Exhibit 10.1

 

Execution Copy

 

 

SECURITY AGREEMENT

 

dated as of August 21, 2003

 

among

 

N-STAR REAL ESTATE CDO I LTD,

as Issuer,

 

LASALLE BANK NATIONAL ASSOCIATION,

as Trustee,

 

and

 

LASALLE BANK NATIONAL ASSOCIATION,

as Collateral Agent and as Accountholder

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

ARTICLE I

DEFINITIONS

1

Section 1.01.

 

Definitions

1

Section 1.02.

 

Assumptions as to Collateral Debt Securities

2

Section 1.03.

 

Generic Terms

3

Section 1.04.

 

Times

3

 

 

 

ARTICLE II

THE COLLATERAL

3

Section 2.01.

 

Security Interests

3

Section 2.02.

 

Creation of Security Interest; Transfer of Control

7

Section 2.03.

 

Termination of Security Interests

7

Section 2.04.

 

Priority of Payments

7

Section 2.05.

 

Representations Regarding Collateral

7

 

 

 

ARTICLE III

CLOSING DATE ACTIONS

9

Section 3.01.

 

Closing Date Requirements

9

Section 3.02.

 

Closing Date Actions

9

 

 

 

ARTICLE IV

ACCOUNTS, ACCOUNTINGS AND RELEASES

10

Section 4.01.

 

Collection of Money

10

Section 4.02.

 

Collection Account

10

Section 4.03.

 

Interest Reserve Account

11

Section 4.04.

 

Expense Reserve Account

12

Section 4.05.

 

Collateral Account

14

Section 4.06.

 

Reports by Collateral Agent

14

Section 4.07.

 

Accountings

15

Section 4.08.

 

Release of Securities

21

Section 4.09.

 

Reports by Independent Accountants

22

Section 4.10.

 

Reports to Rating Agencies

22

Section 4.11.

 

Notices of Noteworthy Events

22

Section 4.12.

 

Amendments to the Transaction Documents

23

 

 

 

ARTICLE V

PRIORITY OF PAYMENTS

23

Section 5.01.

 

Disbursements of Money from Collection Account

23

Section 5.02.

 

Additional Provisions

28

 

 

 

ARTICLE VI

SALE OF COLLATERAL DEBT SECURITIES

29

Section 6.01.

 

Sale of Collateral Debt Securities

29

Section 6.02.

 

Conditions Applicable to all Transactions

29

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

ARTICLE VII

SUBORDINATION

30

Section 7.01.

 

Subordination

30

 

 

 

ARTICLE VIII

HEDGE AGREEMENTS, INITIAL HEDGE AGREEMENT

33

Section 8.01.

 

Hedge Agreement Provisions

33

Section 8.02.

 

Initial Hedge Agreement

36

Section 8.03.

 

Acknowledgement of Custodian

36

 

 

 

ARTICLE IX

THE COLLATERAL AGENT

37

Section 9.01.

 

Appointment and Powers

37

Section 9.02.

 

Performance of Duties

37

Section 9.03.

 

Reliance Upon Documents

38

Section 9.04.

 

Eligibility of Collateral Agent

39

Section 9.05.

 

Successor Collateral Agent

39

Section 9.06.

 

Indemnification

40

Section 9.07.

 

Compensation and Reimbursement

40

Section 9.08.

 

Representations and Warranties of the Collateral Agent

41

Section 9.09.

 

Accounts

41

Section 9.10.

 

Waiver of Setoffs

41

Section 9.11.

 

Provision of Information

42

 

 

 

ARTICLE X

COVENANTS OF THE ISSUER

42

Section 10.01.

 

Preservation of Collateral

42

Section 10.02.

 

Opinions as to Collateral

42

Section 10.03.

 

Non-Interference; etc.

43

 

 

 

ARTICLE XI

MISCELLANEOUS

43

Section 11.01.

 

Amendments

43

Section 11.02.

 

Notices

44

Section 11.03.

 

Severability

45

Section 11.04.

 

Term of This Agreement

45

Section 11.05.

 

Assignments

45

Section 11.06.

 

Non-Petition Agreement

45

Section 11.07.

 

Trial by Jury Waived

46

Section 11.08.

 

Governing Law

46

Section 11.09.

 

Consents to Jurisdiction

46

Section 11.10.

 

Service of Process

46

Section 11.11.

 

Time of Essence

47

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

Section 11.12.

Counterparts

47

Section 11.13.

Integration

47

Section 11.14.

Headings

47

Section 11.15.

Limited Recourse

47

Section 11.16.

Payments in Accordance with the Priority of Payments

47

Section 11.17.

Collateral Agent and Its Affiliates

47

Section 11.18.

Judgment Currency

48

 

 

 

 

ANNEX A

Steps Required For Delivery

 

Annex A-l

ANNEX B

Glossary of Certain Defined Terms

 

Annex B-l

ANNEX C

Specified Types

 

Annex C-l

SCHEDULE A

Collateral Debt Securities as of the Closing Date

 

Schedule A-l

SCHEDULE B

Moody’s Recovery Rate Matrix

 

Schedule B-l

SCHEDULE C

Fitch Recovery Rate Matrix

 

Schedule C-l

SCHEDULE D

S&P Recovery Rate Matrix

 

Schedule D-l

SCHEDULE E

Auction Procedures

 

Schedule E-l

SCHEDULE F

Diversity Score

 

Schedule F-l

SCHEDULE G

Fitch Sectors and Subsectors

 

Schedule G-l

SCHEDULE H

S&P Industry Classification Group

 

Schedule H-l

SCHEDULE I

S&P Structured Finance Sectors

 

Schedule I-l

SCHEDULE J

S&P Notching Criteria I

 

Schedule J-l

SCHEDULE K

S&P Notching Criteria II

 

Schedule K-l

SCHEDULE L

Moody’s Notching Criteria

 

Schedule L-l

SCHEDULE M

Moody’s Industry Classification Groups

 

Schedule M-l

SCHEDULE N

Fitch Report

 

Schedule N-l

SCHEDULE O

Fitch Industry Classification Groups

 

Schedule O-l

 

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This SECURITY AGREEMENT (as amended from time to time, this “Agreement”) is made
as of August 21, 2003 by and among N-Star Real Estate CDO I Ltd, a company
incorporated under the laws of the Cayman Islands, as issuer (the “Issuer”),
LaSalle Bank National Association, a national banking association, as trustee
under the Trust Deed (in such capacity, the “Trustee”), as collateral agent for
and on behalf of the Secured Parties (in such capacity, the “Collateral Agent”)
and as securities intermediary and depositary bank (in such capacity, the
“Accountholder”).

 

RECITALS

 

1.                                       The Issuer intends to purchase for
investment Collateral Debt Securities primarily consisting of CMBS Securities
and REIT Debt Securities.

 

2.                                       In order to obtain funds for its
purchases of the Collateral Debt Securities, the Issuer together with N-Star
Real Estate CDO I Corp., a company organized under the laws of the State of
Delaware (the “Co-Issuer”, and together with the Issuer, the “Co-Issuers”),
intend to issue on the date hereof (a) U.S.$250,000,000 aggregate principal
amount of Class A-1 Floating Rate Senior Notes Due 2038, (b) U.S.$45,000,000
aggregate principal amount of Class A-2A Floating Rate Senior Notes Due 2038,
(c) U.S.$15,000,000 aggregate principal amount of Class A-2B Fixed Rate Senior
Notes Due 2038, (d) U.S.$15,000,000 aggregate principal amount of Class B-1
Floating Rate Senior Subordinate Notes Due 2038, (e) U.S.$10,000,000 aggregate
principal amount of Class B-2 Floating Rate Senior Subordinate Notes Due 2038,
(f) U.S.$5,000,000 aggregate principal amount of Class C-lA Floating Rate
Subordinate Notes Due 2038, (g) U.S.$5,000,000 aggregate principal amount of
Class C-1B Fixed Rate Subordinate Notes Due 2038, (h) U.S.$24,000,000 aggregate
principal amount of Class C-2 Fixed Rate Subordinate Notes Due 2038,
(i) U.S.$10,000,000 aggregate principal amount of Class D-1A Floating Rate
Subordinate Notes Due 2038 and (j) U.S.$4,000,000 aggregate principal amount of
Class D-1B Fixed Rate Subordinate Notes Due 2038 pursuant to the Trust Deed, and
the Issuer intends to issue on the date hereof 19,000 Preferred Shares pursuant
to the Articles.

