obligations and reinvest the Principal Proceeds during the Reinvestment Period andSale Proceeds from the sale of Credit Impaired Obligations and Credit Improved Obligations andUnscheduled Principal Proceeds received in Substitute Collateral Debt Obligations subject tocompliance with the Reinvestment Criteria and certain other conditions. The exercise by theCollateral Manager of its discretion in disposing of such Collateral Debt Obligations and purchasingSubstitute Collateral Debt Obligations in compliance with the Reinvestment Criteria and such other requirements will expose the Issuer to the market conditions prevailing at the time of such sale andreinvestment. Such actions during periods of adverse market conditions may result in unfavourablechanges in the characteristics and quality of the Portfolio and may result in a decrease in the overallyield on the Portfolio, adversely affecting the Issuer’s ability to make payments on the Notes. Theincome generated by any Substitute Collateral Debt Obligations will depend, among other factors, onthe price paid for them and the availability of investments satisfying the Reinvestment Criteria whichare acceptable to the Issuer or the Collateral Manager (acting on behalf of the Issuer). The need tosatisfy such Reinvestment Criteria and the other trading criteria specified in the CollateralManagement Agreement and to identify acceptable investments may require the purchase of Substitute Collateral Debt Obligations with lower yields than those initially acquired or require thatany Principal Proceeds received be maintained temporarily in cash or Eligible Investments, whichmay reduce the yield on the Collateral. Additionally, due to the significant restrictions imposed by theCollateral Management Agreement on the Collateral Manager’s ability to buy and sell Collateral DebtObligations, during certain periods or in certain circumstances, the Collateral Manager may be unableas a result of such restrictions to buy or sell securities or to take other actions which it might consider to be in the best interests of the Issuer and the Noteholders. Further, Obligors of Collateral DebtObligations may be more likely to exercise any rights they may have to redeem such obligations wheninterest rates or spreads are declining. The impact, including any adverse impact, of such disposal or

potential reinvestment on the holders of the Subordinated Notes will be magnified by the leveragednature of the Subordinated Notes. See “ Description of the Portfolio ” below.

3.6 Nature of the Collateral

The Collateral on which the Notes and the claims of the other Secured Parties are secured will besubject to credit, liquidity, interest rate and exchange rate risks, prepayment or early redemption,general economic conditions, operational and structural risks, political events and market value risks.All of the Collateral Debt Obligations pledged to secure the Notes will comprise mainly Senior Secured Loans and Senior Secured Floating Rate Notes lent to or issued by various Obligors with a

principal place of business in a Non-Emerging Market Country which will be primarily rated or assigned an implied rating below investment grade.

Investment in the Notes of any Class involves a degree of risk arising from fluctuations in the amountand timing of receipt of the principal and interest on the Collateral Debt Obligations by or on behalf of the Issuer and the amounts of the claims of creditors of the Issuer ranking in priority to the holdersof each Class of the Notes. In particular, prospective purchasers of such Notes should be aware thatthe amount and timing of payment of the principal and interest on the Collateral Debt Obligations willdepend upon the detailed terms of the documentation relating to each of the Collateral DebtObligations and on whether or not any Obligor thereunder defaults in its obligations.

The subordination levels of each of the Classes of Notes will be established to withstand certainassumed deficiencies in payment caused by defaults on the related Collateral Debt Obligations. If,

however, actual payment deficiencies exceed such assumed levels, payments on the Notes could beadversely affected. Whether and by how much defaults on the Collateral Debt Obligations adversely



32

affect each Class of Notes will be directly related to the level of subordination thereof pursuant to thePriorities of Payments. The risk that payments on the Notes could be adversely affected by defaultson the related Collateral Debt Obligations is likely to be increased to the extent that the Portfolio of Collateral Debt Obligations is concentrated in any one issuer, industry, region or country as a result of the increased potential for correlated defaults in respect of a single issuer or within a single industry,region or country as a result of downturns relating generally to such industry, region or country.Subject to any confidentiality obligations binding on the Issuer, Noteholders will, pursuant to eachMonthly Report, receive notice from time to time of the identity of Collateral Debt Obligations whichhave become Defaulted Obligations.

To the extent that a default occurs with respect to any Collateral Debt Obligation and the CollateralManager on behalf of the Issuer or Trustee sells or otherwise disposes of such Collateral DebtObligation, the proceeds of such sale or disposition are likely to be less than the unpaid principal andinterest thereon. Even in the absence of a default with respect to any of the Collateral DebtObligations, the potential volatility and illiquidity of the sub-investment grade high yield andleveraged loan markets means that the market value of such Collateral Debt Obligations at any timewill vary, and may vary substantially, from the price at which such Collateral Debt Obligations wereinitially purchased and from the principal amount of such Collateral Debt Obligations. Accordingly,no assurance can be given as to the amount of proceeds of any sale or disposition of such CollateralDebt Obligations at any time, or that the proceeds of any such sale or disposition would be sufficientto repay a corresponding par amount of principal of and interest on the Notes after, in each case,

paying all amounts payable prior thereto pursuant to the Priorities of Payments.

A non-investment grade loan or debt obligation or an interest in a non-investment grade loan isgenerally considered speculative in nature and may become a Defaulted Obligation for a variety of reasons. Upon any Collateral Debt Obligation becoming a Defaulted Obligation, such DefaultedObligation may become subject to either substantial workout negotiations or restructuring, which mayentail, among other things, a substantial reduction in the interest rate, a substantial write down of

principal and a substantial change in the terms, conditions and covenants with respect of suchDefaulted Obligation. In addition, such negotiations or restructuring may be quite extensive and

protracted over time, and therefore may result in uncertainty with respect to ultimate recovery on suchDefaulted Obligation. The liquidity for Defaulted Obligations may be limited, and to the extent thatDefaulted Obligations are sold, it is highly unlikely that the proceeds from such sale will be equal tothe amount of unpaid principal and interest thereon. Furthermore, there can be no assurance that theultimate recovery in any Defaulted Obligation will be at least equal either to the minimum recoveryrate assumed by the Rating Agency in rating the Notes or any recovery rate used in the analysis of the

Notes that may have been prepared by the Initial Purchaser/Placement Agent or the Arranger for or atthe direction of the Noteholders.

Loans are generally prepayable in whole or in part at any time at the option of the Obligor thereof at par plus accrued and unpaid interest thereon. Prepayments on loans may be caused by a variety of factors, which are difficult to predict. Accordingly, there exists a risk that loans purchased at a pricegreater than par may experience a capital loss as a result of such a prepayment. In addition, PrincipalProceeds received upon such a prepayment are subject to reinvestment risk. Any inability of theIssuer to reinvest payments or other proceeds in Collateral Debt Obligations with comparable interestrates that satisfy the Reinvestment Criteria may adversely affect the timing and amount of paymentsand distributions received by the Noteholders and the yield to maturity of the Notes. There can be noassurance that the Issuer will be able to reinvest proceeds in Collateral Debt Obligations withcomparable interest rates that satisfy the Reinvestment Criteria or (if it is able to make suchreinvestments) as to the length of any delays before such investments are made.

3.7 Participations and Assignments

The Issuer may acquire interests in Collateral Debt Obligations either directly (by way of novation or

assignment) or indirectly (by way of sub participation). Each institution from which such an interestis acquired is referred to herein as a “ Selling Institution ”. Interests in loans acquired directly by way



33

of novation or assignment are referred to herein as “ Assignments ”. Interests in loans acquiredindirectly by way of sub participation are referred to herein as “ Participations ”.

The purchaser of an Assignment typically succeeds to all the rights of the assigning Selling Institutionand becomes entitled to the benefit of the loans and the other rights of the Selling Institution in respectof the loan agreement including the right to the benefit of any security granted in respect of the loaninterest transferred. The loan agreement usually contains mechanisms for the transfer of the benefit of the loan and the security relating thereto. The efficacy of these mechanisms is rarely tested, if ever,and there is debate amongst counsel in continental jurisdictions over their effectiveness. With regardto some of the loan agreements, security will have been granted over assets in different jurisdictions.Some of the jurisdictions depending on the mechanism for transfer will require registrations, filingsand/or other formalities to be carried out not only in relation to the transfer of the loan but also withrespect to the transfer of the benefit of the security.

In the case of an Assignment, the Issuer, as an assignee, will generally have the direct right to receivefrom the borrower all payments of principal and interest to which the assignee is entitled, provided that notice of such Assignment has been given to the borrower. As a purchaser of an Assignment, theIssuer typically will have voting rights ranking pari passu with the other lenders of the same trancheof debt under the applicable loan agreement. Typically decisions of lenders to waive enforcement of

breaches of covenants and other matters require specific majorities (sometimes at least 66 ⅔ per cent.of those voting or some other proportion). The Issuer will generally also have the same rights as other lenders to enforce compliance by the borrower with the terms of the loan agreement, to set off claimsagainst the borrower and to have recourse to collateral supporting the loan. As a result, followingcompletion of the transfer formalities, the Issuer will generally not bear the credit risk of the SellingInstitution and the insolvency of the Selling Institution should have no effect on the ability of theIssuer to continue to receive payment of principal or interest from the borrower. The Issuer will,however, assume the credit risk of the borrower.

Participations by the Issuer in a Selling Institution’s portion of the loan typically results in acontractual relationship only with such Selling Institution and not with the borrower under such loan;a participation does not transfer any of the seller’s rights, remedies or obligations against the borrower to the purchaser, but is an entirely separate back to back non-recourse funding arrangement. TheIssuer would, in such case, only be entitled to receive payments of principal and interest to the extentthat the Selling Institution has received such payments from the borrower. In purchasingParticipations, the Issuer generally will have no direct right to enforce compliance by the borrower with the terms of the applicable loan agreement and the Issuer will not directly benefit from thecollateral supporting the loan in respect of which it has purchased a Participation. The Issuer mayhave contractual rights with the Selling Institution requiring the Selling Institution to take certainaction against the borrower in certain circumstances: this is not the same as the Issuer itself havingdirect rights against the borrower. As a result, the Issuer will assume the credit risk of both the

borrower and the Selling Institution selling the Participation. In the event of the insolvency of theSelling Institution selling a Participation, the Issuer may be treated as a general creditor of the SellingInstitution and may not benefit from any set off between the Selling Institution and the borrower andthe Issuer may suffer a loss to the extent that the borrower sets off claims against the SellingInstitution. The Issuer may purchase a Participation from a Selling Institution that does not itself retain any economic interest of the loan, and therefore, may have limited interest in monitoring theterms of the loan agreement and the continuing creditworthiness of the borrower, although there may

be mechanisms requiring the Selling Institution to consult with the Issuer and to exercise a relevant proportion of its vote in accordance with the directions. When the Issuer holds a Participation in aloan it may not have the right to participate directly in any vote to waive enforcement of anycovenants breached by a borrower. A Selling Institution voting in connection with a potential waiver of a restrictive covenant may have interests which are different from those of the Issuer and suchSelling Institutions may not be required to consider the interest of the Issuer in connection with the

exercise of its votes. Additional risks are therefore associated with the purchase of Participations bythe Issuer as opposed to Assignments.



34

3.8 Collateral Enhancement Obligations

All funds required in respect of the purchase price of any Collateral Enhancement Obligations and allfunds required in respect of the exercise price of any rights or options thereunder, may only be paidout of the Balance standing to the credit of the Collateral Enhancement Account at the relevant time(including, as described below, Interest Proceeds deposited in such Account for such purpose). SuchBalance shall be comprised of all Distributions and Sale Proceeds received in respect of CollateralEnhancement Obligations from time to time (referred to herein as “ Collateral EnhancementObligation Proceeds ”) together with all other sums deposited therein from time to time which willcomprise interest and/or principal payable in respect of the Subordinated Notes which the CollateralManager, acting on behalf of the Issuer, determines shall be paid into the Collateral EnhancementAccount pursuant to the Priorities of Payments rather than being paid to the Subordinated

Noteholders. In addition, if the Balance standing to the credit of the Collateral Enhancement Accountat the relevant time is not sufficient to fund a purchase or exercise (as applicable) of one or moreCollateral Enhancement Obligations, the Collateral Manager (acting on behalf of the Issuer) may, atits discretion, arrange for the payment of any such shortfall by requesting (on behalf of the Issuer) thatfunds be paid out of the Interest Account to the Collateral Enhancement Account for this purpose onthe terms and subject to the limits set out in Condition 3(j) ( Payments to and from the Accounts ).

The Collateral Manager is under no obligation whatsoever to exercise its discretion (acting on behalf of the Issuer) to take any of the actions described above and there can be no assurance that theBalance standing to the credit of the Collateral Enhancement Account will be sufficient to fund theexercise of any right or option under any Collateral Enhancement Obligation at any time. The abilityof the Collateral Manager (acting on behalf of the Issuer) to exercise any rights or options under anyCollateral Enhancement Obligation will be dependent upon there being sufficient amounts standing tothe credit of the Collateral Enhancement Account to pay the costs of any such exercise (including, asdescribed above, Interest Proceeds). Failure to exercise any such right or option may result in areduction of the returns to the Subordinated Noteholders (and, potentially, Noteholders of other Classes).

Furthermore, Collateral Enhancement Obligation Proceeds (save for amounts representing the SaleProceeds in excess of the purchase price or exercise price of any Collateral Enhancement Obligationthat is sold, which have been either (i) credited or (ii) transferred (pursuant to Condition 3(j)(x)(Collateral Enhancement Account )) to the Principal Account or the Interest Account at the CollateralManager’s discretion) may be distributed to the Subordinated Noteholders pursuant to the CollateralEnhancement Obligation Proceeds Priority of Payments.

Collateral Enhancement Obligations and any income or return generated thereby are not taken intoaccount for the purposes of determining satisfaction of, or required to satisfy, any of the CoverageTests, Portfolio Profile Tests or Collateral Quality Tests.

3.9 Security; Fixed Charge

The Collateral Debt Obligations which are securities will be held by the Custodian. The Custodianwill hold certain of the securities (i) through its accounts with Euroclear or Clearstream, Luxembourgas appropriate, and (ii) through its sub-custodians who will in turn hold such securities both directly(other than in Ireland) and through any appropriate clearing system. Those securities held in ClearingSystems will not be held in special purpose accounts and will be fungible with other securities fromthe same issue held in the same accounts on behalf of the other customers of the Custodian or itssub-custodian, as the case may be. A first fixed charge over such Collateral Debt Obligations whichare securities will be created under English law pursuant to the Trust Deed on the Issue Date and willtake effect as a security interest over the right of the Issuer to require delivery of equivalent securitiesfrom the Custodian in accordance with the terms of the Agency Agreement (as defined in “ Terms and Conditions of the Notes ”).

The Collateral Debt Obligations which are securities held by the Custodian on behalf of the Issuer through its account with Euroclear will also be the subject of a commercial pledge under Belgian law



35

created by the Issuer pursuant to the Euroclear Pledge Agreement on the Issue Date. The effect of thissecurity interest will be to enable, amongst others, the Custodian, on enforcement, to sell the securitiesin the pledged account on behalf of the Trustee. The Euroclear Pledge Agreement will not entitle theTrustee to require delivery of the relevant securities from the depositary or depositaries that have

physical custody of such securities or allow the Trustee to rehypothecate such securities.

However, the charge created pursuant to the Trust Deed and the security created by the Euroclear Pledge Agreement may be insufficient or ineffective to secure the Collateral Debt Obligations whichare securities for the benefit of Noteholders, particularly in the event of any insolvency or liquidationof the Custodian or any sub-custodian that has priority over the right of the Issuer to require deliveryof such assets from the Custodian in accordance with the terms of the Agency Agreement. Any risk of loss arising from any insufficiency or ineffectiveness of the security for the Notes will be borne bythe Noteholders without recourse to the Issuer, the Trustee, the Initial Purchaser/Placement Agent, theArranger, the Collateral Manager, the Collateral Administrator, the Custodian or any other party.

In addition, custody and clearance risks may be associated with Collateral Debt Obligations which aresecurities that do not clear through Euroclear or Clearstream, Luxembourg. There is a risk, for example, that such securities could be counterfeit, or subject to a defect in title or claims to ownership

by other parties.

Although the security constituted by the Trust Deed over the Collateral held from time to time, isexpressed to take effect as fixed security, it may (as a result of the substitutions of Collateral DebtObligations contemplated by the Collateral Management Agreement and the payments to be madefrom the Accounts in accordance with the Conditions of the Notes and the Trust Deed) take effect as afloating charge which, in particular, would rank after a subsequently created fixed security interestand will be subject to matters which are given priority over a floating charge by operation of law.However, the Issuer has covenanted not to create any such subsequent security interests without theconsent of the Trustee.

3.10 Disclosure in Respect of the Portfolio

The decision by any prospective holder of Notes to invest in such Notes should be based on its ownreview and analysis of the Portfolio set out in the “ Description of the Portfolio ” section. For the

purposes of the descriptions of the Portfolio contained in this Offering Memorandum, any CollateralDebt Obligation which the Issuer has committed to purchase pursuant to the Forward Sale Agreementas at its relevant Inclusion Date but the transfer of which has not been completed as at the Issue Datehas been included. No assurance can be given that the transfer to the Issuer of some or all of suchCollateral Debt Obligations will be completed or in what timescale following the Issue Date suchtransfer will occur. Some or all of such Collateral Debt Obligations may prepay or become DefaultedObligations prior to transfer thereof to the Issuer. The Portfolio Profile Tests and the CollateralQuality Tests will be measured by the Collateral Administrator as at the Effective Date and the failureto satisfy any Portfolio Profile Test or Collateral Quality Test on the Effective Date may have an

adverse impact on the ratings of the Class A Notes.The Collateral Administrator will also measure the Portfolio Profile Tests and the Collateral QualityTests on each Measurement Date (save as otherwise provided in the Collateral ManagementAgreement). The Portfolio Profile Tests and the Collateral Quality Tests must be satisfied after giving effect to the purchase of any Substitute Collateral Debt Obligation or, if not satisfied prior tosuch purchase, the relevant thresholds and amounts calculated pursuant thereto must be maintained or improved after giving effect to such purchase. Notwithstanding the foregoing, the failure of thePortfolio to meet the requirements of the Portfolio Profile Tests or the Collateral Quality Tests at anytime shall not prevent any obligation which would otherwise be a Collateral Debt Obligation from

being a Collateral Debt Obligation. There can be no assurance that the Portfolio will satisfy thePortfolio Profile Tests and the Collateral Quality Tests at any time after the Effective Date. None of

the Issuer, the Initial Purchaser/Placement Agent or the Collateral Administrator is responsible for theongoing selection or management of the Portfolio. No investigation has been made into the Obligors



36

of the Collateral Debt Obligations. The value of the Portfolio may fluctuate from time to time (as aresult of substitution or otherwise) and none of the Issuer, the Trustee, the Initial Purchaser/PlacementAgent, the Custodian, the Collateral Manager and the Collateral Administrator, (the “ TransactionParties ”) or any of their Affiliates are under any obligation to maintain the value of the CollateralDebt Obligations at any particular level. None of the Transaction Parties or any of their Affiliates hasany liability to the Noteholders as to the amount or value of, or any decrease in the value of, theCollateral Debt Obligations from time to time.

Timing of Payment Risk

Investment in the Notes of any Class involves a degree of risk arising from fluctuations in the amountand timing of receipt of the principal and interest on the Collateral Debt Obligations by or on behalf of the Issuer and the amounts of the claims of creditors of the Issuer ranking in priority to the holdersof each Class of the Notes. In particular, prospective purchasers of the Notes should be aware that theamount and timing of payment of the principal and interest on the Collateral Debt Obligations willdepend upon the detailed terms of the documentation relating to each of the Collateral DebtObligations and on whether or not any Obligor thereunder defaults in its obligations.

Default and Concentration Risk The subordination levels of each of the Classes of Notes will be established to withstand certainassumed deficiencies in payment caused by defaults on the related Collateral Debt Obligations. See“ Rating of the Class A Notes ”. There is no assurance that actual losses will not exceed such assumedlosses. If actual payment deficiencies exceed such assumed levels, however, payments on the Notescould be adversely affected. The amount which defaults on the Collateral Debt Obligations adverselyaffect each Class of Notes will be directly related to the level of subordination thereof pursuant to thePriorities of Payments. The risk that payments on the Notes could be adversely affected by defaultson the related Collateral Debt Obligations will increase to the extent that the Portfolio is concentratedin any one Obligor, industry, region or country as a result of the increased potential for correlateddefaults in respect of a single issuer or within a single industry, region or country as a result of

downturns relating generally to such industry, region or country.To the extent that a default occurs with respect to any Collateral Debt Obligation and the Issuer or theTrustee (through its agent) sells or otherwise disposes of such Collateral Debt Obligation, the

proceeds of such sale or disposition are likely to be less than the unpaid principal and interest thereon.In addition, the Issuer may incur additional expenses to the extent it seeks recoveries upon the defaultof a Collateral Debt Obligation or participates in the restructuring of a Collateral Debt Obligation.Accordingly, no assurance can be given as to the amount of proceeds of any sale or disposition of such Collateral Debt Obligations at any time, or that the proceeds of any such sale or dispositionwould be sufficient to repay a corresponding par amount of principal of and interest on the Notesafter, in each case, paying all amounts payable prior thereto pursuant to the Priorities of Payments.Moreover, there can be no assurance as to the timing of any recovery.

Disposal Risk

The financial markets may experience substantial fluctuations in the prices of Senior Secured Loans,and Non-Euro Obligations and Covenant Lite Loans and limited liquidity for such obligations. Noassurance can be given that the conditions giving rise to such price fluctuations and limited liquiditywill not occur, subsist or become more acute following the Issue Date. During periods of limitedliquidity and higher price volatility, the ability of the Issuer (or the Collateral Manager on its behalf)to dispose of Collateral Debt Obligations at a price and time that the Issuer deems advantageous may

be impaired. As a result, in periods of rising market prices, the Issuer may be unable to participate in price increases fully in the event that it is unable to dispose of Collateral Debt Obligations whose prices have risen; the Issuer’s inability to dispose fully and promptly of Collateral Debt Obligations indeclining markets will conversely cause the net asset value of the Portfolio to decline. A decrease inthe market value of the Collateral Debt Obligations would also adversely affect the proceeds of salethat could be obtained upon the sale of the Collateral Debt Obligations and could ultimately affect the



37

ability of the Issuer to pay in full or redeem the Notes. Accordingly, no assurance can be given as tothe amount of proceeds of any sale or disposition of such Collateral Debt Obligations at any time, or that the proceeds of any such sale or disposition would be sufficient to repay a corresponding par amount of principal of and interest on the Notes after, in each case, paying all amounts payable prior thereto pursuant to the Priorities of Payments. Moreover, there can be no assurance as to the timingof any recoveries received in respect of Defaulted Obligations.

3.11 Purchase of Collateral Debt Obligations on the Issue Date

The Issuer has entered into a binding commitment to acquire on the Issue Date an Aggregate PrincipalBalance of Collateral Debt Obligations of approximately €1,200,000,000 pursuant to the Forward SaleAgreement with GSCP and the Collateral Manager. The only obligation of the Collateral Manager under the Forward Sale Agreement, is to verify and validate that the price, as at its relevant InclusionDate, at which each Collateral Debt Obligation, the subject of the Forward Sale Agreement, is to betransferred to the Issuer, are not off-market in its reasonable opinion as a market participant.

Notwithstanding the verification exercise carried out by the Collateral Manager, no assurance can begiven that it would not have been possible for the Issuer to acquire the Collateral Debt Obligations at

prices which were lower than those required to be paid by it pursuant to the Forward Sale Agreement.In particular, as referred to under “ Recent Events in the CDO and Leveraged Finance Markets ” above,the secondary market for leveraged loans at the time of entry by the Issuer into the Forward SaleAgreement was volatile.

In addition, the prices paid for such Collateral Debt Obligations may be greater or less than the marketvalue thereof on the Issue Date. (The Collateral Manager pursuant to its sole obligation under theForward Sale Agreement, will have only verified that such prices were not off-market in itsreasonable opinion as a market participant at the relevant Inclusion Date.) Events occurring betweenthe date of the Issuer first committing to acquire a Collateral Debt Obligation under the Forward SaleAgreement and on or prior to the Issue Date, including changes in prevailing interest rates,

prepayments of principal, developments or trends in any particular industry, changes in the financialcondition of the Obligors of Collateral Debt Obligations, the timing of purchases prior to the IssueDate and a number of other factors beyond the Issuer’s control, including the condition of certainfinancial markets, general economic conditions and international political events, could adverselyaffect the market value of the Collateral Debt Obligations acquired prior to the Issue Date. To theextent that any losses are suffered on the Collateral Debt Obligations acquired by the Issuer prior tothe Issue Date, such losses will be borne by the Noteholders, beginning with the holders of theSubordinated Notes as the most junior class. In any case, the services of the Collateral Manager

pursuant to the Forward Sale Agreement shall be provided to the Issuer and the Arranger only. TheCollateral Manager will have no duties (including any fiduciary duties) or responsibilities to the

Noteholders or the Trustee and no fiduciary duties to the Issuer or the Arranger.

Spread Widening Risk

For reasons not necessarily attributable to any of the risks set forth herein (for example,supply/demand imbalances or other market forces), the prices of the Collateral Debt Obligations inwhich the Issuer invests may decline substantially. In particular, purchasing assets at what mayappear to be “undervalued” levels is no guarantee that these assets will not be trading at even lower levels at a time of valuation or at the time of sale. It may not be possible to predict, or to hedgeagainst, such “spread widening” risk.

3.12 Characteristics of Senior Secured Loans

The Portfolio Profile Tests provide that as from the Effective Date, Collateral Debt Obligations whichare Senior Secured Loans shall comprise at least 95.0 per cent. of the Aggregate Portfolio Balance.Senior Secured Loans are of a type generally incurred by the Obligors thereunder in connection withhighly leveraged transactions, often (although not exclusively) to finance internal growth,acquisitions, mergers and/or stock purchases. As a result of, among other things, the additional debt



38

incurred by the Obligor in the course of such a transaction, the Obligor’s creditworthiness is often judged by the rating agencies to be below investment grade.

The majority of Senior Secured Loans bear interest based on a floating rate index, for exampleEURIBOR, the certificate of deposit rate, a prime or base rate (each as defined in the applicable loanagreement) or other index, which may reset daily (as most prime or base rate indices do) or may offer the Obligor a choice of one, two, three, six, nine or 12 month interest and rate reset periods. The

purchaser of an interest in a Senior Secured Loan may also receive certain syndication or participationfees in connection with its purchase. Other fees which may be payable in respect of Senior SecuredLoans, which are separate from interest payments on such loans, may include facility, commitment,amendment and prepayment fees.

Although any particular Senior Secured Loan often will share many similar features with other loansand obligations of its type, the actual terms of any particular Senior Secured Loan will have been amatter of negotiation and will thus be unique. Any particular loan or obligation may contain termsthat are not standard and that provide less protection to creditors than might be expected, including inrespect of covenants, events of default, security or guarantees. The leveraged credit markets areconstantly evolving. Recently, there has been an increasing trend of less protection for creditors interms of covenants and other terms than has historically been the case.

3.13 Risks Associated with Senior Secured Loans

Limited Liquidity

In addition to the limited liquidity and restrictions on transfer of the Notes, there are limited liquidityrisks associated with Senior Secured Loans. As referred to above, the Obligor under a leveraged loanoften provides the lenders thereunder with extensive information about its business, which is notgenerally available to the public. Because of the provision of such confidential information, theunique and customised nature of a loan agreement, and the private syndication of the loan, leveragedloans are generally not as easily purchased or sold as publicly traded securities, and historically thetrading volume in the loan market has been small relative to, for example, the high yield bond market.

Senior Secured Loans also generally provide for restrictive covenants designed to limit the activitiesof the Obligor thereunder in an effort to protect the rights of lenders to receive timely payments of interest thereon, and repayment of, the principal of the loans. Such covenants may include restrictionson dividend payments, specific mandatory minimum financial ratios, limits on total debt and other financial tests. A breach of covenant (after giving effect to any cure period) under a Senior SecuredLoan which is not waived by the lending syndicate is normally an event of default which allows thesyndicate to demand immediate repayment in full of the outstanding loan. The unique nature of theloan documentation and the confidentiality provisions included therein may also create a degree of complexity in negotiating a secondary market purchase or sale which may not exist, for example, inthe high yield bond market.

In order to induce banks and institutional investors to invest in Senior Secured Loans, and to obtain afavourable rate of interest, an Obligor under such an obligation often provides the investors thereinwith extensive information about its business, which is not generally available to the public. Becauseof the provision of confidential information, the unique and customised nature of the loan agreementincluding such Senior Secured Loans, and the private syndication of such Senior Secured Loans, suchSenior Secured Loans are not as easily purchased or sold as a publicly traded security, and historicallythe trading volume in the loan market has been small relative to, for example, the high yield bondmarket.

Defaults and Recoveries

There is limited historical data available as to the levels of defaults and/or recoveries that may be

experienced on Senior Secured Loans and no assurance can be given as to the levels of default and/or recoveries that may apply to any Senior Secured Loans purchased by the Issuer. Although any



39

particular Senior Secured Loan and Mezzanine/Second Lien Loan often will share many similar features with other loans and obligations of its type, the actual terms of any particular Senior SecuredLoan and Mezzanine/Second Lien Loan will have been a matter of negotiation and will thus beunique. Any particular loan or obligation may contain terms that are not standard and that provideless protection to creditors than might be expected, including in respect of covenants, events of default, security or guarantees. The leveraged credit markets are constantly evolving. Recently, therehas been an increasing trend of less protection for creditors in terms of covenants and other terms thanhas historically been the case. Recoveries on Senior Secured Loans may also be affected by thedifferent bankruptcy regimes applicable in different jurisdictions and the enforceability of claimsagainst the Obligors thereunder. See “ Insolvency of Obligors under Collateral Debt Obligations ”

below.

The European Mezzanine/Second Lien Loan market in particular is a relatively new market, whichhas not yet been exposed to a full credit cycle. Accordingly, the market has not yet experienced acredit down-turn and the effects this may have on default rates and the ability of mezzanine/secondlien finance providers to protect their investments in a default situation.

Furthermore, the holders of Senior Secured Loans are more diverse than ever before, including notonly banks and specialist finance providers but also potentially alternative investment managers,specialist debt and distressed debt investors and other financial institutions. The increasingdiversification of the investor base has also been accompanied by an increase in the use of hedges,swaps and other derivative instruments to protect against or spread the economic risk of defaults. Allof these developments may further increase the risk that historical recovery levels will not be realised.The returns on Senior Secured Loans, therefore, may not adequately reflect the risk of future defaultsand the ultimate recovery rates.

A non-investment grade loan or debt obligation or an interest in a non-investment grade loan isgenerally considered speculative in nature and may become a Defaulted Obligation for a variety of reasons. Upon any Collateral Debt Obligation becoming a Defaulted Obligation, such DefaultedObligation may become subject to either substantial workout negotiations or restructuring, which mayentail, among other things, a substantial reduction in the interest rate, a substantial write-down of

principal and a substantial change in the terms, conditions and covenants with respect of suchDefaulted Obligation. In addition, such negotiations or restructuring may be quite extensive and

protracted over time, and therefore may result in uncertainty with respect to ultimate recovery on suchDefaulted Obligation. The liquidity for Defaulted Obligations may be limited, and to the extent thatDefaulted Obligations are sold, it is highly unlikely that the proceeds from such sale will be equal tothe amount of unpaid principal and interest thereon. Furthermore, there can be no assurance that theultimate recovery on any Defaulted Obligation will be at least equal either to the minimum recoveryrate assumed by the Rating Agency in rating the Notes or any recovery rate used in the analysis of the

Notes by investors in determining whether to purchase the Notes.

Prepayment Risk

Loans are generally prepayable in whole or in part at any time at the option of the Obligor thereof at par plus accrued and unpaid interest thereon. Prepayments on loans may be caused by a variety of factors, which are difficult to predict. Accordingly, there exists a risk that loans purchased at a pricegreater than par may experience a capital loss as a result of such a prepayment.

Credit Risk

Risks applicable to Senior Secured Loans also include the possibility that earnings of the Obligor may be insufficient to meet its debt service obligations thereunder and the declining creditworthiness and potential for insolvency of the Obligor of such loans during periods of rising interest rates andeconomic downturn. An economic downturn could severely disrupt the market for leveraged loansand adversely affect the value thereof and the ability of the Obligor thereunder to repay principal andinterest.



40

3.14 Concentration Risk

The Issuer will invest in a Portfolio of Collateral Debt Obligations consisting, at the Issue Date, of Senior Secured Loans. The Portfolio Profile Tests state that as from the Effective Date not less than95.0 per cent. of the Aggregate Portfolio Balance must consist of Senior Secured Loans.

Although no significant concentration with respect to any particular Obligor, industry or country isexpected to exist at the Effective Date, the concentration of the Portfolio in any one Obligor wouldsubject the Notes to a greater degree of risk with respect to defaults by such Obligor, and theconcentration of the Portfolio in any one industry would subject the Notes to a greater degree of risk with respect to economic downturns relating to such industry. This risk is mitigated by the PortfolioProfile Tests on the Portfolio. See “ Description of the Portfolio – Portfolio Profile Tests ”.

3.15 Currency Risk

It is anticipated that, on the Effective Date, a portion of the Aggregate Principal Balance of theCollateral Debt Obligations will be comprised of Non-Euro Obligations. The percentage of thePortfolio that is comprised of these types of loans may increase or decrease over the life of the Notes.

Notwithstanding that Non-Euro Obligations may have associated Asset Swap Transactions (whichwill include currency protection provisions), losses may still be incurred due to fluctuations in theEuro exchange rates in the event of a default under any such Asset Swap Transaction or the sale of therelated Non-Euro Obligation. In addition, a portion of the Portfolio may be comprised of UnhedgedCollateral Debt Obligations which are not required to have an associated Asset Swap Transaction,

provided however that the Collateral Manager (on behalf of the Issuer) must enter into an Asset SwapTransaction in respect of such Unhedged Collateral Debt Obligation within 6 months of the settlementdate of such Unhedged Collateral Debt Obligation or, failing which, shall immediately sell suchUnhedged Collateral Debt Obligation. The Portfolio Profile Tests provide that no more than 5.0 per cent. of the Aggregate Portfolio Balance will comprise Unhedged Collateral Debt Obligations. To theextent more than 5.0 per cent. of the Aggregate Portfolio Balance is comprised of UnhedgedCollateral Debt Obligations, the Issuer is required to enter into (to the extent of such excess) an

associated Asset Swap Transaction. In addition, following the purchase of any Unhedged CollateralDebt Obligations, to the extent that on any Measurement Date on or after the Effective Date theAggregate Portfolio Balance is lower than the Target Par Amount and the Collateral Manager haselected to treat such Unhedged Collateral Debt Obligations in accordance with Method 2, then theIssuer or the Collateral Manager on behalf of the Issuer shall immediately enter into associated AssetSwap Transactions in respect of such Unhedged Collateral Debt Obligations. Notwithstanding that

Non-Euro Obligations are required to have associated Asset Swap Transactions (which will includecurrency protection provisions) by no later than the date falling six months following the settlementdate of the acquisition thereof, losses may still be incurred due to fluctuations in the Euro exchangerates in the event of a default under any such Asset Swap Transaction or the sale of the related

Non-Euro Obligation.

In addition, fluctuations in Euro exchange rates may result in a decrease in value of the Portfolio for the purposes of sale thereof upon enforcement of the security over it. The Collateral Manager mayalso be limited at the time of reinvestment in its choice of Collateral Debt Obligations because of thecost of entry into such Asset Swap Transactions and due to restrictions in the Collateral ManagementAgreement with respect thereto.

The Issuer’s on-going payment obligations under such Asset Swap Transactions (includingtermination payments) may be significant. The payments associated with such hedging arrangementsgenerally rank senior to payments on the Notes.

The Issuer will depend upon each Asset Swap Counterparty to perform its obligations under any AssetSwap Transactions. If an Asset Swap Counterparty defaults or becomes unable to perform due toinsolvency or otherwise, the Issuer may not receive payments it would otherwise be entitled to fromsuch Asset Swap Counterparty to cover its foreign exchange exposure.



41

3.16 Interest Rate Risk

The Notes bear interest at floating rates based on EURIBOR. There may be a timing mismatch between payments of interest on the Notes and payments of interest on the Collateral DebtObligations and, in the case of such Collateral Debt Obligations, the rates at which they bear interestmay adjust more or less frequently, and on different dates and based on different indices than theinterest rate of the Notes. In addition, there will be an interest rate basis mismatch between the Notesand the Collateral Debt Obligations as a result of the fact that there may be fixed rate Collateral DebtObligations. Such mismatches could adversely impact the ability of the Issuer to make payments onthe Notes. In addition, any payments of principal or interest received in respect of Collateral DebtObligations and not otherwise reinvested during any Reinvestment Period in Substitute CollateralDebt Obligations will generally be reinvested in Eligible Investments until shortly before the nextPayment Date. There is no requirement that such Eligible Investments bear interest on a particular

basis, and the interest rates available for such Eligible Investments are inherently uncertain.

3.17 Lender Liability Considerations; Equitable Subordination

In recent years, a number of judicial decisions in the United States and other jurisdictions have upheld

the right of borrowers to sue lenders or bondholders on the basis of various evolving legal theories(collectively, termed “ lender liability ”). Generally, lender liability is founded upon the premise thatan institutional lender or bondholder has violated a duty (whether implied or contractual) of good faithand fair dealing owed to the borrower or issuer or has assumed a degree of control over the borrower or issuer resulting in the creation of a fiduciary duty owed to the borrower or issuer or its other creditors or shareholders. Although it would be a novel application of the lender liability theories, theIssuer may be subject to allegations of lender liability. However, the Issuer does not intend to engagein, and the Collateral Manager does not intend to advise, the Issuer with respect to any conduct thatwould form the basis for a successful cause of action based upon lender liability.

In addition, under common law principles that in some cases form the basis for lender liability claims,if a lender or bondholder (a) intentionally takes an action that results in the under-capitalisation of a

borrower to the detriment of other creditors of such borrower, (b) engages in other inequitableconduct to the detriment of such other creditors, (c) engages in fraud with respect to, or makesmisrepresentations to, such other creditors, or (d) uses its influence as a stockholder to dominate or control a borrower to the detriment of other creditors of such borrower, a court may elect tosubordinate the claim of the offending lender or bondholder to the claims of the disadvantagedcreditor or creditors, a remedy called “equitable subordination”. Because of the nature of theCollateral Debt Obligations, the Issuer may be subject to claims from creditors of an Obligor thatCollateral Debt Obligations issued by such Obligor that are held by the Issuer should be equitablysubordinated. However, the Issuer does not intend to engage in, and the Collateral Manager does notintend to advise the Issuer with respect to, any conduct that would form the basis for a successfulcause of action based upon the equitable subordination doctrine described above.

The preceding discussion is based upon principles of United States federal and state laws. Insofar asCollateral Debt Obligations that are obligations of non-United States Obligors are concerned, the lawsof certain foreign jurisdictions may impose liability upon lenders or bondholders under factualcircumstances similar to those described above, with consequences that may or may not be analogousto those described above under United States federal and state laws.

3.18 Counterparty Risk

Participations and Asset Swap Transactions involve the Issuer entering into contracts withcounterparties. Pursuant to such contracts, the counterparties agree to make payments to the Issuer under certain circumstances as described therein. The Issuer will be exposed to the credit risk of thecounterparty with respect of any such payments. Each such counterparty is required to satisfy theapplicable Required Ratings, upon entry into the applicable contract or instrument.







44

3.22 Collateral Manager

The Collateral Manager is given authority in the Collateral Management Agreement to act asCollateral Manager to the Issuer in respect of the Portfolio pursuant to and in accordance with the

parameters and criteria set out in the Collateral Management Agreement. See “ Description of thePortfolio ” and “ The Collateral Management Agreement ”. The powers and duties of the CollateralManager in relation to the Portfolio include effecting, on behalf of the Issuer, (a) the selection andacquisition, in cooperation with Goldman Sachs International, of the Initial Portfolio; (b) theacquisition of Collateral Debt Obligations during the Reinvestment Period; and (c) the sale of certainof the Collateral Debt Obligations in the Portfolio during the Reinvestment Period (subject to certainlimits) and, at any time, upon the occurrence of certain events (including a Collateral Debt Obligation

becoming a Defaulted Obligation, a Credit Improved Obligation or a Credit Impaired Obligation), inaccordance with the provisions of the Collateral Management Agreement. See “ Description of thePortfolio ”. Any analysis by the Collateral Manager (on behalf of the Issuer) of Obligors under Collateral Debt Obligations which it is purchasing (on behalf of the Issuer) or which are held in thePortfolio from time to time will, in respect of Collateral Debt Obligations which are publicly listed

bonds, be limited to a review of readily available public information and, in respect of Collateral DebtObligations which are Assignments or Participations of senior loans and in relation to which theCollateral Manager has non-public information, such analysis will include due diligence of the kindcommon in relation to senior loans of such kind.

The performance of any investment in the Notes will be dependent in part on the ability of theCollateral Manager to monitor the Portfolio and effect sales and acquisitions of Collateral DebtObligations and the performance of the Collateral Manager of its obligations under the CollateralManagement Agreement. The Collateral Manager will be dependent upon the financial andmanagerial experience of certain individuals associated with the Collateral Manager in themanagement of portfolios of fixed income assets. The loss of key individuals from the CollateralManager responsible for managing the Portfolio could have a material adverse effect on the

performance of the Portfolio and consequently the performance of the Notes. Although the CollateralManager will commit an appropriate amount of its business efforts to the management of thePortfolio, the Collateral Manager is not required to devote all of its time to such affairs and maycontinue to advise and manage other investments in the future.

Prior investment results and returns achieved for accounts managed by TC Group LLC or theCollateral Manager are not likely to be indicative of the Issuer’s investment results. In addition, thenature of, and risks associated with, the Collateral Debt Obligations to be acquired by the Issuer maydiffer materially from those investments and strategies undertaken historically by TC Group LLC or CELF Investment Advisors Limited, including by reason of the diversity and other parametersrequired by the Collateral Management Agreement. There can be no assurance that the Issuer’sinvestments will perform as well as the past investments for any such accounts.

The Collateral Manager may under certain circumstances resign as described herein under “ TheCollateral Management Agreement ”. However, subject to and in accordance with the terms of theCollateral Management Agreement, such resignation will not be effective unless and until the Issuer,or, under certain circumstances, the Collateral Manager on its behalf, has appointed a Successor Collateral Manager (see “ The Collateral Management Agreement ” below).

Liability of the Collateral Manager under the Collateral Management Agreement is limited to (a) theacts or omissions of the Collateral Manager constituting wilful misconduct or negligence of theCollateral Manager under the Collateral Management Agreement and under the Trust Deed or anyother Transaction Document to which it is a party; (b) with respect to the information concerning theCollateral Manager provided in writing to the Issuer by the Collateral Manager expressly for inclusionin the Offering Memorandum, such information containing any untrue statement of material fact or omitting to state a material fact necessary in order to make the statements therein, in the light of the

circumstances under which they were made, not misleading; (c) any unauthorised offers or solicitations to investors by the Collateral Manager; or (d) any breach by the Collateral Manager of



45

the terms of the Collateral Management Agreement (including but not limited to a failure to adhere tothe Investment Restrictions set out in Clause 7.2 ( Investment Restrictions ) therein) having a materialadverse effect on the interests of the Issuer or any Class of Noteholders (acting as a Class) or theTrustee. Pursuant to the Collateral Management Agreement, the Collateral Manager will indemnifythe Issuer in respect of the matters described in (a), (b) and (c) above.

None of the Collateral Manager's partners, managing members, advisers, directors, officers,shareholders, agents or employees will be liable to the Issuer, the Trustee, the holders if any Notes or any other Persons for any acts or omissions in connection with the Collateral ManagementAgreement.

3.23 Performance of Third Parties

The performance of any investment in the Notes will be in part dependent upon the performance bythe Collateral Administrator and the Collateral Manager of their respective obligations under theCollateral Management Agreement, the performance by the Trustee and the Agents of their respectiveobligations under the Notes and the performance of their obligations by certain other parties, such asthe Asset Swap Counterparties and the Custodian.

Notwithstanding that such performance is contractually required, no assurance can be given withrespect to the performance of such obligations.

4. CERTAIN CONFLICTS OF INTEREST

Various potential and actual conflicts of interest may arise from the overall management, investmentand other activities of the Collateral Manager, its Affiliates and their respective clients and from theconduct by the Initial Purchaser/Placement Agent, Arranger and their Affiliates of other transactionswith the Issuer, including, without limitation, acting as counterparty with respect to Asset SwapTransactions and Participations or as party to or in connection with the investment of any funds inEligible Investments. The following briefly summarises some of these conflicts, but is not intended to

be an exhaustive list of all such conflicts.

The Collateral Manager and/or its Affiliates and its clients may invest in loans and securities thatwould be appropriate as security for the Notes. Such investments may be different from those madeon behalf of the Issuer. The Collateral Manager and its Affiliates may also have ongoing relationshipswith, render services to or engage in transactions with, companies whose loans and securities are

pledged to secure the Notes and may own equity or debt securities issued by issuers of and other Obligors on Collateral Debt Obligations. As a result, officers or Affiliates of the Collateral Manager may possess information relating to issuers of Collateral Debt Obligations which is not known to theindividuals at the Collateral Manager responsible for monitoring the Collateral Debt Obligations and

performing the Collateral Manager’s obligations under the Collateral Management Agreement. Inaddition, Affiliates and clients of the Collateral Manager may invest in loans and securities that aresenior to, or have interests different from or adverse to, the Collateral Debt Obligations that are

pledged to secure the Notes. The Collateral Manager and/or its Affiliates may at certain times besimultaneously seeking to purchase or dispose of investments for its or their own account, for theIssuer, for any similar entity for which it serves as manager or adviser and for its clients or Affiliates.It is intended that all Collateral Debt Obligations will be purchased and sold by the Issuer on terms

prevailing in the market. Neither the Collateral Manager nor any of its Affiliates is under anyobligation to offer investment opportunities of which they have become aware to the Issuer or toaccount to the Issuer (or share with the Issuer or inform the Issuer of) any such transaction or any

benefit received by them from any such transaction. Furthermore, the Collateral Manager and/or itsAffiliates may make an investment on behalf of any account that they manage or advise withoutoffering the investment opportunity to or making any investment on behalf of the Issuer. TheCollateral Manager and/or its Affiliates have no affirmative obligation to offer any investments to theIssuer or to inform the Issuer of any investments before offering any investments to other funds or accounts that the Collateral Manager and/or its Affiliates manage or advise. Furthermore, Affiliatesof the Collateral Manager may make an investment on their own behalf without offering the



46

investment opportunity to, or the Collateral Manager making any investment on behalf of, the Issuer.Affirmative obligations may exist or may arise in the future, whereby Affiliates of the CollateralManager are obliged to offer certain investments to funds or accounts that such Affiliates manage or advise before or without the Collateral Manager offering those investments to the Issuer. Affiliates of the Collateral Manager have no affirmative obligation to offer any investments to the Issuer or toinform the Issuer of any investments before engaging in any investments for themselves. TheCollateral Manager will endeavour to resolve conflicts with respect to investment opportunities in amanner which it deems equitable to the extent possible under the prevailing facts and circumstances.Although the professional staff of the Collateral Manager will devote as much time to the Issuer as theCollateral Manager deems appropriate to perform its duties in accordance with the CollateralManagement Agreement, those staff may have conflicts in allocating their time and services amongthe Issuer and the Collateral Manager’s other accounts.

Upon any resignation or removal of the Collateral Manager while any of the Notes are Outstanding,the Subordinated Noteholders, acting by way of Extraordinary Resolution, will have the right, withina 30-day period, to appoint a successor Collateral Manager, subject to (i) meeting the criteria inrespect of a successor Collateral Manager set out in the Collateral Management Agreement,(ii) Rating Agency Confirmation and (iii) the approval of such successor Collateral Manager by theControlling Class, acting by way of Ordinary Resolution. If no successor Collateral Manager has

been appointed within such 30-day period then the Controlling Class, acting by way of OrdinaryResolution will be entitled to appoint a successor Collateral Manager within an additional 30-day

period, subject to (i) meeting the criteria in respect of a successor Collateral Manager set out in theCollateral Management Agreement, (ii) Rating Agency Confirmation and (iii) the approval of suchsuccessor Collateral Manager by the Subordinated Noteholders, acting by way of ExtraordinaryResolution. If no successor Collateral Manager has been appointed within such additional 30-day

period, the Trustee will be entitled to appoint a successor Collateral Manager within a further 30-day period, which appointment shall not require the consent of, nor be subject to the disapproval of, theIssuer or any Noteholder, subject to (i) meeting the criteria in respect of a successor CollateralManager set out in the Collateral Management Agreement and (ii) Rating Agency Confirmation.

In the event that the Collateral Manager resigns or is removed and no successor Collateral Manager isappointed by the Trustee in accordance with the terms of the Collateral Management Agreement, theCollateral Manager shall as soon as practicable provide written confirmation to the Trustee that nosuccessor Collateral Manager has been appointed and the Portfolio will cease to be managed and fromthat date (the “ Static Date ”) there shall be no further additions to or (until the appointment of aDisposal Agent) removals from the Portfolio. As soon as practicable after the Static Date, theCollateral Manager will make a recommendation to the Issuer regarding the appointment of aDisposal Agent. If the Collateral Manager fails to recommend a Disposal Agent to the Issuer withinthree months of the Static Date, the Trustee in its sole discretion will appoint a Disposal Agent,

provided that , at the end of such three month period following the Static Date, the Collateral Manager will be released from its obligations under the Collateral Management Agreement, subject to the terms

of the Collateral Management Agreement. For the period from the Static Date until a Disposal Agentis appointed, the Issuer will not be able to redeem the Portfolio in accordance with the variousredemption provisions of the Notes, other than following the occurrence of an Event of Default

pursuant to Condition 10 ( Events of Default ). Once appointed, the Disposal Agent will have limited powers in relation to managing the Portfolio. As soon as a Disposal Agent is appointed, the CollateralManager will be released from its obligations under the Collateral Management Agreement.

Any Notes held by or on behalf of the Collateral Manager, its Affiliates (including for the avoidanceof doubt, any partners, managing members, advisers, directors, officers or employees of such entities)will have no voting rights with respect to any vote (or written direction or consent) in connection withthe removal of the Collateral Manager that is an outgoing Collateral Manager and will be deemed notto be Outstanding in connection with any such vote provided that the Collateral Manager shall be

entitled to attend and speak at meetings at which its removal is scheduled to be voted upon on thecondition that it shall not be present during any vote relating to its removal. Any Notes held by theCollateral Manager and its Affiliates, any one or more of the funds under management by the



47

Collateral Manager or its Affiliates and/or any partners, managing members, advisers, directors,officers or employees of the Collateral Manager will have voting rights (including in respect of written directions and consents) with respect to all other matters as to which Noteholders are entitledto vote, including, without limitation, any vote in connection with the appointment of a Successor Collateral Manager. Solely for purposes of determining whether any Notes are held by or on behalf of Affiliates of the Collateral Manager in connection with any vote relating to the removal of theCollateral Manager or to the appointment of a successor Collateral Manager, “Affiliates”, as regardsany funds, shall be deemed to include any funds for which the Collateral Manager is the sole provider of collateral or investment management services. See “ The Collateral Management Agreement ”.

The Collateral Manager, acting on behalf of the Issuer, may effect transactions between the Issuer andother entities (including other CDO issuers) in respect of which the Collateral Manager acts asmanager, adviser or agent. The Collateral Manager, on behalf of the Issuer, may conduct principaltrades with itself and its Affiliates, subject to applicable law. The Collateral Manager may also effectclient cross transactions where the Collateral Manager causes a transaction to be effected between theIssuer and another account advised by any of its Affiliates. Client cross transactions enable theCollateral Manager to purchase or sell a block of loans and securities for the Issuer at a set price and

possibly avoid an unfavourable price movement that may be created through entrance into the marketwith such purchase or sell order. In addition, with the prior authorisation of the Issuer, which may berevoked at any time, the Collateral Manager may enter into agency cross transactions where any of itsAffiliates acts as broker for the Issuer and for the other party to the transaction, in which case anysuch Affiliate will receive commissions from, and have a potentially conflicting division of loyaltiesand responsibilities regarding, both parties to the transaction.

It is expected that the Initial Purchaser/Placement Agent and the Arranger or their Affiliates will have,respectively, underwritten or placed certain of the Collateral Debt Obligations at original issuance,will own equity or other loans and securities of Obligors of Collateral Debt Obligations and will have

provided investment banking services, advisory, banking and other services to issuers of CollateralDebt Obligations. In addition, the Collateral Manager and/or its Affiliates may own equity or other loans and securities of Obligors of Collateral Debt Obligations and may have provided investmentadvice, collateral management and other services to issuers of Collateral Debt Obligations. From timeto time, the Collateral Manager may, on behalf of the Issuer, purchase or sell Collateral DebtObligations through the Initial Purchaser/Placement Agent or its Affiliates. The Issuer may invest inthe loans and securities of companies affiliated with the Initial Purchaser/Placement Agent, theArranger, the Collateral Manager or their respective Affiliates or companies in which the InitialPurchaser/Placement Agent, the Arranger, the Collateral Manager or their respective Affiliates havean equity or participation interest. The purchase, holding and sale of such investments by the Issuer may enhance the profitability of the Initial Purchaser/Placement Agent, the Arranger, the CollateralManager’s or their Affiliates’ own investments in such companies. In addition, it is expected that theInitial Purchaser/Placement Agent, the Arranger or one or more Affiliates thereof may also act ascounterparty with respect to one or more Participations, as Asset Swap Counterparty with respect to

one or more Asset Swap Transactions. It is possible that one or more Affiliates of the CollateralManager may also act as counterparty with respect to one or more Participations or Asset SwapTransactions.

There is no limitation or restriction on the Collateral Manager, the Initial Purchaser/Placement Agent,the Arranger, or any of their respective Affiliates with regard to acting as Collateral Manager or inanother or similar role to other parties or persons. This and other future activities of the CollateralManager, the Initial Purchaser/Placement Agent, the Arranger, and/or their Affiliates may give rise toadditional conflicts of interest.

Save as provided below, there will be no restriction on the ability of the Initial Purchaser/PlacementAgent, the Arranger, the Trustee, the Collateral Manager, the Collateral Administrator, any AssetSwap Counterparty or any of their respective Affiliates or employees to purchase Notes of any Class(either upon initial issuance or through secondary transfers) and to exercise any voting rights to whichsuch Notes are entitled. The interests of such holders may differ from those of other holders.



48

The Collateral Manager and/or any one or more of its Affiliates and/or any one or more of the fundsunder management by the Collateral Manager or its Affiliates and/or any of their respective partners,managing members, advisors, directors, officers or employees will purchase a substantial percentageof the Subordinated Notes on the Issue Date. For the avoidance of doubt, neither the CollateralManager, nor any of its Affiliates, nor any fund managed by it or its Affiliates is under any obligationto retain any of the Subordinated Notes purchased on the Issue Date. Further, certain amounts

payable to the Collateral Manager are payable on a subordinated basis. However, the performance bythe Collateral Manager of its limited obligations in respect of the Portfolio is governed by its internal

policies with respect to the management of accounts as well as by the requirement that it comply withthe investment guidelines and its other obligations set out in the Collateral Management Agreement.

On the Issue Date, Goldman Sachs International and/or one or more of its Affiliates (such term for the purpose of this paragraph 4 ( Certain Conflicts of Interest ) to include, with respect to any reference toGoldman Sachs International, any discretionary account of Goldman Sachs International) will

purchase a substantial percentage of the Class S-1 Subordinated Notes. For the avoidance of doubt,neither Goldman Sachs International nor any of its Affiliates is under any obligation to retain any of the Subordinated Notes purchased on the Issue Date.

5. INVESTMENT COMPANY ACT

The Issuer has not registered with the United States Securities and Exchange Commission (the“SEC ”) as an investment company pursuant to the Investment Company Act, in reliance on anexception under Section 3(c)(7) of the Investment Company Act for investment companies (a) whoseoutstanding securities are beneficially owned only by Eligible ICA Investors or Non-U.S. Persons andcertain transferees thereof identified in Section 3(c)(7) of the Investment Company Act and (b) whichdo not make a public offering of their securities in the United States.

If the SEC or a court of competent jurisdiction were to find that the Issuer is required, but in violationof the Investment Company Act, had failed to register as an investment company, possibleconsequences include, but are not limited to, the following: (i) the SEC could apply to a district court

to enjoin the violation; (ii) investors in the Issuer could sue the Issuer and recover any damagescaused by the violation; and (iii) any contract to which the Issuer is party that is made in, or whose performance involves, a violation of the Investment Company Act would be unenforceable by any party to the contract unless a court were to find that under the circumstances enforcement would produce a more equitable result than non-enforcement and would not be inconsistent with the purposes of the Investment Company Act. Should the Issuer be subjected to any or all of theforegoing, the Issuer would be materially and adversely affected.

6. CERTAIN ERISA AND OTHER CONSIDERATIONS

The Issuer intends to prohibit investment by Benefit Plan Investors (as defined under “ Certain Employee Benefit Plan Considerations ”) in the Subordinated Notes or any interest therein so that theassets of the Issuer should not be deemed to be “plan assets” subject to the Employee RetirementIncome Security Act of 1974, as amended (“ ERISA ”), and/or Section 4975 of the Internal RevenueCode of 1986, as amended (the “ Code ”), within the meaning of ERISA and the Plan AssetsRegulation issued by the U.S. Department of Labor. Although the Issuer intends to prohibit theacquisition of the Subordinated Notes by Benefit Plan Investors, there can be no assurance thatownership by Benefit Plan Investors of such Notes will always remain below the 25 per cent.threshold established under ERISA and the Plan Assets Regulation to avoid the assets of the Issuer

being deemed to be “plan assets”. If the assets of the Issuer were deemed to be “plan assets,” certaintransactions that the Issuer might enter into, or may have entered into, in the ordinary course of its

business might constitute direct or indirect non-exempt prohibited transactions under ERISA and/or Section 4975 of the Code and might have to be rescinded.

Each acquirer or transferee of a Class A Note, or any interest therein, will be deemed to haverepresented, warranted and agreed that either (a) it is not, and is not acting on behalf of, a Benefit PlanInvestor or a governmental, church or non-U.S. plan which is subject to any Similar Laws (as defined



49

under “ Certain Employee Benefit Plan Considerations ”) or (b) its acquisition, holding and dispositionof such Notes does not and will not result in a non-exempt prohibited transaction under ERISA and/or Section 4975 of the Code (or, in the case of a governmental, church or non-U.S. plan a non-exemptviolation of any Similar Laws).

See “ Certain Employee Benefit Plan Considerations ” herein for a more detailed discussion of certainERISA and related considerations with respect to an investment in the Notes.

7. FORCED TRANSFER

Each initial purchaser of an interest in a Global Note and each transferee of an interest in a Global Note will be deemed to represent at the time of purchase that, amongst other things, the purchaser iseither (i) a U.S. Person or a person within the United States that is both a QIB and a QualifiedPurchaser or (ii) is a non-U.S. Person outside the United States that is purchasing such Note in anOffshore Transaction in reliance on Regulation S. Each initial purchaser of an Accredited Investor Definitive Certificate and each transferee of an interest in an Accredited Investor DefinitiveCertificate will be required to represent at the time of purchase that, among other things, the purchaser is either (i) both an Accredited Investor and an Eligible ICA Investor or (ii) is a non-U.S. Person

outside the United States that is purchasing such Accredited Investor Definitive Certificates in anOffshore Transaction in reliance on Regulation S. Each initial purchaser and transferee of an interestin a Subordinated Note will be deemed to make and in some cases will be required to affirmativelymake representations in respect of ERISA.

The Trust Deed provides that if, notwithstanding the restrictions on transfer contained therein, theIssuer determines or is advised by the Trustee that (1) (a) any holder of an interest in a Global Note isa U.S. Person and is not both a QIB and a Qualified Purchaser at the time it acquires an interest in aGlobal Note or (b) any holder of an interest in a Accredited Investor Definitive Certificate is a U.S.Person that is not both an Accredited Investor and an Eligible ICA Investor and (2) any holder of ERISA Limited Notes has made or is deemed to have made an ERISA related representation that isfalse or misleading or if the beneficial ownership of such holder of an ERISA Limited Note causes a

violation of the 25 per cent. limitation set forth in such representations (any such person, a“Non-Permitted Holder ”), the Issuer, or the Trustee if the Trustee makes the discovery, shall, promptly after determination that such person is a Non-Permitted Holder by the Issuer or the Trustee(and notice by the Trustee to the Issuer, if the Trustee makes the discovery), send notice to such

Non-Permitted Holder demanding that such Non-Permitted Holder sell or transfer its interest to a person that is not a Non-Permitted Holder within 14 days of the date of such notice. If such Non-Permitted Holder fails to effect the sale or transfer required within such 14 day period, (a) theIssuer, or the Transfer Agent on behalf of and at the expense of the Issuer, shall cause such beneficialinterest to be transferred in a commercially reasonable sale to a person or entity that certifies to theTrustee and the Issuer, in connection with such transfer, that such person or entity is not a

Non-Permitted Holder and (b) pending such transfer, no further payments will be made in respect of such beneficial interest.

The Issuer or the Transfer Agent on behalf of and at the expense of the Issuer may select the purchaser by soliciting one or more bids from one or more brokers or other market professionals thatregularly deal in securities similar to such Notes and selling such Notes to the highest such bidder.However, the Issuer may select a purchaser by any other means determined by it in its sole discretion.Each Noteholder and each other Person in the chain of title from the permitted Noteholder to the

Non-Permitted Holder by its acceptance of an interest in such Notes agrees to cooperate with theIssuer and the Transfer Agent to effect such transfers. The proceeds of such sale, net of anycommissions, expenses and taxes due in connection with such sale shall be remitted to the selling

Noteholder. The terms and conditions of any sale hereunder shall be determined in the sole discretionof the Issuer, subject to the transfer restrictions set out herein, and neither the Issuer nor the Transfer Agent shall be liable to any Person having an interest in the Notes sold as a result of any such sale or

the exercise of such discretion. The Issuer and the Transfer Agent reserve the right to require anyholder of Global Notes or Accredited Investor Notes, as the case may be, to submit a written



50

certification substantiating that it is not a Non-Permitted Holder. If such holder fails to submit anysuch requested written certification on a timely basis, the Issuer and the Transfer Agent have the rightto assume that the holder of the Notes from whom such a certification is requested is a Non-PermittedHolder. Furthermore, the Issuer and the Transfer Agent reserve the right to refuse to honour a transfer of beneficial interests in a Global Note or Accredited Investor Note, as the case may be, to any personwho is a Non-Permitted Holder.

8. GERMAN INVESTMENT TAX ACT

8.1 Tax system until 31 December 2007

The German Investment Tax Act ( Investmentsteuergesetz ) (the “ Investment Tax Act ”) applies only(i) to “units” ( Investmentanteile ) in investment funds held by investors who are resident in Germanyfor German tax purposes, (ii) to an investor holding units through a permanent establishment (or a

permanent representative) in Germany or (iii) to an investor (other than a foreign credit institution or aforeign financial services institution) physically presenting units at the office of a German DisbursingAgent (as defined below) (an “over-the-counter-transaction” – Tafelgeschäft ). A “German DisbursingAgent” means a German credit institution or a German financial services institution each as defined in

the German Banking Act ( Kreditwesengesetz ), including a German branch of a non-German creditinstitution or a non-German financial services institution, but excluding a non-German branch of aGerman credit institution or a German financial services institution. The Issuer believes that theClass A Notes should not fall within the scope of the Investment Tax Act, but the issuer can give noassurance that the Investment Tax Act does not apply to the Subordinated Notes. For potentialchanges with respect to the applicability of the Investment Tax Act on the Notes see “ Tax System from1 January 2008 ”.

In the case that the Investment Tax Act applies to any Notes, the Issuer will need to comply with theminimum statutory reporting and publication requirements of the Investment Tax Act for “semi-transparent” funds (the “ Minimum Reporting Requirements ”) provided always that (i) compliance with such Minimum Reporting Requirements is not, in the opinion and at the entire

discretion of the Issuer or Collateral Manager in consultation with the Collateral Administrator,unduly onerous, (ii) the Issuer may satisfy such Minimum Reporting Requirements by providing therequisite financial information to a professional German tax adviser with instructions to such adviser to re-format the relevant information as required as well as to certify the re-formatted information andto publish such information in the Electronic Federal Gazette in accordance with Section 5 of theInvestment Tax Act on behalf of the Issuer and (iii) the Issuer shall have no liability whatsoever for any such information prepared and/or published under the Minimum Reporting Requirements or for any tax consequences to any Noteholder or other party. The Issuer believes that, in consequence of compliance with such Minimum Reporting Requirements, investors holding Notes which are subjectto the Investment Tax Act will not be subject to the lump-sum taxation provisions of Section 6 of theInvestment Tax Act, but that in principle the rules for semi-transparent funds will apply. Under therules of the Investment Tax Act for semi-transparent funds, the Issuer’s taxable earnings (e.g.

payments of interest received) are in principle taxed in the hands of investors. Certain earningsretained by the Issuer (e.g. retained interest income) (if any) would be deemed to be distributed toinvestors holding Notes which are subject to the Investment Tax Act at the end of the Issuer’sfinancial year in which the income was earned by the Issuer. Therefore, a tax liability for investorscould arise before payments have actually been received.

However, if the Issuer does not comply with the Minimum Reporting Requirements, or if the Germantax authorities do not accept the validity of such reporting, the investors holding Notes which aresubject to the Investment Tax Act will be subject to the adverse lump-sum taxation provisions of Section 6 of the Investment Tax Act pursuant to which the higher of (i) distributions on such Notes,the interim profit ( Zwischengewinn ) and 70 per cent. of the annual increase in the market price of such

Notes and (ii) 6 per cent. of the market price of such Notes at the end of every calendar year, (the

“Assumed Profits ”) would be taxed. The interim profit represents mainly interest accrued or



51

received by an investment fund (within the meaning of the Investment Tax Act) but not yet distributedor attributed to the investors in the fund.

Where Notes to which the Investment Tax Act applies are kept in a custodial account maintained witha German Disbursing Agent, such German Disbursing Agent would be required to withhold tax at arate of 30 per cent. (plus solidarity surcharge thereon at a rate of 5.5 per cent.) not only of the grossamount of interest paid as the case may be but at the point of time the Notes are sold by the respectiveInvestor subject to the Investment Tax Act, or redeemed by the Investor also of the aggregate amountof income deemed to have accrued to investors holding Notes which are subject to the Investment TaxAct and not yet otherwise subject to taxation. In the case of an over-the-counter-transaction, suchwithholding tax is levied at the rate of 35 per cent. (plus solidarity surcharge thereon at a rate of 5.5 per cent.). This also applies with regard to interim profits. Such interim profit is taxedirrespective of whether or not the interim profit is calculated and published by the Fund.

Moreover, there is a risk that investments made by, or on behalf of the Issuer, qualify as shares inforeign investment funds (within the meaning of the Investment Tax Act), which do not satisfy theMinimum Reporting Requirements and therefore qualify as “non-transparent” sub-funds. In this case,the Issuer may be deemed to have earned Assumed Profits from these investments according to thelump-sum taxation provisions of Section 6 of the Investment Tax Act and such Assumed Profits mayaccordingly be attributed to investors holding Notes which are subject to the Investment Tax Act,resulting in adverse tax and liquidity consequences for such investors.

Investors should be aware that there are a number of uncertainties regarding the interpretation of thetax provisions contained in the Investment Tax Act (including those relating to the MinimumReporting Requirements).

8.2 Tax System from 1 January 2008

On 29 December 2007 the amendment act (the “ Amendment Act ”) to the Investment Act(“Investment Act ”) entered into force. The Amendment Act is aimed to further improve theregulatory framework for investment funds and their clients in Germany. As the scope of theInvestment Tax Act is defined by cross-reference to the Investment Act, the amendment to thedefinition of “foreign investment fund units” brings about more legal certainty as to when the specialrules of the Investment Tax Act apply. Under the Amendment Act’s definition, “foreign investmentfund units” are basically confined to redeemable units (i.e. the unitholder may demand the redemptionof the units against a pro rata share of the fund) of open-ended funds or closed-end funds, providedthe latter are subjected to the supervision of a financial supervisory authority for collectiveinvestments. Therefore, investments in foreign non-supervised closed-end funds are no longer taxableunder the possibly punitive (see above “ Assumed Profits ”) Investment Tax Act. As the Issuer is notsubject to any supervision of a financial supervisory authority for collective investments and theredemption provisions of the Conditions with respect to the Subordinated Notes may not becomparable to redemption rights typical for open-ended investment funds, conceivably, as a result of

the changes implemented by the Amendment Act and the Annual Tax Act 2008, from 1 January 2008the Subordinated Notes may no longer qualify as units in a foreign investment fund. Instead, thegeneral German taxation rules should apply. However, it is not currently clear how redeemable unitsshould be interpreted in the context of CDO transactions so that there remains some uncertainty as towhether the Subordinated Notes still qualify as fund units. If the Investment Tax Act still applies thetaxation of a German Investor takes place as set out in this Offering Memorandum below in theSection entitled “ Tax Considerations – Investors Subject to the Investment Tax Act ”. Otherwise, thetaxation of a German Investor follows the rules as described below under “ Tax Considerations –Taxation of Investors Tax Resident in Germany and Not Subject to the Investment Tax Act ”.

This section should be read in conjunction with the section of this Offering Memorandum entitled“Tax Considerations – Taxation in Germany – Investors subject to the German Investment Tax Act ”.



52

This section should be read in conjunction with the section entitled “ Taxation in Germany – Investorssubject to the German Investment Tax Act ” and the section entitled “ Tax Considerations ” – “ Taxationin Germany ”.

9. GERMAN BANKING ACT

There is currently legal uncertainty in the Federal Republic of Germany as to whether collateraliseddebt obligation transactions (“ CDO Transactions ”) involve activities requiring a licence under theGerman Banking Act ( Kreditwesengesetz – KWG ) on the basis that they constitute “banking business”and also as to the treatment of CDO Transactions under the regulatory regime of the GermanInvestment Act ( Investmentgesetz - InvG ) (the “ German Investment Act ”). In particular, theGerman regulator recently broadly interpreted banking business in the form of principal broking

business ( Finanzkommissiongeschäft ) under the German Banking Act as including cases where aGerman or foreign company invests in financial instruments for the economic interest of Germaninvestors. Should it be determined that activities involved in CDO Transactions are subject to licencerequirements under the German Banking Act or that they should be regulated under the GermanInvestment Act, the German regulator could impose sanctions on certain of the parties involved,including the Issuer, including the immediate cessation of business operations and prompt liquidationof the transactions conducted.

10. REGULATORY RISK

The Issuer is not conducting banking or financial services activity requiring licences or consents fromregulators in its jurisdiction of incorporation and seeks to comply with all applicable laws andregulations applicable to it of which it is aware in all jurisdictions with which the transaction isconnected. The possibility cannot be excluded, however, that either by reason of a change in law or regulation or their interpretation in any applicable jurisdiction or by reason of law or regulation of which the issuer is unaware, certain of its activities or those of its agents in relation to the issue andoffering of the Notes and the acquisition, trading and servicing of the Portfolio may constitute the

provision of cross border banking or financial services which are regulated in other jurisdictions.

Should it be determined that the Issuer has failed to comply with any applicable licence or consentrequirements under any applicable banking or financial services law or regulation in any jurisdictionin relation to the issue and offering of the Notes and the acquisition, trading and servicing of thePortfolio, the regulators in such jurisdiction could, to the extent they have authority to do so, imposesanctions on certain of the parties involved, including the Issuer, seeking the immediate cessation of such parties’ activities in that jurisdiction, liquidation of the transactions conducted by it in that

jurisdiction or with investors in or from that jurisdiction and even the imposition of criminalsanctions.

11. UNITED STATES TAXATION

11.1 United States Taxation of the Issuer

The Issuer does not expect that its activities will cause it to be treated as engaged in the conduct of atrade or business within the United States for U.S. federal income tax purposes (a “ U.S. Trade or Business ”), however, there can be no assurance that the U.S. Internal Revenue Service (the “ IRS ”)will agree. If the IRS were to successfully assert that the Issuer is engaged in the conduct of a U.S.Trade or Business, there could be material adverse financial consequences to the Issuer and to personswho hold the Notes. In such a case, part or all of the income and gains of the Issuer could be subjectto United States income tax and additional branch profits tax which would reduce or even eliminatecash available for distribution to the holders of the Notes. In addition, if the Issuer is treated asengaged in a U.S. Trade or Business, in some circumstances payments by the Issuer under the Notescould be subject to U.S. withholding tax.



53

11.2 Tax Information

A U.S. Holder (as defined below – see “ Tax Considerations ”) may for certain purposes elect to treatthe Issuer as a qualified electing fund. In order to comply with such election such U.S. Holder mustreceive certain information from the Issuer (“ QEF Information ”). The Collateral Manager (on

behalf of the Issuer) will use reasonable endeavours to provide the QEF Information if requested by aU.S. Holder.

12. CERTAIN PROVISIONS OF IRISH LAW

12.1 Preferred Creditors under Irish Law and Floating Charges

Under Irish law, upon an insolvency of an Irish company such as the Issuer, when applying the proceeds of assets subject to fixed security which may have been realised in the course of aliquidation or receivership, the claims of a limited category of preferential creditors will take priorityover the claims of creditors holding the relevant fixed security. These preferred claims include theremuneration, costs and expenses properly incurred by any examiner of the company (which mayinclude any borrowings made by an examiner to fund the company’s requirements for the duration of

his or her appointment) which have been approved by the Irish courts. See “ Examinership ” below.The holder of a fixed security over the book debts of an Irish tax resident company (which wouldinclude the Issuer) may be required by the Irish Revenue Commissioners, by notice in writing fromthe Irish Revenue Commissioners, to pay to them sums equivalent to those which the holder receivedin payment of debts due to it by the company.

Where the holder of the security has given notice to the Irish Revenue Commissioners of the creationof the security within 21 days of its creation, the holder’s liability is limited to the amount of certainoutstanding Irish tax liabilities of the company (including liabilities in respect of value added tax)arising after the issuance of the Irish Revenue Commissioners’ notice to the holder of the fixedsecurity.

The Irish Revenue Commissioners may also attach any debt due to an Irish tax resident company byanother person in order to discharge any liabilities of the company in respect of outstanding tax,whether the liabilities are due on its own account or as an agent or trustee. The scope of this right of the Irish Revenue Commissioners has not yet been considered by the Irish courts and it may overridethe rights of holders of security (whether fixed or floating) over the debt in question.

In relation to the disposal of assets of any Irish tax resident company which are subject to security, a person entitled to the benefit of the security may be liable for tax in relation to any capital gains made by the company on a disposal of those assets on exercise of the security.

The essence of a fixed charge is that the person creating the charge does not have liberty to deal withthe assets which are the subject matter of the security in the sense of disposing of such assets or

expending or appropriating the moneys or claims constituting such assets and accordingly, if and tothe extent that such liberty is given to the Issuer, any charge constituted by the Trust Deed mayoperate as a floating, rather than a fixed charge.

In particular, the Irish courts have held that in order to create a fixed charge on receivables, it isnecessary to oblige the chargor to pay the proceeds of collection of the receivables into a designated

bank account and to prohibit the chargor from withdrawing or otherwise dealing with the moniesstanding to the credit of such account without the consent of the chargee.

Depending upon the level of control actually exercised by the chargor, there is therefore a possibilitythat the fixed security over the Issuer’s account and the Eligible Investments would be regarded by theIrish courts as a floating charge.



54

Floating charges have certain weaknesses, including the following:

(a) they have weak priority against purchasers (who are not on notice of any negative pledgecontained in the floating charge) and against lien holders, execution creditors and creditorswith rights of set off;

(b) they rank after certain preferential creditors, such as claims of employees and certain taxes onwinding up;

(c) they rank after certain insolvency remuneration expenses and liabilities;

(d) the examiner of a company has certain rights to deal with the property covered by the floatingcharge; and

(e) they rank after fixed charges.

12.2 Examinership

Examinership is a court procedure available under the Irish Companies (Amendment) Act 1990, as

amended, (the “ 1990 Act ”) to facilitate the survival of Irish companies in financial difficulties.The Issuer, the directors of the Issuer, a contingent, prospective or actual creditor of the Issuer, or shareholders of the Issuer holding, at the date of presentation of the petition, not less than one tenth of the voting share capital of the Issuer are each entitled to petition the court for the appointment of anexaminer. The examiner, once appointed, has the power to set aside contracts and arrangementsentered into by the company after this appointment and, in certain circumstances, can avoid a negative

pledge given by the company prior to this appointment. Furthermore, the examiner may sell assets,the subject of a fixed charge. However, if such power is exercised, the examiner must account to theholders of the fixed charge for the amount realised and discharge the amount due to the holders of thefixed charge out of the proceeds of the sale.

During the period of protection, the examiner will compile proposals for a compromise or scheme of arrangement to assist in the survival of the company or the whole or any part of its undertaking as agoing concern. A scheme of arrangement may be approved by the Irish High Court when at least oneclass of creditors has voted in favour of the proposals and the Irish High Court is satisfied that such

proposals are fair and equitable in relation to any class of members or creditors who have not acceptedthe proposals and whose interests would be impaired by implementation of the scheme of arrangement.

In considering proposals by the examiner, it is likely that secured and unsecured creditors would formseparate classes of creditors. In the case of the Issuer, if the Trustee represented the majority innumber and value of claims within the secured creditor class (which would be likely given therestrictions agreed to by the Issuer in the Conditions of the Notes), the Trustee would be in a positionto reject any proposal not in favour of the Noteholders. The Trustee would also be entitled to argue atthe Irish High Court hearing at which the proposed scheme of arrangement is considered that the

proposals are unfair and inequitable in relation to the Noteholders, especially if such proposalsincluded a writing down to the value of amounts due by the Issuer to the Noteholders. The primaryrisks to the holders of Notes if an examiner were appointed to the Issuer are as follows:

(a) the potential for a scheme of arrangement being approved involving the writing down of thedebt due by the Issuer to the Noteholders as secured by the Trust Deed;

(b) the potential for the examiner to seek to set aside any negative pledge in the Notes prohibitingthe creation of security or the incurring of borrowings by the Issuer to enable the examiner to

borrow to fund the Issuer during the protection period; and

(c) in the event that a scheme of arrangement is not approved and the Issuer subsequently goesinto liquidation, the examiner’s remuneration and expenses (including certain borrowings



55

incurred by the examiner on behalf of the Issuer and approved by the Irish High Court) willtake priority over the monies and liabilities which from time to time are or may become due,owing or payable by the Issuer to each of the Secured Parties under the Notes or theTransaction Documents.

13. NOT A BANK DEPOSIT

Any investment in the Notes does not have the status of a bank deposit in Ireland and is not within thescope of the deposit protection scheme operated by the Irish Financial Services Regulatory Authority.The Issuer is not regulated by the Irish Financial Services Regulatory Authority by virtue of the issueof the Notes.

14. MARKET ABUSE DIRECTIVE

It should be noted that the Issuer will not and should not be deemed to have information which itsagents (including the Agents, Collateral Manager or Collateral Administrator) use or acquire incarrying out their obligations under the Transaction Documents, unless such information is requestedspecifically by the Issuer.

The Issuer is obliged to publicly disclose without delay any “inside information” within the meaningof the Market Abuse (Directive 2003/6/EC) Regulations 2005 which directly concerns the Issuer andin a manner that enables correct and timely assessment of the information by the public. In the caseof the Issuer, such disclosure will be made through the company announcement office of the IrishStock Exchange or other approved regulatory information service.



56

CONDITIONS OF THE NOTES

The following are the conditions of each of the Class A Notes and the Subordinated Notes,substantially in the form in which they will be endorsed on such Notes if issued as DefinitiveCertificates, and will be incorporated by reference into the Global Certificates of each Classrepresenting the Notes (subject to the provisions of such Global Certificates, some of which willmodify the effect of these Conditions (See “Form of the Notes – Amendments to Conditions”)).