 

3.                                       In order to provide security for the
performance by each of the Co-Issuers of all of their obligations to pay to the
Secured Parties amounts payable in respect of such Notes in accordance with
their terms and the terms of the Note Agency Agreement, the Trust Deed and the
other Transaction Documents, the Issuer has agreed to Grant to the Collateral
Agent, on behalf and for the benefit of the Secured Parties, a security interest
in the Collateral in the manner set forth in this Agreement.

 

AGREEMENTS

 

In consideration of the premises and of the agreements herein contained, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, each of the Issuer, the Trustee, the Collateral Agent and
the Accountholder hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.                                  Definitions. Capitalized terms
used herein and not defined herein shall have the meanings set forth in the
Glossary of Certain Defined Terms attached as Annex B hereto (the “Glossary”).

 

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Section 1.02.                                  Assumptions as to Collateral Debt
Securities.

 

(a)                                  In connection with all calculations
required to be made pursuant to this Agreement with respect to Scheduled
Distributions on any Collateral Debt Security, or any payments on any other
assets included in the Collateral, and with respect to the income that can be
earned on Scheduled Distributions on such Collateral Debt Securities and on any
other amounts that may be received for deposit in the Collection Account, the
provisions set forth in this Section 1.02 shall be applied.

 

(b)                                 All calculations by or on behalf of the
Trustee or the Issuer with respect to Scheduled Distributions on the Collateral
Debt Securities shall be made on the basis of information as to the terms of
each such Collateral Debt Security and upon report of payments, if any, received
on such Collateral Debt Security that are furnished by or on behalf of the
issuer of such Collateral Debt Security and, to the extent they are not
manifestly in error, such information or report may be conclusively relied upon
in making such calculations.

 

(c)                                  Each Scheduled Distribution receivable with
respect to a Collateral Debt Security shall be assumed to be received on the
applicable Due Date, and each such Scheduled Distribution shall be assumed to be
immediately deposited in the Collection Account and, except as otherwise
specified, to earn interest at the Assumed Investment Rate; provided, however,
that if the nominal due date for any payment on any Collateral Debt Security or
Eligible Investment occurs on a day during a Due Period that is not a business
day under the applicable Underlying Instrument and as a result such payment is
paid and received in the following Due Period, then such payment shall be deemed
to have been received during the Due Period in which such nominal due date falls
if such payment is timely made in accordance with the related Underlying
Instrument. All such funds shall be assumed to continue to earn interest until
the date on which they are required to be available in the Collection Account
for transfer to the Note Payment Account and application, in accordance with the
terms hereof, of the Notes and of the Trust Deed, to payments on the Notes or
other amounts payable pursuant to this Agreement.

 

(d)                                 For accounting and reporting purposes only,
for each Collateral Debt Security that bears interest based on a floating rate
index, all calculations involving such floating rate index for the then-current
period shall be assumed to be equal to the then-current rate as had been set in
accordance with the terms of the Collateral Debt Security and all calculations
involving such floating rate index for future periods shall be assumed to be
equal to the applicable floating rate on the relevant Measurement Date.

 

(e)                                  For purposes of calculating the Class A
Interest Coverage Ratio, the Class B Interest Coverage Ratio, the Class C
Interest Coverage Ratio and the Class D Interest Coverage Ratio, the expected
interest income on floating rate Collateral Debt Securities and the expected
interest payable on the Notes will be calculated using the then-current interest
rates applicable thereto and expected interest earned on the Eligible
Investments will be calculated using the then-current interest rate applicable
thereto.

 

(f)                                    With respect to any Collateral Debt
Security as to which any interest or other payment thereon is subject to
withholding tax of any relevant jurisdiction, each Scheduled Distribution
thereon shall, for purposes of the Coverage Tests, be deemed to be payable net
of such withholding tax unless the issuer thereof or obligor thereon is required
to make additional payments to fully compensate the Issuer for such withholding
taxes (including in respect of any such additional payments). On any date of
determination, the amount of any Scheduled Distribution due on any future date
shall be assumed to be made net of any such uncompensated withholding tax based
upon withholding tax rates in effect on such date of determination.

 

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(g)                            Unless otherwise provided herein, test
calculations that evaluate to a percentage shall be rounded to the nearest
ten-thousandth and test calculations that evaluate to a number or decimal will
be rounded to the nearest one-hundredth.

 

Section 1.03.                             Generic Terms. The terms “hereof”,
“herein” or “hereunder”, unless otherwise modified by more specific reference,
shall refer to this Agreement in its entirety. Unless otherwise indicated in
context, the terms “Article”, “Section”, “Appendix”, “Exhibit” or “Annex” shall
refer to an Article or Section of, or Appendix, Exhibit or Annex to, this
Agreement. The definition of a term shall include the singular, the plural, the
past, the present, the future, the active and the passive forms of such term.
The words “include”, “including” and “included” shall be illustrative and shall
not imply any limitation or exclusion unless the context clearly indicates
otherwise.

 

Section 1.04.                                  Times. All times referred to
herein shall be to times in The City of New York, unless otherwise expressly
stated herein.

 

ARTICLE II

 

THE COLLATERAL

 

Section 2.01.                                  Security Interests.

 

(a)                             Grant to the Collateral Agent on behalf and for
the benefit of the Secured Parties. In order to secure the full and punctual
payment, and the performance by the Issuer, of all of the Issuer’s obligations
with respect to the Notes, this Agreement, the Note Agency Agreement, the Trust
Deed and each Hedge Agreement and to secure the performance of all obligations
of the Issuer under this Agreement and the other Transaction Documents in favor
of (i) the Trustee for itself and on behalf of the Noteholders, (ii) the
Collateral Advisor and (iii) each Hedge Counterparty (collectively, the “Secured
Parties”), the Issuer hereby Grants to the Collateral Agent on behalf and for
the benefit of the Secured Parties, as their respective interests may appear,
subject to the provisions of this Agreement, a continuing first priority Lien
on, and first priority security interest in, all of its right, title and
interest in, to and under all of the assets of the Issuer, whether now owned and
existing or hereafter acquired or arising and wherever located, but excluding
all of the Issuer’s right, title and interest in and to (A) the Ordinary Shares
Account and any amounts on deposit therein, which will equal the sum of $2,000,
representing (1) the paid up share capital of the Issuer resulting from the
issuance of the Ordinary Shares ($1,000) under the Articles and (2) the fee paid
to the Issuer for issuing the Notes ($1,000) and (B) the Preferred Share
Distribution Account and any amounts on deposit therein (all non-excluded assets
being collectively referred to as the “Collateral”); provided that the
Collateral shall include, without limitation, the following:

 

(i)                                          the Collateral Account, including
all Collateral Debt Securities (listed, as of the Closing Date, in Schedule A)
which the Issuer causes to be delivered to the Collateral Agent for the benefit
and on behalf of the Secured Parties (directly or through a Securities
Intermediary or bailee) and all payments thereon or with respect thereto, and
all Collateral Debt Securities that are delivered to the Collateral Agent in the
future pursuant to the terms hereof and all payments thereon or with respect
thereto;

 

(ii)                                       the Note Payment Account, the
Interest Reserve Account, the Expense Reserve Account, the Hedge Termination
Receipts Account, the Hedge Replacement Account and the Collection Account
(collectively with the Collateral Account, the “Accounts”);

 

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(iii)                                    Eligible Investments purchased with
funds on deposit in any Account and all funds on deposit in any Account and all
income from the investments of funds in any Account;

 

(iv)                                   all Cash or Money delivered to the
Collateral Agent for the benefit of the Trustee (directly or through a
Securities Intermediary or bailee);

 

(v)                                      all the Issuer’s rights under each
Hedge Agreement (including any collateral pledged for the benefit of the Issuer
thereunder) and all payments thereunder or with respect thereto;

 

(vi)                                   all the Issuer’s rights under the
Collateral Advisory Agreement and the Collateral Administration Agreement;

 

(vii)                                all Securities, Security Entitlements,
Instruments, Money and Investment Property and other property of any type or
nature in which the Issuer has an interest, including any part thereof which
consists of General Intangibles; and

 

(viii)                             all proceeds, accessions, profits, income,
substitutions and replacements, whether voluntary or involuntary, of and to any
property in which the Issuer has granted such security interest.