The issue of up to €800,000,000 Class A-1 Senior Secured Floating Rate Notes due 2020, (the“Class A-1 Notes ”), €292,500,000 Class A-2a Senior Secured Floating Rate Notes due 2020, (the“Class A-2a Notes ”), €32,500,000 Class A-2b Senior Secured Floating Rate Notes due 2020, (the“Class A-2b Notes ”), €360,848,000 Class S-1 Subordinated Notes due 2020 (the “ Class S-1Subordinated Notes ”) and €14,152,000 Class S-2 Subordinated Notes due 2020 (the “ Class S-2Subordinated Notes ” and together with the Class S-1 Subordinated Notes, the “ SubordinatedNotes ” and the Subordinated Notes, together with the Class A Notes, the “ Notes ”) of CELFPartnership Loan Funding 2008-I Limited (the “ Issuer ”) was authorised by a resolution of the Boardof Directors of the Issuer dated 9 July 2008. The Notes are constituted by a trust deed (together withall other documents or agreements entered into from time to time by the Issuer in order to grantsecurity over any of the Collateral to the Trustee, the “ Trust Deed ”) dated on or about the Issue Date

between (amongst others) the Issuer and BNY Corporate Trustee Services Limited in its capacity astrustee (the “ Trustee ” which expression shall include all Persons for the time being the trustee or trustees under the Trust Deed) for the Noteholders.

These Conditions include summaries of, and are subject to, the detailed provisions of the Trust Deed(which includes the forms of the Notes). The following agreements have been entered into in relationto the Notes in addition to the Trust Deed:

(a) an agency agreement dated on or about the Issue Date (the “ Agency Agreement ”) betweenthe Issuer, The Bank of New York (Luxembourg) S.A. as registrar (the “ Registrar ”, whichterm shall include any successor or substitute registrar appointed pursuant to the terms of the

Agency Agreement), The Bank of New York Mellon as principal paying agent, custodian,account bank and calculation agent (respectively the “ Principal Paying Agent ”, the“Custodian ”, the “ Account Bank ” and the “ Calculation Agent ”, which terms shall includeany successor or substitute principal paying agent, custodian, account bank or calculationagent as the case may be appointed pursuant to the terms of the Agency Agreement), BNYFinancial Services plc as transfer agent (the “ Transfer Agent ”, which term shall include anysuccessor or substitution transfer agent appointed pursuant to the terms of the AgencyAgreement), the Trustee, the Collateral Administrator and the Collateral Manager (each asdefined below);

(b) a collateral management agreement dated on or about the Issue Date (the “ CollateralManagement Agreement ”) between the Issuer, CELF Investment Advisors Limited as the

Collateral Manager in respect of the Collateral Debt Obligations contained in the Portfolio(the “ Collateral Manager ”, which term shall include any successor or replacement collateralmanager, a “ Successor Collateral Manager ”), appointed pursuant to the terms of theCollateral Management Agreement), The Bank of New York Mellon as collateraladministrator (the “ Collateral Administrator ”, which term shall include any successor or replacement collateral administrator appointed pursuant to the terms of the CollateralManagement Agreement), the Custodian and the Trustee;

(c) a corporate services agreement dated on or about 11 July 2008 (the “ Corporate ServicesAgreement ”) between the Issuer and TMF Administration Services Limited as corporateservices provider (the “ Corporate Services Provider ”);

(d) the forward sale agreement dated 3 June 2008 (the “ Forward Sale Agreement ”) entered into between the Arranger (as defined in Condition 1 ( Definitions ) below), the Issuer, GSCP as



57

seller of the loans and the Collateral Manager, acting in its capacity as verification andvalidation agent thereunder;

(e) a subscription and placement agreement dated on or about 14 July 2008 (the “ Subscriptionand Placement Agreement ”) between the Initial Purchaser/Placement Agent and the Issuer under which the Initial Purchaser/Placement Agent agreed to place the Class A-1 Notes andsubscribe for and underwrite the Class A-2a Notes, the Class A-2b Notes and the Class S-1Subordinated Notes;

(f) a euroclear Belgian law agreement dated on or about the Issue Date (the “ Euroclear PledgeAgreement ”) between the Issuer as pledgor and the Trustee as pledgee in respect of theIssuer’s right, title and interest in and to the Collateral Debt Obligations, Exchanged EquitySecurities, Collateral Enhancement Obligations and Eligible Investments from time to timeheld in Euroclear;

(g) the note purchase agreements dated on or about 15 July 2008, between the Issuer and the purchasers of the Class A-1 Notes (each, a “ Class A-1 Note Purchase Agreement ”) pursuantto which such purchasers will agree to purchase beneficial interests in the Class A-1 Notes;

(h) the note purchase agreements dated on or about 14 July 2008, between the Issuer and the purchasers of the Accredited Investor Notes (each, an “ Accredited Investor Note PurchaseAgreement ”) pursuant to which such purchasers will agree to purchase the AccreditedInvestor Notes; and

(i) the ISDA Master Agreement (Multicurrency Cross-Border) entered into between the Issuer and JPMorgan Chase Bank, N.A. as the initial asset swap counterparty (the “ Initial AssetSwap Counterparty ” and, together with any additional or successor Asset SwapCounterparty or any Replacement Asset Swap Counterparty, the “ Asset SwapCounterparties ”, and each an “ Asset Swap Counterparty ”) dated on or about the IssueDate (an “ Asset Swap Agreement ”, which term shall include an ISDA Master Agreement(Multicurrency Cross-Border), together with the schedule, confirmations and any annexesrelating thereto, entered into between the Issuer and a Asset Swap Counterparty evidencingone or more Asset Swap Transactions entered into by the Issuer from time to time, asamended, supplemented or replaced from time to time and including any guarantee thereof and any credit support document entered into pursuant to the terms thereof and including anyreplacement Asset Swap Agreement entered into in replacement thereof).

The holders of each Class of Notes are entitled to the benefit of, are bound by and are deemed to havenotice of all the provisions of the Trust Deed, and are deemed to have notice of all the provisions of the Agency Agreement, the Collateral Management Agreement, the Euroclear Pledge Agreement,each Asset Swap Agreement and the Corporate Services Agreement applicable to them.

Copies of the Trust Deed, the Agency Agreement, the Collateral Management Agreement, theEuroclear Pledge Agreement, each Asset Swap Agreement and the Corporate Services Agreement areavailable for inspection during usual business hours at the registered office of the Issuer, the principaloffice of the Trustee (presently at One Canada Square, London E14 5AL) and at the specified officesof the Paying Agents for the time being.

1. Definitions

“Accounts ” means the Payment Account, the Principal Account, the Interest Account, the UnusedProceeds Account, the Expense Reserve Account, the Interest Reserve Account, the Asset SwapTermination Account, the Collateral Enhancement Account, the Counterparty Downgrade CashCollateral Account, the Counterparty Downgrade Securities Collateral Account, the FS AccruedInterest Account, the Non-Euro Custody Account, the Revolving Reserve Account and the Euroclear

Pledge Account;



58

“Accredited Investor ” shall have the meaning given to such term in Rule 501(a) of the SecuritiesAct;

“Accredited Investor Definitive Notes ” means notes representing one or more Accredited Investor Notes of each Class in definitive fully registered form;

“Accredited Investor Note Purchase Agreement ” means each of the note purchase agreements to bedated on or about the Issue Date, to be entered into between the Issuer and the purchasers of theAccredited Investor Notes;

“Administrative Expenses ” means amounts due and payable by the Issuer on a pro rata basis:

(a) to the Agents pursuant to the Agency Agreement;

(b) to the Collateral Administrator pursuant to the Collateral Management Agreement (includingindemnities provided for therein);

(c) to the independent accountants, auditors, agents and counsel of the Issuer;

(d) to the directors of the Issuer in respect of directors’ fees (if any) and the Issuer Fee;(e) to the Corporate Services Provider pursuant to the Corporate Services Agreement;

(f) to the Irish Stock Exchange, or such other stock exchange or exchange upon which any of the Notes are listed from time to time;

(g) to any other Person in respect of any governmental fee or charge (other than any value addedtaxes (save for the Collateral Administrator’s fees), taxes provided for elsewhere andwithholding taxes) or any statutory indemnity;

(h) to any other Person in respect of any other indemnities, fees or expenses or other amounts properly incurred by the Issuer from time to time, contemplated in the Conditions or the

documents delivered pursuant to or in connection with the issue and sale of the Notes,including, without limitation, an amount up to €17,500 per annum or such other higher amount as reasonably determined by the Collateral Manager (in its sole and absolutediscretion), in respect of fees and expenses incurred by the Collateral Manager, the CollateralAdministrator or the Issuer in assisting in the preparation, provision or validation of data for

purposes of Noteholder tax jurisdictions;

(i) to the payment of any amounts due and payable by the Issuer to any Selling Institution under any Participation, pursuant to the Forward Sale Agreement or otherwise;

(j) to the payment of any amounts due and payable by the Issuer as a member of a loan syndicatefor costs and expenses incurred on account of any insolvency work out up to an aggregatemaximum amount paid under this item of €25,000 multiplied by the number of days from theIssue Date to, but excluding, the date of determination, divided by 360;

(k) to the payment of any amounts necessary to ensure the orderly dissolution of the Issuer;

(l) to the Collateral Manager pursuant to the Collateral Management Agreement (includingindemnities provided for therein), but excluding any Collateral Management Fee, MakeWhole Redemption Fee or Make Whole Tax Event Fee;

(m) to the payment of any amounts due to an agent bank in relation to the performance of itsduties under a syndicated Senior Secured Loan or Senior Secured Floating Rate Note butexcluding any amounts paid in respect of the acquisition or purchase price of such syndicatedSenior Secured Loan or Senior Secured Floating Rate Note;

(n) to the Rating Agency which may from time to time be requested to assign (i) a rating to any Notes or (ii) a confidential credit estimate to any of the Collateral Debt Obligations, for fees



59

and expenses (including surveillance fees) in connection with any such rating or confidentialcredit estimate including, in each case, the on-going monitoring thereof; and

(o) to the payment of any applicable value added tax required to be paid by the Issuer in respectof any of the foregoing,

provided that “Administrative Expenses” shall not include any Trustee Fees and Expenses, or amounts due or accrued with respect to the actions taken on or in connection with the Issue Datewhich are payable out of the proceeds of the issue of the Notes;

“Affiliate ” or “ Affiliated ” means with respect to a Person, (the “ Relevant Person ”)(a) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with,the Relevant Person or (b) any other Person who is a director, officer or employee of or who, directlyor indirectly, manages (i) the Relevant Person, or (ii) any Person described in (a) above. For the

purposes of this definition, control of a Person shall mean the power, direct or indirect, (A) to votemore than 50 per cent. of the securities having ordinary voting power for the election of directors of such Person, or (B) to direct or cause the direction of the management and policies of such Personwhether by contract or otherwise. The Issuer shall be deemed to have no Affiliates;

“Agent ” means each of the Registrar, the Paying Agents, the Transfer Agent, the Calculation Agent,the Account Bank and the Custodian, and each of their permitted successors or assigns appointed asagents of the Issuer pursuant to the Agency Agreement and “ Agents ” shall be construed accordingly;

“Aggregate Portfolio Balance ” means, as at any Measurement Date, the amount equal to theaggregate of the following amounts, as at such Measurement Date:

(a) the Aggregate Principal Balance of all Collateral Debt Obligations, save that:

(i) for the purpose of calculating the Aggregate Principal Balance for the purposes of thePortfolio Profile Tests and in each case where such is specifically provided, thePrincipal Balance of each Defaulted Obligation shall be excluded; save that, for the

purpose of the Collateral Quality Test entitled “CDO Monitor Test” the PrincipalBalance of a Defaulted Obligation shall be its S&P Value; and

(ii) for all purposes other than as set out in paragraph (i) above, for the purpose of calculating the Aggregate Principal Balance, the Principal Balance of each DefaultedObligation shall be its S&P Collateral Value; and

(iii) the Principal Balance of each Current Pay Obligation shall be, in the event that theMarket Value of such Current Pay Obligation is less than 80.0 per cent. of thenotional amount thereof, its S&P Collateral Value; and

(iv) for the purposes of the Class A Par Value Test, for measurement of the CollateralDebt Obligations against the Target Par Amount and for calculating the Par Coverage

Numerator, the Principal Balance of each Unhedged Collateral Debt Obligation,which (for the avoidance of doubt) is not a Defaulted Obligation, shall, at the electionof the Collateral Manager, be determined in accordance with Method 1 or Method 2

pursuant to the Collateral Management Agreement; and

(b) the Balances standing to the credit of the Principal Account and the Unused ProceedsAccount;

“Aggregate Principal Balance ” means the aggregate of the Principal Balances of all the CollateralDebt Obligations and, when used with respect to some portion of the Collateral Debt Obligations,means the aggregate of the Principal Balances of such portion of the Collateral Debt Obligations, ineach case, as at the date of determination;





61

“Asset Swap Replacement Receipt ” means any amount payable to the Issuer by an Asset SwapCounterparty upon entry into a Replacement Asset Swap Transaction which is replacing an AssetSwap Transaction which was terminated in whole;

“Asset Swap Termination Account ” means the interest bearing account of the Issuer with theAccount Bank into which Asset Swap Termination Receipts and Asset Swap Replacement Receiptswill be paid;

“Asset Swap Termination Payment ” means the amount payable to the Asset Swap Counterparty bythe Issuer upon termination or modification of an Asset Swap Transaction including any DefaultedAsset Swap Termination Payment, if applicable, but excluding Asset Swap Issuer Principal ExchangeAmounts as described therein;

“Asset Swap Termination Receipt ” means the amount payable by the Asset Swap Counterparty tothe Issuer upon termination or modification of an Asset Swap Transaction including any DefaultedAsset Swap Termination Receipt, if applicable, but excluding Asset Swap Counterparty PrincipalExchange Amounts as described therein;

“Asset Swap Transaction ” means any asset swap transaction under an Asset Swap Agreement,which is entered into by the Issuer with an Asset Swap Counterparty in connection with a Non-EuroObligation under which the Issuer swaps cash flows receivable on such Non-Euro Obligation for eurodenominated cash flows from such Asset Swap Counterparty;

“Asset Swap Transaction Exchange Rate ” means the exchange rate specified in each Asset SwapTransaction;

“Authorised Integral Denomination ” means (a) in respect of Regulation S Notes of each Class(excluding the Accredited Investor Notes) €1,000, and (b) in respect of Rule 144A Notes of eachClass €1,000, and (c) in respect of the Accredited Investor Notes of each Class, €1,000;

“Balance ” means, in respect of any cash or Eligible Investments standing to the credit of an Account,

the aggregate of:

(a) the current balance of cash, demand deposits, time deposits and certificates of deposit;

(b) the principal amount of interest bearing corporate and government securities, money marketaccounts and repurchase obligations; and

(c) the purchase price (but not greater than the face amount) of non-interest bearing governmentand corporate securities and commercial paper;

“Base Currency ” means, in respect of any Revolving Obligation or Delayed Drawdown CollateralDebt Obligation, the currency (which may be Euro, U.S. Dollars, Canadian Dollars, Sterling, SwedishKronor, Norwegian Kroner, Danish Kroner, Swiss Francs, Australian Dollars, New Zealand Dollarsor Japanese Yen) in which the commitment under such Revolving Obligation or Delayed DrawdownCollateral Debt Obligation is determined in accordance with the Underlying Instruments thereof;

“Business Day ” means (save to the extent otherwise defined herein or in any Transaction Document):

(a) a day, other than a Saturday or Sunday, on which the TARGET System is open for settlementof payments in euro or, if such TARGET Day is not a day on which banks are open for

business in London and New York, the next succeeding TARGET Day on which banks areopen for business in London and New York; and

(b) for the purposes of the definition of “Presentation Date”, in relation to any place, a day, other than a Saturday or Sunday, on which commercial banks and foreign exchange markets settle

payments in the relevant place of presentation;



62

“CCC+ Bucket Excess ” means the amount, if any, by which the Aggregate Principal Balance of theCCC Obligations exceeds 5.0 per cent. of the Aggregate Portfolio Balance and any CCC+ BucketExcess shall comprise CCC Obligations with the lowest Market Values;

“CCC Obligation ” means each Collateral Debt Obligation (other than a Defaulted Obligation) whichhas an S&P Rating of “CCC +” or less;

“Class ” or “ Class of Notes ” means each of the classes of Notes being:

(a) the Class A-1 Notes;

(b) the Class A-2a Notes;

(c) the Class A-2b Notes

(d) the Class S-1 Subordinated Notes; and

(e) the Class S-2 Subordinated Notes,

save to the extent that Classes of Notes referencing the same letter in the title thereof (for example the“Class of Notes ”) are specifically referred to, in which event such reference shall include all Classesof Notes that include the same letter in their title and “ Class of Noteholders ” and “ Class ” shall beconstrued accordingly;

“Class A Floating Rate of Interest ” has the meaning given thereto in Condition 6(c)(i) ( Rate of Interest );

“Class A Noteholders ” means the holders of interests in the Class A Notes, from time to time;

“Class A Interest Coverage Ratio ” means, on any Determination Date, the ratio (expressed as a percentage) obtained by dividing (a) the Interest Coverage Amount by (b) the aggregate of thescheduled interest payments payable on the Class A Notes on the following Payment Date;

“Class A Interest Coverage Test ” shall be satisfied in respect of any Determination Date if, on suchDetermination Date, the Class A Interest Coverage Ratio is at least 108.0 per cent.;

“Class A Par Value Ratio ” means, as of any Determination Date, the ratio (expressed as a percentage) obtained by dividing the Par Coverage Numerator by the sum of the Principal AmountOutstanding of the Class A Notes;

“Class A Par Value Test ” means the test satisfied if, on any Determination Date, the Class A Par Value Ratio is at least 124.0 per cent.;

“Class A-1 Noteholders ” means the holders of interests in the Class A-1 Notes, from time to time;

“Class A-2a Noteholders ” means the holders of interests in the Class A-2a Notes, from time to time;“Class A-2b Noteholders ” means the holders of interests in the Class A-2b Notes, from time to time;

“Class S-1 Subordinated Noteholders ” means the holders of the Class S-1 Subordinated Notes fromtime to time;

“Class S-2 Subordinated Noteholders ” means the holders of the Class S-2 Subordinated Notes fromtime to time;

“CM UK Tax Event ” means that the Issuer has become subject to a UK corporation tax liability (as aresult of the actions or inaction of the Collateral Manager causing the Issuer to be carrying on a tradein the United Kingdom through a United Kingdom permanent establishment) in sufficient amount

such that the Class A Interest Coverage Ratio would be lower than 108.0 per cent. if calculatedassuming payment by the Issuer of such UK tax liability;



63

“CM UK Tax Termination Date ” means the date on which the Collateral Manager ceases to act as“Collateral Manager” under the Collateral Management Agreement as a result of a CM UK TaxEvent;

“Collateral ” means the property, assets, rights and benefits described in Condition 4(a) (Security )which are charged and/or assigned and/or pledged to the Trustee from time to time for the benefit of the Secured Parties pursuant to the Trust Deed and the Euroclear Pledge Agreement;

“Collateral Acquisition Agreements ” means each of the agreements entered into by the Issuer inrelation to the purchase by the Issuer of Collateral Debt Obligations from time to time;

“Collateral Debt Obligation ” means any debt obligation or debt security purchased by or on behalf of the Issuer from time to time (or, if the context so requires, to be purchased by or on behalf of theIssuer). References to Collateral Debt Obligations shall not include Collateral EnhancementObligations, Eligible Investments or Exchanged Equity Securities. Obligations which are toconstitute Collateral Debt Obligations in respect of which the Issuer has entered into a bindingcommitment to purchase but which have not yet been settled shall be included as Collateral DebtObligations, and obligations in respect of which the Issuer has entered into a binding commitment to

sell but which have not yet settled shall not be included as Collateral Debt Obligations, in thecalculation of the Portfolio Profile Tests and Collateral Quality Tests at any time as if such purchaseor sale, as the case may be, had been completed. For the avoidance of doubt, the failure of anyobligation to satisfy the Eligibility Criteria at any time after the Issuer or the Collateral Manager on

behalf of the Issuer has entered into a binding agreement to purchase it, shall not cause suchobligation to cease to constitute a Collateral Debt Obligation;

“Collateral Enhancement Account ” means the interest bearing account in the name of the Issuer,held with the Account Bank, the amounts standing to the credit of which from time to time may beapplied in the acquisition of Collateral Enhancement Obligations by or on behalf of the Issuer inaccordance with the Collateral Management Agreement;

“Collateral Enhancement Obligation ” means any option or warrant which is related to or connectedwith a Collateral Debt Obligation, excluding Exchanged Equity Securities and any equity securityreceived upon conversion or exchange of, or exercise of an option under, or otherwise in respect of aCollateral Debt Obligation; or any warrant or equity security purchased as part of a unit with aCollateral Debt Obligation (but in all cases, excluding, for the avoidance of doubt, the Collateral DebtObligation), in each case, the acquisition of which will not result in the imposition of any present or future, actual or contingent liabilities or obligations on the Issuer other than those which may arise atits option. For the avoidance of doubt, Collateral Enhancement Obligations shall only includeobligations (a) the acquisition (including the manner of acquisition), ownership, enforcement or disposition of which will not cause the Issuer to be treated as engaged in a trade or business within theUnited States for U.S. federal income tax purposes, (b) that are acquired, and held in a manner thatdoes not violate the Investment Restrictions set out in the Collateral Management Agreement, (c) the

nature of which do not violate the Investment Restrictions set out in the Collateral ManagementAgreement, and (d) in the case of an obligation of a company incorporated or established in, or asovereign issuer of, the United States, or otherwise bearing interest that arises, for U.S. federal incometax purposes, from sources within the United States, are in registered form at the time they areacquired;

“Collateral Enhancement Obligation Proceeds ” means all Distributions and Sale Proceeds receivedin respect of any Collateral Enhancement Obligation and all monies standing to the credit of theCollateral Enhancement Account without double counting any proceeds;

“Collateral Enhancement Obligation Proceeds Priority of Payments ” means the priority of payments in respect of Collateral Enhancement Obligation Proceeds as set out in Condition 3(c)(iii)( Application of Collateral Enhancement Obligation Proceeds );



64

“Collateral Manager Breach ” mean each of the following:

(a) the acts or omissions of the Collateral Manager constituting wilful misconduct or negligenceof the Collateral Manager under the Collateral Management Agreement and under the TrustDeed or any other Transaction Document to which it is a party;

(b) with respect to the information concerning the Collateral Manager provided in writing to theIssuer by the Collateral Manager expressly for inclusion in the Offering Memorandum, suchinformation containing any untrue statement of material fact or omitting to state a materialfact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(c) any unauthorised offers or solicitations to investors by the Collateral Manager; or

(d) any breach by the Collateral Manager of the terms of the Collateral Management Agreement(including but not limited to a failure to adhere to the Investment Restrictions set out inClause 7.2 ( Investment Restrictions ) therein) having a material adverse effect on the interestsof the Issuer or any Class of Noteholders (acting as a Class) or the Trustee.

“Collateral Management Fee ” shall be equal to:

(a) 0.175 per cent. per annum of the original aggregate Principal Amount Outstanding of the Notes (as of the Issue Date), on each Payment Date following the Issue Date up to andincluding the Payment Date falling in March 2012; and

(b) thereafter, 0.175 per cent. per annum of the Aggregate Portfolio Balance of the CollateralDebt Obligations as at the beginning of the Due Period preceding the applicable PaymentDate,

in each case, (calculated on the basis of a 360 day year and the number of days elapsed in such DuePeriod) payable in arrear on each Payment Date in accordance with the applicable Priorities of

Payments and together with any value added tax payable in respect thereof whether payable to theCollateral Manager or directly to the relevant tax authority. Any Collateral Management Fees accrued but unpaid on the Payment Date on which it is due or deferred by the Collateral Manager inaccordance with the applicable Priorities of Payment, shall accrue at the rate of EURIBOR plus2.0 per cent. per annum and shall be payable pro rata to the Collateral Manager and any former collateral manager by reference to the period of time that such entity was a “Collateral Manager”;

“Collateral Quality Tests ” means the Collateral Quality Tests set out in the Collateral ManagementAgreement being each of the following:


(i) as of the Effective Date and until the end of the Reinvestment Period, the CDOMonitor Test; and

(ii) the S&P Minimum Weighted Average Recovery Rate Test; and


(i) the Minimum Weighted Average Spread Test; and

(ii) the Weighted Average Maturity Test,

each as defined in the Collateral Management Agreement;

“Collateral Tax Event ” has the meaning given thereto in Condition 7(b)(i) ( Redemption at the

Option of the Subordinated Noteholders or the Holders of the Controlling Class );



65

“Commitment Amount ” means, with respect to any Revolving Obligation or Delayed DrawdownCollateral Debt Obligation, the maximum aggregate outstanding principal amount (whether at thetime funded or unfunded) of advances or other extensions of credit at any one time outstanding thatthe Issuer could be required to make to the Obligor under the Underlying Instruments relating theretoor to a funding bank in connection with any ancillary facilities related thereto;

“Conditions ” means the conditions of the Class A Notes and the Subordinated Notes set out inSchedule 4 of the Trust Deed, and references to any “ Condition ” shall be construed accordingly;

“Consenting Purchaser ” has the meaning given to it in Condition 7(j) ( Refinancing of Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment );

“Controlling Class ” means the Class A-1 Notes, the Class A-2a Notes and the Class A-2b Notes,acting together as one Class of Notes or, following redemption and payment in full of the Class A

Notes, the Class S-1 Subordinated Notes and the Class S-2 Subordinated Notes, acting together as oneClass of Notes (the principal amounts of such Notes Outstanding being considered as constituent partsof one Class);

“Corporate Services Provider ” means TMF Administration Services Limited;“Counterparty Downgrade Cash Collateral Account ” means an interest bearing account of theIssuer with the Account Bank into which all Counterparty Downgrade Collateral in the form of cash isto be deposited;

“Counterparty Downgrade Collateral ” means any cash and/or securities delivered to the Issuer ascollateral for the obligations of a Asset Swap Counterparty under an Asset Swap Transaction;

“Counterparty Downgrade Securities Collateral Account ” means an interest bearing account of the Issuer with the Custodian into which all Counterparty Downgrade Collateral in the form of securities is to be deposited;

“Coverage Tests ” means each of the Class A Par Value Test and the Class A Interest Coverage Testand “ Coverage Test ” shall be construed accordingly;

“Credit Impaired Obligation ” means any Collateral Debt Obligation which, in the CollateralManager’s judgement, has a significant risk of declining in credit quality and, with a lapse of time,

becoming a Defaulted Obligation;

“Credit Improved Obligation ” means any Collateral Debt Obligation which, in the CollateralManager’s judgement, has significantly improved in credit quality;

“Current Pay Obligation ” means a Collateral Debt Obligation that would otherwise be a DefaultedObligation in respect of which (a) all prior cash principal and interest payments due were paid in cashand the Collateral Manager reasonably expects that the next interest payment due will be paid in cash,or (b) if the Obligor of such Collateral Debt Obligation is subject to a bankruptcy proceeding, a

bankruptcy court has authorised the payment of interest due and payable on such Collateral DebtObligation, provided that no more than five per cent. of the Aggregate Portfolio Balance may consistof Current Pay Obligations;

“Defaulted Asset Swap Termination Payment ” means any amount payable by the Issuer to a AssetSwap Counterparty upon termination of any Asset Swap Agreement in respect of which the AssetSwap Counterparty was the “Defaulting Party” or the sole “Affected Party” (as each such term isdefined therein);

“Defaulted Asset Swap Termination Receipt ” means any amount payable by a Asset SwapCounterparty to the Issuer upon termination of a Asset Swap Agreement in respect of which the Asset

Swap Counterparty was the “Defaulting Party” or the sole “Affected Party” (as each such term isdefined therein);



66

“Defaulted Obligation ” means an Eligible Investment or a Collateral Debt Obligation (other than aCurrent Pay Obligation, in which case it shall not be deemed a Defaulted Obligation):

(a) in respect of which there has occurred and is continuing a default with respect to the paymentof interest or principal, (i) disregarding any grace periods applicable thereto or (ii) in the caseof any Collateral Debt Obligation (A) which pays interest not less frequently than quarterlyand (B) in respect of which the Collateral Manager has certified to the Trustee in writing that,to the knowledge of the Collateral Manager, such default has resulted from non-credit relatedcauses, for the lesser of three Business Days and any grace period applicable thereto, in eachcase which default entitles the holders thereof, with notice or passage of time or both, toaccelerate the maturity of all or a portion of the principal amount of such obligation, but onlyuntil such default has been cured;

(b) in respect of which any bankruptcy, insolvency or receivership proceeding has been initiatedin connection with the Obligor under such Collateral Debt Obligation;

(c) in respect of which the Collateral Manager becomes aware that the Obligor thereunder is indefault as to payment of principal and/or interest on another obligation, save for obligations

constituting trade debts which the applicable Obligor is disputing in good faith, (and suchdefault has not been cured), but only if both such other obligation and the Collateral DebtObligation are full recourse, unsecured obligations and the other obligation is senior to, or

pari passu with, the Collateral Debt Obligation in right of payment save that a Collateral DebtObligation shall not constitute a “ Defaulted Obligation ” under this paragraph (c) if it is aCurrent Pay Obligation;

(d) that has an S&P Rating of “D” or “SD”;

(e) that the Collateral Manager, acting on behalf of the Issuer, determines in its reasonable business judgement should be treated as a Defaulted Obligation; or

(f) in respect of which a Distressed Exchange has become binding upon the holders of suchCollateral Debt Obligation generally, for the purposes of which “ Distressed Exchange ”means any distressed exchange or other debt restructuring where the Obligor of suchCollateral Debt Obligation has offered the class of holders of the Collateral Debt Obligationgenerally a new obligation or package of obligations which, in the reasonable judgement of the Collateral Manager either (i) amounts to a diminished financial obligation, or (ii) has the

purpose of helping the Obligor of such Collateral Debt Obligation to avoid default.

“Deferred Collateral Management Amount ” means such amount of the Collateral Management Feethat the Collateral Manager elects to designate for deferment pursuant to the Interest Proceeds Priorityof Payments. For the avoidance of doubt, the Collateral Manager may only elect to defer amountsthat would have been paid if no deferrals had taken place on the relevant Payment Date.

“Definitive Certificate ” means a certificate representing one or more of the Notes (other than theAccredited Investor Notes) in definitive fully registered form;

“Delayed Drawdown Collateral Debt Obligation ” means a Collateral Debt Obligation that(a) requires the Issuer to make one or more future advances to the borrower under the UnderlyingInstruments relating thereto, (b) specifies a maximum amount that can be borrowed on one or morefixed borrowing dates, and (c) does not permit the reborrowing of any amount previously repaid; butany such Collateral Debt Obligation will be a Delayed Drawdown Collateral Debt Obligation onlyuntil all commitments to make advances to the borrower expire or are terminated or reduced to zero,

provided that the Delayed Drawdown Collateral Debt Obligation may provide for accession of new borrowers where the accession of such borrowers is contemplated in the terms of the DelayedDrawdown Collateral Debt Obligation and (i) any such borrower is an Approved Borrower or (ii) the

accession is subject to the prior consent of all lenders under such Delayed Drawdown Collateral DebtObligation;



67

“Determination Date ” means the last Business Day of each Due Period or, in the case of anyacceleration of the Notes pursuant to an Event of Default, the applicable Redemption Date; for theavoidance of doubt the first Determination Date for the Class A Interest Coverage Test will be theDetermination Date preceding the Payment Date on 17 September 2009;

“Directors ” means Kieran Desmond and Neil Synnott or such other persons who may be appointed asdirectors of the Issuer from time to time;

“Discount Obligation ” means any Collateral Debt Obligation acquired by, or on behalf of, the Issuer for a purchase price (excluding accrued interest thereon) of less than 80.0 per cent. of the principalamount of such Collateral Debt Obligation, provided that such Collateral Debt Obligation shall ceaseto be a Discount Obligation where the Market Value thereof for a period of 30 consecutive BusinessDays equals or exceeds 85.0 per cent. of the principal amount of such Collateral Debt Obligation (ascertified by the Collateral Manager to the Issuer, Trustee and Collateral Administrator);

“Disposal Agent ” means a recognised collateral or portfolio manager with experience in themanagement of assets of a similar nature to the Collateral Debt Obligations;

“Disposal Agreement ” means the agreement which may be entered into between, inter alios , theIssuer, the Disposal Agent and the Trustee in accordance with the Collateral Management Agreement;

“Distribution ” means any payment of principal or interest or any dividend or premium or other amount or asset paid or delivered on or in respect of any Collateral Debt Obligation, any EligibleInvestment, any Collateral Enhancement Obligations, any Exchanged Equity Security or under or inrespect of any Asset Swap Transaction;

“Due Date ” means each date on which a Distribution is due and payable on, or in respect of, aCollateral Debt Obligation, an Eligible Investment, a Collateral Enhancement Obligation or anExchanged Equity Security;

“Due Period ” means, with respect to any Payment Date, the period commencing on the day

immediately following the eighth Business Day prior to the preceding Payment Date (or on the IssueDate, in the case of the Due Period relating to the first Payment Date) and ending on the eighthBusiness Day prior to such Payment Date (or, in the case of the Due Period applicable to the PaymentDate which is the Maturity Date of any Note, ending on the day preceding such Payment Date);

“Effective Date ” means the earlier of:

(a) the date designated for such purpose by the Collateral Manager by written notice to theTrustee, the Issuer, the Collateral Administrator and S&P pursuant to the CollateralManagement Agreement ( provided that the Effective Date Determination Requirements shall

be satisfied on such designated date); and

(b) the day falling 8 calendar months after the Issue Date;

“Effective Date Confirmation ” means written confirmation by the Rating Agency to the Issuer (or the Collateral Manager on its behalf) that it has not downgraded or withdrawn the Initial Ratings of the Class A Notes, upon request for confirmation thereof to the Rating Agency by the CollateralManager, acting on behalf of the Issuer, following the Effective Date pursuant to the terms of theCollateral Management Agreement;

“Effective Date Determination Requirements ” means, as at the Effective Date and any datethereafter, each of the Portfolio Profile Tests, the Collateral Quality Tests and the Class A Par ValueTest being satisfied on such date, and the Issuer having entered into binding commitments to acquireCollateral Debt Obligations the Aggregate Principal Balance of which equals or exceeds the TargetPar Amount by such date ( provided that , for the purposes of determining the Aggregate Principal

Balance as provided above, any repayments or prepayments of Collateral Debt Obligationssubsequent to the Issue Date (to the extent that such repayments or prepayments have not been



68

reinvested) shall be disregarded and the Principal Balance of each Collateral Debt Obligation which isa Defaulted Obligation will be its S&P Collateral Value);

“Effective Date Rating Event ” means either (a)(i) any of the Initial Ratings of the Class A Notes aredowngraded or withdrawn by the Rating Agency or (ii) the Rating Agency notifies the Issuer or theCollateral Manager on behalf of the Issuer that it intends to downgrade or withdraw any of its InitialRatings of the Class A Notes, in each case, upon request for confirmation thereof to the RatingAgency by the Collateral Manager, acting on behalf of the Issuer, following the Effective Date

pursuant to the terms of the Collateral Management Agreement or (b) the Effective DateDetermination Requirements are not satisfied on the Effective Date;

“Eligibility Criteria ” has the meaning ascribed to it in the Collateral Management Agreement;

“Eligible ICA Investor ” means a QP or Knowledgeable Employee or a company beneficially ownedexclusively by one or more QPs and/or Knowledgeable Employees;

“Eligible Investments ” means any investment denominated in Euro that, the acquisition (includingthe manner of acquisition), ownership, enforcement or disposition and the nature of which will not

violate the Investment Restrictions set out in the Collateral Management Agreement, and in the eventthat it is an obligation of a company incorporated or established in, or a sovereign issuer of, theUnited States, or otherwise bearing interest that arises, for U.S. federal income tax purposes, fromsources within the United States, is in registered form at the time it is acquired, and is one or more of the following obligations or securities, including, without limitation, any Eligible Investments for which the Custodian, the Trustee or the Collateral Manager or an Affiliate of any of them providesservices:

(a) direct obligations of, and obligations the timely payment of principal of and interest under which is fully and expressly guaranteed by, a Qualifying Country or any agency or instrumentality of a Qualifying Country, the obligations of which are fully and expresslyguaranteed by such Qualifying Country and such Qualifying Country is rated at least “AA”

by S&P (in the case of long-term debt obligations) or “A-1+” by S&P (in the case of commercial paper and short-term debt obligations);

(b) demand and time deposits in, certificates of deposit of and bankers’ acceptances issued by,any depositary institution or trust company (including the Account Bank) incorporated under the laws of a Qualifying Country with, in each case, a maturity of no more than 180 days andsubject to supervision and examination by governmental banking authorities so long as thecommercial paper and/or the debt obligations of such depositary institution or trust company(or, in the case of the principal depositary institution in a holding company system, thecommercial paper or debt obligations of such holding company) at the time of suchinvestment or the contractual commitment providing for such investment have the EligibleInvestments Minimum Long-Term Rating or the Eligible Investments Minimum Short-TermRating;

(c) subject to receipt of Rating Agency Confirmation related thereto, unleveraged repurchaseobligations with respect to:

(i) any obligation described in paragraph (a) above; or

(ii) any other security issued or guaranteed by an agency or instrumentality of aQualifying Country, in either case entered into with a depositary institution or trustcompany (acting as principal) described in paragraph (b) above or entered into with acorporation (acting as principal) whose long-term debt obligations are rated not lessthan the Eligible Investments Minimum Long-Term Rating or whose short-term debtobligations are valid not less than the Eligible Investments Minimum Short-Term

Rating at the time of such investment provided that , if such security has a maturity of longer than 91 days, the issuer thereof must also have, at the time of such investment,



69

a long-term credit rating of not less than the Eligible Investments MinimumLong-Term Rating;

(d) securities bearing interest or sold at a discount to the face amount thereof issued by anycorporation incorporated under the laws of a Qualifying Country that have a credit rating of not less than the Eligible Investments Minimum Long-Term Rating at the time of suchinvestment or contractual commitment providing for such investment;

(e) commercial paper or other short-term obligations having, at the time of such investment, acredit rating of not less than the Eligible Investments Minimum Short-Term Rating and thateither are bearing interest or are sold at a discount to the face amount thereof and have amaturity of not more than 183 days from their date of issuance; provided, that if such securityhas a maturity of longer than 91 days, the issuer thereof must also have, at the time of suchinvestment, a long-term credit rating of not less than the Eligible Investments MinimumLong-Term Rating;

(f) offshore funds investing in the money markets rated at all times, “AAAm” or “AAAm-G” byS&P; and

(g) any other investment similar to those described in (a) to (f) (inclusive) above:

(i) in respect of which Rating Agency Confirmation has been received as to its inclusionin the Portfolio as an Eligible Investment; and

(ii) which has, in the case of an investment with a maturity of longer than 91 days, along-term credit rating not less than the Eligible Investments Minimum Long-TermRating or, in the case of an investment with a maturity of 91 days or less, a short-termcredit rating of not less than the Eligible Investments Minimum Short-Term Rating,

and, in each case, such instrument or investment provides for payment of a pre-determinedfixed amount of principal on maturity that is not subject to change and either (A) has a Stated

Maturity (giving effect to any applicable grace period) no later than the second Business Dayimmediately preceding the next following Payment Date; or (B) may (and in the case of Eligible Investments standing to the credit of the Revolving Reserve Account, must) becapable of being liquidated at par on demand without penalty, provided, however, that Eligible Investments shall not include any mortgage-backed security, interest-only security,security subject to withholding or similar taxes, security rated with a “r” or “t” subscript byS&P, security purchased at a price in excess of 100.0 per cent. of par, security whoserepayment is subject to substantial non-credit-related risk, as determined by the CollateralManager in its discretion in a commercially reasonable manner, or any investment that is nota qualifying asset for the purposes of Section 110 of the Irish Taxes Consolidation Act, 1997;

“Eligible Investments Minimum Long Term Rating ” means a long-term debt credit rating of

“AAA” from S&P for so long as there are Class A Notes which are Outstanding which are rated bysuch Rating Agency and provided that no applicable rating described herein is on watch for downgrade;

“Eligible Investments Minimum Short-Term Rating ” means a short-term credit rating of “A1+”from S&P for so long as there are Class A Notes which are Outstanding which are rated by suchRating Agency and provided that no applicable rating described herein is on watch for downgrade;

“ERISA ” means the United States Employee Retirement Income Security Act of 1974, as amended;

“ERISA Limited Notes ” means the Class S-1 Subordinated Notes and the Class S-2 Subordinated Notes;



70

“EURIBOR ” means the rate determined in accordance with Condition 6(c)(i) ( Rate of Interest ) asapplicable to six month Euro deposits (or, in the case of the initial Due Period, as determined throughthe use of linear interpolation by reference to 6 month Euro deposits and 9 month Euro deposits);

“Euro ”, “euro ”, “Euros ”, “euros ” and “ €” mean the currency introduced at the start of the third stageof European economic and monetary union pursuant to the Treaty establishing the EuropeanCommunity, as amended from time to time;

“Euroclear ” means Euroclear Bank S.A./N.V.;

“Euroclear Pledge Account ” means the GSP account 518666 linked to account 18026 held inEuroclear in the name of the Custodian;

“Euro zone ” has the meaning given thereto in Condition 6(c)(i)(D) ( Rate of Interest );

“Event of Default ” means each of the events defined as such in Condition 10(a) ( Events of Default );

“Exchanged Equity Security ” means an equity security which is not a Collateral EnhancementObligation and which is delivered to the Issuer upon acceptance of an Offer in respect of a Defaulted

Obligation or received by the Issuer in connection with the exercise of any conversion or exchangerights in respect of a Collateral Debt Obligation. For the avoidance of doubt, Exchanged EquitySecurities shall only include obligations (a) the acquisition (including the manner of acquisition),ownership, enforcement or disposition of which will not cause the Issuer to be treated as engaged in atrade or business within the United States for U.S. federal income tax purposes, (b) that are acquired,and held in a manner that does not violate the Investment Restrictions set out in the CollateralManagement Agreement, (c) the nature of which do not violate the Investment Restrictions set out inthe Collateral Management Agreement, and (d) in the case of an obligation of a company incorporatedor established in, or a sovereign issuer of, the United States, or otherwise bearing interest that arises,for U.S. federal income tax purposes, from sources within the United States, are in registered form atthe time they are acquired;

“Expense Reserve Account ” means the interest bearing account of the Issuer with the Account Bank amounts standing to the credit of which will be used to fund certain expenses incurred in connectionwith the issuance of the Notes;

“Extraordinary Resolution ” means an Extraordinary Resolution as described in Condition 14( Meetings of Noteholders, Modification, Waiver and Substitution ) and as further described in, and asdefined in, the Trust Deed;

“Financial Institution ” means a bank that has a short term rating of at least “A-2” (or a long termrating of at least “BBB+” if there is no short-term rating) from S&P, subject to collateral posting;

“Form Approved Asset Swap ” means an Asset Swap Transaction the documentation for andstructure of which conforms (save for the amount and timing of periodic payments, the name andeconomics of the related Non-Euro Obligation, the notional amount, the effective date, thetermination date and other consequential and immaterial changes) to a form approved by the RatingAgency from time to time;

“FS Accrued Interest Account ” means an interest bearing account of the Issuer with the AccountBank into which all FS Accrued Interest is deposited;

“FS Accrued Interest ” means any accrued and unpaid interest due to GSCP on a Collateral DebtObligation under the Forward Sale Agreement (up to and including the Issue Date) which issubsequently received by the Issuer;

“Funded Amount ” means, with respect to any Revolving Obligation or Delayed Drawdown

Collateral Debt Obligation at any time, the aggregate principal amount of advances or other extensions of credit to the extent funded thereunder by the Issuer that are outstanding at such time;



71

“GSCP ” means Goldman Sachs Credit Partners, L.P. an exempted limited partnership organisedunder the laws of Bermuda with its registered office at c/o Codan Services Limited, 2 Church Street,Hamilton, Bermuda;

“GSI ” means Goldman Sachs International;

“Inclusion Date ” means the date on which any Collateral Debt Obligation is agreed to be acquired bythe Issuer;

“Initial Asset Swap Counterparty ” means JPMorgan Chase Bank, N.A. of 125 London Wall,London EC2Y 5AJ;

“Initial Par Amount ” means €1,200,000,000;

“Initial Portfolio ” means the initial portfolio purchased or committed to be purchased by the Issuer on or prior to the Issue Date pursuant to the Forward Sale Agreement;

“Initial Purchaser/Placement Agent ” means Goldman Sachs International acting in its capacity as a placement agent with respect to its placement of the Class A-1 Notes and as an initial purchaser with

respect to its subscription for and underwriting of the Class A-2a Notes, the Class A-2b Notes and theClass S-1 Subordinated Notes.

“Initial Ratings ” means the ratings assigned to the Class A-1 Notes, the Class A-2a Notes and theClass A-2b Notes by the Rating Agency as at the Issue Date;

“Interest Account ” means an interest-bearing account described as such in the name of the Issuer with the Account Bank into which Interest Proceeds are to be paid;

“Interest Accrual Period ” has the meaning given thereto in Condition 6(a) ( Payment Dates );

“Interest Amount ” means, on each Payment Date, the amount of interest payable in respect of the principal amounts of the Notes of any Class indicated for any Interest Accrual Period being:

(a) in the case of the Class A Notes, the amount calculated by the Calculation Agent as soon as practicable after 11:00 a.m. (Brussels time) on the relevant Interest Determination Date, but inno event later than the second Business Day in London after such date, in accordance withCondition 6(c) ( Interest on the Class A Notes ) and payable pursuant to the Priorities of Payments; and

(b) in the case of the Subordinated Notes, the amount calculated by the Calculation Agent as provided in Condition 6(d) ( Interest on the Subordinated Notes );

“Interest Coverage Amount ” means, on any particular Determination Date, the sum of:

(a) the Balance standing to the credit of each of the Interest Account and the Interest ReserveAccount;

plus

(b) the scheduled interest payments (and any commitment fees due but not yet received in respectof any Revolving Obligations or Delayed Drawdown Collateral Debt Obligations) due but notyet received (in each case regardless of whether the applicable due date has yet occurred)

provided that scheduled interest payments in respect of any Unhedged Collateral DebtObligations (converted into Euro at the relevant Spot Rate) shall be multiplied by 85.0 per cent. (determined assuming that EURIBOR as applicable (or such other rate basis applicableto the relevant Collateral Debt Obligation or Eligible Investment) remains constantthroughout such period) in the Due Period in which such Determination Date occurs on:







74

“Market Value ” means, on any date of determination:

(a) the bid price determined by an independent pricing service; or

(b) if such service is not available, the means of the bid prices determined by three independent broker dealers active in the trading of one or more Collateral Debt Obligations or, if three

such broker dealer prices are not available, the lower of the bid prices determined by two such broker dealers or if two such broker dealer prices are not available, the bid price determined by one such broker dealer; or

(c) if the determinations of such broker dealers or broker dealer are not available, then the MarketValue shall be the greater of (A) 70 per cent. of the principal amount outstanding and (B) theS&P Class A Recovery Rate unless the Collateral Manager reasonably believes the securityshould be carried at a lower amount,

in each case, as notified by the Collateral Manager to the Collateral Administrator on the date of determination thereof, and in the case of any Non-Euro Obligations, converted into Euros at therelevant Asset Swap Transaction Exchange Rate set out in the relevant Asset Swap Transaction or, if

none, at the relevant Spot Rate;“Maturity Date ” means, in respect of each Class of Notes, 17 September 2020 or in the event thatsuch day is not a Business Day, the immediately following Business Day;

“Measurement Date ” means:

(a) the Effective Date;

(b) for the purposes of determining satisfaction of the Reinvestment Criteria after the EffectiveDate, first, immediately prior to receipt of any Principal Proceeds which are to be reinvestedwithout taking into account and, second, taking into account, the proposed sale andreinvestment of the Sale Proceeds thereof in Substitute Collateral Debt Obligations;

(c) the date of acquisition of any additional Collateral Debt Obligation following the EffectiveDate;

(d) each Determination Date;

(e) the date as at which any Report is prepared; and

(f) with reasonable (and not less than two Business Days’) notice, any Business Day requested by the Rating Agency to the Collateral Administrator in writing;

“Member States ” means each of the member states of the European Union;

“Method 1 ” has the meaning given to it in the Collateral Management Agreement;

“Method 2 ” has the meaning given to it in the Collateral Management Agreement;

“Minimum Denomination ” means (a) in respect of the Rule 144A Notes of each Class, €250,000;(b) in respect of Regulation S Notes of each Class (excluding the Accredited Investor Notes)

€100,000 and (c) in respect of the Accredited Investor Notes of each Class €50,000;

“Minimum Weighted Average Spread Test ” has the meaning ascribed to in the CollateralManagement Agreement;

“Monthly Report ” means any monthly report defined as such in the Collateral ManagementAgreement which is prepared by the Collateral Administrator (in consultation with the CollateralManager) on behalf of the Issuer on such dates as are set forth in the Collateral ManagementAgreement, and is made available by means of a dedicated website to the Trustee, the CollateralManager, the Issuer, the Arranger, the Initial Purchaser/Placement Agent and the Rating Agency and,



75

upon request therefor in accordance with Condition 4(f) ( Information Regarding the Portfolio ), to any Noteholder and which shall include information regarding the status of the Collateral pursuant to theCollateral Management Agreement provided that the first Monthly Report delivered by the CollateralAdministrator shall be provided no earlier than 8 weeks after the Issue Date;

“Non-Call Period ” means the period from, and including, the Issue Date up to, but excluding, theDetermination Date immediately preceding the Payment Date falling on 17 September 2010;

“Non-Consenting Note Refinancing ” has the meaning given to it in Condition 7(j) ( Refinancing of Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment );

“Non-Consenting Note Refinancing Date ” has the meaning given to it in Condition 7(j)( Refinancing of Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment );

“Non-Consenting Noteholder ” has the meaning given to it in Condition 7(j) ( Refinancing of Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment );

“Non-Consenting Notes ” has the meaning given to it in Condition 7(j) ( Refinancing of Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment );

“Non-Consenting Notes Payment Amount ” has the meaning given to it in Condition 7(j)( Refinancing of Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment );

“Non-Euro Custody Account ” means each segregated account in the name of the Issuer, held withthe Custodian, into which amounts due to the Issuer in respect of each Non-Euro Obligation and outof which amounts from the Issuer to each Asset Swap Counterparty under each Asset SwapTransaction are to be paid, which shall be subdivided in the ledgers of the Custodian in respect of each individual currency received and each individual Non-Euro Obligation;

“Non-Euro Obligation ” means any Collateral Debt Obligation purchased by or on behalf of theIssuer which is not denominated in Euro (or in one of the predecessor currencies of those Member

States which have adopted the Euro as their currency) but is denominated in U.S. Dollars, CanadianDollars, Sterling, Swedish Kronor, Norwegian Kroner, Danish Kroner, Swiss Francs, AustralianDollars, New Zealand Dollars, Japanese Yen or any other currency in respect of which Rating AgencyConfirmation has been obtained and that satisfies each of the Eligibility Criteria;

“Note Payment Sequence ” means the application of Interest Proceeds in accordance with the InterestProceeds Priority of Payments or the application of Principal Proceeds in accordance with thePrincipal Proceeds Priority of Payments, as applicable, to the redemption of the Class A Notes (on a

pari passu basis) provided however that in relation to the application of Interest Proceeds or PrincipalProceeds to the redemption of the Class A-2 Notes, such proceeds shall be applied first to the Class A-2a Notes and thereafter to the Class A-2b Notes, at the applicable Redemption Price in whole or in

part until the Class A-1 Notes, the Class A-2a Notes and the Class A-2b Notes have been fully

redeemed;“Note Tax Event ” has the meaning set out in Condition 7(b)(i) ( Redemption at the Option of theSubordinated Noteholders or the Holders of the Controlling Class );

“Noteholders ” means the holders of each Class of Notes, or any of them;

“Notes ” means the notes comprising, where the context permits, the Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes, the Class S-1 Subordinated Notes and the Class S-2 Subordinated Notes,constituted by the Trust Deed or the principal amount thereof for the time being Outstanding or, as thecontext may require, a specific number thereof and includes any replacements for Notes issued

pursuant to Condition 13 ( Replacement of Definitive Certificates or Accredited Investor Definitive Notes ). References in these Conditions to the “Notes” (unless the context requires otherwise) include

any Notes issued pursuant to Condition 19 ( Additional Issuances ) and forming a single series with the Notes;



76

“Obligor ” means, in respect of a Collateral Debt Obligation, the borrower thereunder or issuer thereof or, in either case, the guarantor thereof;

“Officer ” means, with respect to any entity, any Person duly authorised to act for and on behalf of such entity;

“Offshore Transactions ” shall have the meaning given to it in Regulation S.“Ordinary Resolution ” means an Ordinary Resolution as described in Condition 14 ( Meetings of

Noteholders, Modification, Waiver and Substitution ) and as further described in, and defined in, theTrust Deed;

“Original Purchase Price ” means the purchase price at which a Collateral Debt Obligation has been purchased by the Issuer under the Forward Sale Agreement;

“Outstanding ” means in relation to the Notes of a Class as of any date of determination, all of the Notes of such Class issued other than:

(a) those Notes of the relevant Class which have been redeemed pursuant to the Trust Deed with

the exception of Subordinated Notes in relation to which amounts of Interest Proceeds andPrincipal Proceeds have or may become payable notwithstanding the redemption in full of the

principal amount of the Subordinated Notes;

(b) those Notes of each Class in respect of which the date for redemption in accordance with therelevant Conditions has occurred and the redemption moneys (including premium (if any) andall interest payable in respect thereof and any interest payable under the relevant Conditionsafter such date) have been duly paid to the Noteholders, the Trustee or to the Paying Agentsin the manner provided in the Agency Agreement (and where appropriate notice to that effecthas been given to the relevant Noteholders) and remain available for payment against

presentation of the relevant Notes;

(c) those Notes which have become void in accordance with the Conditions; and(d) any Global Certificates to the extent that such Global Certificates shall have been exchanged

for Notes represented by Definitive Certificates pursuant to its provisions,

provided that for each of the following purposes, namely:

(i) the right to attend and vote at any meeting of the Noteholders of a Class;

(ii) the determination of how many and which of the relevant Notes are for the time beingOutstanding for certain purposes under the Trust Deed and for the purposes of Conditions 10 ( Events of Default ) and 11 ( Enforcement );

(iii) any discretion, power or authority (whether contained in the Trust Deed or vested byoperation of law) which the Trustee is required, expressly or implicitly, to exercise inor by reference to the interests of the Noteholders or any of them; and

(iv) the determination (where relevant) by the Trustee as to whether any event,circumstance, matter or thing, in its opinion, is materially prejudicial to the interestsof the Noteholders of any Class,

those Notes (if any) which are for the time being held by, for the benefit of, or on behalf of, the Issuer and not cancelled shall (unless and until ceasing to be so held) be deemed not to remain Outstandingand any Notes held by the Collateral Manager and/or its Affiliates will have no voting rights withrespect to any vote in connection with the removal of the Collateral Manager and will be deemed notto be Outstanding in connection with any such vote; provided however that Notes held by theCollateral Manager and/or its Affiliates will have voting rights with respect to all other matters as towhich the Noteholders are entitled to vote, including, without limitation, any vote in connection with



77

the appointment of a successor Collateral Manager which is not Affiliated with the CollateralManager in accordance with the Collateral Management Agreement and in connection with anoptional redemption pursuant to Condition 7(b) ( Optional Redemption ). Solely for the purposes of determining whether any Notes are held by or on behalf of Affiliates of the Collateral Manager inconnection with any vote relating to the removal of the Collateral Manager or the appointment of asuccessor Collateral Manager, “Affiliates”, as regards any fund, shall be deemed to include only fundsfor which the Collateral Manager is the sole provider of collateral or investment managementservices;

“Par Coverage Numerator ” means:

the sum of:

(a) the Aggregate Principal Balance, and

(b) the Balances standing to the credit of the Principal Account and the Unused ProceedsAccount;

less the Par Value Test Excess Adjustment Amount, if positive;

“Participation ” means an interest in a Senior Secured Loan acquired indirectly by the Issuer by wayof sub-participation from a Selling Institution which shall include Intermediary Obligations;

“Par Value Test Excess Adjustment Amount ” means, on any date of determination, the sum of:

(a) the amount equal to the product of:

(i) the excess, if any, of (A) the Aggregate Principal Balance of all CCC Obligations asof such date over (B) 5.0 per cent. of the Aggregate Portfolio Balance; and

(ii) one minus the weighted average of the Market Values of all CCC Obligations (as a percentage of the principal amount of the CCC Obligations, and as determined by theCollateral Administrator) of the CCC Obligations; and

(b) the amount equal to the product of:

(i) the sum of (A) the excess, if any, of (1) the Aggregate Principal Balance of allDiscount Obligations acquired by, or on behalf of, the Issuer for a purchase price(excluding accrued interest thereon) equal to or greater than 70.0 per cent. of the

principal amount thereof over (2) 5.0 per cent. of the Aggregate Portfolio Balance and(B) the Aggregate Principal Balance of all Discount Obligations acquired by, or on

behalf of, the Issuer for a purchase price (excluding accrued interest thereon) of lessthan 70.0 per cent. of the principal amount thereof; and

(ii) one minus the weighted average of the purchase prices (as a percentage of the principal amount of the Discount Obligations, expressed as a decimal amount, asdetermined by the Collateral Administrator) paid by, or on behalf of, the Issuer (excluding accrued interest thereon) of all Discount Obligations,

provided that , in the event that any Collateral Debt Obligation is a Discount Obligation and fallswithin the CCC Obligations, such Collateral Debt Obligation shall be included in whichever of

paragraphs (a) and (b) above would result in the higher Par Value Test Excess Adjustment Amount;

“Paying Agent ” means the Principal Paying Agent and any other paying agent appointed pursuant tothe Agency Agreement and “ Paying Agents ” shall be construed accordingly;

“Payment Account ” means the interest bearing account of the Issuer with the Account Bank into

which euro amounts shall be transferred by the Account Bank acting on the instructions of theCollateral Administrator on the Business Day prior to each Payment Date out of (to the extent



78

applicable) the other Accounts and out of which the amounts required to be paid on each PaymentDate, each as provided pursuant to the Priorities of Payments, shall be paid;

“Payment Date Report ” means the accounting report defined as such in the Collateral ManagementAgreement which is prepared by the Collateral Administrator (in consultation with the CollateralManager) on behalf of the Issuer and is made available by means of a dedicated website to theTrustee, the Collateral Manager, the Arranger, the Initial Purchaser/Placement Agent, the Issuer, anyholder of a beneficial interest in any Note (upon written request of such holder) and the RatingAgency not later than the second Business Day preceding the related Payment Date;

“Payment Dates ” means for the first date 17 March 2009 and thereafter 17 September and 17 Marchin each year and ending on the Maturity Date and any Redemption Date, provided that , if anyPayment Date would otherwise fall on a day which is not a Business Day, it shall be postponed to thenext day that is a Business Day and “ Payment Date ” shall be construed accordingly;

“Person ” means an individual, corporation (including a business trust), partnership, collectiveinvestment scheme, joint venture, association, joint stock company, trust (including any beneficiarythereof), unincorporated association or government or any agency or political subdivision thereof;

“Portfolio ” means the Collateral Debt Obligations (including Substitute Collateral Debt Obligations),Collateral Enhancement Obligations, Exchanged Equity Securities and Eligible Investments held byor on behalf of the Issuer from time to time;

“Portfolio Profile Tests ” has the meaning ascribed to it in the Collateral Management Agreement;

“Post-Acceleration Priority of Payments ” means the priority of payments set out in Condition 11(b)( Enforcement );

“Post-Reinvestment Period Reinvestment Criteria ” has the meaning given to it in the CollateralManagement Agreement;

“Presentation Date ” means a day which (subject to Condition 12 ( Prescription )):(a) is a Business Day;

(b) is or falls after the relevant due date or, if the due date is not or was not a Business Day in the place of presentation, is or falls after the next following Business Day which is a BusinessDay in the place of presentation; and

(c) is a day on which the account (if any) specified by the payee is open;

“Pricing Amendment ” has the meaning given to it in Condition 7(j) ( Refinancing of Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment );

“Principal Account ” means the interest bearing account described as such in the name of the Issuer with the Account Bank into which Principal Proceeds are to be paid;

“Principal Amount Outstanding ” means in relation to any Class of Notes and at any time, theaggregate principal amount Outstanding under such Class of Notes at that time;



79

“Principal Balance ” means, with respect to any Collateral Debt Obligation, Eligible Investment,Collateral Enhancement Obligation or Exchanged Equity Security, as of any date of determination,the outstanding principal amount thereof (excluding any interest capitalised pursuant to the terms of such instrument other than Purchased Accrued Interest), provided however that :

(a) the Principal Balance of a Collateral Debt Obligation received upon acceptance of an offer toexchange a Collateral Debt Obligation for such Collateral Debt Obligation where such offer expressly states that failure to accept such offer may result in a default under any applicableUnderlying Instrument shall be the lesser of:

(i) a percentage of the outstanding principal amount equal to the S&P Recovery Rate for such Collateral Debt Obligation based upon its S&P Priority Category until such timeas Interest Proceeds or Principal Proceeds, as applicable, are first received in fullwhen due and no deferred amounts remain outstanding with respect to such CollateralDebt Obligation; and

(ii) a percentage of the outstanding principal amount equal to the Market Value for suchCollateral Debt Obligation, until such time as Interest Proceeds or Principal Proceeds,

as applicable, are first received in full when due and no deferred amounts remainoutstanding with respect to such Collateral Debt Obligation;

(b) except to the extent provided otherwise in paragraph (c) below, the Principal Balance of anyCollateral Debt Obligation or Eligible Investment which is or has become a DefaultedObligation shall be deemed to be zero;

(c) for purposes of the Class A Par Value Test, for measurement of the Collateral DebtObligations against the Target Par Amount and for calculating the Par Coverage Numerator,the Principal Balance of:

(i) any Collateral Debt Obligation or Eligible Investment which is or has become aDefaulted Obligation or

(ii) any Current Pay Obligation with a Market Value lower than 80 per cent. of itsnotional,

shall be deemed to be its S&P Collateral Value;

(d) the Principal Balance of any Non-Euro Obligation in respect of which an Asset SwapTransaction has been entered into shall be an amount equal to all Asset Swap CounterpartyPrincipal Exchange Amounts payable to the Issuer upon any scheduled termination (in wholeor in part) of such Asset Swap Transaction;

(e) the Principal Balance of any cash shall be the amount of such cash;

(f) the Principal Balance of any Collateral Enhancement Obligation or Exchanged EquitySecurity, shall be deemed to be zero;

(g) the Principal Balance of any Unhedged Collateral Debt Obligations shall be the outstanding principal amount of such Unhedged Collateral Debt Obligations, converted into Euro at therelevant Spot Rate provided that (A) the Principal Balance of an Unhedged Collateral DebtObligation which remains unhedged for over 6 months from the date of acquisition thereof shall be zero and (B) where the aggregate Principal Balance of Unhedged Collateral DebtObligations exceeds 5.0 per cent. of the Aggregate Portfolio Balance (for these purposes,taking into consideration 100 per cent. of the outstanding principal amount of such UnhedgedCollateral Debt Obligations) the Principal Balance of an Unhedged Collateral Debt Obligationin excess of such percentage shall be zero;



80

(h) the Principal Balance of any Revolving Obligation and Delayed Drawdown Collateral DebtObligation as of any date of determination, shall be the outstanding principal amount of suchRevolving Obligation or Delayed Drawdown Collateral Debt Obligation, plus any undrawncommitments that have not been irrevocably reduced with respect to such RevolvingObligation or Delayed Drawdown Collateral Debt Obligation; and

(i) for the purposes of the Class A Par Value Test, for measurement of the Collateral DebtObligations against the Target Par Amount and for calculating the Par Coverage Numerator,the Principal Balance of each Unhedged Collateral Debt Obligation, which (for the avoidanceof doubt) is not a Defaulted Obligation, shall, at the election of the Collateral Manager, bedetermined in accordance with Method 1 or Method 2 pursuant to the Collateral ManagementAgreement;

“Principal Paying Agent ” means The Bank of New York Mellon acting through its principal officeat One Canada Square, London E14 5AL;

“Principal Proceeds ” means all amounts paid and payable into the Principal Account from time totime and, with respect to any Payment Date, means any Principal Proceeds received or receivable by

the Issuer during the related Due Period, together with any other amounts to be disbursed out of thePayment Account as Principal Proceeds on such Payment Date pursuant to Condition 3(i) ( Accounts );

“Principal Proceeds Priority of Payments ” means the priority of payments set out inCondition 3(c)(ii) ( Application of Principal Proceeds );

“Priorities of Payments ” means (a) save for following any optional redemption of the Notes pursuantto Condition 7(b)(i) ( Redemption at the Option of the Subordinated Noteholders or the Holders of theControlling Class ) and prior to enforcement of the security over the Collateral, in the case of InterestProceeds, the Interest Proceeds Priority of Payments or, in the case of Principal Proceeds, thePrincipal Proceeds Priority of Payments, or, in the case of Collateral Enhancement ObligationProceeds, the Collateral Enhancement Obligation Proceeds Priority of Payments (b) in the event of any optional redemption of the Notes pursuant to Condition 7(b)(i) ( Redemption at the Option of theSubordinated Noteholders or the Holders of the Controlling Class ) or following enforcement of thesecurity over the Collateral, the Post-Acceleration Priority of Payments;

“Purchased Accrued Interest ” means, with respect to any Due Period, all payments of interest and proceeds of sale and other Principal Proceeds, received during such Due Period in relation to anyCollateral Debt Obligation or Eligible Investment, in each case, to the extent that such amountsrepresent accrued interest in respect of such Collateral Debt Obligation, which was purchased at thetime of acquisition thereof with Principal Proceeds or Unused Proceeds (excluding any such accruedinterest that is paid for out of the subscription proceeds of the Notes on the Issue Date);

“Qualified Institutional Buyer ” or “ QIB ” means a Person who is a qualified institutional buyer asdefined in Rule 144A;

“Qualified Purchaser ” or “ QP ” means a Person who is a qualified purchaser as defined inSection 2(a)(51)(A) of the Investment Company Act;

“Qualifying Countries ” means countries having a foreign currency issuer credit rating of “AA” or above by S&P or any other country subject to Rating Agency Confirmation, together withconfirmation from the holders of at least a majority of the Principal Amount Outstanding of theControlling Class, each a “ Qualifying Country ”;

“QIB/QP ” means a Person who is both a QIB and a QP;

“Rating Agency ” means S&P or, if at any time S&P ceases to provide rating services, any other internationally recognised investment rating agency or rating agencies (as applicable) selected by theIssuer and satisfactory to the Trustee (a “ Replacement Rating Agency ”). For the avoidance of doubt, in the event that at any time the Rating Agency is replaced by a Replacement Rating Agency,



81

references to rating categories of the original Rating Agency in these Conditions, the Trust Deed andthe Collateral Management Agreement, shall be deemed instead to be references to the equivalentcategories of the relevant Replacement Rating Agency as of the most recent date on which such other rating agency published ratings for the type of security in respect of which such Replacement RatingAgency is used;

“Rating Agency Confirmation ” means, with respect to any specified action or determination, receipt by the Issuer and the Trustee of written confirmation by the Rating Agency that such specified action,determination or appointment will not result in the reduction or withdrawal of the rating currentlyassigned to the Class A Notes by it;

“Realisation Gain ” means, with respect to any Collateral Debt Obligation, the excess, if any, of theScheduled Principal Proceeds, Unscheduled Principal Proceeds or Sale Proceeds (as applicable)received in respect thereof over the purchase price (excluding, for the avoidance of doubt, any

purchased interest included in the purchase price) of such Collateral Debt Obligation, provided that where this calculation results in a negative number, the Realisation Gain shall be deemed to be zero;

“Receiver ” means an administrative receiver, administrator, trustee, receiver, custodian, conservator

or other similar official (whether appointed pursuant to the Trust Deed, pursuant to any statute, by acourt or otherwise);

“Record Date ” has the meaning given thereto in Condition 8(a) ( Method of Payment );

“Redemption Date ” means each date specified for a redemption (in whole or in part) of the Notes of a Class pursuant to Condition 7 ( Redemption and Purchase ) or the date on which the Notes of suchClass are accelerated pursuant to Condition 10 ( Events of Default ) provided that , in each case, if suchday is not a Business Day the Redemption Date shall be the next following Business Day;

“Redemption Determination Date ” has the meaning set out in Condition 7(b)(ii) ( Conditions to Optional Redemption );

“Redemption Notice ” means a redemption notice in the form available from any of the PayingAgents which has been duly completed by a Noteholder and which specifies, amongst other things,the applicable Redemption Date;

“Redemption Price ” means, when used with respect to:

(a) any Class A-1 Note, Class A-2a Note or Class A-2b Note, 100 per cent. of the PrincipalAmount Outstanding of such Note together with (i) interest accrued thereon to the date of redemption and (ii) any Make Whole Amount (if applicable); and

(b) any Subordinated Note, such Subordinated Note’s pro rata share (based on the percentagewhich the outstanding principal amount of such Subordinated Note bears to the PrincipalAmount Outstanding of all the Subordinated Notes immediately prior to such redemption) of the aggregate proceeds of liquidation of the Collateral, or realisation of the security thereover,remaining following redemption of the Class A Notes in full and payment of all other amounts required to be paid in priority thereto in accordance with the Priorities of Payments,

provided that , in the event that the Notes become subject to redemption in whole pursuant to morethan one of the redemption provisions contained in Condition 7 ( Redemption and Purchase ) or anEvent of Default, the Redemption Price applicable upon redemption thereof shall be that which relatesto the redemption of the Notes (i) upon the occurrence of an Event of Default, if an Event of Defaulthas occurred; and (ii) which would occur first in time pursuant to the relevant provisions thereof if noEvent of Default has occurred;

“Redemption Threshold Amount ” means the Redemption Price that is due and payable on the

redemption of the Class A-1 Notes, the Class A-2a Notes and the Class A-2b Notes, together with all prior ranking amounts payable in accordance with the Priorities of Payments on the scheduled



82

Redemption Date to the extent such amounts are ascertainable on the Redemption DeterminationDate;

“Register ” means the register of holders of the legal title to the Accredited Investor Definitive Notesand any Definitive Certificates kept by the Registrar pursuant to the terms of the Agency Agreement;

“Regulation S ” means Regulation S promulgated under the Securities Act;“Regulation S Notes ” means Notes offered for sale outside of the United States of America inOffshore Transactions to Non-U.S. Persons in reliance on Regulation S;

“Reinvestment Criteria ” means the Reinvestment Period Reinvestment Criteria and thePost-Reinvestment Period Reinvestment Criteria;

“Reinvestment Diversion Ratio ” means the percentage derived on any date of determination bydividing (a) the Par Coverage Numerator by (b) the aggregate Principal Amount Outstanding of all of the Class A Notes, in each case, as of such date;

“Reinvestment Diversion Threshold ” means the threshold which is met on any date of

determination if the Reinvestment Diversion Ratio is greater than or equal to 127.6 per cent.;

“Reinvestment Period ” means the period from and including the Issue Date up to and including theearliest of (a) the date falling at end of the Due Period preceding the Payment Date falling on17 September 2010, or, if such day is not a Business Day, the immediately following Business Day,(b) the date of the acceleration of the Notes pursuant to Condition 10(b) ( Acceleration ) and (c) thedate on which the Collateral Manager reasonably believes and notifies the Issuer, the Rating Agencyand the Trustee that it can no longer reinvest in additional Collateral Debt Obligations in accordancewith the Reinvestment Criteria;

“Reinvestment Period Reinvestment Criteria ” has the meaning given to it in the CollateralManagement Agreement;

“Replacement Asset Swap Agreement ” means any Asset Swap Agreement entered into by the Issuer upon termination of an existing Asset Swap Agreement on substantially the same terms as the originalAsset Swap Agreement (including with respect to any Asset Swap Transaction entered intothereunder), subject to such amendments thereto as may be agreed by the Collateral Manager, actingon behalf of the Issuer and in respect of which Rating Agency Confirmation is obtained;

“Replacement Asset Swap Counterparty ” means any replacement Asset Swap Counterpartyappointed in respect of a Replacement Asset Swap Agreement, provided always that suchreplacement Asset Swap Counterparty can receive payments under the Replacement Asset SwapAgreement free from Irish withholding taxes has, as at the effective date of each Asset SwapTransaction it enters into, Required Ratings;

“Replacement Asset Swap Transaction ” means any Asset Swap Transaction entered into by theIssuer in accordance with the provisions of the Collateral Management Agreement upon terminationof an existing Asset Swap Transaction, on substantially the same terms as such terminated AssetSwap Transaction, that preserves for the Issuer the economic effect of the terminated Asset SwapTransaction, subject to such amendments thereto as may be agreed by the Trustee and in respect of which Rating Agency Confirmation is obtained unless such Replacement Asset Swap Transaction is aForm Approved Asset Swap;

“Replacement Notes ” has the meaning given to it in Condition 7(j) ( Refinancing of Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment );

“Report ” means any Monthly Report and/or the Payment Date Report and/or Subordinated

Noteholder Report and “ Reports ” shall be construed accordingly;



83

“Required Ratings ” means:

(a) in the case of the Account Bank and the Paying Agents, short-term unsecured debt rating of atleast “A-1” by S&P;

(b) in the case of the Custodian, short-term unsecured debt rating of at least “A-1” by S&P; and

(c) in the case of an Asset Swap Counterparty, it or its credit support provider or guarantor under the relevant Asset Swap Agreement has a short-term rating of “A-1” from S&P,

in each case, for so long as the Rating Agency has assigned any rating to the Notes Outstanding andsave to the extent Rating Agency Confirmation is received in respect of any failure to satisfy therequirements specified;

“Resolution ” means any Ordinary Resolution or Extraordinary Resolution;

“Revolving Obligation ” means any Collateral Debt Obligation (other than a Delayed DrawdownCollateral Debt Obligation) that is a loan (including, without limitation, revolving loans, funded andunfunded portions of revolving credit lines and letter of credit facilities, unfunded commitments under

specific facilities and other similar loans and investments) that pursuant to the terms of its UnderlyingInstruments may require one or more future advances to be made to the borrower by the Issuer; butany such Collateral Debt Obligation will be a Revolving Obligation only until all commitments tomake advances to the borrower expire or are terminated or reduced to zero, provided that theRevolving Obligation may provide for accession of new borrowers when the accession of such

borrowers is contemplated in the terms of the Revolving Obligation and (a) any such borrower is anApproved Borrower or (b) the accession of such borrower is subject to the prior consent of all lendersunder such Revolving Obligation;

“Revolving Reserve Account ” means the multi-currency interest bearing account of the Issuer withthe Account Bank into which amounts equal to the Unfunded Amounts in respect of RevolvingObligations and Delayed Drawdown Collateral Debt Obligations and certain principal payments

received in respect of Revolving Obligations and Delayed Drawdown Collateral Debt Obligations are paid;

“Rule 144A ” means Rule 144A under the Securities Act;

“Rule 144A Notes ” means Notes offered for sale within the United States or to U.S. Persons inreliance on Rule 144A;

“S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.and any successor or successors thereto;

“S&P Collateral Value ” means in the case of any Collateral Debt Obligation or Eligible Investmentwhich is a Defaulted Obligation the lower of:

(a) its prevailing Market Value; and

(b) the relevant S&P Class A Recovery Rate multiplied by its Principal Balance,

provided that if the Market Value cannot be determined for any reason, the Market Value shall bedeemed to be for this purpose the relevant S&P Recovery Rate multiplied by its Principal Balance;

“S&P Priority Category ” means any of the categories set out in the schedule attached to theCollateral Management Agreement setting out the S&P Priority Categories as amended from time totime.

“S&P Recovery Rate ” means in respect of any Collateral Debt Obligation or Eligible Investment, the

recovery rate applicable to such Collateral Debt Obligation or Eligible Investment and the recovery



84

rate applicable to the Class A Notes determined in accordance with the Collateral ManagementAgreement or as advised by S&P;

“Sale Proceeds ” means:

(a) all proceeds (excluding any accrued interest included in any such proceeds of sale) received

upon the sale or other realisation of any Collateral Debt Obligation together with anyrecoveries received in respect of any Defaulted Obligations (save for any Non-EuroObligation in respect of which an Asset Swap Transaction is entered into by the Issuer),Eligible Investment, Collateral Enhancement Obligations or Exchanged Equity Security andupon the termination of any Asset Swap Transactions; and

(b) in the case of a Non-Euro Obligation in respect of which an Asset Swap Transaction isentered into by the Issuer, all amounts in euro, paid to the Issuer by the applicable Asset SwapCounterparty in exchange for payment by the Issuer of the sale proceeds of any Non-EuroObligation under the related Asset Swap Transaction (after netting-off any Asset SwapTermination Payment payable by the Issuer in such circumstances), together with any other

proceeds of sale of the related Collateral Debt Obligation not paid to such Asset Swap

Counterparty;“Scheduled Periodic Asset Swap Payment ” means, with respect to any Asset Swap Transaction, theamount scheduled to be paid to the applicable Asset Swap Counterparty by the Issuer pursuant to theterms of such Asset Swap Transaction, excluding any Asset Swap Termination Payment and anyAsset Swap Issuer Principal Exchange Amounts;

“Scheduled Periodic Asset Swap Receipt ” means, with respect to any Asset Swap Transaction, theamount scheduled to be paid to the Issuer by the applicable Asset Swap Counterparty pursuant to theterms of such Asset Swap Transaction, excluding any Asset Swap Termination Receipts and anyAsset Swap Issuer Principal Exchange Amounts;

“Scheduled Principal Proceeds ” means, (i) with respect to any Collateral Debt Obligation (save for Non-Euro Obligations), scheduled principal repayments received by the Issuer, and (ii) with respect toany Asset Swap Obligation, scheduled final and interim payments in the nature of principal exchanges

payable to the Issuer by the applicable Asset Swap Counterparty under the related Asset SwapTransaction;

“Secured Party ” means each of the Class A Noteholders, the Subordinated Noteholders, theCollateral Manager, the Collateral Administrator, the Trustee, the Agents, the InitialPurchaser/Placement Agent, each Asset Swap Counterparty, the Corporate Services Provider, theDirectors and GSCP and “ Secured Parties ” means any two or more of them as the context sorequires;

“Securities Act ” means the United States Securities Act of 1933, as amended;

“Selling Institution ” means an institution from which a Collateral Debt Obligation which is a loan isacquired either directly (by way of novation or assignment) or indirectly (by way of a participation or a sub-participation);

“Senior Expenses Cap ” means, in respect of each Due Period, €550,000 plus 4.75 per cent. per annum of the Aggregate Portfolio Balance as of the immediately preceding Determination Date,calculated on the basis of a calendar year consisting of 360 days and the actual number of dayselapsed.

“Senior Secured Floating Rate Note ” means a Collateral Debt Obligation that is a senior securednote with a stated coupon that bears a floating rate of interest as determined by the Collateral Manager in its reasonable business judgment,

provided that :



85

(a) it is secured (i) by fixed assets of the Obligor or guarantor thereof if and to the extent asecured interest of fixed assets is permissible under applicable law (save in the case of assetsso numerous or diverse that the failure to take such security is consistent with reasonablesecured lending practices), and otherwise (ii) by 100 per cent. of the equity interests in thestock of an entity owning such fixed assets; and

(b) no other obligation of the Obligor has any higher priority security interest in such fixed assetsor stock referred to in (a) above;

“Senior Secured Loan ” means a Collateral Debt Obligation (which may be a Revolving Obligationor a Delayed Drawdown Collateral Debt Obligation) that is a senior secured obligation as determined

by the Collateral Manager in its reasonable business judgment or a Participation therein, provided that :

(a) it is secured (i) by fixed assets of the Obligor or guarantor thereof if and to the extent asecured interest of fixed assets is permissible under applicable law (save in the case of assetsso numerous or diverse that the failure to take such security is consistent with reasonablesecured lending practices), and otherwise (ii) by 100 per cent. of the equity interests in the

stock of an entity owning such fixed assets; and(b) no other obligation of the Obligor has any higher priority security interest in such fixed assets

or stock referred to in (a) above;

“Special Redemption ” has the meaning given to it in Condition 7(k) ( Special Redemption );

“Special Redemption Amount ” has the meaning given to it in Condition 7(k) ( Special Redemption );

“Special Redemption Date ” has the meaning given to it in Condition 7(k) ( Special Redemption );

“Spot Rate ” means with respect to any conversion of a non-Euro currency, as applicable, into euro or,as the case may be, of euro into any such currency, the relevant spot rate of exchange quoted by the

Collateral Administrator on the date of calculation or exchange;“Stated Maturity ” means, with respect to any Collateral Debt Obligation or Eligible Investment,(a) the date specified in such obligation as the fixed date on which the final payment or repayment of

principal of such obligation is due and payable or (b) if the holder (and any subsequent holder) has aright to require the issuer or Obligor of such obligation to purchase, redeem or retire such obligation(at par) on any one or more dates prior to such date (a “ put right ”) and the Collateral Manager, actingon behalf of the Issuer, certifies to the Trustee that it shall exercise such put right on any such date,the Stated Maturity shall be the date specified in such certification;

“Sterling ”, “£” and “ pound ” mean the lawful currency for the time being of the United Kingdom;

“Subordinated Noteholder Report” means the report defined as such in the Collateral ManagementAgreement which is prepared by the Collateral Administrator (in consultation with the CollateralManager) on behalf of the Issuer and which shall be provided to the Issuer, the Trustee, the Arranger,the Initial Purchaser/Placement Agent and the Collateral Manager and, upon request therefor inaccordance with Condition 4(f) ( Information Regarding the Portfolio ), to any Subordinated

Noteholder and which shall include information regarding the status of certain of the Collateral pursuant to the Collateral Management Agreement;

“Subordinated Noteholders ” means the holders of the Class S-1 Subordinated Notes and theClass S-2 Subordinated Notes;

“Substitute Collateral Debt Obligation ” means a Collateral Debt Obligation purchased insubstitution for a previously held Collateral Debt Obligation pursuant to the terms of the Collateral

Management Agreement and which satisfies the Eligibility Criteria and Reinvestment Criteria;“TARGET Day ” means a day on which the TARGET System is open for business;



86

“Target Par Amount ” means an amount equal to (a) €1,481,250,000, (b) €1,488,000,000 or (c) €1,492,500,000, as selected by the Collateral Manager in its sole discretion pursuant to the CollateralManagement Agreement on or prior to the second Business Day immediately preceding the EffectiveDate;

“TARGET System ” means the Trans-European Automated Real-Time Gross Settlement ExpressTransfer System (or if such system ceases to be operative, such other system (if any) as determined bythe Trustee to be suitable replacement);

“Transaction Creditors ” means each of the Secured Parties and the Directors and any other Personto whom the Issuer owes any obligations from time to time;

“Transaction Documents ” means the Trust Deed, the Agency Agreement, the Subscription andPlacement Agreement, the Euroclear Pledge Agreement, the Asset Swap Agreements, the ForwardSale Agreement, the Corporate Services Agreement, each Accredited Investor Note PurchaseAgreement, each Class A-1 Note Purchase Agreement, the Collateral Management Agreement, anydocuments supplemental or ancillary thereto and any other document, including, without limitation, aliquidity facility agreement, nominated to be a “Transaction Document” subject to the consent of the

parties thereto and the other Secured Parties;“Transfer Agent ” means BNY Financial Services plc acting through its principal office at 4th Floor,Hanover Building, Windmill Lane, Dublin 2, Ireland;

“Trustee Fees and Expenses ” means fees, expenses and other amounts payable (including, for theavoidance of doubt, any legal expenses) by the Issuer to the Trustee pursuant to the Trust Deed;

“Underlying Instrument ” means the agreements or instruments pursuant to which a Collateral DebtObligation has been issued or created and each other agreement that governs the terms of, or securesthe obligations represented by, such Collateral Debt Obligation or under which the holders or creditors under such Collateral Debt Obligation are the beneficiaries;

“Unfunded Amount ” means, with respect to any Revolving Obligation or Delayed DrawdownCollateral Debt Obligation, the excess, if any, of (a) the Commitment Amount under such RevolvingObligation or Delayed Drawdown Collateral Debt Obligation, as the case may be, at such time over (b) the Funded Amount thereof at such time;

“Unhedged Collateral Debt Obligation ” means a Non-Euro Obligation denominated in an ApprovedUnhedged Currency, in respect of which an Asset Swap Transaction has not been entered into andwhich may be purchased by the Collateral Manager, on behalf of the Issuer, subject to certainconditions including, without limitation, that (i) both (A) the Class A Par Value Ratio (calculatedusing the principal amount outstanding of the Class A Notes as of the Effective Date) and (B) thecurrent Class A Par Value Ratio are greater than or equal to (a) 131.7 per cent. if the Target Par Amount is equal to 1,481,250,000, (b) 132.3 per cent. if the Target Par Amount is equal to

€1,488,000,000 or (c) 132.7 per cent. if the Target Par Amount is equal to €1,492,500,000, before andafter such acquisition, (ii) the Coverage Tests are satisfied, in each case, both before and after suchacquisition and (iii) that in relation to any such Collateral Debt Obligation which is either a bond or aloan, such Collateral Debt Obligation has been purchased in the primary market;

“Unscheduled Principal Proceeds ” means:

(a) with respect to any Collateral Debt Obligation (other than an Asset Swap Obligation), principal proceeds prior to the Stated Maturity thereof received as a result of optionalredemptions, prepayments (including any acceleration) or Offers (excluding any premiums or make-whole amounts in excess of the principal amount of such Collateral Debt Obligation)and any other principal repayments with respect to Collateral Debt Obligations (to the extent

not included in Sale Proceeds); and



87

(b) in the case of any Asset Swap Obligation, the Asset Swap Counterparty Principal ExchangeAmount payable in exchange for the amounts referred to in (a) above pursuant to the relatedAsset Swap Transaction, together with amounts that are not payable to such Asset SwapCounterparty pursuant to the terms of such Asset Swap Transaction;

“Unused Proceeds ” means all amounts standing to the credit of the Unused Proceeds Account fromtime to time;

“Unused Proceeds Account ” means the interest bearing account of the Issuer with the Account Bank into which the proceeds of the issue of the Notes remaining following the payment of all fees andexpenses, the acquisition cost of all Collateral Debt Obligations acquired on the relevant InclusionDate and certain other amounts payable as at the Issue Date shall be paid on the Issue Date;

“US Dollar ”, “US Dollars ”, “U.S.$” and “ $” mean the lawful currency for the time being of theUnited States of America;

“U.S. Person ” has the meaning given thereto in Regulation S; and

“Written Resolution ” means a resolution in writing signed by or on behalf of the requisite majorityof the Noteholders of a Class which would be required at a meeting of the Noteholders of such Classto approve such resolution as either an Extraordinary Resolution or an Ordinary Resolution, as thecase may be.

2. Form and Denomination, Title, Transfer and Exchange

(a) Form and Denomination. The Notes of each Class (other than the Accredited Investor Notes) will initially be represented by a separate global note in fully registered form (“ GlobalCertificates ”), without interest coupons or principal receipts attached, in the applicableMinimum Denomination and integral multiples of any Authorised Integral Amount in excessthereof. The Notes, interests in which are to be sold in reliance on Regulation S (excludingthe Accredited Investor Notes) and pursuant to Rule 144A under the Securities Act, will be

represented by the Global Certificates, without coupons attached. The Accredited Investor Notes of each Class will be issued only in definitive fully registered form (“ AccreditedInvestor Definitive Certificates ”) without interest coupons, or principal receipts attached, inthe applicable Minimum Denomination and integral multiples of any Authorised IntegralAmounts in excess thereof. Only in the limited circumstances described in the GlobalCertificates, will the Global Notes be transferred into definitive form (“ DefinitiveCertificates ”) in the applicable Minimum Denomination and integral multiples of anyAuthorised Integral Amount in excess thereof. Notes in definitive form will not be issued in

bearer form.

Each Accredited Investor Definitive Certificate and, if applicable, Definitive Certificate will be numbered serially with an identifying number which will be recorded in the Register

which the Issuer shall procure will be kept by the Registrar.(b) Title to the Registered Notes. Title to the Notes passes upon registration of transfers in

respect thereof in the Register in accordance with the provisions of the Agency Agreementand the Trust Deed. Notes will be transferable only on the books of the Issuer and its agents.The registered holder of any Note will (except as otherwise required by law) be treated as itsabsolute owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it, any writing on it, or its theft or loss) and no person will

be liable for so treating the registered holder thereof.

(c) Transfer. One or more Notes may be transferred in whole or in part in nominal amountsequal to the applicable authorised denomination in excess thereof only upon the surrender, at

the specified office of the Registrar or the Transfer Agent, of the Definitive Certificaterepresenting such Note(s) to be transferred, with the form of transfer endorsed on suchDefinitive Certificate duly completed and executed and together with such other evidence as



88

the Registrar or Transfer Agent may reasonably require. In the case of a transfer of part onlyof a holding of Notes represented by one Definitive Certificate, a new Definitive Certificatewill be issued to the transferee in respect of the part transferred and a further new DefinitiveCertificate in respect of the balance of the holding not transferred will be issued to thetransferor.

(d) Delivery of New Definitive Certificates. Each new Definitive Certificate to be issued pursuant to Condition 2(c) ( Transfer ) will be available for delivery within five Business Daysof receipt of such form of transfer and surrender of the relevant existing Definitive Certificate.Delivery of new Definitive Certificates shall be made at the specified office of the Registrar to whom delivery or surrender shall have been made or, at the option of the holder makingsuch delivery or surrender as aforesaid and as specified in the form of transfer or otherwise inwriting, shall be mailed by pre-paid first class post (or any other manner acceptable to theRegistrar) at the risk of the holder entitled to the new Definitive Certificate to such address asmay be so specified. In this Condition 2(d) ( Delivery of New Definitive Certificates ),“Business Day” means a day, other than a Saturday or Sunday, on which banks are open for

business in the place of the specified office of the Registrar.

(e) Transfer Free of Charge. Transfer of Notes and Definitive Certificates representing such Notes in accordance with these Conditions on registration or transfer will be effected withoutcharge by or on behalf of the Issuer or the Registrar, but upon payment (or the giving of suchindemnity as the Issuer, the Registrar may require in respect thereof) of any tax or other governmental charges which may be imposed in relation to it.

(f) Closed Periods. No Noteholder may require the transfer of a Note to be registered (i) duringthe period of 15 calendar days ending on the due date for redemption (in full) of that Note or (ii) during the period of seven calendar days ending on any Record Date.

(g) Regulations Concerning Transfer and Registration. All transfers of Notes and entries onthe Register will be made subject to the detailed regulations concerning the transfer of Notes

scheduled to the Trust Deed, including without limitation, that a transfer of Notes in breach of certain of such regulations will result in such transfer being void ab initio . The regulationsmay be changed by the Issuer in any manner which is reasonably required by the Issuer (after consultation with the Trustee) to reflect changes in legal requirements or in any other manner which, in the opinion of the Issuer (after consultation with the Trustee), is not prejudicial tothe interests of the holders of the relevant Class of Notes. A copy of the current regulationswill be sent by the Registrar to any Noteholder who so requests.

(h) Forced Transfer of Certain Notes. If the Issuer determines or the Trustee becomes aware atany time that (1) a holder of any Global Notes is a U.S. Person and not a QIB/QP or (2) aholder of any Accredited Investor Note is a U.S. Person that is not both an AccreditedInvestor and an Eligible ICA Investor (3) that any holder of ERISA Limited Notes has made

or is deemed to have made an ERISA related representation that is false or misleading or if the beneficial ownership of such holder of an ERISA Limited Note causes a violation of the25 per cent. limitation set forth in such representation (any such person, a “ Non-PermittedHolder ”), the Issuer, or the Trustee if the Trustee makes the discovery, shall promptly sendnotice to such Non-Permitted Holder demanding such Non-Permitted Holder sell or transfer its Notes to a person that is not a Non-Permitted Holder within 14 days of the date of suchnotice. If such holder fails to sell or transfer its Notes within such period, (a) the Issuer, or the Transfer Agent on behalf of and at the expense of the Issuer, shall cause such beneficialinterest to be transferred in a commercially reasonable sale to a person or entity that certifiesto the Trustee and the Issuer, in connection with such transfer, that such person or entity is nota Non-Permitted Holder and (b) pending such transfer, no further payments will be made inrespect of such beneficial interest.



89

The Issuer or the Transfer Agent on behalf of and at the expense of the Issuer may select the purchaser by soliciting one or more bids from one or more brokers or other market professionals that regularly deal in securities similar to such Notes and selling such Notes tothe highest such bidder. However, the Issuer may select a purchaser by any other meansdetermined by it in its sole discretion. Each Noteholder and each other Person in the chain of title from the permitted Noteholder to the Non-Permitted Holder by its acceptance of aninterest in such Notes agrees to cooperate with the Issuer and the Transfer Agent to effectsuch transfers. The proceeds of such sale, net of any commissions, expenses and taxes due inconnection with such sale shall be remitted to the selling Noteholder. The terms andconditions of any sale hereunder shall be determined in the sole discretion of the Issuer,subject to the transfer restrictions set out herein, and neither the Issuer nor the Transfer Agentshall be liable to any Person having an interest in the Notes sold as a result of any such sale or the exercise of such discretion. The Issuer and the Transfer Agent reserve the right to requireany holder of Global Notes or Accredited Investor Notes, as the case may be, to submit awritten certification substantiating that it is not a Non-Permitted Holder. If such holder failsto submit any such requested written certification on a timely basis, the Issuer and theTransfer Agent have the right to assume that the holder of the Notes from whom such a

certification is requested is a Non-Permitted Holder. Furthermore, the Issuer and the Transfer Agent reserve the right to refuse to honour a transfer of beneficial interests in a Global Noteor Accredited Investor Note, as the case may be, to any person who is a Non-PermittedHolder.

3. Status

(a) Status. The Notes of each Class constitute direct and secured obligations of the Issuer,recourse in respect of which is limited in the manner described in Condition 4(c) ( Limited

Recourse ). The Notes of each Class are secured in the manner described in Condition 4(a)(Security ) and, within each Class, shall at all times rank pari passu and without any

preference amongst themselves.

(b) Relationship Among the Classes. The Notes of each Class are constituted by the Trust Deedand are secured on the Collateral as further described in the Trust Deed. Payments of

principal and interest (if any) on the Class A Notes will rank senior to payments of principaland interest on each Payment Date in respect of the Subordinated Notes.

The Subordinated Notes will be entitled to receive, out of Principal Proceeds, the amountsdescribed under the Principal Proceeds Priority of Payments. Payments on the Subordinated

Notes are subordinated to payments on the Class A Notes (on a pari passu basis) provided however that in relation to amounts allocated to the Class A-2 Notes, such amounts shall beallocated to the Class A-2a Notes in priority to the Class A-2b Notes) and other amountsdescribed in the Interest Proceeds Priority of Payments and the Principal Proceeds Priority of Payments, and no payments out of Principal Proceeds will be made on the Subordinated

Notes until the Class A Notes and other payments ranking prior to the Subordinated Notes inaccordance with the Priorities of Payments are paid in full.

(c) Priorities of Payments. The Collateral Administrator shall (on the basis of the Payment DateReport prepared by the Collateral Administrator in consultation with the Collateral Manager

pursuant to the terms of the Collateral Management Agreement on each Determination Date),on behalf of the Issuer, on each Payment Date cause the Account Bank to disburse InterestProceeds and Principal Proceeds transferred to the Payment Account by the second BusinessDay prior thereto, or, in the case of (iii) below, the Collateral Enhancement Account, inaccordance with the following Priorities of Payments, provided that, for the avoidance of doubt, the Issuer is not required to satisfy the Class A Par Value Test prior to the EffectiveDate or the Class A Interest Coverage Test prior to the Determination Date immediately

preceding the Payment Date falling in September 2009 and provided further that all amountsavailable to be disbursed in accordance with the Interest Proceeds Priority of Payments and



90

the Principal Proceeds Priority of Payments will be reduced by any amounts required to be paid to GSCP pursuant to the Forward Sale Agreement in respect of accrued interest received by the Issuer:

(i) Application of Interest Proceeds. Interest Proceeds shall be applied in the followingorder of priority:

(A) to the payment of taxes or statutory fees owing by the Issuer accrued inrespect of the related Due Period, as notified by an authorised officer of theIssuer to the Trustee, if any, save for any amount in respect of value addedtax payable by the Issuer in respect of any Collateral Management Fee, MakeWhole Redemption Fee or Make Whole Tax Event Fee;

(B) to the payment of any amounts due and payable by the Issuer to GSCP pursuant to the Forward Sale Agreement;

(C) to the payment of accrued and unpaid Trustee Fees and Expenses up to anamount equal to the Senior Expenses Cap in respect of the related Due

Period; provided that the Senior Expenses Cap shall not apply to this paragraph at any time following the taking of any enforcement action by theTrustee or the occurrence of an Event of Default (for so long as such Event of Default is continuing);

(D) to the payment on a pro rata and pari passu basis of Administrative Expensesin relation to each item thereof, up to an amount equal to the Senior ExpensesCap in respect of the related Due Period less any amounts paid pursuant to(C) above;

(E) to the payment to the Collateral Manager of the Collateral Management Feedue and payable on such Payment Date and any value added tax in respectthereof (whether payable to the Collateral Manager or directly to the relevanttaxing authority) and, thereafter, to the payment of any CollateralManagement Fee due and payable but not paid pursuant to this paragraph (E)(excluding any Deferred Collateral Management Amount) on any prior Payment Date (together with accrued interest at the rate of EURIBOR plus2.0 per cent. per annum) and to the payment of any value added tax in respectthereof (whether payable to the Collateral Manager or directly to the relevanttaxing authority), except that the Collateral Manager may, in its solediscretion, elect to (x) designate for reinvestment or (y) defer payment of some or all of the amounts that would have been payable to the CollateralManager under this paragraph (E) (any such amounts, being a “ DeferredCollateral Management Amount ”) on any Payment Date, provided that anysuch amount in the case of (x) shall be (i) used to purchase SubstituteCollateral Debt Obligations or (ii) deposited in the Principal Account pendingreinvestment in Substitute Collateral Debt Obligations or in the case of (y),shall be applied to the payment of amounts in accordance with paragraphs (F)through (P) below, excluding (K) subject to the Collateral Manager havingnotified the Collateral Administrator in writing not later than one BusinessDay prior to the relevant Determination Date of any amounts to be soapplied;

(F) to the payment on a pro rata basis of any Asset Swap Termination Paymentsdue to any Asset Swap Counterparty (to the extent not paid out of SaleProceeds or funds available for such purpose within the Principal Account),in each case, other than Defaulted Asset Swap Termination Payments;



91

(G) to the payment on a pro rata and pari passu basis, of all Interest Amountsdue and payable in respect of the Interest Accrual Period ending on suchPayment Date and all other Interest Amounts due and payable on the Class A

Notes provided however that in respect of Interest Amounts due and payableto the Class A-2 Notes, such amounts shall be paid first to the holders of theClass A-2a Notes and thereafter to the holders of the Class A-2b Notes;

(H) in the event that either of the Coverage Tests are not satisfied on the relatedDetermination Date on or after the Effective Date (other than the Class AInterest Coverage Test, which test shall apply from the Determination Daterelating to the Payment Date falling in September 2009), to the payment inaccordance with the Note Payment Sequence to the extent necessary to causethe Coverage Tests to be met if recalculated following such redemption;

(I) on the Payment Date following the Effective Date and each Payment Datethereafter to the extent required, in the event of the occurrence of an EffectiveDate Rating Event which is continuing on the second Business Day prior tosuch Payment Date, to redeem and repay the Class A Notes in accordancewith the Note Payment Sequence or, if earlier, until an Effective Date RatingEvent is no longer continuing;

(J) during the Reinvestment Period, in the event that, on any Payment Dateduring such period after giving effect to the payment of all amounts payablein respect of (A) through (I) (inclusive) above, the Reinvestment DiversionThreshold has not been met, to the payment to the Principal Account for theacquisition of additional Collateral Debt Obligations in an amount equal tothe lesser of (1) 50.0 per cent. of all remaining Interest Proceeds available for

payment and (2) the amount which would be sufficient to cause theReinvestment Diversion Threshold to be met;

(K) to the payment of any Deferred Collateral Management Amount which has been designated for reinvestment or payment of which has been deferredunder paragraph (E) above in respect of a previous Payment Date and notsubsequently paid to the Collateral Manager;

(L) to the payment of Trustee Fees and Expenses (if any) not paid by reason of the Senior Expenses Cap;

(M) to the payment on a pro rata basis of Administrative Expenses (if any) not paid by reason of the Senior Expenses Cap, in relation to each item thereof,on a pari passu basis;

(N) to the payment on a pro rata basis of any Defaulted Asset Swap TerminationPayments due to any Asset Swap Counterparty;

(O) to the payment to the Collateral Manager of the Make Whole Tax Event Fee,if any is due on such Payment Date, and to the payment of any value addedtax in respect thereof (whether payable to the Collateral Manager or directlyto the relevant taxing authority) and to the payment of any Make Whole TaxEvent Fee due and payable but not previously paid pursuant to this

paragraph (O) (together with accrued interest on such amount at the rate of EURIBOR plus 2.0 per cent. per annum);

(P) at the discretion of the Collateral Manager acting on behalf of the Issuer, savefor the Payment Date on which the Subordinated Notes are to be redeemed

and paid in full, to payment into the Collateral Enhancement Account up to amaximum aggregate amount (taking into account all payments to the



92

Collateral Enhancement Account pursuant to this paragraph (P) on any prior Payment Date) of €1,800,000; and

(Q) any remaining Interest Proceeds, to the payment of interest on theSubordinated Notes on a pro rata basis.

In addition, during the term of the appointment of a Disposal Agent (if any), all payments in respect of the fees payable to the Disposal Agent shall be payable in thesame priority as the Collateral Management Fee and in an amount up to such fees, asset out in the Disposal Agreement provided however that for the avoidance of doubt,such fees payable to the Disposal Agent shall not exceed the fee that had previously

been payable to the Collateral Manager.

(ii) Application of Principal Proceeds. Principal Proceeds shall be applied in thefollowing order of priority:

(A) to the payment on a sequential basis of the amounts referred to in paragraphs (A) through (H) (inclusive) of Condition 3(c)(i) ( Application of

Interest Proceeds ) to the extent not paid in full there under provided that item (k) of the definition of “Administrative Expenses” will be paidregardless of whether the Senior Expenses Cap has been breached;

(B) save for the Payment Date on which the Notes are to be redeemed and repaidin full, to the payment, where so obliged, of the cost of any ReplacementAsset Swap Agreement, to the extent not previously paid from funds standingto the credit of the Asset Swap Termination Account;

(C) on the Payment Date on which the Notes are to be redeemed and repaid infull, to the payment to the Collateral Manager of the Make WholeRedemption Fee, if any is due on such Payment Date, and to the payment of any value added tax in respect thereof (whether payable to the CollateralManager or directly to the relevant taxing authority);

(D) during the Reinvestment Period, either (i) to the purchase of SubstituteCollateral Debt Obligations or to the Principal Account pending reinvestmentin Substitute Collateral Debt Obligations at a later date or (ii) at the discretionof the Collateral Manager (acting on behalf of the Issuer), in redemption of the Class A Notes (on a pari passu basis) provided however that in relation tothe Class A-2 Notes, the Class A-2a Notes shall be redeemed in priority tothe Class A-2b Notes, such redemption to be at the Redemption Price for such Notes;

(E) after the expiry of the Reinvestment Period, all remaining Principal Proceeds

(other than those Sale Proceeds from the sale of Credit Impaired Obligationsand Credit Improved Obligations and Unscheduled Principal Proceeds

permitted to be and actually designated for reinvestment by the CollateralManager in accordance with the terms of the Collateral ManagementAgreement) in redemption of the Class A Notes (on a pari passu basis),

provided however that in relation to the Class A-2 Notes, the Class A-2a Notes shall be redeemed in priority to the Class A-2b Notes, such redemptionto be at the Redemption Price for such Notes;

(F) to the payment on a sequential basis of the amounts referred to in paragraphs (I) through (M) (inclusive) of the Interest Proceeds Priority of Payments but only to the extent not paid in full thereunder;





94

transferred to the Payment Account in accordance with Condition 3(j) ( Payments to and fromthe Accounts ).

(f) De Minimis Amounts. The Collateral Administrator may, in consultation with the CollateralManager and on behalf of the Issuer, adjust the amounts required to be applied in payment of

principal on the Class A Notes and the Subordinated Notes from time to time pursuant to thePriorities of Payments so that the amount to be so applied in respect of each Class A Note andSubordinated Note is a whole amount, not involving any fraction of a Euro smaller than €0.01or, at the discretion of the Collateral Administrator, part of a Euro.

(g) Publication of Amounts. The Collateral Administrator will cause details of the amounts of interest and principal to be paid, and any amounts of interest payable but not paid, on eachPayment Date in respect of the Notes to be notified at the expense of the Issuer to the Issuer,the Trustee, the Principal Paying Agent, the Registrar and the Irish Stock Exchange (for solong as Notes are listed on such exchange) by no later than 11.00 a.m. (London time) on thesecond Business Day following the applicable Determination Date and the Registrar shall

procure that details of such amounts are notified at the expense of the Issuer to the Noteholders of each Class in accordance with Condition 16 ( Notices ) as soon as possible after notification thereof to the Registrar in accordance with the above but in no event later than (tothe extent applicable) the third Business Day after the last day of the applicable Due Period.

(h) Notifications to be Final. All notifications, opinions, determinations, certificates, quotationsand decisions given, expressed, made or obtained or discretions exercised for the purposes of the provisions of this Condition will (in the absence of manifest error) be binding on theIssuer, the Collateral Administrator, the Collateral Manager, the Trustee, the Registrar, thePrincipal Paying Agent, the Transfer Agent, all Noteholders and any other Secured Partiesand (in the absence as referred to above) no liability to the Issuer or the Noteholders shallattach to the Collateral Administrator in connection with the exercise or non-exercise by it of its powers, duties and discretions under this Condition.

(i) Accounts. The Issuer shall, prior to the Issue Date, establish the following accounts with theAccount Bank:

(i) the Principal Account;

(ii) the Interest Account;

(iii) the Unused Proceeds Account;

(iv) the Payment Account;

(v) the Asset Swap Termination Account;

(vi) the FS Accrued Interest Account;

(vii) the Collateral Enhancement Account;

(viii) the Expense Reserve Account;

(ix) the Revolving Reserve Account;

(x) the Counterparty Downgrade Cash Collateral Account; and

(xi) the Interest Reserve Account.

The Issuer shall, prior to the Issue Date, establish the following accounts with the Custodian:

(A) the Non-Euro Custody Account;(B) the Counterparty Downgrade Securities Collateral Account; and





96

(j) Payments to and from the Accounts

(i) Principal Account. The Issuer will procure that the following Principal Proceeds are paid into the Principal Account promptly upon receipt thereof:

(A) all principal payments received in respect of any Collateral Debt Obligation

(save for any Non-Euro Obligations), including, without limitation:(1) amounts received in respect of any maturity, scheduled amortisation,

prepayment or mandatory sinking fund payment on a Collateral DebtObligation;

(2) Unscheduled Principal Proceeds;

(3) recoveries on Defaulted Obligations to the extent not included in SaleProceeds; and

(4) any other principal payments with respect to Collateral DebtObligations or Eligible Investments (to the extent not included in the

Sale Proceeds),

but excluding (y) any amount representing a Realisation Gain on a CollateralDebt Obligation which at the discretion of the Collateral Manager may betransferred to the Interest Account pursuant to paragraph (J) of Condition 3(j)(ii) ( Interest Account ) and subject to satisfaction of the relevantconditions set out in the Collateral Management Agreement and (z) any such

payments received in respect of any Revolving Obligation or DelayedDrawdown Collateral Debt Obligation, to the extent required to be paid intothe Revolving Reserve Account;

(B) any Asset Swap Counterparty Principal Exchange Amount and Asset Swap

Replacement Receipt received by the Issuer under any Asset SwapTransactions and for the avoidance of doubt, excluding any Asset SwapTermination Receipts;

(C) all premia (including prepayment premia) receivable upon redemption of anyCollateral Debt Obligation at maturity or otherwise or upon the exercise of any put or call option in respect thereof which is above the outstanding

principal amount of such Collateral Debt Obligation;

(D) all fees and commissions (such as syndication, workout, defaulted or restructuring fees) received in connection with Defaulted Obligations and the

purchase or sale of any Collateral Debt Obligation or Eligible Investment;

(E) all Sale Proceeds of any Collateral Debt Obligation (including amountsrepresenting Sale Proceeds in excess of the purchase price and/or exercise

price of any Collateral Enhancement Obligation that is sold which have beentransferred to the Principal Account pursuant to Condition 3(j)(x) ( Collateral

Enhancement Account )) other than (a) Interest Sale Proceeds and (b) anyamount representing a Realisation Gain on a Collateral Debt Obligationwhich at the discretion of the Collateral Manager may be transferred to theInterest Account pursuant to paragraph (J) of Condition 3(j)(ii) ( Interest

Account ), subject to satisfaction of the relevant conditions in the CollateralManagement Agreement;

(F) all distributions and Sale Proceeds received in respect of Exchanged Equity

Securities;



97

(G) all Purchased Accrued Interest;

(H) the Balance standing to the credit of the Asset Swap Termination Account inthe circumstances described under Condition 3(j)(v) ( Asset Swap Termination

Account ) below;

(I) amounts transferred to the Principal Account from any other Account asrequired below;

(J) all amounts received in respect of Collateral Enhancement Obligations other than amounts in the nature of interest on the Collateral EnhancementObligations;

(K) cash amounts (representing any excess standing to the credit of the Non-EuroCustody Account after provisioning by the Collateral Manager for anyamounts to be paid to any Asset Swap Counterparty pursuant to any AssetSwap Transaction) transferred to the Principal Account after conversionthereof into Euros at the Spot Rate as determined by the Collateral

Administrator at the direction of the Collateral Manager;(L) all amounts payable into the Principal Account pursuant to paragraph (J) of

the Interest Proceeds Priority of Payments upon the failure to meet theReinvestment Diversion Threshold during the Reinvestment Period;

(M) any amounts transferred from the Unused Proceeds Account upon satisfactionof the Effective Date Determination Requirements pursuant to paragraph (3)of Condition 3(j)(iii) ( Unused Proceeds Account );

(N) any other amounts payable into the Principal Account in accordance withCondition 3(c)(i) ( Application of Interest Proceeds ) and Condition 3(c)(ii)( Application of Principal Proceeds );

(O) any other amounts received in respect of the Collateral which are not requiredto be paid into another Account (if relevant, following conversion thereof intoEuro to the extent required at the Spot Rate);

(P) all Deferred Collateral Management Amounts payable into the PrincipalAccount pursuant to paragraph (E) of the Interest Proceeds Priority of Payments; and

(Q) any amounts transferred into the Principal Account from the Interest ReserveAccount pursuant to Condition 3(j)(xii)( Interest Reserve Account ).

The Issuer shall procure payment of the following amounts (and shall ensure that payment of no other amount is made, save to the extent otherwise permitted below)out of the Principal Account:

(1) on the second Business Day prior to each Payment Date, all PrincipalProceeds standing to the credit of the Principal Account to the PaymentAccount to the extent required for disbursement pursuant to the PrincipalProceeds Priority of Payments, save for (x) (other than on any date on whichthe Notes are to be redeemed in full) amounts deposited after the end of therelated Due Period and (y) any Principal Proceeds deposited prior to the endof the related Due Period to the extent such Principal Proceeds are permittedto be and have been designated for reinvestment by the Collateral Manager (on behalf of the Issuer) pursuant to the Collateral Management Agreement

for a period beyond such Payment Date, provided that no such payment shall be made to the extent that such amounts are not required to be distributed



98

pursuant to the Principal Proceeds Priority of Payments on such PaymentDate;

(2) at any time at the discretion of the Collateral Manager, acting on behalf of theIssuer, in accordance with the terms of, and to the extent permitted under, theCollateral Management Agreement, in the acquisition of Collateral DebtObligations (including (i) any payments to an Asset Swap Counterparty inrespect of initial principal exchange amounts pursuant to an Asset SwapTransaction and/or (ii) amounts equal to the Unfunded Amounts of anyRevolving Obligations or Delayed Drawdown Collateral Debt Obligationswhich are required to be deposited in the Revolving Reserve Account);

(3) at any time, any Asset Swap Termination Payment payable by the Issuer (save to the extent it is a Defaulted Asset Swap Termination Payment) to theextent required to be paid pursuant to an Asset Swap Transaction on any dateother than a Payment Date and to the extent not paid out of Sale Proceedsreceived in respect of the related Non-Euro Obligation and thereafter, up toan amount not exceeding any Asset Swap Replacement Receipts received inrespect of the related Non-Euro Obligation;

(4) during the Reinvestment Period, in the acquisition of Collateral DebtObligations and Substitute Collateral Debt Obligations, in an amount up tothe amount deposited into the Principal Account pursuant to paragraphs (E)and (L) above;

(5) at any time, amounts payable by the Issuer upon entry into of a ReplacementAsset Swap Agreement in accordance with the Collateral ManagementAgreement, unless termination of the relevant Asset Swap Agreement occurson a Redemption Date, or the Collateral Manager determines not to replacethe relevant Asset Swap Agreement and a Rating Agency Confirmation is

received in respect of such determination;(6) all interest accrued on the Principal Account to the Interest Account;

(7) without duplication, to the payment, on a pro rata basis at any time, of anyAsset Swap Replacement Payment due and payable to a Asset SwapCounterparty under an Asset Swap Agreement, being replaced, as referred toin the definition of Asset Swap Replacement Receipts, insofar as it does notexceed the amount of the corresponding Asset Swap Termination Receipt;

(8) at any time after the Effective Date, amounts standing to the credit of thePrincipal Account which the Collateral Manager (acting on behalf of theIssuer) has determined at its option shall be paid into the Interest Account,subject to satisfaction of each of the Coverage Tests and Collateral QualityTests both immediately before and immediately after such payment; provided that the Aggregate Portfolio Balance is equal to or greater than the Target Par Amount immediately after such payment and provided further that the Issuer (or the Collateral Manager on its behalf) has received Effective DateConfirmation from S&P; and

(9) during the Reinvestment Period, in the acquisition of Collateral DebtObligations and Substitute Collateral Debt Obligations (including amountsequal to Unfunded Amounts of any Revolving Obligations or DelayedDrawdown Collateral Debt Obligations which are required to be deposited inthe Revolving Reserve Account), in each case pursuant to the CollateralManagement Agreement.



99

(ii) Interest Account. The Issuer will procure that the following Interest Proceeds arecredited to the Interest Account promptly upon receipt thereof:

(A) all cash payments of interest (other than any Purchased Accrued Interest) inrespect of the Collateral Debt Obligations (save for any Non-EuroObligations), together with all amounts received by the Issuer by way of gross up in respect of such interest and in respect of a claim under anyapplicable double taxation treaty;

(B) all interest accrued on the Interest Account from time to time and all interestaccrued in respect of the Balances standing to the credit of the other Accounts(including interest on any Eligible Investments standing to the credit thereof)(to the extent applicable, converted at the Spot Rate as determined by theCollateral Administrator at the direction of the Collateral Manager) from timeto time;

(C) all amendment and waiver fees, all late payment fees, all commitment fees,syndication fees and all other fees and commissions received in connection

with any Collateral Debt Obligations and Eligible Investments (other thanfees and commissions received in connection with the purchase or sale of anyCollateral Debt Obligations or Eligible Investments or work out or restructuring of any Defaulted Obligations or Collateral Debt Obligationswhich fees and commissions shall be payable into the Principal Account andshall constitute Principal Proceeds);

(D) all accrued interest included in the proceeds of sale of any other CollateralDebt Obligation that are designated by the Collateral Manager as InterestProceeds pursuant to the Collateral Management Agreement ( provided that no such designation may be made in respect of (i) any Purchased AccruedInterest or (ii) proceeds representing accrued interest received in respect of

any Defaulted Obligation unless and until (x) the principal of such DefaultedObligation has been repaid in full and (y) any Purchased Accrued Interest inrelation to such Defaulted Obligation has been paid);

(E) all Scheduled Periodic Asset Swap Receipts received by the Issuer under anAsset Swap Transaction;

(F) any amounts transferred from the Unused Proceeds Account pursuant to paragraph (3) of Condition 3(j)(iii) ( Unused Proceeds Account ); provided that the Aggregate Portfolio Balance is equal to or greater than the Target Par Amount immediately after such transfer and provided further that the Issuer (or the Collateral Manager on its behalf) has received Effective DateConfirmation from S&P;

(G) all amounts received in the nature of interest in respect of CollateralEnhancement Obligations;

(H) all amounts transferred by the Collateral Manager to the Interest Account pursuant to Condition 3(j)(x) ( Collateral Enhancement Account );

(I) all Interest Sale Proceeds;

(J) all amounts, including any delayed settlement compensation payment pursuant to the Forward Sale Agreement, representing accrued interest (basedon the stated coupon) received from GSCP;

(K) at the discretion of the Collateral Manager, any amount in Sale Proceeds,Scheduled Principal Proceeds or Unscheduled Principal Proceeds of a



100

Collateralised Debt Obligation to the extent that such amount represents aRealisation Gain subject to the satisfaction of the relevant conditions set outin the Collateral Management Agreement; provided that the AggregatePortfolio Balance is equal to or greater than the Target Par Amountimmediately after such payment and provided further that the Issuer (or theCollateral Manager on its behalf) has received Effective Date Confirmationfrom S&P;

(L) any amounts transferred from the Principal Account pursuant to paragraph (8)of Condition 3(j)(i)( Principal Account );

(M) interest amounts representing any excess standing to the credit of the Non-Euro Custody Account after provisioning by the Collateral Manager for any amounts to be paid to any Asset Swap Counterparty pursuant to anyAsset Swap Transaction transferred to the Interest Account after conversionthereof into Euros at the Spot Rate as determined by the CollateralAdministrator at the direction of the Collateral Manager, provided that nosuch transfer into the Interest Account shall be permitted to the extent theeuro equivalent (calculated using the same Spot Rate mentioned above) of thefull amount of the principal amount of the Non-Euro Obligation has not been

paid into the Principal Account;

(N) all scheduled commitment fees received by the Issuer in respect of anyRevolving Obligations or Delayed Drawdown Collateral Debt Obligationsdenominated in EUR;

(O) all amounts received by the Issuer in respect of interest paid in respect of anycollateral deposited by the Issuer with a third party as security for anyreimbursement or indemnification obligations to any other lender under aEuro-denominated Revolving Obligation or a Delayed Drawdown Collateral

Debt Obligation in an account established pursuant to an ancillary facility;and

(P) any amounts transferred into the Interest Account from the Interest ReserveAccount pursuant to Condition 3(j)(xii)( Interest Reserve Account ).

The Issuer shall procure payment of the following amounts (and shall ensure that payment of no other amount is made, save to the extent otherwise permitted above)out of the Interest Account:

(1) on the second Business Day prior to each Payment Date, all Interest Proceedsstanding to the credit of the Interest Account shall be transferred to thePayment Account to the extent required for disbursement pursuant to theInterest Proceeds Priority of Payments, save for amounts deposited after theend of the related Due Period;

(2) at any time, funds may be transferred to the Non-Euro Custody Account (tothe relevant segregated sub-account thereof) up to an amount equal to anyshortfall in the Balance standing to the credit of such Account with respect toany payment obligation by the Issuer pursuant to paragraph (A) and/or (B) of Condition 3(j)(vi) ( Non-Euro Custody Account ) at such time;

(3) at any time, subject to insufficient amounts being available in the CollateralEnhancement Account for the acquisition or exercise of any CollateralEnhancement Obligation at such time, amounts required by the Issuer or the

Collateral Manager acting on behalf of the Issuer for such purpose at such





102

actions taken on or in connection with the Issue Date with respect to the issueof the Notes and the entry into the Transaction Documents in payment of such amount, provided that , Rating Agency Confirmation is received inrespect thereof.

(iv) Payment Account. The Issuer will procure that, on the second Business Day prior toeach Payment Date, all amounts standing to the credit of each of the Accounts whichare required to be transferred from the other accounts to the Payment Account

pursuant to Condition 3(i) ( Accounts ) and Condition 3(j) ( Payments to and from the Accounts ) are so transferred, to be disbursed pursuant to the Interest Proceeds Priorityof Payments on any Payment Date and, on such Payment Date, the CollateralAdministrator (acting on the basis of the Payment Date Report), shall instruct theAccount Bank to disburse such amounts in accordance with the Priorities of Payments. No amounts shall be transferred to or withdrawn from the PaymentAccount at any other time or in any other circumstances, save that all interest accruedon the Payment Account shall be credited to the Interest Account.

(v) Asset Swap Termination Account. The Issuer will procure that all Asset SwapTermination Receipts, Asset Swap Replacement Receipts and all amounts payable tothe Issuer from the Counterparty Downgrade Cash Collateral Account (uponliquidation of the relevant security) or Counterparty Downgrade Cash CollateralAccount, as the case may be, upon termination of an Asset Swap Agreement or following an event of default thereunder are paid into the Asset Swap TerminationAccount promptly upon receipt thereof.

The Issuer will procure payment of the following amounts (and shall ensure that payment of no other amount is made, save to the extent otherwise permitted above)out of the Asset Swap Termination Account:

(1) at any time, in the case of any Asset Swap Replacement Receipts paid into

the Asset Swap Termination Account, in the payment of any Asset SwapTermination Payment due and payable to any Asset Swap Counterparty under the Asset Swap Transaction being replaced or to the extent not required tomake such payment, in payment of such amount to the Principal Account;

(2) at any time, in the case of any Asset Swap Termination Receipts paid into therelevant Asset Swap Termination Account, in payment of any Asset SwapReplacement Payment and any other amounts payable by the Issuer uponentry into a Replacement Asset Swap Transaction in accordance with theCollateral Management Agreement or to the extent not required to make such

payment, in payment of such amount to the Principal Account;

(3) in the case of any Asset Swap Termination Receipts paid into the relevantAsset Swap Termination Account, in the event that:

(x) the Collateral Manager, acting on behalf of the Issuer, determines notto replace an Asset Swap Agreement that has terminated and a RatingAgency Confirmation is received in respect of such determination; or

(y) if termination of any Asset Swap Agreement under which such AssetSwap Termination Receipts are received occurs on a RedemptionDate,

the Balance standing to the credit of the Asset Termination Account shall betransferred to the Principal Account and shall constitute Unscheduled

Principal Proceeds.



103

(vi) Non-Euro Custody Account. The Issuer shall procure that (i) all amounts due to theIssuer in respect of each Non-Euro Obligation (including, any payments from anAsset Swap Counterparty in respect of initial principal exchange amounts pursuant toan Asset Swap Transaction), (ii) interest and principal proceeds received in respect of

Non-Euro Obligations and (iii) Unscheduled Principal Proceeds in respect of Unhedged Collateral Debt Obligations, shall, on receipt, be deposited in a segregatedinterest bearing sub-account in respect of, and maintained in the currency of, eachsuch individual Non-Euro Obligation. Additional amounts may also be transferred tothe Non-Euro Custody Account from the Interest Account at any time to the extent of any shortfall in the balance standing to the credit of such Non-Euro Custody Accountin respect of any payment required to be made by the Issuer pursuant to (2) below atsuch time.

The Issuer will procure payment of the following amounts (and shall ensure that payment of no other amount is made, save to the extent otherwise permitted above)out of the Non-Euro Custody Account:

(1) during the Reinvestment Period, to the extent of any initial principalexchange amount deposited into the Non-Euro Custody Account inaccordance with the terms of and to the extent permitted under the CollateralManagement Agreement, in the acquisition of Non-Euro Obligations;

(2) Scheduled Periodic Asset Swap Payments due to each Asset SwapCounterparty pursuant to each Asset Swap Transaction;

(3) Asset Swap Issuer Principal Exchange Amounts due to each Asset SwapCounterparty pursuant to each Asset Swap Transaction;

(4) cash amounts (representing any excess standing to the credit of the Non-EuroCustody Account after provisioning by the Collateral Manager for anyamounts to be paid to any Asset Swap Counterparty pursuant to any AssetSwap Transaction) to the Principal Account after conversion thereof intoEuros at the Spot Rate as determined by the Collateral Administrator at thedirection of the Collateral Manager; and

(5) at any time, principal proceeds and/or interest proceeds to the relevantPrincipal Account or interest proceeds to the relevant Interest Account at thediscretion of the Collateral Manager.

(vii) Counterparty Downgrade Securities Collateral Account and Counterparty Downgrade Cash Collateral Account. The Issuer will procure that all CounterpartyDowngrade Collateral pledged pursuant to a Asset Swap Agreement shall bedeposited, with respect to securities, in the Counterparty Downgrade SecuritiesCollateral Account and with respect to cash, in the Counterparty Downgrade CashCollateral Account. All Counterparty Downgrade Collateral deposited from time totime in any Counterparty Downgrade Securities Collateral Account or CounterpartyDowngrade Cash Collateral Account, as the case may be, shall be held and released

pursuant to the terms of the relevant Asset Swap Agreement. Upon termination of anAsset Swap Agreement or following an event of default by an Asset SwapCounterparty under an Asset Swap Agreement, the Issuer or the Collateral Manager,on its behalf, shall promptly exercise its remedies under the related agreement,including liquidating the related Counterparty Downgrade Collateral, whereupon suchCounterparty Downgrade Collateral shall be transferred to the Asset SwapTermination Account in an amount agreed pursuant to the related Asset SwapAgreement. For the avoidance of doubt, upon the termination of a Asset SwapAgreement, the Counterparty Downgrade Collateral deposited from time to time inany Counterparty Downgrade Securities Collateral Account or any Counterparty



104

Downgrade Cash Collateral Account that is in excess of the Asset SwapCounterparty’s liability to the Issuer shall be for the account of, and forwarded to, theAsset Swap Counterparty outside the Priorities of Payments and in accordance withthe relevant credit support annex.

(viii) FS Accrued Interest Account. The Issuer shall procure that any FS Accrued Interestreceived in respect of any Collateral Debt Obligation is paid into the FS InterestAccount and shall transfer such amounts to GSCP on the date of receipt.

(ix) Expense Reserve Account. The Issuer shall procure that the amount of €3,750,000 is paid into the Expense Reserve Account on the Issue Date and shall ensure that theamounts due or accrued with respect to actions taken on or in connection with theIssue Date with respect to the issue of the Notes and the entry into the TransactionDocuments are paid out of the Expense Reserve Account, provided however, that anyamounts standing to the credit of the Expense Reserve Account after the payment of such amounts (which shall be no later than one year after the Issue Date) shall be paidinto the Unused Proceeds Account.

(x) Collateral Enhancement Account. The Issuer shall procure that the followingamounts are paid into to the Collateral Enhancement Account:

(A) at any time, all Collateral Enhancement Obligation Proceeds;

(B) at any time, any amounts withdrawn from the Interest Account pursuant to paragraph (3) of Condition 3(j)(ii) ( Interest Account ); and

(C) on each Payment Date, all amounts of interest payable in respect of theSubordinated Notes which the Issuer, or the Collateral Manager on its behalf,determines at its discretion shall be applied in payment into the CollateralEnhancement Account pursuant to paragraph (P) of the Interest ProceedsPriority of Payments, subject to the limit specified in such paragraph.

The Issuer shall procure payment of the following amounts (and shall ensure that payment of no other amount is made, save to the extent otherwise permitted above)out of the Collateral Enhancement Account:

(1) at any time, in the acquisition of, or in respect of any exercise of any optionor warrant comprised in, Collateral Enhancement Obligations, in accordancewith the terms of the Collateral Management Agreement;

(2) on the second Business Day prior to each Payment Date, at the discretion of the Collateral Manager, acting on behalf of the Issuer, all or part of theBalance standing to the credit of Collateral Enhancement Account to the

Payment Account for distribution on such Payment Date in accordance withthe Collateral Enhancement Obligation Proceeds Priority of Payments; and

(3) at any time, at the discretion of the Collateral Manager, amounts representingSale Proceeds in excess of the purchase price and/or exercise price of anyCollateral Enhancement Obligation that is sold, to the Principal Account or the Interest Account.

(xi) The Revolving Reserve Account.

The Revolving Reserve Account shall comprise a multi-currency interest bearingaccount established by the Issuer with the Account Bank from time to time in respectof Delayed Drawdown Collateral Debt Obligations and Revolving Obligations, and

amounts shall be paid into and out of each such account in accordance with the BaseCurrency in which they are denominated.



105

The Issuer shall procure the following amounts are paid into the relevant RevolvingReserve Account:

(A) upon the acquisition by or on behalf of the Issuer of any RevolvingObligation or Delayed Drawdown Collateral Debt Obligation, an amountequal to the amount which would cause the Balance standing to the credit of the Revolving Reserve Account to be at least equal to the combinedaggregate principal amounts of the Unfunded Amounts under each of theRevolving Obligations or Delayed Drawdown Collateral Debt Obligations of such Base Currency (which Unfunded Amounts will be treated as part of the

purchase price for the related Revolving Obligation or Delayed DrawdownCollateral Debt Obligation) less amounts posted as collateral for anyUnfunded Amounts pursuant to paragraph (1) below (and which do notconstitute Funded Amounts);

(B) all principal payments received by the Issuer in respect of any RevolvingObligation or Delayed Drawdown Collateral Debt Obligation, if and to theextent that the amount of such principal payments may be reborrowed under such Revolving Obligation or Delayed Drawdown Collateral DebtObligation, following conversion thereof into the applicable Base Currency,if required, pursuant to any Asset Swap Transaction entered into in respectthereof; and

(C) all repayments of collateral to the Issuer originally paid by the Issuer pursuantto (1) below.

The Issuer shall procure payment of the following amounts (and shall ensure that noother amounts are paid) out of the relevant Revolving Reserve Account:

(1) all amounts required to fund any drawings under any Delayed DrawdownCollateral Debt Obligation or Revolving Obligation or (subject to RatingAgency Confirmation) required to be deposited in the Issuer’s name with anythird party as collateral for any reimbursement or indemnification obligationsof the Issuer owed to any other lender under such Revolving Obligation or Delayed Drawdown Collateral Debt Obligation (subject to such securitydocumentation as may be agreed between such lender, the CollateralManager (acting on behalf of the Issuer) and the Trustee), such amounts to bedenominated in the Base Currency of such Revolving Obligation or DelayedDrawdown Collateral Debt Obligation and to the extent required, convertedinto the currency in which it is to be drawn down or so deposited, by theCollateral Manager, acting on behalf of the Issuer.

(2) (x) at any time at the direction of the Collateral Manager (acting on behalf of the Issuer) or (y) upon the sale (in whole or in part) of a RevolvingObligation or the reduction, cancellation or expiry of any commitment of theIssuer to make future advances or otherwise extend credit thereunder, anyexcess of (a) the amount standing to the credit of the Revolving ReserveAccount which is denominated in the Base Currency thereof less (b) the sumof the Unfunded Amounts of all Revolving Obligations and DelayedDrawdown Collateral Debt Obligations which have the same Base Currency,after taking into account such sale or such reduction, cancellation or expiry of commitment, to the Principal Account (following conversion thereof intoEuros, to the extent necessary);

(3) all initial principal exchange amounts scheduled to be paid by the Issuer to anAsset Swap Counterparty under an Asset Swap Transaction on the scheduled



106

date for payment thereof which relate to any Revolving Obligation or Delayed Drawdown Collateral Debt Obligation; and

(4) all interest accrued on the Balance standing to the credit of the RevolvingReserve Account from time to time (including capitalised interest receivedupon the sale, maturity or termination of any Eligible Investment) to theInterest Account, following conversion thereof into Euros, to the extentnecessary.

(xii) Interest Reserve Account. The Issuer shall procure that the amount of €12,000,000 is paid into the Interest Reserve Account on the Issue Date. On any Business Day after the Issue Date, the Collateral Manager (acting on behalf of the Issuer) may, in its solediscretion, direct that all or a portion of the Balance standing to the credit of theInterest Reserve Account be paid into the Principal Account or the Interest Account.

4. Security

(a) Security . Pursuant to the Trust Deed, the obligations of the Issuer under the Notes of each

Class, the Trust Deed, the Agency Agreement and the Collateral Management Agreement(together with the obligations owed by the Issuer to the other Secured Parties) are secured infavour of the Trustee for the benefit of the Secured Parties by:

(i) an assignment by way of security of the Issuer’s right, title and interest present andfuture, including its present and future claims in and to the Collateral DebtObligations, Collateral Enhancement Obligations (save to the extent that it wouldcause the Issuer to be in breach of any obligations by which it is bound which relateto any such Collateral Enhancement Obligation) and the Eligible Investments and allrights, entitlements or other benefits relating thereto and a first fixed charge and first

priority security interest over all present and future rights, title and interest of theIssuer in respect of the Collateral Debt Obligations, Collateral EnhancementObligations and the Eligible Investments including, without limitation, all moneysreceived in respect thereof, all dividends and distributions paid or payable thereon, all

property paid, distributed, accruing or offered at any time on, to or in respect of or insubstitution therefor and the proceeds of sale, repayment and redemption thereof;

(ii) a first fixed charge over all rights of the Issuer present and future in respect of each of the Accounts (other than the Counterparty Downgrade Securities Collateral Accountand the Counterparty Downgrade Cash Collateral Account which shall each becharged in favour of the Asset Swap Counterparty and the FS Accrued InterestAccount which shall be charged in favour of GSCP) and all moneys from time to timestanding to the credit of such Accounts and the debts represented thereby andincluding, without limitation, all interest accrued and other moneys received inrespect thereof;

(iii) a first fixed charge and first priority security interest (where the applicable assets aresecurities) over, or an assignment by way of security (where the applicable rights arecontractual obligations) of, all present and future rights of the Issuer in respect of anyCounterparty Downgrade Collateral standing to the credit of the CounterpartyDowngrade Securities Collateral Account and/or the Counterparty Downgrade CashCollateral Account including all moneys received in respect thereof subject andsubordinate to any security granted pursuant to paragraph (A) below;

(iv) a first fixed charge over all rights of the Issuer present and future in respect of the FSAccrued Interest standing to the credit of the FS Accrued Interest Account includingall moneys received in respect thereof subject and subordinate to any security granted

pursuant to paragraph (B) below;



107

(v) an assignment by way of security of the Issuer’s rights present and future against theCustodian under the Agency Agreement and a first fixed charge over the Non-EuroCustody Account and/or accounts established on the books of the Custodian inaccordance with the Agency Agreement and each cash account relating thereto, anycash held therein and the debts represented thereby;

(vi) an assignment by way of security of the Issuer’s rights present and future under eachAsset Swap Agreement (including the Issuer’s rights under any guarantee or creditsupport annex entered into pursuant to any Asset Swap Agreement and anyCounterparty Downgrade Collateral provided that such assignment by way of security shall not in any way restrict the release of collateral granted thereunder inwhole or in part at any time pursuant to the terms thereof);

(vii) an assignment by way of security of the Issuer’s rights present and future under theCollateral Management Agreement, the Subscription and Placement Agreement, theAccredited Investor Note Purchase Agreements and the Class A-1 Note PurchaseAgreements;

(viii) a first fixed charge over all moneys held from time to time by each Paying Agent for payment of principal, interest or other amounts on the Notes (if any);

(ix) an assignment by way of security of the remainder of the Issuer’s rights present andfuture under the Agency Agreement not assigned pursuant to paragraph (v) above;

(x) an assignment by way of security of the Issuer’s rights present and future under theForward Sale Agreement and any Collateral Acquisition Agreement; and

(xi) a floating charge over the whole of the Issuer’s undertaking and assets (other than anyand all amounts standing from time to time to the credit of the Irish Issuer Accountand the Issuer’s rights under the Corporate Services Agreement) to the extent thatsuch undertaking and assets are not subject to the security created pursuant to theTrust Deed and the Euroclear Pledge Agreement.

The Issuer may from time to time grant security by way of a first priority security interest:

(A) to an Asset Swap Counterparty over the Counterparty Downgrade Collateraldeposited by such Asset Swap Counterparty in the Counterparty DowngradeSecurities Collateral Account and/or the Counterparty Downgrade Cash CollateralAccount as security for the Issuer’s obligations to repay or redeem such CounterpartyDowngrade Collateral pursuant to the terms of the applicable Asset Swap Agreement(subject to such security documentation as may be agreed between such third party,the Collateral Manager acting on behalf of the Issuer and the Trustee);

(B) to GSCP over the FS Accrued Interest deposited by the Issuer in the FS AccruedInterest Account as security for the Issuer’s obligations to repay such FS AccruedInterest pursuant to the terms of the applicable Forward Sale Agreement; and

(C) by way of first priority security interest over amounts representing all or part of theUnfunded Amount of any Revolving Obligation or Delayed Drawdown CollateralDebt Obligation and deposited in its name with a third party as security for anyreimbursement or indemnification obligation of the Issuer owed to any other lender under such Revolving Obligation or Delayed Drawdown Collateral Debt Obligation,subject to the terms of Condition 3(j)(xi) ( The Revolving Reserve Account ) (includingRating Agency Confirmation).

If, for any reason, the purported assignment by way of security of, and/or the grant of firstfixed charge over, the property, assets, rights and/or benefits described above is found to beineffective in respect of any such property, assets, rights and/or benefits (together the



108

“Affected Collateral ”), the Issuer shall hold the benefit of the Affected Collateral and anysums received in respect thereof or any security interest, guarantee or indemnity or undertaking of whatever nature given to secure such Affected Collateral (together the “ TrustCollateral ”) on trust for the Trustee (for the benefit of itself and the other Secured Parties)and shall (i) account to the Trustee, for or otherwise apply all sums received in respect of suchTrust Collateral as the Trustee may direct ( provided that subject to the Conditions and theterms of the Collateral Management Agreement, if no Event of Default has occurred and iscontinuing, the Issuer shall be entitled to apply the benefit of such Trust Collateral and suchsums in respect of such Trust Collateral received by it and held on trust under this Conditionwithout prior direction from the Trustee), (ii) exercise any rights it may have in respect of theTrust Collateral at the direction of the Trustee and (iii) at its own cost take such action andexecute such documents as the Trustee may in its sole discretion require.

All deeds, documents, assignments, instruments, bonds, notes, negotiable instruments, papersand any other instruments comprising, evidencing, representing and/or transferring thePortfolio will be deposited with or held by or on behalf of the Custodian until the securityover such obligations is irrevocably discharged in accordance with the provisions of the TrustDeed and, if applicable, the Euroclear Pledge Agreement. In the event that the ratings of theCustodian and the Account Bank are downgraded to below the Required Ratings or withdrawn, the Issuer shall use reasonable endeavours either (1) to procure that a replacementCustodian and the Account Bank with the Required Ratings and who is acceptable to theTrustee is appointed within 30 days, or (2) put in place an unconditional and irrevocableguarantee from an entity satisfying the Required Ratings, in each case in accordance with the

provisions of the Agency Agreement.

Pursuant to the terms of the Trust Deed, the Trustee is exempted from any liability in respectof any loss or theft or decrease in value of the Collateral, from any obligation to insure, or tomonitor the provisions of any insurance arrangements in respect of, the Collateral and fromany claim arising from the fact that the Collateral is held by the Custodian or is otherwise heldin safe custody by a bank or other custodian. The Trustee shall not be responsible for themanagement of the Portfolio by the Collateral Manager under the Collateral ManagementAgreement or for the price validation of the Initial Portfolio under the Forward SaleAgreement or to supervise the administration of the Portfolio by the Collateral Administrator or any other party. The Trustee shall not be responsible for the performance by the Custodianor any other Agent of any of its duties under the Agency Agreement or for the performance

by the Collateral Manager or the Collateral Administrator of any of its duties under theCollateral Management Agreement, or for the performance by any other Person appointed bythe Issuer in relation to the Notes. The Trustee shall not have any responsibility for theadministration or operation of the Collateral or to advise with respect thereto, including therequest by the Collateral Manager as directed by the Issuer to release any of the Collateralfrom time to time.

The Trust Deed also provides that the Trustee shall accept without investigation, requisitionor objection such right, benefit, title and interest as the Issuer has in and to any of theCollateral and shall not be bound or concerned to examine, enquire or make any investigationinto the same or into the Collateral in any respect or be liable for any defect or failure in theright, benefit, title and interest of the Issuer to the Collateral or any part thereof whether suchdefect or failure was known to the Trustee or might have been discovered upon examination,enquiry or investigation and whether capable of remedy or not.

Pursuant to the Euroclear Pledge Agreement, the Issuer has also created a Belgian law pledgeover the Collateral Debt Obligations from time to time held by the Custodian on behalf of theIssuer in Euroclear.

(b) Application of Proceeds upon Enforcement. The Trust Deed provides that the net proceedsof realisation of, or enforcement with respect to the security over, the Collateral constituted



109

by the Trust Deed, shall be applied in accordance with the Post-Acceleration Priority of payments set out in Condition 11(b) ( Enforcement ).

(c) Limited Recourse. Only the Trustee may pursue the remedies available under applicable law,under the Trust Deed to enforce the rights of the Transaction Creditors against the Issuer andno other Transaction Creditor shall be entitled to proceed directly against the Issuer, unlessthe Trustee having been bound to take steps and/or proceedings, fails to do so within areasonable time and such failure is continuing. The obligations of the Issuer to pay anyamounts due and payable in respect of the Notes, the Trust Deed and the other TransactionDocuments shall be limited to the proceeds available at such time to make such payments inaccordance with the applicable Priorities of Payments. If the net proceeds of realisation of thesecurity constituted by the Trust Deed and the Euroclear Pledge Agreement, uponenforcement thereof in accordance with Condition 11 ( Enforcement ) and the provisions of theTrust Deed, are less than the aggregate amount payable in such circumstances by the Issuer inrespect of the Notes and to the other Transaction Creditors (such negative amount beingreferred to herein as a “ shortfall ”), the obligations of the Issuer in respect of the Notes of each Class and its obligations to the other Transaction Creditors in such circumstances will belimited to such net proceeds, which shall be applied in accordance with the Post-AccelerationPriority of Payments (other than, in the case of the Asset Swap Counterparty, with respect toCounterparty Downgrade Collateral and in the case of GSCP, with respect to the FS AccruedInterest). In such circumstances, the other assets (if any) of the Issuer (including any and allamounts standing to the credit of the Irish Issuer Account and its rights under the CorporateServices Agreement) will not be available for payment of such shortfall which shall be borne

by the Class A Noteholders (on a pari passu basis), provided however that in relation to theClass A-2 Noteholders, any such shortfall shall be borne first by the Class A-2b Noteholdersin priority and thereafter by the Class A-2a Noteholders, the Subordinated Noteholders, theTrustee, and the other Transaction Creditors in accordance with the Post-Acceleration Priorityof Payments (other than, in the case of the Asset Swap Counterparty, with respect toCounterparty Downgrade Collateral) (applied in reverse order). The rights of the Transaction

Creditors to receive any further amounts in respect of such obligations shall be extinguishedand none of the Noteholders of each Class or the other Transaction Creditors may take anyfurther action to recover such amounts. None of the Noteholders of any Class, the Trusteenor the other Transaction Creditors (nor any other Person acting on behalf of any of them)shall be entitled at any time to institute against the Issuer, or join in any institution against theIssuer of, any bankruptcy, examinership, reorganisation, arrangement, insolvency, winding-upor liquidation proceedings or for the appointment of a liquidator, administrator, examiner or similar official, or other proceedings under any applicable bankruptcy or similar law inconnection with any obligations of the Issuer relating to the Notes of any Class, the TrustDeed or otherwise owed to the Transaction Creditors, save for lodging a claim in theliquidation of the Issuer which is initiated by another party or taking proceedings to obtain adeclaration as to the obligations of the Issuer.

None of the Noteholders of any Class, the Trustee nor any other Transaction Creditor (nor other Person acting on behalf of any of them) shall have any recourse against any director,shareholder, or officer of the Issuer in respect of any obligations, covenant or agreemententered into or made by the Issuer pursuant to the terms of the Trust Deed or any other Transaction Document to which the Issuer is a party or any notice or documents which it isrequested to deliver hereunder or thereunder.

The Collateral Manager’s partners, managing members, advisers, directors, officers,shareholders, agents and employees shall not be liable to the Issuer, the Trustee, anyTransaction Creditor, the Noteholders of any Class or any Person (nor any other Person actingon behalf of any of them).

None of the Trustee, the Corporate Services Provider, the Directors, the Arranger, the InitialPurchaser/Placement Agent, the Collateral Manager, the Collateral Administrator, the Asset



110

Swap Counterparty or the Custodian has any obligation to any Noteholder of any Class for payment of any amount by the Issuer in respect of the Notes of any Class.

(d) Acquisition and Sale of the Portfolio. The Collateral Manager is required to manage thePortfolio and to act in specific circumstances in relation to the Portfolio on behalf of theIssuer pursuant to the terms of, and subject to the parameters set out in, the CollateralManagement Agreement and subject to the overall supervision and control of the Issuer.

The duties of the Collateral Manager with respect to the Portfolio include (amongst others):

(i) the purchase of Collateral Debt Obligations on or prior to the Issue Date and duringthe Initial Investment Period;

(ii) the investment of amounts standing to the credit of the Accounts (other than thePayment Account, the Asset Swap Termination Account, the Expense ReserveAccount, the Euroclear Pledge Account, the FS Accrued Interest Account and theCounterparty Downgrade Cash Collateral Account) in Eligible Investments;

(iii) the sale of certain of the Collateral Debt Obligations and the reinvestment of Principal Proceeds received in Substitute Collateral Debt Obligations in accordancewith the criteria set out in the Collateral Management Agreement and thereafter; and

(iv) the management of the currency and/or interest hedging strategy in respect of thePortfolio.

The Collateral Manager is required to monitor the Collateral Debt Obligations with a view toseeking to determine whether any Collateral Debt Obligation has converted into, or beenexchanged for, an Exchanged Equity Security or become a Credit Improved Obligation,Defaulted Obligation or Credit Impaired Obligation, provided that , if it fails to do so, exceptin the circumstances set out in the Collateral Management Agreement, the Issuer shall nothave any recourse against any of the Collateral Manager, the Collateral Administrator, the

Custodian, the Principal Paying Agent, the Registrar or the Trustee for any loss suffered as aresult of such failure.

(e) Exercise of Rights in Respect of the Portfolio. Pursuant to the Collateral ManagementAgreement, the Issuer authorises the Collateral Manager, prior to enforcement of the securityover the Collateral and subject to the overall supervision and control of the Issuer, to exerciseany and all rights and remedies of the Issuer in its capacity as a holder of, or person

beneficially entitled to, the Collateral Debt Obligations, Collateral Enhancement Obligations,Exchanged Equity Securities or Eligible Investments, subject to the limitations set out in theCollateral Management Agreement. In particular, the Collateral Manager is authorised,subject to any specific direction given by the Issuer, to attend and vote at any meeting of holders of, or other persons interested or participating in, or entitled to the rights or benefits

(or a part thereof) under, any obligation forming part of the Portfolio and to give any consent,waiver, indulgence, time or notification, make any declaration or agree any composition,compounding or other similar arrangement with respect to any obligation forming part of thePortfolio.

(f) Information Regarding the Portfolio. The Collateral Administrator shall procure that a copyof each Monthly Report and each Payment Date Report will be made available via a securedwebsite accessible only by way of unique password (which may be obtained from theCollateral Administrator by the Noteholder (subject to receipt by the Collateral Administrator of a notice certifying that it is a holder of a beneficial interest in any Note)). The CollateralAdministrator shall also procure that a copy of each Subordinated Noteholder Report will bedelivered to the Trustee (who shall, subject to receipt by the Trustee of a notice certifying that

it is a holder of a beneficial interest in a Subordinated Note, on request, deliver such report to



111

such Subordinated Noteholder), the Collateral Manager, the Initial Purchaser/PlacementAgent and the Issuer on the date so provided for the Payment Date Report.

5. Covenants of and Restrictions on the Issuer

(a) Covenants of the Issuer. Unless otherwise provided and as more fully described in the Trust

Deed, for so long as any of the Notes remains Outstanding, the Issuer covenants to theTrustee on behalf of the holders of such Outstanding Notes that it will:

(i) take such steps as are reasonable to enforce all its rights and remedies:

(A) under the Notes;

(B) under the Trust Deed;

(C) in respect of the Collateral;

(D) in respect of the Accounts;

(E) under the Agency Agreement;

(F) under any Asset Swap Agreement (including any guarantee or credit supportannex entered into pursuant to any such Asset Swap Agreement);

(G) under the Subscription and Placement Agreement;

(H) under the Euroclear Pledge Agreement (if applicable);

(I) under each Class A-1 Note Purchase Agreement;

(J) under each Accredited Investor Note Purchase Agreement;

(K) under the Forward Sale Agreement;

(L) under the Collateral Management Agreement; and

(M) under any Collateral Acquisition Agreement;

(ii) comply with its obligations under the Notes, the Trust Deed, the Agency Agreementand any other Transaction Document to which it is a party;

(iii) keep proper books of account;

(iv) at all times maintain its tax residence in Ireland and shall not establish a branch or agency (other than the appointment of the Collateral Manager or the CollateralAdministrator pursuant to the terms of the Collateral Management Agreement or any

of the Agents pursuant to the terms of the Agency Agreement) outside of Ireland;(v) pay its debts generally as they fall due;

(vi) do all things as are necessary to maintain its corporate existence;

(vii) use its best endeavours to obtain and maintain a listing of the Outstanding Notes onthe Irish Stock Exchange. If, however, it is unable to do so, having used suchendeavours, or if the maintenance of such listing is agreed by the Trustee to beunduly onerous and the Trustee is satisfied that the interests of the holders of theOutstanding Notes would not thereby be materially prejudiced, the Issuer will insteaduse all reasonable endeavours promptly to obtain and thereafter to maintain a listingfor such Notes on such other stock exchange(s) as it may (with the approval of theTrustee such approval not to be unreasonably withheld) decide or failing such



112

decision as the Trustee may determine having acted reasonably regarding itsobligations as a trustee;

(viii) supply such information to the Rating Agency as it may reasonably request;

(ix) conduct its business and affairs such that, at all times:

(A) it shall maintain its registered office in Ireland;

(B) it shall hold all meetings of its board of directors in Ireland and ensure that allof its directors are resident in Ireland for tax purposes, that they will exercisetheir control over the business and the Issuer independently and that thosedirectors (acting independently) exercise their authority only from and withinIreland by taking all key decisions relating to the Issuer in Ireland;

(C) it shall not open any office or branch or place of business outside of Ireland;

(D) it shall not knowingly take any action (save to the extent necessary for theIssuer to comply with its obligations under the Transaction Documents)

which will cause its “centre of main interests” (within the meaning of European Council Regulation No. 1346/2000 on Insolvency Proceedings (the“Insolvency Regulations ”) to be located in any jurisdiction other thanIreland and will not establish any offices, branches or other permanentestablishments (as defined in the Insolvency Regulations) or register as aCompany in any jurisdiction other than Ireland; and

(E) take, or cause to be taken, such actions as are required in order for the Issuer to qualify for and maintain its qualifications for, the exclusion from status asan “investment company” provided by Section 3(c)(7) of the InvestmentCompany Act.

(b) Restrictions on the Issuer . As more fully described in the Trust Deed, for so long as any of the Notes remains Outstanding, save as contemplated in the Transaction Documents, theIssuer covenants to the Trustee on behalf of the holders of such Outstanding Notes that (to theextent applicable) it will not, without prior notification to the Rating Agency and the prior written consent of the Trustee:

(i) sell, factor, discount, transfer, assign, lend or otherwise dispose of any of its right,title or interest in or to the Collateral, other than in accordance with the CollateralManagement Agreement, nor will it create or permit to be outstanding any mortgage,

pledge, lien, charge, encumbrance or other security interest over the Collateral exceptin accordance with the Trust Deed, the Euroclear Pledge Agreement or theseConditions or to or in favour of a Selling Institution under a Participation to the Issuer

in respect of moneys payable by the Issuer to such Selling Institution to the relevantParticipation;

(ii) sell, factor, discount, transfer, assign, lend or otherwise dispose of, nor create or permit to be outstanding any mortgage, pledge, lien, charge, encumbrance or other security interest over, any of its other property or assets or any part thereof or interesttherein other than in accordance with the Trust Deed, the Euroclear PledgeAgreement or these Conditions;

(iii) engage in any business other than the holding or managing or both the holding andmanaging of “qualifying assets” within the meaning of Section 110 of the TaxesConsolidation Act, 1997, of Ireland and in connection therewith shall not engage inany business other than:

(A) acquiring and holding the Collateral;



113

(B) issuing and performing its obligations under the Notes;

(C) entering into, exercising its rights and performing its obligations under or enforcing its rights under the Transaction Documents; or

(D) performing any act incidental to or necessary in connection with any of the

above;(iv) amend any term or condition of the Notes of any Class (save in accordance with these

Conditions and the Trust Deed);

(v) agree to any amendment to any provision of, or grant any waiver or consent under theTransaction Documents;

(vi) incur any indebtedness for borrowed money, other than in respect of the Notes(including the issuance of additional Notes pursuant to Condition 19 ( Additional

Issuances ) or any document entered into in connection with the Notes or the salethereof, including the Asset Swap Agreements and any documents relating to theissuance of additional Notes pursuant to Condition 19 ( Additional Issuances );

(vii) amend, supplement or otherwise modify its memorandum and articles of associationor other constitutive documents;

(viii) (A) have any subsidiaries;

(B) take any action (save to the extent necessary for the Issuer to comply with itsobligations under the Transaction Documents) which will cause its “centre of main interests” to be located in any jurisdiction other than Ireland and willnot establish any offices, branches or other permanent establishments (asdefined in the Insolvency Regulations) or register as a Company in any

jurisdiction other than Ireland; or

(C) have any employees (for the avoidance of doubt, the Directors of the Issuer do not constitute employees);

(ix) enter into any reconstruction, amalgamation, merger or consolidation;

(x) convey or transfer all or a substantial part of its properties or assets (in one or a seriesof transactions) to any Person, otherwise than as contemplated in these Conditions;

(xi) issue any shares (other than such shares as are in issue as at the Issue Date) nor redeem or purchase any of its issued share capital;

(xii) enter into any material agreement or contract with any Person (other than anagreement on customary market terms, which terms do not contain the provisions

below) unless such contract or agreement contains “limited recourse” and“non-petition” provisions and such Person agrees that, prior to the date that is twoyears and one day after all the related obligations of the Issuer have been paid in full(or, if longer, the applicable preference period under applicable insolvency law), suchPerson shall not take any action or institute any proceeding against the Issuer under any insolvency law applicable to the Issuer or which would reasonably be likely tocause the Issuer to be subject to or seek protection of, any such insolvency law,

provided that such Person shall be permitted to become a party to and to participate inany proceeding or action under any such insolvency law that is initiated by any other Person other than one of its Affiliates;

(xiii) otherwise than as contemplated in the Transaction Documents, release from or terminate the appointment of any of the Agents under the Agency Agreement, or thatof the Collateral Administrator or the Collateral Manager under the Collateral



114

Management Agreement, respectively, (including, in each case, any transactionsentered into thereunder) or, in each case, from any executory obligation thereunder;

(xiv) pay any dividends other than those payable out of distributable reserves arising fromthe Issuer Fee;

(xv) enter into any lease in respect of, or own, premises; or (xvi) make any election within the meaning of Section 110(6) of the Taxes Consolidation

Act 1997 of Ireland.

6. Interest

(a) Payment Dates

(i) Class A Notes. The Class A Notes bear interest from the Issue Date and such interestwill first be payable on 17 March 2009 and thereafter semi-annually in arrear on17 September and 17 March in each year commencing on the Issue Date and endingon the Maturity Date, and any Redemption Date unless any such day is not a Business

Day, in which case interest shall be payable on the following Business Day (eachsuch date a “ Payment Date ”). The period from (and including) a Payment Date (or the Issue Date) to (but excluding) the next (or first) Payment Date is called an“Interest Accrual Period ” in these Conditions.

(ii) Subordinated Notes. Interest shall be payable in respect of the Subordinated Noteson an available funds basis in accordance with Condition 3(c)(i)(Q) ( Application of

Interest Proceeds ) and Condition 3(c)(ii)(G) ( Application of Principal Proceeds ) oneach Payment Date. Notwithstanding any other provision of the Conditions of the

Notes or the Trust Deed, all references herein and therein to the Subordinated Notes being redeemed in full or at their Principal Amount Outstanding shall be deemed to be amended to the extent required to ensure that a minimum of €1 principal amount

of each such Class of Notes remains Outstanding at all times and any amounts whichare to be applied in redemption of such Class of Notes pursuant hereto which are inexcess of the Principal Amount Outstanding thereof minus €1, shall constitute interest

payable in respect of such Notes and shall not be applied in redemption of thePrincipal Amount Outstanding thereof, provided always however that such €1

principal amount shall no longer remain Outstanding and each such Class of Notesshall be redeemed in full on the date on which all of the Collateral securing the Noteshas been realised and is to be finally distributed to the Noteholders.

(b) Interest Accrual

(i) Class A Notes. Each Class A Note will cease to bear interest from the due date for

redemption unless, upon due presentation, payment of principal is improperlywithheld or refused. In such event, it shall continue to bear interest in accordancewith this Condition 6 ( Interest ) (both before and after judgement) until whichever isthe earlier of (i) the day on which all sums due in respect of such Note up to that dayare received by or on behalf of the relevant Noteholder and (ii) the day seven daysafter the Trustee, the Principal Paying Agent or the Registrar having notified the

Noteholders of such Class of Notes in accordance with Condition 16 ( Notices ) of receipt of all sums due in respect of all the Notes of such Class up to that seventh day(except to the extent that there is failure in the subsequent payment to the relevantholders under these Conditions).

(ii) Subordinated Notes. Interest on the Subordinated Notes will cease to be payable in

respect of each Subordinated Note upon the date that all of the Collateral has beenrealised and no Interest Proceeds, Principal Proceeds or Collateral Enhancement



115

Obligation Proceeds remain available for distribution in accordance with thePriorities of Payments.

(c) Interest on the Class A Notes:

(i) Rate of Interest. Subject to as provided in (iii) below, the rate of interest from time

to time in respect of the Class A-1 Notes (the “ Class A-1 Floating Rate of Interest ”), in respect of the Class A-2a Notes (the “ Class A-2a Floating Rate of Interest ”) and in respect of the Class A-2b Notes (the “ Class A-2b Floating Rate of Interest ”) will be determined by the Calculation Agent on the following basis:

(A) On the second Business Day before the beginning of each Interest AccrualPeriod (each, an “ Interest Determination Date ”), the Calculation Agent willdetermine the Applicable EURIBOR for six month euro deposits (or, in thecase of the initial Due Period, a linear interpolation of the offered rate for sixmonth euro deposits and nine month euro deposits) as at 11:00 a.m. (Brusselstime) on the Interest Determination Date in question. Such offered rate will

be that which appears on the display designated as Reuters Screen

EURIBOR 01 (“ EURIBOR ”). The Class A-1 Floating Rate of Interest, theClass A-2a Floating Rate of Interest and the Class A-2b Floating Rate of Interest for such Interest Accrual Period shall be the aggregate of theApplicable Margin (as defined in this Condition below) and the rate which soappears, all as determined by the Calculation Agent.