 

Such Grants are made, however, in trust to secure the Notes equally and ratably
without prejudice, priority or distinction, except as expressly provided in this
Agreement, between any Note and any other Note by reason of difference in time
of issuance or otherwise, and to secure in accordance with the priorities set
forth in this Agreement (i) the payment of all amounts due on the Notes in
accordance with their terms, (ii) the payment of all other sums payable under
this Agreement and all amounts payable to the Collateral Advisor under the
Collateral Advisory Agreement and each Hedge Counterparty under a Hedge
Agreement and (iii) compliance with the provisions of this Agreement, the
Collateral Advisory Agreement and each Hedge Agreement, all as provided in this
Agreement. The Collateral Agent, on behalf of the Secured Parties, acknowledges
such Grant, accepts the trusts hereunder and agrees to perform the duties herein
in accordance with the provisions hereof.

 

(b)                                 Priorities. The Issuer intends, and the
Collateral Agent agrees, that the security interests in the Collateral securing
the Issuer’s obligations with respect to the Notes and performance of all its
obligations under this Agreement in favor of the Collateral Agent for the
benefit of the Secured Parties shall rank pari passu with each other, shall be
prior to all other Liens in respect of the Collateral, subject to the terms of
this Agreement, and shall be subject to the Priority of Payments. The Issuer
shall take all actions necessary to obtain and maintain, in favor of the
Collateral Agent for the benefit of the Secured Parties, a first priority Lien
on and a first priority perfected security interest in the Collateral, subject
to no other Liens.

 

(c)                                  Holding of Collateral. The Collateral
Agent, for the benefit and on behalf of the Secured Parties, acknowledges the
Grant of the security interests under this Agreement in accordance with the
provisions of this Agreement. The Collateral in the form of Securities, Security
Entitlements, Instruments and Money shall be held by the Accountholder for the
Collateral Agent for the benefit and on behalf of the Secured Parties pursuant
to the Account Control Agreement and the Accountholder shall comply with any
instruction given by the Collateral Agent. If so directed in writing by the
Issuer, the Collateral Agent shall, and in any event shall cause the
Accountholder to, hold, and perfect the security interest in, the Collateral.
Except as provided herein, no Collateral may be withdrawn from the Accounts.

 

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(d)                                 Delivery of Portfolio Collateral. Collateral
Debt Securities acquired prior to or on the Closing Date shall be delivered by,
or at the direction of, the Issuer to the Collateral Agent on or before the
Closing Date in accordance with Annex A hereto, and the Collateral Debt
Securities which the Issuer has on or before the Closing Date committed to
purchase but which will not have settled on or before the Closing Date shall be
delivered by, or at the direction of, the Issuer to the Collateral Agent when
acquired in accordance with Annex A hereto. The Issuer shall Grant pursuant to
Section 2.01(a) all of the Issuer’s right, title and interest in and to the
Collateral Debt Securities and deliver the Collateral Debt Securities in
accordance with the requirements set forth in Annex A hereto in order to perfect
a first priority security interest in favor of the Collateral Agent on behalf
and for the benefit of the Secured Parties. If any such Collateral Debt
Securities are held through the Accountholder, delivery shall be deemed to have
occurred upon receipt of evidence satisfactory to the Collateral Agent that such
Collateral Debt Securities have been credited to the Collateral Account in
accordance with Annex A hereto.

 

(e)                                  Financing Statements. The Issuer shall
cause a UCC financing statement describing the Collateral and naming the Issuer
as debtor and the Collateral Agent as secured party to be filed, by or on behalf
of the Issuer, in the District of Columbia within ten (10) Business Days of the
Closing Date. The Issuer shall take all actions necessary to maintain the
effectiveness of such financing statement and shall notify the Collateral Agent
in writing not less than thirty (30) days prior to any change in the Issuer’s
name, identity, corporate structure, jurisdiction of incorporation or
jurisdiction of its chief executive office. The Issuer hereby authorizes the
Collateral Agent to, and the Collateral Agent shall upon receipt of an Opinion
of Counsel as to the necessity of such filing, file such additional financing
statement or any other financing statement, amendment, assignment or
continuation statement that the Issuer shall deem necessary or advisable in
connection with the security interest Granted hereunder, including, without
limitation, financing statements describing the Collateral. The Issuer agrees
that it will from time to time cause to be filed financing statements and
continuation statements required to be made, it being understood that the
Collateral Agent shall be entitled to rely upon an Opinion of Counsel as to the
need to file such financing statements and continuation statements, the dates by
which such filings are required to be made and the jurisdictions in which such
filings are required to be made. The Issuer shall not without the written
consent of the Collateral Agent (which consent shall not be unreasonably
withheld or delayed) authorize the filing of any financing statements naming it
as debtor other than financing statements in favor of the Collateral Agent.

 

(f)                                    Pledge Notices. Concurrently with the
execution and delivery by the Issuer of the Transaction Documents, the Issuer
shall deliver to each of the Accountholder, the Collateral Agent, the Trustee,
each Paying Agent, each Hedge Counterparty and the Collateral Advisor, a notice
in form and substance satisfactory to the Collateral Agent informing such
Persons of the Collateral Agent’s charge over, and security interest in, the
Hedge Agreements and all of the Issuer’s right, title and interest in, to and
under the Collateral Advisory Agreement and the Collateral Administration
Agreement. Each Hedge Counterparty shall, by entering into such agreement,
acknowledge that the Lien of this Agreement extends to such agreement.

 

(g)                                 No Transfer of Duties. The security
interests are Granted as security only and shall not (i) transfer or in any way
affect or modify, or relieve the Issuer from any obligation to perform or
satisfy, any term, covenant, condition or agreement to be performed or satisfied
by the Issuer under or in connection with this Agreement or any other
Transaction Document to which it is a party or (ii) impose any obligation on the
Trustee, the Collateral Agent, the Collateral Advisor or the Accountholder to
perform or observe any such term, covenant, condition or agreement or impose any
liability on the Trustee, the Collateral Agent, the Collateral Advisor or the
Accountholder for any act or omission on the part of the Issuer relative thereto
or for any breach of any representation or warranty on the part of the Issuer
contained therein or made in connection therewith.

 

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(h)                            Representative of Noteholders Only; Agent for All
Other Secured Parties. With respect to the security interests created hereunder,
the pledge of any item of Collateral to the Collateral Agent is made to the
Collateral Agent (i) for the benefit of the Trustee as representative of the
Noteholders and (ii) as agent for each of the other Secured Parties; in
furtherance of the foregoing, the possession by the Collateral Agent of any item
of Collateral, the endorsement to or registration in the name of the Collateral
Agent of any item of Collateral (including as entitlement holder of the
Collateral Account) are all undertaken by the Collateral Agent for the benefit
of the Trustee as representative of the Noteholders and as agent for each of the
other Secured Parties. The Collateral Agent shall have no fiduciary duties to
any Hedge Counterparty or the Collateral Advisor; provided that the foregoing
shall not limit any of the express obligations of the Collateral Agent under
this Agreement.

 

(i)                                The Issuer hereby agrees, and hereby
undertakes to obtain the agreement of the Collateral Advisor, in the Collateral
Advisory Agreement to the following:

 

(i)                                          The Collateral Advisor consents to,
and agrees to perform, the provisions of this Agreement and the other
Transaction Documents applicable to the Collateral Advisor.

 

(ii)                                       The Collateral Advisor acknowledges
that the Issuer is assigning all of its right, title and interest in, to and
under the Collateral Advisory Agreement to the Collateral Agent on behalf and
for the benefit of the Secured Parties, and the Collateral Advisor agrees that
all of the representations, covenants and agreements made by the Collateral
Advisor in the Collateral Advisory Agreement are also for the benefit of the
Secured Parties.

 

(iii)                                    Neither the Issuer nor the Collateral
Advisor will enter into any agreement amending, modifying or terminating the
Collateral Advisory Agreement (other than in respect of an amendment or
modification of the type that may be made to this Agreement and the Trust Deed
without Noteholder consent) or selecting or consenting to a successor collateral
advisor, without prior written notice to the Requisite Noteholders and Rating
Agency Confirmation.

 

(iv)                                   Except as otherwise set forth in the
Collateral Advisory Agreement, the Collateral Advisor shall continue to serve as
Collateral Advisor under the Collateral Advisory Agreement notwithstanding that
the Collateral Advisor shall not have received amounts due it under the
Collateral Advisory Agreement because sufficient funds were not then available
to pay such amounts and the Collateral Advisor agrees not to cause the filing of
a petition in bankruptcy against the Issuer for the non-payment to the
Collateral Advisor until the later of (A) payment in full of all Notes issued
under the Trust Deed and the payment of the amounts, if any, to the Preferred
Share Fiscal and Paying Agent for payment of dividends and other distributions
on the Preferred Shares pursuant to the Preferred Share Documents, in accordance
with the Priority of Payments plus ten (10) days following such payment, and
(B) the expiration of a period equal to the applicable preference period under
any applicable bankruptcy law; provided that nothing in this clause (B) shall
preclude, or be deemed to estop, the Collateral Advisor (1) from taking any
action prior to the expiration of the ten (10) days following such payment or,
if longer, the applicable preference period then in effect, in (x) any case or
proceeding voluntarily filed or commenced by the Issuer or the Co-Issuer, as the
case may be, or (y) any involuntary insolvency proceeding filed or commenced
against the Issuer or the Co-Issuer, as the case may be, by a Person other than
the Collateral Advisor or (2) from commencing against the Issuer or the
Co-Issuer or any properties of the Issuer or the Co-Issuer any legal action that
is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or
liquidation proceeding; and provided, further, that the obligations of the
Issuer hereunder shall be payable solely from the Collateral in accordance with
the Priority of Payments.

 

(j)                                Collateral Agent as Attorney-In-Fact. Without
imposing any obligations on the Collateral Agent with respect thereto (other
than as set forth in this Agreement), the Issuer hereby

 

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appoints the Collateral Agent as its attorney-in-fact for the specific purpose
of filing any financing statements and continuation statements with respect to
the security interests provided for herein.

 

Section 2.02.                                  Creation of Security Interest;
Transfer of Control. The Issuer hereby agrees to (a) create in each item of
Collateral in favor of the Collateral Agent on behalf and for the benefit of the
Secured Parties a first priority Lien on the Collateral Granted pursuant to
Section 2.01(a) and (b) give Control over each item of the Collateral
constituting a Financial Asset to the Collateral Agent. The obligation in the
preceding sentence shall be an obligation of the Issuer and not an obligation of
the Collateral Agent or the Accountholder. All procedures regarding the
transfer, relinquishment or maintenance of Control by the Collateral Agent over
the Collateral shall be governed by the Account Control Agreement and Annex A
hereto. The parties hereto agree that, following the occurrence of any Event of
Default, the Trustee shall be entitled to give all instructions to the
Collateral Agent on behalf of the Secured Parties as described in Section 9.01.

 

Section 2.03.                                  Termination of Security
Interests. On the Final Termination Date, the security interests and the rights,
remedies, powers, duties, authority and obligations conferred upon the
Collateral Agent for the benefit and on behalf of the Secured Parties and the
Accountholder pursuant to this Agreement shall terminate and be of no further
force and effect and all rights, remedies, powers, duties, authority and
obligations of each of the Collateral Agent, the Accountholder and the Trustee
with respect to the Collateral shall be automatically released in favor of the
Issuer; provided, however, that each of the Collateral Agent, the Accountholder
and the Trustee, if requested in writing by the Issuer, shall execute and
deliver such instruments of release in favor of the Issuer as the Issuer may
reasonably request to effectuate such release, and any such instruments so
executed and delivered shall be fully binding on each of the Trustee, the
Collateral Agent and the Accountholder.

 

Section 2.04.                                  Priority of Payments. All amounts
received in respect of the Collateral (whether by payments or by sale or other
disposition) that are available for distribution shall be distributed in
accordance with the Priority of Payments set forth herein.

 

Section 2.05.                                  Representations Regarding
Collateral. The Issuer, as of the date hereof (and, as of the date of each
acquisition of any Collateral), represents and warrants to the following:

 

(a)                                  This Agreement creates a valid and
continuing security interest (as defined in the applicable UCC) in the
Collateral in favor of the Collateral Agent on behalf and for the benefit of the
Secured Parties, which security interest is prior to all other Liens and
security interests, and is enforceable as such as against creditors of and
purchasers from the Issuer and, upon delivery of the Collateral Debt Securities
in accordance with the requirements set forth in Annex A hereto and filing of
the appropriate financing statements in the appropriate filing offices, the Lien
and security interest created by this Agreement shall be a perfected first
priority security interest in favor of the Collateral Agent for the benefit of
the Secured Parties.

 

(b)                                 The Issuer owns and has good and marketable
title to the Collateral free and clear of any Liens, claims, encumbrances or
defects of any nature whatsoever except for those which are being released on
the Closing Date or on the date of purchase by the Issuer or those created
pursuant to or contemplated under this Agreement and encumbrances arising from
due bills, if any, with respect to interest, or a portion thereof, accrued on
any Collateral Debt Security prior to the first payment date and owed by the
Issuer to the seller of such Collateral Debt Security.

 

(c)                                  The Issuer has acquired its ownership in
each such Collateral Debt Security, or will acquire in the case of any
Collateral Debt Securities which the Issuer has on or before the Closing

 

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Date committed to purchase but which will not have settled on or before the
Closing Date, in good faith without notice of any adverse claim, except as
described in paragraph (b) above.

 

(d)                                 The Issuer (i) has delivered each such
Collateral Debt Security, or will deliver any Collateral Debt Securities which
the Issuer has on or before the Closing Date committed to purchase but which
will not have settled on or before the Closing Date, to the Collateral Agent in
accordance with Annex A hereto and (ii) has not assigned, pledged, sold, granted
a security interest in or otherwise encumbered any interest in such Collateral
Debt Security other than interests Granted pursuant to this Agreement;

 

(e)                                  The Issuer has full right to Grant all
security interests Granted herein.

 

(f)                                  All Collateral is comprised of either
“securities”, “instruments”, “tangible chattel paper”, “accounts”, “security
entitlements” or “general intangibles”, in each case as defined in the
applicable UCC.

 

(g)                               Each of the Accounts, and all subaccounts
thereof, constitute Securities Accounts.

 

(h)                                 All items of the Collateral that constitute
Security Entitlements have been and will have been credited to one of the
Securities Accounts. The securities intermediary for each of the Accounts has
agreed to treat all assets credited to the Securities Accounts as financial
assets under the applicable UCC.

 

(i)                                     Other than the security interest Granted
to the Collateral Agent on behalf and for the benefit of the Secured Parties
pursuant to this Agreement, the Issuer has not pledged, assigned, sold, granted
a security interest in or otherwise conveyed any of the Collateral. The Issuer
has not authorized the filing of and is not aware of any financing statements
against the Issuer that include a description of collateral covering the
Collateral other than any financing statement relating to the security interest
Granted to the Collateral Agent on behalf and for the benefit of the Secured
Parties hereunder or that has been terminated. The Issuer is not aware of any
judgment, Pension Benefit Guarantee Corp. lien or tax lien filings against it.

 

(j)                                     The Issuer has caused or will have
caused, within ten (10) days of the Closing Date, the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the security interest in
the Collateral Granted to the Collateral Agent on behalf and for the benefit of
the Secured Parties hereunder that constitutes chattel paper, instruments,
accounts, securities entitlements or general intangibles under the applicable
UCC, if any.

 

(k)                                  The Collateral Agent or the Accountholder
has in its possession all original copies of the instruments that constitute or
evidence the Collateral, if any. The instruments, loan agreements and leases
that constitute or evidence the Collateral do not have any marks or notations
indicating that they have been pledged, assigned or otherwise conveyed to any
Person other than the Collateral Agent on behalf and for the benefit of the
Secured Parties. All financing statements filed or to be filed against the
Issuer in favor of the Collateral Agent on behalf and for the benefit of the
Secured Parties in connection herewith describing the Collateral contain a
statement to the following effect: “A purchase of or security interest in any
collateral described in this financing statement will violate the rights of the
Collateral Agent on behalf and for the benefit of (A) the Trustee, for the
benefit of the Noteholders, (B) the Collateral Advisor and (C) each Hedge
Counterparty.”

 

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(l)                           The authoritative copy of any chattel paper that
constitutes or evidences the Collateral, if any, has been communicated to the
Trustee and has no marks or notations indicating that it has been pledged,
assigned or otherwise conveyed to any Person other than the Collateral Agent on
behalf and for the benefit of the Secured Parties.