(B) If the offered rate so appearing is replaced by the corresponding rates of morethan one bank then paragraph (A) above shall be applied, with any necessaryconsequential changes, to the arithmetic mean (rounded, if necessary, to thenearest one-hundred-thousandth of a percentage point (with 0.000005 beingrounded upwards)) of the rates (being at least two) which so appear, asdetermined by the Calculation Agent. If for any other reason such offered

rate does not so appear, or if the relevant page is unavailable, the CalculationAgent will request each of four major banks in the Euro zone interbank market acting in each case through its principal Euro zone (as defined in thisCondition below) office (the “ Reference Banks ”) to provide the CalculationAgent with its offered quotation to leading banks for euro deposits in theEuro zone interbank market for a period of six months (or, in the case of theinitial Due Period, a linear interpolation of the offered quotation for sixmonth euro deposits and nine month euro deposits) as at 11:00 a.m. (Brusselstime) on the Interest Determination Date in question. The Class A-1 FloatingRate of Interest, the Class A-2a Floating Rate of Interest and the Class A-2bFloating Rate of Interest for such Interest Accrual Period shall be theaggregate of the Applicable Margin and the arithmetic mean (rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point (with0.000005 being rounded upwards)) of such quotations (or of such of them,

being at least two, as are so provided), all as determined by the CalculationAgent.

(C) If on any Interest Determination Date one only or none of the ReferenceBanks provides such quotation, the Class A-1 Floating Rate of Interest, theClass A-2a Floating Rate of Interest and the Class A-2a Floating Rate of Interest, respectively, for the next Interest Accrual Period shall be the rate per annum which the Calculation Agent determines to be either the arithmeticmean (rounded, if necessary, to the nearest one-hundred-thousandth of a

percentage point (with 0.000005 being rounded upwards)) of the euro lending

rates which major banks in the Euro zone selected by the Calculation Agentare quoting, on the relevant Interest Determination Date, for loans in euro for



116

a period of six months to leading European banks plus the ApplicableMargin.

(D) “ Applicable Margin ” means:

(1) in the case of the Class A-1 Notes: 1.65 per cent.;

(1) in the case of the Class A-2a Notes: 1.50 per cent.; and

(1) in the case of the Class A-2b Notes: 3.00 per cent.

“Euro zone ” means the region comprised of Member States of the EuropeanUnion that have adopted the single currency in accordance with the Treatyestablishing the European Community, as amended.

(ii) Determination of Class A Floating Rate of Interest and Calculation of Interest Amount. The Calculation Agent will, as soon as practicable after 11:00 a.m.(Brussels time) on each Interest Determination Date, but in no event later than thesecond Business Day after such date, determine the Class A-1 Floating Rate of

Interest, the Class A-2a Floating Rate of Interest and the Class A-2b Floating Rate of Interest and calculate the Interest Amount payable in respect of outstanding principalamounts of the Class A-1 Notes, Class A-2a Notes and Class A-2b Notes for therelevant Interest Accrual Period. The amount of interest payable in respect of theClass A-1 Notes, the Class A-2a Notes and the Class A-2b Notes for each AuthorisedIntegral Denomination shall be calculated by applying the Class A-1 Floating Rate of Interest in the case of the Class A-1 Notes, the Class A-2a Floating Rate of Interest inthe case of the Class A-2a Notes and the Class A-2b Floating Rate of Interest in thecase of the Class A-2b Notes, to an amount equal to the Principal AmountOutstanding in respect of each such Note, multiplying the product by the actualnumber of days in the Interest Accrual Period concerned divided by 360 and roundingthe resultant figure to the nearest cent (half a cent being rounded upwards).

(iii) Reference Banks and Calculation Agent. The Issuer will procure that, so long asany Class A-1 Note, Class A-2a Note or Class A-2b Note remains Outstanding:

(A) a Calculation Agent shall be appointed and maintained for the purposes of determining the interest rate and Interest Amount payable in respect of theClass A-1 Notes, Class A-2a Notes and Class A-2b Notes; and

(B) in the event that the Class A-1 Floating Rate of Interest, the Class A-2aFloating Rate of Interest and the Class A-2b Floating Rate of Interest are to

be calculated by reference to the rates quoted by Reference Banks pursuant to paragraph (B) of Condition 6(c)(i) ( Rate of Interest ) that the number of

Reference Banks required pursuant to such Condition are appointed.If the Calculation Agent is unable or unwilling to continue to act as the CalculationAgent for the purpose of calculating interest hereunder or fails duly to establish theClass A-1 Floating Rate of Interest, the Class A-2a Floating Rate of Interest and theClass A-2b Floating Rate of Interest for any Accrual Period or to calculate theInterest Amount on the Class A-1 Notes, the Class A-2a Notes or the Class A-2b

Notes, the Issuer shall (with the prior approval of the Trustee) appoint some other leading bank to act as such in its place. The Calculation Agent may not resign itsduties without a successor having been so appointed.

(d) Interest on the Subordinated Notes. The Calculation Agent will on each InterestDetermination Date calculate the Interest Amount payable in respect of each €1,000 in

principal amount of the Subordinated Notes for the relevant Interest Accrual Period. TheInterest Amount payable to each Subordinated Noteholder shall be paid on a pro rata basis on



117

the applicable Payment Date pursuant to paragraph (Q) of Condition 3(c)(i) ( Application of Interest Proceeds ) and paragraph (G)(2) of Condition 3(c)(ii) ( Application of PrincipalProceeds ) determined by the proportion of the original face amount of the Subordinated

Notes held by the relevant Subordinated Noteholder to the Principal Amount Outstanding onthe Issue Date. In addition, Collateral Enhancement Obligation Proceeds (save for amountsrepresenting the Sale Proceeds in excess of the purchase price or exercise price of anyCollateral Enhancement Obligation that is sold, which have been either (i) credited or (ii) transferred (pursuant to Condition 3(j)(x) ( Collateral Enhancement Account )) to thePrincipal Account or the Interest Account at the Collateral Manager’s discretion) received bythe Issuer may, at the option of the Issuer (or the Collateral Manager on its behalf), be paid tothe Subordinated Noteholders pursuant to Condition 3(c)(iii) ( Application of Collateral

Enhancement Obligation Proceeds ).

(e) Publication of Floating Rates of Interest and Interest Amounts. The Calculation Agent willcause the Class A-1 Floating Rate of Interest, the Class A-2a Floating Rate of Interest and theClass A-2b Floating Rate of Interest, the Interest Amount payable in respect of each Class of

Notes and the Principal Amount Outstanding of each Class of Notes as of the applicablePayment Date to be notified to the Issuer, the Registrar, the Trustee, the CollateralAdministrator, the Collateral Manager, the Transfer Agent, the Paying Agents (including thePrincipal Paying Agent) and the Irish Stock Exchange (for so long as the Notes are listed onsuch exchange) as soon as possible after their determination but should only be required tomake publication on the fourth Business Day or thereafter, and the Registrar shall cause eachsuch rate, amount and date to be notified to the Noteholders of each Class in accordance withCondition 16 ( Notices ) as soon as possible following notification to the Principal PayingAgent but in no event later than the third Business Day after such notification. The InterestAmounts and Payment Date in respect of the Class A Notes so published may subsequently

be amended (or appropriate alternative arrangements made with the consent of the Trustee byway of adjustment) without notice in the event of an extension or shortening of the InterestAccrual Period. If any of the Notes become due and payable under Condition 10 ( Events of

Default ), interest shall nevertheless continue to be calculated as previously by the CalculationAgent in accordance with this Condition 6(e) ( Publication of Floating Rates of Interest and Interest Amounts ) but no publication of the applicable Interest Amounts shall be made unlessthe Trustee so determines.

(f) Determination or Calculation by Trustee. If the Calculation Agent does not at any time for any reason so determine the Class A-1 Floating Rate of Interest, the Class A-2a Floating Rateof Interest or the Class A-2b Floating Rate of Interest or calculate the Interest Amounts

payable in respect of the Class A Notes for an Interest Accrual Period, the Trustee (or aPerson appointed by it for the purpose) shall do so and such determination or calculation shall

be deemed to have been made by the Calculation Agent and shall be binding on the Noteholders. In doing so, the Trustee, or such Person appointed by it, shall apply the

foregoing provisions of this Condition 6(f) ( Determination or Calculation by Trustee ), withany necessary consequential amendments, to the extent that, in its opinion, it can do so, and,in all other respects it shall do so in such manner as it shall deem fair and reasonable in all thecircumstances and reliance on such Persons as it has appointed for such purpose. The Trusteeshall have no liability to any Person in connection with any determination or calculation it isrequired to make pursuant to this Condition 6(f) ( Determination or Calculation by Trustee ).

(g) Notifications, etc. to be Final. All notifications, opinions, determinations, certificates,quotations and decisions given, expressed, made or obtained for the purposes of the

provisions of this Condition 6(g) ( Notifications, etc. to be Final ), whether by the ReferenceBanks (or any of them), the Calculation Agent or the Trustee, will (in the absence of wilfuldefault, bad faith, manifest error) be binding on the Issuer, the Reference Banks, the

Calculation Agent, the Trustee, the Registrar, the Paying Agents, the CollateralAdministrator, the Collateral Manager and all Noteholders and (in the absence of manifesterror) no liability to the Issuer or the Noteholders of any Class shall attach to the Reference





119

The Issuer shall procure that notice of such redemption, including the applicableRedemption Date, shall be given to the Noteholders in accordance with Condition 16( Notices ) and, for so long as the Class A Notes are rated, the Rating Agency.

A “Note Tax Event ” is the introduction of a new, or any change in, theIssuer’s home jurisdiction tax statute, treaty, regulation, rule, ruling, practice,

procedure or judicial decision or interpretation (whether proposed, temporaryor final) which results in (or would on the next Payment Date result in) any

payment of principal or interest on the Class A Notes becoming properlysubject to any withholding tax (other than any withholding tax which arisesin the circumstances described in Condition 9(b)(i), (ii), (iii) or (iv))(Substitution of Principal Obligor or Change in Tax Residence ).

A “Collateral Tax Event ” is the introduction of a new, or any change in,home jurisdiction or foreign tax statute, treaty, regulation, rule, ruling,

practice, procedure or judicial decision or interpretation (whether proposed,temporary or final) which results in payments due from the Obligor under one or more Collateral Debt Obligations held by or on behalf of the Issuer

becoming properly subject to the imposition of home jurisdiction or foreignwithholding tax (to the extent that such withholding tax is not compensatedfor by a “gross-up” provision in the terms of the Collateral Debt Obligationthat holds the holder completely harmless from the full amount of suchwithholding tax on an after tax basis) which reduces in the aggregate byfive per cent. or more the aggregate interest payments on all of the CollateralDebt Obligations held by or on behalf of the Issuer during the related DuePeriod.

(ii) Conditions to Optional Redemption. Following receipt of notice from the Issuer or,as the case may be, of confirmation from the Trustee of receipt of a direction from therequisite percentage of Subordinated Noteholders or, as the case may be, the holdersof the Controlling Class, to exercise any right of optional redemption pursuant to thisCondition, the Collateral Administrator shall, (i) notify the Collateral Manager assoon as possible of such redemption and in any event not less than 38 Business Days

before the scheduled Redemption Date and (ii) as soon as practicable, and in anyevent not later than 30 Business Days prior to the scheduled Redemption Date (the“Redemption Determination Date ”) calculate the “ Redemption ThresholdAmount ”, which amount shall be the Redemption Price amount which would be dueand payable on redemption of the Class A Notes, together with, in each case, all prior ranking amounts payable in accordance with the Post-Acceleration Priority of Payments on the scheduled Redemption Date to the extent such amounts areascertainable on the Redemption Determination Date. For the avoidance of doubt anySubordinated Noteholder may withdraw its instructions/direction to exercise any rightof optional redemption (a “ Subordinated Noteholder Withdrawal ”) pursuant to thisCondition 7(b)(ii) ( Conditions to Optional Redemption ) at any time prior to the dateon which the Issuer enters into a binding agreement or agreements to sell all or part of the Portfolio.

Following receipt of notice from the Issuer or the Collateral Administrator pursuantto the Collateral Management Agreement, the Collateral Manager will use allcommercially reasonable efforts to estimate (expressed as a Euro amount) the marketvalue of the Collateral Debt Obligations based upon its reasonable commercial

judgement in accordance with this paragraph. The Collateral Manager will advise theCollateral Administrator of such market value estimate no later than 28 BusinessDays prior to the scheduled Redemption Date.



120

In estimating the market value of the Collateral Debt Obligations, the CollateralManager will bear no liability in the event the Sale Proceeds from the assignment,termination or disposal of the Collateral Debt Obligations is less than the marketvalue estimate.

Upon receipt of the market value estimate, the Collateral Administrator will provideconfirmation to the Collateral Manager on the next Business Day whether the marketvalue estimate together with (i) any Balances of the Accounts and (ii) any amountsreceivable under any Asset Swap Transaction is equal to or more than theRedemption Threshold Amount.

Upon receipt of this confirmation, the Collateral Manager shall, subject to theconditions set out below, be required to use all commercially reasonable efforts to

procure the assignment, termination or disposal of the Collateral Debt Obligationscontained in the Portfolio as soon as practicable so that the proceeds thereof are inimmediately available funds not later than one Business Day prior to such scheduledRedemption Date. The Collateral Manager will use all commercially reasonableefforts to procure that the settlement dates for any such sales of Collateral DebtObligations and Collateral Enhancement Obligations shall be no later than oneBusiness Day prior to the applicable scheduled Redemption Date.

In liquidating the Collateral Debt Obligations contained in the Portfolio, theCollateral Manager will be acting solely as an agent of the Issuer and shall not beresponsible to any other person for the provision of such service. The CollateralManager shall have no duties (including any fiduciary duties) or responsibilities tothe Arranger, the Noteholders or the Trustee and no fiduciary duties to the Issuer.

The Collateral Manager shall only sell any asset or group of assets together forming part of the Portfolio pursuant to Clause 20.1(i) ( Sale of the Portfolio upon Optional Redemption of the Notes ) of the Collateral Management Agreement at a price which it

believes to be reasonably close to the highest fully actionable price for such asset or group of assets together in its reasonable opinion as a market participant.

The Notes shall not be optionally redeemed pursuant to Condition 7(b)(i)( Redemptionat the Option of the Subordinated Noteholders or the Holders of the ControllingClass ) above unless by at least ten Business Days prior to the scheduled RedemptionDate (a) the Issuer shall have provided the Noteholders with notice (in accordancewith Condition 16 ( Notices )) of such redemption and (b) the Collateral Manager shallhave furnished to the Trustee evidence, in form satisfactory to the Trustee, that eachof:

(1) (A) the expected sale proceeds from the binding agreement or agreementsentered into by the Issuer with one or more Financial Institutionswhich (or whose guarantor under such obligations) has a short-termcredit rating from S&P of at least “A-1” and “P-l”, respectively, to

purchase, not later than the Business Day immediately preceding thescheduled Redemption Date, in immediately available funds, all or

part of the Portfolio at an aggregate purchase price and/or

(B) the expected sale proceeds (subject in each case to Rating AgencyConfirmation) from the binding agreement or agreements enteredinto by the Issuer with one or more funds or other investmentvehicles established for the purpose of acquiring assets similar to theCollateral Debt Obligations in the Portfolio to purchase, not later than two Business Days immediately preceding the scheduledRedemption Date, in immediately available funds, all or part of thePortfolio at an aggregate purchase price; and



121

(2) the estimated market value of the Collateral Debt Obligations ascertained bythe Collateral Manager,

in each case, together with all other amounts receivable upon liquidation of thePortfolio (net of any expenses payable in connection with such liquidation), theaggregate of the Balances standing to the credit of the Accounts and all amountsscheduled to be received under any Asset Swap Transaction on or prior to suchscheduled Redemption Date, is at least equal to the applicable Redemption ThresholdAmount; provided however the conditions to optional redemption may be amendedwith the prior written consent of the Trustee and the Collateral Manager, subject toreceipt of Rating Agency Confirmation.

(iii) Mechanics of Redemption. Following calculation by the Collateral Administrator of the applicable Redemption Threshold Amount, the Collateral Administrator shallmake such other calculations as it is required to make pursuant to the CollateralManagement Agreement and shall notify the Issuer, the Trustee, the CollateralManager and the Registrar of such amounts.

To exercise any option under this Condition 7(b) ( Optional Redemption ), the holdersof greater than 50 per cent. of the Principal Amount Outstanding of the Subordinated Notes, in the case of a redemption pursuant to Condition 7(b)(i)(A) ( Redemption at the Option of the Subordinated Noteholders or the Holders of the Controlling Class ),the holders of at least 66 ⅔ per cent. of the Principal Amount Outstanding of theSubordinated Notes at such time, acting by Extraordinary Resolution in the case of redemption pursuant to Condition 7(b)(i)(B) ( Redemption at the Option of theSubordinated Noteholders or the Holders of the Controlling Class ), or the holders of at least 66 ⅔ per cent. of the Principal Amount Outstanding of the Controlling Class atsuch time or of at least 66 ⅔ per cent. of the Principal Amount Outstanding of theSubordinated Notes at such time, in each case acting by Extraordinary Resolution inthe case of a redemption pursuant to Condition 7(b)(i)(C) ( Redemption at the Optionof the Subordinated Noteholders or the Holders of the Controlling Class ), mustdeliver to a Paying Agent the Definitive Certificates representing such Notes (wheresuch relevant Notes are in definitive form) together with a duly completedRedemption Notice not more than 60 nor less than 40 Business Days prior to theapplicable Redemption Date. No Redemption Notice or Definitive Certificate sodelivered may be withdrawn without the prior written consent of the Issuer other thanfollowing a Subordinated Noteholder Withdrawal. The Paying Agent shall copy eachRedemption Notice received to each of the Issuer, the Trustee, the CollateralAdministrator and the Collateral Manager.

The Collateral Administrator shall notify the Issuer, the Trustee, the CollateralManager, each Asset Swap Counterparty and the Registrar, whereupon the Registrar shall notify the Noteholders, upon satisfaction of the conditions set out inCondition 7(b)(ii) ( Conditions to Optional Redemption ) above. The CollateralManager shall arrange for assignment, termination or other disposal of the CollateralDebt Obligations on behalf of the Issuer in accordance with the terms set out in theCollateral Management Agreement following confirmation from the CollateralAdministrator that the conditions set out in Condition 7(b)(ii) ( Conditions to Optional

Redemption ) have been satisfied. The Issuer shall deposit, or cause to be deposited,the funds required for an optional redemption of the Notes in accordance with thisCondition 7(b) ( Redemption and Purchase ) in the Payment Account on or before theBusiness Day prior to the applicable Redemption Date. Principal Proceeds andInterest Proceeds received in connection with such redemption shall be payable inaccordance with the Post-Acceleration Priority of Payments specified inCondition 11(b) ( Enforcement ).



122

(c) Mandatory Redemption

(i) Redemption upon Breach of Coverage Tests

Class A Notes. If either of the Coverage Tests is not met on any Determination Dateor, in the case of the Class A Interest Coverage Test, on or following the

Determination Date relating to the second Payment Date, Interest Proceeds andthereafter Principal Proceeds will be applied in redemption of the Class A Notes inaccordance with the Note Payment Sequence on the related Payment Date inaccordance with and subject to the Priorities of Payments (including payment of all

prior ranking amounts) in each case, until each such Coverage Test is met after suchredemption.

Following receipt of notice from the Issuer notifying it of a mandatory redemption pursuant to this Condition, the Collateral Administrator shall notify the CollateralManager as soon as possible pursuant to the terms of the Collateral ManagementAgreement.

(d) Redemption upon Effective Date Rating EventIn the event that as at the second Business Day prior to the Payment Date following theEffective Date and thereafter as at each Payment Date (to the extent required), an EffectiveDate Rating Event has occurred and is continuing, the Class A Notes shall be redeemed attheir Redemption Price on a pro rata basis in accordance with the Note Payment Sequenceon such Payment Date out of Interest Proceeds and thereafter out of Principal Proceedssubject to the Priorities of Payment, in each case, until redeemed in full or, if earlier, until anEffective Date Rating Event is no longer continuing.

(e) Redemption following the expiry of the Reinvestment Period. Save to the extent previouslyredeemed and cancelled, the Notes of each Class will be redeemed on any Payment Datefollowing the expiry of the Reinvestment Period out of Principal Proceeds in accordance withthe Priorities of Payments as set out in Condition 3(c)(ii) ( Application of Principal Proceeds ).

(f) Redemption. All Notes in respect of which any notice of redemption is given under Condition 7(b) ( Optional Redemption ) shall be redeemed on the Redemption Date at their applicable Redemption Prices and to the extent specified in such notice and in accordancewith the requirements of this Condition 7 ( Redemption and Purchase ).

(g) Purchase of Notes by the Issuer. The Issuer may not purchase any of the Notes at any time.

(h) Cancellation. All Notes redeemed in full, in accordance with this Condition 7 ( Redemptionand Purchase ), will be cancelled and may not be reissued or resold.

(i) Redemption of the Subordinated Notes. Notwithstanding any other provisions of theConditions or the Trust Deed, all references herein and therein to any of the Subordinated

Notes being redeemed in full or at their Principal Amount Outstanding shall be deemed to beamended to the extent required to ensure that €1 principal amount of each such Class of Notesremains Outstanding at all times and any amounts which are to be applied in redemption of such Notes pursuant hereto which are in excess of the Principal Amount Outstanding thereof minus €1, shall constitute interest payable in respect of such Notes and shall not be applied inredemption of the Principal Amount Outstanding thereof, provided always however that such

€1 principal amount shall no longer remain outstanding and each such Class of Notes shall beredeemed in full on the date on which all of the Collateral securing the Notes has beenrealised and is to be finally distributed to the Noteholders.

(j) Refinancing of Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment. If on any date after the Issue Date (1) holders of at least 66 ⅔ per cent. of thePrincipal Amount Outstanding of the Subordinated Notes and the Collateral Manager consent



123

to a proposed amendment, modification, supplement or waiver of the provisions of anyTransaction Document relating to interest on the Class A Notes (a “ Pricing Amendment ”),(2) any relevant holder(s) of Class A Notes whose consent is required to effect such PricingAmendment under the Transaction Documents do not provide their consent thereto withinfifteen Business Days after the request therefor is notified to such holder(s) in accordancewith Condition 16 ( Notices ) (each a “ Non-Consenting Noteholder ”), (3) so long as thePricing Amendment has been approved by holders of at least 66 ⅔ per cent. of the PrincipalAmount Outstanding of the Subordinated Notes and the Collateral Manager and, therefore,only lacks the consent of the Non-Consenting Noteholders and (4) Rating AgencyConfirmation has been obtained and a rating of the Replacement Notes has been obtainedfrom the Rating Agency corresponding to the rating assigned by it to the Class A Notes of allsuch Non-Consenting Noteholders (the “ Non-Consenting Notes ”), then the Issuer and theTrustee shall, if so directed by the holders of at least 66 ⅔ per cent. of the Principal AmountOutstanding of the Subordinated Notes and the Collateral Manager, effect a refinancing (a“Non-Consenting Note Refinancing ”) of the Non-Consenting Notes by the issuance of additional Class A Notes and respective principal amounts (the “ Replacement Notes ”) to be

purchased by a person or persons consenting to such Pricing Amendment and otherwise

eligible under the provisions of the Trust Deed to be a holder of such Replacement Notes(each a “ Consenting Purchaser ”). The Consenting Purchasers shall make payment to theorder of the Trustee for the account of such Non-Consenting Noteholders in full at theapplicable Redemption Price (the “ Non-Consenting Notes Payment Amount ”).

Notice of any Non-Consenting Note Refinancing shall be given by the Trustee on behalf of and at the direction and the expense of the Issuer in accordance with Condition 16 ( Notices ).

All notices of a Non-Consenting Note Refinancing shall state:

(i) the applicable date of such Non-Consenting Note Refinancing (the “ Non-ConsentingNote Refinancing Date ”) which shall be a Payment Date;

(ii) the Non-Consenting Notes subject to the Non-Consenting Note Refinancing;(iii) the Non-Consenting Notes Payment Amount for such Non-Consenting Note; and

(iv) the place or places where such Non-Consenting Notes are to be surrendered inexchange for payment of the Non-Consenting Note Payment Amount.

Any failure to give notice of refinancing, or any defect therein, to any Non-Consenting Noteholder shall not impair or affect the validity of the refinancing of any other Notes of anyother Non-Consenting Noteholder.

Each Non-Consenting Noteholder shall present and surrender its Non-Consenting Note(s) atthe place specified in the notice of refinancing for payment of the Non-Consenting Notes

Payment Amount. Notice of refinancing having been given as aforesaid, on the Non-Consenting Note Refinancing Date, upon (a) receipt by the Trustee of the Non-Consenting Notes Payment Amount from the Consenting Purchaser(s) and (b) issuanceand authentication of the Replacement Notes, (1) the Non-Consenting Notes shall be deemedfor all purposes of the Trust Deed to be replaced by the Replacement Notes issued to theConsenting Purchasers), (2) the Non-Consenting Notes shall be deemed void and no longer beClass A Notes issued under the Trust Deed, except to the extent provided in the Trust Deed,and (3) such Pricing Amendment shall be effective. The failure of any Non-Consenting

Noteholder to present and deliver its Non-Consenting Note(s) shall not affect or impair thevalidity of such refinancing.

(k) Special Redemption Principal payments on the Notes shall be made in accordance with the

Principal Proceeds Priority of Payments at the sole and absolute discretion of the CollateralManager (acting on behalf of the Issuer) if, at any time during the Reinvestment Period, the



124

Collateral Manager (acting on behalf of the Issuer) has been unable, for a period of 20consecutive Business Days, to identify additional Collateral Debt Obligations that are deemedappropriate by the Collateral Manager (acting on behalf of the Issuer) in its discretion whichmeet the Eligibility Criteria or, to the extent applicable, the Reinvestment Criteria, insufficient amounts to permit the investment or reinvestment of all or a portion of the fundsthen in the Principal Account that are to be invested in additional Collateral Debt Obligationsand has so notified the Trustee (a “ Special Redemption ”). On the first Payment Datefollowing the Due Period in which such notice is given (a “ Special Redemption Date ”), thefunds in the Principal Accounts representing Principal Proceeds which cannot be reinvested inadditional Collateral Debt Obligations or Substitute Collateral Debt Obligations (the “ SpecialRedemption Amount ”) will be applied in accordance with paragraph (D) of the PrincipalProceeds Priority of Payments. Notice of payments pursuant to this Condition 7(k) ( Special

Redemption ) shall be given in accordance with Condition 16 ( Notices ) not less than threeBusiness Days prior to the applicable Special Redemption Date to each Noteholder affectedthereby and to the Rating Agency. For the avoidance of doubt, the exercise of a SpecialRedemption shall be at the sole and absolute discretion of the Collateral Manager (acting on

behalf of the Issuer) and the Collateral Manager shall be under no obligation to, or have any

responsibility for, any Noteholder or any other person for the exercise or non-exercise (asapplicable) of such Special Redemption.

8. Payments

(a) Method of Payment. Payments of principal upon final redemption in respect of each Notewill be made (i) in the case of the Global Certificates, by transfer to a euro accountmaintained by the payee with a branch of a bank in London and (ii) in the case of theAccredited Investor Definitive Certificates and any Definitive Notes, to the holder (or to thefirst named of joint holders) of such Note appearing on the Register against presentation andsurrender (or, in the case of part payment only, endorsement) of the Accredited Investor Definitive Certificate or, if applicable, Definitive Note representing such Note at the specifiedoffice of the Registrar or any Paying Agent by euro cheque drawn on a bank in Europe and

posted on the Business Day immediately preceding the relevant due date. Payments of interest on each Note and, prior to redemption in full thereof, principal in respect of each

Note, will be made (i) in the case of the Global Certificates, by transfer to a euro accountmaintained by the payee with a branch of a bank in London and (ii) in respect of AccreditedInvestor Definitive Certificates and any Definitive Notes, will be made by euro cheque drawnon a bank in Europe and posted on the Business Day immediately preceding the relevant duedate to the holder (or to the first named of joint holders) of such Note appearing on theRegister at the close of business on the fifteenth day before the relevant due date (the“Record Date ”) at his or her address shown on the register on the Record Date. Uponapplication of the holder to the specified office of the Registrar or any Paying Agent not lessthan five Business Days before the due date for any payment in respect of an Accredited

Investor Note or a Definitive Certificate the payment may be made (in the case of any final payment of principal against presentation and surrender or, in the case of part payment onlyof such final payment, endorsement of the Accredited Investor Definitive Certificate or Definitive Note representing such Note as provided above) by wire transfer, in immediatelyavailable funds, on the due date to an account denominated in any of Euro, Sterling or U.S.Dollars as provided in the Collateral Management Agreement, in each case maintained by theregistered Noteholder with a bank in Europe or the United States, as applicable, and subject tothe conditions set out in the Agency Agreement.

(b) Payments Subject to Fiscal Laws. All payments are subject in all cases to any applicablefiscal or other laws, regulations and directives, but without prejudice to the provisions of Condition 9 ( Taxation ). No commission shall be charged to the Noteholders.



125

(c) Payments on Presentation Dates. A holder shall be entitled to present a Note for paymentonly on a Presentation Date and shall not, except as provided in Condition 6 ( Interest ), beentitled to any further interest or other payment if a Presentation Date falls after the due date.

If a Note is presented for payment at a time when, as a result of differences in time zones it isnot practicable to transfer the relevant amount to an account as referred to above for value onthe relevant Presentation Date, the Issuer shall not be obliged so to do but shall be obliged totransfer the relevant amount to the account for value on the first practicable date after thePresentation Date.

(d) Agents. The names of the initial Registrar and Paying Agents and their initial specifiedoffices are set out below. The Issuer reserves the right at any time, with the approval of theTrustee, to vary or terminate the appointment of the Registrar and any Paying Agent andappoint additional or other agents, provided that it will maintain (i) a Registrar and (ii) aPaying Agent and a Transfer Agent having its specified office in a major city in a Member State of the European Union and that it will maintain a Paying Agent or Transfer Agent thatwill not be obliged to withhold or deduct tax pursuant to Council Directive 2003/48/EC onTaxation of Savings Income in the Form of Interest Payments and Related Matters and shall

procure that it shall at all times maintain a Custodian, Account Bank, Registrar, PayingAgent, Transfer Agent, Calculation Agent, Collateral Manager (unless and until a DisposalAgent is appointed pursuant to the terms of the Collateral Management Agreement) andCollateral Administrator. Notice of any change in identity or specified office of any of theRegistrar, the Principal Paying Agent, the Paying Agents, the Account Bank, the Custodian,the Collateral Manager or the Collateral Administrator will promptly be given to the

Noteholders by the Issuer in accordance with Condition 16 ( Notices ).

9. Taxation

(a) Withholding. All payments of principal and interest in respect of the Notes shall be madefree and clear of, and without withholding or deduction for, any taxes, duties, assessments or

governmental charges of whatever nature imposed, levied, collected, withheld or assessed byor within Ireland, or any political sub-division or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. For the avoidance of doubt, the Issuer shall not be required to gross-up any payments made to Noteholders of anyClass and shall withhold or deduct from any such payments any amounts on account of taxwhere so required by law or any relevant taxing authority. If the Issuer is so required towithhold, then the Issuer will instruct the Collateral Administrator to so withhold. Any suchwithholding or deduction shall not constitute an Event of Default under Condition 10(a)( Events of Default ).

(b) Substitution of Principal Obligor or Change in Tax Residence. Subject as provided below,if the Issuer satisfies the Trustee by whatever means the Trustee shall deem appropriate in its

sole discretion that it has or will on the occasion of the next payment due in respect of the Notes of any Class become obliged by the laws of Ireland to withhold or account for tax sothat it would be unable to make payment of the full amount then due, the Issuer (with theconsent of the Trustee and save as provided below) shall use all reasonable endeavours toarrange for the substitution of a company incorporated in another jurisdiction approved by theTrustee and as the principal obligor under the Notes of such Class, or to change its taxresidence to another jurisdiction approved by the Trustee, subject to receipt by the Trustee of Rating Agency Confirmation in respect of such substitution or change (subject to receipt of such information and/or opinions as the Rating Agency may require), provided that any suchsubstitution or change of residence does not cause the Issuer to be subject to tax.

Notwithstanding the above, if any taxes referred to in this Condition 9 ( Taxation ) arise:

(i) due to the connection of any Noteholder with Ireland otherwise than by reason onlyof the holding of any Note or receiving principal or interest in respect thereof; or



126

(ii) by reason of the failure by the relevant Noteholder to comply with any applicable procedures required to establish non-residence or other similar claim for exemptionfrom such tax; or

(iii) in respect of a payment made or secured for the immediate benefit of an individual or a non-corporate entity pursuant to Council Directive 2003/48/EC on Taxation of Savings Income in the Form of Interest Payments or any law implementing or complying with, or introduced in order to conform to, such Directive, or anyarrangements entered into between the Member States and certain other thirdcountries and territories in connection with the Directive; or

(iv) as a result of presentation for payment by or on behalf of a Noteholder who wouldhave been able to avoid such withholding or deduction by presenting the Note toanother Paying Agent in a Member State of the European Union; or

(v) any combination of the immediately preceding paragraphs (i) through (iv) (inclusive),

the requirement to substitute the Issuer as a principal obligor and/or change its residence for

taxation purposes shall not apply.10. Events of Default

(a) Events of Default. The occurrence of any of the following events shall constitute an “ Eventof Default ”:

(i) Non-payment of interest. The Issuer fails to pay any Interest Amount in respect of any Class A Note when the same becomes due and payable, provided that in theevent that such failure to pay interest arises as a result of any deduction therefrom or the imposition of withholding thereon as set out in Condition 9 ( Taxation ) suchfailure shall not constitute an Event of Default, provided further that any such failureto pay such interest continues for a period of five days;

(ii) Non-payment of principal. The Issuer fails to pay any principal when the same becomes due and payable on any Note on any Redemption Date;

(iii) Default under Priorities of Payments. Other than a failure already referred to in (i)and (ii) above, the Issuer fails on any Payment Date to disburse amounts available inthe Payment Account in accordance with the Priorities of Payments, which failurecontinues for a period of five days;

(iv) Breach of Other Obligations. The Issuer does not perform or comply with any other of its covenants, warranties or other agreements of the Issuer under the TransactionDocuments (other than a covenant, warranty or other agreement a default in the

performance or breach of which is dealt with elsewhere in this Condition 10(a)( Events of Default ) and other than the failure to meet any Coverage Test), or anyrepresentation, warranty or statement of the Issuer made in the Trust Deed, or in anycertificate or other writing delivered pursuant thereto, or in connection therewithceases to be correct in all material respects when the same shall have been made, andthe continuation of such default, breach or failure for a period of 30 days (or 15 days,in the case of any default, breach or failure of representation or warranty in respect of the Collateral) after notice thereof shall have been given, by registered or certifiedmail or overnight courier, to the Issuer by the Trustee specifying such default, breachor failure and requiring it to be remedied and stating that such notice is a “ Notice of Default ” hereunder;

(v) Insolvency Proceedings. Proceedings are initiated against the Issuer under anyapplicable liquidation, insolvency, bankruptcy, composition, examinership,reorganisation or other similar laws (together, “ Insolvency Law ”), or an examiner,



127

receiver, trustee, administrator, administrative receiver, custodian, conservator or other similar official (a “ Receiver ”) is appointed in relation to the Issuer or in relationto the whole or any substantial part of the undertaking or assets of the Issuer; or awinding-up petition is presented in respect of, or a winding-up order (including

judicial liquidation) is applied for by, or a distress or execution or other process islevied or enforced upon or sued out against the whole or any substantial part of theundertaking or assets of the Issuer; or the Issuer becomes or is, or could be deemed bylaw or a court to be, insolvent or bankrupt or unable to pay its debts, or initiates or consents to judicial proceedings relating to itself under any applicable InsolvencyLaw, or seeks the appointment of a Receiver, or makes a conveyance or assignmentfor the benefit of its creditors generally or otherwise becomes subject to anyreorganisation or amalgamation (other than on terms previously approved in writing

by the Trustee); or

(vi) Illegality. It is or will become unlawful for the Issuer to perform or comply with anyone or more of its obligations under the Notes.

(b) Acceleration

(i) If an Event of Default occurs and is continuing, the Trustee may, at its discretion, andshall, at the request of the Controlling Class acting by Extraordinary Resolution(subject to being indemnified and/or secured to its satisfaction against all liabilities,

proceedings, claims and demands to which it may thereby become liable and all costs,charges and expenses which may be incurred by it in connection therewith) givenotice to the Issuer that all the Notes are to be immediately due and payable.

(ii) Upon any such notice being given to the Issuer in accordance with (i) above, all of the Notes shall immediately become due and repayable at their applicable RedemptionPrices, provided that no such notice shall be required in the case of the Event of Default referred to in Condition 10(a)(v) ( Insolvency Proceedings ), (other than any

winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 30 days of commencement or, if earlier, the date on which it isadvertised) the occurrence of which shall result in automatic acceleration of maturityof the Notes in accordance with this Condition 10(b) ( Acceleration ).

(c) Curing of Default. At any time after a notice of acceleration of the maturity of the Notes has been made following the occurrence of an Event of Default and prior to enforcement of thesecurity pursuant to Condition 11 ( Enforcement ), the Trustee, at its discretion, may or, if requested by the Controlling Class acting by Ordinary Resolution, shall (in each case, subjectto being indemnified and/or secured to its satisfaction against all liabilities, proceedings,claims and demands to which it may thereby become liable and all costs, charges andexpenses which may be incurred by it in connection therewith) rescind and annul such notice

of acceleration under Condition 10(b)(i) ( Acceleration ) above or automatic acceleration under Condition 10(b)(ii) ( Acceleration ) above and its consequences if:

(i) the Issuer has paid or deposited with the Trustee a sum sufficient to pay:

(A) all overdue payments of interest and principal on the Notes, other than theSubordinated Notes;

(B) all due but unpaid taxes owing by the Issuer, as certified by an authorisedofficer of the Issuer to the Trustee;

(C) all unpaid Administrative Expenses up to the Senior Expenses Cap andunpaid Trustee Fees and Expenses up to the Senior Expenses Cap; and

(D) all amounts due and payable under the Asset Swap Agreement; and



128

(ii) the Trustee has determined (upon expert advice, which it may obtain in its absolutediscretion) that all Events of Default, other than the non-payment of the interest inrespect of, or principal of, the Notes that have become due solely as a result of theacceleration thereof under Condition 10(b) ( Acceleration ) above due to theoccurrence of such Events of Default, have been cured or waived.

Any previous rescission and annulment of a notice of acceleration pursuant to this Condition10(c) ( Curing of Default ) shall not prevent the subsequent acceleration of the Notes if theTrustee, at its discretion or, as subsequently requested to accelerate the Notes in accordancewith Condition 10(b)(i) ( Acceleration ) above, accelerates in accordance withCondition 10(b)(ii) ( Acceleration ) above.

(d) Restriction on Acceleration of Notes. No acceleration of the Notes shall be permitted pursuant to this Condition by any Class of Noteholders, other than consent of the holders of the Controlling Class as provided in Condition 10(b) ( Acceleration ) above, or unless and untilthe acceleration of any other Class of Notes is simultaneous with, or occurs subsequent to,acceleration by such Controlling Class.

(e) Notification and Confirmation of No Default. The Issuer shall promptly notify the Trustee,the Collateral Administrator, the Collateral Manager and the Rating Agency upon becomingaware of the occurrence of an Event of Default. The Trust Deed contains provision for theIssuer to provide written confirmation to the Trustee and the Rating Agency on an annual

basis or on request that no Event of Default has occurred and that no condition, event or acthas occurred which, with the lapse of time and/or the issue, making or giving of any notice,certification, declaration and/or request and/or the taking of any similar action and/or thefulfilment of any similar condition could constitute an Event of Default and that no other matter which is required (pursuant thereto) to be brought to the Trustee’s attention hasoccurred.

11. Enforcement

(a) Security Becoming Enforceable. Subject as provided in Condition 11(b) ( Enforcement ) below, the security constituted under the Trust Deed (and, if applicable, the Euroclear PledgeAgreement) over the Collateral shall become enforceable upon an acceleration of the maturityof the Notes pursuant to Condition 10 ( Events of Default ). Prior to any application of thePost-Acceleration Priority of Payments, the Counterparty Downgrade Collateral (if any)under the relevant Asset Swap Agreement will be paid or delivered to the Asset SwapCounterparty subject to and in accordance with the terms of the credit support annex annexedto the relevant Asset Swap Agreement.

(b) Enforcement. At any time after the Notes become due and payable and the security under theTrust Deed (and, if applicable, the Euroclear Pledge Agreement) becomes enforceable, theTrustee, to the extent permitted under any applicable laws but subject to Condition 4(c)( Limited Recourse ), may, at its discretion and without further notice, appoint a Receiver toenforce the terms of the Trust Deed, (if applicable, the Euroclear Pledge Agreement) and the

Notes and, pursuant and subject to the terms of the Trust Deed, realise and/or otherwiseliquidate the Collateral and/or take such action as may be permitted under applicable lawsagainst any Obligor in respect of the Collateral and/or take any other action to enforce thesecurity over the Collateral (such action “ Enforcement Action ”, which term includes anyother action which the Trustee may deem to fall within such definition), in each case withoutany liability as to the consequence of any action and without having regard (save to the extent

provided in Condition 14(e) ( Entitlement of the Trustee and Conflicts of Interest )) to theeffect of such action on individual Noteholders of such Class or any other Secured Party

provided however that no such Enforcement Action may be taken by the Trustee unless:

(i) it determined that the anticipated proceeds from such Enforcement Action (after deducting any reasonable expenses incurred in connection therewith) would be



129

sufficient to discharge in full all amounts due and payable in respect of the Class A-1 Notes, the Class A-2a Notes and the Class A-2b Notes and all amounts payable in priority thereto pursuant to the Post-Acceleration Priority of Payments (suchdetermination being an “ Enforcement Threshold Determination ”) and shall besubject to the Controlling Class, acting by Extraordinary Resolution, and theCollateral Manager concurring with such determination; or

(ii) consent to the taking of such enforcement action is received from the ControllingClass acting by an Extraordinary Resolution of such Class.

The Trustee shall not be bound to institute any such proceedings or take any such other actionunless it is directed by an Extraordinary Resolution of the holders of the Controlling Class atsuch time and, the Trustee is indemnified and/or otherwise secured to its satisfaction againstall liabilities, proceedings, claims and demands to which it may thereby become liable and allcosts, charges and expenses which may be incurred by it in connection therewith.

During the Post-Acceleration Priority of Payments Period, Interest Proceeds, PrincipalProceeds, Collateral Enhancement Obligation Proceeds and the net proceeds of enforcement

of the security over the Collateral shall be credited to the Payment Account or such other account as the holders of the Class of Notes entitled to direct the Trustee with respect toenforcement (in accordance with the previous paragraph) shall designate to the Trustee andshall be distributed in accordance with the following order of priority but in each case only tothe extent that all payments of a higher priority have been made in full (the“Post-Acceleration Priority of Payments ”):

(i) to the payment of taxes owing by the Issuer accrued in respect of the current tax year as certified by an authorised officer (as defined in the Trust Deed) of the Issuer to theTrustee, if any (excluding any taxes which have accrued prior to the current tax year);

(ii) to the payment of any amounts due and payable by the Issuer to GSCP pursuant to theForward Sale Agreement;

(iii) to the payment of firstly, any Trustee Fees and Expenses due and payable;

(iv) prior to the enforcement of the security pursuant to Condition 11 ( Enforcement ), tothe payment of Administrative Expenses up to an amount equal to the Senior Expenses Cap;

(v) following the enforcement of the security pursuant to Condition 11 ( Enforcement ), tothe payment of Administrative Expenses (such Administrative Expenses to be subjectto the Senior Expenses Cap, except that item (k) of the definition of “AdministrativeExpenses” will be payable regardless of the Senior Expenses Cap) due and payable;

(vi) to the payment to the Collateral Manager of any accrued and unpaid CollateralManagement Fee (or, to the extent applicable, any fee accrued and unpaid to theDisposal Agent) with any value added tax thereon;

(vii) on a pro rata basis, any payments due in respect of the Asset Swap Agreements(other than any Defaulted Asset Swap Termination Payments);

(viii) to the payment, on a pro rata and pari passu basis, of the Interest Amount due and payable on the Class A Notes provided however that in relation to payments of theInterest Amount due and payable on the Class A-2 Notes, such amounts shall beapplied first to the Class A-2a Noteholders and thereafter to the Class A-2b

Noteholders;

(ix) to the payment, on a pro rata basis and pari passu basis, in redemption andrepayment, as applicable, of the Class A Notes in full provided however that any



130

redemption or repayment made in respect of the Class A-2 Notes shall be made to theClass A-2a Notes in priority to the Class A-2b Notes;

(x) to the payment of any Administrative Expenses over and above the Senior ExpensesCap;

(xi) to the payment of the Defaulted Asset Swap Termination Payments;(xii) to the payment of any accrued and unpaid Make Whole Redemption Fee or Make

Whole Tax Event Fee with any value added tax thereon;

(xiii) to the payment, on a pro rata basis, in redemption of the Subordinated Notes in full;and

(xiv) thereafter, in payment of interest on the Subordinated Notes on a pro rata basis.

(c) Only Trustee to Act. Only the Trustee may pursue the remedies available under the TrustDeed to enforce the rights of the Noteholders or of any of the other Secured Parties under theTrust Deed and the Notes and no Noteholder or other Secured Party may proceed directly

against the Issuer or any of its assets unless (i) the Trustee, having become bound to proceedin accordance with the terms of the Trust Deed, fails or neglects to do so within a reasonable

period of time following the instance of the obligation to proceed having arisen and suchfailure or neglect is continuing and (ii) reasonable notice of such failure or neglect has beengiven to the Trustee. In such circumstances, subject to Condition 4(c) ( Limited Recourse ),any Secured Party may proceed directly against the Issuer or its assets. After realisation of the security which has become enforceable and distribution of the net proceeds in accordancewith the Post-Acceleration Priority of Payments, no Noteholder or other Transaction Creditor may take any further steps against the Issuer to recover any sum still unpaid in respect of the

Notes or the Issuer’s obligations to such Transaction Creditor and all claims against the Issuer to recover any sum still unpaid in respect of the Notes or the Issuer’s obligations to suchTransaction Creditor and all claims against the Issuer in respect of such sums unpaid shall beextinguished. In particular, none of the Trustee, any Noteholder or any other TransactionCreditor shall be entitled in respect thereof to petition, initiate an examinership or take anyother step for the winding-up of the Issuer.

(d) Purchase of Collateral by Noteholders. Upon any sale of any part of the Collateral followingthe occurrence of an Event of Default, whether made under the power of sale under the TrustDeed or by virtue of judicial proceedings, any Noteholder may (but shall not be obliged to)

bid for and purchase the Collateral or any part thereof and, upon compliance with the terms of sale, may hold, retain, possess or dispose of such property in its or their own absolute rightwithout accountability. For the avoidance of doubt, nothing in this Condition shall preventany Noteholder from making a bid for or purchasing Collateral or any part thereof at any time

prior to an Event of Default. In addition, any purchaser in any such sale which is a Noteholder may deliver Notes held by it in place of payment of the purchase price for suchCollateral where the amount payable to such Noteholder in respect of such Notes pursuant tothe Post-Acceleration Priority of Payments out of the net proceeds of such sale is equal to or exceeds the purchase moneys so payable.

12. Prescription

Claims in respect of principal and interest payable on redemption in full of the relevant Notes will become void unless payment is made as required by Condition 8 ( Payments ) within a period of fiveyears, in the case of interest, and ten years, in the case of principal, from the appropriate Record Date.

13. Replacement of Definitive Certificates or Accredited Investor Definitive Notes

If any Note is lost, stolen, mutilated, defaced or destroyed it may be replaced at the specified office of the Paying Agent in Ireland, subject in each case to all applicable laws and Irish Stock Exchange



131

requirements (for so long as the Notes are listed on such exchange), upon payment by the claimant of the expenses incurred in connection with such replacement and on such terms as to evidence, security,indemnity and otherwise as the Issuer may require ( provided that the requirement is reasonable in thelight of prevailing market practice). Mutilated or defaced Notes must be surrendered beforereplacements will be issued.

14. Meetings of Noteholders, Modification, Waiver and Substitution

(a) Provisions in Trust Deed. The Trust Deed contains provisions for convening meetings of the Noteholders (and for passing Resolutions) to consider matters affecting the interests of the Noteholders including, without limitation, modifying or waiving certain of the provisions of these Conditions and the substitution of the Issuer in certain circumstances. The provisions inthis Condition 14 ( Meetings of Noteholders, Modification, Waiver and Substitution ) aredescriptive of the detailed provisions of the Trust Deed.

(b) Decisions and Meetings of Noteholders.

(i) General . Decisions may be taken by Noteholders by way of Ordinary Resolution or,

to the extent required, Extraordinary Resolution, in each case, either acting together or, to the extent specified in any applicable Transaction Document, as a Class of Noteholders acting independently. Such Resolutions can be effected either at a dulyconvened meeting of the applicable Noteholders or by the applicable Noteholdersresolving in writing, in each case, in at least the minimum percentages specified inthe table “Minimum Percentage Voting Requirements” in Condition 14(b)(iii)( Minimum Voting Rights ) below. Meetings of the Noteholders may be convened bythe Issuer, the Trustee or by one or more Noteholders holding not less than 10 per cent. in Principal Amount Outstanding of the Notes of a particular Class, subject tocertain conditions including minimum notice periods.

The Trustee may, in its discretion, determine that any proposed Ordinary Resolutionor Extraordinary Resolution affects only the holders of one or more Classes of Notes,in which event the required quorum and minimum percentage voting requirements of such Ordinary Resolution or Extraordinary Resolution may be determined byreference only to the holders of that Class or Classes of Notes and not the holders of any other Notes as set forth in the tables below.

(ii) Quorum. The quorum required for any meeting convened to consider an OrdinaryResolution or Extraordinary Resolution, in each case, of all the Noteholders or of aspecified Class of Noteholders, or at any adjourned meeting to consider such aResolution, shall be as set out in the relevant column and row corresponding to thetype of Resolution in the table “Quorum Requirements” below.

Quorum Requirements

Type of Resolution

Any meeting other than ameeting adjourned for want of

quorum Meeting previously adjourned

for want of quorum

Extraordinary Resolution of all Noteholders (or a certain Class or Classes only)

Two or more persons holding or representing not less than 50 per cent. of the aggregate PrincipalAmount Outstanding of each Classof Notes (or the relevant Class or Classes only, if applicable)

Two or more persons holding or representing any Notes (or therelevant Class or Classes only, if applicable) regardless of theaggregate Principal AmountOutstanding of each Class of Notes(or the relevant Class or Classesonly, if applicable) so held or represented



132

Ordinary Resolution of all Noteholders (or a certain Class or Classes only)

Two or more persons holding or representing not less than 10 per cent. of the aggregate PrincipalAmount Outstanding of each Classof Notes (or the relevant Class or Classes only, if applicable)

Two or more persons holding or representing any Notes (or therelevant Class or Classes only, if applicable) regardless of theaggregate Principal AmountOutstanding of each Class of Notes

(or the relevant Class or Classesonly, if applicable) so held or represented

The Trust Deed does not contain any provision for higher quorums in anycircumstances.

(iii) Minimum Voting Rights. Set out in the table “Minimum Percentage VotingRequirements” below are the minimum percentages required to pass the Resolutionsspecified in such table which, (A) in the event that such Resolution is beingconsidered at a duly convened meeting of Noteholders, shall be determined byreference to the percentage which the aggregate Principal Amount Outstanding of

Notes held or represented by any person or persons entitled to vote in favour of suchResolution represents of the aggregate Principal Amount Outstanding of allapplicable Notes which are represented at such meeting and are entitled to be votedor, (B) in the case of any Written Resolution, shall be determined by reference to the

percentage which the aggregate Principal Amount Outstanding of the Notes entitledto be voted in respect of such Resolution which are voted in favour thereof representof the aggregate Principal Amount Outstanding of all the Notes entitled to vote inrespect of such Written Resolution.

Minimum Percentage Voting Requirements

Type of Resolution Minimum percentage

Extraordinary Resolution of all Noteholders (or acertain Class or Classes only)

66⅔ per cent. of the aggregate Principal AmountOutstanding of each Class of Notes (or of a certainClass or Classes only)

Ordinary Resolution of all Noteholders (or a certainClass or Classes only)

Over 50 per cent. of the aggregate Principal AmountOutstanding of each Class of Notes (or of a certainClass or Classes only)

(iv) Written Resolutions. Any Written Resolution may be contained in one document or in several documents in like form each signed by or on behalf of one or more of therelevant Noteholders and the date of such Written Resolution shall be the date onwhich the latest such document is signed.

(v) All Resolutions Binding. Any Resolution of the Noteholders (including anyResolution of a specified Class or Classes of Noteholders, where the Resolution of one or more Classes is not required) duly passed shall be binding on all Noteholders(regardless of Class and regardless of whether or not a Noteholder was present at themeeting at which such Resolution was passed).

(vi) Extraordinary Resolution. Any Resolution to sanction any of the following itemswill be required to be passed by an Extraordinary Resolution (in each case, subject toanything else contemplated in the Trust Deed Condition 14(c) ( Modification and Waiver ) or the relevant Transaction Document, as applicable) and the Trustee shall

not have any discretion to consent to such matters on behalf of the relevant





134

(iii) to correct or amplify the description of any property at any time subject to thesecurity of the Trust Deed, or to better assure, convey and confirm unto the Trusteeany property subject or required to be subject to the security of the Trust Deed(including, without limitation, any and all actions necessary or desirable as a result of changes in law or regulations) or to subject to the security of the Trust Deed anyadditional property;

(iv) to evidence and provide for the acceptance of appointment under the Trust Deed by asuccessor Trustee subject to and in accordance with the terms of the Trust Deed andto add to or change any of the provisions of the Trust Deed as shall be necessary tofacilitate the administration of the trusts under the Trust Deed by more than oneTrustee, pursuant to the requirements of the relevant provisions of the Trust Deed;

(v) to modify the restrictions on and procedures for resales and other transfers of Notes toreflect any changes in applicable law or regulation (or the interpretation thereof) or toenable the Issuer to rely upon any exemption from registration under the SecuritiesAct or the Investment Company Act or applicable Irish banking or securities laws or to remove restrictions on resale and transfer to the extent not required thereunder or otherwise to make any such modifications to the restrictions on and procedures for resales and other transfers of Notes as shall be necessary or advisable;

(vi) to make such changes as shall be necessary or advisable in order for the Notes to be(or to remain) listed on the Irish Stock Exchange or any other exchange;

(vii) save as contemplated pursuant to Condition 14(d) ( Substitution ) below, to take anyaction advisable to prevent the Issuer from becoming subject to withholding or other taxes, fees or assessments;

(viii) to take any action advisable to prevent the Issuer from being treated as resident in theUnited Kingdom for UK tax purposes, as trading in the United Kingdom through aUnited Kingdom permanent establishment for UK tax purposes or as subject to UK VAT in respect of Collateral Management Fees;

(ix) to take any action advisable to prevent the Issuer from being treated as engaged in aUnited States trade or business or otherwise be subject to United States federal, stateor local income tax on a net income basis;

(x) to enter into any additional agreements not expressly prohibited by the Trust Deed or the Collateral Management Agreement (as applicable) provided that such additionalagreements are not materially prejudicial to the interests of the Noteholders of anyClass;

(xi) to evidence any waiver by the Rating Agency as to any requirement (or condition in

the Trust Deed or the Collateral Management Agreement (as applicable)), of suchRating Agency;

(xii) to make any other modification of any of the provisions of the Trust Deed, theCollateral Management Agreement or any other Transaction Document which, in theopinion of the Trustee, is of a formal, minor or technical nature or is made to correct amanifest error or cure any ambiguity; and

(xiii) save as otherwise provided in the Trust Deed, the Collateral Management Agreementor the relevant Transaction Document, give any waiver or authorisation of any breachor proposed breach of any of the provisions of the Trust Deed or any other Transaction Document which is, in the opinion of the Trustee, not materially

prejudicial to the interests of the Noteholders of any Class.



135

Any such modification, authorisation or waiver shall be binding on all Noteholders and shall(save in the case of (xii) above) be subject to receipt of Rating Agency Confirmation and tonotice being given to the Noteholders as soon as practicable in accordance with Condition 16( Notices ), provided that the Trustee shall be entitled to obtain such advice in connectiontherewith and give such consent as it sees fit. Any such fees and/or charges incurred by theTrustee in connection with such advice shall be for the account of the Issuer.

Under no circumstances shall the Trustee be required to give such consent on less than21 days’ notice and shall be entitled to obtain such advice and/or opinions in connection withgiving such consent as it sees fit (and to be indemnified and/or secured in respect of all of itscosts and expenses in obtaining such advice and/or opinions). The foregoing shall not obligethe Trustee to consent where such proposed amendment, modification, supplement or waiver would in the Trustee’s sole determination be materially prejudicial to the interests of the

Noteholders of any Class.

In addition, the Trust Deed and the Collateral Management Agreement provide that the Issuer may:

(a) modify the calculation of any Coverage Test to correspond with changes in theguidelines, methodology or standards established by the Rating Agency, subject toreceipt of Rating Agency Confirmation with respect to such modification;

(b) modify the Collateral Quality Tests, provided that Rating Agency Confirmation withrespect to such modification has been obtained;

in each case, without consent of the Trustee or any Class of Noteholders; and

(c) modify any of the Portfolio Profile Tests and/or the Eligibility Criteria, subject toreceipt of the consent of the holders of at least 50 per cent. of the Principal AmountOutstanding of the Controlling Class and Rating Agency Confirmation with respect tosuch modification, without the consent of the Trustee provided that such modificationis not, in the opinion of the Trustee, materially prejudicial to the interests of the

Noteholders of any Class provided that the Collateral Administrator has been given15 Business Days’ notice.

(d) Substitution. The Trust Deed contains provisions permitting the Trustee to agree, subject tosuch amendment of the Trust Deed and such other conditions as the Trustee may require, butwithout the consent of the Noteholders of any Class, to the substitution of any other companyin place of the Issuer, or of any previous substituted company, as principal debtor under theTrust Deed and the Notes of each Class, if required for taxation purposes. In the case of sucha substitution the Trustee may agree, without the consent of the Noteholders, but subject toreceipt by the Trustee of Rating Agency Confirmation (subject to receipt of such informationand/or opinions as the Rating Agency may require), to a change of the law governing the

Notes and/or the Trust Deed, provided that such change would not in the opinion of theTrustee be materially prejudicial to the interests of the Noteholders of any Class. Anysubstitution agreed by the Trustee pursuant to this Condition 14(d) ( Substitution ) shall be

binding on the Noteholders, and shall be notified to the Noteholders and the Irish Stock Exchange (for so long as the Notes are listed on such exchange) as soon as practicable inaccordance with Condition 16 ( Notices ).

The Trustee may, subject to the satisfaction of certain conditions, including receipt by theTrustee of Rating Agency Confirmation, agree to a change in the place of residence of theIssuer for taxation purposes without the consent of the Noteholders of any Class, provided theIssuer does all such things as the Trustee may reasonably require in order that such change inthe place of residence of the Issuer for taxation purposes is fully effective and complies withsuch other requirements which are in the interests of the Noteholders as it may reasonablydirect.



136

(e) Entitlement of the Trustee and Conflicts of Interest. In connection with the exercise of itstrusts, powers, duties and discretions (including but not limited to those referred to in thisCondition) the Trustee shall have regard to the interests of each Class of Noteholders as aClass and shall not have regard to the consequences of such exercise for individual

Noteholders of such Class and the Trustee shall not be entitled to require, nor shall any Noteholder be entitled to claim, from the Issuer, the Trustee or any other Person anyindemnification or payment in respect of any tax consequence of any such exercise uponindividual Noteholders except to the extent already provided for in Condition 8 ( Payments ).

The Trust Deed provides that in the event of any conflict of interest between the holders of the Class A Notes and the Subordinated Notes, the interests of the holders of the ControllingClass will prevail. If the holders of the Controlling Class do not have an interest in theoutcome of the conflict, the Trustee shall give priority to the interests of the Subordinated

Noteholders. In the event that the Trustee shall receive conflicting or inconsistent requestsfrom two or more groups of holders of the Controlling Class (or another Class given priorityas described in this paragraph), each representing less than the majority of the PrincipalAmount Outstanding of the Controlling Class (or other Class given priority as described inthis paragraph), the Trustee shall give priority to the group which holds the greater amount of

Notes Outstanding of such Class. The Trust Deed provides further that the Trustee will actupon the directions of the holders of the Controlling Class (or other Class given priority asdescribed in this paragraph) in such circumstances, and shall not be obliged to consider theinterests of the holders of any other Class of Notes.

In addition, the Trust Deed provides that in the event of any conflict of interest between the Noteholders and any other Secured Party, the interests of the Noteholders will prevail.

(f) Replacement of the Trustee. The Trust Deed contains provisions by which the Issuer has the power to appoint a new Trustee subject to the prior approval of such Person by anExtraordinary Resolution of the Controlling Class. Any appointment of a new Trustee or newTrustees under the Trust Deed shall as soon as practicable thereafter be notified by the Issuer to the Paying Agents, the Secured Parties, the Registrar, the Noteholders, the Irish Stock Exchange (for so long as the Notes are listed on such exchange) and, so long as any of therated Class A Notes remain Outstanding, the Rating Agency.

15. Indemnification of the Trustee

The Trust Deed contains provisions for the indemnification of the Trustee and for its relief fromresponsibility in certain circumstances, including provisions relieving it from instituting proceedingsto enforce repayment or to enforce the security constituted by or pursuant to the Trust Deed, unlessindemnified to its satisfaction. The Trustee is entitled to enter into business transactions with theIssuer and any entity related to the Issuer without accounting for any profit. The Trustee is exemptedfrom any liability in respect of any loss or theft of the Collateral, from any obligation to insure, or to

monitor the provisions of any insurance arrangements in respect of, the Collateral (for the avoidanceof doubt, under the Trust Deed the Trustee is under no such obligation) and from any claim arisingfrom the fact that the Collateral is held by the Custodian or is otherwise held in safe custody by a bank or other custodian. The Trustee shall not be responsible for the performance by the Custodian or anyother Agent of any of its duties under the Agency Agreement or for the performance by the CollateralManager or the Collateral Administrator of any of its duties under the Collateral ManagementAgreement, or for the performance by any other Person appointed by the Issuer in relation to the

Notes. The Trustee shall not have any responsibility for the administration or operation of theCollateral, or to advise with respect thereto, including the request by the Collateral Manager asdirected by the Issuer to release any of the Collateral from time to time.

The Trust Deed contains provisions for the retirement of the Trustee and the removal of the Trustee

by Extraordinary Resolution of the Controlling Class, but no such retirement or removal shall becomeeffective until a successor trustee is appointed.



137

16. Notices

Notices may be given to Noteholders in any manner deemed acceptable by the Trustee provided that for so long as the Notes are listed on the Irish Stock Exchange, such notice shall be in accordancewith the guidelines of the Irish Stock Exchange. Each notice provided to the Noteholders pursuant tothis Condition 16 ( Notices ) shall be copied to GSI in such manner and to such address (electronic or otherwise) and/or fax number as GSI may inform the Trustee from time to time.

Notices to a Noteholder will be valid if posted to the address of such Noteholder appearing in theRegister at the time of publication of such notice by pre-paid, first Class mail (or any other manner approved by the Trustee which may be by electronic transmission) and (for so long as the Notes arelisted on the Irish Stock Exchange and the rules of the Irish Stock Exchange so require) if filed withthe Company Announcements Office of the Irish Stock Exchange.

The Trustee shall be at liberty to sanction some other method of giving notice to the Noteholders or acategory of them including, providing notice through the Clearing Systems, if, in its opinion, suchother method is reasonable having regard to market practice then prevailing and to the rules of thestock exchange on which the Notes are then listed and provided that notice of such other method is

given to the Noteholders in such manner as the Trustee shall require.17. Third Party Rights

No Person shall have any right to enforce any term or condition of this Note under the Contracts(Rights of Third Parties) Act 1999.

18. Governing Law

(a) Governing Law. The Trust Deed and each Class of Notes are governed by and shall beconstrued in accordance with English law. The Corporate Services Agreement is governed byand shall be construed in accordance with Irish law. The Euroclear Pledge Agreement isgoverned by and shall be construed in accordance with Belgian law.

(b) Jurisdiction. The courts of England are to have jurisdiction to settle any disputes which mayarise out of or in connection with the Notes, and accordingly any legal action or proceedingsarising out of or in connection with the Notes (“ Proceedings ”) may be brought in such courts.The Issuer has in the Trust Deed irrevocably submitted to the jurisdiction of such courts andwaives any objection to Proceedings in any such courts whether on the ground of venue or onthe ground that the Proceedings have been brought in an inconvenient forum. Thissubmission is made for the benefit of each of the Noteholders and the Trustee and shall notlimit the right of any of them to take Proceedings in any other court of competent jurisdictionnor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not).

(c) Agent for Service of Process. The Issuer appoints TMF Management (UK) Limited (havingan office, at the date hereof, at Pellipar House, First Floor, 9 Cloak Lane, London EC4R 2RU,United Kingdom) as its agent in England to receive service of process in any Proceedings inEngland based on any of the Notes. If for any reason the Issuer does not have such agent inEngland, it will promptly appoint a substitute process agent and notify the Trustee, theCustodian and the Noteholders of such appointment within 15 days, failing which the Trusteeshall be entitled to appoint a new agent for service of process by written notice to the Issuer.

Nothing herein shall affect the right to service of process in any other manner permitted bylaw.

19. Additional Issuances

The Issuer may from time to time, subject to the written consent of the holders of at least 66 ⅔ per cent. of the Principal Amount Outstanding of the Subordinated Notes and the Collateral Manager,create and issue the Replacement Notes in accordance with Condition 7(j) ( Refinancing of



138

Non-Consenting Noteholders’ Notes in Connection with Pricing Amendment ), having the same termsand conditions as the Non-Consenting Notes and which shall be consolidated and form a single serieswith the Class of Notes to which each Non-Consenting Note relates, provided that the followingconditions are met:

(i) such Replacement Notes must be issued for a cash sale price and the Consenting Purchasersshall make payment of the Non-Consenting Notes Payment Amount to the Trustee for theaccount of the Non-Consenting Noteholders;

(ii) such Replacement Notes must be of the same Classes and respective principal amounts asthose of the Non-Consenting Notes being replaced so that the respective proportions of aggregate principal amount of the Classes of Notes existing immediately prior to suchadditional issuance remain unchanged following such additional issuance;

(iii) the terms (other than the date of issuance, the issue price and the date from which interest willaccrue) of such Replacement Notes must be identical to the terms of the Non-Consenting

Notes of the applicable Class of Notes being replaced;

(iv) the Issuer must receive Rating Agency Confirmation in respect of such additional issuances;(v) (so long as the existing Notes of the Class of Replacement Notes to be issued are listed on the

Irish Stock Exchange) the Replacement Notes of such Class must be admitted to the OfficialList and trading on the regulated market of the Irish Stock Exchange; and

(vii) such additional issuances are in accordance with all applicable laws including, withoutlimitation, the securities, banking and tax laws and regulations of Ireland.

References in these Conditions to the “Notes” include (unless the context requires otherwise) anyother notes issued pursuant to this Condition and forming a single series with the Notes. Any further securities forming a single series with Notes constituted by the Trust Deed or any deed supplementalto it shall, and any other securities may (with the consent of the Trustee), be constituted by a deed

supplemental to the Trust Deed.

Noteholders should be aware that additional notes that are treated for non-tax purposes as a singleseries with the original Notes may be treated as a separate series for U.S. federal income tax purposes.In such case, the new notes may be considered to have been issued with OID (as defined in “ Taxation

– United States Federal Income Taxation – Interest on the Class A Notes ”), which may affect themarket value of the original Notes since such additional notes may not be distinguishable from theoriginal Notes.





140

FORM OF THE NOTES

References below to Notes, to Regulation S Global Certificates and the Rule 144A Global Certificates(together the “ Global Certificates ”), and the Accredited Investor Definitive Certificates and theDefinitive Certificates representing such Notes are to each respective Class of Notes, except asotherwise indicated.

1. Initial Issue of Notes

The Regulation S Notes of each Class (other than the Accredited Investor Definitive Notes) will berepresented on issue by a Regulation S Global Certificate deposited on their issue date with andregistered in the name of The Bank of New York Depository (Nominees) Limited as nominee for TheBank of New York Mellon as common depositary for Euroclear and Clearstream, Luxembourg (each,a “Regulation S Global Certificate ”). Beneficial interests in a Regulation S Global Certificate may

be held only through Euroclear or Clearstream, Luxembourg at any time. See “ Book-Entry ClearanceProcedures ”. Beneficial interests in a Regulation S Global Certificate may not be held by or on

behalf of a U.S. Person (as defined in Regulation S under the Securities Act) at any time. Byacquisition of a beneficial interest in a Regulation S Global Certificate, the purchaser thereof will be

deemed to represent, among other things, that it is not a U.S. Person, and that, if in the future itdetermines to transfer such beneficial interest, it will transfer such interest only to a person whom theseller reasonably believes (a) in the case of a purchaser who takes delivery in the form of an interest ina Regulation S Global Certificate, to be a non-U.S. Person in an Offshore Transaction in accordancewith Rule 903 or Rule 904 of Regulation S, (b) in the case of a purchaser who takes delivery in theform of an interest in a Rule 144A Global Certificate, to be a U.S. Person that is a QIB/QP who takesdelivery in the form of an interest in a Rule 144A Global Certificate and (c) otherwise in accordancewith the Trust Deed and applicable securities laws. See “ Transfer Restrictions ”.

The Rule 144A Notes of each Class will be represented by a Rule 144A Global Certificate depositedon their issue date with the common depositary for, and registered in the name of Bank of New York Depository (Nominees) Limited as nominee of The Bank of New York Mellon (each a “ Rule 144A

Global Certificate ”). A beneficial interest in a Rule 144A Global Certificate may only be heldthrough Euroclear and Clearstream, Luxembourg at any time. See “ Book-Entry ClearanceProcedures ”. By acquisition of a beneficial interest in a Rule 144A Global Certificate, the purchaser thereof will be deemed to represent, amongst other things, that it is a QIB (for the purposes of Rule 144A under the Securities Act) and a QP (for the purposes of Section 3(c)(7) of the InvestmentCompany Act) and that, if in the future it determines to transfer such beneficial interest, it will transfer such interest only to a person whom the seller reasonably believes (a) in the case of a purchaser whotakes delivery in the form of an interest in a Regulation S Global Certificate, to be a non-U.S. Personin an Offshore Transaction in accordance with Rule 903 or Rule 904 of Regulation S, (b) in the caseof a purchaser who takes delivery in the form of an interest in a Rule 144A Global Certificate, to be aU.S. Person that is a QIB/QP who takes delivery in the form of an interest in a Rule 144A GlobalCertificate, and (c) otherwise in accordance with the Trust Deed and applicable securities laws.

The Accredited Investor Notes will be represented on issue by definitive certificated notes in fullyregistered form, without interest coupons or principal receipts, registered in the name of the holder (or nominee) thereof (each, an “ Accredited Investor Definitive Note ”). By acquisition of an AccreditedInvestor Note, the purchaser thereof will represent, amongst other things, that it is either (a) within theUnited States or a U.S. Person that is both an Accredited Investor and an Eligible ICA Investor or (b) a non-U.S. Person acquiring such Accredited Investor Note in an Offshore Transaction in relianceon Regulation S and that, if in the future it determines to transfer such beneficial interest, it willtransfer such interest in accordance with the procedures and restrictions contained in the Trust Deed.Except as set out in the Trust Deed and in any event in accordance with applicable securities laws, aninterest in an Accredited Investor Note may only be transferred to a person who (a) is in the UnitedStates or is a U.S. Person that is both an Accredited Investor and an Eligible ICA Investor or (b) is a

non-U.S. Person taking delivery in the form of a Regulation S Note upon receipt of a transfer certificate (in the form provided in the Trust Deed).



141

Interests in Global Certificates, Accredited Investor Definitive Certificates and, if applicable,Definitive Certificates related thereto will be subject to certain restrictions on transfer set forth thereinand in the Trust Deed and as set forth in Rule 144A and the Investment Company Act and the Noteswill bear the applicable legends regarding the restrictions set forth under “ Transfer Restrictions ”. Inthe case of each Class of Notes (excluding the Accredited Investor Notes), an interest in aRegulation S Global Certificate may be transferred to a person who takes delivery in the form of aninterest in a Rule 144A Global Certificate in denominations greater than or equal to the MinimumDenominations applicable to interests in such Rule 144A Global Certificate only upon receipt by theTransfer Agent of a written certification (in the form provided in the Trust Deed) to the effect that thetransferor reasonably believes that the transferee is a QIB/QP and that such transaction is inaccordance with any applicable securities laws of any state of the United States or any other

jurisdiction. In the case of each Class of Notes (excluding the Accredited Investor Notes), an interestin the Rule 144A Global Certificates may be transferred to a person who takes delivery in the form of an interest in a Regulation S Global Certificate only upon receipt by the Transfer Agent of a writtencertification (in the form provided in the Trust Deed) from the transferor to the effect that the transfer is being made to a non-U.S. Person and outside the United States in Offshore Transactions and inaccordance with Regulation S under the Securities Act.

Any interest in a Regulation S Global Certificate that is transferred to a person who takes delivery inthe form of an interest in a Rule 144A Global Certificate will, upon transfer, cease to be an interest insuch Regulation S Global Certificate and become an interest in the Rule 144A Global Certificate, and,accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to

beneficial interests in a Rule 144A Global Certificate for as long as it remains such an interest. Any beneficial interest in a Rule 144A Global Certificate that is transferred to a person who takes deliveryin the form of an interest in a Regulation S Global Certificate will, upon transfer, cease to be aninterest in a Rule 144A Global Certificate and become an interest in the Regulation S GlobalCertificate and, accordingly, will thereafter be subject to all transfer restrictions and other proceduresapplicable to beneficial interests in a Regulation S Global Certificate for so long as it remains such aninterest. No service charge will be made for any registration of transfer or exchange of Notes, but the

Transfer Agent may require payment of a sum sufficient to cover any tax or other governmentalcharge payable in connection therewith.

Except in the limited circumstances described below, owners of beneficial interests in GlobalCertificates will not be entitled to receive physical delivery of certificated Notes. The Notes are notissuable in bearer form.

2. Exchange for Definitive Certificates

2.1 Exchange:

Each Global Certificate will be exchangeable, free of charge to the holder, on or after its DefinitiveExchange Date (as defined below), in whole but not in part, for Definitive Certificates if the

Rule 144A Global Certificate or Regulation S Global Certificate is held (directly or indirectly) on behalf of Euroclear, Clearstream, Luxembourg or an alternative Clearing System and any suchClearing System is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or announces its intention to permanently cease business or does infact do so.

The Registrar will not register the transfer of, or exchange of interests in, a Global Certificate for Definitive Certificates for a period of 15 calendar days before the date for any payment of principal or interest in respect of the Notes.

If only one of the Global Certificates (the “ Exchanged Global Certificate ”) becomes exchangeablefor Definitive Certificates in accordance with the above two paragraphs, transfers of Notes may nottake place between, on the one hand, persons holding Definitive Certificates issued in exchange for

beneficial interests in the Exchanged Global Certificate and, on the other hand, persons wishing to purchase beneficial interests in the other Global Certificate.



142

“Definitive Exchange Date ” means a day falling not less than 30 days after that on which the noticerequiring exchange is given and on which banks are open for business in the city in which thespecified office of the Registrar and in the cities in which the relevant alternative Clearing System islocated.

2.2 Delivery of Definitive Certificates:

In such circumstances, the relevant Global Certificate shall be exchanged in full for DefinitiveCertificates and the Issuer will, at the cost of the Issuer (but against such indemnity as the Registrar may require in respect of any tax or other duty of whatever nature which may be levied or imposed inconnection with such exchange), cause sufficient Definitive Certificates to be executed and deliveredto the Registrar for completion, authentication and dispatch to the relevant Noteholders. A personhaving an interest in a Global Certificate must provide the Registrar with (a) a written order containing instructions and such other information as the Issuer and the Registrar may require tocomplete, execute and deliver such Certificates and (b) in the case of the Rule 144A GlobalCertificate only, a fully completed, signed certification substantially to the effect that the exchangingholder is not transferring its interest at the time of such exchange or, in the case of simultaneous sale

pursuant to Rule 144A, a certification that the transfer is being made in compliance with the provisions of Rule 144A. Definitive Certificates issued in exchange for a beneficial interest in theRule 144A Global Certificate shall bear the legends applicable to transfers pursuant to Rule 144A, asset out under “ Transfer Restrictions ” below.

2.3 Legends

The holder of a Definitive Certificate may transfer the Notes represented thereby in whole or in part inthe applicable Minimum Denomination by surrendering it at the specified office of the Registrar or any Paying Agent, together with the completed form of transfer thereon. “ Minimum Denomination ”means (a) in respect of Rule 144A Notes of each Class, €250,000 and (b) in respect of Regulation S

Notes of each Class (excluding, for the avoidance of doubt, the Accredited Investor Notes), €100,000.Upon the transfer, exchange or replacement of a Definitive Certificate bearing the legend referred to

below or upon specific request for removal of the legend on a Definitive Certificate, the Issuer willdeliver only Definitive Certificates that bear such legend, or will refuse to remove such legend, as thecase may be, unless there is delivered to the Issuer and the Registrar such satisfactory evidence, whichmay include an opinion of counsel, as may reasonably be required by the Issuer that neither the legendnor the restrictions on transfer set forth therein are required to ensure compliance with the provisionsof the Securities Act, the Investment Company Act, Regulation S or Rule 144A. The legend on eachDefinitive Certificate representing a Rule 144A Note will be in substantially the form of the legendapplicable to the Rule 144A Global Certificate, and the legend on each Definitive Certificaterepresenting a Regulation S Note will be in substantially the form of the legend applicable to theRegulation S Global Certificate, with the exception that written certificates from the transferee will berequired in lieu of deemed representations and warranties as to transferee status.



143

DESCRIPTION OF THE PORTFOLIO

Terms used and not otherwise defined herein or in this Offering Memorandum as specificallyreferenced herein shall have the meaning given to them in Condition 1 (Definitions) of the Conditionsof the Notes.

IntroductionPursuant to the Collateral Management Agreement, the Collateral Manager is required to act as theIssuer’s manager in specific circumstances in relation to a portfolio comprising Collateral DebtObligations (including Substitute Collateral Debt Obligations), Collateral Enhancement Obligations,Exchanged Equity Securities and Eligible Investments (the “ Portfolio ”) and to carry out the dutiesand functions described below. In addition, the Collateral Administrator is required to performcertain calculations and other administrative functions in relation to the Portfolio on behalf of theIssuer, in each case as described in the Collateral Management Agreement as described in greater detail below under “ Description of the Collateral Management Agreement ”.

Acquisition of Collateral Debt Obligations

The acquisition of Collateral Debt Obligations by, or on behalf of, the Issuer will take place duringthree periods: (a) on or prior to the Issue Date; (b) the period from the Issue Date up to but excludingthe Effective Date (such period, being the “ Initial Investment Period ”), by which time the Issuer shall have acquired or committed to acquire an Aggregate Principal Balance of Collateral DebtObligations equal to not less than the Target Par Amount; and (c) the period from the Effective Dateup to but excluding the earliest of (i) the date falling at end of the Due Period preceding the PaymentDate falling on 17 September 2010, or, if such day is not a Business Day, the immediately followingBusiness Day, (ii) the date of the acceleration of the Notes pursuant to Condition 10(b) ( Acceleration )and (iii) the date on which the Collateral Manager reasonably believes and notifies the Issuer, theRating Agency and the Trustee that it can no longer reinvest in additional Collateral Debt Obligationsin accordance with the Reinvestment Criteria (the period from the Issue Date to the earliest of (i), (ii)and (iii) above, the “ Reinvestment Period ”). In certain limited circumstances, the CollateralManager, on behalf of the Issuer, may acquire further Collateral Debt Obligations after the expiry of the Reinvestment Period.