 

(m)                          The Issuer has received or will receive all
consents and approvals required by the terms of the underlying loan agreement,
indenture or other underlying documentation, if any, relating to the Collateral
to the transfer to the Collateral Agent on behalf and for the benefit of the
Secured Parties of its interest and rights in the Collateral hereunder.

 

(n)                            The Issuer has delivered to the Trustee a fully
executed agreement pursuant to which the Collateral Agent and the Accountholder
have agreed to comply with all instructions originated by the Trustee relating
to the Accounts without further consent by the Issuer.

 

(o)                            None of the Issuer Accounts is in the name of any
person other than the Issuer or the Collateral Agent, held on behalf and for the
benefit of the Secured Parties. The Issuer has not consented to the Collateral
Agent or to the Accountholder maintaining any of the Issuer Accounts to comply
with entitlement orders or instructions of any Person other than the Trustee.

 

(p)                            Notwithstanding any other provision of this
Agreement or any other related Transaction Document, the representations in this
Section 2.05 shall be continuing and deemed to be updated on any day a new item
of Collateral is acquired, and remain in full force and effect until such time
as all obligations under this Agreement, the Trust Deed, the Note Agency
Agreement and the Notes have been finally and fully paid and performed.

 

(q)                            The parties to this Agreement (i) shall not,
without obtaining a Rating Agency Confirmation, waive any of the representations
in this Section 2.05; (ii) shall provide each of the Rating Agencies with prompt
written notice of any breach of the representations contained in this
Section 2.05 upon becoming aware thereof; and (iii) shall not, without obtaining
a Rating Agency Confirmation (as determined after any adjustment or withdrawal
of the ratings following notice of such breach), waive a breach of any of the
representations in this Section 2.05.

 

ARTICLE III

 

CLOSING DATE ACTIONS

 

Section 3.01.                             Closing Date Requirements. The Issuer
hereby represents and warrants to the Collateral Agent on behalf and for the
benefit of the Secured Parties that as of the Closing Date it will have acquired
Collateral Debt Securities and Eligible Investments in an aggregate Principal
Balance representing at least U.S.$402.1 million.

 

Section 3.02.                             Closing Date Actions. Within fifteen
(15) Business Days after the Closing Date, (i) the Issuer, or the Collateral
Advisor on the Issuer’s behalf, shall be required to obtain and deliver to the
Trustee an accountants’ certificate from the Independent Accountants of national
reputation (a) confirming the information with respect to each Collateral Debt
Security set forth on Schedule A hereto, as of the Closing Date and the
information provided by the Issuer with respect to every other asset included in
the Collateral, by reference to such sources as will be specified therein,
(b) certifying as of the Closing Date the procedures applied and the associated
findings with respect to the Coverage Tests and (c) the procedures undertaken by
them to review data and computations relating to the foregoing statement,
(ii) the Trustee shall be required to run the S&P CDO Monitor and (iii) the
Trustee will be required to report the S&P scenario default and break-even
default rate for each Class of Notes.

 

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ARTICLE IV

 

ACCOUNTS, ACCOUNTINGS AND RELEASES

 

Section 4.01.                             Collection of Money. The Accounts
established by the Collateral Agent pursuant to Section 8.01 and this Article IV
may include any number of sub-accounts requested by the Collateral Advisor for
convenience in administering Collateral Debt Securities. In addition, all Cash
deposited in the Accounts established pursuant to this Article IV shall be
invested in Eligible Investments in accordance with the procedures set forth in
this Article IV and any restrictions applicable to such Accounts.

 

Section 4.02.                             Collection Account.

 

(a)                             The Collateral Agent shall, prior to the Closing
Date, establish a single, segregated trust account in the United States which
shall be designated as the “Collection Account”, which shall be held in the name
of the Collateral Agent for the benefit and on behalf of the Secured Parties and
over which the Collateral Agent shall have exclusive Control and the sole right
of withdrawal, into which the Collateral Agent shall from time to time deposit,
in addition to the deposits required pursuant to Sections 4.03(d) and 4.04(d),
(i) all distributions on the Collateral Debt Securities and (ii) all proceeds
received from the disposition of any Collateral Debt Securities (unless
simultaneously reinvested in Eligible Investments) and (iii) all Collections.
Funds in the Collection Account shall not be commingled with any other Money.
The Collateral Agent shall give to the Issuer, the Collateral Advisor and the
Trustee prompt notice if the Collection Account or any funds on deposit therein,
or otherwise to the credit thereof, shall become subject to any writ, order,
judgment, warranty of attachment, execution or similar process. The Issuer shall
not have any legal, equitable or beneficial interest in the Collection Account
other than in accordance with the Priority of Payments. In addition, (x) the
Issuer may, but under no circumstances shall be required to, deposit or cause to
be deposited from time to time such Moneys in the Collection Account as it
deems, in its sole discretion, to be advisable and by notice to the Collateral
Agent and (y) the Collateral Advisor may designate such Money to be treated as
Collateral Principal Collections or Collateral Interest Collections hereunder at
its discretion. All Money deposited from time to time in the Collection Account
pursuant to this Agreement shall be held by the Collateral Agent as part of the
Collateral and shall be applied in accordance with the terms hereof and to the
purposes herein provided. The Collection Account shall remain at all times with
a financial institution having a long-term debt rating of at least “BBB+” by
S&P, at least “Baal” by Moody’s and, at least “BBB+” by Fitch and a short-term
debt rating of at least “A-1” by S&P, at least “P-1” by Moody’s and, at least
“F-1” by Fitch.

 

(b)                            All Distributions, any deposit required pursuant
to Section 4.02(c) and any net proceeds from the sale or disposition of a
Collateral Debt Security received by the Collateral Agent shall be immediately
deposited into the Collection Account. All such property, together with any
securities in which funds included in such property are or will be invested or
reinvested during the term of this Agreement, and any income or other gain
realized from such investments, shall be held by the Collateral Agent in the
Collection Account as part of the Collateral subject to disbursement and
withdrawal as provided in this Section 4.02. By Issuer Order (which may be in
the form of standing instructions), the Issuer (or the Collateral Advisor on
behalf of the Issuer) may at any time direct the Collateral Agent to, and upon
receipt of such Issuer Order the Collateral Agent shall, invest all funds
received into the Collection Account during a Due Period, and amounts received
in prior Due Periods and retained in the Collection Account, as so directed in
Eligible Investments maturing no later than the Business Day immediately
preceding the next Payment Date. The Collateral Agent shall, within one
(1) Business Day after receipt of any Distribution or other proceeds which is
not Cash, so notify the Issuer and the Issuer (or the Collateral Advisor on
behalf of the Issuer) shall, within thirty (30) Business Days after receipt of

 

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such notice from the Collateral Agent, sell such Distribution or other proceeds
for Cash in an arm’s-length transaction to a Person which is not an Affiliate
(other than a Permitted Affiliate, subject to the Investment Advisers Act) of
the Issuer or the Collateral Advisor and deposit the proceeds thereof in the
Collection Account for investment pursuant to this Section 4.02; provided,
however, that the Issuer (or the Collateral Advisor on behalf of the Issuer)
need not sell such Distributions or other proceeds if it delivers an Officer’s
certificate to the Collateral Agent certifying that such Distributions or other
proceeds constitute Collateral Debt Securities or Eligible Investments.

 

(c)                             If, prior to the occurrence of an Event of
Default, the Issuer shall not have given any investment directions pursuant to
Section 4.02(b), the Collateral Agent shall seek instructions from the
Collateral Advisor within three (3) Business Days after transfer of such funds
to the Collection Account. If the Collateral Agent does not thereupon receive
written instructions from the Issuer (or the Collateral Advisor on behalf of the
Issuer) within thirty (30) Business Days after transfer of such funds to the
Collection Account, it shall invest and reinvest the funds held in the
Collection Account, as fully as practicable, but only in one or more Eligible
Investments described in clause (iii) of the definition of Eligible Investments
of its selection maturing no later than the Business Day immediately preceding
the next Payment Date. If, after the occurrence of an Event of Default, the
Issuer shall not have given investment directions to the Collateral Agent
pursuant to Section 4.02(b) for three (3) consecutive days, the Collateral Agent
shall invest and reinvest such Money as fully as practicable in Eligible
Investments as described in clause (iii) of the definition of Eligible
Investments of its selection maturing not later than the Business Day
immediately preceding the next Payment Date. All interest and other income from
such investments shall be deposited in the Collection Account, any gain realized
from such investments shall be credited to the Collection Account and any loss
resulting from such investments shall be charged to the Collection Account. The
Collateral Agent shall not in any way be held liable by reason of any
insufficiency of such Collection Account resulting from any loss relating to any
such Eligible Investment, except with respect to investments in obligations of
the Collateral Agent or any Affiliate thereof.