On or before 5.00 p.m. (London Time) on the second Business Day immediately preceding theEffective Date, the Collateral Manager will give notice to the Issuer, the Trustee, the CollateralAdministrator and the Rating Agency as to the Target Par Amount it has selected to be applicable asat the Effective Date. The Collateral Manager may, in its sole discretion, select as the Target Par Amount an amount equal to (a) €1,481,250,000, (b) €1,488,000,000 or (c) €1,492,500,000.

Purchase of the Initial Portfolio

As of the Issue Date, the Issuer, or the Collateral Manager acting on its behalf, will have purchased or

committed to purchase an Aggregate Principal Balance of Senior Secured Loans and/or Senior Secured Floating Rate Notes (the “ Initial Portfolio ”) of approximately €1,200,000,000 (the “ InitialPar Amount ”) pursuant to the Forward Sale Agreement.

Pursuant to the terms of the Forward Sale Agreement, the Collateral Manager has verified andvalidated that the Original Purchase Price of each Collateral Debt Obligation paid by the Issuer under the Forward Sale Agreement is not an off-market price as at its Inclusion Date in its reasonableopinion as a market participant (this service being the Collateral Manager’s sole obligation under theForward Sale Agreement) determined by reference to:

(i) the offer price obtained in respect of such Collateral Debt Obligation from an independent pricing service; or

(ii) if either (a) such service is not available or (b) such offer price provided by the independent pricing service, in the reasonable opinion of GSCP, is not executable or current, the average



144

of the two lowest executable offer prices for the principal amount of such Collateral DebtObligation received from at least three independent broker dealers by the Collateral Manager,which may not include GSCP); or

(iii) if the price cannot be determined under either (i) or (ii) above, the Collateral Manager willexercise its own judgement and it may in its discretion consult with other market participants,including the GSCP.

In providing such verification and validation, the Collateral Manager (a) will be acting solely as agentof the Issuer and the Arranger in accordance with the Forward Sale Agreement and will not beresponsible to any other person for the provision of such verification and validation and (b) shall haveno duties (including any fiduciary duties) or responsibilities to the Noteholders or the Trustee and nofiduciary duties to the Issuer or the Arranger. See also “ Risk Factors - Purchase of Collateral Debt Obligations on the relevant Inclusion Date ”. For the avoidance of doubt, the verification andvalidation responsibilities of the Collateral Manager under the Forward Sale Agreement relate only tothe Collateral Debt Obligations that make up the Initial Portfolio.

The proceeds of issue of the Notes remaining after payment of (a) the acquisition costs for the Initial

Portfolio and (b) certain fees, costs and expenses incurred in connection with the issue of the Notesand anticipated to be payable by the Issuer following completion of the issue of the Notes will bedeposited in the Unused Proceeds Account on the Issue Date.

During the Initial Investment Period, the Collateral Manager, acting on behalf of the Issuer, shall useall reasonable efforts to select and acquire, on behalf of the Issuer, additional Collateral DebtObligations out of the Balance standing to the credit of the Unused Proceeds Account.

The Effective Date

The date falling on the earlier of: (a) the date designated for such purpose by the Collateral Manager by written notice to the Trustee, the Issuer, the Collateral Administrator and S&P pursuant to theCollateral Management Agreement ( provided that the Effective Date Determination Requirements (asdefined below) shall be satisfied on such designated date) and (b) the day falling 8 calendar monthsafter the Issue Date, shall be the “ Effective Date ”. The “ Effective Date DeterminationRequirements ” are as follows:

(a) each of the Portfolio Profile Tests, the Collateral Quality Tests and the Class A Par ValueTest being satisfied on such date; and

(b) the Issuer having entered into binding commitments to acquire Collateral Debt Obligationsthe Aggregate Principal Balance of which equals or exceeds the Target Par Amount by suchdate ( provided that , for the purposes of determining the Aggregate Principal Balance as

provided above, any repayments or prepayments of Collateral Debt Obligations subsequent tothe Issue Date (to the extent that such repayments or prepayments have not been reinvested)

shall be disregarded and the Principal Balance of each Collateral Debt Obligation which is aDefaulted Obligation will be its S&P Collateral Value).

For the avoidance of doubt, the Issuer does not expect and is not required to satisfy the CollateralQuality Tests, Portfolio Profile Tests or the Coverage Tests prior to the Effective Date.

On the Effective Date, the Balance standing to the credit of the Unused Proceeds Account will betransferred to the Principal Account and/or, provided that the Aggregate Portfolio Balance is equal toor greater than the Target Par Amount immediately after such payment and the Issuer (or theCollateral Manager on its behalf) has received Effective Date Confirmation from S&P, the InterestAccount at the discretion of the Collateral Manager (acting on behalf of the Issuer) (excluding suchamounts as may be necessary to meet un-invoiced expenses as the Collateral Manager may determine,

in its absolute discretion).



145

Within 30 Business Days after the Effective Date, the independent certified public accountantsappointed by the Collateral Manager (on behalf of the Issuer) in accordance with the CollateralManagement Agreement shall issue a report (i) confirming the Aggregate Principal Balances of theCollateral Debt Obligations purchased or committed to be purchased as at such date, (ii) confirmingthe computations and results of the Portfolio Profile Tests, the Collateral Quality Tests and the ClassA Par Value Test by reference to such Collateral Debt Obligations, copies of which shall beforwarded to the Issuer, the Trustee, the Collateral Manager, the Collateral Administrator and theRating Agency and (iii) specifying the procedures undertaken by them to review data andcomputations relating to such confirmation ( provided that , for the purposes of determining theAggregate Principal Balance as provided above, any repayments or prepayments of Collateral DebtObligations subsequent to the Issue Date shall be disregarded and the Principal Balance of eachCollateral Debt Obligation which is a Defaulted Obligation will be its S&P Collateral Value) (the“Effective Date Report ”).

The Collateral Manager (acting on behalf of the Issuer) shall promptly following receipt of theEffective Date Report request that the Rating Agency confirms its Initial Ratings of the Class A

Notes.

In the event that (a) either (i) the Initial Ratings of the Class A Notes are reduced or withdrawn or (ii)the Rating Agency notifies the Issuer or the Collateral Manager on behalf of the Issuer that it intendsto reduce or withdraw its Initial Ratings of the Class A Notes, in each case upon request for confirmation thereof to the Rating Agency by the Collateral Manager, acting on behalf of the Issuer,following the Effective Date pursuant to the terms of the Collateral Management Agreement or (b) theEffective Date Determination Requirements are not satisfied, an “ Effective Date Rating Event ” shallhave occurred. In the event that an Effective Date Rating Event has occurred and is continuing on thesecond Business Day prior to the Payment Date next following the Effective Date, the Class A Notesshall be redeemed in full or, if earlier, until such time as the Effective Date Rating Event is no longer continuing, pursuant to Condition 7(d) ( Redemption upon Effective Date Rating Event ). TheCollateral Manager shall notify the Rating Agency promptly upon the discontinuance of an EffectiveDate Rating Event.

During such time an Effective Date Rating Event shall have occurred and be continuing the CollateralManager (acting on behalf of the Issuer) may prepare and present to the Rating Agency a plan (a“Rating Confirmation Plan ”) setting forth the timing and manner of acquisition of additionalCollateral Debt Obligations and/or any other intended action which will cause confirmation or reinstatement of the Initial Rating. The Collateral Manager (acting on behalf of the Issuer) is under no obligation whatsoever to present a Rating Confirmation Plan to the Rating Agency.

Management of the Portfolio

Overview

The Collateral Manager (acting on behalf of the Issuer) is permitted, in certain circumstances andsubject to certain requirements and to the overall policies of the Issuer, to sell Collateral DebtObligations, Defaulted Obligations and Exchanged Equity Securities and to reinvest the Sale Proceeds(other than accrued interest on such Collateral Debt Obligations included in Interest Proceeds by theCollateral Manager) thereof in Collateral Debt Obligations satisfying the Eligibility Criteria and theReinvestment Criteria. The Collateral Administrator (on behalf of the Issuer) shall calculate and shall

provide confirmation of whether certain of the criteria which are required to be satisfied in connectionwith any such sale or reinvestment are satisfied or, if any such criteria are not satisfied, shall notifythe Issuer and the Collateral Manager of the reasons and the extent to which such criteria are not sosatisfied, following request by the Collateral Manager, which request shall specify all necessarydetails of the Collateral Debt Obligation, Defaulted Obligation or Exchanged Equity Security to besold and the proposed Substitute Collateral Debt Obligation(s) to be purchased. Furthermore,

pursuant to the Collateral Management Agreement, the Collateral Manager (acting on behalf of theIssuer) shall select and acquire additional Collateral Debt Obligations with Interest Proceeds paid into



146

the Principal Account following the Reinvestment Diversion Threshold not being met on any PaymentDate during the Reinvestment Period pursuant to Condition 3(c)(i)( Application of Interest Proceeds ).

The Collateral Manager (and with respect to the Initial Portfolio only, Goldman Sachs International)(acting on behalf of the Issuer) will select and cause to be purchased by the Issuer, Collateral DebtObligations (including Substitute Collateral Debt Obligations) taking into account the EligibilityCriteria and, where applicable, the Reinvestment Criteria and the Collateral Manager will monitor the

performance and credit quality of the Collateral Debt Obligations on an ongoing basis to the extent practicable using sources of information reasonably available to it provided that the CollateralManager shall not be responsible for determining whether or not the terms of any individual CollateralDebt Obligation have been observed.

The activities referred to below that the Collateral Manager may undertake on behalf of the Issuer aresubject to the Issuer monitoring the performance of the Collateral Manager under the CollateralManagement Agreement.

Sale of Collateral Debt Obligations

Terms and Conditions applicable to the Sale of Credit Impaired ObligationsCredit Impaired Obligations may be sold at any time by the Collateral Manager (acting on behalf of the Issuer) subject to:

(a) the Collateral Manager certifying that, in its reasonable business judgment, such securityconstitutes a Credit Impaired Obligation;

(b) the Collateral Manager using reasonable efforts to purchase (on behalf of the Issuer)Substitute Collateral Debt Obligations out of the Sale Proceeds of such Credit ImpairedObligations within 180 Business Days of receipt of such Sale Proceeds; and

(c) provided the Controlling Class has not voted against such sale following the occurrence of an

Event of Default.“Credit Impaired Obligation ” means any Collateral Debt Obligation which, in the CollateralManager’s judgement, has a significant risk of declining in credit quality and, with a lapse of time,

becoming a Defaulted Obligation.

Terms and Conditions applicable to the Sale of Defaulted Obligations

Defaulted Obligations may be sold at any time by the Collateral Manager (acting on behalf of theIssuer) subject to:

(a) to the Collateral Manager’s knowledge, no Event of Default having occurred which iscontinuing;

(b) the Collateral Manager certifying that, in its reasonable business judgment, such securityconstitutes a Defaulted Obligation; and

(c) the Collateral Manager using reasonable efforts to purchase (on behalf of the Issuer)Substitute Collateral Debt Obligations out of the Sale Proceeds of such Defaulted Obligationwithin 180 Business Days of receipt of such Sale Proceeds.

“Defaulted Obligation ” means a Collateral Debt Obligation (other than a Current Pay Obligation, inwhich case it shall not be deemed to be a Defaulted Obligation):

(a) in respect of which there has occurred and is continuing a default with respect to the paymentof interest or principal, (i) disregarding any grace periods applicable thereto or (ii) in the case

of any Collateral Debt Obligation (A) which pays interest not less frequently than quarterlyand (B) in respect of which the Collateral Manager has certified to the Trustee in writing that,



147

to the knowledge of the Collateral Manager, such default has resulted from non-credit relatedcauses, for the lesser of three Business Days and any grace period applicable thereto, in eachcase which default entitles the holders thereof, with notice or passage of time or both, toaccelerate the maturity of all or a portion of the principal amount of such obligation, but onlyuntil such default has been cured;

(b) in respect of which any bankruptcy, insolvency or receivership proceeding has been initiatedin connection with the Obligor under such Collateral Debt Obligation;

(c) in respect of which the Collateral Manager becomes aware that the Obligor thereunder is indefault as to payment of principal and/or interest on another obligation, save for obligationsconstituting trade debts which the applicable Obligor is disputing in good faith, (and suchdefault has not been cured), but only if both such other obligation and the Collateral DebtObligation are full recourse, unsecured obligations and the other obligation is senior to, or

pari passu with, the Collateral Debt Obligation in right of payment save that a Collateral DebtObligation shall not constitute a “Defaulted Obligation” under this paragraph (c) if it is aCurrent Pay Obligation;

(d) that has an S&P Rating of “D” or “SD”;(e) that the Collateral Manager, acting on behalf of the Issuer, determines in its reasonable

business judgement should be treated as a Defaulted Obligation; or

(f) in respect of which a Distressed Exchange has become binding upon the holders of suchCollateral Debt Obligation generally, for the purposes of which “ Distressed Exchange ”means any distressed exchange or other debt restructuring where the Obligor of suchCollateral Debt Obligation has offered the class of holders of the Collateral Debt Obligationgenerally a new obligation or package of obligations which, in the reasonable judgement of the Collateral Manager either (i) amounts to a diminished financial obligation, or (ii) has the

purpose of helping the Obligor of such Collateral Debt Obligation to avoid default.

Terms and Conditions applicable to the Sale of Credit Improved Obligations

Credit Improved Obligations may be sold at any time by the Collateral Manager (acting on behalf of the Issuer) subject to:

(a) the Collateral Manager certifying that, in its reasonable business judgment, such obligationconstitutes a Credit Improved Obligation;

(b) prior to the end of the Reinvestment Period only:

(i) the Collateral Manager certifying that it will use reasonable efforts to reinvest theSale Proceeds thereof in one or more Substitute Collateral Debt Obligations;

(ii) the Collateral Manager certifying that, in its reasonable business judgment, after giving effect to such sale and reinvestment of the Sale Proceeds thereof, theReinvestment Criteria will be met; and

(iii) the Collateral Manager using reasonable efforts to reinvest such Sale Proceeds within180 Business Days of receipt of such Sale Proceeds;

(c) following the expiry of the Reinvestment Period, the Market Value (excluding accruedinterest) of such Credit Improved Obligation being greater than the principal amount thereof;

(d) following the expiry of the Reinvestment Period, the Collateral Manager using all reasonableefforts to purchase (on behalf of the Issuer) Substitute Collateral Debt Obligations within 20Business Days of receipt of such Sale Proceeds; and



148

(e) provided the Controlling Class has not voted against such sale following the occurrence of anEvent of Default.

“Credit Improved Obligation ” means any Collateral Debt Obligation which, in the CollateralManager’s judgement, has significantly improved in credit quality.

Terms and Conditions applicable to the Sale of Exchanged Equity SecuritiesAny Exchanged Equity Security may be sold by the Collateral Manager (on behalf of the Issuer) atany time following receipt thereof.

In addition, any Exchanged Equity Security that constitutes Margin Stock shall be sold as soon as practicable.

Discretionary Sales during the Reinvestment Period

During the Reinvestment Period only, the Issuer or the Collateral Manager (acting on behalf of theIssuer) may dispose of any Collateral Debt Obligation (other than a Credit Improved Obligation, aCredit Impaired Obligation, a Defaulted Obligation or an Exchanged Equity Security, each of which

may only be sold in the circumstances provided above) and reinvest the Sale Proceeds thereof in oneor more Substitute Collateral Debt Obligations, subject to:

(a) no Event of Default having occurred which is continuing; and

(b) the Collateral Manager certifying that, in its reasonable business judgment:

(i) the Sale Proceeds thereof may be reinvested in one or more Substitute Collateral DebtObligations within 20 Business Days of receipt of such Sale Proceeds; and

(ii) after giving effect to such sale and purchase, the Reinvestment Criteria will be met;and

(c) the Collateral Administrator confirming that the aggregate of the Principal Balances of Collateral Debt Obligations sold during the period from (and including) the Issue Date to (butexcluding) the second Payment Date following the Issue Date or, thereafter, during eachsuccessive rolling 12 month period from (and including) the 17th day of each month after theIssue Date to (but excluding) the succeeding anniversary of such date, does not exceed20.0 per cent. of the Aggregate Portfolio Balance, measured as at the beginning of each such12 month period (or, in the case of the first such period, the Issue Date).

Sale of Collateral Prior to Maturity Date

In the event of any redemption of the Notes in whole prior to the Maturity Date, the CollateralManager, in accordance with terms set out in the Collateral Management Agreement, shall use allcommercially reasonable efforts to procure the assignment, termination or disposal of the CollateralDebt Obligations and Collateral Enhancement Obligations so that the proceeds thereof are inimmediately available funds not later than one Business Day prior to such scheduled RedemptionDate. The settlement dates for any such sales of Collateral Debt Obligations and CollateralEnhancement Obligations shall be no later than one Business Day prior to the applicable scheduledRedemption Date.



149

Reinvestment of Collateral Debt Obligations

During the Reinvestment Period

During the Reinvestment Period, the Collateral Manager (acting on behalf of the Issuer) shall use itsreasonable efforts to reinvest all Principal Proceeds in the purchase of Substitute Collateral Debt

Obligations satisfying the Eligibility Criteria, provided that immediately after each such purchase, thecriteria set out below (the “ Reinvestment Period Reinvestment Criteria ”) must be satisfied:

(a) to the Collateral Manager’s knowledge, no Event of Default has occurred that is continuing atthe time of such purchase;

(b) the Collateral Quality Tests are satisfied or, if any test was not satisfied, it is no further from being satisfied than immediately prior to sale or prepayment (in whole or in part) of therelevant Collateral Debt Obligation the Principal Proceeds of which are being reinvested, savethat this paragraph (b) shall not apply in respect of the CDO Monitor Test in the case of thereinvestment of Sale Proceeds from Credit Impaired Obligations;

(c) the Portfolio Profile Tests are satisfied or, if any such limitation is not satisfied, in the case of each limitation (i) in respect of which an upper limit is applicable, the relevant concentrationis no greater, and (ii) in respect of which a lower limit is applicable, the relevantconcentration is no lesser, after giving effect to such reinvestment than it was immediately

prior to sale or prepayment (in whole or in part) of the relevant Collateral Debt Obligation thePrincipal Proceeds of which are being reinvested;

(d) following the Effective Date, each of the Class A Par Value Test and, on or after theDetermination Date immediately preceding the Payment Date falling in September 2009, theClass A Interest Coverage Test is satisfied or if (other than with respect to the reinvestment of any Sale Proceeds received upon the sale of, or as a recovery on, any Defaulted Obligation) ascalculated immediately prior to sale or prepayment (in whole or in part) of the relevantCollateral Debt Obligation the Principal Proceeds of which are being reinvested, any relevantCoverage Test was not satisfied, the coverage ratio relating to such test will be at least asclose to being satisfied after giving effect to such reinvestment as it was immediately prior tosale or prepayment (in whole or in part) of the relevant Collateral Debt Obligation; and

(e) (i) in the case of Substitute Collateral Debt Obligations purchased with the SaleProceeds of a Defaulted Obligation, immediately following such purchase, either:

(A) both of (i) the Class A Par Value Ratio and (ii) the Class A Par Value Ratiocalculated using the Principal Amount Outstanding of the Class A Notes as of the Issue Date are each greater than the relevant Class A Par ValueReinvestment Percentage; or

(B) the Aggregate Principal Balance of all Substitute Collateral Debt Obligations purchased with such Sale Proceeds is at least equal to the Sale Proceeds fromsuch sale,

(ii) in the case of Substitute Collateral Debt Obligations purchased with the SaleProceeds of a Credit Impaired Obligation, immediately following such purchase,either:

(A) the Aggregate Principal Balance of all Substitute Collateral Debt Obligations purchased with such Sale Proceeds is at least equal to the Sale Proceeds fromsuch sale; or

(B) both of (i) the Class A Par Value Ratio and (ii) the Class A Par Value Ratio

calculated using the Principal Amount Outstanding of the Class A Notes as of



150

the Issue Date are each greater than the relevant Class A Par ValueReinvestment Percentage; and

(iii) in the case of any purchase of Substitute Collateral Debt Obligations other than in (i)or (ii) above, either:

(A) the Aggregate Principal Balance of all Substitute Collateral Debt Obligations purchased with such Sale Proceeds is equal to or greater than the AggregatePrincipal Balance of the Collateral Debt Obligations sold; or

(B) both of (i) the Class A Par Value Ratio and (ii) the Class A Par Value Ratiocalculated using the Principal Amount Outstanding of the Class A Notes as of the Issue Date are each greater than the relevant Class A Par ValueReinvestment Percentage,

provided that , in the case of each of paragraphs (i) and (ii) above, the Class A Par Value Ratiois greater than 124.0 per cent. immediately before and after the purchase of such additionalCollateral Debt Obligations, and provided further that the Collateral Manager, acting on

behalf of the Issuer, may in its discretion on the second Business Day prior to any PaymentDate during the Reinvestment Period, direct that all or a part of the Principal Proceedsstanding to the credit of the Principal Account be paid into the Payment Account anddisbursed in accordance with the Principal Proceeds Priority of Payments on such PaymentDate.

The “ Class A Par Value Reinvestment Percentage ” shall be equal to:

(i) in the event the Collateral Manager has, in its sole discretion, selected an amountequal to €1,481,250,000 as the Target Par Amount, 131.7 per cent.;

(ii) in the event the Collateral Manager has, in its sole discretion, selected an amountequal to €1,488,000,000 as the Target Par Amount, 132.3 per cent.; or

(iii) in the event the Collateral Manager has, in its sole discretion, selected an amountequal to €1,492,500,000 as the Target Par Amount, 132.7 per cent.

Following the Expiry of the Reinvestment Period

Following the expiry of the Reinvestment Period, Unscheduled Principal Proceeds and the SaleProceeds from the sale of Credit Improved Obligations and Credit Impaired Obligations only may bereinvested by the Collateral Manager (acting on behalf of the Issuer) in one or more SubstituteCollateral Debt Obligations satisfying the Eligibility Criteria, in each case provided that immediatelyafter each such purchase, the criteria set out below (the “ Post-Reinvestment Period ReinvestmentCriteria ”, and together with the Reinvestment Period Reinvestment Criteria, the “ ReinvestmentCriteria ”):

(a) to the Collateral Manager’s knowledge, no Event of Default has occurred that is continuing atthe time of such reinvestment;

(b) the Collateral Quality Tests are satisfied or, if any test was not satisfied, it is no further from being satisfied than immediately prior to sale or prepayment (in whole or in part) of therelevant Collateral Debt Obligation the Principal Proceeds of which are being reinvested, savethat this paragraph (b) shall not apply in respect of the CDO Monitor Test in the case of thereinvestment of Sale Proceeds from Credit Impaired Obligation;

(c) the Portfolio Profile Tests are satisfied or, if any such limitation is not satisfied, in the case of each limitation (i) in respect of which an upper limit is applicable, the relevant concentration

is no greater, and (ii) in respect of which a lower limit is applicable, the relevantconcentration is no lesser, after giving effect to such reinvestment, than it was immediately



151

prior to sale or prepayment (in whole or in part) of the relevant Collateral Debt Obligation thePrincipal Proceeds of which are being reinvested;

(d) the Aggregate Principal Balance of the Collateral Debt Obligations is maintained or increasedor in the case of the sale and reinvestment of the Sale Proceeds of Credit ImpairedObligations, the Aggregate Principal Balance of all additional Collateral Debt Obligations

purchased with such Sale Proceeds is at least equal to the Sale Proceeds from such sale;

(e) the Coverage Tests are satisfied (both immediately before and immediately after suchreinvestment);

(f) both of (i) the Class A Par Value Ratio and (ii) the Class A Par Value Ratio calculated usingthe principal amount outstanding of the Class A Notes as of the Issue Date, are each greater than 128.7 per cent.;

(g) (i) such Substitute Collateral Debt Obligation(s) have the same or a shorter Stated Maturityand the same or higher S&P rating or (ii) the scenario default rates calculated using the S&PCDO Evaluator are maintained or improved;

(h) not more than 5.0 per cent. of the Aggregate Portfolio Balance consists of Collateral DebtObligations having a rating of “CCC” or lower from S&P (both immediately before andimmediately after such reinvestment); and

(i) the ratings by S&P of the Class A Notes have not been and are not currently reduced by S&P by at least one sub-category from the Initial Ratings or are withdrawn by S&P.

Following the expiry of the Reinvestment Period, any Unscheduled Principal Proceeds and any SaleProceeds from the sale of Credit Improved Obligations and Credit Impaired Obligations that have not

been reinvested as provided above prior to the end of the Due Period in which such proceeds werereceived or, if received less than 30 days prior to the end of such Due Period, then the end of theimmediately following Due Period, shall be paid into the Payment Account pursuant to

Condition 3(j)(i)( Principal Account ) and disbursed in accordance with the Principal Proceeds Priorityof Payments on the next following Payment Date (subject as provided at the end of this paragraph),save that the Collateral Manager (acting on behalf of the Issuer) may in its discretion procure that allor a part of such Unscheduled Principal Proceeds and Sale Proceeds from the sale of any CreditImproved Obligations and Credit Impaired Obligations, standing to the credit of the Principal Accountare designated for reinvestment in Substitute Collateral Debt Obligations, in which case suchPrincipal Proceeds shall not be so disbursed in accordance with the Principal Proceeds Priority of Payments for so long as they remain so designated for reinvestment; provided that no suchdesignation for reinvestment may continue in the event any of the Post-Reinvestment PeriodReinvestment Criteria are not satisfied as of the Determination Date applicable to any Payment Datefalling at least 15 months after the date on which such Unscheduled Principal Proceeds were receivedand the Post-Reinvestment Period Reinvestment Criteria were not satisfied.

Eligibility Criteria

Each Collateral Debt Obligation must, at the time of entering into a binding commitment to acquiresuch obligation by, or on behalf of, the Issuer, satisfy the following “ Eligibility Criteria ”:

(a) it is a Senior Secured Loan or a Senior Secured Floating Rate Note or to the extent deliveredto the Issuer in respect of a Defaulted Obligation or received by the Issuer as a result of restructuring of the terms of a Collateral Debt Obligation in effect as of the later of the IssueDate and the date of issuance thereof, a debt security;

(b) it is either (A) denominated in Euro (or in one of the predecessor currencies of those Member States which have adopted the Euro as their currency) or (B) (i) a Non-Euro Obligation and isthe subject of an Asset Swap Transaction with a notional amount in the relevant currency





153

(r) save to the extent otherwise permitted pursuant to paragraph (l) of the Portfolio Profile Tests,it has an S&P Rating of at least “B-”;

(s) its acquisition by the Issuer will not result in the imposition of stamp duty or stamp dutyreserve tax payable by the Issuer, unless such stamp duty or stamp duty reserve tax has beenincluded in the purchase price of such Collateral Debt Obligation;

(t) it must require majority consent of all lenders to the Obligor thereunder for any change in the principal repayment profile or interest applicable on such obligation, for the avoidance of doubt, excluding any changes originally envisaged in the loan documentation;

(u) upon acquisition, both (i) the Collateral Debt Obligation is capable of being, and will be, thesubject of a first fixed charge or first priority security interest in favour of the Trustee for the

benefit of the Secured Parties pursuant to the Trust Deed (or any deed or documentsupplemental thereto) and (ii) (subject to (i) above) the Issuer (or the Collateral Manager on

behalf of the Issuer) has notified the Trustee in the event that any Collateral Debt Obligationthat is a bond is not held through Euroclear and has taken such action as the Trustee mayrequire to effect such security interest;

(v) it will not result in the imposition of any present or future, actual or contingent, monetaryliabilities or obligations of the Issuer other than those (i) which may arise at its option; or (ii) which are fully collateralised; or (iii) which are owed to the agent bank or the SellingInstitution in relation to the performance of its duties under a syndicated Senior Secured Loanor Senior Secured Floating Rate Note; or (iv) which may arise as a result of an undertaking to

participate in a financial restructuring of a Senior Secured Loan or Senior Secured FloatingRate Note where such undertaking is contingent upon the redemption in full of such Senior Secured Loan or Senior Secured Floating Rate Note on or before the time by which the Issuer is obliged to enter into the restructured Senior Secured Loan or Senior Secured Floating Rate

Note and where the restructured Senior Secured Loan or Senior Secured Floating Rate Notesatisfies the Eligibility Criteria, but which does not provide for the Issuer to advance further

monies pursuant to the terms of such financial restructuring;(w) it has a Stated Maturity that is not later than the Maturity Date;

(x) it is a qualifying asset for the purposes of Section 110 of the Irish Taxes Consolidation Act1997;

(y) it is not a Structured Finance Security;

(z) it is not a Synthetic Security; and

(aa) it is not a PIK Security.

The subsequent failure of any Collateral Debt Obligation to satisfy any of the Eligibility Criteria shallnot prevent any obligation which would otherwise be a Collateral Debt Obligation from being aCollateral Debt Obligation so long as such obligation satisfied the Eligibility Criteria when the Issuer or the Collateral Manager on behalf of the Issuer entered into a binding agreement to purchase suchobligation.

The Issuer may only modify the Eligibility Criteria provided that such modification is made inaccordance with the provisions of the Collateral Management Agreement and the Trust Deed, subjectto Rating Agency Confirmation and consent from the holders of at least 50 per cent. of the PrincipalAmount Outstanding of the Controlling Class being obtained in respect of such modification and

provided further that such modification is not, in the opinion of the Trustee, materially prejudicial tothe interests of the Noteholders of any Class.

“Non-Emerging Market Country ” means the United Kingdom (including the Channel Islands),Ireland, France, Greece, Spain, Portugal, Italy, The Netherlands, Luxembourg, Belgium, Germany,



154

Austria, Liechtenstein, Norway, Sweden, Denmark, Finland, Switzerland, Cayman Islands, Canada,the United States of America, Australia, New Zealand, Japan, any country which is or becomes amember of the European Union after the Issue Date and, any country, the foreign currency issuer credit rating of which is rated, at the time of acquisition of the relevant Collateral Debt Obligation, atleast “AA” by S&P and/or any other country in respect of which a Rating Agency Confirmation isreceived.

“PIK Security ” means any debt security which, by its terms, may pay interest thereon other than on acurrent basis;

“Structured Finance Security ” means any debt security which is secured directly, or represents theownership of collateralised loan obligations, collateralised debt obligations or a form of securitisationwhich attaches to the general operating cash flow arising from a particular line or area of business of the originator and is secured by the business generating assets of the originator.

“Synthetic Security ” means any swap transaction, debt security, security issued by a trust or similar vehicle or other investment, the returns on which are linked to the credit and/or price performance of areference obligation.

Reinvestment Diversion Threshold

During the Reinvestment Period, in the event that, after giving effect to the payment of all amounts payable in respect of paragraphs (A) through (I) (inclusive) of the Interest Proceeds Priority of Payments on any Determination Date during such period, the Reinvestment Diversion Threshold hasnot been met, then on the related Payment Date Interest Proceeds shall be paid to the PrincipalAccount for the acquisition of additional Collateral Debt Obligations in an amount equal to the lesser of (a) 50 per cent. of all remaining Interest Proceeds available for payment pursuant to paragraph (J)of the Interest Proceeds Priority of Payments and (b) the amount which, after giving effect to the

payment of all amounts payable in respect of paragraphs (A) through (I) of the Interest ProceedsPriority of Payments, would be sufficient to cause the Reinvestment Diversion Threshold to be met.

The “ Reinvestment Diversion Threshold ” means the threshold which is met on any date of determination if the Reinvestment Diversion Ratio is greater than or equal to 127.6 per cent.

Designation for Reinvestment

After the expiry of the Reinvestment Period, the Collateral Manager shall, two Business Days prior toeach Determination Date, notify the Issuer and the Collateral Administrator in writing of all SaleProceeds from the sale of Credit Impaired Obligations and Credit Improved Obligations andUnscheduled Principal Proceeds which the Collateral Manager determines in its discretion (acting on

behalf of the Issuer, and subject to the terms of Collateral Management Agreement as describedabove) shall remain designated for reinvestment on or after the following Payment Date, in whichevent such proceeds shall not constitute Principal Proceeds which are to be paid into the Payment

Account and disbursed on such Payment Date in accordance with the applicable Priorities of Payments, provided that no such designation for reinvestment may continue in the event any of thePost-Reinvestment Period Reinvestment Criteria are not satisfied as of the Determination Dateapplicable to any Payment Date falling at least 15 months after the date on which such Sale Proceedsfrom the sale of Credit Impaired Obligations and Credit Improved Obligations and UnscheduledPrincipal Proceeds were received and the Post-Reinvestment Period Reinvestment Criteria were notsatisfied.

The Collateral Manager (acting on behalf of the Issuer) may direct that the proceeds of sale of anyCollateral Debt Obligation which represents accrued interest be designated as Interest Proceeds and

paid into the Interest Account save for Purchased Accrued Interest. In addition, all or part of anyRealisation Gain received in respect of any Collateral Debt Obligation may be designated as Interest

Proceeds and paid into the Interest Account, subject to (a) no Event of Default having occurred,(b) each of the Collateral Quality Tests and Portfolio Profile Tests being satisfied following such



155

designation, (c) each of the coverage ratios relating to each Coverage Test following such designation being equal to or greater than the coverage ratios applicable thereto based on the Target Par Amountand (d) any time that such Realisation Gains are designated as Interest Proceeds (A) the difference

between (1) the Class A Par Value Ratio at such time and (2) the value required to satisfy the Class APar Value Test is equal to, or exceeds, (B) the difference between (y) the Class A Par Value Ratio asat the Effective Date when recalculated assuming that the numerator of each such ratio is equal to theTarget Par Amount and (z) the value required to satisfy the Class A Par Value Test.

Accrued Interest

Amounts included in the purchase price of any Collateral Debt Obligation comprising accrued interestthereon may be paid from the Interest Account or the Principal Account or the Unused ProceedsAccount at the discretion of the Collateral Manager (acting on behalf of the Issuer) but subject to theterms of the Collateral Management Agreement and Condition 3(j) ( Payments to and from the

Accounts ). Notwithstanding the foregoing, in any Due Period, all payments of interest and proceedsof sale received during such Due Period in relation to any Collateral Debt Obligation, in each case, tothe extent that such amounts represent accrued interest in respect of such Collateral Debt Obligation,which was purchased at the time of acquisition thereof with Principal Proceeds and/or principalamounts from the Unused Proceeds Account (excluding any such accrued interest that is paid for outof the subscription proceeds of the Notes on the Issue Date) shall constitute “ Purchased AccruedInterest ” and shall be deposited into the Principal Account as Principal Proceeds.

Block Trades

The requirements described herein with respect to the Portfolio shall be deemed to be satisfied uponany sale and/or purchase of Collateral Debt Obligations on any day in the event that such CollateralDebt Obligations satisfy such requirements in aggregate rather than on an individual basis.

Eligible Investments

The Issuer or the Collateral Manager (acting on behalf of the Issuer) may from time to time purchaseEligible Investments out of the Balances standing to the credit of the Accounts (other than thePayment Account, the Asset Swap Termination Account, the Expense Reserve Account, the Euroclear Pledge Account, the FS Accrued Interest Account and the Counterparty Downgrade Cash CollateralAccount). For the avoidance of doubt, Eligible Investments may be sold by the Issuer or theCollateral Manager (acting on behalf of the Issuer) at any time.

Collateral Enhancement Obligations

The Issuer or the Collateral Manager (acting on behalf of the Issuer) may, from time to time, subjectto the final paragraph below, purchase Collateral Enhancement Obligations independently or as partof a unit with the Collateral Debt Obligations being so purchased.

All funds required in respect of the purchase price of any Collateral Enhancement Obligations, and allfunds required in respect of the exercise price of any rights or options thereunder, may only be paidout of the balance standing to the credit of the Collateral Enhancement Account at the relevant time.Pursuant to Condition 3(j)(x) ( Collateral Enhancement Account ), such Balance shall be comprised of all Collateral Enhancement Obligation Proceeds received by the Issuer, together with all other sumsdeposited therein from time to time which will comprise interest and/or principal payable in respect of the Subordinated Notes which the Collateral Manager, acting on behalf of the Issuer, determines shall

be paid into the Collateral Enhancement Account pursuant to the Priorities of Payments rather than being paid to the Subordinated Noteholders. In addition, if the amount standing to the credit of theCollateral Enhancement Account at the relevant time is not sufficient to fund a purchase or exercise(as applicable) of one or more Collateral Enhancement Obligations, the Collateral Manager (acting on

behalf of the Issuer) may, at its discretion, arrange for the payment of any such shortfall by requesting

(on behalf of the Issuer) that funds be paid out of the Interest Account to the Collateral Enhancement



156

Account for this purpose on the terms and subject to the limits set out in Condition 3(j) ( Payments toand from the Accounts ).

Collateral Enhancement Obligations may be sold at any time.

Collateral Enhancement Obligations and any income or return generated thereby are not taken into

account for the purposes of determining satisfaction of, or required to satisfy, any of the CoverageTests, Portfolio Profile Tests or Collateral Quality Tests.

Current Pay Obligations

The Collateral Manager may, at any time with notice to the Collateral Administrator, reclassify aCollateral Debt Obligation which becomes a Defaulted Obligation as a Current Pay Obligation, if it(i) meets the definition of Current Pay Obligation and (ii) following such reclassification, theAggregate Principal Balance of Current Pay Obligations is not more than 5.0 per cent. of theAggregate Portfolio Balance. The Collateral Manager may, at any time with notice to the CollateralAdministrator, classify a Current Pay Obligation as no longer being a Current Pay Obligation, whichfor the avoidance of doubt will result in such Collateral Debt Obligation becoming a Defaulted

Obligation (unless such obligation has been cured of such default). Margin Stock

The Collateral Management Agreement requires that the Collateral Manager, acting on behalf of theIssuer, will sell any Collateral Debt Obligation or Collateral Enhancement Obligation which is or atany time becomes Margin Stock as soon as practicable following such event.

Non-Euro Obligations

Each Non-Euro Obligation included in the Initial Portfolio shall be the subject of an Asset SwapTransaction entered into on or prior to the Issue Date (and any such Asset Swap Transaction shall beeffective from the Issue Date).

In addition, the Collateral Manager shall be authorised to purchase, on behalf of the Issuer, Non-EuroObligations from time to time, subject to the satisfaction of certain conditions set out in the CollateralManagement Agreement. A Non-Euro Obligation denominated in U.S. Dollars, Sterling, DanishKroner, Swedish Kronor, Norwegian Kroner or Swiss Francs (each such currency, an “ ApprovedUnhedged Currency ”) shall constitute a Collateral Debt Obligation that satisfies the EligibilityCriteria if (1) (a) within no later than six months following the acquisition thereof, the CollateralManager procures entry by the Issuer into an Asset Swap Transaction pursuant to which the currencyrisk arising from receipt of cash flows from such Non-Euro Obligation, including interest and

principal payments, is hedged through the swapping of such flows for Euro payments to be made byan Asset Swap Counterparty or (2) if following the acquisition thereof, the aggregate PrincipalBalance of Unhedged Collateral Debt Obligations would be greater than 5.0 per cent. of the

Aggregate Portfolio Balance (for these purposes, taking into consideration 100 per cent. of thePrincipal Balance of Unhedged Collateral Debt Obligations) on the date of settlement of theacquisition of such obligation the Collateral Manager, on behalf of the Issuer, enters into an AssetSwap Transaction, provided that such Collateral Debt Obligation satisfies the criteria for UnhedgedCollateral Debt Obligations as set out in the Collateral Management Agreement. A Non-EuroObligation that is not denominated in an Approved Unhedged Currency shall constitute a CollateralDebt Obligation that satisfies the Eligibility Criteria if on the date of settlement of the acquisition of such obligation the Collateral Manager, on behalf of the Issuer, enters into an Asset Swap Transactionin respect thereof. The Collateral Manager shall be authorised to enter into spot forward exchangetransactions, as necessary, to fund the Issuer’s payment obligations under any Asset SwapTransaction.

Any Asset Swap Transaction entered into by the Issuer must be with an Asset Swap Counterparty thatsatisfies the applicable Required Ratings.



157

Rating Agency Confirmation shall be required in relation to entry into (a) each Asset SwapTransaction unless such Asset Swap Transaction is a Form Approved Asset Swap and (b) eachDelayed Drawdown Collateral Debt Obligation or Revolving Obligation which is not denominated inEuro. See “ Description of the Hedging Arrangements ”.

Revolving Obligations and Delayed Drawdown Collateral Debt Obligations

The Issuer, or the Collateral Manager acting on its behalf, may acquire Collateral Debt Obligationswhich are Revolving Obligations or Delayed Drawdown Collateral Debt Obligations from time totime.

Such Revolving Obligations and Delayed Drawdown Collateral Debt Obligations may only beacquired if they are (i) capable of being drawn in a single currency only and are not payable in or convertible into another currency; and (ii) denominated in any Base Currency provided that an AssetSwap Transaction is entered into in respect of any such obligation denominated in a currency other than Euro upon acquisition thereof.

Each Revolving Obligation and Delayed Drawdown Collateral Debt Obligation will, pursuant to its

terms, require the Issuer to make one or more future advances or other extensions of credit in the BaseCurrency only (including extensions of credit made on an unfunded basis pursuant to which the Issuer may be required to reimburse the provider of a guarantee or other ancillary facilities made available tothe obligor thereof in the event of any default by the obligor thereof in respect of its reimbursementobligations in connection therewith). Such Revolving Obligations and Delayed Drawdown CollateralDebt Obligations may or may not provide that amounts may be repaid and reborrowed from time totime by the Obligor thereunder. Upon acquisition of any Revolving Obligations and DelayedDrawdown Collateral Debt Obligations, the Issuer shall deposit into the Revolving Reserve Accountand shall maintain from time to time in the Revolving Reserve Account amounts equal to thecombined aggregate principal amounts of the Unfunded Amounts under each of the RevolvingObligations and Delayed Drawdown Collateral Debt Obligations in the Base Currency. To the extentrequired, and provided Rating Agency Confirmation is obtained, the Issuer, or the Collateral Manager

acting on its behalf, may direct that amounts standing to the credit of the Revolving Reserve Account be deposited with a third party from time to time as collateral for any reimbursement or indemnification obligations owed by the Issuer to any other lender in connection with a RevolvingObligation or a Delayed Drawdown Collateral Debt Obligation and upon receipt of an Issuer Order (as defined in the Collateral Management Agreement), the Trustee shall release such amounts fromthe security granted thereover pursuant to the Trust Deed.

The Issuer shall be required to enter into an Asset Swap Transaction in respect of each RevolvingObligation and Delayed Drawdown Collateral Debt Obligation which is not denominated in Euro.Each such Asset Swap Transaction shall be entered into in respect of the full Principal Balance of such Collateral Debt Obligation (including any Unfunded Amount thereof) and the interim payments

payable thereunder shall, pursuant to the terms of such Asset Swap Transaction, be subject to

amendment on an ongoing basis to reflect changes in the amount of coupon and/or commitment feesreceivable by the Issuer in respect of such Collateral Debt Obligation from time to time as amountsare drawn down thereunder.

Participations

The Issuer or the Collateral Manager, acting on behalf of the Issuer, may from time to time acquireCollateral Debt Obligations from Selling Institutions by way of Participation, provided that :

(a) at the time such Participation is acquired, the Aggregate Portfolio Balance that representsParticipations entered into by the Issuer with a single Selling Institution as a percentage of theAggregate Portfolio Balance as of the Issue Date, will not exceed the individual percentageset out in the Bivariate Risk Table determined by reference to the credit rating of such SellingInstitution (or any guarantor thereof); and



158

(b) at the time such Participation is acquired, the Aggregate Portfolio Balance that representsParticipations entered into by the Issuer with Selling Institutions (or any guarantor thereof)having the same credit rating as a percentage of the Aggregate Portfolio Balance as of theIssue Date will not exceed the percentage set out in the Bivariate Risk Table for such creditrating,

provided that if the Selling Institution selling the Participation continues, after such sale, to derive itsinterest through a Participation or series of Participations then:

(i) for the purposes of paragraphs (a) and (b) above, each entity (excluding the relevant borrower) through which such Selling Institution, directly or indirectly, derives its interest inthe relevant Collateral Debt Obligation shall be treated as a Selling Institution; and

(ii) for the purposes of this paragraph (ii), the relevant Collateral Debt Obligation shall be treatedseparately as different Participations (with a Principal Balance equal to that of the relevantParticipation) entered into by the Issuer with each Selling Institution,

and for the purpose of determining the foregoing, account shall be taken of each sub-participation

from which the Issuer, directly or indirectly derives its interest in the relevant Collateral DebtObligation.

Form of Participation Agreement

The Collateral Manager shall ensure that each Participation is entered into pursuant to aSub-Participation Agreement substantially in the form of:

(a) the LMA Funded Participation (Par) (as published by the Loan Market Association from timeto time) together with any substantive changes in respect of which Rating AgencyConfirmation has been received;

(b) the LSTA Model Participation Agreement for par/near par trades (as published by the Loan

Syndications and Trading Association Inc. from time to time) together with any substantivechanges in respect of which Rating Agency Confirmation has been received; or

(c) in such other form in respect of which Rating Agency Confirmation has been received,

provided, however , in each case, the Collateral Manager shall include additional limited recourse provisions in the form of those set out in Schedule 7 ( Form of Limited Recourse Language for Participation Agreements ) of the Collateral Management Agreement unless the Collateral Manager has performed due diligence on the relevant Senior Secured Loan as specified in paragraph 2.8 of Schedule 6 ( Due Diligence ) of the Collateral Management Agreement.

Bivariate Risk Table

The following is the bivariate risk table (the “ Bivariate Risk Table ”) and as referred to in “ PortfolioProfile Tests ” and “ Participations ” above.

Long Term Senior Unsecured DebtRating of Selling Institution

Individual Third Party CreditExposure Limit*

Aggregate Third Party CreditExposure Limit*

S&PAAA 20% 30%AA+ 10% 20%AA 10% 20%AA- 10% 15%A+ 5% 15%A 5% 10%

____________ * As a percentage of the Aggregate Portfolio Balance (excluding Defaulted Obligations) and in respect of the Aggregate

Third Party Credit Exposure Limit, such limit shall be determined by reference to the aggregate third party credit



159

exposure of all such counterparties which share the same or lower rating level, as indicated in the Bivariate Risk Table.

Assignments

The Issuer or the Collateral Manager, acting on behalf of the Issuer may from time to time acquireCollateral Debt Obligations from Selling Institutions by way of Assignment provided that at the timesuch Assignment is acquired the Issuer or the Collateral Manager (acting on behalf of the Issuer) shallhave complied, to the extent within their control, with any requirements relating to such Assignmentset out in the relevant loan documentation for such Collateral Debt Obligation (including, withoutlimitation, with respect to the form of such Assignment and obtaining the consent of any personspecified in the relevant loan documentation).

Treatment of Unhedged Collateral Debt Obligations for Test Purposes

Upon the first instance of an Unhedged Collateral Debt Obligation being purchased, for the purposesof the determination of the Coverage Tests and the Minimum Weighted Average Spread Test, themeasurement of the Collateral Debt Obligations against the Target Par Amount and the calculation of the Par Coverage Numerator, the Collateral Manager shall elect to treat such obligation in accordance

with either Method 1 or Method 2 described below. For the avoidance of doubt, the same Method soelected shall apply for all subsequent purchases of Unhedged Collateral Debt Obligations.

Method 1

For the purposes of the Class A Par Value Test, when an Unhedged Collateral Debt Obligation is purchased, the Principal Balance of such Collateral Debt Obligation shall be 70 per cent. of theoutstanding principal amount of such obligation (where such obligation is denominated in Sterling or U.S. Dollars), or 50 per cent. of the outstanding principal amount of such obligation (where suchobligation is denominated in any other Approved Unhedged Currency), provided that , if suchUnhedged Collateral Debt Obligation has also become a Defaulted Obligation, then the PrincipalBalance of such Collateral Debt Obligation shall be its S&P Collateral Value multiplied by 70 per cent. (where such obligation is denominated in Sterling or U.S. Dollars) or 50 per cent. (where suchobligation is denominated in any other currency) (converted in each case at the applicable Spot Rate).

For the purposes of the Interest Coverage Amount (as used in the Class A Interest Coverage Test)scheduled interest payments due in respect of any Unhedged Collateral Debt Obligation shall be85 per cent. of such payments.

For the purposes of the definition of Weighted Average Spread as used in the Minimum WeightedAverage Spread Test, the Relevant Percentage will be 85 per cent.

For the avoidance of doubt, to the extent that on any Measurement Date on or after the Effective Datethe Aggregate Portfolio Balance is lower than the Target Par Amount and the Collateral Manager haselected to treat such Unhedged Collateral Debt Obligations in accordance with Method 1, the Issuer

will not be required to either sell such obligation or enter into an Asset Swap Transaction in relationto it.

Method 2

For the purposes of the Class A Par Value Test, when an Unhedged Collateral Debt Obligation is purchased, the Principal Balance of such Collateral Debt Obligation shall be determined on a weekly basis and is equal to 85 per cent. of the outstanding principal amount of such obligation, provided that , if such Unhedged Collateral Debt Obligation has also become a Defaulted Obligation, then the

principal Balance of such Collateral Debt Obligation shall be determined on a weekly basis and beequal to 85 per cent. multiplied by its S&P Collateral Value (converted in each case at the applicableSpot Rate). To the extent that on any Measurement Date on or after the Effective Date the AggregatePortfolio Balance is lower than the Target Par Amount and the Collateral Manager has elected to treatsuch Unhedged Collateral Debt Obligations in accordance with Method 2, then the Issuer or theCollateral Manager on behalf of the Issuer shall immediately enter into associated Asset Swap



160

Transactions in respect of such Unhedged Collateral Debt Obligations. If the Collateral Manager (on behalf of the Issuer) fails to procure entry by the Issuer into an Asset Swap Transaction, either (i) theCollateral Manager (on behalf of the Issuer) shall use its best efforts to sell as soon as reasonably

practicable such Unhedged Collateral Debt Obligation or (ii) such Unhedged Collateral DebtObligation shall be assigned a zero value for the purposes of the Coverage Tests.

For the purposes of the Interest Coverage Amount (as used in the Class A Interest Coverage Test)scheduled interest payments due in respect of any Unhedged Collateral Debt Obligation shall be70 per cent. of such payments.

For the purposes of the definition of Weighted Average Spread as used in the Minimum WeightedAverage Spread Test, the Relevant Percentage will be 70 per cent.

For the avoidance of doubt, for either Method 1 or Method 2, the Principal Balance of an UnhedgedCollateral Debt Obligation (A) which remains unhedged for over 6 months from the date of acquisition thereof or (B) where the aggregate Principal Balance of Unhedged Collateral DebtObligations exceeds 5 per cent. of the Aggregate Portfolio Balance of the Portfolio (for these

purposes, taking into consideration 100 per cent. of the Principal Balance of Unhedged Collateral

Debt Obligations) shall be zero.

Portfolio Profile Tests and Collateral Quality Tests

Measurement of Tests

The Portfolio Profile Tests, the Coverage Tests and the Collateral Quality Tests will be used primarilyas the criteria for purchasing Collateral Debt Obligations. The Collateral Administrator will measurethe Portfolio Profile Tests, the Coverage Tests and the Collateral Quality Tests on each MeasurementDate (save as otherwise provided herein).

The Portfolio Profile Tests, Coverage Tests and the Collateral Quality Tests must be satisfied after giving effect to the purchase of any Substitute Collateral Debt Obligation after the Effective Date (or in respect of the Class A Interest Coverage Test, on or after the Determination Date immediately

preceding the Payment Date falling in September 2009) or, if not satisfied prior to such purchase, therelevant thresholds and amounts calculated pursuant thereto must be maintained or improved after giving effect to such purchase. See “ Reinvestment of Collateral Debt Obligations ” above.

Notwithstanding the foregoing, the failure of the Portfolio to meet the requirements of the PortfolioProfile Tests, the Coverage Tests or the Collateral Quality Tests at any time shall not prevent anyobligation which would otherwise be a Collateral Debt Obligation from being a Collateral DebtObligation.

“Measurement Date ” means:

(a) the Effective Date;(b) for the purposes of determining satisfaction of the Reinvestment Criteria after the Effective

Date, first , immediately prior to receipt of any Principal Proceeds which are to be reinvestedwithout taking into account and, second , taking into account, the proposed sale andreinvestment of the Sale Proceeds thereof in Substitute Collateral Debt Obligations;

(c) the date of acquisition of any additional Collateral Debt Obligation following the EffectiveDate;

(d) each Determination Date;

(e) the date as at which any Report is prepared; and

(f) with reasonable (and not less than two Business Days’) notice, any Business Day requested by the Rating Agency.



161

Portfolio Profile Tests

The “ Portfolio Profile Tests ” will consist of each of the following:

(a) at least 95.0 per cent. of the Aggregate Portfolio Balance must consist of Senior SecuredLoans (which term, for the purposes of this paragraph (a), shall comprise the aggregate of the

Aggregate Principal Balance of the Senior Secured Loans and the Balances standing to thecredit of the Principal Account and the Unused Proceeds Account, in each case as at therelevant Measurement Date);

(b) with respect to Senior Secured Loans and Senior Secured Floating Rate Notes, not more than3.0 per cent. of the Aggregate Portfolio Balance may be the obligation of any single Obligor thereunder;

(c) not more than 20.0 per cent. of the Aggregate Portfolio Balance may consist of Participations;

(d) not more than 5.0 per cent. of the Aggregate Portfolio Balance may consist of Collateral DebtObligations that are Fixed Rate Collateral Debt Obligations unless Rating AgencyConfirmation has been obtained in which case not more than 10.0 per cent.;

(e) not less than 95.0 per cent. of the Aggregate Portfolio Balance may consist of Collateral DebtObligations that are Floating Rate Collateral Debt Obligations (which term, for the purposesof this paragraph (e), shall comprise the aggregate of the Aggregate Principal Balance of theFloating Rate Collateral Debt Obligations and the Balances standing to the credit of thePrincipal Account and the Unused Proceeds Account, in each case as at the relevantMeasurement Date) unless Rating Agency Confirmation has been obtained in which case notmore than 90.0 per cent.;

(f) not more than 5.0 per cent. of the Aggregate Portfolio Balance may consist of Senior SecuredFloating Rate Notes;

(g) not more than 30.0 per cent. of the Aggregate Portfolio Balance may consist of Non-EuroObligations;

(h) not more than 20.0 per cent. of the Aggregate Portfolio Balance may consist of U.S. dollar denominated Collateral Debt Obligations;

(i) not more than 5.0 per cent. of the Aggregate Portfolio Balance may consist of Collateral DebtObligations that pay interest less frequently than semi-annually;

(j) the limits specified in the Bivariate Risk Table determined by reference to the S&P Ratings of Selling Institutions are not exceeded;

(k) not more than 5.0 per cent. of the Aggregate Portfolio Balance may consist of Current Pay

Obligations;(l) not more than 5.0 per cent. of the Aggregate Portfolio Balance may consist of CCC

Obligations, excluding Defaulted Obligations;

(m) not more than 10.0 per cent. of the Aggregate Portfolio Balance may consist of Covenant LiteLoans;

(n) not more than 5.0 per cent. of the Aggregate Portfolio Balance may consist of UnhedgedCollateral Debt Obligations; and

(o) not more than 5.0 per cent. of the Aggregate Portfolio Balance may consist of UnfundedAmounts and Funded Amounts under Delayed Drawdown Collateral Debt Obligations and/or

Revolving Obligations.



162

The percentage requirements applicable to different types of Collateral Debt Obligations specified inthe Portfolio Profile Tests shall be determined by reference to the Aggregate Principal Balance of such type of Collateral Debt Obligations, excluding Defaulted Obligations.

Obligations which are to constitute Collateral Debt Obligations in respect of which the Issuer hasentered into a binding commitment to purchase but which have not yet settled shall be included asCollateral Debt Obligations, and obligations in respect of which the Issuer has entered into a bindingcommitment to sell but which have not yet settled shall not be included as Collateral Debt Obligationsin the calculation of the Portfolio Profile Tests at any time as if such purchase or sale, as the case may

be, had been completed.

The Issuer may only modify the Portfolio Profile Tests provided that such modification is made inaccordance with the provisions of the Collateral Management Agreement and the Trust Deed, subjectto Rating Agency Confirmation and consent from the holders of at least 50.0 per cent. of the PrincipalAmount Outstanding of the Controlling Class being obtained in respect of such modification and

provided further that such modification is not, in the opinion of the Trustee, materially prejudicial tothe interests of the Noteholders of any Class.

For the purposes of the Portfolio Profile Tests:“Covenant Lite Loan ” means a Senior Secured Loan (or Participation therein) that (i) does notcontain any financial covenants or (ii) requires the borrower to comply with an Incurrence Covenant,

but does not require the borrower to comply with a Maintenance Covenant, in each case as determined by the Collateral Manager in its reasonable judgment.

“Current Pay Obligation ” means a Collateral Debt Obligation that would otherwise be a DefaultedObligation in respect of which (a) all prior cash principal and interest payments due were paid in cashand the Collateral Manager reasonably expects that the next interest payment due will be paid in cash,or (b) the rating of such Collateral Debt Obligation is at least “CCC+” from S&P and is based on arating (either public or private) from S&P or (c) if the Obligor of such Collateral Debt Obligation issubject to a bankruptcy proceeding, a bankruptcy court has authorised the payment of interest due and

payable on such Collateral Debt Obligation, provided that no more than five per cent. of theAggregate Portfolio Balance may consist of Current Pay Obligations.

“Fixed Rate Collateral Debt Obligation ” means a Collateral Debt Obligation, the interest or coupon payable in respect of which is calculated by reference to a fixed rate and for the avoidance of doubtshall exclude any Collateralised Credit Default Swaps.

“Floating Rate Collateral Debt Obligation ” means a Collateral Debt Obligation, the interest or coupon payable in respect of which is calculated by reference to a floating rate or index and shallinclude any Collateralised Credit Default Swaps.

“Incurrence Covenant ” means a covenant by the Obligor of a Collateral Debt Obligation to comply

with one or more financial covenants only upon the occurrence of certain actions of the Obligor or certain events relating to the Obligor, including, but not limited to, a debt issuance, dividend payment,share purchases, merger, acquisition or divestiture, unless, as at any date of determination, such actionwas taken or such event has occurred, the effect of which causes such covenant to meet the criteria of a Maintenance Covenant.

“Maintenance Covenant ” means as at any date of determination, a covenant by the Obligor of aCollateral Debt Obligation to comply with one or more financial covenants during each reporting

period applicable to such Collateral Debt Obligation, whether or not any action by, or event relatingto, the Obligor occurs after such date of determination.



163

Collateral Quality Tests

The “ Collateral Quality Tests ” will consist of each of the following:


(i) as of the Effective Date and until the end of the Reinvestment Period, the CDOMonitor Test; and

(ii) the S&P Minimum Weighted Average Recovery Rate Test; and


(i) the Minimum Weighted Average Spread Test; and

(ii) the Weighted Average Maturity Test,

each as defined in the Collateral Management Agreement and as set out herein.

For the purposes of the Collateral Quality Tests, a zero value shall be assigned to any UnhedgedCollateral Debt Obligation where (a) such Unhedged Collateral Debt Obligation remains unhedgedfor over 6 months from the date of acquisition thereof, (b) the Aggregate Principal Balance of Unhedged Collateral Debt Obligations exceeds 5 per cent. of the Aggregate Portfolio Balance of thePortfolio (for these purposes, taking into consideration 100 per cent. of the Principal Balance of Unhedged Collateral Debt Obligations and only in respect of such excess) or (c) all of the followingconditions are in occurrence: (1) the Aggregate Portfolio Balance is lower than the Target Par Amounton any Measurement Date on or after the Effective Date, (2) Method 2 has been selected, (3) theCollateral Manager has failed to procure entry by the Issuer into an Asset Swap Transaction and(4) the Collateral Manager has chosen not to sell such Unhedged Collateral Debt Obligation.

The Issuer may only modify the Collateral Quality Tests provided that such modification is made inaccordance with the provisions of the Collateral Management Agreement and the Trust Deed and

provided further that Rating Agency Confirmation with respect to such modification has beenobtained. For the avoidance of doubt, no additional consent from the Noteholders of any Class or theTrustee shall be required.

S&P Tests Matrix

Subject to the provisions below, on and after the Effective Date, the Collateral Manager, acting on behalf of the Issuer, will have the option to elect which of the cases (the “ S&P Break-even RateCases ”) set out in the applicable matrix in respect of the Target Par Amount selected by the CollateralManager below (the “ S&P Tests Matrix ”) shall be applicable for purposes of the S&P MinimumWeighted Average Recovery Rate Test and the Minimum Weighted Average Spread Test and basedon the cases selected by the Collateral Manager (on behalf of the Issuer), S&P will provide the

Collateral Manager (on behalf of the Issuer) on the Effective Date, and from time to time thereafter until the end of the Reinvestment Period, with the applicable CDO Monitor in connection with theCDO Monitor Test.

For any given case:

(a) the applicable recovery rates for performing the S&P Minimum Weighted Average RecoveryRate Test will be in the applicable row and columns of the “S&P Tests Recovery Matrix” for the applicable Recovery Scenario that is associated with the elected case as per the S&P TestsMatrix; and

(b) the applicable row for determining the Minimum Weighted Average Spread will be the row inwhich the elected case is set out.



164

On the Effective Date, the Collateral Manager, acting on behalf of the Issuer, will be required to electwhich S&P Break-even Rate Case shall apply initially. Thereafter, on five Business Days’ notice tothe Issuer, the Trustee, the Collateral Administrator and S&P, the Collateral Manager (on behalf of the Issuer) may elect to have a different S&P Break-even Rate Case apply, provided that the S&PMinimum Weighted Average Recovery Rate Test and the Minimum Weighted Average Spread Testapplicable to the S&P Break-even Rate Case to which the Collateral Manager (on behalf of the Issuer)desires to change are satisfied. In no event will the Issuer or the Collateral Manager (on behalf of theIssuer) be obliged to elect to have a different S&P Break-even Rate Case apply.

S&P Tests Matrix A(in respect of a Target Par Amount equal to €1,481,250,000)

S&P Minimum Weighted Average Recovery RateS&P Break-even Rate Case Recovery

Scenario 1Recovery

Scenario 2RecoveryScenario 3

RecoveryScenario 4

RecoveryScenario 5

2.10% 1 2 3 4 52.25% 6 7 8 9 102.40% 11 12 13 14 15

2.55% 16 17 18 19 202.70% 21 22 23 24 252.90% 26 27 28 29 30

Minimum

WeightedAverageSpread

3.10% 31 32 33 34 35

S&P Tests Matrix B(in respect of a Target Par Amount equal to €1,488,000,000)

S&P Minimum Weighted Average Recovery RateS&P Break-even Rate Case Recovery

Scenario 1Recovery

Scenario 2RecoveryScenario 3

RecoveryScenario 4

RecoveryScenario 5

2.02% 1 2 3 4 5

2.17% 6 7 8 9 102.32% 11 12 13 14 152.47% 16 17 18 19 202.62% 21 22 23 24 252.82% 26 27 28 29 30

MinimumWeightedAverageSpread

3.07% 31 32 33 34 35

S&P Tests Matrix C(in respect of a Target Par Amount equal to €1,492,500,000)

S&P Minimum Weighted Average Recovery Rate

S&P Break-even Rate Case RecoveryScenario 1 RecoveryScenario 2 RecoveryScenario 3 RecoveryScenario 4 RecoveryScenario 51.95% 1 2 3 4 52.10% 6 7 8 9 102.25% 11 12 13 14 152.40% 16 17 18 19 202.55% 21 22 23 24 252.75% 26 27 28 29 30

MinimumWeightedAverageSpread

3.00% 31 32 33 34 35



165

S&P Tests Recovery Matrix

RecoveryScenario Class A

1 55.0%2 56.5%

3 58.0%4 59.5%5 61.0%

The CDO Monitor Test

The “ CDO Monitor Test ” will be satisfied on any date from the Effective Date until the end of theReinvestment Period if, after giving effect to the purchase or sale of a Collateral Debt Obligation, theClass A Default Differential of the Proposed Portfolio is positive on such date. The CDO Monitor Test will be considered to be “improved” if the Class A Default Differential of the Proposed Portfoliois greater than the Class A Default Differential of the Current Portfolio. The CDO Monitor Test shallnot apply until the later of (a) the Effective Date and (b) the receipt by the Collateral Manager of theCDO Monitor from S&P, provided however that the Collateral Manager must request the CDOMonitor from S&P on or before the Effective Date. The Collateral Manager shall request a new CDOMonitor each time it elects a different matrix point in respect of the applicable S&P Tests Matrix,

provided that if the Collateral Manager does not receive a new CDO Monitor from S&P within 5Business Days of any such request the CDO Monitor Test shall not apply until receipt by theCollateral Manager of the new CDO Monitor from S&P. If, on any date, as disclosed in the Issuer’smost recent Monthly Report (as defined in “ Description of the Reports – Monthly Reports ”), morethan 20.0 per cent. of the Aggregate Portfolio Balance consists of Participations with counterpartiesrated “AA” by S&P or below, then the Collateral Manager (on behalf of the Issuer) shall notify S&Pand request that S&P modify the CDO Monitor accordingly.

For the purposes of the CDO Monitor Test, Defaulted Obligations shall be treated as cash (in anamount equal to the Principal Balance of such Defaulted Obligation which, for the avoidance of doubt, shall be equal to its S&P Collateral Value) and not form part of either the Current Portfolio or the Proposed Portfolio (each as defined below).

The “ Class A Break-even Default Rate ” is, at any time, the maximum percentage of defaults whichthe Current Portfolio or the Proposed Portfolio, as applicable, can sustain, as determined by S&Pthrough application of the CDO Monitor, which, after giving effect to S&P’s assumptions onrecoveries and timing and to the Priorities of Payments, will result in sufficient funds remaining for the payment of the Class A Notes in full by their stated maturity and the timely payment of interest onthe Class A Notes in full.

The “ Class A Default Differential ” is, at any time, the rate calculated by subtracting the Class AScenario Default Rate from the Class A Break-even Default Rate at such time.

The “ Class A Scenario Default Rate ” is, at any time, an estimate of the cumulative default rate for the Current Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of “AAA” byS&P, determined by application of the CDO Monitor Test at such time.

The “ Current Portfolio ” means the portfolio of Collateral Debt Obligations (included at their Principal Balance) and Eligible Investments existing (including purchased or binding commitment to

purchase) prior to the sale, maturity or other disposition of a Collateral Debt Obligation or a proposedreinvestment of Principal Proceeds in a Substitute Collateral Debt Obligation, as the case may be.

The “ Proposed Portfolio ” means the portfolio of Collateral Debt Obligations (included at their Principal Balance) and Eligible Investments resulting from the sale, maturity or other disposition of a



166

Collateral Debt Obligation or a proposed reinvestment of Principal Proceeds in a Substitute CollateralDebt Obligation, as the case may be.

The “ CDO Monitor ” is the dynamic, analytical computer model developed by S&P and used toestimate default risk of Collateral Debt Obligations and provided to the Collateral Manager on or

before the Issue Date, as it may be modified by S&P from time to time. The CDO Monitor calculatesthe cumulative default rate of a pool of Collateral Debt Obligations and Eligible Investmentsconsistent with a specified benchmark rating level based upon S&P’s proprietary corporate debtdefault studies. In calculating the scenario loss rate in respect of a Class of Notes, the CDO Monitor considers each Obligor’s issuer credit rating, the number of Obligors in the portfolio, the Obligor andindustry concentrations in the Portfolio and the remaining weighted average maturity of the CollateralDebt Obligations and Eligible Investments and calculates a cumulative default rate based on thestatistical probability of distributions or defaults on the Collateral Debt Obligations and EligibleInvestments.

The S&P Minimum Weighted Average Recovery Rate Test

The “ S&P Minimum Weighted Average Recovery Rate Test ” will be satisfied as at any

Measurement Date, from (and including) the Effective Date, if the S&P Class A Weighted AverageRecovery Rate is greater than or equal to the recovery rate percentage set out in the applicable rowand column of the S&P Tests Recovery Matrix based upon the applicable Recovery Scenario that islinked to the elected S&P Break-even Rate Case as per the S&P Tests Matrix.

“S&P Class A Weighted Average Recovery Rate ” means, as of any Measurement Date, the number (expressed as a percentage) obtained by summing the products obtained by multiplying the PrincipalBalance of each Collateral Debt Obligation (excluding Defaulted Obligations) by its S&P Class ARecovery Rate, dividing such sum by the Aggregate Principal Balance of all Collateral DebtObligations and rounding up to the nearest 0.1 per cent.

“S&P Class A Recovery Rate ” means in respect of any Collateral Debt Obligation, the recovery rateapplicable to such Collateral Debt Obligation and the recovery rate applicable to the Class A Notesdetermined in accordance with the Collateral Management Agreement or as advised by S&P.

The Minimum Weighted Average Spread Test

The “ Minimum Weighted Average Spread Test ” will be satisfied if as at any Measurement Date,from (and including) the Effective Date, the Weighted Average Spread as at such Measurement Dateequals or exceeds the Minimum Weighted Average Spread as at such Measurement Date.

The “ Minimum Weighted Average Spread ”, as of any Measurement Date, will equal the number setout in the row headed “Minimum Weighted Average Spread” in the S&P Tests Matrix in each case

based upon the option chosen by the Collateral Manager as currently applicable to the Portfolio.

The “ Weighted Average Spread ” as of any Measurement Date will equal a fraction (expressed as a percentage) obtained by summing the following:

(a) the products obtained by multiplying:

(1) the Principal Balance (excluding any Purchased Accrued Interest) of each FloatingRate Collateral Debt Obligation (excluding Defaulted Obligations, UnhedgedCollateral Debt Obligations, Delayed Drawdown Collateral Debt Obligations andRevolving Obligations) held by the Issuer as at such Measurement Date; by

(2) the current per annum rate at which it pays interest in excess of EURIBOR or suchother floating rate index upon which such Floating Rate Collateral Debt Obligation

bears interest;



167

(b) the products obtained by multiplying:

(1) the Principal Balance of each Fixed Rate Collateral Debt Obligation (excludingDefaulted Obligations, Unhedged Collateral Debt Obligations, Delayed DrawdownCollateral Debt Obligations and Revolving Obligations) held by the Issuer as at suchMeasurement Date; by

(2) the current rate per annum at which it pays interest minus the applicable Swap Rate asat such Measurement Date;

(c) the product obtained by multiplying:

(1) each Unfunded Amount held by the Issuer as at such Measurement Date in respect of which a commitment fee is receivable by the Issuer; by

(2) the current per annum rate payable by way of such commitment fee in respect of eachsuch Unfunded Amount; and

(d) the product obtained by multiplying:

(1) each Funded Amount held by the Issuer as at such Measurement Date; by

(2) the current per annum rate in excess of EURIBOR or such other floating rate indexapplicable to each such Funded Amount as at such Measurement Date;

(e) the product obtained by multiplying:

(1) the Principal Balance of each Unhedged Collateral Debt Obligation held by the Issuer as at such Measurement Date; by

(2) the Relevant Percentage (as specified in either Method 1 or Method 2, as the casemay be);

(i) in case where such Unhedged Collateral Debt Obligation is a Floating RateCollateral Debt Obligation, the current per annum rate at which it paysinterest in excess of the relevant floating rate index upon which such FloatingRate Collateral Debt Obligation bears interest; or

(ii) in case where such Unhedged Collateral Debt Obligation is a Fixed RateCollateral Debt Obligation, the current rate per annum at which it paysinterest minus the applicable Swap Rate as at such Measurement Date; and

provided, however, that a zero value shall be assigned to any Unhedged CollateralDebt Obligation where (a) such Unhedged Collateral Debt Obligation remainsunhedged for over 6 months from the date of acquisition thereof, (b) the aggregatePrincipal Balance of Unhedged Collateral Debt Obligations exceeds 5 per cent. of theAggregate Portfolio Balance of the Portfolio (for these purposes, taking intoconsideration 100 per cent. of the Principal Balance of Unhedged Collateral DebtObligations and only in respect of such excess) or (c) all of the following conditionsare in occurrence: (1) the Aggregate Portfolio Balance is lower than the Target Par Amount on any Measurement Date on or after the Effective Date, (2) Method 2 has

been selected, (3) the Collateral Manager has failed to procure entry by the Issuer intoan Asset Swap Transaction and (4) the Collateral Manager has chosen not to sell suchUnhedged Collateral Debt Obligation;

(f) and dividing such sum by the aggregate of the Principal Balances referred to in paragraphs(a)(1), (b)(1) and (e)(1) and the aggregate of all Funded Amounts and Unfunded Amountsreferred to in paragraphs (c)(1) and (d)(1) as above.



168

The Weighted Average Spread of any Non-Euro Obligation that is the subject of an Asset SwapTransaction shall be calculated by reference to the notional amount of the related Asset SwapTransaction and the spread payable thereon shall be the spread over EURIBOR payable to the Issuer under the related Asset Swap Transaction.

The “ Swap Rate ” means, as at any date of determination and in respect of any Fixed Rate CollateralDebt Obligation, a rate equal to the prevailing swap rate with an average life equal to the AverageLife of such Fixed Rate Collateral Debt Obligation.

The “ Average Life ” means in respect of any Collateral Debt Obligation, as of any date of determination, its expected remaining average life as reasonably determined by the CollateralManager based on publicly available information from a reputable source (expected to be Bloomberg)or sources ( provided that the Collateral Manager shall not be held responsible for any error occurringas a result of any missing information, incorrect or inaccurate publicly available informationappearing on the public source(s) used at the time of determination notwithstanding that the correctinformation appeared at such time on a source not used by the Collateral Manager).

The Weighted Average Maturity Test

The “ Weighted Average Maturity Test ” means a test which will be satisfied as at any MeasurementDate, from (and including) the Effective Date, if the Portfolio Weighted Average Maturity is on or

before July 2017.

“Portfolio Weighted Average Maturity ” is, as of any date of determination, the date calculated byadding the Weighted Average Maturity of the Collateral Debt Obligations to the Issue Date.

The “ Weighted Average Maturity ” of the Collateral Debt Obligations shall be expressed as anumber of months from the Issue Date and calculated by (i) summing the products obtained bymultiplying (a) the Principal Balance (or portion thereof) of each Collateral Debt Obligation(excluding Defaulted Obligations) that is then held by the Issuer and that matures or amortises on anydate subsequent to such date of determination by (b) the number of months from the Issue Date to thedate of such maturity or amortisation and (ii) dividing such sum by the Aggregate Principal Balance(excluding Defaulted Obligations).

Ratings

The “ S&P Rating ” of any Collateral Debt Obligation will be determined as follows:

(a) if there is an issuer credit rating of the issuer of such Collateral Debt Obligation, or of theguarantor who unconditionally and irrevocably guarantees such Collateral Debt Obligation,then the S&P Rating of such issuer, or the guarantor, shall be such rating (regardless of whether there is a published rating by S&P on the Collateral Debt Obligation of such issuer held by the Issuer); or

(b) if no other security or obligation of the issuer is rated by S&P, then the Issuer, or theCollateral Manager on behalf of the Issuer, may apply to S&P for a corporate credit estimate,which shall be its S&P Rating provided that , pending receipt from S&P of such estimate, suchCollateral Debt Obligation shall for a maximum period of 6 calendar months from the date of acquisition thereof be assigned a temporary S&P Rating of “B-" ; or

(c) if such Collateral Debt Obligation is not rated by S&P, but another security or obligation of the issuer is rated by S&P and neither the Issuer nor the Collateral Manager obtains an S&PRating for such Collateral Debt Obligation pursuant to paragraph (b) above, then the S&PRating of such Collateral Debt Obligation shall be the issuer credit rating or shall bedetermined as follows:

(i) if there is a rating on a senior secured obligation of the issuer, then the S&P Rating of such Collateral Debt Obligation shall be one sub-category below such rating if such



169

Collateral Debt Obligation is a senior secured or senior unsecured obligation of theissuer;

(ii) if there is a rating on a senior unsecured obligation of the issuer, then the S&P Ratingof such Collateral Debt Obligation shall equal such rating if such Collateral DebtObligation is a senior secured or senior unsecured obligation of the issuer; and

(iii) if there is a rating on a subordinated obligation of the issuer, and if such CollateralDebt Obligation is a senior secured or senior unsecured obligation of the issuer,

then the S&P Rating of such Collateral Debt Obligation shall be one sub-category above suchrating, if such rating is higher than “BB+”, and shall be two sub-categories above such rating,if such rating is “BB+” or lower; or

(d) if (i) neither the issuer nor any of its Affiliates is subject to reorganisation or bankruptcy proceedings and (ii) no debt securities or obligations of the issuer have been in default duringthe past two years, the S&P Rating of such Collateral Debt Obligations will be “CCC”; or

(e) if a debt security or obligation of the issuer has been in default during the past two years, theS&P Rating of such Collateral Debt Obligation will be “D”; or

(f) if there is no issuer credit rating published by S&P and such Collateral Debt Obligation is notrated by S&P, and no other security or obligation of the issuer is rated by S&P and neither theIssuer nor the Collateral Manager on behalf of the Issuer obtains an S&P Rating for suchCollateral Debt Obligation pursuant to paragraph (b) above, then the S&P Rating of suchCollateral Debt Obligation may be determined using any one of the methods provided below:

(i) if such Collateral Debt Obligation is publicly rated by Moody’s, then the S&P Ratingof such Collateral Debt Obligation will be (A) one sub-category below the S&Pequivalent of the public rating assigned by Moody’s if such Collateral DebtObligation is rated “Baa3” or higher by Moody’s and (B) two sub-categories below

the S&P equivalent of the public rating assigned by Moody’s if such Collateral DebtObligation is publicly rated “Ba1” or lower by Moody’s provided, however, that (x) an S&P Rating may only be derived under this paragraph (f)(i) from a Moody’s

public rating and may not be derived from any Moody’s confidential credit rating or credit estimate and (y) the Aggregate Portfolio Balance of the Collateral DebtObligations that may be deemed to have an S&P rating based on a rating assigned byMoody’s as provided in this paragraph (f)(i) may not exceed 10 per cent. of theAggregate Portfolio Balance; or

(ii) if such Collateral Debt Obligation is not publicly rated by Moody’s but a securitywith the same ranking (a “ parallel security ”) is publicly rated by Moody’s, then theS&P Rating of such parallel security will be determined in accordance with the

methodology set out in paragraph (f)(i) above and the S&P Rating of such CollateralDebt Obligation will be determined in accordance with the methodology set out in

paragraph (d) above (for such purposes treating the parallel security as if it were rated by S&P at the rating determined pursuant to this paragraph (f)(ii)); or

(g) with respect to any Current Pay Obligation that is rated “D” or “SD”, the S&P Rating of suchCurrent Pay Obligation will be “CCC”.

For the purposes of this definition “ Moody’s ” shall mean Moody’s Investors Service, Inc. and anysuccessor or successors thereto.

The Coverage Tests

The coverage tests (the “ Coverage Tests ”) will consist of the Class A Par Value Test (the “ Class A Par Value Test ”, as defined in the Conditions of the Notes) and the Class A Interest Coverage Test



170

(an “ Class A Interest Coverage Test ”, as defined in the Conditions of the Notes). The CoverageTests will be used primarily to determine whether interest may be paid on the Subordinated Notes andwhether Principal Proceeds may be reinvested in Substitute Collateral Debt Obligations, or whether Interest Proceeds and, to the extent needed, Principal Proceeds which would otherwise be used to payinterest on the Subordinated Notes must instead be used to repay principal of the Class A Notes in theevent of failure to satisfy the Coverage Tests. The Class A Interest Coverage Test will only apply onor after the second Payment Date. The Coverage Tests will be measured to include all Collateral DebtObligations which have been transferred to the Issuer.

The Class A Par Value Test will be satisfied on a Measurement Date on or after the Effective Dateand the Class A Interest Coverage Test will be satisfied on or after the Determination Date relating tothe Payment Date falling on 17 September 2009 if the corresponding Class A Par Value Ratio or Class A Interest Coverage Ratio (as the case may be) is at least equal to the percentage specified inthe table below in relation to that Coverage Test.

Coverage Test and Ratio Percentage at which Test is Satisfied

Class A Par Value 124.0%Class A Interest Coverage 108.0%

For the purposes of the Coverage Tests, a zero value shall be assigned to any Unhedged CollateralDebt Obligation where (a) such Unhedged Collateral Debt Obligation remains unhedged for over 6 months from the date of acquisition thereof, (b) the aggregate Principal Balance of UnhedgedCollateral Debt Obligations exceeds 5 per cent. of the Aggregate Portfolio Balance of the Portfolio(for these purposes, taking into consideration 100 per cent. of the Principal Balance of UnhedgedCollateral Debt Obligations and only in respect of such excess) or (c) all of the following conditionsare in occurrence: (1) the Aggregate Portfolio Balance is lower than the Target Par Amount on anyMeasurement Date on or after the Effective Date, (2) Method 2 has been selected, (3) the CollateralManager has failed to procure entry by the Issuer into an Asset Swap Transaction and (4) theCollateral Manager has chosen not to sell such Unhedged Collateral Debt Obligation.

The Issuer may only modify the Coverage Tests provided that such modification is made inaccordance with the provisions of the Collateral Management Agreement and the Trust Deed and

provided further that Rating Agency Confirmation is obtained in respect of such modification. For theavoidance of doubt, no further consent from any of the Noteholders of any Class or the Trustee shall

be required.



171

DESCRIPTION OF THE COLLATERAL MANAGEMENT AGREEMENT

The description in this section refers to certain provisions of the Collateral Management Agreement.This description does not purport to be complete and is subject to, and qualified in its entirety byreference to, the detailed provisions of the Collateral Management Agreement. All terms used but notdefined in this section shall have the meanings given to them in Condition 1 ( Definitions ) of theConditions of the Notes.

THE COLLATERAL MANAGEMENT AGREEMENT

General

The collateral management functions described herein will be performed by the Collateral Manager pursuant to authority granted to the Collateral Manager by the Issuer under the CollateralManagement Agreement, subject to the Issuer monitoring the performance of the Collateral Manager.The Collateral Management Agreement contains procedures whereby any acquisition, disposal,reinvestment and management of the Portfolio will be subject to a calculation in respect of certainmatters and confirmation in respect thereof being given by the Collateral Administrator. Pursuant to

the Collateral Management Agreement, the Issuer has delegated and may delegate authority to theCollateral Manager to carry out certain functions in relation to the Portfolio and the hedgingarrangements without the requirement for specific approval by the Issuer, the Collateral Administrator or the Trustee.

Subject to the provisions of the Collateral Management Agreement, the Collateral Manager hasagreed to perform the collateral management and related functions described herein.

Fees

The “ Collateral Management Fee ” shall be equal to:

(a) 0.175 per cent. per annum of the original aggregate Principal Amount Outstanding of the

Notes (as of the Issue Date), on each Payment Date following the Issue Date up to andincluding the Payment Date falling in March 2012; and

(b) thereafter, 0.175 per cent. per annum of the Aggregate Portfolio Balance of the CollateralDebt Obligations as at the beginning of the Due Period preceding the applicable PaymentDate,

in each case, (calculated on the basis of a 360 day year and the number of days elapsed in such DuePeriod) payable in arrear on each Payment Date in accordance with the applicable Priorities of Payments and together with any value added tax payable in respect thereof whether payable to theCollateral Manager or directly to the relevant tax authority. Any Collateral Management Fees accrued

but unpaid on the Payment Date on which it is due or deferred by the Collateral Manager inaccordance with the applicable Priorities of Payment will be added to the Collateral Management Feeon the next occurring Payment Date and will accrue interest at the rate of EURIBOR plus 2.0 per cent.

per annum and shall be payable pro rata to the Collateral Manager and any former collateral manager by reference to the period of time that such entity was the “Collateral Manager”.

If the appointment of the Collateral Manager is terminated due to the occurrence of a CM UK TaxEvent, the Collateral Manager will be paid a Make Whole Tax Event Fee equal to 0.175 per cent.multiplied by the Aggregate Portfolio Balance (together with any value added tax payable in respectthereof (whether payable to the Collateral Manager or directly to the relevant tax authority)) as at theCM UK Tax Termination Date, subject to any relevant conditions in respect thereto in the CollateralManagement Agreement.

In the event the Notes are redeemed in whole prior to the Payment Date falling on 17 March 2012, the

Collateral Manager will be paid a Make Whole Redemption Fee on the Redemption Date equal to the present value of the remaining Collateral Management Fees payable to the Collateral Manager





173

Manager has failed to change the location from which it provides its services under the terms of theCollateral Management Agreement or has failed to arrange for another CELF Group Company whichis not resident in the United Kingdom for United Kingdom tax purposes to replace it as CollateralManager within 90 days of the date that the Collateral Manager first becomes aware of a CM UK TaxEvent provided that either such change of location or replacement would reasonably have beenexpected to have had the effect of curing such CM UK Tax Event. Such 90 day period shall beextended by a further 90 days if the Collateral Manager has notified the Issuer before the end of thefirst 90 day period that it expects (i) to have changed the place from which it provides its servicesunder the terms of the Collateral Management Agreement, or (ii) to have arranged for another CELFGroup Company which is not resident in the United Kingdom for United Kingdom tax purposes tohave replaced it as Collateral Manager within 90 days of the end of, the first 90 day period. Removalof the Collateral Manager as set out above will occur upon ten days prior written notice by the Trusteeacting at the direction of the holders of (a) the Subordinated Notes acting by Extraordinary Resolutionor (b) the Controlling Class acting by Extraordinary Resolution, provided that notice of such removalshall have been given to the holders of each Class of the Notes by the Issuer in accordance withCondition 16 ( Notices ).

“CM UK Tax Event ” means that the Issuer has become subject to a UK corporation tax liability (as aresult of the actions or inaction of the Collateral Manager causing the Issuer to be carrying on a tradein the United Kingdom through a United Kingdom permanent establishment) in sufficient amountsuch that the Class A Interest Coverage Ratio would be lower than 108.0 per cent. if calculatedassuming payment by the Issuer of such UK tax liability.

“CELF Group Company ” means (a) any company which is a 51 per cent. subsidiary (within themeaning of section 838 of the Income and Corporation Taxes Act 1988) of CELF InvestmentAdvisors Limited or (b) any company of which CELF Investment Advisors Limited is itself a51 per cent. subsidiary (within the meaning of section 838 of the Income and Corporation TaxesAct 1988).

Resignation

The Collateral Manager may at any time resign upon 45 days’ prior written notice to the Issuer, theCollateral Administrator, the Trustee and the Rating Agency.

Successor Collateral Manager

Upon any resignation or removal of the Collateral Manager while any of the Notes are Outstanding,the Subordinated Noteholders, acting by way of Extraordinary Resolution, will have the right, withina 30 day period, to appoint a successor Collateral Manager, subject to (i) meeting the criteria in the

paragraph immediately below, (ii) Rating Agency Confirmation and (iii) the approval of suchsuccessor Collateral Manager by the Controlling Class, acting by way of Ordinary Resolution. If nosuccessor Collateral Manager has been appointed within such 30 day period then the ControllingClass, acting by way of Ordinary Resolution will be entitled to appoint a successor CollateralManager within an additional 30 day period, subject to (i) meeting the criteria in the paragraphimmediately below, (ii) Rating Agency Confirmation and (iii) the approval of such successor Collateral Manager by the Subordinated Noteholders, acting by way of Extraordinary Resolution. If no successor Collateral Manager has been appointed within such additional 30 day period, the Trusteeshall appoint a successor Collateral Manager, which appointment shall not require the consent of, nor

be subject to the disapproval of, the Issuer or any Noteholder, subject to (i) meeting the criteria in the paragraph immediately below and (ii) Rating Agency Confirmation. Upon the appointment of asuccessor Collateral Manager pursuant to the Collateral Management Agreement, the CollateralManager’s appointment and obligations will be terminated on the effective date of such appointment.

Any successor Collateral Manager must (i) have demonstrated an ability professionally andcompetently to perform duties similar to those imposed upon the Collateral Manager, (ii) be legallyqualified and have the capacity to act as Collateral Manager, (iii) not cause the Issuer or the Portfolioto become, or result in the Issuer or the Portfolio becoming, an investment company under the



174

Investment Company Act, (iv) not cause the Issuer to be subject to United Kingdom tax or tax in anyother jurisdiction and (v) not be Affiliated with the Collateral Manager.

No compensation payable to a successor Collateral Manager from payments on the Collateral shall begreater than that paid to the Collateral Manager without the prior written consent of holders of at least66⅔ per cent. of the Principal Amount Outstanding of the Subordinated Notes. Upon termination of the appointment of any Collateral Manager as specified in the Collateral Management Agreement, allauthority and power of the Collateral Manager under the Collateral Management Agreement, whether with respect to the Collateral or otherwise, shall automatically and without action by any Person or entity pass to and be vested in the successor Collateral Manager upon the appointment thereof.

Disposal Agent

In the event that the Collateral Manager resigns or is removed and no successor Collateral Manager isappointed by the Trustee in accordance with the terms of the Collateral Management Agreement, theCollateral Manager shall as soon as practicable provide written confirmation to the Trustee that nosuccessor Collateral Manager has been appointed and the Portfolio will cease to be managed and fromthat date (the “ Static Date ”) there shall be no further additions to or (until the appointment of a

Disposal Agent) removals from the Portfolio. As soon as practicable after the Static Date, theCollateral Manager will make a recommendation to the Issuer regarding the appointment of aDisposal Agent. If the Collateral Manager fails to recommend a Disposal Agent to the Issuer withinthree months of the Static Date, the Trustee in its sole discretion will appoint a Disposal Agent,

provided that , at the end of such three month period following the Static Date, the Collateral Manager will be released from its obligations under the Collateral Management Agreement, subject to the termsof the Collateral Management Agreement. For the period from the Static Date until a Disposal Agentis appointed, the Issuer will not be able to redeem the Portfolio in accordance with the variousredemption provisions of the Notes, other than following the occurrence of an Event of Default

pursuant to Condition 10 ( Events of Default ). Once appointed, the Disposal Agent will have limited powers in relation to managing the Portfolio. As soon as a Disposal Agent is appointed, the CollateralManager will be released from its obligations under the Collateral Management Agreement.

Notes held by Collateral Manager

Any Notes held by or on behalf of the Collateral Manager and/or its Affiliates (including, for theavoidance of doubt, any partners, managing members, advisers, directors, officers or employees of such entities) will have no voting rights with respect to any vote (or written direction or consent) inconnection with the removal of the Collateral Manager and will be deemed not to be Outstanding inconnection with any such vote provided that the Collateral Manager shall be entitled to attend andspeak at meetings at which its removal is scheduled to be voted upon on the condition that it shall not

be present during any vote relating to its removal; provided, further, that any Notes held by theCollateral Manager and/or its Affiliates (including, for the avoidance of doubt, any partners,managing members, advisers, directors, officers or employees of such entities) will have voting rights

(including in respect of written directions and consents) with respect to all other matters as to which Noteholders are entitled to vote, including, without limitation, any vote in connection with theappointment of a successor Collateral Manager. Solely for purposes of determining whether any

Notes are held by or on behalf of Affiliates of the Collateral Manager in connection with any voterelating to the removal of the Collateral Manager or to the appointment of a successor CollateralManager, “Affiliates”, as regards any funds, shall be deemed to include only funds for which theCollateral Manager is the sole provider of collateral or investment management services.

Liability of the Collateral Manager

The Collateral Manager, (a) shall not be responsible for any action of the Issuer, the Trustee or theCollateral Administrator in declining to follow any advice, direction, instruction or recommendationof the Collateral Manager, (b) does not assume any fiduciary duty with regard to the Issuer, theArranger, any Noteholder or any other Persons, (c) does not guarantee or otherwise assume anyresponsibility for the performance of the Notes, any obligation comprised in the Portfolio or the



175

performance by any third party of any contract entered into by or on behalf of the Issuer, (d) does notguarantee or otherwise assume any responsibility for the performance of any other party under anyTransaction Document and (e) shall incur no liability to anyone in acting in reliance upon anysignature, instrument, statement, notice, resolution, request, direction, consent, order, report, opinion,

bond or other document or paper believed by it to be genuine and believed by it to be properlyexecuted or signed by the proper party or parties including any independent pricing service or broker dealer. The Collateral Manager also may rely upon any statement made to it orally or by telephoneand believed by it in good faith to be made by the proper person (including any independent pricingservice or broker dealer) unless the relevant communication is required pursuant to the TransactionDocuments to be in writing and will not incur any liability for relying thereon. The CollateralManager may consult with legal counsel (who may be concurrently acting as legal counsel to anObligor under any Collateral Debt Obligation or any Affiliates of the Collateral Manager), auditorsand other experts selected by it in good faith, and will not be liable for any action taken or not taken

by it in good faith in accordance with the advice of any such legal counsel, auditors or experts.

The Collateral Manager shall not be liable (whether directly or indirectly, in contract or in tort or otherwise) to the Issuer, the Collateral Administrator, the Trustee, the Noteholders, any Asset SwapCounterparty or any other person for losses, expenses, claims, damages, judgments, interest on

judgments, assessments, taxes, costs, fees, charges, amounts paid in settlement of other liabilities(collectively, “ Liabilities ”) incurred by the Issuer, the Trustee, the Collateral Administrator, the

Noteholders, any Asset Swap Counterparty or any other person that arise out of or in connection withany act or omission in the performance by the Collateral Manager of its duties under the CollateralManagement Agreement except that nothing shall relieve the Collateral Manager from liability to theIssuer in respect of any direct liabilities (to the exclusion of any consequential or indirect losses,which term shall include without limitation, any consequential or indirect economic losses or any lossof turnover, profits or business incurred by the Issuer but for the avoidance of doubt shall exclude anyamount contemplated or envisaged by the Collateral Manager and the Issuer on execution of theCollateral Management Agreement to be payable to or as the case may be by the Issuer in relation tothe Transaction Documents) it may incur due to a Collateral Manager Breach (as defined in the

Collateral Management Agreement). None of the Collateral Manager's partners, managing members, advisers, directors, officers,shareholders, agents, employees or Affiliates will be liable to the Issuer, the Trustee, the Noteholders,any Asset Swap Counterparty or any other Person for Liabilities (as defined below) incurred by theIssuer, the Trustee, the Noteholders, any Asset Swap Counterparty, or any other Person, respectively,that arise out of or in connection with the performance by the Collateral Manager of its duties under the Collateral Management Agreement.

Indemnities

Collateral Manager’s Indemnity

The Collateral Manager will agree in the Collateral Management Agreement to indemnify (as the“CM Indemnifying Party ”) and hold harmless the Issuer (in such case, the “ CM IndemnifiedParty ”) from and against any and all liabilities and expenses incurred by the Issuer (which shall notextend to any consequential loss or damage of any kind to the Issuer including lost profits andwhether or not foreseeable, but for the avoidance of doubt excluding any amount contemplated or envisaged to be payable to or as the case may be by the Issuer in relation to the TransactionDocuments) in respect of or arising out of paragraphs (a), (b) and (c) of the definition of “ CollateralManager Breach ” (as defined in the Collateral Management Agreement) except, in each case, to theextent that any such liability or expenses would not have been incurred but for any act or omissionconstituting wilful misconduct or negligence by the Issuer.

Issuer’s Indemnity

The Issuer will agree in the Collateral Management Agreement to indemnify and hold harmless (theIssuer in such case, the “ Issuer Indemnifying Party ”) each of the Collateral Manager and its



176

partners, managing members, advisers, directors, officers, employees, shareholders, agents or Affiliates of the Collateral Manager and consultants and other similar advisers engaged by theCollateral Manager in the ordinary course of its business (other than, for the avoidance of doubt, itslegal advisers) (each such party, in each case, an “ Issuer Indemnified Party ”) (other than, for theavoidance of doubt, in relation to such Issuer Indemnified Party in its capacity as a Noteholder) fromand against any and all liabilities and expenses incurred by such Issuer Indemnified Party, and willreimburse each such Issuer Indemnified Party for all expenses incurred in investigating, preparing,

pursuing or defending any claim, action, proceeding or investigation with respect to any pending or threatened litigation, caused by, or arising out of or in connection with, the issuance of the Notes andthe transactions contemplated by this Offering Memorandum, the Trust Deed and the CollateralManagement Agreement and/or any action taken by, or any failure to act by, such Issuer IndemnifyingParty; provided, however, that no Issuer Indemnified Party shall be indemnified for any suchliabilities or expenses it incurs as a result of any acts or omissions of any Issuer Indemnified Partyfinally determined and directly as a result of a Collateral Manager Breach.

Delegation

In providing its services under the Collateral Management Agreement, the Collateral Manager,without the prior consent of the Issuer, the Controlling Class or the Trustee, may employ third parties,including its Affiliates provided that the Collateral Manager shall remain liable for its duties or liabilities under the Collateral Management Agreement regardless of the performance of any services

by third parties and provided further that the Collateral Manager shall notify the Issuer and theTrustee as soon as is reasonably practicable of any such appointment.

Assignment

The Collateral Manager, with the consent in writing of the Issuer and the Controlling Class acting byExtraordinary Resolution, may assign its rights and obligations under the Collateral ManagementAgreement; provided, inter alia , such assignment will not result in a material adverse tax event, bindsthe transferee in the same manner as the Collateral Manager is bound under the Collateral

Management Agreement and Rating Agency Confirmation has been received in respect of theassignment. Upon such assignment of its rights and obligations under the Collateral ManagementAgreement, the Collateral Manager will be released from its obligations thereunder in accordancewith the terms and conditions of the Collateral Management Agreement.

Liquidity Facility Agreement

The Collateral Manager reserves the right to enter into a liquidity facility agreement on behalf of theIssuer after the Issue Date, subject to receipt of Rating Agency Confirmation, the prior consent of theSecured Parties and amendment of the Transaction Documents.



177

DESCRIPTION OF THE HEDGING ARRANGEMENTS

1. Hedging

1.1 Asset Swap Transactions

The Collateral Manager, on behalf of the Issuer, may purchase Collateral Debt Obligations which are Non-Euro Obligations, subject to the satisfaction of certain conditions set out in the CollateralManagement Agreement. An Asset Swap Transaction must be entered into in respect of each

Non-Euro Obligation denominated in U.S. Dollars, Sterling, Danish Kroner, Swedish Kronor, Norwegian Kroner or Swiss Francs (each such currency, an “ Approved Unhedged Currency ”) either (i) within 6 months of the settlement date of the acquisition thereof, or (ii) if, following the acquisitionthereof, the Aggregate Principal Balance of all Unhedged Collateral Debt Obligations would begreater than 5.0 per cent. of the Aggregate Portfolio Balance (for these purposes, taking intoconsideration 100 per cent. of the Principal Balance of Unhedged Collateral Debt Obligations), anAsset Swap Transaction is entered into in respect of such obligation on the date of settlement thereof.An Asset Swap Transaction must be entered into in respect of each Non-Euro Obligation which is notdenominated in an Approved Unhedged Currency on the date of settlement thereof. Each Non-Euro

Obligation included in the Initial Portfolio shall be the subject of an Asset Swap Transaction enteredinto on or prior to the Issue Date (and any such Asset Swap Transaction shall be effective from theIssue Date).

With respect to each Asset Swap Transaction to be entered into by the Issuer, the Issuer (or theCollateral Manager on its behalf) will seek to solicit bids from at least two recognised creditderivative market participants. The Issuer’s (or the Collateral Manager’s) criterion for selecting anAsset Swap Counterparty will be to satisfy inter alia the applicable Required Ratings and suitable

pricing.

The entry into any Asset Swap Transaction shall, save in the case of Form-Approved Asset Swaps, besubject to receipt of Rating Agency Confirmation and shall in addition be subject to there being nowithholding or deduction for or on account of any tax required in respect of any payments by both

parties to such Asset Swap Transaction at the time of entry into such transaction.

The Collateral Manager (acting on behalf of the Issuer) shall convert all amounts received by theIssuer in respect of any Non-Euro Obligation which is not the subject of a related Asset SwapTransaction into Euros promptly upon receipt thereof at the Spot Rate (as determined by the CollateralAdministrator) and shall procure that such amounts are paid into the Principal Account or the InterestAccount, as applicable, determined by reference to the nature of the payments so received.

For the purposes of the Coverage Tests, the Minimum Weighted Average Spread Test and the CDOMonitor Test, an Asset Swap Obligation shall be included as a Collateral Debt Obligation having therelevant characteristics of the related Asset Swap Transaction and not of the related Non-EuroObligation, unless the Collateral Manager (acting on behalf of the Issuer) determines otherwise andreceives Rating Agency Confirmation in respect of such determination.

For the purposes of the Collateral Quality Tests and the Portfolio Profile Tests other than theMinimum Weighted Average Spread Test and the CDO Monitor Test, an Asset Swap Obligation shall

be included as a Collateral Debt Obligation having the relevant characteristics of the related Non-EuroObligation and not of the related Asset Swap Transaction, unless the Issuer, following consultationwith the Collateral Manager, determines otherwise and receives Rating Agency Confirmation.

Upon the first instance that an Unhedged Collateral Debt Obligation is purchased, for purposes of determining the Coverage Tests and the Minimum Weighted Average Spread Test, the CollateralManager shall elect to treat such obligation (and shall apply the same election for all subsequentobligations) in accordance with either Method 1 or Method 2. See “ Treatment of Unhedged Collateral

Debt Obligations for Test Purposes ” under “ The Portfolio ”. Following the purchase of any UnhedgedCollateral Debt Obligations, to the extent that on any Measurement Date on or after the Effective Date



178

the Aggregate Portfolio Balance is lower than the Target Par Amount and the Collateral Manager haselected to treat such Unhedged Collateral Debt Obligations in accordance with Method 2, then theIssuer or the Collateral Manager on behalf of the Issuer shall immediately enter into associated AssetSwap Transactions in respect of such Unhedged Collateral Debt Obligations.

1.2 Replacement Asset Swap Transactions

In the event that any Asset Swap Transaction terminates in whole at any time in circumstances inwhich the applicable Asset Swap Counterparty is the “Defaulting Party” or sole “Affected Party”(each as defined in the applicable Asset Swap Agreement) the Issuer (or the Collateral Manager on its

behalf) shall use commercially reasonable efforts to enter into a Replacement Asset Swap Transactionwithin 30 days of the termination thereof with a counterparty which (or whose guarantor) satisfies theapplicable Required Ratings and which has the regulatory capacity, as a matter of Irish law, to enter into derivatives transactions with Irish residents. In seeking to enter into a Replacement Asset SwapTransaction, the Issuer (or the Collateral Manager on its behalf) will solicit bids from at least tworecognised credit derivative market participants. The Issuer’s (or the Collateral Manager’s) criterionfor selecting an Asset Swap Counterparty will be to satisfy the applicable Required Ratings andsuitable pricing.

In the event of termination of an Asset Swap Transaction in the circumstances referred to above, anyAsset Swap Counterparty Termination Payment will be paid into the Asset Swap TerminationAccount and shall be applied towards the costs of entry into a Replacement Asset Swap Transaction,together with, where necessary, Interest Proceeds and/or Principal Proceeds that are available for such

purpose on any Payment Date pursuant to the Priorities of Payments, subject to receipt of RatingAgency Confirmation, save:

(a) where the Issuer (or the Collateral Manager on its behalf) determines not to replace suchAsset Swap Transaction and Rating Agency Confirmation is received in respect of suchdetermination; or

(b) where termination of the Asset Swap Transaction occurs on a Redemption Date pursuant toConditions 7(a) ( Final Redemption ), Condition 7(b) ( Optional Redemption ) or Condition 10( Events of Default ); or

(c) to the extent that such Asset Swap Counterparty Termination Payment is not required for application towards the costs of entry into such Replacement Asset Swap Transaction,

in which event such Asset Swap Counterparty Termination Payment shall be paid into the PrincipalAccount and shall constitute Unscheduled Principal Proceeds.

In the event that the Issuer receives any Asset Swap Replacement Receipt upon entry into aReplacement Asset Swap Transaction, such amount shall be paid into the Principal Account andapplied directly in payment of any Asset Swap Termination Payment payable upon termination of the

Asset Swap Transaction being so replaced. To the extent not fully paid out of Asset SwapReplacement Receipts, any Asset Swap Termination Payment payable by the Issuer shall be paid tothe applicable Asset Swap Counterparty on the next Payment Date in accordance with the Priorities of Payments. To the extent not required for making any such Asset Swap Termination Payment, suchAsset Swap Replacement Receipts shall be paid into the Principal Account and shall constituteUnscheduled Principal Proceeds.

The Collateral Manager will, in accordance with the Collateral Management Agreement, usecommercially reasonable efforts to dispose of Non-Euro Obligations if a Replacement Asset SwapTransaction cannot be entered into by the Collateral Manager.



179

2. Standard Terms of Asset Swap Agreements

Each Asset Swap Agreement entered into by or on behalf of the Issuer shall contain the followingstandard provisions, save to the extent agreed otherwise by the Issuer and the applicable Asset SwapCounterparty and subject to receipt of Rating Agency Confirmation in respect thereof.

Gross Up Under each Asset Swap Agreement neither the Issuer nor the applicable Asset SwapCounterparty will be obliged to gross up any payments thereunder in the event of any withholding or deduction required thereon. Any such event will, however, result in a “Tax Event” (as defined in suchAsset Swap Agreement) which is a “Termination Event” for the purposes of each Asset SwapAgreement. In the event of the occurrence of a Tax Event, the Asset Swap Agreement includes

provision for the relevant Affected Party (as defined therein) to use all reasonable commercial effortsto transfer its obligations under such Asset Swap Agreement to an Affiliate (as defined in such AssetSwap Agreement) (in the case of the Asset Swap Counterparty) or to an entity incorporated in analternative jurisdiction (in the case of the Issuer) subject to satisfaction of the conditions specifiedtherein.

Limited Recourse The obligations of the Issuer under each Asset Swap Agreement will be limited to

the proceeds of enforcement of the Collateral as applied in accordance with the Priorities of Paymentsand will contain non-petition covenants, in each case as set out in Condition 4(c) ( Limited Recourse ).

Counterparties

Rating Downgrade Requirements

In the event that any Class A Notes remain Outstanding and the applicable ratings of any Asset SwapCounterparty (each, a “ Swap Counterparty ”) at any time fall below the applicable Required Ratingor are withdrawn, the applicable Swap Counterparty shall, within the relevant period specified in therelevant Asset Swap Agreement, take such steps (such as the posting of Collateral with the Issuer or the transfer of its rights and obligations under any Asset Swap Transaction to which it is party (each a“Swap Transaction ”) to another entity) as required by the terms of the relevant Swap Transaction.

The Swap Counterparties may be Affiliates of the Arranger or the Initial Purchaser/Placement Agentwhich arrangements may create certain conflicts of interest. See “ Risk Factors – Certain Conflicts of

Interest ”.

Termination

Each Asset Swap Agreement may terminate by its terms, whether or not the Notes have been paid infull prior to such termination, upon, among other events, the earlier to occur of:

(a) certain events of bankruptcy, insolvency, receivership or reorganisation of the Issuer or therelated Swap Counterparty;

(b) failure on the part of the Issuer or the related Swap Counterparty to make any payment under any Asset Swap Agreement within the applicable grace period; and

(c) an “Illegality” or “Tax Event”, as defined in each Asset Swap Agreement.

A termination of an Asset Swap Agreement does not constitute an Event of Default under the Notes.Upon any such termination the Collateral Manager, acting on behalf of the Issuer, shall use reasonableefforts to enter into a substitute Asset Swap Agreement together with substitute Asset SwapTransactions thereunder on similar terms (each, a “ Replacement Asset Swap Agreement ”) to theextent that the Issuer is able to enter into such agreements in each case, subject to Rating AgencyConfirmation unless a Form-Approved Asset Swap Agreement is used. The Issuer will not enter intosuch replacement hedging arrangements except to the extent it is required to do so (see “ Description

of the Portfolio ”). If the Issuer is unable to obtain a Replacement Asset Swap Agreement together with substitute Asset Swap Transactions thereunder on terms reasonably acceptable to it, interest due



180

on the Notes will be paid from amounts received on the Collateral Debt Obligations without the benefits of such Asset Swap Transactions. There can be no assurance that such amounts will besufficient to provide for the full payment of interest on the Notes at the applicable interest rates. Therepayment in full of the Notes shall be an additional termination event under any Asset SwapAgreements.

Transfer and Modification

The Issuer may not modify any Asset Swap Transaction without Rating Agency Confirmation inrelation to such modification, save in the case of any Asset Swap Transaction to the extent it wouldconstitute a Form-Approved Asset Swap following such modification. A Swap Counterparty mayonly assign its obligations under a Asset Swap Agreement as specified under the related Asset SwapAgreement.

Governing Law and Withholding Tax

The payments to be made to the Issuer by a Asset Swap Counterparty will not be subject to anywithholding tax at the date on which such Agreement is entered into and each Asset Swap Agreement

together with each Asset Swap Transaction thereunder will be governed by, and construed inaccordance with, the laws of England.



181

DESCRIPTION OF THE REPORTS

Terms used and not otherwise defined herein or in this Offering Memorandum as specificallyreferenced herein shall have the meaning given to them in Condition 1 (Definitions) of the Conditionsof the Notes.

Monthly ReportsThe Collateral Administrator, not later than the tenth Business Day after the eighteenth calendar dayof each month (save in respect of any month for which a Payment Date Report has been prepared) (or if such day is not a Business Day, the immediately following Business Day) commencing no earlier than 8 weeks after the Issue Date but no later than 18 October 2008 on behalf, and at the expense, of the Issuer and in consultation with the Collateral Manager, shall compile and make available via asecured website accessible only by way of unique password (which may be obtained from theCollateral Administrator by the Noteholder (subject to receipt by the Collateral Administrator of anotice certifying that it is a holder of a beneficial interest in any Note)) and also provide to theTrustee, the Collateral Manager, the Issuer, the Arranger, the Initial Purchaser/Placement Agent andthe Rating Agency, a monthly report (the “ Monthly Report ”), which shall contain the following

information with respect to the Portfolio, subject in all cases to any confidentiality obligations bindingon the Issuer, determined by the Collateral Administrator in consultation with the Collateral Manager.The Monthly Report will be prepared as of the eighteenth calendar day of each month.

Portfolio

(a) the Aggregate Principal Balance of the Collateral Debt Obligations;

(b) subject to any confidentiality obligations binding on the Issuer, in respect of each CollateralDebt Obligation, its Principal Balance, Market Value, annual interest rate, Stated Maturity,Obligor, Obligor’s principal place of business and significant operations, location of assets,location of security, S&P Rating (other than any confidential credit estimate), its S&Pindustry category;

(c) subject to any confidentiality obligations binding on the Issuer, in respect of each CollateralEnhancement Obligation and Exchanged Equity Security (to the extent applicable), itsPrincipal Balance, face amount, annual interest rate, Stated Maturity and Obligor, details of the type of instrument it represents and details of any amounts payable thereunder or other rights accruing pursuant thereto;

(d) subject to any confidentiality obligations binding on the Issuer, the number, identity and, if applicable, Principal Balance of, respectively, any Collateral Debt Obligations, CollateralEnhancement Obligations or Exchanged Equity Securities that were released for sale or other disposition (specifying the reason for such sale or other disposition and the section in theCollateral Management Agreement pursuant to which such sale or other disposition was

made), the aggregate of the Principal Balances of Collateral Debt Obligations (expressed as a percentage of the Aggregate Portfolio Balance) sold at the Collateral Manager’s discretionduring the period from (and including) the Issue Date to (but excluding) the second PaymentDate following the Issue Date or, thereafter, during each successive rolling twelve month

period from (and including) the 20th day of each month after the Issue Date to (but excluding)the succeeding anniversary of such date, measured as at the beginning of each such twelvemonth period (or, in the case of the first such period, the Issue Date), and the sale pricethereof and identity of any of the purchasers thereof (if any) that are Affiliated with theCollateral Manager;

(e) subject to any confidentiality obligations binding on the Issuer, the purchase or sale price of each Collateral Debt Obligation, Eligible Investment and Collateral Enhancement Obligation

acquired by the Issuer and in which the Issuer has granted a security interest to the Trustee,and each Collateral Debt Obligation, Eligible Investment and Collateral Enhancement



182

Obligation sold by the Issuer since the date of determination of the last Monthly Report andthe identity of the purchasers or sellers thereof, if any, that are Affiliated with the Issuer, theCollateral Manager or GSCP;

(f) subject to any confidentiality obligations binding on the Issuer, the identity of each CollateralDebt Obligation which became a Defaulted Obligation or in respect of which an ExchangedEquity Security has been received since the date of determination of the last Monthly Reportand the identity and Principal Balance of each CCC Obligation and Current Pay Obligation;

(g) Applicable EURIBOR, the Class A Floating Rate of Interest;

(h) the percentage of the Aggregate Portfolio Balance that consists of Participations withcounterparties rated “AA-“ by S&P or below;

(i) the Aggregate Principal Balance of Collateral Debt Obligations which were upgraded or downgraded since the most recent Monthly Report and of which the Collateral Administrator or the Collateral Manager has actual knowledge; and

(j) subject to any confidentiality obligations binding on the Issuer, the Aggregate PrincipalBalance and identity of Collateral Debt Obligations that are Unhedged Collateral DebtObligations.

Accounts

(a) the nature, source and amount of all deposits into and withdrawals from each of the Accounts,sorted by transaction type, showing aggregate amounts in respect of each transaction typesince the date of determination of the last Monthly Report, including details of all EligibleInvestments acquired or disposed of;

(b) the Balances standing to the credit of each of the Accounts at the end of the related DuePeriod;

(c) the Balances standing to the credit of each of the Accounts at the beginning of the related DuePeriod;

(d) the nature, source and amount of any proceeds in the Interest Account received (statingseparately the amount of Interest Sale Proceeds) since the date of determination of the lastMonthly Report;

(e) the nature, source and amount of any proceeds in the Principal Account received since thedate of determination of the last Monthly Report; and

(f) the nature, source and amount of any proceeds in the Collateral Enhancement Account sincethe date of determination of the last Monthly Report.

Asset Swap Transactions

(a) the outstanding notional amount (as defined therein) of each Asset Swap Transaction; and

(b) the amounts scheduled to be received and paid by the Issuer and the relevant counterparty, theapplicable rates, the amortisation schedule and any termination amounts received or paid

pursuant to each Asset Swap Transaction on or before the next Payment Date.

Coverage Tests and Collateral Quality Tests

(a) after the Effective Date, a statement as to whether the Class A Par Value Test is satisfied anddetails of the Class A Par Value Ratio;



183

(b) after the Determination Date immediately preceding the Payment Date falling in September 2009, a statement as to whether the Class A Interest Coverage Test is satisfied and details of the Class A Interest Coverage Ratio;

(c) after the Effective Date, a statement as to whether the CDO Monitor Test is satisfied; and

(d) after the Effective Date, the S&P Minimum Average Recovery Rate, the Weighted AverageSpread and the Weighted Average Maturity.

Portfolio Profile Tests

(a) after the Effective Date, in respect of each Portfolio Profile Test, a statement as to whether such test is satisfied, together with details of the result of the calculations required to be madein order to make such determination which details shall include the applicable numbers, levelsand/or percentages resulting from such calculations.

Payment Date Report

The Collateral Administrator, on behalf, and at the expense, of the Issuer and in consultation with the

Collateral Manager, shall render an accounting report (the “ Payment Date Report ”), prepared anddetermined as of each Determination Date, and made available via a secured website accessible only

by way of unique password (which may be obtained from the Collateral Administrator by the Noteholder (subject to receipt by the Collateral Administrator of a notice certifying that it is a holder of a beneficial interest in any Note)) and also provide to the Trustee, the Collateral Manager, theIssuer, the Arranger, the Initial Purchaser/Placement Agent and, while the Class A Notes are rated, theRating Agency not later than the second Business Day preceding the related Payment Date or delivered to such parties in any other reasonable manner as agreed by the Collateral Administrator andCollateral Manager. Upon receipt of each Payment Date Report, the Collateral Administrator, in thename and at the expense of the Issuer, shall notify the Irish Stock Exchange of the Principal AmountOutstanding of each Class of Notes after giving effect to the principal payments, if any, on the nextPayment Date. For the avoidance of doubt, no Monthly Report shall be published in the same monththat a Payment Date Report is published. The Payment Date Report shall contain the followinginformation:

Portfolio

(a) the Aggregate Principal Balance of the Collateral Debt Obligations as of the close of businesson such Determination Date, after giving effect to (A) Principal Proceeds received on theCollateral Debt Obligations with respect to the related Due Period and the reinvestment of such Principal Proceeds in Substitute Collateral Debt Obligations during such Due Period and(B) the disposal of any Collateral Debt Obligations during such Due Period;

(b) subject to any confidentiality obligations binding on the Issuer, a list of, respectively, the

Collateral Debt Obligations and Collateral Enhancement Obligations indicating the PrincipalBalance and Obligor of each; and

(c) the information required pursuant to “Monthly Reports Portfolio” above.

Notes

(a) the Principal Amount Outstanding of the Notes of each Class and such aggregate amount as a percentage of the original aggregate Principal Amount Outstanding of the Notes of such Classat the beginning of the Due Period, the amount of principal payments to be made on the Notesof each Class on the related Payment Date, and the aggregate amount of the Notes of eachClass Outstanding and such aggregate amount as a percentage of the original aggregateamount of the Notes of such Class Outstanding after giving effect to the principal payments,

if any, on the next Payment Date; and





185

Subordinated Noteholder Report

The Collateral Administrator, on behalf, and at the expense, of the Issuer and in consultation with theCollateral Manager, shall provide information (the “ Subordinated Noteholder Report ”), determinedas of each Determination Date (except as specified otherwise below) as of, and delivered to theTrustee, the Collateral Manager, the Arranger, the Initial Purchaser/Placement Agent and the Issuer on the date so provided for the Payment Date Report. The Trustee shall, in addition, deliver a copy of the Subordinated Noteholder Report to any holder of Subordinated Notes upon written requesttherefor in the form set out in the Agency Agreement certifying that it is a holder of Subordinated

Notes no later than the second Business Day preceding the related Payment Date. All Subordinated Noteholder Reports shall be mailed from outside the United States. The Subordinated Noteholder Report shall contain the following information:

Portfolio

(a) the approximate aggregate Market Value of, respectively, the Collateral Debt Obligations andthe Collateral Enhancement Obligations as of the preceding month end;

(b) subject to any confidentiality obligations binding on the Issuer, the identity of each CollateralDebt Obligation that became a Defaulted Obligation or that experienced a rating change sincethe last such report;

(c) the Aggregate Principal Balance of the Collateral Debt Obligations, as of the close of businesson such Determination Date, after giving effect to (A) Principal Proceeds received on theCollateral Debt Obligations with respect to the related Due Period and the reinvestment of such Principal Proceeds in Substitute Collateral Debt Obligations during such Due Period and(B) the disposal of any Collateral Debt Obligations during such Due Period;

(d) the Principal Amount Outstanding of the Notes of each Class and as a percentage of theoriginal Principal Amount Outstanding of the Notes of such Class at the beginning of the DuePeriod, the amount of principal payments to be made on the Notes of each Class on therelated Payment Date, the Principal Amount Outstanding of the Notes of each Class and as a

percentage of the original Principal Amount Outstanding of the Notes of such Class, in eachcase after giving effect to the principal payments, if any, on such Payment Date;

(e) the Principal Proceeds received during the related Due Period;

(f) the Interest Proceeds received during the related Due Period;

(g) the Collateral Enhancement Obligation Proceeds received during the related Due Period;

(h) subject to any confidentiality obligations binding on the Issuer, a list of the Collateral DebtObligations, indicating the Principal Balance, annual interest rate, Stated Maturity, S&Pindustry category and, if applicable, the S&P Rating (but excluding any confidential creditestimates in relation thereto); and

(i) subject to any confidentiality obligations binding on the Issuer, the identity of any CollateralDebt Obligations that were released for sale or other disposition, indicating whether suchCollateral Debt Obligation is a Defaulted Obligation, a Credit Improved Obligation, a CreditImpaired Obligation or an Exchanged Equity Security and pursuant to which clause of theCollateral Management Agreement such Collateral Debt Obligation or Exchanged EquitySecurity was sold or disposed of.

Notes

(a) the Interest Amount payable in respect of the Class A-1 Notes, the Class A-2a Notes, the

Class A-2b Notes and Subordinated Notes on the next Payment Date;



186

(b) EURIBOR for the related Due Period and the Floating Rate of Interest applicable to the ClassA Notes which are Floating Rate Notes during the related Due Period; and

(c) EURIBOR for the related Due Period.

Coverage Tests

The results of each of the Coverage Tests as of the close of business on the related Measurement Dateand as at the end of each purchase, sale or other disposition of Collateral Debt Obligations since thelast report.

Nothing in any of the foregoing shall oblige the Issuer or the Collateral Manager to disclose, whether directly or indirectly, any information held under an obligation of confidentiality.

In addition to the above, the Issuer shall take reasonable efforts to procure the CollateralAdministrator to produce (on behalf of the Issuer) any supplemental report required in respect of theCollateral pursuant to the requirements of the German tax authorities to the extent that suchrequirements apply to a German investor in the Notes, provided always that the production of such areport is not, in the opinion of the Issuer, the Collateral Administrator or the Collateral Manager,unduly onerous and the Issuer will not be required to incur costs above an amount of €17,500 per annum as set out in the definition of “Administrative Expenses”.

Minimum Reporting for purpose of the German Investment Tax Act

The Issuer shall use its reasonable efforts to comply with the minimum statutory reporting and publication requirements of the German Investment Tax Act for “semi-transparent” funds (the“Minimum Reporting Requirements ”), provided always that the Issuer may satisfy such MinimumReporting Requirements by providing the requisite financial information (upon such information

being made available to it) to a professional tax adviser with instructions to such adviser to re formatthe relevant information as required and none of the Issuer, the Trustee, the Collateral Administrator,the Collateral Manager nor the Agents shall have any liability whatsoever for any such information

prepared and/or published by the German Tax Adviser under the Minimum Reporting Requirementsor for any tax consequences to any Noteholder or other party. See “ Risk Factors – German

Investment Tax Act ” and “ Taxation in Germany ”.

Miscellaneous

Each Monthly Report, each Payment Date Report and Subordinated Noteholder Report shall state thatit is for the purposes of information only, that certain information included in the report is estimated,approximated or projected and that it is provided without any representations or warranties as to theaccuracy or completeness thereof and that none of the Collateral Administrator, the Trustee, the Issuer or the Collateral Manager will have any liability for estimates, approximations or projectionscontained therein.



187

RATING OF THE CLASS A NOTES

It is a condition of the issue and sale of the Notes that the Class A-1 Notes, the Class A-2a Notes andthe Class A-2b Notes each be issued with at least an S&P rating of “AAA”. The S&P Rating assignedto the Class A Notes addresses the timely payment of interest and the ultimate repayment of principal.The Subordinated Notes being offered hereby will not be rated. A security rating is not arecommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the applicable Rating Agency.

S&P Rating

S&P will rate the Class A Notes in a manner similar to the manner in which it rates other structuredissues. This requires an analysis of the following:

(a) the credit quality of the portfolio of Collateral Debt Obligations securing the Notes;

(b) the cash flow used to pay liabilities and the priorities of these payments; and

(c) legal considerations.

Based on these analyses, S&P determines the necessary level of credit enhancement needed to achievea desired rating.

S&P’s analysis includes the application of its proprietary default expectation computer model (the“S&P CDO Monitor ”), which is used to estimate the default rate S&P projects the Portfolio is likelyto experience and which will be provided to the Collateral Manager and the Issuer on or before theIssue Date. The S&P CDO Monitor calculates the cumulative default rate of a pool of Collateral DebtObligations and Eligible Investments consistent with a specified benchmark rating level based uponS&P’s proprietary corporate debt default studies. The S&P CDO Monitor takes into consideration therating of each issuer or obligor, the number of issuers or obligors, the issuer or obligor industryconcentration and the remaining weighted average maturity of each of the Collateral Debt Obligations

included in the Portfolio. The risks posed by these variables are accounted for by effectivelyadjusting the necessary default level needed to achieve a desired rating. The higher the desired rating,the higher the level of defaults the Portfolio must withstand. For example, the higher the issuer or obligor industry concentration or the longer the weighted average maturity, the higher the defaultlevel is assumed to be. None of the Issuer, the Collateral Manager, the Collateral Administrator, theInitial Purchaser/Placement Agent or the Arranger makes any representation as to, or takes anyresponsibility for, the accuracy or efficiency of the S&P CDO Monitor.

Credit enhancement to support a particular rating is then provided on the results of the S&P CDOMonitor, as well as other more qualitative considerations such as legal issues and managementcapabilities. Credit enhancement is typically provided by a combination of over collateralisation/subordination, cash collateral/reserve account, excess spread/interest and

amortisation. A cash flow model (the “ Transaction Specific Cash Flow Model ”) prepared by theseller or adviser is used to evaluate the portfolio and determine whether it can comfortably withstandthe estimated level of default while fully repaying the Class of debt under consideration.

There can be no assurance that actual losses on the Collateral Debt Obligations will not exceed thoseassumed in the application of the S&P CDO Monitor or that recovery rates and the timing of recoverywith respect thereto will not differ from those assumed in the Transaction Specific Cash Flow Model.

None of S&P, the Issuer, Collateral Manager, the Initial Purchaser/Placement Agent or the Arranger makes any representation as to the expected rate of defaults on the Portfolio or as to or takes anyresponsibility for the expected timing of any defaults that may occur.

S&P’s rating of the Class A Notes will be established under various assumptions and scenarioanalyses. There can be no assurance that actual defaults on the Collateral Debt Obligations will notexceed those assumed by S&P in its analysis, or that recovery rates with respect thereto (and,consequently, loss rates) will not differ from those assumed by S&P.



188

DESCRIPTION OF THE ISSUER

General

The Issuer is a special purpose vehicle established for the purposes of issuing asset backed securitiesand is a private company with limited liability, incorporated on 13 February 2008 in Ireland, under the

Irish Companies Act 1963 to 2006 (as amended) and having its registered office at 85 MerrionSquare, Dublin 2, Ireland; telephone: +353 1 614 6240; facsimile: +353 1 614 6250. The Issuer isregistered with the Irish Registrar of Companies under number 453285.

Corporate Purpose of the Issuer

The principal objects of the Issuer are set forth in Clause 2 of its Memorandum of Association andinclude, inter alia , the power to issue securities and to raise or borrow money, to grant security over its assets for such purposes, to lend with or without security and to enter into derivative transactions.

Business Activity

The Issuer has not previously carried on any business or activities other than those incidental to its

incorporation, the entry into and the receipt of services under the Corporate Services Agreement, theForward Sale Agreement over Collateral Debt Obligations dated 3 June 2008 and made between theIssuer, GSCP and the Collateral Manager and other ancillary documents relating to the Forward SaleAgreement, the authorisation and issue of the Notes and activities incidental to the exercise of itsrights and compliance with its obligations under the Notes, the Subscription and PlacementAgreement, each Class A-1 Note Purchase Agreement, each Accredited Investor Note PurchaseAgreement, the Euroclear Pledge Agreement, the Agency Agreement, the Trust Deed, the CollateralManagement Agreement, the Corporate Services Agreement, the Forward Sale Agreement, eachAsset Swap Agreement and the other documents and agreements entered into in connection with theissue of the Notes and the purchase of the Portfolio. The Issuer has been established as a special

purpose vehicle for the purpose of issuing asset backed securities.

There are no legal, arbitration or governmental proceedings which may have, or have had, significanteffects on the Issuer’s financial position or profitability nor, so far as the Issuer is aware, are any such

proceedings pending or threatened against the Issuer.

Corporate Administration

TMF Administration Services Limited (the “ Corporate Services Provider ”), an Irish company, actsas the corporate services provider for the Issuer. The principal office of the Corporate ServicesProvider serves as the general business office of the Issuer. Through the principal office and pursuantto the terms of the Corporate Services Agreement, the Corporate Services Provider performs variousmanagement functions on behalf of the Issuer, including the provision of certain clerical, reporting,accounting, administrative and other services until termination of the Corporate Services Agreement.

In consideration of the foregoing, the Corporate Services Provider receives various fees and other charges payable by the Issuer at rates agreed upon from time to time plus expenses. The terms of theCorporate Services Agreement provide that either party may terminate the Corporate ServicesAgreement upon the occurrence of certain stated events, including any material breach by the other

party of its obligations under the Corporate Services Agreement which is either incapable of remedyor which is not cured within 30 days from the date on which it was notified of such breach. Inaddition, either party may terminate the Corporate Services Agreement at any time by giving at least60 days’ written notice to the other party. The Corporate Services Agreement contains provisionsrelating to the appointment of a successor corporate services provider should this be necessary.

The Corporate Services Provider’s principal office is 85 Merrion Square, Dublin 2, Ireland.



189

Capital and Shares

The authorised share capital of the Issuer is €1,000 divided into 1,000 ordinary shares of par value €1each (the “ Shares ”). The Issuer has issued 1 Share which is fully paid and held on trust by TMFManagement (Ireland) Limited (the “ Share Trustee ”) under the terms of a declaration of trust (the“Declaration of Trust ”) dated 7 March 2008, under which the Share Trustee holds the Share on trustfor charity. The Share Trustee has no beneficial interest in and derives no benefit (other than any feesfor acting as Share Trustee) from its holding of the Share. The Share Trustee will apply any incomederived from the Issuer solely for the above purposes.

Indebtedness

The Issuer has no indebtedness as at the date of this Offering Memorandum, other than under theForward Sale Agreement and that which the Issuer has incurred or shall incur as at the date of thisOffering Memorandum in relation to the transactions contemplated herein.

Directors and Company Secretary

The Issuer’s Articles of Association provide that the Board of Directors of the Issuer will consist of atleast two Directors.

The Directors of the Issuer and their business addresses are as follows:

Kieran Desmond 85 Merrion Square, Dublin 2, Ireland

Neil Synnott 85 Merrion Square, Dublin 2, Ireland

The Company Secretary is TMF Administration Services Limited.

Subsidiaries

The Issuer has no subsidiaries or Affiliates.Financial Statements

Since its date of incorporation, no financial statements of the Issuer have been prepared as of the dateof the Offering Memorandum. The Issuer intends to publish its first financial statements in respect of the period ending on 30 June 2009. The Issuer will not prepare interim financial statements.

Each year a copy of the audited profit and loss account and balance sheet of the Issuer together withthe report of the directors and the auditors thereon is required to be filed in the Irish CompaniesRegistration Office within 28 days of the annual return date of the Issuer and is available for inspection. The profit and loss account and the balance sheet can be obtained free of charge from thespecified office of the Irish Listing Agent. The Issuer must hold an annual general meeting in eachcalendar year and the gap between its annual general meetings must not exceed 15 months.

The auditors of the Issuer are KPMG who are chartered accountants and are members of the Instituteof Chartered Accountants and registered auditors qualified to practice in Ireland.



190

DESCRIPTION OF THE COLLATERAL ADMINISTRATOR

The information appearing in this section has been prepared by The Bank of New York Mellon(acting as the Collateral Administrator) and The Bank of New York Mellon takes responsibility for the accuracy and completeness of any such information.

GeneralThe Bank of New York Mellon, a wholly owned subsidiary of The Bank of New York MellonCorporation, is incorporated, with limited liability by Charter, under the Laws of the State of NewYork by special act of the New York State Legislature, Chapter 616 of the Laws of 1871, with itsHead Office situated at One Wall Street, New York, NY 10286, USA and having a branch registeredin England & Wales with FC No 005522 and BR No 000818 with its principal office in the UnitedKingdom situated at One Canada Square, London E14 5AL.

The Bank of New York Mellon is a leading provider of corporate trust and agency services. GlobalCorporate Trust services $11 trillion in outstanding debt for some 90,000 clients worldwide. TheBank is a recognised leader for trust services in several debt products, including corporate and

municipal debt, mortgage-backed and asset-backed securities, derivative securities services andinternational debt offerings.

The Bank of New York Mellon Corporation (NYSE:BK) is a global financial services companyfocused on helping clients move and manage their financial assets, operating in 37 countries andserving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset and wealthmanagement, asset servicing, issuer services, and treasury services through a worldwideclient-focused team. It has more than $18 trillion in assets under custody and administration and$1 trillion in assets under management, and it services more than $11 trillion in outstanding debt.Additional information is available at www.bnymellon.com.

Removal and Resignation of the Collateral Administrator

Removal Without Cause

Pursuant to the terms of the Collateral Management Agreement and subject to the appointment of aSuccessor Collateral Administrator, the appointment of the Collateral Administrator may beterminated without cause at any time, upon 60 Business Days’ prior written notice by (a) the Issuer or (b) the Trustee at its discretion or acting upon the directions of the holders of a majority of thePrincipal Amount Outstanding of each Class of Notes, to the Collateral Administrator copied to theIssuer or Trustee (as applicable) and the Collateral Manager and upon written notice to the

Noteholders in accordance with Condition 16 ( Notices ).

Removal of Collateral Administrator With Cause

Subject to the appointment of a Successor Collateral Administrator, the appointment of the CollateralAdministrator may be terminated, for cause by (a) the Issuer or (b) the Trustee at its discretion or acting upon the directions of the holders of each Class of Notes each acting by Ordinary Resolutionforthwith upon 10 Business Days’ prior written notice to the Collateral Administrator copied to theIssuer or the Trustee (as applicable) and the Collateral Manager and upon written notice to the

Noteholders in accordance with Condition 16 ( Notices ). For purposes of the Collateral ManagementAgreement, “cause” shall mean any one of the following events:

(a) the Collateral Administrator shall default in the performance of any of its material dutiesunder the Collateral Management Agreement and shall not cure such default within 30 daysof the occurrence of such default;

(b) a court having relevant jurisdiction shall enter a decree or order for relief in respect of theCollateral Administrator in any involuntary case under any applicable bankruptcy, insolvency





192

DESCRIPTION OF THE COLLATERAL MANAGER

The information appearing in this section has been prepared by the Collateral Manager and has not been independently verified by the Issuer, the Arranger, the Initial Purchaser/Placement Agent or anyother party. None of the Issuer, the Arranger, the Initial Purchaser/Placement Agent or any other

party other than the Collateral Manager assumes any responsibility for the accuracy or completenessof such information.

General

CELF Investment Advisors Limited (“ CELF ”), a wholly owned subsidiary of TC Group LLC, wasestablished in September 2004 and will act as Collateral Manager for the Issuer. CELF is authorisedand regulated by the Financial Services Authority and is subject to its Conduct of Business Rules. In

performing its duties as Collateral Manager under the Collateral Management Agreement, CELF willdraw upon the investment experience of its own personnel, as well as the significant resources andinvestment experience of its Affiliates.

The Carlyle Group

TC Group LLC is a Delaware limited liability company formed in 1987 (“ TCG ”), which is indirectlycontrolled by William E. Conway, Jr., Daniel A. D’Aniello and David M. Rubenstein (the“Managing Members ”). “The Carlyle Group ” refers to CELF, TCG and related companies that do

business under the name “The Carlyle Group”. The Carlyle Group is a global investment firm thatoriginates, structures and acts as lead equity investors in leveraged buyouts, venture capitalinvestments, growth capital financings and other private equity investments. As of 31 March 2008The Carlyle Group had invested over $46.3 billion of the equity in 802 corporate and real estatetransactions, having an aggregate acquisition value of over $216 billion. The Carlyle Group hasexperience in the areas of leveraged buyout, venture capital, growth capital and other private equityinvestments.

One of the largest private equity firms, as of 31 March 2008, The Carlyle Group had 33 officeslocated in 21 countries around the world and employs 1,033 persons, including 574 investment

professionals. The Carlyle Group believes that its global network helps to create, identify andconsummate certain investment opportunities that are not available to many other private equity firms.The Collateral Manager believes that the Issuer will benefit from the resources of The CarlyleGroup’s global network.

Ownership and Management of Collateral Manager

All of the membership interests in CELF are owned by TCG, which is indirectly controlled by theManaging Members.

The CELF Team

As of 31 March 2008, there were 20 people in the CELF team, 14 of which were investment professionals.

Key Individuals Biographies

Mike Ramsay

Mike Ramsay joined The Carlyle Group as a Managing Director in September 2004 to establish andlead Carlyle’s European Leveraged Finance group. This group now has over €4.5 billion funds under management across eight distinct funds, investing predominantly in the European high yield markets.Mr. Ramsay is the portfolio manager for CELF’s funds and is Chief Investment Officer of CELF. Mr.Ramsay joined from Prudential M&G where he was Head of Leveraged Finance establishing

Prudential M&G in 1999 as one of the first institutional investors within the European leveraged buyout market. Over the five year period the business invested over €2.5 billion in the leveraged





194

Mr. Preston is a holder of the CFA Charter and holds an M.A. from Herford College, the Universityof Oxford.

Anjali Bastianpillai

Anjali Bastianpillai joined Carlyle as a Director in July 2007 in Carlyle’s European Leveraged

Finance Group where she is focusing on fundraising and investor relations. Prior to joining Carlyle,Miss Bastianpillai was a Director at CIFG (a Natixis company) where she worked as an originator for CDOs, CMBS and insurance-linked transactions. Prior to that, Miss Bastianpillai was a Director inStandard and Poor’s CDO group where she covered cash flows, arbitrage and synthetic CDO’s.

Miss Bastianpillai holds a BS in Finance and International Business from Georgetown University inWashington D.C.

Matthew Cottrell

Matthew Cottrell joined The Carlyle Group as an Associate Director in May 2006. Mr. Cottrell isfocused on risk management in the European Leveraged Finance Group. Prior to joining Carlyle, Mr.Cottrell was a Director in Fitch Ratings’ CDO group where he covered cash flow arbitrage andsynthetic CDOs. Previously, Mr. Cottrell worked in Fitch Ratings’ credit policy group and also in theleveraged finance group where he was responsible for rating and analysing European leveraged loanand high yield bond transactions. Prior to Fitch Ratings, he practised as a banking lawyer in theinternational finance group at Ashurst, an international law firm.

Mr. Cottrell holds a BSc (Hons) in Mathematics and Philosophy from Durham University and an LPCfrom the College of Law. He is a qualified solicitor and a CFA charterholder.

Nilesh Desai

Nilesh Desai is a Director within the European Leveraged Finance group where he is involved inanalysing and monitoring credits, with a particular focus on the telecommunications, media and

technology sector as well as having membership of the credit committee. Mr.Desai joined fromCitigroup in November 2004. While at Citigroup, he was a Vice President in the Leveraged FinancePortfolio team responsible for monitoring credits in the European Leveraged Finance portfolio andwas involved in structuring and negotiating restructurings. Prior to Citigroup, Mr. Desai spent four years at KPMG where he joined the graduate accounting scheme in August 1996 and worked on avariety of audits in a number of different industry sectors.

In addition to his ACA qualification, Mr. Desai holds a BSc (Hons) in Management Sciences from theUniversity of Warwick and is a CFA charterholder.

Stuart MacKenzie

Stuart MacKenzie is an Associate Director of The Carlyle Group and is a member of the EuropeanLeveraged Finance group. He is responsible for high yield bond trading, in addition to being amember of the credit team with responsibility for the retail and automotive sectors as well as havingmembership of the credit committee. Mr. MacKenzie joined from Alcentra, an independent debt assetmanagement company, in December 2004. While at Alcentra, Mr. MacKenzie acted as AssistantVice President in the credit team. He primarily focused on the retail, gaming and healthcare sectorsand monitored a portfolio of leveraged loan and high yield bond investments. During his time there,he was also involved in a number of workouts of portfolio investments. Prior to that, Mr. MacKenzieworked in Alcentra’s transaction management team where he was responsible for investor reportingand managing relationships with trustees, rating agencies and legal counsel.

Mr. MacKenzie holds a BSc (Econ) in Financial and Business Economics from Royal Holloway,University of London and is a CFA charterholder.



195

Martin Glavin

Martin Glavin joined The Carlyle Group as an Associate Director in January 2006. Mr. Glavin is amember of the credit team within the European Leveraged Finance group. Mr. Glavin is the assistant

portfolio manager for CELF Low Levered Partners plc as well as having membership of the creditcommittee. Prior to joining The Carlyle Group, Mr. Glavin was a Manager in the leveraged financeteam at Prudential M&G where he was responsible for analysing senior, second lien and mezzaninedebt facilities across a number of industries. Prior to that, Mr. Glavin worked in various areasincluding structured finance, macroeconomic research and government debt analysis. Mr. Glavin alsocompleted Prudential M&G’s graduate training scheme.

Mr. Glavin holds a MA (Hons) in Economics from the University of Cambridge and is a CFAcharterholder.

Louis Reynolds

Louis Reynolds joined The Carlyle Group as an Associate Director in September 2005, and is part of the Credit team within the European Leverage Finance Group, analysing and monitoring credits with

particular focus on the chemicals, paper and packaging sectors as well as having membership of thecredit committee. Prior to joining The Carlyle Group, Mr. Reynolds was an Associate Director at GEEuropean Leverage Finance. During his time there he analysed and evaluated both Primary andSecondary Leveraged Finance transactions, and monitored transactions in their leverage finance

portfolio, including sole responsibility for €120 million of underwritten transactions. Prior to joiningGE European Leveraged Finance, Mr. Reynolds was an Analyst at Abbey National Treasury Servicesfor three years, in their asset management group. During his time there, he focused on high yield

bonds, and in particular on the industrial and gaming sectors.

Mr. Reynolds holds a BSc (Hons) in Economics and Finance and an MSc (Hons) in Project Analysis,Finance and Investment from the University of York.

Szymon Jaroszewski

Szymon Jaroszewski is an Associate in the European Leveraged Finance group where he is involvedin analysing and monitoring credits. Mr. Jaroszewski joined from GMAC in October 2006. While atGMAC, he worked as a Project Manager where he focused on credit analysis and risk return systems.Prior to this, he worked as an investment adviser to high net worth clients at a firm of IndependentFinancial Advisers.

Mr. Jaroszewski holds a Masters degree in Economics from the University of Economics Poznan andis a CFA charterholder.

Harris Revankar

Harris Revankar joined The Carlyle Group as an Associate in May 2007 in the European LeveragedFinance group where he is involved in analysing and monitoring credits, with a particular focus ongaming as well as general industrials. Prior to joining Carlyle, Mr. Revankar was a summer associatewithin the Global Proprietary Trading division of Credit Suisse, focusing on credit-relatedinvestments. Prior to that, Mr. Revankar worked in equity and fixed income research at variousinvestment banks in New York including ING Barings, Daiwa Securities and Arnhold and S.Bleichroeder.

Mr. Revankar holds an MBA in finance from the London Business School and a BA in Economicsand a Minor in Japanese from New York University.

Jonathan Millet

Jonathan Millet joined The Carlyle Group as an Associate in August 2007 and is a member of theEuropean Leveraged Finance group where he is involved in analysing and monitoring credits with a



196

particular focus on healthcare. Prior to joining Carlyle, Mr. Millet was an Executive at NM Rothschildwithin Investment Banking, focusing principally on financial sponsor private placements.

Mr. Millet graduated from the University of Warwick with a BSc (Hons) in Economics and received aDiploma from the Institut d'Etudes Politiques (Sciences-Po), Paris.

Neil McTernan Neil McTernan is an Associate Director of The Carlyle Group and joined the European LeveragedFinance business in March 2006, focusing on the day to day fund administration of CELF’s funds.Mr. McTernan previously worked at JPMorgan Chase Bank, where he was a Transaction Manager focusing primarily on cash flow and synthetic CDOs. During his time at JPMorgan Chase Bank heheld a number of roles including being a Team Leader in the CDO Account Management group,working on a variety of different transactions. Prior to JPMorgan, Mr. McTernan spent fourteen yearsat GE Capital, in a number of operations roles, spending the last four years as Investment OperationsManager.

Rob Pike

Rob Pike is an Associate and works with Neil McTernan on the day to day fund administration of CELF’s funds. Mr. Pike joined The Carlyle Group in June 2005 from JPMorgan where he wasmanaging a reconciliations/controls team for the Equity and Debt group based in Bournemouth. Prior to that, Mr. Pike worked as a CDO Administrator for JPMorgan’s Structured Finance team in Londonacting as trustee on a variety of CDO deals.

Marcel Louw

Marcel Louw joined The Carlyle Group in February 2007 and works with Neil McTernan on the fundadministration of CELF’s funds. Mr. Louw joined from ABN Amro where he worked as aTransaction Manager for ABN Amro’s CDO Trustee group, overseeing Swap Transactions andReconciliations in Europe. Prior to that Mr. Louw worked at Goldman Sachs in the Loan Servicing

Team.

Mr. Louw studied at the University of Pretoria and holds a post graduate degree, B.Com (Hons) inFinancial Management.

Dhalia Khanna

Dhalia Khanna joined The Carlyle Group as an Analyst in April 2007. Prior to joining The CarlyleGroup, Ms. Khanna was an analyst in Credit and Interest Rate Derivatives at Deutsche Bank andworked in Private Wealth Management at Goldman Sachs International.

Ms. Khanna holds a BSc (Hons) in Human Genetics from University College London.

Paul O’MahonyPaul O’Mahony joined The Carlyle Group as an Associate in November 2007. Prior to joiningCarlyle, Mr. O’Mahony was a CDO account manager at Deutsche Bank. Mr. O’Mahony has alsoworked as a CDO Fund Administrator for Henderson Global Investors and at JP Morgan Chase.

Mr. O’Mahony holds a BA (Hons) in Business Studies from Dublin Business School.







199

Euroclear or Clearstream, Luxembourg will be conducted in accordance with the normal rules andoperating procedures of Euroclear and Clearstream, Luxembourg and will be settled using the

procedures applicable to conventional eurobonds, which provide for settlement in same day funds.Since the purchase determines the place of delivery, it is important to establish at the time of tradingwhere both the purchaser’s and seller’s accounts are located to ensure that settlement can be made onthe desired value date.



200

TAX CONSIDERATIONS

General

The following is a summary based on present law of certain Irish income tax consideration, and U.S. federal income tax considerations for prospective purchasers of the Notes. It addresses only

purchasers that buy in the original offering at the original offering price and hold the Notes as capitalassets. The discussion is a general summary. It is not a substitute for tax advice. The discussiondoes not consider the circumstances of particular purchasers, some of which (such as banks,insurance companies, dealers, tax exempt organisations or persons holding the Notes as part of ahedge, straddle, conversion, integrated or constructive sale transaction) are subject to special taxregimes. It also does not address purchasers that buy Notes, in an additional issuance or otherwise,after the Issue Date.

EACH PROSPECTIVE PURCHASER IS URGED TO CONSULT ITS OWN TAX ADVISER ABOUT THE TAX CONSEQUENCES OF AN INVESTMENT IN THE NOTES UNDER THELAWS OF IRELAND, THE UNITED KINGDOM, THE UNITED STATES AND ITSCONSTITUENT JURISDICTIONS, AND ANY OTHER JURISDICTIONS WHERE THE

PURCHASER MAY BE SUBJECT TO TAXATION.Purchasers of Notes may be required to pay stamp taxes and other charges in accordance with thelaws and practices of the country of purchase in addition to the issue price of each Note.

Potential purchasers who are in any doubt about their tax position on purchase, ownership, transfer or exercise of any Note should consult their own tax advisers. In particular, no representation ismade as to the manner in which payments under the Notes would be characterised by anyrelevant taxing authority. Potential investors should be aware that the relevant fiscal rules ortheir interpretation may change, possibly with retrospective effect, and that this summary is notexhaustive. This summary does not constitute legal or tax advice or a guarantee to any potentialinvestor of the tax consequences of investing in the Notes.

European Union Directive on the Taxation of Savings Income (Directive 2003/48/EC)

On 1 July 2005 a new EU directive regarding the taxation of savings income payments came intoeffect. The directive obliges a Member State to provide to the tax authorities of another Member Statedetails of payments of interest or other similar income payments made by a person within its

jurisdiction for the immediate benefit of an individual or to certain non-corporate entities resident inthat other Member State (or for certain payments secured for their benefit). However, Austria,Belgium and Luxembourg have opted out of the reporting requirements and may instead apply aspecial withholding tax for a transitional period in relation to such payments of interest, deducting taxat rates rising over time to 35 per cent. This transitional period commenced on 1 July 2005 and willterminate at the end of the first fiscal year following agreement by certain non-EU countries to theexchange of information relating to such payments.

Also with effect from 1 July 2005, a number of non-EU countries and certain dependent or associatedterritories of Member States have adopted similar measures (either provision of information or transitional withholding) in relation to payments of interest or other similar income payments made bya person in that jurisdiction for the immediate benefit of an individual or to certain non-corporateentities in any Member State. The Member States have entered into reciprocal provision of information or transitional special withholding tax arrangements with certain of those dependent or associated territories. These apply in the same way to payments by persons in any Member State toindividuals or certain non-corporate residents of those territories.

The Issuer, Collateral Manager or Paying Agents shall be entitled to require the Noteholders to provide any information regarding their tax status, identity or residency in order to satisfy the

disclosure requirements in Directive 2003/48/EC and Noteholders will be deemed by their



201

subscription for Notes to have authorised the automatic disclosure of such information by the Issuer,Collateral Manager, Paying Agents or any other person to the relevant tax authorities.

IRELAND TAXATION

The following is a summary based on the laws and practices currently in force in Ireland

regarding the tax position of investors beneficially owning their Notes and should be treatedwith appropriate caution. Particular rules may apply to certain classes of taxpayers holdingNotes. The summary does not constitute tax or legal advice and the comments below are of ageneral nature only. Prospective investors in the Notes should consult their professionaladvisers on the tax implications of the purchase, holding, redemption or sale of the Notes andthe receipt of interest thereon under the laws of their country of residence, citizenship ordomicile.

Withholding Tax

In general, tax at the standard rate of income tax (currently 20 per cent.), is required to be withheldfrom payments of Irish source interest. However, an exemption from withholding on interest

payments exists under Section 64 of the Taxes Consolidation Act, 1997 (the “ 1997 Act ”) for certaininterest bearing securities issued by a body corporate (such as the Issuer) which are quoted on arecognised stock exchange (which would include the Irish Stock Exchange) (“ quoted Eurobonds ”).

Any interest paid on such quoted Eurobonds can be paid free of withholding tax provided:

1. the person by or through whom the payment is made is not in Ireland; or

2. the payment is made by or through a person in Ireland, and either:

2.1. the quoted Eurobond is held in a clearing system recognised by the Irish RevenueCommissioners (Euroclear, Clearstream Banking SA and Clearstream Banking AGare so recognised), or

2.2. the person who is the beneficial owner of the quoted Eurobond and who is beneficially entitled to the interest is not resident in Ireland and has made adeclaration to the person by or through whom the payment is made in the prescribedform.

In summary, interest on Notes which are quoted Eurobonds and are either held in Euroclear,Clearstream Banking SA or Clearstream Banking AG or interest on the Notes is paid through a payingagent outside Ireland can be paid by the Issuer and any paying agent acting on behalf of the Issuer without any withholding or deduction for or on account of Irish income tax. Interest can also be paidfree of withholding tax on Notes which are quoted Eurobonds which are not held in a clearing systemwhere the payment is made by a paying agent outside Ireland.

If, for any reason, the quoted Eurobond exemption referred to above does not or ceases to apply, theIssuer can still pay interest on the Notes free of withholding tax provided it is a “qualifying company”(within the meaning of Section 110 of the 1997 Act) and provided the interest is paid to a personresident in a “ Relevant Territory ” (i.e. a member state of the European Union (other than Ireland) or in a country with which Ireland has a double taxation agreement). For this purpose, residence isdetermined by reference to the law of the country in which the recipient claims to be resident. Thisexemption from withholding tax will not apply, however, if the interest is paid to a company inconnection with a trade or business carried on by it through a branch or agency located in Ireland.

In certain circumstances, Irish tax will be required to be withheld at the standard rate from interest onany quoted Eurobond, where such interest is collected by a bank or other agent in Ireland on behalf of any Noteholder who is Irish resident.



202

Taxation of Noteholders

Notwithstanding that a Noteholder may receive interest on the Notes free of withholding tax, the Noteholder may still be liable to pay Irish income tax. Interest paid on the Notes may have an Irishsource and therefore be within the charge to Irish income tax and levies. Ireland operates a self assessment system in respect of income tax and any person, including a person who is neither residentnor ordinarily resident in Ireland, with Irish source income comes within its scope.

However, interest on the Notes will be exempt from Irish income tax if the recipient of the interest isresident in a Relevant Territory provided either (i) the Notes are quoted Eurobonds and are exemptfrom withholding tax as set out above (ii) in the event of the Notes not being or ceasing to be quotedEurobonds exempt from withholding tax, if the Issuer is a qualifying company within the meaning of Section 110 of the 1997 Act, or (iii) if the Issuer has ceased to be a qualifying company, the recipientof the interest is a company.

Notwithstanding these exemptions from income tax, a corporate recipient that carries on a trade inIreland through a branch or agency in respect of which the Notes are held or attributed, may have aliability to Irish corporation tax on the interest.

Noteholders receiving interest on the Notes which does not fall within the above exemptions may beliable to Irish income tax on such interest.

Capital Gains Tax

A holder of Notes will be subject to Irish tax on capital gains on a disposal of Notes unless suchholder is neither resident nor ordinarily resident in Ireland and does not carry on a trade in Irelandthrough a branch or agency in respect of which the Notes are used or held.

Capital Acquisitions Tax

A gift or inheritance comprising of Notes will be within the charge to capital acquisitions tax if either

(i) the disponer or the donee/successor in relation to the gift or inheritance is resident or ordinarilyresident in Ireland (or, in certain circumstances, if the disponer is domiciled in Ireland irrespective of his residence or that of the donee/successor) or (ii) if the Notes are regarded as property situate inIreland. Bearer notes are generally regarded as situated where they are physically located at any

particular time. Registered notes are generally regarded as situated where the principal register of noteholders is maintained or is required to be maintained, but the Notes may be regarded as situated inIreland regardless of their physical location or the location of the register as they secure a debt due byan Irish resident debtor and they may be secured over Irish property. Accordingly, if such Notes arecomprised in a gift or inheritance, the gift or inheritance may be within the charge to tax regardless of the residence status of the disponer or the donee/successor.

Stamp Duty

Provided the Issuer remains a qualifying company no stamp duty or similar tax is imposed in Irelandon the issue, transfer or redemption of the Notes whether they are represented by Global Notes or Definitive Notes (on the basis of an exemption provided for in Section 85(2)(c) to the Stamp DutiesConsolidation Act, 1999 provided the money raised on the issue of the Notes is used in the course of the Issuer’s business).

EU Savings Directive

The Council of the European Union has adopted a directive regarding the taxation of interest incomeknown as the “European Union Directive on the Taxation of Savings Income (Directive2003/48/EC)”.

Ireland has implemented the directive into national law. Any Irish paying agent making an interest payment on behalf of the Issuer to an individual, and certain residual entities defined in the 1997 Act,



203

resident in another EU Member State and certain associated and dependent territories of a Member State will have to provide details of the payment to the Irish Revenue Commissioners who in turn will

provide such information to the competent authorities of the state or territory of residence of theindividual or residual entity concerned.

The Issuer, or the Collateral Manager or the Paying Agents on behalf of the Issuer shall be entitled torequire the Noteholders to provide any information regarding their tax status, identity or residency inorder to satisfy the disclosure requirements in Directive 2003/48/EC and Noteholders will be deemed

by their subscription for Notes to have authorised the automatic disclosure of such information by theIssuer, Collateral Manager, the Paying Agents or any other person to the relevant tax authorities.

United States Federal Income Taxation

United States Taxation

This is a discussion of the principal U.S. federal income tax consequences of the acquisition,ownership, disposition and retirement of the Notes.

Except as expressly set forth below, this discussion does not address all aspects of U.S. federalincome taxation that may be relevant to a particular holder based on such holder’s particular circumstances, nor does it address any aspect of state, local, or non-U.S. tax laws or the possibleapplication of U.S. federal gift or estate taxes. In particular, except as expressly set forth below, thisdiscussion does not address aspects of U.S. federal income taxation that may be applicable to holdersthat are subject to special treatment, including holders that are broker-dealers, securities traders,insurance companies, tax-exempt organisations, financial institutions, real estate investment trusts,regulated investment companies, certain former citizens or residents of the United States, partnershipsor other pass-through entities or grantor trusts; hold Notes as part of a “straddle,” “hedge,”“conversion,” “integrated transaction” or “constructive sale” with other investments; or own or aredeemed to own 10 per cent. or more, by voting power or value, of the equity of the Issuer (includingthe Subordinated Notes treated as equity for U.S. federal income tax purposes).

This discussion considers only holders that will hold Notes as capital assets and whose functionalcurrency is the U.S. dollar. This discussion is generally limited to the tax consequences to initialholders that purchase Notes upon their initial issue at their initial issue price.

For purposes of this discussion, the term “ U.S. Holder ” means a beneficial owner of a Note who or which is:

● a citizen or resident of the United States;

● a corporation (or an entity treated as a corporation for U.S. federal income tax purposes)created or organised under the laws of the United States or any political subdivision thereof or therein;

● an estate, the income of which is subject to U.S. federal income tax regardless of the source;or

● a trust, (i) that validly elects to be treated as a U.S. person for U.S. federal income tax purposes; or (ii)(A) if a court within the U.S. is able to exercise primary supervision over theadministration of the trust; and (B) one or more U.S. persons have the authority to control allsubstantial decisions of the trust.

The term “ non-U.S. Holder ” means a beneficial owner of Notes that is neither a U.S. Holder nor a partnership (or an entity treated as a partnership for U.S. federal income tax purposes).

If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes)

holds the Notes, the tax treatment of the partnership and a partner in such partnership generally will



204

depend on the status of the partner and the activities of the partnership. Such a partner or partnershipshould consult its own tax adviser as to its consequences.

This discussion is based upon the U.S. Internal Revenue Code of 1986, as amended (the “ Code ”),existing and proposed regulations thereunder, and current administrative rulings and court decisions,each as available on the date hereof. All of the foregoing are subject to change, possibly on aretroactive basis, and any such change could affect the continuing validity of this discussion.Furthermore, there are no cases or rulings by the U.S. Internal Revenue Service (“ IRS ”) addressingentities similar to the Issuer or securities similar to the Notes. As a result, the IRS might disagree withall or part of the discussion below. No rulings will be requested of the IRS regarding the issuesdiscussed below or the U.S. federal income tax characterisation of the Notes.

U.S. Internal Revenue Service Circular 230 Disclosure

Pursuant to U.S. Internal Revenue Service Circular 230, we hereby inform you that thedescription set forth herein with respect to U.S. federal tax issues was not intended or written tobe used, and such description cannot be used by any taxpayer for the purpose of avoiding anypenalties that may be imposed on the taxpayer under the U.S. Internal Revenue Code. Such

description was written to support the marketing of the Notes (within the meaning of U.S.Internal Revenue Service Circular 230). This description is limited to the U.S. federal tax issuesdescribed herein. It is possible that additional issues may exist that could affect the U.S. federaltax treatment of an investment in the Notes, or the matter that is the subject of the descriptionherein, and this description does not consider or provide any conclusions with respect to anysuch additional issues. Taxpayers should seek advice based on the taxpayer’s particularcircumstances from an independent tax adviser.

Prospective Noteholders should consult their tax adviser concerning the application of U.S. federalincome tax laws, as well as the laws of any state or local taxing jurisdiction, to their particular situation.