 

(d)                            Collateral Principal Collections and Sale
Proceeds shall be used to redeem the Notes in accordance with the Priority of
Payments in an amount equal to the lesser of (i) the Collateral Principal
Collections and (ii) the amount of Available Funds remaining in the Collection
Account.

 

Section 4.03.                             Interest Reserve Account.

 

(a)                        The Collateral Agent shall, prior to the Closing
Date, establish a single, segregated trust account which shall be designated as
the “Interest Reserve Account”, which shall be held in the name of the
Collateral Agent for the benefit and on behalf of the Secured Parties and over
which the Collateral Agent shall have exclusive Control and the sole right of
withdrawal, into which the Collateral Agent shall deposit on each Payment Date,
the Interest Reserve Amount, if any, in accordance with Section 5.01(a)(vii).
Funds in the Interest Reserve Account shall not be commingled with any other
Money. The Collateral Agent shall give to the Issuer, the Collateral Advisor and
the Trustee prompt notice if the Interest Reserve Account or any funds on
deposit therein, or otherwise to the credit of the Interest Reserve Account,
shall become subject to any writ, order, judgment, warranty of attachment,
execution or similar process. All Money deposited from time to time in the
Interest Reserve Account pursuant to this Agreement shall be held by the
Collateral Agent as part of the Collateral and shall be applied in accordance
with the terms hereof and to the purposes herein provided. The Issuer shall not
have any legal, equitable or beneficial interest in the Interest Reserve Account
other than in accordance with the Priority of Payments. The Interest Reserve
Account shall remain at all times with a financial institution having a
long-term debt rating of at least “BBB+” by S&P, at least “Baa1” by Moody’s and,
at least “BBB+” by Fitch and a short-term debt rating of at least “A-1” by S&P,
at least “P-1” by Moody’s and, at least “F-1” by Fitch.

 

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(b)                            Any deposit required pursuant to
Section 4.03(c) shall be immediately deposited into the Interest Reserve
Account. All such property, together with any securities in which funds included
in such property are or will be invested or reinvested during the term of this
Agreement, and any income or other gain realized from such investments, shall be
held by the Collateral Agent in the Interest Reserve Account as part of the
Collateral subject to disbursement and withdrawal as provided in this
Section 4.03. By Issuer Order (which may be in the form of standing
instructions), the Issuer (or the Collateral Advisor on behalf of the Issuer)
may at any time direct the Collateral Agent to, and upon receipt of such Issuer
Order the Collateral Agent shall, invest all funds received into the Interest
Reserve Account during a Due Period, and amounts received in prior Due Periods
and retained in the Interest Reserve Account, as so directed in Eligible
Investments maturing no later than the Business Day immediately preceding the
next Payment Date. The Collateral Agent shall, within one (1) Business Day after
receipt of any Distribution or other proceeds which is not Cash, so notify the
Issuer and the Issuer (or the Collateral Advisor on behalf of the Issuer) shall,
within thirty (30) Business Days after receipt of such notice from the
Collateral Agent, sell such Distribution or other proceeds for Cash in an
arm’s-length transaction to a Person which is not an Affiliate (other than a
Permitted Affiliate, subject to the Investment Advisers Act) of the Issuer or
the Collateral Advisor and deposit the proceeds thereof in the Interest Reserve
Account for investment pursuant to this Section 4.03; provided, however, that
the Issuer (or the Collateral Advisor on behalf of the Issuer) need not sell
such Distributions or other proceeds if it delivers an Officer’s certificate to
the Collateral Agent certifying that such Distributions or other proceeds
constitute Collateral Debt Securities or Eligible Investments.

 

(c)                             If, prior to the occurrence of an Event of
Default, the Issuer (or the Collateral Advisor on behalf of the Issuer) shall
not have given any investment directions pursuant to Section 4.03(b), the
Collateral Agent shall seek instructions from the Collateral Advisor within
three (3) Business Days after transfer of such funds to the Interest Reserve
Account. If the Collateral Agent does not thereupon receive written instructions
from the Issuer (or the Collateral Advisor on behalf of the Issuer) within
thirty (30) Business Days after transfer of such funds to the Interest Reserve
Account, it shall invest and reinvest the funds held in the Interest Reserve
Account, as fully as practicable, but only in one or more Eligible Investments
in clause (iii) of the definition of Eligible Investments of its selection
maturing no later than the Business Day immediately preceding the next Payment
Date. If, after the occurrence of an Event of Default, the Issuer (or the
Collateral Advisor on behalf of the Issuer) shall not have given investment
directions to the Collateral Agent pursuant to Section 4.03(b) for three
(3) consecutive days, the Collateral Agent shall invest and reinvest such Money
as fully as practicable in Eligible Investments as described in clause (iii) of
the definition of Eligible Investments of its selection maturing not later than
the Business Day immediately preceding the next Payment Date. All interest and
other income from such investments shall be deposited in the Interest Reserve
Account, any gain realized from such investments shall be credited to the
Interest Reserve Account and any loss resulting from such investments shall be
charged to the Interest Reserve Account. The Collateral Agent shall not in any
way be held liable by reason of any insufficiency of such Interest Reserve
Account resulting from any loss relating to any such Eligible Investment, except
with respect to investments in obligations of the Collateral Agent or any
Affiliate thereof.

 

(d)                            On the Business Day prior to each Payment Date,
the Collateral Agent shall deposit into the Collection Account the balance of
the Interest Reserve Account (including reinvestment income) for distribution in
accordance with the Priority of Payments on the related Payment Date.

 

Section 4.04.                             Expense Reserve Account.

 

(a)                             The Collateral Agent shall, prior to the Closing
Date, establish a single, segregated trust account which shall be designated as
the “Expense Reserve Account”, which shall be held in the name of the Collateral
Agent for the benefit and on behalf of the Secured Parties and over

 

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which the Collateral Agent shall have exclusive Control and the sole right of
withdrawal, into which the Collateral Agent shall deposit, on the Closing Date,
an amount equal to U.S.$25,000 and, on each Payment Date, an amount in
accordance with Section 5.01(a)(i). Funds in the Expense Reserve Account shall
not be commingled with any other Money. The Collateral Agent shall give to the
Issuer, the Collateral Advisor and the Trustee prompt notice if the Expense
Reserve Account or any funds on deposit therein, or otherwise to the credit of
the Expense Reserve Account, shall become subject to any writ, order, judgment,
warranty of attachment, execution or similar process. All Money deposited from
time to time in the Expense Reserve Account pursuant to this Agreement shall be
held by the Collateral Agent as part of the Collateral and shall be applied in
accordance with the terms hereof and to the purposes herein provided. The Issuer
shall not have any legal, equitable or beneficial interest in the Expense
Reserve Account other than in accordance with this Agreement. The Expense
Reserve Account shall remain at all times with a financial institution having a
long-term debt rating of at least “BBB+” by S&P, at least “Baal” by Moody’s and,
at least “BBB+” by Fitch and a short-term debt rating of at least “A-1” by S&P,
at least “P-1” by Moody’s and, at least “F-1” by Fitch.

 

(b)                            Any deposit required pursuant to
Section 4.04(c) shall be immediately deposited into the Expense Reserve Account.
All such property, together with any securities in which funds included in such
property are or will be invested or reinvested during the term of this
Agreement, and any income or other gain realized from such investments, shall be
held by the Collateral Agent in the Expense Reserve Account as part of the
Collateral subject to disbursement and withdrawal as provided in this
Section 4.04. By Issuer Order (which may be in the form of standing
instructions), the Issuer (or the Collateral Advisor on behalf of the Issuer)
may at any time direct the Collateral Agent to, and upon receipt of such Issuer
Order the Collateral Agent shall, invest all funds received into the Expense
Reserve Account during a Due Period, and amounts received in prior Due Periods
and retained in the Expense Reserve Account, as so directed in Eligible
Investments maturing not later than the second (2nd) Business Day immediately
preceding the next Payment Date unless such Eligible Investments are investments
of the type described in clause (i) or (iii) of the definition of “Eligible
Investments”, in which event such Eligible Investments may mature on the
Business Day immediately preceding such Payment Date. The Collateral Agent
shall, within one (1) Business Day after receipt of any Distribution or other
proceeds which is not Cash, so notify the Issuer and the Issuer (or the
Collateral Advisor on behalf of the Issuer) shall, within thirty (30) Business
Days after receipt of such notice from the Collateral Agent, sell such
Distribution or other proceeds for Cash in an arm’s-length transaction to a
Person that is not an Affiliate (other than a Permitted Affiliate, subject to
the Investment Advisers Act) of the Issuer or the Collateral Advisor and deposit
the proceeds thereof in the Expense Reserve Account for investment pursuant to
this Section 4.04; provided, however, that the Issuer (or the Collateral Advisor
on behalf of the Issuer) need not sell such Distributions or other proceeds if
it delivers an Officer’s certificate to the Collateral Agent certifying that
such Distributions or other proceeds constitute Collateral Debt Securities or
Eligible Investments.