United States Taxation of the Issuer

This summary assumes that, the Issuer will be treated as a corporation for U.S. federal income tax purposes and that no election will be made for the Issuer to be treated otherwise. It is intended thatthe Issuer will not operate so as to be engaged in a trade or business in the United States for U.S.federal income tax purposes and, accordingly, will not be subject to U.S. federal income taxes on itsnet income. Although there is no direct authority addressing transactions similar to thosecontemplated herein, under current law and assuming compliance with the Issuer’s organisationaldocuments and with the Transaction Documents, and assuming the Issuer conducts its affairs inaccordance with certain assumptions and representations as to the Issuer’s contemplated activities, theIssuer believes its contemplated activities will not cause it to be engaged in a trade or business in theUnited States. This summary assumes that the Issuer will not be so engaged. If the IRS were tosuccessfully assert that the Issuer is engaged in a U.S. trade or business, however, there could bematerial adverse financial consequences to the Issuer and to persons who hold the Notes. There can

be no assurance, that the Issuer’s net income will not become subject to U.S. federal net income tax asa result of unanticipated activities by the Issuer, changes in law, contrary conclusions by U.S. taxauthorities or other causes. In such a case, the Issuer would be potentially subject to substantial U.S.federal income tax and, in certain circumstances interest payments by the Issuer under the Notes could

be subject to U.S. withholding tax. The imposition of any of the foregoing taxes would materiallyaffect the Issuer’s ability to pay principal, interest, and other amounts owing in respect of the Notes.

Each holder and beneficial owner of a Note that is not a “United States person” (as defined inSection 7701(a)(30) of the Code) will make, or by acquiring such Note or an interest therein will bedeemed to make, a representation to the effect that (A) either (i) it is not a bank extending credit

pursuant to a loan agreement entered into in the ordinary course of its trade or business (within themeaning of Section 881(c)(3)(A) of the Code), or (ii) it is a person that is eligible for benefits under an income tax treaty with the United States that eliminates U.S. federal income taxation of U.S.



205

source interest not attributable to a permanent establishment in the United States, and (B) it is not purchasing the Note in order to reduce its U.S federal income tax liability pursuant to a tax avoidance plan.

Characterisation of the Notes

The Issuer will treat the Class A Notes as debt for U.S. federal income tax purposes, and thissummary assumes such treatment. By acquiring an interest in a Class A Note, the holder will agree totreat such Class A Note as debt for U.S. federal income tax purposes. Prospective investors shouldnote, however, that the classification of an instrument as debt or equity is highly factual, and there can

be no assurance that the IRS will not contend, and that a court will not ultimately hold, that one or more Classes of Notes, particularly the more junior Classes of Notes, are equity.

If the IRS were to challenge the treatment of the Class A Notes and such challenge succeeded, theaffected Notes would be treated as equity interests and the U.S. federal income tax consequences of investing in those Notes would be the same as those described below with respect to investments inthe Subordinated Notes. Under U.S. federal income tax principles, a strong likelihood exists that theSubordinated Notes will be treated as equity. By acquiring an interest in a Subordinated Note, the

holder will agree to treat such Subordinated Note as equity for U.S. federal income tax purposes. Thissummary assumes such treatment.

Holders of the Notes should note that no rulings have been or will be sought from the IRS withrespect to the classification of the Notes or the U.S. federal income tax consequences discussed

below, and no assurance can be given that the IRS or the courts will not take a contrary position toany of the views expressed herein.

Interest on the Class A Notes

Subject to the discussion below regarding original issue discount (“ OID ”), a U.S. Holder of a Class A Note that uses the cash method of accounting must include in income the U.S. dollar value of interest paid when received. Non-U.S. dollar interest received is translated at the applicable U.S. dollar spotrate on the date of receipt, regardless of whether the payment is converted into U.S. dollars on the dateof receipt. A cash method U.S. Holder will therefore generally not have foreign currency gain or losson receipt of a non-U.S. dollar interest payment but may have foreign currency gain or loss upondisposing of the non-U.S. dollars received.

A U.S. Holder of a Class A Note that uses the accrual method of accounting or any U.S. Holder required to accrue OID will be required to include in income the U.S. dollar value of non-U.S. dollar interest accrued during the accrual period. An accrual basis U.S. Holder may determine the amount of income recognised with respect to such interest using either of two methods, in either case regardlessof whether the payments are in fact converted into U.S. dollars on the date of receipt. Under the firstmethod, the U.S. dollar value of accrued interest is translated at the applicable average exchange ratefor the interest accrual period (or, with respect to an accrual period that spans two taxable years, the

partial period within the taxable year). An accrual method U.S. Holder of a Class A Note that usesthis first method will therefore recognise foreign currency gain or loss, as the case may be, on interest

paid to the extent that the applicable rate on the date the interest is received differs from the rate atwhich the interest income was accrued. Under the second method, the U.S. Holder can elect to accrueinterest at the applicable spot rate on the last day of an interest accrual period (or, in the case of anaccrual period that spans two taxable years, at the exchange rate in effect on the last day of the partial

period within the taxable year) or, if the last day of an interest accrual period is within five businessdays of the receipt of such interest, the spot rate on the date of receipt. An election to accrue interestat the spot rate generally will apply to all non-U.S. dollar denominated debt instruments held by theU.S. Holder and is irrevocable without the consent of the IRS. Regardless of the method used toaccrue interest, a U.S. Holder may have additional foreign currency gain or loss upon a subsequentdisposition of the non-U.S. dollars received.



206

For U.S. federal income tax purposes, OID is the excess of the “stated redemption price at maturity”of a debt instrument over its “issue price”, if that excess equals or exceeds ¼ of 1 per cent. of the debtinstrument’s stated redemption price at maturity multiplied by the number of complete years from itsissue date to its maturity or weighted average maturity in the case of instalment obligations (the “ OIDde minimis amount ”). The “stated redemption price at maturity” of a debt instrument such as theClass A Notes is the sum of all payments required to be made on a Class A Note other than “qualifiedstated interest” payments. The “issue price” of a Class A Note generally is the first offering price tothe public at which a substantial amount of the debt instrument is sold. The term “qualified statedinterest” generally means stated interest that is unconditionally payable in cash or property (other thandebt instruments of the issuer), or that is treated as constructively received, at least annually at a singlefixed rate or, under certain conditions discussed below, at a variable rate.

If a U.S. Holder holds a Class A Note with OID (an “ OID Note ”) such U.S. Holder may be requiredto include OID in income before receipt of the associated cash payment, regardless of the U.S.Holder’s accounting method for tax purposes. If the U.S. Holder is an initial purchaser of an OID

Note, the amount of the OID includible in income is the sum of the daily accruals of the OID for the Note for each day during the taxable year (or portion of the taxable year) in which such U.S. Holder held the OID Note. The daily portion is determined by allocating the OID to each day of the accrual

period. An accrual period may be of any length and the accrual periods may even vary in length over the term of the OID Note, provided that each accrual period is no longer than one year and eachscheduled payment of principal or interest occurs either on the first day of an accrual period or on thefinal day of an accrual period. The amount of OID allocable to an accrual period is equal to thedifference between: (a) the product of the “adjusted issue price” of the OID Note at the beginning of the accrual period and its yield to maturity (computed generally using a constant yield method andcompounded at the end of each accrual period, taking into account the length of the particular accrual

period); and (b) the amount of any qualified stated interest allocable to the accrual period. The“adjusted issue price” of an OID Note at the beginning of any accrual period is the sum of the issue

price of the OID Note plus the amount of OID allocable to all prior accrual periods reduced by any payments the U.S. Holder received on the OID Note that were not qualified stated interest. Under

these rules, the U.S. Holder generally will have to include in income increasingly greater amounts of OID in successive accrual periods.

The Class A Notes will be “variable rate debt instruments” if the Class A Notes (a) has an issue pricethat does not exceed the total non-contingent principal payments on the Class A Notes by more thanan amount equal to the lesser of: (i) 0.015 multiplied by the product of such total non-contingent

principal payments and the number of complete years to maturity from the issue date of the Class A Notes; and (ii) 15 per cent. of the total non-contingent principal payments on the Class A Notes;(b) provide for stated interest (compounded or paid at least annually) at the current value of one or more qualified floating rates, including the EURIBOR rate on the Class A Notes; and (c) does not

provide for any principal payments that are contingent. Interest payments on certain “variable ratedebt instruments” may be considered qualified stated interest. To the extent the Class A Notes are

variable rate debt instruments, interest payments on the Class A Notes may be considered qualifiedstated interest.

As a result of the existence of the Make Whole Amounts due to holders of the Class A Notes inrespect of a redemption thereof in the circumstances described in the Conditions, there is a significantrisk that the Class A Notes will be treated as CPDIs for U.S. federal income tax purposes, and a U.S.Holder will be required to report income in respect of such Class A Notes in accordance with certainU.S. Treasury Regulations governing such instruments (the “ CPDI regulations ”). Under the CPDIregulations, each U.S. Holder would be required to include OID (as defined above) in income as itaccrues for each accrual period in an amount equal to the product of the adjusted issue price of theClass A Notes at the beginning of such accrual period and the projected yield to maturity of suchClass A Notes, calculated based upon the “comparable yield” for such Class A Notes (the yield at

which the Issuer could issue a fixed rate debt instrument with terms and conditions similar to those of such Class A Notes). Under the CPDI regulations, a U.S. Holder generally would include in income(as additional interest income) the amount of any actual interest payments received in excess of the





208

of a non-corporate U.S. Holder, the maximum marginal U.S. federal income tax rate applicable tosuch gain will be lower than the maximum marginal U.S. federal income tax rate applicable toordinary income (other than certain dividends) if such U.S. Holder’s holding period for such Class A

Notes exceeds one year.

Tax Treatment of U.S. Holders of Subordinated Notes

As noted above, a strong likelihood exists that a U.S. Holder of a Subordinated Note will be viewed asowning equity, rather than debt, for U.S. federal income tax purposes. This summary assumes that theSubordinated Notes will be treated as equity rather than debt for U.S. federal income tax purposes.

Investment in a Passive Foreign Investment Company

A non-U.S. corporation will be classified as a passive foreign investment company (a “ PFIC ”) for U.S. federal income tax purposes if 75 per cent. or more of its gross income (including the pro rata share of the gross income of any corporation in which the Issuer is considered to own 25 per cent. or more of the shares by value) in a taxable year is passive income. Alternatively, a foreign corporationwill be classified as a PFIC if at least 50 per cent. of its assets, averaged over the year and generally

determined based on fair market value (including the pro rata share of the assets of any corporation inwhich the Issuer is considered to own 25 per cent. or more of the shares by value) are held for the production of, or produce, passive income.

Based on the assets that the Issuer expects to hold and the income anticipated thereon, it is highlylikely that the Issuer will be classified as a PFIC for U.S. federal income tax purposes. Accordingly,the following discussion assumes that the Issuer will be a PFIC throughout the term of theSubordinated Notes, and U.S. Holders of Subordinated Notes should assume that they will be subjectto the U.S. federal income tax consequences described below that result from owning stock in a PFIC(subject to the discussion below under “ Investment in a Controlled Foreign Corporation ”).

Unless a U.S. Holder elects to treat the Issuer as a “qualified electing fund” (as described in the next paragraph) and the PFIC rules are otherwise applicable, upon certain distributions (“ excessdistributions ”) by the Issuer and upon a disposition of the Subordinated Notes at a gain, the U.S.Holder will be liable to pay tax at the highest tax rate on ordinary income in effect for each period towhich the income is allocated, as if such distributions and gain had been recognised rateably over theU.S. Holder’s holding period for the Subordinated Notes. An interest charge is also applied to thedeferred tax amount resulting from the deemed rateable distribution or gain recognition. Finally, aU.S. Holder who acquires Subordinated Notes from a decedent U.S. Holder would not receive astep-up of the income tax basis to fair market value for such Subordinated Notes, but would have a tax

basis equal to the decedent’s basis, if lower.

If a U.S. Holder of the Subordinated Notes elects to treat the Issuer as a “qualified electing fund” (a“QEF ”), excess distributions and gain will not be taxed as if recognised rateably over the U.S.Holder’s holding period and there will be no interest charge applicable to deferred tax, nor will thedenial of a basis step-up at death described above apply. Instead, a U.S. Holder that makes a QEFelection is required for each taxable year to include in income the U.S. Holder’s pro rata share of theordinary earnings of the QEF as ordinary income and a pro rata share of the net capital gain of theQEF as capital gain, regardless of whether such earnings or gain have in fact been distributed(assuming the discussion below under “ Investment in a Controlled Foreign Corporation ” does notapply), and subject to a separate election to defer payment of taxes, which deferral is subject to aninterest charge. Consequently, in order to comply with the requirements of a QEF election, a U.S.Holder must receive QEF Information (as defined above in “ Risk Factors ”) from the Issuer. TheCollateral Manager (on behalf of the Issuer) will use reasonable endeavours to provide the QEFInformation if requested by a U.S. Holder. Except as expressly stated, the discussion below assumesthat a QEF election will not be made.

As a result of the nature of the investments that the Issuer intends to hold, the Issuer may holdinvestments treated as equity of non-U.S. corporations that are PFICs. In such a case, assuming that



209

the Issuer is a PFIC, a U.S. Holder would be treated as owning its pro rata share of the stock of thePFIC owned by the Issuer. Such a U.S. Holder would be subject to the rules generally applicable toshareholders of PFICs discussed above with respect to distributions received by the Issuer from such aPFIC and dispositions by the Issuer of the stock of such a PFIC (even though the U.S. Holder may nothave received the proceeds of such distribution or disposition). Assuming the Issuer receives thenecessary information from the PFIC in which it owns stock, certain U.S. Holders may make the QEFelection discussed above with respect to the stock of the PFIC owned by the Issuer. It is unclear,however, whether the Issuer will be able to obtain and pass on to U.S. Holders QEF information withrespect to any PFICs owned by the Issuer. If the Issuer is a PFIC, each U.S. Holder of a Subordinated

Note must make an annual return on IRS Form 8621, reporting distributions received and gainsrealised with respect to each PFIC in which the U.S. Holder holds a direct or indirect interest.Prospective purchasers should consult their tax advisers regarding the potential application of thePFIC rules.

Investment in a Controlled Foreign Corporation

Depending on the degree of ownership of the Subordinated Notes and other equity interests in theIssuer by U.S. Holders and whether the Subordinated Notes are treated as voting securities, the Issuer may constitute a controlled foreign corporation (“ CFC ”). In general, a foreign corporation willconstitute a CFC if more than 50 per cent. of the shares of the corporation, measured by reference tocombined voting power or value, are owned, directly or indirectly, by “U.S. 10% Shareholders.” A“U.S. 10% Shareholder ,” for this purpose, is any U.S. person that owns or is deemed to own 10 per cent. or more of the combined voting power of all classes of shares of a corporation. It is possible thatthe IRS may assert that the Subordinated Notes should be treated as voting securities, andconsequently that the U.S. Holders owning Subordinated Notes so treated, or any combination of suchSubordinated Notes and other voting securities of the Issuer, that constitute 10 per cent. or more of thecombined voting power of all classes of shares of the Issuer are “U.S. 10% Shareholders” and that,assuming more than 50 per cent. of the Subordinated Notes and other voting securities of the Issuer are held by such U.S. 10% Shareholders, the Issuer is a CFC.

If the Issuer were treated as a CFC, a U.S. 10% Shareholder of the Issuer would be treated, subject tocertain exceptions, as receiving a dividend at the end of the taxable year of the Issuer in an amountequal to that person’s pro rata share of the “subpart F income” and investments in U.S. property of the Issuer. Among other items, and subject to certain exceptions, “subpart F income” includesdividends, interest, annuities, gains from the sale of shares and securities, certain gains fromcommodities transactions, certain types of insurance income and income from certain transactionswith related parties. It is likely that, if the Issuer were to constitute a CFC, predominantly all of itsincome would be subpart F income. In addition, special rules apply to determine the appropriateexchange rate to be used to translate such amounts treated as dividends and the amount of any foreigncurrency gain or loss with respect to distributions of previously taxed amounts attributable tomovements in exchange rates between the times of deemed and actual distributions. Unless otherwisenoted, the discussion below assumes that the Issuer is not a CFC. U.S. Holders should consult their tax advisers regarding these special rules.

If the Issuer were to constitute a CFC, for the period during which a U.S. Holder of Subordinated Notes is a U.S. 10 % Shareholder of the Issuer, such Holder generally would be taxable on its pro rata share of the subpart F income and investments in U.S. property of the Issuer under the rules describedin the preceding paragraph and not under the PFIC rules previously described. A U.S. Holder that is aU.S. 10 % Shareholder of the Issuer subject to the CFC rules for only a portion of the time duringwhich it holds Subordinated Notes should consult its own tax adviser regarding the interaction of thePFIC and CFC rules.

Distributions on the Subordinated Notes

Except to the extent that distributions are attributable to amounts previously taxed pursuant to theCFC rules or a QEF election is made, some or all of any distributions with respect to the Subordinated



210

Notes may constitute excess distributions, taxable as previously described. Distributions of current or accumulated earnings and profits of the Issuer which are not excess distributions will be taxed asdividends when received. The amount of such income is determined by translating non-U.S. dollarsreceived into U.S. dollars at the spot rate on the date of receipt. A U.S. Holder may realise foreigncurrency gain or loss on a subsequent disposition of the non-U.S. dollars received. See “ Taxation –United States Federal Income Taxation ”.

Eligibility for Reduced Rate of Taxation on Dividends

It is not expected that dividends received on the Subordinated Notes will be eligible for taxation at thelower rates applicable to long-term capital gains that are available on certain dividends paid tonon-corporate U.S. Holders of shares of U.S. corporations and certain non-U.S. corporations.

Disposition of the Subordinated Notes

In general, a U.S. Holder of a Subordinated Note will recognise gain or loss upon the sale or exchangeof the Subordinated Note, as the case may be, equal to the difference between the amount realised andsuch Holder’s adjusted tax basis in such Subordinated Note. Initially, the tax basis of a U.S. Holder

should equal the amount paid for a Subordinated Note, as the case may be. Such basis will beincreased by amounts taxable to such Holder by virtue of the QEF or CFC rules, if applicable, anddecreased by actual distributions from the Issuer that are deemed to consist of such previously taxedamounts or are treated as a non-taxable return of capital. A U.S. Holder that receives non-U.S. dollarsupon the sale or other disposition of the Subordinated Notes generally will realise an amount equal tothe U.S. dollar value of the non-U.S. dollars on the date of sale. A U.S. Holder will have a tax basisin the non-U.S. dollars received equal to the U.S. dollar amount realised. Any gain or loss realised bya U.S. Holder on a subsequent conversion of the non-U.S. dollars for a different amount will beforeign currency gain or loss. If, however, the Subordinated Notes are traded on an establishedsecurities market, a cash basis U.S. Holder or electing accrual basis U.S. Holder will determine theamount realised on the settlement date.

It is highly likely that any gain realised on the sale or exchange of a Subordinated Note will be treatedas an excess distribution and taxed as ordinary income under the special tax rules described aboveassuming that the PFIC rules apply and not the CFC rules.

Subject to a special limitation for individual U.S. Holders that have held the Subordinated Notes for more than one year, if the Issuer were treated as a CFC and a U.S. Holder were treated as a U.S. 10%Shareholder therein, then any gain realised by such Holder upon the disposition of Subordinated

Notes, would be treated as ordinary income to the extent of the U.S. Holder’s pro rata share of currentand accumulated earnings and profits of the Issuer and any of its subsidiaries. In this respect, earningsand profits would not include any amounts previously taxed pursuant to the CFC rules.

Foreign Currency Gain or Loss

A U.S. Holder of Subordinated Notes that recognises income from such Notes under the QEF, or CFCrules discussed above will recognise foreign currency gain or loss attributable to movement in foreignexchange rates between the date when it recognised income under those rules and the date when theincome actually is distributed.

A U.S. Holder that purchases Notes with previously owned non-U.S. dollars generally will recogniseforeign currency gain or loss in an amount equal to any difference between the U.S. Holder’s tax basisin the non-U.S. dollars and the U.S. dollar value of the non-U.S. dollars at the spot rate on the date the

Notes are purchased. A U.S. Holder that receives non-U.S. dollars upon the sale or other dispositionof the Notes generally will realise an amount equal to the U.S. dollar value of the non-U.S. dollars onthe date of sale. A U.S. Holder will have a tax basis in the non-U.S. dollars received equal to the U.S.dollar amount realised. Any gain or loss realised by a U.S. Holder on a subsequent conversion of the

non-U.S. dollars for a different amount will be foreign currency gain or loss.



211

Issuer Investments in Bearer Form

In computing the Issuer’s earnings for the purposes of the CFC rules, losses on dispositions of securities in bearer form may not be allowed. Similarly, in computing the Issuer’s ordinary earningsand net capital gain for purposes of the PFIC rules, losses on dispositions of securities in bearer formmay not be allowed, and any gain on such securities may be ordinary income rather than capital.

Reportable Transaction Reporting

Under certain U.S. Treasury Regulations, U.S. Holders that participate in “reportable transactions” (asdefined in the regulations) must attach to their U.S. federal income tax returns a disclosure statementon Form 8886. U.S. Holders should consult their own tax advisers as to the possible obligation to fileForm 8886 with respect to the ownership or disposition of the Notes, or any related transaction,including without limitation, the disposition of any non-U.S. currency received as interest or as

proceeds from the sale or other disposition of the Notes.

Transfer Reporting Requirements

A U.S. Holder (including a U.S. tax-exempt entity) that transfers property (including cash) to theIssuer in exchange for Subordinated Notes may be required to file an IRS Form 926 or similar formwith the IRS. In the event a U.S. Holder fails to file any required form, it could be subject to a

penalty equal to 10 per cent. of the fair market value of the Subordinated Notes, as the case may be, purchased by such U.S. Holder (generally up to a maximum of U.S.$100,000).

Tax Treatment of Non-U.S. Holders of Notes

Subject to the discussion below under “ Information Reporting and Backup Withholding Tax ”, payments, including interest, OID and any amounts treated as dividends, on a Note to a non-U.S.Holder and gain realised on the sale, exchange or retirement of a Note by a non-U.S. Holder, will not

be subject to U.S. federal income or withholding tax, unless (a) such income is effectively connectedwith a trade or business conducted by such non-U.S. Holder in the United States; or (b) in the case of

U.S. federal income tax imposed on gain, such non-U.S. Holder is a non-resident alien individual whoholds a Note as a capital asset and is present in the United States for 183 days or more in the taxableyear of sale and certain other conditions are satisfied.

Information Reporting and Backup Withholding Tax

The amount of interest and principal paid or accrued on the Notes, and the proceeds from the sale of a Note, in each case, paid within the United States or by a U.S. payor or U.S. middleman to a U.S. person (other than a corporation or other exempt recipient) will be reported to the IRS. Under theCode, a U.S. person may be subject, under certain circumstances, to “backup withholding tax” withrespect to interest and principal on a Note or the gross proceeds from the sale of a Note paid withinthe United States or by a U.S. middleman or United States payor to a U.S. person. The backup

withholding tax rate is 28 per cent. through 2010. Backup withholding tax generally applies only if the U.S. person: (a) fails to furnish its social security or other taxpayer identification number within areasonable time after the request therefore; (b) furnishes an incorrect taxpayer identification number;(c) is notified by the IRS that it has failed to properly report interest, OID or dividends; or (d) fails,under certain circumstances, to provide a certified statement, signed under penalty of perjury, that ithas furnished a correct taxpayer identification number and has not been notified by the IRS that it issubject to backup withholding tax for failure to report interest and dividend payments.

Non-U.S. persons may be required to comply with certification procedures to establish that they arenot subject to information reporting and backup withholding tax. In the case of payments to a foreignsimple trust, a foreign grantor trust or a foreign partnership (other than payments to a foreign simpletrust, a foreign grantor trust or a foreign partnership that qualifies as a “withholding foreign trust” or a

“withholding foreign partnership” within the meaning of the applicable United States TreasuryRegulations and payments to a foreign simple trust, a foreign grantor trust or a foreign partnership thatare effectively connected with the conduct of a trade or business in the United States), the



212

beneficiaries of the foreign simple trust, the persons treated as the owners of the foreign grantor trustor the partners of the foreign partnership, as the case may be, will be required to provide thecertification discussed above in order to establish an exemption from backup withholding tax andinformation reporting requirements. Moreover, a payor may rely on a certification provided by a

payee that is not a U.S. person only if such payor does not have actual knowledge or reason to knowthat any information or certification stated in such certificate is incorrect.

Taxation in Germany

The information contained in this section is not intended as tax advice and does not purport todescribe all of the tax considerations that may be relevant to a prospective purchaser of the Notes. Itis based upon German tax laws (including tax treaties) in effect and applied as of the date hereof,which are subject to change, potentially with retroactive effect. It should be read in conjunction withthe section entitled “ Risk Factors – German Investment Tax Act .”

Prospective purchasers of the Notes are advised to consult their own tax advisers as to the taxconsequences, under German tax laws and the tax laws of the country in which they are resident, of

purchasing, holding and disposing of the Notes and receiving payments under the Notes.

Tax System until 31 December 2007

The Issuer believes that the Class A Notes should not fall within the scope of the Investment Tax Act, but the Issuer can give no assurance that the German Investment Tax Act does not apply to theSubordinated Notes.

Investors Subject to the German Investment Tax Act

The German Investment Tax Act ( Investmentsteuergesetz ) (the “ Investment Tax Act ”) applies only(i) to “units” ( Investmentanteile ) in investment funds held by investors who are resident in Germanyfor German tax purposes, (ii) to an investor holding units through a permanent establishment (or a

permanent representative) in Germany or (iii) to an investor (other than a foreign credit institution or a

foreign financial services institution) physically presenting units at the office of a German DisbursingAgent (as defined below) (an “ over-the-counter-transaction ” – Tafelgeschäft ). A “GermanDisbursing Agent” means a German credit institution or a German financial services institution eachas defined in the German Banking Act ( Kreditwesengesetz ), including a German branch of anon-German credit institution or a non-German financial services institution, but excluding anon-German branch of a German credit institution or a German financial services institution.

In the case that the German Investment Tax Act applies to any Notes, the Issuer will need to complywith the minimum statutory reporting and publication requirements of the Investment Tax Act (if applicable) for “semi-transparent” funds (the “ Minimum Reporting Requirements ”) provided always that (i) compliance with such Minimum Reporting Requirements is not, in the opinion and atthe entire discretion of the Issuer or Collateral Manager in consultation with the Collateral

Administrator, unduly onerous, (ii) the Issuer may satisfy such Minimum Reporting Requirements by providing the requisite financial information to a professional German tax adviser with instructions tosuch adviser to re-format the relevant information as required as well as to certify the re-formattedinformation and to publish such information in the Electronic Federal Gazette in accordance withSection 5 of the Investment Tax Act on behalf of the Issuer and (iii) the Issuer shall have no liabilitywhatsoever for any such information prepared and/or published under the Minimum ReportingRequirements or for any tax consequences to any Noteholder or other party. The Issuer believes that,in consequence of compliance with such Minimum Reporting Requirements, investors holding Noteswhich are subject to the Investment Tax Act will not be subject to the lump-sum taxation provisionsof Section 6 of the Investment Tax Act, but that in principle the rules for semi-transparent funds willapply. Under the rules of the Investment Tax Act for semi-transparent funds, the Issuer’s taxableearnings (e.g. payments of interest received) are in principle taxed in the hands of investors. Certainearnings retained by the Issuer (e.g. retained interest income) (if any) would be deemed to bedistributed to investors holding Notes which are subject to the Investment Tax Act at the end of the



213

Issuer’s financial year in which the income was earned by the Issuer. Therefore, a tax liability for investors could arise before payments have actually been received.

However, if the Issuer does not comply with the Minimum Reporting Requirements, or if the Germantax authorities do not accept the validity of such reporting, the investors holding Notes which aresubject to the Investment Tax Act will be subject to the adverse lump-sum taxation provisions of Section 6 of the Investment Tax Act pursuant to which the higher of (i) distributions on such Notes,the interim profit ( Zwischengewinn ) and 70 per cent. of the annual increase in the market price of such

Notes and (ii) six per cent. of the market price of such Notes at the end of every calendar year, (the“Assumed Profits ”) would be taxed. The interim profit represents mainly interest accrued or received by an investment fund (within the meaning of the Investment Tax Act) but not yet distributedor attributed to the investors in the fund.

Where Notes to which the Investment Tax Act applies are kept in a custodial account maintained witha German Disbursing Agent, such German Disbursing Agent would be required to withhold tax at arate of 30 per cent. (plus solidarity surcharge thereon at a rate of 5.5 per cent.) not only of the grossamount of interest paid, but as the case may be at the point of time the Notes are sold by therespective Investor subject to the Investment Tax Act, or redeemed by the Issuer also of the aggregateamount of income deemed to have accrued to investors holding Notes which are subject to theInvestment Tax Act and not yet otherwise subject to taxation. In the case of anover-the-counter-transaction, such withholding tax is levied at the rate of 35 per cent. (plus solidaritysurcharge thereon at a rate of 5.5 per cent.). This also applies with regard to interim profits. Suchinterim profit is taxed irrespective of whether or not the interim profit is calculated and published bythe fund.

Moreover, there is a risk that investments made by or on behalf of the Issuer qualify as shares inforeign investment funds (within the meaning of the Investment Tax Act) which do not satisfy theMinimum Reporting Requirements and therefore qualify as “non-transparent” sub-funds. In this casethe Issuer may be deemed to have earned Assumed Profits from these investments according to thelump-sum taxation provisions of Section 6 of the Investment Tax Act and such Assumed Profits mayaccordingly be attributed to investors holding Notes which are subject to the Investment Tax Act,resulting in adverse tax and liquidity consequences for such investors.

Investors should be aware that there are a number of uncertainties regarding the interpretation of thetax provisions contained in the Investment Tax Act (including those relating to the MinimumReporting Requirements).

Taxation of investors tax resident in Germany and not subject to the Investment Tax Act

Payments of interest (including accrued interest) on Notes not falling within the scope of theInvestment Tax Act paid to an investor who is resident in Germany for German tax purposes (a“German Investor ”) is subject to corporate income tax ( Körperschaftsteuer ) or income tax( Einkommensteuer ) (plus in both cases a solidarity surcharge thereon at a rate of 5.5 per cent.) and, if the Notes are held as business assets, to trade tax ( Gewerbesteuer ) in Germany.

Any gains realised upon a sale or partial or final redemption of Notes (including accrued interest) over their current book value or otherwise realised (“ Capital Gains ”) by a German Investor who holds

Notes as business assets are subject to income tax or corporate income tax (plus a solidarity surchargethereon at a rate of 5.5 per cent.) and, if the Notes form part of a permanent establishment maintainedin Germany by the German Investor, to trade tax. Tax treaties concluded by Germany generally

permit German tax authorities to impose a tax on such Capital Gains in this situation.

In case of German individual investors who hold Notes as part of their private assets and to the extentthe Notes qualify as financial innovations ( Finanzinnovationen ) in the meaning of the German IncomeTax Act ( Einkommensteuergesetz ), any gains realised upon a sale or partial or final redemption of

Notes (including accrued interest) over their acquisition costs or otherwise realised are subject to



214

income tax at the investor’s personal income tax rate (plus a solidarity surcharge thereon at a rate of 5.5 per cent.).

To the extent Notes held by German individual investors as part of their private assets do not qualifyas such financial innovations, gains realised upon a sale or partial or final redemption of Notes(including accrued interest) or otherwise realised are not subject to German income tax provided theindividual investor has held the Notes for a period of more than one year.

If the Notes are held in a custodial account which the German Investor maintains with a GermanDisbursing Agent, a 30 per cent. (or 35 per cent. in the case of over-the-counter transactions(Tafelgeschäft )) withholding tax on interest payments ( Zinsabschlagsteuer ) plus a 5.5 per cent.solidarity surcharge thereon, will be levied. Withholding tax on interest is also imposed on interestwhich has accrued up to the sale, transfer or redemption of Notes and been credited separately(Stückzinsen ).

Withholding tax and a solidarity surcharge on interest payments (including accrued interest) arecredited as prepayments against the German income or corporate income tax and the solidaritysurcharge liability of the German Investor. Where interest (including accrued interest) is subject to

withholding tax, the Issuer is not required to gross up any payments made to a German Investor or tootherwise compensate or indemnify such German Investor for withholding taxes levied in connectionwith the Notes.

Where Capital Gains are taxable in Germany and the German Investor keeps the Notes in a custodialaccount maintained with a German Disbursing Agent, withholding tax may be deducted at a rate of 30 per cent. (plus a solidarity surcharge thereon at a rate of 5.5 per cent.) of the amount by which the

proceeds from the sale or redemption of the Notes exceed the purchase price paid by such GermanInvestor. This is the case provided that since acquisition such Notes have been held by the GermanDisbursing Agent in a custodial account; where the Notes have not been so held, withholding tax isdeducted at a rate of 30 per cent. (plus a solidarity surcharge thereon at a rate of 5.5 per cent.) basedon 30 per cent. of the proceeds derived from the sale or redemption of the Notes. In the case of

over-the-counter transactions, withholding tax will be levied at a rate of 35 per cent. (plus solidaritysurcharge thereon at a rate of 5.5 per cent.). Withholding tax is credited against the final liability of the German Investor to income tax or corporate income tax. The Issuer is not required to gross up any

payments made to a German Investor or to otherwise compensate or indemnify such German Investor for withholding taxes levied in connection with Capital Gains.

Taxation of investors not tax resident in Germany and not subject to the Investment Tax Act

Payments of interest (including accrued interest) on Notes not falling within the scope of theInvestment Tax Act paid to an investor who is not resident in Germany for tax purposes (a “ ForeignInvestor ”) and Capital Gains realised by a Foreign Investor are subject to German taxation and incertain cases also to German withholding tax if the Notes form part of the business assets of a

permanent establishment (including a permanent representative) maintained in Germany by theForeign Investor or if a Foreign Investor physically presents the Notes at the office of a GermanDisbursing Agent (an over-the-counter transaction).

Tax System from 1 January 2008

On 29 December 2007 the amendment act (the “ Amendment Act ”) to the Investment Act(“Investment Act ”) entered into force. The Amendment Act is aimed to further improve theregulatory framework for investment funds and their clients in Germany. As the scope of theInvestment Tax Act is defined by cross-reference to the Investment Act, the amendment to thedefinition of “foreign investment fund units” brings about more legal certainty as to when the specialrules of the Investment Tax Act apply. Under the Amendment Act’s definition, “foreign investmentfund units” are basically confined to redeemable units (i.e. the unitholder may demand the redemptionof the units against a pro rata share of the fund) of open-ended funds or closed-end funds, providedthe latter are subjected to the supervision of a financial supervisory authority for collective



215

investments. Therefore, investments in foreign non-supervised closed-end funds are no longer taxableunder the possibly punitive (see above “ Assumed Profits ”) Investment Tax Act. As the Issuer is notsubject to any supervision of a financial supervisory authority for collective investments and theredemption provisions of the Conditions with respect to the Subordinated Notes may not becomparable to redemption rights typical for open-ended investment funds, conceivably, as a result of the changes implemented by the Amendment Act and the Annual Tax Act 2008, from 1 January 2008the Subordinated Notes may no longer qualify as units in a foreign investment fund. Instead, thegeneral German taxation rules should apply. However, it is not currently clear how redeemable unitsshould be interpreted in the context of CDO transactions so that there remains some uncertainty as towhether the Subordinated Notes still qualify as fund units. If the Investment Tax Act still applies thetaxation of a German Investor takes place as set out in this Offering Memorandum above in theSection entitled “ Investors Subject to the Investment Tax Act ”. Otherwise, the taxation of a GermanInvestor follows the rules as described above under “ Taxation of Investors Tax Resident in Germanyand Not Subject to the Investment Tax Act ”.

Tax System from 1 January 2009

On 17 August 2007 the Business Tax Reform Act 2008 ( Unternehmensteuerreformgesetz 2008, the“BTRA ”) was published in the Federal Gazette and – except for certain provisions discussed below – came into force one day after its publication. The BTRA, inter alia , will introduce a flat tax( Abgeltungsteuer ) for private investors with effect of 1 January 2009 for capital investment income(e.g. interest, dividends and current income from investment funds) and private capital gains derivedfrom the disposal of capital assets (such as bonds, investment fund units etc.), regardless of anyholding period for the capital assets.

The flat tax will be levied as a withholding tax at a rate of 25 per cent. (plus 5.5 per cent. solidaritysurcharge thereon and, if applicable, church tax) and satisfy any income tax liability of the investor inrespect of such capital investment income or private capital gains. However, a taxpayer will be ableto apply for a tax assessment if his or her personal income tax rate is lower than the flat tax rate. Thelatter would be the case if the personal income tax rate of the investor were to be lower than the flattax rate. However, even if this were to be the case, the capital investment income and private capitalgains would have to be taken into account at their gross amount, i.e. any income related expensesexcept for a small lump sum tax allowance would not be deductible from the investor’s tax base.

According to the flat tax regime losses from the sale or redemption of capital assets can only beset-off against other investment income. If the set-off is not possible in the assessment period inwhich the losses have been realised, such losses can be carried forward into future assessment periodsonly and can be set-off against capital investment income generated in these future assessment

periods.

The flat tax will apply, inter alia , to current capital investment income received after 31 December 2008 as well as capital gains/losses from the disposal of capital assets held as non-business assets,

irrespective of any holding period, provided that the gains/losses are generated after 31 December 2008. However, the flat tax will only be imposed on private capital gains/losses from assets acquiredafter 31 December 2008, unless the assets were to qualify as financial innovations. In this case thenew tax regime will be applicable to private capital gains/losses from a disposal or redemption after 31 December 2008, even if the assets were acquired prior to 1 January 2009. Further, additional

provisions apply to the taxation of unitholders of investment funds.

EU Directive on the Taxation of Savings Income (2003/48/EC)

The European Union has adopted a directive (2003/48/EC) regarding the taxation of savings income.Under the directive each Member State is required to provide to the tax authorities of another Member State details of payments of interest or other similar income paid by a person within its jurisdiction toan individual resident in that other Member State, however, Austria, Belgium and Luxembourg mayinstead apply a withholding system for a transitional period in relation to such payments, deductingtax at rates rising over time to 35 per cent., unless during such period they elect otherwise. A number



216

of third countries and territories have adopted similar measures in relation to payments made by a person within their jurisdiction to, or collected by such a person for, an individual resident in aMember State.

THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAXMATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACHPROSPECTIVE INVESTOR IS STRONGLY URGED TO CONSULT ITS OWN TAXADVISER ABOUT THE TAX CONSEQUENCES OF AN INVESTMENT IN THE NOTESUNDER THE INVESTOR’S OWN CIRCUMSTANCES.



217

CERTAIN EMPLOYEE BENEFIT PLAN CONSIDERATIONS

The advice below was not written and is not intended to be used and cannot be used by any taxpayer for purposes of avoiding United States federal income tax penalties that may be imposed. The adviceis written to support the promotion or marketing of the transaction. Each taxpayer should seek advicebased on the taxpayer’s particular circumstances from an independent tax adviser.

The foregoing language is intended to satisfy the requirements under the new regulations inSection 10.35 of Circular 230.

______________________________

The U.S. Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), imposescertain fiduciary standards and certain other requirements on employee benefit plans subject toERISA, including entities such as collective investment funds, certain insurance company separateaccounts, certain insurance company general accounts, and entities whose underlying assets aretreated as being subject to ERISA (collectively, “ ERISA Plans ”), and on those persons who arefiduciaries with respect to ERISA Plans. Investments by ERISA Plans are subject to ERISA’s generalfiduciary requirements, including the requirement of investment prudence and diversification and the

requirement that an ERISA Plan’s investments be made in accordance with the documents governingthe ERISA Plan. The prudence of a particular investment should be determined by the responsiblefiduciary of an ERISA Plan by taking into account the ERISA Plan’s particular circumstances and allof the facts and circumstances of the investment, including, but not limited to, the matters discussedabove under “ Risk Factors ” and the fact that in the future there may be no market in which suchfiduciary will be able to sell or otherwise dispose of the Notes or any interest therein.

Section 406 of ERISA and Section 4975 of the U.S. Internal Revenue Code of 1986, as amended (the“Code ”), prohibit certain transactions involving the assets of an ERISA Plan, as well as those plansthat are not subject to ERISA but which are subject to Section 4975 of the Code, such as individualretirement accounts and Keogh plans (together with ERISA Plans, “ Plans ”), and certain persons(referred to as “parties in interest” under ERISA or “disqualified persons” under the Code) having

certain relationships to Plans, unless a statutory or administrative exemption is applicable to thetransaction. A party in interest or disqualified person who engages in a prohibited transaction may besubject to excise taxes or other liabilities under ERISA and the Code and the transaction may have to

be rescinded.

Governmental plans, certain church plans and certain non-U.S. plans, while not subject to thefiduciary responsibility or prohibited transaction provisions of ERISA or the provisions of Section 4975 of the Code, may nevertheless be subject to federal, state, local, non-U.S. laws or other laws or regulations (such as the prohibited transaction rules of Section 503 of the Code) that aresubstantially similar to the foregoing provisions of ERISA or the Code (“ Similar Laws ”).

Under Section 3(42) of ERISA and a regulation issued by the United States Department of Labor (29 C.F.R. Section 2510.3 101, the “ Plan Assets Regulation ”), if a Plan invests in an “equityinterest” of an entity that is neither a “publicly offered security” nor a security issued by aninvestment company registered under the Investment Company Act of 1940, the Plan’s assets aredeemed to include both the equity interest and an undivided interest in each of the entity’s underlyingassets, unless either (a) immediately after the most recent acquisition of any equity interest in theentity, less than 25 per cent. of the total value of each class of equity interest in the entity is held by“Benefit Plan Investors” (disregarding equity interests held by certain persons, other than Benefit PlanInvestors, with discretionary authority or control over the assets of the entity or who provideinvestment advice with respect to such assets (such as the Collateral Manager), or any affiliates of such persons) or (b) that the entity is an “operating company,” as defined in the Plan AssetsRegulation. Under Section 3(42) of ERISA a “ Benefit Plan Investor ” means (1) an employee benefit

plan (as defined in Section 3(3) of ERISA) subject to the provisions of part 4 of subtitle B of Title I of

ERISA, (2) a plan to which Section 4975 of the Code applies, or (3) any entity whose underlying



218

assets include “plan assets” by reason of any such plan’s investment in the entity, but only to theextent of the percentage of the equity interests in such entity that are held by Benefit Plan Investors.

If any class of the Notes were deemed to be equity interests in the Issuer and no exception under ERISA and/or the Plan Assets Regulation applied, an undivided portion of the Issuer’s assets would

be deemed to be assets of each Plan that invests in those Notes. In such case, certain transactions thatthe Issuer might enter into, or may have entered into, in the ordinary course of its business, might bedeemed to constitute direct or indirect “prohibited transactions” under Section 406 of ERISA and/or Section 4975 of the Code with respect to such Plan investors and might have to be rescinded; the

payment of certain of the fees to the Collateral Manager might be considered to be a non-exempt prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code; the CollateralManager and other persons, in providing services with respect to the Issuer’s assets, might befiduciaries or other parties in interest or disqualified persons with respect to such Plans; and it is notclear whether the limitations of Section 403(a) of ERISA on the delegation of investmentmanagement responsibilities by fiduciaries of ERISA Plans or whether the rules of Section 404(b) of ERISA and the regulations thereunder regarding maintenance of the indicia of ownership of the assetsof an ERISA Plan outside the jurisdiction of the U.S. district courts would be satisfied. Moreover, theacquisition or holding of the Notes of other indebtedness issued by the Issuer by or on behalf of a

party in interest or disqualified person with respect to a Plan that owns or acquires an equity interestin the Issuer also could give rise to an indirect prohibited transaction.

The Plan Assets Regulation defines an “equity interest” as any interest in an entity other than aninstrument that is treated as indebtedness under applicable local law and which has no substantialequity features. Although the Plan Assets Regulation is silent with respect to the question of whichlaw constitutes applicable local law for this purpose, the Department of Labor has stated that thesedeterminations should be made under the state law governing interpretation of the instrument inquestion. In the preamble to the Plan Assets Regulation, the Department of Labor declined to providea precise definition of what features are equity features or the circumstances under which suchfeatures would be considered “substantial,” noting that the question of whether a Plan’s interest hassubstantial equity features is an inherently factual one, but that in making a determination it would beappropriate to take into account whether the equity features are such that a Plan’s investment would

be a practical vehicle for the indirect provision of investment management services. There is little pertinent authority in this area.

Although there can be no assurance in this regard, based on the credit quality (as reflected by thecredit rating assigned by the Rating Agency) of the Class A Notes, the traditional debt characteristicsof such Notes and the absence of rights to payment in excess of principal and stated interest under such Notes, the Issuer is initially treating the Class A Notes as not being “equity interests” in theIssuer for purposes of ERISA and the Plan Assets Regulation. The treatment of the Class A Notes asnot being “equity interests” in the Issuer could, however, be affected, subsequent to their issuance, bycertain changes in the structure or financial condition of the Issuer. In addition, there is increaseduncertainty regarding the characterization of debt instruments that do not carry an investment graderating. There is a heightened risk that the Subordinated Notes would likely constitute “equityinterests” in the Issuer for purposes of ERISA and the Plan Assets Regulation.

Each of the Issuer, the Initial Purchaser/Placement Agent, the Arranger, the Collateral Manager, theTrustee, and certain other parties, or their respective affiliates, may be the sponsor of, or investmentadviser with respect, to one or more Plans. Because such parties may receive certain benefits inconnection with the sale of the Notes to such Plans, whether or not the Notes are treated as equityinterests in the Issuer, the purchase of such Notes using the assets of a Plan over which any of such

parties has investment authority might be deemed to be a violation of the prohibited transaction rulesof ERISA and/or Section 4975 of the Code for which no exemption may be available. Accordingly,the Notes may not be purchased using the assets of any Plan if any of the Issuer, the InitialPurchaser/Placement Agent, the Arranger, the Collateral Manager, the Trustee, or their respectiveaffiliates has investment authority or provides or has provided investment advice with respect to suchassets.



219

Also, if the Notes are acquired by a Plan with respect to which the Issuer, the InitialPurchaser/Placement Agent, the Arranger, the Collateral Manager, the Trustee, any holder of the

Notes or any of their respective Affiliates is a party in interest or a disqualified person, other than asponsor of, or investment adviser with respect to, such Plan, such transaction could be deemed to be adirect or indirect prohibited transaction within the meaning of Section 406 of ERISA and/or Section 4975 of the Code. In addition, without regard to whether the Class A Notes are deemedequity or debt for purposes of ERISA, if a party in interest or disqualified person with respect to aPlan owns or acquires a 50 per cent. or more beneficial interest in the Issuer, the acquisition or holding of the Class A Notes by or on behalf of such Plan could be considered to constitute an indirect

prohibited transaction. Certain exemptions from the prohibited transaction provisions of Section 406of ERISA and Section 4975 of the Code could be applicable, however, to a Plan’s acquisition of anClass A Note depending in part upon the type of Plan fiduciary making the decision to acquire either such Notes or an ERISA Limited Note and the circumstances under which such decision is made.Included among these exemptions are Prohibited Transaction Class Exemption (“ PTE ”) 90-1,regarding investments by insurance company pooled separate accounts; PTE 91-38, regardinginvestments by bank collective investment funds; PTE 84-14 (amended effective August 23, 2005),regarding transactions effected by a “qualified professional asset manager;” PTE 96-23, regarding

investments by certain “in house asset managers;” and PTE 95-60, regarding investments byinsurance company general accounts. Section 408(b)(17) of ERISA and Section 4975(d)(20) of theCode provide a statutory prohibited transaction exemption for some transactions between Plans andnon-fiduciary service providers who are parties in interest or disqualified persons if specifiedconditions are satisfied. Even if the conditions specified in one or more of these exemptions are met,the scope of the relief provided by these exemptions might not cover all acts which might beconstrued as prohibited transactions.

Although the Issuer intends to prohibit the acquisition of the ERISA Limited Notes by Benefit PlanInvestors, there can be no assurance that ownership of the ERISA Limited Notes by Benefit PlanInvestors will always remain below the 25 per cent. threshold established under ERISA and the PlanAssets Regulation.

EACH ACQUIRER AND EACH TRANSFEREE OF AN CLASS A NOTE OR ANY INTERESTTHEREIN, AND EACH FIDUCIARY ACTING ON BEHALF OF THE ACQUIRER OR TRANSFEREE (BOTH IN ITS FIDUCIARY AND CORPORATE CAPACITY), WILL BEDEEMED TO REPRESENT AND AGREE (OR, IF REQUIRED BY THE TRUST DEED, ATRANSFEREE WILL BE REQUIRED TO CERTIFY) THAT SUCH ACQUIRER OR TRANSFEREE (1) EITHER (A) IS NOT, AND IS NOT ACTING ON BEHALF OF (AND FOR SOLONG AS IT HOLDS SUCH NOTE OR INTEREST THEREIN WILL NOT BE, AND WILL NOTBE ACTING ON BEHALF OF), A BENEFIT PLAN INVESTOR, OR A GOVERNMENTAL,CHURCH OR NON-U.S. PLAN WHICH IS SUBJECT TO ANY SIMILAR LAWS, AND NOPART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH NOTES OR ANYINTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR

SUCH A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN, OR (B)(I) IN CONNECTIONWITH THE ACQUISITION, HOLDING AND DISPOSITION OF ANY NOTE, THE BENEFITPLAN INVESTOR’S FIDUCIARY HAS DETERMINED THAT THE BENEFIT PLAN INVESTOR IS RECEIVING NO LESS, AND PAYING NO MORE, THAN “ADEQUATE CONSIDERATION”(WITHIN THE MEANING OF SECTION 408(b)(17) OF ERISA AND SECTION 4975(f)(10) OFTHE CODE) AND (II) ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH NOTE OR ANY INTEREST THEREIN DOES NOT AND WILL NOT CONSTITUTE OR OTHERWISERESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISAAND/OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL,CHURCH OR NON-U.S. PLAN, A NON-EXEMPT VIOLATION OF ANY SIMILAR LAWS);AND (2) SUCH NOTES OR ANY INTEREST THEREIN WILL NOT BE SOLD OR OTHERWISETRANSFERRED OR DELIVERED OTHER THAN TO AN ACQUIRER OR TRANSFEREE THAT

IS DEEMED TO REPRESENT AND AGREE (OR, IF REQUIRED BY THE TRUST DEED,REQUIRED TO CERTIFY) WITH RESPECT TO ITS ACQUISITION, HOLDING AND



220

DISPOSITION OF SUCH NOTES TO THE SAME EFFECT AS THE ACQUIRER’SREPRESENTATION AND AGREEMENT SET OUT IN THIS SENTENCE.

NEITHER THE ERISA LIMITED NOTES NOR ANY INTEREST THEREIN MAY BEACQUIRED OR HELD BY BENEFIT PLAN INVESTORS; ACCORDINGLY, EACH ACQUIRER AND EACH TRANSFEREE OF THE ERISA LIMITED NOTES OR ANY INTEREST THEREIN,AND EACH FIDUCIARY ACTING ON BEHALF OF THE ACQUIRER OR TRANSFEREE(BOTH IN ITS FIDUCIARY AND CORPORATE CAPACITY), WILL BE DEEMED OR REQUIRED IN WRITING, AS APPLICABLE, TO REPRESENT AND AGREE THAT, DURINGTHE PERIOD IT HOLDS ANY INTEREST IN ANY SUCH NOTE THAT SUCH ACQUIRER OR TRANSFEREE (1) EITHER (A) IS NOT, AND IS NOT ACTING ON BEHALF OF, A BENEFITPLAN INVESTOR OR A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN WHICH ISSUBJECT TO ANY SIMILAR LAWS AND/OR LAWS OR REGULATIONS THAT PROVIDETHAT THE ASSETS OF THE ISSUER COULD BE DEEMED TO INCLUDE “PLAN ASSETS”OF SUCH PLAN, AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH NOTES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANYBENEFIT PLAN INVESTOR OR SUCH A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN,OR (B) IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH OR NON-U.S.PLAN, AND SUCH ACQUISITION DOES NOT AND WILL NOT RESULT IN A NON-EXEMPTVIOLATION OF ANY SIMILAR LAWS, AND WILL NOT SUBJECT THE ISSUER OR THECOLLATERAL MANAGER TO ANY LAWS, RULES OR REGULATIONS APPLICABLE TOSUCH PLAN SOLELY AS A RESULT OF THE INVESTMENT IN THE ISSUER BY SUCHPLAN; AND (2) SUCH NOTES OR ANY INTEREST THEREIN WILL NOT BE SOLD OR OTHERWISE TRANSFERRED OR DELIVERED OTHER THAN TO AN ACQUIRER OR TRANSFEREE THAT IS DEEMED TO REPRESENT AND AGREE (OR, IF REQUIRED BY THETRUST DEED, REQUIRED TO CERTIFY) WITH RESPECT TO ITS ACQUISITION, HOLDINGAND DISPOSITION OF SUCH NOTES TO THE SAME EFFECT AS THE ACQUIRER’SREPRESENTATION AND AGREEMENT SET OUT IN THIS SENTENCE. NO ACQUISITIONBY OR TRANSFER TO A BENEFIT PLAN INVESTOR OF ANY SUCH NOTE WILL BE

EFFECTIVE, AND NONE OF THE ISSUER, THE REGISTRAR, THE TRANSFER AGENT OR THE TRUSTEE WILL RECOGNISE SUCH ACQUISITION OR TRANSFER OF SUCH NOTE. INTHE EVENT THAT THE ISSUER DETERMINES THAT ANY SUCH NOTE IS HELD BY ABENEFIT PLAN INVESTOR, THE ISSUER MAY CAUSE A SALE OR TRANSFER OF SUCH

NOTE.

THE ISSUER, THE TRUSTEE, THE INITIAL PURCHASER/PLACEMENT AGENT AND THECOLLATERAL MANAGER SHALL BE ENTITLED TO CONCLUSIVELY RELY UPON THEREPRESENTATIONS AND AGREEMENTS DESCRIBED HEREIN BY ACQUIRERS ANDTRANSFEREES OF ANY NOTES WITHOUT FURTHER INQUIRY.

THE ACQUIRER AND ANY FIDUCIARY CAUSING IT TO ACQUIRE AN INTEREST IN ANY NOTES AGREES TO INDEMNIFY AND HOLD HARMLESS THE ISSUER, THE INITIALPURCHASER/PLACEMENT AGENT, THE ARRANGER, THE COLLATERAL MANAGER, THETRUSTEE, AND THEIR RESPECTIVE AFFILIATES, FROM AND AGAINST ANY COST,DAMAGE OR LOSS INCURRED BY ANY OF THEM AS A RESULT OF ANY OF THEFOREGOING REPRESENTATIONS AND AGREEMENTS BEING OR BECOMING FALSE.

ANY PURPORTED ACQUISITION OR TRANSFER OF ANY NOTE OR BENEFICIALINTEREST THEREIN TO AN ACQUIRER OR TRANSFEREE THAT DOES NOT COMPLYWITH THE REQUIREMENTS DESCRIBED HEREIN SHALL BE NULL AND VOID AB INITIO .

It should be noted that an insurance company’s general account may be deemed to include assets of Plans under certain circumstances, e.g. where a Plan purchases an annuity contract issued by such aninsurance company, based on the reasoning of the United States Supreme Court in John Hancock

Mutual Life Ins. Co. v. Harris Trust and Savings Bank, 510 U.S. 86 (1993). An insurance companyconsidering the purchase of Notes with assets of its general account should consider such purchase







223

Hampshire constitutes a finding by the secretary of state of New Hampshire that any document filedunder RSA 421-B is true, complete and not misleading. Neither any such fact nor the fact that anexemption or exception is available for a security or a transaction means that the Secretary of Statehas passed in any way upon the merits or qualifications of, or recommended or given approval to, any

person, security, or transaction. It is unlawful to make, or cause to be made, to any prospective purchaser, customer, or client any representation inconsistent with the provisions of this paragraph.

Notwithstanding anything herein to the contrary, effective from the date of commencement of discussions, recipients, and each employee, representative or other agent of the recipients, maydisclose to any and all persons, without limitation of any kind, the U.S. federal, state, and localincome and franchise tax treatment and tax structure of the offering and all materials of any kind,including opinions or other tax analyses, that are provided to the recipients relating to such taxtreatment and tax structure.

United States

The Notes have not been and will not be registered under the Securities Act and may not be offered,sold, pledged or otherwise transferred or delivered within the United States or to, or for the account or

benefit of, U.S. Persons except pursuant to an exemption from, or in a transaction not subject to, theregistration requirements under the Securities Act and in a manner so as not to require the registrationof the Issuer or the pool of Collateral as an “investment company” pursuant to the InvestmentCompany Act. Each purchaser of a Note agrees to be bound by the foregoing restriction on transfers.Terms used in this paragraph and not otherwise defined have the meanings given to them byRegulation S.

The Initial Purchaser/Placement Agent proposes to offer and sell the Notes (other than the AccreditedInvestor Notes) (a) outside the United States to non-U.S. Persons in Offshore Transactions in relianceon Regulation S and (b) within the United States and to U.S. Persons who are QIB/QPs. Any offer or sale of Notes in the United States made in reliance on Rule 144A (or in relation to the initial sale of the Class A-1 Notes, Section 4(2) of the Securities Act) will be made by the Initial

Purchaser/Placement Agent or other broker-dealers, including certain Affiliates of the InitialPurchaser/Placement Agent, who are registered as broker-dealers under the Exchange Act.

In the Subscription and Placement Agreement, the Initial Purchaser/Placement Agent will representand agree that it has not offered or sold the Notes and will not offer or sell the Notes (excluding theAccredited Investor Notes) as part of their distribution except to non-U.S persons in offshoretransactions in accordance with Regulation S or to QIB/QPs as provided below. Accordingly, theInitial Purchaser/Placement Agent will represent and agree that neither the InitialPurchaser/Placement Agent, its Affiliates (if any) nor any Persons acting on their behalf have engagedor will engage in any directed selling efforts with respect to the Notes, and they have complied andwill comply with the offering restrictions requirements of Regulation S.

In the Subscription and Placement Agreement, the Initial Purchaser/Placement Agent will agree thatneither it nor any of its Affiliates nor anyone acting on its or their behalf will, acting either as

principal or agent, offer, sell, reoffer or resell any Notes (excluding the Accredited Investor Notes) toU.S. Persons other than Rule 144A Notes in registered form bearing a restrictive legend thereon, andneither it nor any of its Affiliates nor anyone acting on its or their behalf will, acting either as

principal or agent, offer, sell, reoffer or resell any of such Notes (or approve the resale of any of such Notes):

(a) except (1) through a U.S. broker dealer that is registered under the Exchange Act to investorseach of which such Initial Purchaser/Placement Agent reasonably believes is a QIB that hassuch knowledge and experience in financial and business matters that it is capable of evaluating and bearing the risks of investing in the Rule 144A Notes or is represented by afiduciary or agent with sole investment discretion having such knowledge and experience thatis also a QP or (2) otherwise in accordance with the restrictions on transfer set forth in such



224

Rule 144A Notes, the Subscription and Placement Agreement, the Trust Deed and the finalOffering Memorandum; or

(b) by means of any form of general solicitation or general advertising, including but not limitedto (1) any advertisement, article, notice or other communication published in any newspaper,magazine or similar media or broadcast over television or radio and (2) any seminar or meeting whose attendees have been advised by any general solicitation or general advertising.

The Rule 144A Notes will be issued in minimum denominations of €250,000 (as applicable), andintegral multiples of €1,000 (as applicable) in excess thereof.

In addition, until 40 days after the commencement of the offering, an offer or sale of Rule 144A Noteswithin the United States by a dealer (whether or not participating in the offering) may violate theregistration requirements of the Securities Act if such offer or sale is made otherwise than inaccordance with Rule 144A.

This Offering Memorandum has been prepared by the Issuer for use in connection with the offer andsale of the Regulation S Notes (other than the Accredited Investor Notes) outside the United States to

non-U.S. Persons in Offshore Transactions, for the offer and sale of the Rule 144A Notes within theUnited States to persons and outside the United States to U.S. Persons which are QIB/QPs, for theoffer and sale of the Accredited Investor Notes to either non-U.S. Persons outside the United States inOffshore Transactions in reliance on Regulation S or to U.S. Persons or within the United States to

persons which are both Accredited Investors and Eligible ICA Investors and for the listing of the Notes on the Irish Stock Exchange. Each of the Issuer and the Initial Purchaser/Placement Agentreserve the right to reject any offer to purchase, in whole or in part, for any reason, or to sell less thanthe principal amount of Notes which may be offered. This Offering Memorandum does not constitutean offer to any U.S. Person or to any Person within the United States other than a QIB/QP or, in thecase of the Accredited Investor Notes, an Accredited Investor that is also an Eligible ICA Investor.Distribution of this Offering Memorandum to any such U.S. Person or Person within the UnitedStates, other than those Persons, if any, retained to advise a QIB/QP or an Accredited Investor and

Eligible ICA Investor with respect thereto, is unauthorised and any disclosure of any of its contents,without the prior written consent of the Issuer, is prohibited.

Ireland

The Initial Purchaser/Placement Agent has represented and agreed that:

(a) it will not underwrite the issue of, or place the Notes, otherwise than in conformity than withthe provisions of S.I. No. 60 of 2007, European Communities (Markets in Financial Notes)Regulations 2007 (the “ MiFID Regulations ”), including, without limitation, Parts 6, 7, and12 thereof and the provisions of the Investor Compensation Act 1998;

(b) it will not underwrite the issue of, or place, the Notes, otherwise than in conformity with the provisions of the Irish Central Bank Acts 1942 to 2004 (as amended) and any codes of conduct rules made under Section 117(1) thereof;

(c) it will not underwrite the issue of, or place, or do anything in Ireland in respect of the Notesotherwise than in conformity with the provisions of the Irish Prospectus (Directive2003/71/EC) Regulations 2005 and any rules issued under Section 51 of the Irish InvestmentFunds, Companies and Miscellaneous Provisions Act 2005, by the Irish Central Bank andFinancial Services Regulatory Authority (the “ Financial Regulator ”); and

(d) it will not underwrite the issue of, place or otherwise act in Ireland in respect of the Notes,otherwise than in conformity with the provisions of the Irish Market Abuse (Directive2003/6/EC) Regulations 2005 and any rules issued by the Financial Regulator under Section34 of the Irish Investment Funds, Companies and Miscellaneous Provisions Act 2005 by theFinancial Regulator.



225

Jersey

The Notes are only suitable for acquisition by a person who (i) has a significantly substantial asset base such that would enable them to sustain any loss that might be incurred as a result of acquiringsuch Notes and (ii) is sufficiently financially sophisticated to be reasonably expected to know the risksinvolved in acquiring the Notes. Neither the issue of the Notes nor the activities of the issuer withregard to the issue of the Notes are subject to all the provisions of the Financial Services (Jersey) Law1998.

The Notes may not be offered to, sold or purchased or held by, or for the account of, persons (other than financial institutions in the normal course of business) resident for income tax purposes in Jersey.

Switzerland

The Initial Purchaser/Placement Agent understands that the Issuer is not a foreign investment fundsubject to the Swiss Investment Fund Act of 18 March 1994 and no authorisation from the SwissFederal Banking Commission (“ FBC ”) has been obtained in connection with the offering anddistribution of the Notes in Switzerland. Accordingly, the Initial Purchaser/Placement Agent agrees

that the Notes may not be publicly offered or distributed in or from Switzerland, and the InitialPurchaser/Placement Agent agrees that neither the Offering Memorandum nor any other offeringmaterials relating to any of the Notes may be publicly distributed in connection with any such offeringor distribution. The Initial Purchaser/Placement Agent understands that the Notes may, however, beoffered and the Offering Memorandum may be distributed in Switzerland in accordance with certainexemptions granted under the Swiss Investment Fund Act or its interpretation by the FBC. No

publicity (as defined in the Circular of 1 July 2003 released by the FBC defining the term ‘publicsolicitation’ or ‘public advertisement’ pursuant to the Swiss Investment Fund Law) may be made for the Issuer or the Notes in Switzerland. The Offering Memorandum is for the respective recipient onlyand may not in any way be forwarded to any other Person or to the public in Switzerland. Any use inthe Offering Memorandum of the terms “fund” or “investment”, or terms with similar meanings,should not be interpreted to imply that the FBC has reviewed or given their approval to any

information contained therein.United Kingdom

The Initial Purchaser/Placement Agent has agreed that:

(a) it has only communicated or caused to be communicated, and will only communicate or causeto be communicated any invitation or inducement to engage in investment activity (within themeaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the

Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect toanything done by it in relation to the Notes in, from or otherwise involving the United

Kingdom.Germany

The Notes may not be offered or sold in the Federal Republic of Germany other than in compliancewith the restrictions contained in the German Securities Prospectus Act ( Wertpapierprospektgesetz ),the German Investment Act ( Investmentgesetz ), respectively, and any other laws and regulationsapplicable in the Federal Republic of Germany governing the issue, the offering and the sale of securities.

The Notes may not actually be, or intended to be distributed by way of public offering, publicadvertisement or in a similar manner within the meaning of the German Securities Prospectus Act andthe German Investment Act nor shall the distribution of this Offering Memorandum or any other document relating to the Notes constitute such public offer. In addition, the InitialPurchaser/Placement Agent has agreed that it has offered, sold or advertised and that it will offer, sell



226

or advertise the Notes only to qualified investors (“ Qualified Investors ”) within the meaning of Section 2 No. 6 of the German Securities Prospectus Act in the Federal Republic of Germany and thisOffering Memorandum may not be passed on to any other person or entity in the Federal Republic of Germany. Furthermore, each subsequent transferee/purchaser of the Notes will be deemed torepresent that if it is a person or entity in the Federal Republic of Germany it is a Qualified Investor and it agrees not to offer, sell or advertise the Notes to any person or entity in the Federal Republic of Germany who is not a Qualified Investor.

This Offering Memorandum has not been approved by or notified to and deposited with the GermanFederal Financial Supervisory Authority ( Bundesanstalt für Finanzdienstleistungsaufsicht – Bafin )and the Notes are not authorised for public distribution in the Federal Republic of Germany.

Prospective German investors in the Notes are urged to seek independent tax advice and to consulttheir professional advisers as to the legal and tax consequences that may arise from the application of the German Investment Tax Act ( Investmentgesetz ) to the Notes and neither the Issuer (nor the InitialPurchaser/Placement Agent) accepts any responsibility in respect of the German tax position of the

Notes.

European Economic Area In relation to each Member State of the European Economic Area which has implemented theProspectus Directive (each, a “ Relevant Member State ”), the Initial Purchaser/Placement Agent hasrepresented and agreed that with effect from and including the date on which the Prospectus Directiveis implemented in that Relevant Member State (the “ Relevant Implementation Date ”) it has notmade and will not make an offer of Notes to the public in that Relevant Member State prior to the

publication of this Offering Memorandum in relation to the Notes which has been approved by thecompetent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all inaccordance with the Prospectus Directive, except that it may, with effect from and including theRelevant Implementation Date, make an offer of the Notes to the public in that Relevant Member

State at any time:(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not

so authorised or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees duringthe last financial year, (2) a total balance sheet of more than €43,000,000 and (3) an annualnet turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;or

(c) in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of the Notes to the public” in relation toany Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by anymeasure implementing the Prospectus Directive in that Member State and the expression “ProspectusDirective” means Directive 2003/71/EC and includes any relevant implementing measure in eachRelevant Member State.

General

Other than the application for approval of this Offering Memorandum by the Financial Regulator inIreland, no action has been or will be taken in any jurisdiction that would permit a public offering of

the Notes, or the possession, circulation or distribution of this Offering Memorandum or any other material relating to the Issuer, the Notes in any jurisdiction where action for such purpose is required.Accordingly, the Notes may not be offered or sold, directly or indirectly, and neither this Offering



227

Memorandum nor any other offering material or advertisements in connection with the Notes may bedistributed or published, in or from any country or jurisdiction except under circumstances that willresult in compliance with any applicable rules and regulations of any such country or jurisdiction.

The Initial Purchaser/Placement Agent represents and agrees that it has not, directly or indirectly,offered, sold, transferred or delivered and will not, directly or indirectly, offer, sell, transfer or deliver any Notes in denominations (or, in the case of Notes issued at a discount, issue prices) less than

€250,000 in the case of Rule 144A Notes, €100,000 (or the equivalent thereof in other currencies) inthe case of Regulation S Notes to anyone anywhere in the world other than to banks, investment

banks, pension funds, insurance companies, securities firms, investment institutions, centralgovernments, large international and supranational organisations, and other comparable entities,including, inter alios , treasuries and finance companies of large enterprises, which are active on aregular and professional basis in the financial markets for their own account.



228

TRANSFER RESTRICTIONS

Because of the following restrictions, purchasers are advised to consult legal counsel prior to makingany offer, resale, pledge or transfer of the Notes.

A beneficial interest in a Regulation S Global Certificate may be transferred to a person who wishes

to take delivery of such interest through a Rule 144A Global Certificate only upon receipt by theTransfer Agent of a written certification (in the applicable form provided in the Trust Deed) to theeffect that such transfer is being made to a person that is a QIB/QP and in accordance with anyapplicable securities laws of any state of the United States or any other jurisdiction. U.S. Persons maynot hold an interest in a Regulation S Global Certificate at any time. A beneficial interest in aRule 144A Global Certificate may be transferred to a person who wishes to take delivery of suchinterest through a Regulation S Global Certificate of such Class only upon receipt by the Transfer Agent of a written certification from the transferor (in the applicable form provided in the Trust Deed)to the effect that such transfer is being made in accordance with Regulation S.

A beneficial interest in an Accredited Investor Definitive Certificate may be transferred to a personwho wishes to take delivery of such interest through an Accredited Investor Definitive Certificate of

such Class only upon receipt by the Registrar of a written certification from the transferor (in theapplicable form provided in the Trust Deed) to the effect that such transfer is being made to a personthat is an Accredited Investor which is also an Eligible ICA Investor or to a person that is not a U.S.Person and outside the United States in accordance with Regulation S and in accordance with anyapplicable securities laws of any state of the United States or any other jurisdiction.

Rule 144A Notes

Each prospective purchaser of Rule 144A Notes, by accepting delivery of this Offering Memorandum,will be deemed to have represented and agreed as follows:

(a) The purchaser acknowledges that this Offering Memorandum is personal to it and does notconstitute an offer to any other person or to the public generally to subscribe for or otherwiseacquire Notes other than pursuant to Rule 144A under the Securities Act, in OffshoreTransactions in accordance with Regulation S under the Securities Act. Distribution of thisOffering Memorandum, or disclosure of any of its contents to any person other than suchofferee and those persons, if any, retained to advise it with respect thereto is unauthorised andany disclosure of any of its contents, without the prior written consent of the Issuer, is

prohibited.

(b) The purchaser agrees not to make any photocopies of this Offering Memorandum or anydocuments referred to herein and, if such person does not purchase such Notes or the offeringis terminated, to return this Offering Memorandum and all documents referred to herein to theArranger, the Initial Purchaser/Placement Agent or the Affiliates thereof who furnished thisOffering Memorandum and those documents.

(c) The purchaser further understands that no approved prospectus will be published in respect of Accredited Investor Note within any of the Member States of the European Economic Area(“EEA ”) other than the Republic of Ireland and that as a result it must not engage in anyconduct which would require the publication of such an approved prospectus in any EEAMember State. The purchaser, where resident in an EEA Member State, has also informeditself of any restrictions or prohibitions on solicitations as applicable to the place of hisresidence and confirms that the purchase by it from the Issuer of Accredited Investor Notewill not violate such restrictions or prohibitions.

(d) The purchaser (a) is a Qualified Institutional Buyer as defined in Rule 144A, (b) is aware thatthe sale of such Rule 144A Notes to it is being made in reliance on Rule 144A (or in relation

to initial the sale of the Class A-1 Notes, Section 4(2) of the Securities Act), (c) is acquiringsuch Notes for its own account or for the account of a QIB as to which the purchaser





230

the purchaser’s and each such account’s assets (except when each beneficial owner of the purchaser and each such account is a QP). The purchaser understands and agrees that any purported transfer of the Notes to a purchaser that does not comply with the requirements of this paragraph (h) will be of no force and effect, will be void ab initio and the Issuer will havethe right to direct the purchaser to transfer its Rule 144A Notes to a Person who meets theforegoing criteria.

(i) The purchaser understands that pursuant to the terms of the Trust Deed, the Issuer has agreedthat the Rule 144A Notes offered in reliance on Rule 144A (or in relation to the initial sale of the Class A-1 Notes, Section 4(2) of the Securities Act) will bear the legend set forth below,and, will issue will be represented by one or more Rule 144A Notes.

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THEUNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIESACT ”), AND THE ISSUER HAS NOT BEEN REGISTERED UNDER THE UNITEDSTATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE“INVESTMENT COMPANY ACT ”). THE HOLDER HEREOF, BY PURCHASING THE

NOTES IN RESPECT OF WHICH THIS CERTIFICATE HAS BEEN ISSUED, AGREESFOR THE BENEFIT OF THE ISSUER THAT THE NOTES REPRESENTED BY THISCERTIFICATE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISETRANSFERRED OR DELIVERED, ONLY (A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THEMEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITSOWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONALBUYER, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144AUNDER THE SECURITIES ACT IN A PRINCIPAL AMOUNT OUTSTANDING OF NOTLESS THAN €250,000 FOR THE PURCHASER AND FOR EACH ACCOUNT FOR WHICH IT IS ACTING, OR (2) IN OFFSHORE TRANSACTIONS COMPLYING WITHRULE 903 OR RULE 904 OF REGULATION S OF THE SECURITIES ACT IN APRINCIPAL AMOUNT OUTSTANDING OF NOT LESS THAN €100,000 FOR THEPURCHASER AND FOR EACH ACCOUNT FOR WHICH IT IS ACTING AND, IN THECASE OF CLAUSE (1), TO A PURCHASER THAT (U) IS A QUALIFIED PURCHASER FOR PURPOSES OF SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT,(V) WAS NOT FORMED FOR THE PURPOSE OF INVESTING IN THE ISSUER (EXCEPT WHEN EACH BENEFICIAL OWNER OF THE PURCHASER IS AQUALIFIED PURCHASER), (W) HAS RECEIVED THE NECESSARY CONSENT FROMITS BENEFICIAL OWNERS WHEN THE PURCHASER IS A PRIVATE INVESTMENTCOMPANY FORMED BEFORE APRIL 30, 1996, (X) THAT THE NOTES PURCHASEDDIRECTLY OR INDIRECTLY BY IT CONSTITUTE AN INVESTMENT OF NO MORETHAN 40 PER CENT. OF THE PURCHASER’S AND EACH SUCH ACCOUNT’SASSETS (EXCEPT WHEN EACH BENEFICIAL OWNER OF THE PURCHASER AND

EACH SUCH ACCOUNT IS A QP), (Y) IS NOT A BROKER-DEALER THAT OWNSAND INVESTS ON A DISCRETIONARY BASIS LESS THAN U.S.$25,000,000 INSECURITIES OF UNAFFILIATED ISSUERS AND (Z) IS NOT A PENSION, PROFITSHARING OR OTHER RETIREMENT TRUST FUND OR PLAN IN WHICH THEPARTNERS, BENEFICIARIES OR PARTICIPANTS, AS APPLICABLE, MAYDESIGNATE THE PARTICULAR INVESTMENTS TO BE MADE, AND IN ATRANSACTION THAT MAY BE EFFECTED WITHOUT LOSS OF ANY APPLICABLEINVESTMENT COMPANY ACT EXEMPTION AND (B) IN ACCORDANCE WITH ALLAPPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES ANDANY OTHER APPLICABLE JURISDICTIONS. ANY TRANSFER IN VIOLATION OFTHE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE,

NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER,THE TRUSTEE OR ANY INTERMEDIARY. IN ADDITION TO THE FOREGOING, THE





232

INTEREST HEREIN DOES NOT AND WILL NOT RESULT IN A NON-EXEMPTPROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL, CHURCHOR NON-U.S. PLAN, A NON-EXEMPT VIOLATION OF ANY SIMILAR LAWS); AND(II) THIS NOTE OR ANY INTEREST HEREIN WILL NOT BE SOLD OR OTHERWISETRANSFERRED OR DELIVERED OTHER THAN TO AN ACQUIRER OR TRANSFEREE THAT IS DEEMED (OR IF REQUIRED BY THE TRUST DEED,CERTIFIED) TO REPRESENT AND AGREE WITH RESPECT TO ITS ACQUISITION,HOLDING AND DISPOSITION OF THIS NOTE TO THE SAME EFFECT AS THEACQUIRER’S REPRESENTATION AND AGREEMENT SET FORTH IN THISSENTENCE.] 1

[BY ITS PURCHASE OR HOLDING OF THIS NOTE OR ANY INTEREST HEREIN,EACH BENEFICIAL OWNER HEREOF, AND EACH FIDUCIARY ACTING ONBEHALF OF THE BENEFICIAL OWNER (BOTH IN ITS INDIVIDUAL ANDCORPORATE CAPACITY), WILL BE DEEMED OR REQUIRED IN WRITING, ASAPPLICABLE, TO REPRESENT AND AGREE THAT, DURING THE PERIOD ITHOLDS ANY INTEREST IN THIS NOTE THAT SUCH ACQUIRER OR TRANSFEREE(1) EITHER (A) IS NOT, AND IT IS NOT ACTING ON BEHALF OF, AN EMPLOYEEBENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEERETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ ERISA ”), THATIS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OFERISA, A PLAN TO WHICH SECTION 4975 OF THE U.S. INTERNAL REVENUECODE OF 1986, AS AMENDED (“ CODE ”) APPLIES, OR AN ENTITY WHOSEUNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF SUCH ANEMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY (EACH,A “ BENEFIT PLAN INVESTOR ”), OR A GOVERNMENTAL, CHURCH OR NON-U.S.PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIALLY SIMILAR TO THE

FIDUCIARY RESPONSIBILITY AND/OR THE PROHIBITED TRANSACTIONPROVISIONS OF ERISA AND/OR SECTION 4975 OF THE CODE (“ SIMILAR LAWS ”)AND/OR LAWS OR REGULATIONS THAT PROVIDE THAT THE ASSETS OF THEISSUER COULD BE DEEMED TO INCLUDE “PLAN ASSETS” OF SUCH PLAN, AND

NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD THIS NOTEOR ANY INTEREST HEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLANINVESTOR OR SUCH A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN OR (B) IS,OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN,AND SUCH ACQUISITION DOES NOT AND WILL NOT RESULT IN A NON-EXEMPTVIOLATION OF ANY SIMILAR LAWS AND WILL NOT SUBJECT THE ISSUER OR THE COLLATERAL MANAGER TO ANY LAWS, RULES OR REGULATIONSAPPLICABLE TO SUCH PLAN SOLELY AS A RESULT OF THE INVESTMENT IN

THE ISSUER BY SUCH PLAN; AND (2) THIS NOTE OR ANY INTEREST HEREINWILL NOT BE SOLD OR OTHERWISE TRANSFERRED OR DELIVERED OTHER THAN TO AN ACQUIRER OR TRANSFEREE THAT IS DEEMED (OR, IF REQUIREDBY THE TRUST DEED, CERTIFIED) TO MAKE THESE SAME REPRESENTATIONS,WARRANTIES AND AGREEMENTS WITH RESPECT TO ITS ACQUISITION,HOLDING AND DISPOSITION OF THIS NOTE. NO ACQUISITION BY OR TRANSFER TO A BENEFIT PLAN INVESTOR OF THIS NOTE, OR ANY INTERESTHEREIN, WILL BE EFFECTIVE, AND NONE OF THE ISSUER, THE REGISTRAR, THETRANSFER AGENT OR THE TRUSTEE WILL RECOGNISE ANY SUCHACQUISITION OR TRANSFER. IN THE EVENT THAT THE ISSUER DETERMINESTHAT THIS NOTE IS HELD BY A BENEFIT PLAN INVESTOR, THE ISSUER MAY

1 This paragraph will only be inserted in the legend for the Class A-1 Notes, the Class A-2a Notes and the Class A-2b Notes.



233

CAUSE A SALE OR TRANSFER IN THE MANNER DESCRIBED IN THE OFFERINGMEMORANDUM.] 2

THE FAILURE TO PROVIDE THE ISSUER, THE TRUSTEE AND ANY PAYINGAGENT WITH THE APPLICABLE U.S. FEDERAL INCOME TAX CERTIFICATIONS(GENERALLY, AN INTERNAL REVENUE SERVICE FORM W-9 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATESPERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE OR ANAPPLICABLE INTERNAL REVENUE SERVICE FORM W-8 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITEDSTATES PERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE)MAY RESULT IN U.S. FEDERAL BACK-UP WITHHOLDING FROM PAYMENTS TOTHE HOLDER IN RESPECT OF THE NOTES REPRESENTED BY THIS CERTIFICATE.

EACH HOLDER AND BENEFICIAL OWNER OF THIS NOTE THAT IS NOT A“UNITED STATES PERSON” (AS DEFINED IN SECTION 7701(a)(30) OF THE CODE)WILL MAKE, OR BY ACQUIRING SUCH NOTE OR AN INTEREST THEREIN WILLBE DEEMED TO MAKE, A REPRESENTATION TO THE EFFECT THAT (A) EITHER (I) IT IS NOT A BANK EXTENDING CREDIT PURSUANT TO A LOAN AGREEMENTENTERED INTO IN THE ORDINARY COURSE OF ITS TRADE OR BUSINESS(WITHIN THE MEANING OF SECTION 881(c)(3)(A) OF THE CODE), OR (II) IT IS APERSON THAT IS ELIGIBLE FOR BENEFITS UNDER AN INCOME TAX TREATYWITH THE UNITED STATES THAT ELIMINATES U.S. FEDERAL INCOMETAXATION OF U.S. SOURCE INTEREST NOT ATTRIBUTABLE TO A PERMANENTESTABLISHMENT IN THE UNITED STATES, AND (B) IT IS NOT PURCHASING THE

NOTE IN ORDER TO REDUCE ITS U.S. FEDERAL INCOME TAX LIABILITY OR PURSUANT TO A TAX AVOIDANCE PLAN.

EACH HOLDER AND EACH BENEFICIAL OWNER OF A CLASS A-1 NOTE, CLASSA-2a NOTE, CLASS A-2b NOTE, OR ANY INTEREST HEREIN, BY ACCEPTANCE OFSUCH NOTE OR ITS INTEREST IN SUCH NOTE, AS THE CASE MAY BE, SHALL BEDEEMED TO HAVE AGREED TO TREAT, AND SHALL TREAT, SUCH NOTE ASDEBT OF THE ISSUER FOR UNITED STATES FEDERAL INCOME TAX PURPOSES.

EACH HOLDER AND EACH BENEFICIAL OWNER OF A CLASS S-1SUBORDINATED NOTE, BY ACCEPTANCE OF SUCH NOTE, OR ITS INTEREST INSUCH NOTE, AS THE CASE MAY BE, SHALL BE DEEMED TO HAVE AGREED TOTREAT, AND SHALL TREAT, SUCH NOTE AS EQUITY FOR U.S. FEDERAL INCOMETAX PURPOSES.

THE CLASS A-1 NOTES, CLASS A-2a NOTES, AND CLASS A-2b NOTESREPRESENTED BY THIS RECEIPT ARE BEING ISSUED WITH ORIGINAL ISSUE

DISCOUNT (“ OID ”). THE ISSUE PRICE, TOTAL AMOUNT OF OID, ISSUE DATE,THE COMPARABLE YIELD TO MATURITY AND A PROJECTED PAYMENTSCHEDULE MAY BE OBTAINED BY CONTACTING THE TRUSTEE AT ONECANADA SQUARE, LONDON E14 5AL, UNITED KINGDOM.

(j) The purchaser will not, at any time, offer to buy or offer to sell the Rule 144A Notes by anyform of general solicitation or advertising, including, but not limited to, any advertisement,article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio or seminar or meeting whose attendees have

been invited by general solicitations or advertising.

2 This paragraph will only be inserted in the legend for the Class S-1 Subordinated Notes.



234

(k) The purchaser is not purchasing the Rule 144A Notes with the intent or purpose of evading,either alone or in conjunction with any other person, the provisions of the InvestmentCompany Act.

(l) The purchaser is not purchasing such Rule 144A Notes with a view toward the resale,distribution or other disposition thereof in violation of the Securities Act. It has suchknowledge and experience in financial and business matters as to be capable of evaluating themerits and risks of its investment in the Rule 144A Notes, and the purchaser and any accountsfor which it is acting are each able to bear the economic risk of its investment. The purchaser understands that an investment in the Rule 144A Notes involves certain risks, including therisk of loss of all or a substantial part of its investment under certain circumstances. The

purchaser has had access to such financial and other information concerning the Issuer andthe Rule 144A Notes as it deemed necessary or appropriate in order to make an informedinvestment decision with respect to its purchase of the Rule 144A Notes, including anopportunity to ask questions of, and request information from, the Issuer.

(m) In connection with the purchase of the Rule 144A Notes: (i) none of the Issuer, the InitialPurchaser/Placement Agent, the Arranger, the Collateral Manager, the CollateralAdministrator or the Trustee is acting as a fiduciary or financial or investment manager for the purchaser; (ii) the purchaser is not relying (for purposes of making any investmentdecision or otherwise) upon any advice, counsel or representations (whether written or oral)of the Issuer, the Initial Purchaser/Placement Agent, the Arranger, the Collateral Manager, theCollateral Administrator or the Trustee other than in this Offering Memorandum for suchRule 144A Notes and any representations expressly set forth in a written agreement with such

party; (iii) none of the Issuer, the Initial Purchaser/Placement Agent, the Arranger, theCollateral Manager, the Collateral Administrator or the Trustee has given to the purchaser (directly or indirectly through any other person) any assurance, guarantee, or representationwhatsoever as to the expected or projected success, profitability, return, performance, result,effect, consequence, or benefit (including legal, regulatory, tax, financial, accounting, or otherwise) as to an investment in the Rule 144A Notes; (iv) the purchaser has consulted withits own legal, regulatory, tax, business, investment, financial, and accounting advisers to theextent it has deemed necessary, and it has made its own investment decisions (includingdecisions regarding the suitability of any transaction pursuant to the Trust Deed) based uponits own judgement and upon any advice from such advisers as it has deemed necessary andnot upon any view expressed by the Issuer, the Arranger, the Initial Purchaser/PlacementAgent, the Trustee, the Collateral Manager or the Collateral Administrator; (v) the purchaser has evaluated the rates, prices or amounts and other terms and conditions of the purchase andsale of the Rule 144A Notes with a full understanding of all of the risks thereof (economicand otherwise), and it is capable of assuming and willing to assume (financially andotherwise) those risks; and (vi) the purchaser is a sophisticated investor.

(n) Prospective purchasers are hereby notified that sellers of the Notes may be relying on theexemption from the provisions of Section 5 of the Securities Act provided by Rule 144A,Section 4(2) of the Securities Act or Regulation S.

(o) In the case of each acquirer and/or holder of any Class A Note (or any interest therein), andeach fiduciary acting on behalf of the acquirer or holder (both in its fiduciary and corporatecapacity), such acquirer or transferor, (1) either (i) is not, and it is not acting on behalf of (andfor so long as it holds any such Note or any interest therein will not be, and will not be actingon behalf of), an employee benefit plan (as defined in Section 3(3) of the U.S. EmployeeRetirement Income Security Act of 1974, as amended (“ ERISA ”)) subject to the provisionsof part 4 of subtitle B of Title I of ERISA, a plan to which Section 4975 of the U.S. InternalRevenue Code of 1986, as amended (“ Code ”) applies, or any entity whose underlying assetsinclude “plan assets” by reason of such an employee benefit plan’s or plan’s investment insuch entity (each, a “ Benefit Plan Investor ”), or a governmental, church or non-U.S. planwhich is subject to any federal, state, local, non-U.S. or other laws or regulations that are



235

substantially similar to the fiduciary responsibility or prohibited transaction provisions of ERISA or the provisions of Section 4975 of the Code (“ Similar Laws ”), and no part of theassets to be used by it to acquire or hold such Notes or any interest therein constitutes theassets of any such Benefit Plan Investor or such plan, or (ii) (a) in connection with theacquisition, holding and disposition of such Note, the Benefit Plan Investor’s fiduciary hasdetermined that the Benefit Plan Investor is receiving no less, and paying no more, than“adequate consideration” (within the meaning of Section 408(b)(17) of ERISA andSection 4975(f)(10) of the Code) and (b) its acquisition, holding and disposition of such Noteor interest therein does not and will not constitute or otherwise result in a non-exempt

prohibited transaction under Section 406 of ERISA or Section 4975 of the Code (or, in thecase of a governmental, church or non-U.S. plan, a non-exempt violation of any Similar Laws); and (2) such Note or any interest therein will not be sold or otherwise transferred other than to an acquirer or transferee that is deemed (or if required by the Trust Deed, certified) tomake these same representations, warranties and agreements with respect to its acquisition,holding and disposition of such Notes.

(p) In the case of each acquirer and/or holder of any ERISA Limited Note (or any interesttherein), and each fiduciary acting on behalf of the acquirer or holder (both in its fiduciaryand corporate capacity), such acquirer or transferor, (1) either (i) is not, and is not acting on

behalf of (and for so long as it holds such Note (or any interest therein) will not be, or beacting on behalf of), a Benefit Plan Investor or a governmental, church or non-U.S. planwhich is subject to any Similar Laws and/or laws or regulations that provide that the assets of the Issuer could be deemed to include “plan assets” of such plan, and no part of the assetsused by it to acquire or hold such Note or any interest therein constitutes the assets of suchBenefit Plan Investor or such plan, or (ii) is, or is acting on behalf of, a governmental, churchor non-U.S. plan, and such acquisition or holding of such Note does not and will not result ina non-exempt violation of any Similar Laws, and will not subject the Issuer or the CollateralManager to any laws, rules or regulations applicable to such plan solely as a result of theinvestment in the Issuer by such plan; and (2) such Note or any interest therein will not be

sold or otherwise transferred other than to an acquirer or transferee that is deemed (or if required by the Trust Deed, certified) to make these same representations, warranties andagreements with respect to its acquisition, holding and disposition of such Note.

(q) Each holder and beneficial owner of a Rule 144A Note, by acceptance of its Rule 144A Noteor its interest in a Note, shall be deemed to understand and acknowledge that failure to

provide the Issuer, the Trustee or any Paying Agent with the applicable U.S. federal incometax certifications (generally, a United States Internal Revenue Service Form W-9 (or successor applicable form) in the case of a person that is a “United States person” within themeaning of Section 7701(a)(30) of the Code or an appropriate United States Internal RevenueService Form W-8 (or successor applicable form) in the case of a person that is not a “UnitedStates person” within the meaning of Section 7701(a)(30) of the Code) may result in U.S.

federal back-up withholding from payments in respect of such Note.(r) Each holder and beneficial owner of a Rule 144A Note represented by this Note that is not a

“United States person” (as defined in section 7701(a)(30) of the Code) will make, or byacquiring such Note or an interest therein will be deemed to make, a representation to theeffect that (A) either (i) it is not a bank extending credit pursuant to a loan agreement enteredinto in the ordinary course of its trade or business (within the meaning of section 881(c)(3)(A)of the Code), or (ii) it is a person that is eligible for benefits under an income tax treaty withthe United States that eliminates U.S. federal income taxation of U.S. source interest notattributable to a permanent establishment in the United States, and (B) it is not purchasing the

Note in order to reduce its U.S. federal income tax liability or pursuant to a tax avoidance plan.

(s) Each person purchasing Rule 144A Notes from the Initial Purchaser/Placement Agent or through an Affiliate of the Initial Purchaser/Placement Agent acknowledges that (i) it has



236

been afforded an opportunity to request from the Issuer thereof and to review, and it hasreceived, all additional information considered by it to be necessary to verify the accuracy of the information herein; (ii) it has not relied on the Initial Purchaser/Placement Agent or any

person affiliated with the Initial Purchaser/Placement Agent in connection with itsinvestigation of the accuracy of the information contained in this Offering Memorandum or its investment decision; and (iii) no person has been authorised to give any information or tomake any representation concerning the Issuer or the Rule 144A Notes other than thosecontained in this Offering Memorandum and, if given or made, such other information or representation should not be relied upon as having been authorised by the Issuer or the InitialPurchaser/Placement Agent.

(t) The purchaser acknowledges that the Issuer, the Transfer Agent, the Registrar, the InitialPurchaser/Placement Agent and their respective Affiliates, and others will rely upon the truthand accuracy of the foregoing acknowledgements, representations and agreements. If it isacquiring the Rule 144A Notes for the account of a QIB, it represents that it has soleinvestment discretion with respect to such account and that it has full power to make theforegoing acknowledgements, representations and agreements on behalf of such account.

Regulation S Notes

Each purchaser of Regulation S Notes (other than the Accredited Investor Notes) will be deemed tohave represented and agreed as follows:

(a) The purchaser is located outside the United States and is not a U.S. Person.

(b) The purchaser understands that the Regulation S Notes have not been and will not beregistered under the Securities Act and that the Issuer has not registered and will not register under the Investment Company Act. It agrees, for the benefit of the Issuer, the Arranger, theInitial Purchaser/Placement Agent and any of their Affiliates, that, if it decides to resell,

pledge or otherwise transfer such Regulation S Notes (or any beneficial interest or participation therein) purchased by it, any offer, sale or transfer of such Regulation S Notes(or any beneficial interest or participation therein) will be made in compliance with theSecurities Act and only (I) to a U.S. Person or a person within the United States that (A) itreasonably believes is a QIB/QP, (B) that any purchaser or any account for which the

purchaser is acquiring such Note: (a) was not formed for the specific purpose of investing inthe Notes (except when each beneficial owner of the purchaser and each such account is aQP; (b) to the extent the purchaser is a private investment company formed before April 30,1996, the purchaser has received the necessary consent from its beneficial owners; (c) is not a

pension, profit-sharing or other retirement trust fund or plan in which the partners, beneficiaries or participants, as applicable, may designate the particular investments to bemade; and (d) is not a broker-dealer that owns and invests on a discretionary basis less thanU.S.$25,000,000 in securities of unaffiliated issues. Further, the purchaser agrees with

respect to itself and each such account: (x) that it shall not hold such Notes for the benefit of any other person and shall be the sole beneficial owner thereof for all purposes; (y) that itshall not sell participation interests in the Notes or enter into any other arrangement pursuantto which any other person shall be entitled to a beneficial interest in the distributions on the

Notes; and (z) that the Notes purchased directly or indirectly by it constitute an investment of no more than 40 per cent. of the purchaser’s and each such account’s assets (except wheneach beneficial owner of the purchaser and each such account is a QP), or (II) to a non-U.S.Person in Offshore Transactions in accordance with Rule 903 or Rule 904 (as applicable)under Regulation S.

(c) The purchaser further understands that no approved prospectus will be published in respect of Accredited Investor Note within any of the Member States of the European Economic Area

(“EEA ”) other than the Republic of Ireland and that as a result it must not engage in anyconduct which would require the publication of such an approved prospectus in any EEA



237

Member State. The Purchaser, where resident in an EEA Member State, has also informeditself of any restrictions or prohibitions on solicitations as applicable to the place of hisresidence and confirms that the purchase by it from the Issuer of Accredited Investor Notewill not violate such restrictions or prohibitions.

(d) The purchaser understands that pursuant to the terms of the Trust Deed, the Issuer has agreedthat the Regulation S Notes offered in reliance on Regulation S will bear the legend set forth

below, and, on issue, will be represented by one or more Regulation S Notes. TheRegulation S Notes may not at any time be held by or on behalf of U.S. Persons. Before anyinterest in a Regulation S Notes may be offered, resold, pledged or otherwise transferred to a

person who takes delivery in the form of an interest in a Rule 144A Note, the transferor will be required to provide the Trustee with a written certification (in the form provided in theTrust Deed) as to compliance with the transfer restrictions.

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THEUNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIESACT ”), AND THE ISSUER HAS NOT BEEN REGISTERED UNDER THE UNITEDSTATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE“INVESTMENT COMPANY ACT ”). THE HOLDER HEREOF, BY PURCHASING THE

NOTES IN RESPECT OF WHICH THIS CERTIFICATE HAS BEEN ISSUED, AGREESFOR THE BENEFIT OF THE ISSUER THAT THE NOTES REPRESENTED BY THISCERTIFICATE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISETRANSFERRED OR DELIVERED, ONLY (A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THEMEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITSOWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONALBUYER, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144AUNDER THE SECURITIES ACT IN A PRINCIPAL AMOUNT OUTSTANDING OF NOTLESS THAN €250,000 FOR THE PURCHASER AND FOR EACH ACCOUNT FOR WHICH IT IS ACTING, OR (2) IN OFFSHORE TRANSACTIONS COMPLYING WITHRULE 903 OR RULE 904 OF REGULATION S OF THE SECURITIES ACT IN APRINCIPAL AMOUNT OUTSTANDING OF NOT LESS THAN €100,000 FOR THEPURCHASER AND FOR EACH ACCOUNT FOR WHICH IT IS ACTING, AND IN THECASE OF CLAUSE (1), TO A PURCHASER THAT (U) IS A QUALIFIED PURCHASER FOR PURPOSES OF SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT,(V) WAS NOT FORMED FOR THE PURPOSE OF INVESTING IN THE ISSUER (EXCEPT WHEN EACH BENEFICIAL OWNER OF THE PURCHASER IS AQUALIFIED PURCHASER), (W) HAS RECEIVED THE NECESSARY CONSENT FROMITS BENEFICIAL OWNERS WHEN THE PURCHASER IS A PRIVATE INVESTMENTCOMPANY FORMED BEFORE APRIL 30, 1996, (X) THAT THE NOTES PURCHASEDDIRECTLY OR INDIRECTLY BY IT CONSTITUTE AN INVESTMENT OF NO MORE

THAN 40 PER CENT. OF THE PURCHASER’S AND EACH SUCH ACCOUNT’SASSETS (EXCEPT WHEN EACH BENEFICIAL OWNER OF THE PURCHASER ANDEACH SUCH ACCOUNT IS A QP), (Y) IS NOT A BROKER-DEALER THAT OWNSAND INVESTS ON A DISCRETIONARY BASIS LESS THAN U.S.$25,000,000 INSECURITIES OF UNAFFILIATED ISSUERS AND (Z) IS NOT A PENSION, PROFITSHARING OR OTHER RETIREMENT TRUST FUND OR PLAN IN WHICH THEPARTNERS, BENEFICIARIES OR PARTICIPANTS, AS APPLICABLE, MAYDESIGNATE THE PARTICULAR INVESTMENTS TO BE MADE, AND IN ATRANSACTION THAT MAY BE EFFECTED WITHOUT LOSS OF ANY APPLICABLEINVESTMENT COMPANY ACT EXEMPTION AND (B) IN ACCORDANCE WITH ALLAPPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES ANDANY OTHER APPLICABLE JURISDICTION. ANY TRANSFER IN VIOLATION OF

THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE,



238

NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER,THE TRUSTEE OR ANY INTERMEDIARY. IN ADDITION TO THE FOREGOING, THEISSUER MAINTAINS THE RIGHT TO DIRECT THE RESALE OF ANY NOTESPREVIOUSLY TRANSFERRED TO NON-PERMITTED HOLDERS (AS DEFINED INTHE TRUST DEED) IN ACCORDANCE WITH AND SUBJECT TO THE TERMS OFTHE TRUST DEED. EACH TRANSFEROR OF THE NOTES REPRESENTED BY THISCERTIFICATE WILL PROVIDE NOTICE OF THE TRANSFER RESTRICTIONS SETFORTH HEREIN AND IN THE TRUST DEED TO ITS TRANSFEREE.

(e) The purchaser understands that the Trust Deed requires the Issuer to demand that any beneficial owner of Regulation S Notes who is determined to be a U.S. Person at the time of acquisition of such Regulation S Notes to sell all its right, title and interest in suchRegulation S Notes (a) to a person who is both a Qualified Purchaser and a QualifiedInstitutional Buyer who will take delivery of its interest in such Regulation S Notes in theform of a Note in a transaction meeting the requirements of Rule 144A under the SecuritiesAct, as applicable, or (b) to a person who will take delivery of its interest in suchRegulation S Notes in the form of an interest in a Regulation S Note and who is not a U.S.Person in a transaction meeting the requirements of Regulation S and, if it does not complywith such demand within 14 days thereof, the Issuer shall sell its interest in the Regulation S

Note.

(f) The purchaser understands that the Trust Deed requires the Issuer to demand that any beneficial owner of an ERISA Limited Note who is determined to be a Benefit Plan Investor sell all its right, title and interest in such ERISA Limited Note to a person who is not a BenefitPlan Investor, and if the holder does not comply with such demand within 14 days thereof, theIssuer shall sell such holder’s interest in the ERISA Limited Note.

EACH PURCHASER OF THE NOTES REPRESENTED BY THIS CERTIFICATE OR ANY BENEFICIAL INTEREST HEREIN UNDERSTANDS THAT THE ISSUER MAYRECEIVE A LIST OF PARTICIPANTS HOLDING POSITIONS IN THE NOTES FROMONE OR MORE BOOK-ENTRY DEPOSITORIES.

TRANSFERS OF THE NOTES REPRESENTED BY THIS CERTIFICATE OR OFPORTIONS OF THE NOTES REPRESENTED BY THIS CERTIFICATE SHOULD BELIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SETFORTH IN THE TRUST DEED REFERRED TO HEREIN.

PRINCIPAL OF THE NOTES REPRESENTED BY THIS CERTIFICATE IS PAYABLEAS SET FORTH HEREIN. ACCORDINGLY, THE PRINCIPAL AMOUNTOUTSTANDING OF THE NOTES REPRESENTED BY THIS CERTIFICATE AT ANYTIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. ANYPERSON ACQUIRING THE NOTES REPRESENTED BY THIS CERTIFICATE MAY

ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THEREGISTRAR.

[BY ITS PURCHASE OR HOLDING OF THIS NOTE OR ANY INTEREST HEREIN,EACH BENEFICIAL OWNER HEREOF, AND EACH FIDUCIARY ACTING ONBEHALF OF THE BENEFICIAL OWNER (BOTH IN ITS FIDUCIARY ANDCORPORATE CAPACITY), IS DEEMED TO REPRESENT AND WARRANT THATSUCH ACQUIRER OR TRANSFEREE (I) EITHER (A) IS NOT (AND FOR SO LONG ASIT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOTACTING ON BEHALF OF (AND FOR SO LONG AS IT HOLDS THIS NOTE OR ANINTEREST HEREIN WILL NOT BE ACTING ON BEHALF OF), AN EMPLOYEEBENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEE

RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ ERISA ”), THATIS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF



239

ERISA, A PLAN TO WHICH SECTION 4975 OF THE U.S. INTERNAL REVENUECODE OF 1986, AS AMENDED (“ CODE ”) APPLIES, OR AN ENTITY WHOSEUNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF SUCH ANEMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY (EACH,A “ BENEFIT PLAN INVESTOR ”), OR A GOVERNMENTAL, CHURCH OR NON-U.S.PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIALLY SIMILAR TO THEFIDUCIARY RESPONSIBILITY OR THE PROHIBITED TRANSACTION PROVISIONSOF ERISA AND/OR SECTION 4975 OF THE CODE (“ SIMILAR LAWS ”), AND NOPART OF THE ASSETS BEING USED BY IT TO ACQUIRE OR HOLD SUCH NOTE OR ANY INTEREST HEREIN CONSTITUTES THE ASSETS OF ANY SUCH BENEFITPLAN INVESTOR OR SUCH A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN, OR (B)(1) IN CONNECTION WITH THE ACQUISITION, HOLDING AND DISPOSITION OFTHIS NOTE, THE BENEFIT PLAN INVESTOR’S FIDUCIARY HAD DETERMINEDTHAT THE BENEFIT PLAN INVESTOR IS RECEIVING NO LESS, AND PAYING NOMORE, THAN “ADEQUATE CONSIDERATION” (WITHIN THE MEANING OFSECTION 408(b)(17) OF ERISA AND SECTION 4975(f)(10) OF THE CODE) AND

(2) THE ACQUISITION, HOLDING AND DISPOSITION OF THIS NOTE OR ANINTEREST HEREIN DOES NOT AND WILL NOT RESULT IN A NON-EXEMPTPROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A GOVERNMENTAL, CHURCHOR NON-U.S. PLAN, A NON-EXEMPT VIOLATION OF ANY SIMILAR LAWS); AND(II) THIS NOTE OR ANY INTEREST HEREIN WILL NOT BE SOLD OR OTHERWISETRANSFERRED OR DELIVERED OTHER THAN TO AN ACQUIRER OR TRANSFEREE THAT IS DEEMED (OR IF REQUIRED BY THE TRUST DEED,CERTIFIED) TO REPRESENT AND AGREE WITH RESPECT TO ITS ACQUISITION,HOLDING AND DISPOSITION OF THIS NOTE TO THE SAME EFFECT AS THEACQUIRER’S REPRESENTATION AND AGREEMENT SET FORTH IN THISSENTENCE.] 3

[BY ITS PURCHASE OR HOLDING OF THIS NOTE OR ANY INTEREST HEREINEACH BENEFICIAL OWNER HEREOF, AND EACH FIDUCIARY ACTING ONBEHALF OF THE BENEFICIAL OWNER (BOTH IN ITS INDIVIDUAL ANDCORPORATE CAPACITY), WILL BE DEEMED OR REQUIRED IN WRITING, ASAPPLICABLE, TO REPRESENT AND AGREE THAT, DURING THE PERIOD ITHOLDS ANY INTEREST IN THIS NOTE THAT SUCH ACQUIRER OR TRANSFEREE(1) EITHER (A) IS NOT, AND IT IS NOT ACTING ON BEHALF OF, AN EMPLOYEEBENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEERETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ ERISA ”), THATIS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OFERISA, A PLAN TO WHICH SECTION 4975 OF THE U.S. INTERNAL REVENUE

CODE OF 1986, AS AMENDED (“ CODE ”) APPLIES, OR AN ENTITY WHOSEUNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF SUCH ANEMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY (EACH,A “ BENEFIT PLAN INVESTOR ”), OR A GOVERNMENTAL, CHURCH OR NON-U.S.PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIALLY SIMILAR TO THEFIDUCIARY RESPONSIBILITY AND/OR THE PROHIBITED TRANSACTIONPROVISIONS OF ERISA AND/OR SECTION 4975 OF THE CODE (“ SIMILAR LAWS ”)AND/OR LAWS OR REGULATIONS THAT PROVIDE THAT THE ASSETS OF THEISSUER COULD BE DEEMED TO INCLUDE “PLAN ASSETS” OF SUCH PLAN, AND

NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD THIS NOTE

3 This paragraph will only be inserted in the legend for the Class A-1 Notes, the Class A-2a Notes and the Class A-2b Notes.



240

OR ANY INTEREST HEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLANINVESTOR OR SUCH A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN OR (B) IS,OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN,AND SUCH ACQUISITION DOES NOT AND WILL NOT RESULT IN A NON-EXEMPTVIOLATION OF ANY SIMILAR LAWS AND WILL NOT SUBJECT THE ISSUER OR THE COLLATERAL MANAGER TO ANY LAWS, RULES OR REGULATIONSAPPLICABLE TO SUCH PLAN SOLELY AS A RESULT OF THE INVESTMENT INTHE ISSUER BY SUCH PLAN; AND (2) THIS NOTE OR ANY INTEREST HEREINWILL NOT BE SOLD OR OTHERWISE TRANSFERRED OR DELIVERED OTHER THAN TO AN ACQUIRER OR TRANSFEREE THAT IS DEEMED (OR, IF REQUIREDBY THE TRUST DEED, CERTIFIED) TO MAKE THESE SAME REPRESENTATIONS,WARRANTIES AND AGREEMENTS WITH RESPECT TO ITS ACQUISITION,HOLDING AND DISPOSITION OF THIS NOTE. NO ACQUISITION BY OR TRANSFER TO A BENEFIT PLAN INVESTOR OF THIS NOTE, OR ANY INTERESTHEREIN, WILL BE EFFECTIVE, AND NONE OF THE ISSUER, THE REGISTRAR, THETRANSFER AGENT OR THE TRUSTEE WILL RECOGNISE ANY SUCHACQUISITION OR TRANSFER. IN THE EVENT THAT THE ISSUER DETERMINES

THAT THIS NOTE IS HELD BY A BENEFIT PLAN INVESTOR, THE ISSUER MAYCAUSE A SALE OR TRANSFER IN THE MANNER DESCRIBED IN THE OFFERINGMEMORANDUM.] 4

THE FAILURE TO PROVIDE THE ISSUER, THE TRUSTEE AND ANY PAYINGAGENT WITH THE APPLICABLE U.S. FEDERAL INCOME TAX CERTIFICATIONS(GENERALLY, AN INTERNAL REVENUE SERVICE FORM W-9 (OR SUCCESSOR APPLICABLE FORM)) IN THE CASE OF A PERSON THAT IS A “UNITED STATESPERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE OR ANAPPLICABLE INTERNAL REVENUE SERVICE FORM W-8 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITEDSTATES PERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE CODE)

MAY RESULT IN U.S. FEDERAL BACK-UP WITHHOLDING FROM PAYMENTS TOTHE HOLDER IN RESPECT OF THE NOTES REPRESENTED BY THIS CERTIFICATE.

EACH HOLDER AND BENEFICIAL OWNER OF THIS NOTE THAT IS NOT A“UNITED STATES PERSON” (AS DEFINED IN SECTION 7701(a)(30) OF THE CODE)WILL MAKE, OR BY ACQUIRING SUCH NOTE OR AN INTEREST THEREIN WILLBE DEEMED TO MAKE, A REPRESENTATION TO THE EFFECT THAT (A) EITHER (I) IT IS NOT A BANK EXTENDING CREDIT PURSUANT TO A LOAN AGREEMENTENTERED INTO IN THE ORDINARY COURSE OF ITS TRADE OR BUSINESS(WITHIN THE MEANING OF SECTION 881(c)(3)(A) OF THE CODE), OR (II) IT IS APERSON THAT IS ELIGIBLE FOR BENEFITS UNDER AN INCOME TAX TREATYWITH THE UNITED STATES THAT ELIMINATES U.S. FEDERAL INCOME

TAXATION OF U.S. SOURCE INTEREST NOT ATTRIBUTABLE TO A PERMANENTESTABLISHMENT IN THE UNITED STATES, AND (B) IT IS NOT PURCHASING THE NOTE IN ORDER TO REDUCE ITS U.S. FEDERAL INCOME TAX LIABILITY OR PURSUANT TO A TAX AVOIDANCE PLAN.

EACH HOLDER AND EACH BENEFICIAL OWNER OF A CLASS A-1 NOTE, CLASSA-2a NOTE OR CLASS A2b NOTE, OR ANY INTEREST HEREIN, BY ACCEPTANCEOF SUCH NOTE OR ITS INTEREST IN SUCH NOTE, AS THE CASE MAY BE, SHALLBE DEEMED TO HAVE AGREED TO TREAT, AND SHALL TREAT, SUCH NOTE ASDEBT OF THE ISSUER FOR UNITED STATES FEDERAL INCOME TAX PURPOSES.

EACH HOLDER AND EACH BENEFICIAL OWNER OF A CLASS S-1SUBORDINATED NOTE, BY ACCEPTANCE OF SUCH NOTE, OR ITS INTEREST IN

4 This paragraph will only be inserted in the legend for the Class S-1 Subordinated Notes.



241

SUCH A CLASS S-1 SUBORDINATED NOTE, AS THE CASE MAY BE, SHALL BEDEEMED TO HAVE AGREED TO TREAT, AND SHALL TREAT, SUCH CLASS S-1SUBORDINATED NOTE AS EQUITY FOR U.S. FEDERAL INCOME TAX PURPOSES.

THE CLASS A-1 NOTES, CLASS A-2a NOTES, AND CLASS A-2b NOTESREPRESENTED BY THIS RECEIPT ARE BEING ISSUED WITH ORIGINAL ISSUEDISCOUNT (“ OID ”). THE ISSUE PRICE, TOTAL AMOUNT OF OID, ISSUE DATE,THE COMPARABLE YIELD TO MATURITY AND A PROJECTED PAYMENTSCHEDULE MAY BE OBTAINED BY CONTACTING THE TRUSTEE AT ONECANADA SQUARE, LONDON E14 5AL, UNITED KINGDOM.

(g) The purchaser is not purchasing such Regulation S Notes with a view to the resale,distribution or other disposition thereof in violation of the Securities Act.

(h) The purchaser is aware that the sale of Regulation S Notes to it is being made in reliance onthe exemption from registration provided by Regulation S.

(i) The purchaser understands that an investment in the Regulation S Notes involves certain

risks, including the risk of loss of all or a substantial part of its investment under certaincircumstances. The purchaser has had access to such financial and other informationconcerning the Issuer and the Regulation S Notes as it deemed necessary or appropriate inorder to make an informed investment decision with respect to its acquisition of theRegulation S Notes, including an opportunity to ask questions of and request informationfrom the Issuer.

(j) In connection with the purchase of the Regulation S Notes: (i) none of the Issuer, theArranger, the Initial Purchaser/Placement Agent, the Trustee, the Collateral Administrator or the Collateral Manager is acting as a fiduciary or financial or investment manager for the

purchaser; (ii) the purchaser is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer,the Arranger, the Initial Purchaser/Placement Agent or the Collateral Manager other than thisOffering Memorandum for such Regulation S Notes and any representations expressly setforth in a written agreement with such party; (iii) none of the Issuer, the Arranger, the InitialPurchaser/Placement Agent or the Collateral Manager has given to the purchaser (directly or indirectly through any other person) any assurance, guarantee, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect,consequence, or benefit (including legal, regulatory, tax, financial, accounting, or otherwise)as to an investment in the Regulation S Notes; (iv) the purchaser has consulted with its ownlegal, regulatory, tax, business, investment, financial, and accounting advisers to the extent ithas deemed necessary, and it has made its own investment decisions (including decisionsregarding the suitability of any transaction pursuant to the Trust Deed) based upon its own

judgement and upon any advice from such advisers as it has deemed necessary and not upon

any view expressed by the Issuer, the Arranger, the Initial Purchaser/Placement Agent, theCollateral Administrator, the Trustee or the Collateral Manager; (v) the purchaser hasevaluated that the rates, prices or amounts and other terms of the purchase and sale of theRegulation S Notes with a full understanding of all of the risks thereof (economic andotherwise), and it is capable of assuming and willing to assume (financially and otherwise)those risks; and (vi) the purchaser is a sophisticated investor.

(k) The purchaser will not, at any time, offer to buy or offer to sell the Regulation S Notes by anyform of general solicitation or advertising, including, but not limited to, any advertisement,article, notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio or seminar or meeting whose attendees have

been invited by general solicitations or advertising.

(l) The purchaser will provide notice to each person to whom it proposes to transfer any interestin the Regulation S Notes of the transfer restrictions and representations set forth herein.



242

(m) ERISA. In the case of each acquirer and/or holder of any Class A Note (or any interesttherein), and each fiduciary acting on behalf of the acquirer or holder (both in its fiduciaryand corporate capacity) that such acquirer or transferor, (1) either (i) is not, and it is not actingon behalf of (and for so long as it holds any such Note or any interest therein will not be, andwill not be acting on behalf of), an employee benefit plan (as defined in Section 3(3) of theU.S. Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)) subject tothe provisions of part 4 of subtitle B of Title I of ERISA, a plan to which Section 4975 of theU.S. Internal Revenue Code of 1986, as amended (“ Code ”) applies, or any entity whoseunderlying assets include “plan assets” by reason of such an employee benefit plan’s or plan’sinvestment in such entity (each, a “Benefit Plan Investor”), or a governmental, church or non-U.S. plan which is subject to any federal, state, local, non-U.S. or other laws or regulationsthat are substantially similar to the fiduciary responsibility or prohibited transaction

provisions of ERISA or the provisions of Section 4975 of the Code (“ Similar Laws ”), and no part of the assets to be used by it to acquire or hold such Notes or any interest thereinconstitutes the assets of any such Benefit Plan Investor or such plan, or (ii)(a) in connectionwith the acquisition, holding and disposition of such Note, the Benefit Plan Investor’sfiduciary has determined that the Benefit Plan Investor is receiving no less, and paying no

more, than “adequate consideration” (within the meaning of Section 408(b)(17) of ERISA andSection 4975(f)(10) of the Code) and (b) its acquisition, holding and disposition of such Noteor interest therein does not and will not constitute or otherwise result in a non-exempt

prohibited transaction under Section 406 of ERISA or Section 4975 of the Code (or, in thecase of a governmental, church or non-U.S. plan, a non-exempt violation of any Similar Laws); and (2) such Note or any interest therein will not be sold or otherwise transferred other than to an acquirer or transferee that is deemed (or if required by the Trust Deed, certified) tomake these same representations, warranties and agreements with respect to its acquisition,holding and disposition of such Notes.

(n) In the case of each acquirer and/or holder of any ERISA Limited Note (or any interesttherein), and each fiduciary acting on behalf of the acquirer or holder (both in its fiduciary

and corporate capacity) that such acquirer or transferor, (1) either (i) is not, and is not actingon behalf of (and for so long as it holds the such Note (or any interest therein) will not be, or be acting on behalf of), a Benefit Plan Investor or a governmental, church or non-U.S. planwhich is subject to any Similar Laws and/or laws or regulations that provide that the assets of the Issuer could be deemed to include “plan assets” of such plan, and no part of the assetsused by it to acquire or hold such Note or any interest therein constitutes the assets of suchBenefit Plan Investor or such plan, or (ii) is, or is acting on behalf of, a governmental, churchor non-U.S. plan, and such acquisition or holding of such Note does not and will not result ina non-exempt violation of any Similar Laws, and will not subject the Issuer or the CollateralManager to any laws, rules or regulations applicable to such plan solely as a result of theinvestment in the Issuer by such plan; and (2) such Note or any interest therein will not besold or otherwise transferred other than to an acquirer or transferee that is deemed (or if

required by the Trust Deed, certified) to make these same representations, warranties andagreements with respect to its acquisition, holding and disposition of such Note.

(o) Each holder and beneficial owner of a Regulation S Note, by acceptance of its Regulation S Note or its interest in a Regulation S Note, shall be deemed to understand and acknowledgethat failure to provide the Issuer, the Trustee or any Paying Agent with the applicable U.S.federal income tax certifications (generally, a United States Internal Revenue Service FormW-9 (or successor applicable form)) in the case of a person that is a “United States person”within the meaning of Section 7701(a)(30) of the Code or an applicable United States InternalRevenue Service Form W-8 (or successor applicable form) in the case of a person that is not a“United States person” within the meaning of Section 7701(a)(30) of the Code) may result inU.S. federal back-up withholding from payments in respect of such Note.

(p) Each purchaser or subsequent transferee of a Note that is not a “United States person” (asdefined in Section 7701(a)(30) of the Code) will make or by acquiring such Note or an



243

interest therein will be deemed to make, a representation to the effect that (A) either (i) it isnot a bank (within the meaning of Section 881(c)(3)(A) of the Code) or an affiliate of a bank or (ii) it is a person (or a wholly owned affiliate of a person) that is eligible for benefits under an income tax treaty with the United States that eliminates U.S. federal income taxation of U.S. source interest not attributable to a permanent establishment in the United States, and(B) it is not purchasing the Note in order to reduce its U.S. federal income tax liability

pursuant to a tax avoidance plan.

(q) The purchaser acknowledges that the Issuer, the Transfer Agent, the Registrar, the InitialPurchaser/Placement Agent, the Arranger and their Affiliates, and others will rely upon thetruth and accuracy of the foregoing acknowledgements, representations and agreements.

Accredited Investor Notes

Each prospective purchaser of Accredited Investor Notes, by accepting delivery of this OfferingMemorandum, will have represented and agreed that such person acknowledges that this OfferingMemorandum is personal to it and does not constitute an offer to any other person or to the publicgenerally to subscribe for or otherwise acquire Accredited Investor Notes other than to Accredited

Investors that are Eligible ICA Investors or to non-U.S. Persons in Offshore Transactions inaccordance with Regulation S under the Securities Act. Distribution of this Offering Memorandum,or disclosure of any of its contents to any person other than such offeree and those persons, if any,retained to advise it with respect thereto is unauthorised and any disclosure of any of its contents,without the prior written consent of the Issuer, is prohibited.

Transfers of the Accredited Investor Notes will only be effected in accordance with the Trust Deed,including execution of a Transfer Certificate by the purchaser of the relevant Accredited Investor

Note.

Each purchaser of an Accredited Investor Note will represent and agree and will be required toexecute and deliver an Accredited Investor Note Purchase Agreement (in the case of the initial

purchasers) or a Transfer Certificate in the form of the relevant exhibit to the Trust Deed (in the caseof transferees) making certain representations, warranties and agreements, including the following,

provided that in the case of resales, each reference to the “purchaser” will be deemed a reference tothe transferee:

(a) The purchaser is (a)(i) an accredited investor as defined in Rule 501(A) under the SecuritiesAct of 1933, as amended (the “ Securities Act ”) (an “ Accredited Investor ”) which is alsoeither (x) a qualified purchaser (for the purposes of the Investment Company Act of 1940, asamended (the “ Investment Company Act ”) (a “ Qualified Purchaser ”)), (y) aknowledgeable employee (as defined in Rule 3c-5 under the Investment Company Act(“Knowledgeable Employee ”) or (z) a company owned exclusively by Qualified Purchasersand/or Knowledgeable Employees (such entities, Qualified Purchasers or KnowledgeableEmployees, “ Eligible ICA Investors ”), (ii) is aware that the sale of the Accredited Investor

Note to it is being made in reliance on an exemption from the registration requirements under the Securities Act and is acquiring the Accredited Investor Note for its own account in a

principal amount of not less than €50,000 or (iii) is a non-U.S. Person, is purchasing theAccredited Investor Note in an Offshore Transaction, is aware that the sale of AccreditedInvestor Note to it is being made in reliance on the exemption from the registrationrequirements of the Securities Act provided by Regulation S and is acquiring the AccreditedInvestor Note for its own account in a principal amount of not less than €50,000 and (b) will

provide notice of the transfer restrictions described in this heading to any subsequenttransferees.

(b) The purchaser understands that the Accredited Investor Notes have not been and will not beregistered under the Securities Act, and may be reoffered, resold or pledged or otherwisetransferred only (a) to an Accredited Investor which is also an Eligible ICA Investor

purchasing for its own account in a transaction exempt from registration under the Securities



244

Act or (b) to a non-U.S. Person in an Offshore Transaction in accordance with Regulation Sand, in each case, (c) in accordance with all applicable securities laws including the securitieslaws of any state of the United States. The purchaser understands that the Issuer has not beenregistered under the Investment Company Act. The purchaser understands that before anAccredited Investor Note may be offered, sold, pledged or otherwise transferred, the Issuer isrequired to receive a written certification from the purchaser (in the form provided in theTrust Deed) as to compliance with the transfer restrictions described herein. The purchaser understands and agrees that any purported transfer of an Accredited Investor Note to a

purchaser that does not comply with the requirements of this paragraph (b) shall be null andvoid ab initio .

(c) The purchaser further understands that no approved prospectus will be published in respect of the Accredited Investor Notes within any of the Member States of the European EconomicArea (“ EEA ”) other than the Republic of Ireland and that as a result it must not engage in anyconduct which would require the publication of such an approved prospectus in any suchEEA Member State. The purchaser, where resident in an EEA Member State, has alsoinformed itself of any restrictions or prohibitions on solicitations as applicable to the place of his residence and confirms that the purchase by it from the Issuer of an Accredited Investor

Note will not violate such restrictions or prohibitions.

(d) The purchaser is not purchasing such Accredited Investor Note with a view towards theresale, distribution or other disposition thereof in violation of the Securities Act. The

purchaser understands that an investment in the Accredited Investor Notes involves certainrisks, including the risk of loss of its entire investment in the Accredited Investor Notes under certain circumstances. The purchaser has had access to such financial and other informationconcerning the Issuer and the Accredited Investor Notes as it deemed necessary or appropriatein order to make an informed investment decision with respect to its purchase of AccreditedInvestor Notes, including an opportunity to ask questions of, and request information from,the Issuer.

(e) In connection with the purchase of the Accredited Investor Note: (a) none of the Issuer, theArranger, the Initial Purchaser/Placement Agent, the Trustee, the Collateral Manager or theCollateral Administrator is acting as a fiduciary or financial or investment manager for the

purchaser, (b) the purchaser is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer,the Arranger, the Initial Purchaser/Placement Agent, the Trustee, the Collateral Manager or the Collateral Administrator other than as set out in the Offering Memorandum for AccreditedInvestor Notes and any representations expressly set out in a written agreement with such

party, where relevant, (c) none of the Issuer, the Arranger, the Initial Purchaser/PlacementAgent, the Trustee, the Collateral Manager or the Collateral Administrator has given to the

purchaser (directly or indirectly through any other person) any assurance, guarantee or representation whatsoever as to the expected or projected success, profitability, return,

performance, result, effect, consequence or benefit (including legal, regulatory, tax, financial,accounting or otherwise) as to an investment in the Accredited Investor Notes, (d) the

purchaser has consulted with its own legal, regulatory, tax, business, investment, financial andaccounting advisers to the extent it has deemed necessary, and it has made its own investmentdecisions (including decisions regarding the suitability of any transaction pursuant to theTrust Deed) based upon its own judgement and upon any advice from such advisers as it hasdeemed necessary and not upon any view expressed by the Issuer, the Arranger, the InitialPurchaser/Placement Agent, the Trustee, the Collateral Manager or the CollateralAdministrator, (e) the purchaser has evaluated the rates, prices or amounts and other termsand conditions of the purchase and sale of the Accredited Investor Notes with a fullunderstanding of all of the risks thereof (economic and otherwise), and it is capable of

assuming and willing to assume (financially and otherwise) those risks and (f) the purchaser is a sophisticated investor.



245

(f) (a) If the purchaser is purchasing an Accredited Investor Note within the United States or is aU.S. Person, it is both an Accredited Investor and an Eligible ICA Investor and it is acquiringeach Accredited Investor Note in a principal amount of not less than €50,000; (b) the

purchaser is acquiring the Accredited Investor Note as principal for its own account for investment and not for sale in connection with any distribution thereof; (c) the purchaser:(i) was not formed for the specific purpose of investing in the Accredited Investor Notes(except when each beneficial owner of the purchaser is an Eligible ICA Investor for purposesof Section 3(c)(7) of the Investment Company Act), (ii) to the extent the purchaser is a privateinvestment company formed before 30 April 1996, the purchaser has received the necessaryconsent from its beneficial owners; (d) further, the purchaser agrees: (x) that it shall not holdsuch Accredited Investor Note for the benefit of any other person and shall be the sole

beneficial owner thereof for all purposes, (y) that it shall not sell the Accredited Investor Notes (except to a person executing a transfer certificate substantially in the form provided inSchedule 3 of the Trust Deed) and (z) that the Accredited Investor Notes purchased by itconstitute an investment of no more than 40 per cent. of the purchaser’s assets (except wheneach beneficial owner of the purchaser and each such account is an Eligible ICA Investor);and (e) the purchaser understands and agrees that any purported transfer of the Accredited

Investor Note to a purchaser that does not comply with the requirements of this paragraph (f)will be of no force and effect and be void ab initio and the Issuer will have the right to directthe purchaser to transfer its Accredited Investor Notes to a Person who meets the foregoingcriteria.

(g) The purchaser, (1) either (i) is not, and is not acting on behalf of (and for so long as it holdsthe Accredited Investor Notes (or any interest therein) will not be, or be acting on behalf of)an employee benefit plan (as defined in Section 3(3) of the U.S. Employee RetirementIncome Security Act of 1974, as amended (“ ERISA ”)), subject to the provisions of part 4 of subtitle B of Title I of ERISA, a plan to which Section 4975 of the U.S. Internal RevenueCode of 1986, as amended (“ Code ”), applies, or any entity whose underlying assets include“plan assets” by reason of such an employee benefit plan’s or plan’s investment in such entity

(each, a “ Benefit Plan Investor ”), or a governmental, church or non-U.S. plan which issubject to any federal, state, local, non-U.S. or other laws or regulations that are substantiallysimilar to the fiduciary responsibility or prohibited transaction provisions of ERISA or the

provisions of Section 4975 of the Code (“ Similar Laws ”), and/or laws or regulations that provide that the assets of the Issuer could be deemed to include “plan assets” of such plan,and no part of the assets used by it to acquire or hold such Accredited Investor Notes or anyinterest therein constitutes the assets of such Benefit Plan Investor or such plan, or (ii) is, or isacting on behalf of, a governmental, church or non-U.S. plan, and such acquisition or holdingof such Accredited Investor Notes does not and will not result in a non-exempt violation of any Similar Laws, and will not subject the Issuer or the Collateral Manager to any laws, rulesor regulations applicable to such plan solely as a result of the investment in the Issuer by such

plan; and (2) it will not sell or otherwise transfer such Notes or any interest therein otherwise

than to an acquirer or transferee that is deemed (or if required by the Trust Deed, certified) tomake these same representations, warranties and agreements with respect to its acquisition,holding and disposition of such Notes.

(h) The purchaser understands and acknowledges that failure to provide the Issuer, the Trustee,the Registrar or any Paying Agent, whenever requested by the Issuer or the CollateralManager on behalf of the Issuer with the applicable U.S. federal income tax certificate(generally, an Internal Revenue Service Form W-9 (or successor applicable form) in the caseof a person that is a “United States person” within the meaning of Section 7701(a)(30) of theCode or an appropriate Internal Revenue Service Form W-8 (or successor applicable form) inthe case of a person that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code) may result in U.S. federal back up withholding from

payments to the purchaser in respect of its Notes.



246

(i) The purchaser understands that pursuant to the terms of the Trust Deed, the Issuer has agreedthat the Accredited Investor Notes will bear the legend set out below, and will be represented

by one or more definitive certificates. Before any Accredited Investor Note may be offered,resold, pledged or otherwise transferred, the transferor will be required to provide the Issuer with a written certification (in the form provided in Schedule 3 to the Trust Deed) as tocompliance with the transfer restrictions.

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THEUNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIESACT ”), AND THE ISSUER HAS NOT BEEN REGISTERED UNDER THE UNITEDSTATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE“INVESTMENT COMPANY ACT ”). THE BENEFICIAL OWNER HEREOF AGREESFOR THE BENEFIT OF THE ISSUER, THE INITIAL PURCHASER/PLACEMENTAGENT AND ANY OF THEIR AFFILIATES THAT A BENEFICIAL INTEREST IN THE

NOTES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED OR DELIVERED, ONLY (A)(1) TO THE ISSUER (UPON REDEMPTION THEREOF OR OTHERWISE), (2) TO AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)UNDER THE SECURITIES ACT) IN A TRANSACTION EXEMPT FROMREGISTRATION UNDER THE SECURITIES ACT WHO IS ALSO EITHER (X) AQUALIFIED PURCHASER WITHIN THE MEANING OF SECTION (3)(c)(7) OF THEINVESTMENT COMPANY ACT, (Y) A KNOWLEDGEABLE EMPLOYEE (ASDEFINED IN RULE 3c-5 UNDER THE INVESTMENT COMPANY ACT) WITHRESPECT TO THE ISSUER OR (Z) A COMPANY OWNED EXCLUSIVELY BYQUALIFIED PURCHASERS AND/OR KNOWLEDGEABLE EMPLOYEES, OR (3) TO A“NON-U.S. PERSON” (WITHIN THE MEANING OF REGULATION S UNDER THESECURITIES ACT) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITHRULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT AND(B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THESTATES OF THE UNITED STATES IN A TRANSACTION THAT MAY BE EFFECTED

WITHOUT LOSS OF ANY APPLICABLE INVESTMENT COMPANY ACTEXEMPTION. ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO AND WILL NOT OPERATE TOTRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANYINSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE TRUSTEE OR ANYINTERMEDIARY. IN ADDITION TO THE FOREGOING, THE ISSUER MAINTAINSTHE RIGHT TO DIRECT THE RESALE OF ANY NOTES PREVIOUSLYTRANSFERRED TO NON-PERMITTED HOLDERS (AS DEFINED IN THE TRUSTDEED) IN ACCORDANCE WITH AND SUBJECT TO THE TERMS OF THE TRUSTDEED. EACH TRANSFEROR OF THIS NOTE WILL PROVIDE NOTICE OF THETRANSFER RESTRICTIONS SET OUT HEREIN AND IN THE TRUST DEED TO ITSTRANSFEREE.

EACH PURCHASER OF NOTES WILL BE REQUIRED TO EXECUTE AND DELIVER TO THE ISSUER AND THE REGISTRAR OR THE TRANSFER AGENT, ASAPPLICABLE, A NOTE PURCHASE AGREEMENT (IN THE CASE OF THE INITIALPURCHASER) OR A TRANSFER CERTIFICATE (IN THE CASE OF A TRANSFEREE)WHICH WILL CONTAIN REPRESENTATIONS AND WARRANTIES TO THE EFFECTTHAT SUCH INVESTOR WILL NOT TRANSFER NOTES EXCEPT IN COMPLIANCEWITH THE TRANSFER RESTRICTIONS SET OUT IN THE TRUST DEED(INCLUDING THE REQUIREMENT THAT ANY SUBSEQUENT TRANSFEREEEXECUTE AND DELIVER A TRANSFER CERTIFICATE IN THE FORM PROVIDED INSCHEDULE 3 TO THE TRUST DEED). ACCORDINGLY, AN INVESTOR IN THE

NOTES MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THE

INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.



247

PRINCIPAL OF THIS NOTE IS PAYABLE AS SET OUT HEREIN. ACCORDINGLY,THE OUTSTANDING PRINCIPAL OF THIS NOTE AT ANY TIME MAY BE LESSTHAN THE AMOUNT SHOWN ON THE FACE HEREOF. ANY PERSON ACQUIRINGTHIS NOTE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRYOF A PAYING AGENT OR THE TRUSTEE.

THE FAILURE OF A NOTEHOLDER TO PROVIDE THE ISSUER, THE TRUSTEE ANDANY PAYING AGENT WITH THE APPLICABLE U.S. FEDERAL INCOME TAXCERTIFICATIONS (GENERALLY, A U.S. INTERNAL REVENUE SERVICE FORM W-9(OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS A“UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OFTHE CODE OR AN APPLICABLE U.S. INTERNAL REVENUE SERVICE FORM W-8(OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A“UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(a)(30) OFTHE CODE) MAY RESULT IN U.S. FEDERAL BACK UP WITHHOLDING TAX FROMPAYMENTS TO SUCH NOTEHOLDER IN RESPECT OF THE NOTES.

THE HOLDER OF THIS CLASS S-2 SUBORDINATED NOTE, BY ACCEPTANCE OFSUCH NOTE AGREES TO TREAT, AND SHALL TREAT, SUCH NOTE AS EQUITYFOR UNITED STATES FEDERAL INCOME TAX PURPOSES.

BY ITS PURCHASE OR HOLDING OF THIS NOTE OR ANY INTEREST HEREINEACH BENEFICIAL OWNER HEREOF, AND EACH FIDUCIARY ACTING ONBEHALF OF THE BENEFICIAL OWNER (BOTH IN ITS INDIVIDUAL ANDCORPORATE CAPACITY), WILL BE DEEMED OR REQUIRED IN WRITING, ASAPPLICABLE, TO REPRESENT AND AGREE THAT, DURING THE PERIOD ITHOLDS ANY INTEREST IN THIS NOTE THAT SUCH ACQUIRER OR TRANSFEREE(1) EITHER (A) IS NOT, AND IT IS NOT ACTING ON BEHALF OF, AN EMPLOYEEBENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE U.S. EMPLOYEERETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ ERISA ”), THATIS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OFERISA, A PLAN TO WHICH SECTION 4975 OF THE U.S. INTERNAL REVENUECODE OF 1986, AS AMENDED (“ CODE ”) APPLIES, OR AN ENTITY WHOSEUNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF SUCH ANEMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY (EACH,A “ BENEFIT PLAN INVESTOR ”), OR A GOVERNMENTAL, CHURCH OR NON-U.S.PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIALLY SIMILAR TO THEFIDUCIARY RESPONSIBILITY AND/OR THE PROHIBITED TRANSACTIONPROVISIONS OF ERISA AND/OR SECTION 4975 OF THE CODE (“ SIMILAR LAWS ”)AND/OR LAWS OR REGULATIONS THAT PROVIDE THAT THE ASSETS OF THEISSUER COULD BE DEEMED TO INCLUDE “PLAN ASSETS” OF SUCH PLAN, AND

NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD THIS NOTEOR ANY INTEREST HEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLANINVESTOR OR SUCH A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN OR (B) IS,OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH OR NON-U.S. PLAN,AND SUCH ACQUISITION DOES NOT AND WILL NOT RESULT IN A NON-EXEMPTVIOLATION OF ANY SIMILAR LAWS AND WILL NOT SUBJECT THE ISSUER OR THE COLLATERAL MANAGER TO ANY LAWS, RULES OR REGULATIONSAPPLICABLE TO SUCH PLAN SOLELY AS A RESULT OF THE INVESTMENT INTHE ISSUER BY SUCH PLAN; AND (2) THIS NOTE OR ANY INTEREST HEREINWILL NOT BE SOLD OR OTHERWISE TRANSFERRED OR DELIVERED OTHER THAN TO AN ACQUIRER OR TRANSFEREE THAT IS DEEMED (OR, IF REQUIRED

BY THE TRUST DEED, CERTIFIED) TO MAKE THESE SAME REPRESENTATIONS,WARRANTIES AND AGREEMENTS WITH RESPECT TO ITS ACQUISITION,HOLDING AND DISPOSITION OF THIS NOTE. NO ACQUISITION BY OR





249

not purchasing the Note in order to reduce its U.S. federal income tax liability pursuant to atax avoidance plan.



250

GENERAL INFORMATION

1. Clearing Systems

The Class A-1 Notes, Class A-2a Notes, Class A-2b Notes and the Class S-1 Subordinated Notes have been accepted for clearance through Euroclear and Clearstream, Luxembourg.The Common Code and the International Securities Identification Number (“ ISIN ”) for theGlobal Certificates of each Class are:

Rule 144A Global Certificates

Rule 144A ISIN Rule 144A Common Code Class A-1 Notes.... .. .. .. .. .. .. .. .. .. .. .. .. .. . XS0367717633 036771763Class A-2a Notes. .... .... .... .... .... .... ... . XS0367718441 036771844Class A-2b Notes.... ..... .... .... .... .... ... . XS0367718797 036771879Class S-1 Subordinated Notes ....... XS0367718953 036771895

Regulation S Global Certificates

Reg S ISIN Reg S Common Code Class A-1 Notes.... .. .. .. .. .. .. .. .. .. .. .. .. .. . XS0367715850 036771585Class A-2a Notes... .. .. .. .. .. .. .. .. .. .. .. .. .. XS0367716155 036771615Class A-2b Notes... .. .. .. .. .. .. .. .. .. .. .. .. .. XS0367716312 036771631Class S-1 Subordinated Notes ....... XS0367716668 036771666

The address for Euroclear is 3 Boulevard du Roi Albert II, B.1210, Brussels, Belgium.

The address for Clearstream, Luxembourg is 42 Avenue J.F. Kennedy, L-1855, Luxembourg.

The Accredited Investor Notes will not be eligible for clearance through Euroclear or

Clearstream, Luxembourg and will be privately placed.2. Listing

Application will be made to the Financial Regulator, as competent authority under theProspectus Directive, for this Offering Memorandum to be approved. Application will bemade to the Irish Stock Exchange for the Notes to be admitted to the Official List and tradingon its regulated market. A&L Listing Limited is acting solely in its capacity as listing agentfor the Issuer in connection with the Notes and is not itself seeking admission of the Notes tothe Official List of the Irish Stock Exchange or to trading on its regulated market for the

purposes of the Prospectus Directive.

3. Fees

The total fees related to the admission to trading on the Irish Stock Exchange will beapproximately €5,600.

4. Consents and Authorisations

The Issuer has obtained all necessary consents, approvals and authorisations in Ireland (if any) in connection with the issue and performance of the Notes. The issue of the Notes wasauthorised by a resolution of the Board of Directors of the Issuer passed on 9 July 2008.

4. No Significant or Material Change

There has been no significant change in the financial or trading position or prospects of the

Issuer since its incorporation on 13 February 2008 and there has been no material adversechange in the financial position or prospects of the Issuer since its incorporation. Since its



251

incorporation, the Issuer has not commenced trading (save as set out in the Forward SaleAgreement) or established any accounts save as described in this Offering Memorandum.

5. Accounts

So long as any Note remains outstanding, copies of the most recent annual audited financial

statements of the Issuer, when published, can be obtained at the specified offices of thePaying Agents during normal business hours. Since the date of incorporation, no financialstatements of the Issuer have been prepared as of the date of the Offering Memorandum. Thefirst financial statements of the Issuer will be in respect of the period from incorporation to 30June 2009. The Issuer will not prepare interim financial statements. The auditors of theIssuer are KPMG who are chartered accountants and are members of the Institute of Chartered Accountants and registered auditors qualified to practice in Ireland.

The Issuer is not involved nor has it been involved since incorporation in any governmental,legal or arbitration proceedings. There are no governmental, legal or arbitration proceedingsthreatened or pending which have had a significant effect on the Issuer’s financial position or

profitability.

6. Documents Available

Copies, in electronic form, of the following documents may be inspected (and, in the case of each of (i) and (j) below, will be available for collection free of charge) at the registered officeof the Issuer and at the offices of the Trustee and any Paying Agent during usual businesshours on any day (Saturdays, Sundays and public holidays excepted) for the term of the

Notes:

(a) the Memorandum Articles of Association of the Issuer;

(b) the Trust Deed (which includes the form of each Note of each Class);

(c) Collateral Management Agreement;(d) the Agency Agreement;

(e) the Euroclear Pledge Agreement;

(f) each Asset Swap Agreement; and

(g) the Corporate Services Agreement.



252

INDEX OF DEFINED TERMS

$ ...................................................... ................. v, 87£ ...................................................... ..................... 85

€ ...................................................... ................ iv, 701990 Act .............................................................. 54

1997 Act ............................................................ 201ABS ......................................................... ............ 20Account Bank ...................................................... 56Accounts ........................................................ 13, 57Accredited Investor...................................... 58, 243Accredited Investor Definitive Certificate... 16, 140Accredited Investor Definitive Certificates ... 16, 87Accredited Investor Definitive Notes .................. 58Accredited Investor Note Purchase Agreement.. 57,58Accredited Investor Notes ...................................... iAccredited Investors .............................................. iiAdministrative Expenses ..................................... 58

Affected Collateral ............................................ 108Affiliate ............................................................... 59Affiliated............................................................. . 59Agency Agreement .............................................. 56Agent ...................................................... ............. 59Agents............................... ................................... 59Aggregate Portfolio Balance................................ 59Aggregate Principal Balance ............................... 59Amendment Act........................................... 51, 214Applicable EURIBOR ......................................... 60Applicable Margin..... .................................. 60, 116Approved Borrower............................................. 60Approved Unhedged Currency...... 14, 60, 156, 177

Arranger........................................... ................. i, 60Asset Swap Agreement.................................. 57, 60Asset Swap Agreements ...................................... 60Asset Swap Counterparties .................................. 57Asset Swap Counterparty .............................. 57, 60Asset Swap Counterparty Principal ExchangeAmount .................................................. .............. 60Asset Swap Issuer Principal Exchange Amount.. 60Asset Swap Obligation ........................................ 60Asset Swap Replacement Payment...................... 60Asset Swap Replacement Receipt ....................... 61Asset Swap Termination Account ....................... 61Asset Swap Termination Payment....................... 61

Asset Swap Termination Receipt......................... 61Asset Swap Transaction....................................... 61Asset Swap Transaction Exchange Rate.............. 61Assignments ........................................................ 33Assumed Profits........................................... 50, 213Australian Dollars....................... .......................... ivAuthorised Integral Denomination ...................... 61Average Life ...................................................... 168Balance ........................................................... ..... 61Base Currency ..................................................... 61Beneficial Owner............................................... 198Benefit Plan Investor .217, 231, 232, 234, 239, 245,247Bivariate Risk Table .......................................... 158BTRA ................................................................ 215

Business Day........................................................61Calculation Agent ................................................ 56Canadian Dollars....................................................vCapital Gains......................................................213

Cause..................................................................172CCC Obligation ................................................... 62CCC+ Bucket Excess...........................................62CDO Monitor..................................................... 166CDO Monitor Test ............................................. 165CDO Transactions................................................52CDOs ...................................................... ............. 20CELF............................................ ...................... 192CELF Group Company......................................173CFC....................................................................209Class..................................................................i, 62Class A Break-even Default Rate ...................... 165Class A Default Differential .............................. 165

Class A Floating Rate of Interest ......................... 62Class A Interest Coverage Ratio.......................... 62Class A Interest Coverage Test.................... 62, 170Class A Noteholders ......................................... i, 62Class A Notes......................................................i, 2Class A Par Value Ratio ...................................... 62Class A Par Value Reinvestment Percentage..... 150Class A Par Value Test ................................ 62, 169Class A Scenario Default Rate........................... 165Class A-1 Floating Rate of Interest....................115Class A-1 Note Purchase Agreement....... .... 57, 222Class A-1 Noteholders ...................................... i, 62Class A-1 Notes ............................................ i, 2, 56

Class A-2 Noteholders ............................................ iClass A-2 Notes .................................................. i, 2Class A-2a Floating Rate of Interest .................. 115Class A-2a Noteholders .................................... i, 62Class A-2a Notes .......................................... i, 2, 56Class A-2b Floating Rate of Interest.................. 115Class A-2b Noteholders .................................... i, 62Class A-2b Notes .......................................... i, 2, 56Class of Noteholders............................................62Class of Notes ...................................................... 62Class S-1 Subordinated Noteholders.................i, 62Class S-1 Subordinated Notes.......................i, 2, 56Class S-2 Subordinated Noteholders.................i, 62

Class S-2 Subordinated Notes.......................... 2, 56Clearing Systems ............................................... 197CM Indemnified Party ....................................... 175CM Indemnifying Party ..................................... 175CM UK Tax Event.................................... ... 62, 173CM UK Tax Termination Date............................ 63Code.... 48, 204, 217, 231, 232, 234, 239, 242, 245,247, 248Collateral............................................... ........... 8, 63Collateral Acquisition Agreements......................63Collateral Administrator ...................................... 56Collateral Debt Obligation...................................63Collateral Enhancement Account.........................63Collateral Enhancement Obligation ..................... 63Collateral Enhancement Obligation Proceeds 34, 63



253

Collateral Enhancement Obligation ProceedsPriority of Payments ............................................ 63Collateral Management Agreement ..................... 56Collateral Management Fee......................... 64, 171Collateral Manager .............................................. 56Collateral Manager Breach .......................... 64, 175

Collateral Quality Tests ......................... 10, 64, 163Collateral Tax Event .................................... 64, 119Commitment Amount .......................................... 65Condition ............................................................. 65Conditions............................................................ 65Consenting Purchaser .............................. 6, 65, 123Controlling Class ................................................. 65Corporate Services Agreement ............................ 56Corporate Services Provider .................. 56, 65, 188Counterparty Downgrade Cash Collateral Account.................................................... ......................... 65Counterparty Downgrade Collateral .................... 65Counterparty Downgrade Securities Collateral

Account ............................................................... 65Covenant Lite Loan ........................................... 162covenant-lite loans............................................... 42Coverage Test ...................................................... 65Coverage Tests ............................................ 65, 169CPDI regulations ............................................... 206CPDI Regulations.............................................. 207Credit Impaired Obligation................ .......... 65, 146Credit Improved Obligation......................... 65, 148Current Pay Obligation................................ 65, 162Current Portfolio............... ................................. 165Danish Kroner ....................................................... vDeclaration of Trust........................................... 189

Defaulted Asset Swap Termination Payment ...... 65Defaulted Asset Swap Termination Receipt........ 65Defaulted Obligation ................................... 66, 146Deferred Collateral Management Amount .... 66, 90Definitive Certificate ..................................... 17, 66Definitive Certificates.......................................... 87Definitive Exchange Date................................. . 142Delayed Drawdown Collateral Debt Obligation.. 66Determination Date.............................................. 67Direct Euroclear/Clearstream Participants......... 197Directors .............................................................. 67Discount Obligation.......................................... ... 67Disposal Agent .................................................... 67Disposal Agreement ............................................ 67Distressed Exchange..................... ............... 66, 147Distribution.......................................................... 67Due Date............................................................ .. 67Due Period ........................................................... 67EEA ................................................... 228, 236, 244Effective Date.......................................... 9, 67, 144Effective Date Confirmation................................ 67Effective Date Determination Requirements .. 9, 67,144Effective Date Rating Event ........................ 68, 145Effective Date Report ........................................ 145Eligibility Criteria............... ......................... 68, 151Eligible ICA Investor................................... 68, 243Eligible ICA Investors ........................................... ii

Eligible Investments.............................................68Eligible Investments Minimum Long Term Rating.............................................................................69Eligible Investments Minimum Short-Term Rating.............................................................................69Enforcement Action...........................................128

Enforcement Threshold Determination..............129ERISA... 48, 69, 217, 231, 232, 234, 238, 239, 242,245, 247ERISA Limited Notes..........................................69ERISA Plans ...................................................... 217EUR ......................................................... ............. ivEurclear Pledge Agreement ................................. 57EURIBOR.... ............................................ 3, 70, 115euro .......................................................... ....... iv, 70Euro.................................................................iv, 70Euro zone ..................................................... 70, 116Euroclear..............................................................70Euroclear Pledge Account....................................70

Euroclear Pledge Agreement ................................. 8Euroclear/Clearstream Participants .................... 197euros.....................................................................70Euros....................................................................70Event of Default........................................... 70, 126excess distributions ............................................ 208Exchange Act........................................................viExchanged Equity Security..................................70Exchanged Global Certificate ............................ 141Expense Reserve Account....................................70Extraordinary Resolution ..................................... 70FBC....................................................................225Financial Institution ............................................. 70

Financial Regulator.........................................i, 224Fixed Rate Collateral Debt Obligation...............162Floating Rate Collateral Debt Obligation ..........162Foreign Investor................................................. 214Form Approved Asset Swap ................................ 70Forward Sale Agreement ..................................... 56FS Accrued Interest..............................................70FS Accrued Interest Account ............................... 70FSMA ................................................................... ivFunded Amount ................................................... 70German Disbursing Agent ................................... 50German Investment Act ....................................... 52German Investor ................................................ 213Global Certificates ....................................... 87, 140GSCP ................................................................ ... 71GSI.......................................................................71Inclusion Date......................................................71Incurrence Covenant .......................................... 162Indirect Euroclear/Clearstream Participants.......197Initial Asset Swap Counterparty .................... 57, 71Initial Investment Period................................8, 143Initial Par Amount.................................... 9, 71, 143Initial Portfolio......................................... 9, 71, 143Initial Purchaser/Placement Agent............i, 71, 222Initial Ratings.......................................................71Insolvency Law..................................................126Insolvency Regulations......................................112Interest Account...................................................71



254

Interest Accrual Period................................ 71, 114Interest Amount ............................................... 3, 71Interest Coverage Amount........ ........................... 71Interest Determination Date......................... 72, 115Interest Proceeds................................... ............... 72Interest Proceeds Priority of Payments................ 73

Interest Reserve Account..................................... 72Interest Sale Proceeds.......................................... 72Intermediary Obligation ...................................... 73Investment Act............................................. 51, 214Investment Company Act ii, 73, 230, 237, 243, 246Investment Grade............................................ ..... 73Investment Restrictions ....................................... 73Investment Tax Act ..................................... 50, 212Irish Issuer Account..................... ........................ 73Irish Stock Exchange .............................................. iIRS...... ......................................................... 52, 204ISIN ........................................................... ........ 250Issue Date ............................................................ 73

Issuer .......................................................... i, 56, 73Issuer Fee................ ............................................. 73Issuer Indemnified Party...................... .............. 176Issuer Indemnifying Party.................................. 175Japanese Yen ......................................................... vKnowledgeable Employee ................................. 243Knowledgeable Employees ................................... iilender liability.................. .................................... 41Liabilities........................................................... 175Maintenance Covenant ...................................... 162maintenance tests... .............................................. 42Make Whole Amount .......................................... 73Make Whole Redemption Fee ............................. 73

Make Whole Tax Event Fee ................................ 73Managing Members... ........................................ 192Margin Stock ....................................................... 73Market Value ....................................................... 74Maturity Date................................................... 5, 74Measurement Date....................................... 74, 160Member States ..................................................... 74Method 1....................................... ....................... 74Method 2....................................... ....................... 74MiFID Regulations ............................................ 224Minimum Denomination ............................. 74, 142Minimum Reporting Requirements ..... 50, 186, 212Minimum Weighted Average Spread ................ 166Minimum Weighted Average Spread Test .. 74, 166Monthly Report ........................................... 74, 181Moody’s.................................................. ........... 169

New Zealand Dollars ............................................. v Non-Call Period....... ........................................ 5, 75 Non-Consenting Note Refinancing.......... 6, 75, 123 Non-Consenting Note Refinancing Date ..... 75, 123 Non-Consenting Noteholder.................... 6, 75, 123 Non-Consenting Notes ............................ 6, 75, 123 Non-Consenting Notes Payment Amount.... 75, 123 Non-Emerging Market Country......................... 153 Non-Euro Custody Account ................................ 75 Non-Euro Obligation ........................................... 75 Non-Permitted Holder ................................... 49, 88non-U.S. Holder................................................. 203

Norwegian Kroner ................................................. v Note Payment Sequence ...................................... 75 Note Tax Event ............................................ 75, 119 Noteholders.......................................................i, 75 Notes.......................................................i, 2, 56, 75 Notice of Default ............................................... 126

Obligor.................................................................76Offering..................................................................vOffering Memorandum ......................................... iiiOfficer..................................................................76Official List.............................................................iOffshore Transactions......................................ii, 76OID .................................................... 205, 233, 241OID de minimis amount.....................................206OID Note ........................................................... 206Ordinary Resolution.............................................76Original Purchase Price........................................76Outstanding..........................................................76over-the-counter-transaction ........................ 50, 212

Par Coverage Numerator......................................77Par Value Test Excess Adjustment Amount ........ 77

parallel security..................................................169Participation.........................................................77Participations ....................................................... 33Paying Agent........................................................77Paying Agents......................................................77Payment Account.................................................77Payment Date........................................... 3, 78, 114Payment Date Report ................................... 78, 183Payment Dates ..................................................... 78Person .................................................. ................ 78PFIC...................................................................208

PIK Security.......................................................154Plan Assets Regulation ...................................... 217Plans...................................................................217Portfolio .................................................... i, 78, 143Portfolio Profile Tests ............................ 11, 78, 161Portfolio Weighted Average Maturity ............... 168Post-Acceleration Priority of Payments ....... 78, 129Post-Reinvestment Period Reinvestment Criteria78,150

pound ............................................................. ...... 85Presentation Date ................................................. 78Pricing Amendment ................................. 6, 78, 123Principal Account ................................................ 78Principal Amount Outstanding.............................78Principal Balance ................................................. 79Principal Paying Agent ........................................ 80Principal Proceeds................................................80Principal Proceeds Priority of Payments..............80Priorities of Payments .......................................... 80Proceedings........................................................ 137Proposed Portfolio ............................................. 165Prospectus Directive ............................................... iProspectus Regulations ......................................... ivPTE ......................................................... ........... 219Purchased Accrued Interest.......................... 80, 155

put right................................................................85QEF..... ............................................................... 208QEF Information..................................................53



255

QIB ......................................................... ............. 80QIB/QP....................................................... ......... 80QIBs................................................................... .... iiQP.......................................................... .............. 80QPs ........................................................................ iiQualified Institutional Buyer ............................... 80

Qualified Institutional Buyers................................ iiQualified Investors ............................................ 226Qualified Purchaser ..................................... 80, 243Qualified Purchasers........................................ ...... iiQualifying Countries ........................................... 80Qualifying Country........................... ................... 80quoted Eurobonds.............................................. 201Rating Agency .................................................. i, 80Rating Agency Confirmation............................... 81Rating Confirmation Plan .................................. 145Realisation Gain .................................................. 81Receiver....................................................... 81, 127Record Date ................................................. 81, 124

Redemption Date ................................................. 81Redemption Determination Date ................. 81, 119Redemption Notice .............................................. 81Redemption Price ................................................ 81Redemption Threshold Amount .................. 81, 119Reference Banks................................................ 115Register............................ .................................... 82Registrar .............................................................. 56Regulation S .................................................... ii, 82Regulation S Global Certificate................... 15, 140Regulation S Notes .............................................. 82Reinvestment Criteria .................................. 82, 150Reinvestment Diversion Ratio............................. 82

Reinvestment Diversion Threshold ....... 13, 82, 154Reinvestment Period........... ..................... 8, 82, 143Reinvestment Period Reinvestment Criteria 82, 149Relevant Implementation Date .......................... 226Relevant Member State ..................................... 226Relevant Person ................................................... 59Relevant Territory.............................................. 201Replacement Asset Swap Agreement .......... 82, 179Replacement Asset Swap Counterparty............... 82Replacement Asset Swap Transaction................. 82Replacement Notes .................................. 6, 82, 123Replacement Rating Agency ............................... 80Report ............................................................ ...... 82Reports.................................................. ............... 82Required Ratings ................................................. 83Resolution............. ............................................... 83Revolving Obligation .......................................... 83Revolving Reserve Account ................................ 83RSA ............................................................ .. iii, 222Rule 144A................................................... ..... ii, 83Rule 144A Global Certificate ...................... 15, 140Rule 144A Notes ................................................. 83S&P .................................................................. i, 83S&P Break-even Rate Cases.............................. 163S&P CDO Monitor ............................................ 187S&P Class A Recovery Rate.............................. 166S&P Class A Weighted Average Recovery Rate166S&P Collateral Value .......................................... 83

S&P Minimum Weighted Average Recovery RateTest ........................................................... ......... 166S&P Priority Category ......................................... 83S&P Rating ........................................................ 168S&P Recovery Rate ............................................. 83S&P Tests Matrix...............................................163

Sale Proceeds ....................................................... 84Scheduled Periodic Asset Swap Payment............84Scheduled Periodic Asset Swap Receipt..............84Scheduled Principal Proceeds .............................. 84SEC......................................................................48Secured Parties.....................................................84Secured Party ....................................................... 84Securities Act................... ii, 84, 230, 237, 243, 246Selling Institution...........................................32, 84Senior Expenses Cap............................................84Senior Secured Floating Rate Note......................84Senior Secured Loan............................................85Share Trustee ..................................................... 189

Shares.................................................................189shortfall .............................................................. 109Similar Laws ..... 217, 231, 232, 235, 239, 242, 245,247Special Redemption ..................................... 85, 124Special Redemption Amount ....................... 85, 124Special Redemption Date............................. 85, 124Spot Rate..............................................................85Stabilising Manager ...................................... vi, 222Stated Maturity .................................................... 85Static Date........................... ......................... 46, 174Sterling............................................................iv, 85Structured Finance Security ............................... 154

Subordinated Noteholder Report .................85, 185Subordinated Noteholder Withdrawal................119Subordinated Noteholders.................................i, 85Subordinated Notes.......................................i, 2, 56Subscription and Placement Agreement .............. 57Substitute Collateral Debt Obligation .................. 85Successor Collateral Manager..............................56Swap Counterparty.............................................179Swap Rate .......................................................... 168Swap Transaction...............................................179Swedish Kronor ..................................................... vSwiss Francs .......................................................... vSynthetic Security .............................................. 154TARGET Day......................................................85Target Par Amount...............................................86TARGET System.................................................86TCG ................................................................ ... 192The Carlyle Group ............................................. 192Transaction Creditors...........................................86Transaction Documents ....................................... 86Transaction Parties...............................................36Transaction Specific Cash Flow Model ............. 187Transfer Agent ............................................... 56, 86Trust Collateral .................................................. 108Trust Deed.........................................................i, 56Trustee .......................................................... i, 2, 56Trustee Fees and Expenses .................................. 86U.S. 10% Shareholder........................................209





REGISTERED OFFICE OF THE ISSUER

CELF Partnership Loan Funding 2008-I Limited85 Merrion SquareDublin 2, Ireland

TRUSTEE