 

(c)                             If, prior to the occurrence of an Event of
Default, the Issuer shall not have given any investment directions pursuant to
Section 4.04(b), the Collateral Agent shall seek instructions from the
Collateral Advisor within three (3) Business Days after transfer of such funds
to the Expense Reserve Account. If the Collateral Agent does not thereupon
receive written instructions from the Issuer (or the Collateral Advisor on
behalf of the Issuer) within thirty (30) Business Days after transfer of such
funds to the Expense Reserve Account, it shall invest and reinvest the funds
held in the Expense Reserve Account, as fully as practicable, but only in
Eligible Investments of the type described in clause (iii) of the defmition of
“Eligible Investments”, maturing the Business Day immediately preceding such
Payment Date. If, after the occurrence of an Event of Default, the Issuer shall
not have given investment directions to the Collateral Agent pursuant to
Section 4.04(b) for three (3) consecutive days, the Collateral Agent shall
invest and reinvest such Money as fully as practicable, but only in Eligible
Investments of its selection of the type described in clause (iii) of the
definition of “Eligible Investments”, maturing on the

 

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Business Day immediately preceding such Payment Date. All interest and other
income from such investments shall be deposited in the Expense Reserve Account,
any gain realized from such investments shall be credited to the Expense Reserve
Account and any loss resulting from such investments shall be charged to the
Expense Reserve Account. The Collateral Agent shall not in any way be held
liable by reason of any insufficiency of such Expense Reserve Account resulting
from any loss relating to any such Eligible Investment, except with respect to
investments in obligations of the Collateral Agent or any Affiliate thereof.

 

(d)                       On the Business Day prior to each Payment Date, the
Collateral Agent shall deposit into the Collection Account the balance of the
Expense Reserve Account (including reinvestment income) for distribution in
accordance with the Priority of Payments on the related Payment Date.

 

(e)                        The Collateral Agent may, from time to time and at
any time, withdraw amounts from the Expense Reserve Account to pay accrued and
unpaid administrative expenses of the Co-Issuers. All amounts remaining on
deposit in the Expense Reserve Account at the time when substantially all of the
Issuer’s assets have been sold or otherwise disposed of will be deposited by the
Collateral Agent into the Collection Account (including reinvestment income) as
Collateral Interest Collections for distribution in accordance with the Priority
of Payments on the immediately succeeding Payment Date.

 

Section 4.05.                             Collateral Account. The Collateral
Agent shall, prior to the Closing Date, establish a single, segregated trust
account (or a subaccount of the Collection Account) which shall be designated as
the “Collateral Account”, which shall be held in the name of the Collateral
Agent for the benefit and on behalf of the Secured Parties and over which the
Collateral Agent shall have exclusive Control and the sole right of withdrawal.
Any and all assets or securities at any time on deposit in, or otherwise to the
credit of, the Collateral Account shall be held in trust by the Collateral Agent
for the benefit and on behalf of the Secured Parties. The only permitted
withdrawals from the Collateral Account shall be in accordance with this
Agreement. The Collateral Agent agrees to give the Issuer and the Trustee prompt
notice if the Collateral Account or any funds on deposit therein, or otherwise
to the credit of the Collateral Account, shall become subject to any writ,
order, judgment, warrant of attachment, execution or similar process. The Issuer
shall not have any legal, equitable or beneficial interest in the Collateral
Account other than in accordance with this Agreement. The Collateral Account
shall remain at all times with a financial institution located in the United
States having a long-term debt rating of at least “BBB+” by S&P, at least “Baal”
by Moody’s and at least “BBB+” by Fitch and a short-term debt rating of at least
“A-1” by S&P, at least “P-1” by Moody’s and, at least “F-1” by Fitch.

 

Section 4.06.                             Reports by Collateral Agent. The
Collateral Agent shall supply, in a timely fashion, to the Co-Issuers, the
Trustee, each Hedge Counterparty, the Principal Note Paying Agent, the Preferred
Share Fiscal and Paying Agent, each Rating Agency (so long as any Notes are
rated by such Rating Agency), the Initial Purchasers and the Collateral Advisor
any information regularly maintained by the Collateral Agent that each such
party may from time to time request with respect to the Collateral Debt
Securities, any Hedge Agreement, the Collection Account and the Collateral
Account and such other information as is regularly maintained by the Collateral
Agent and is reasonably needed to verify information contained in the Note
Valuation Report. Additionally, the Collateral Agent shall promptly provide any
other information reasonably available to the Collateral Agent by reason of its
acting as Collateral Agent hereunder and required to be provided by Section 4.07
or to permit the Collateral Advisor to perform its obligations under the
Collateral Advisory Agreement. The Collateral Agent shall forward to the
Collateral Advisor copies of all notices and other writings received by it from
the issuer of any Collateral Debt Security or from any Clearing Agency with
respect to any Collateral Debt Security advising the holders of such security of
any rights that the holders might have with respect thereto (including, without
limitation, notices of calls and redemptions of securities) as well as all
periodic financial reports received from such issuer and Clearing Agencies with
respect to such issuer. The

 

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Collateral Agent shall also cause the amount of interest paid on the Notes on
each Payment Date to be communicated to Euroclear, Clearstream and the Irish
Stock Exchange (as long as any of the Notes are listed thereon) on or prior to
such Payment Date.

 

Section 4.07.                             Accountings.

 

(a)                             Payment Date Accounting; Note Valuation Reports.
The Collateral Agent on behalf of the Issuer shall prepare or cause to be
prepared an accounting (the “Note Valuation Report”), determined as of each
Determination Date, and make available or cause to be made available on its
website, initially located at www.cdotrustee.net and deliver by e-mail to S&P
and otherwise upon request, the Note Valuation Report, after the reconciliation
process described in this Section 4.07(a), to the Collateral Advisor, the
Trustee, the Principal Note Paying Agent, the Preferred Share Fiscal and Paying
Agent, each Hedge Counterparty, if any, each Rating Agency (so long as any Notes
are rated by such Rating Agency), the Initial Purchasers and the Depositary
(accompanied by a request that it be transmitted to the Holders of Notes on the
books of the Depositary) by no later than the close of business on the Business
Day preceding the related Payment Date. The Collateral Advisor shall provide any
information reasonably requested by the Issuer or on the Issuer’s behalf for
preparation of the Note Valuation Report in accordance with this
Section 4.07(a). Upon receipt of each Note Valuation Report, the Trustee, in the
name and at the expense of the Co-Issuers, shall notify the Irish Paying Agent,
so long as any Notes are listed thereon, of the aggregate principal amount of
the Notes of each Class after giving effect to the principal payments, if any,
on the next Payment Date. The Note Valuation Report shall contain the following
information:

 

(i)                                a calculation in reasonable detail necessary
to determine compliance with each of the Coverage Tests;

 

(ii)                             the estimated remaining average life (on each
asset and on an aggregate basis) of all Collateral Debt Securities;

 

(iii)                          the Applicable Periodic Interest Rate in respect
of each Class of Notes and the amount of Periodic Interest payable to the
Holders of the Notes for such Payment Date (in the aggregate and by Class);

 

(iv)                         the amount (if any) payable to each Hedge
Counterparty pursuant to the related Hedge Agreement;

 

(v)                            the amount (if any) payable by each Hedge
Counterparty pursuant to the related Hedge Agreement;

 

(vi)                         the Aggregate Fees and Expenses payable on the next
Payment Date on an itemized basis;

 

(vii)                      the Aggregate Fees and Expenses paid during a period
of twelve (12) months ending on the next Payment Date on an itemized basis;

 

(viii)                   for the Collection Account:

 

(A)                    the Balance on deposit in the Collection Account at the
end of the related Due Period;

 

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(B)                      the amounts payable from the Collection Account
pursuant to each priority in the Priority of Payments on the next Payment Date;
and

 

(C)                      the Balance remaining in the Collection Account
immediately after all payments and deposits to be made on such Payment Date;

 

(ix)                                     for the Interest Reserve Account:

 

(A)                    the Balance on deposit in the Interest Reserve Account at
the end of the related Due Period;

 

(B)                      the amount payable from the Interest Reserve Account
pursuant to the Priority of Payments on the next Payment Date;

 

(C)                      the Interest Reserve Amount to be paid into the
Interest Reserve Account on the next Payment Date; and

 

(D)                     the Balance remaining in the Interest Reserve Account
immediately after all payments and deposits to be made on such Payment Date;

 

(x)                                             for the Expense Reserve Account,

 

(A)                    the amount to be paid into the Expense Reserve Account on
the next Payment Date; and

 

(B)                      the Balance remaining in the Expense Reserve Account
immediately after all payments and deposits to be made on such Payment Date;

 

(xi)                                          the Hedge Receipt Amount or the
Hedge Payment Amount for the related Payment Date, and for each Hedge Agreement,
the outstanding notional amount of such Hedge Agreement and the amounts, if any,
scheduled to be received or paid, as the case may be, by the Issuer pursuant to
such Hedge Agreement for the related Payment Date, separately stating the
portion payable under the Priority of Payments;

 

(xii)                                       the amount of Excess Funds to be
paid to the Holders of the Preferred Shares on the related Payment Date;

 

(xiii)                                    the amount of the Senior Collateral
Advisory Fee and the amount of the Subordinate Collateral Advisory Fee;

 

(xiv)                                 the amount of the Deferred Subordinate
Collateral Advisory Fee (including the amounts of the Monitoring Fee and the
Senior Structuring Fee);

 

(xv)                                      any information required to be
included in a Monthly Report as set forth in Section 4.07(b);

 

(xvi)                                   such other information as the Collateral
Advisor, the Initial Purchasers, the Trustee, S&P, Moody’s or any Hedge
Counterparty may reasonably request; and

 

(xvii)                                the aggregate principal amount of the
Collateral Debt Securities and, with respect to each Collateral Debt Security,
the Principal Balance, the annual coupon rate or spread to the relevant floating
rate index, the frequency of coupon payments, the amount of principal payments

 

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received, the maturity date, the Weighted Average Life, the issuer, the country
in which the issuer is incorporated or organized, the Weighted Average Fixed
Rate Coupon, the Weighted Average Spread, the Moody’s Industry Classification
Weighted Average Group, the S&P Industry Classification Group, the Fitch
Industry Classification Group, the S&P Recovery Rate for each Class of Notes,
the Fitch Sector Score, the Moody’s Recovery Rate, the Moody’s Diversity Score,
the Moody’s Weighted Average Recovery Rate, the Fitch Weighted Average Recovery
Rate for each class of Notes, the Fitch Weighted Average Rating Factor, the
Weighted Average Moody’s Rating Factor, the Moody’s Rating, the S&P Rating and
the Fitch Rating of such Collateral Debt Security (provided that if any Moody’s
Rating, S&P Rating or Fitch Rating for any Collateral Debt Security is set forth
in any Note Valuation Report and such rating is an “estimated” or “shadow”
rating, such rating shall be identified as “estimated” or “shadow rated”, shall
be disclosed with an asterisk in the place of the applicable estimated or shadow
rating and shall include the date as of which such rating was first provided by
Moody’s, S&P or Fitch, as the case may be, to the Issuer).

 

Upon receipt of each Note Valuation Report, the Trustee and the Collateral
Advisor shall compare the information contained therein to the information
contained in their respective records with respect to the Collateral and shall,
within two (2) Business Days after receipt of such Note Valuation Report, notify
each of the Issuer, each Hedge Counterparty, the Collateral Advisor, the
Trustee, Moody’s and S&P if the information contained in the Note Valuation
Report does not conform to the information maintained by the Trustee or the
Collateral Advisor as applicable, with respect to the Collateral, and detail any
discrepancies. In the event that any discrepancy exists, the Trustee and the
Issuer, or the Collateral Advisor shall attempt to promptly resolve the
discrepancy. If such discrepancy cannot be promptly resolved, the Trustee shall
within five (5) Business Days after discovery of such discrepancy cause the
Independent Accountants of national reputation to review such Note Valuation
Report and the Trustee’s and the Collateral Advisor’s records to determine the
cause of such discrepancy. If such review reveals an error in the Note Valuation
Report or the Trustee’s or the Collateral Advisor’s records, the Note Valuation
Report or Trustee’s and the Collateral Advisor’s records, as the case may be,
shall be revised accordingly and, as so revised, shall be utilized in making
further calculations.

 

(b)                                 Monthly Report. Not later than the fifth
(5th) Business Day after the last Business Day of each month (excluding the
months in which a Payment Date occurs), commencing in October, 2003, the Issuer
shall compile and make available, or cause to be compiled and made available on
the Trustee’s website initially located at www.cdotrurstee.net and to be
delivered by e-mail to S&P and otherwise upon request, to the Trustee, each
Hedge Counterparty, the Collateral Advisor, the Preferred Share Fiscal and
Paying Agent, the Initial Purchasers and each Rating Agency (so long as any
Notes are rated by such Rating Agency), and, upon written request, accompanied
by a note owner certificate, to any Holder of a Note, a monthly report (the
“Monthly Report”), which shall contain the following information and
instructions with respect to the Collateral Debt Securities (individually and
collectively), determined as of the last Business Day of such month:

 

(i)                           the aggregate principal amount of the Collateral
Debt Securities and, with respect to each Collateral Debt Security, the
Principal Balance, the annual coupon rate or spread to the relevant floating
rate index, the frequency of coupon payments, the amount of principal payments
received, the maturity date, the Weighted Average Life, the issuer, the country
in which the issuer is incorporated or organized, the Weighted Average Fixed
Rate Coupon, the Weighted Average Spread, the Moody’s Industry Classification
Group, the S&P Industry Classification Group, the Fitch Industry Classification
Group, the S&P Recovery Rate, the Fitch Sector Score, the Moody’s Recovery Rate,
the S&P Weighted Average Recovery Rate for each Class of Notes, the Moody’s
Weighted Average Recovery Rate, the Fitch Weighted Average Recovery Rate, the
Fitch Weighted Average Rating Factor, the Weighted Average Moody’s Rating
Factor, the Moody’s Rating, the S&P Rating and the Fitch Rating of such
Collateral Debt Security (provided that if any Moody’s Rating, S&P Rating or
Fitch Rating for

 

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any Collateral Debt Security is set forth in any Monthly Report and such rating
is an “estimated” or “shadow” rating, such rating shall be identified as
“estimated” or “shadow rated”, shall be disclosed with an asterisk in the place
of the applicable estimated or shadow rating and shall include the date as of
which such rating was first provided by Moody’s, S&P or Fitch, as the case may
be, to the Issuer);

 

(ii)                        the Principal Balance, the annual interest rate, the
maturity date, the Moody’s Rating, the S&P Rating, the Fitch Rating and the
issuer of each Eligible Investment included in the Collateral;

 

(iii)                     the nature, source and amount of any Collections in
the Collection Account, including Collections received since the date of the
later of the last Monthly Report and the last Note Valuation Report;

 

(iv)                    the Principal Balance and identity of each Collateral
Debt Security that was released for sale indicating the reason for such sale;

 

(v)                       the identity and Principal Balance of each Collateral
Debt Security that became a Defaulted Security, an Equity Security, a Written
Down Security, a Withholding Tax Security, a Deferred Interest PIK Bond or,
except with respect to Defaulted Securities, a Collateral Debt Security whose
Moody’s Rating has been reduced below “Ba3” since the later to occur of the last
Monthly Report and the last Note Valuation Report, and the identity and
Principal Balance of each Collateral Debt Security that was a Defaulted
Security, an Equity Security, a Written Down Security, a Withholding Tax
Security or a Deferred Interest PIK Bond or, except with respect to Defaulted
Securities, a Collateral Debt Security whose Moody’s Rating was below “Ba3” as
of the last Monthly Report or the last Note Valuation Report and that remains a
Defaulted Security, an Equity Security, a Written Down Security, a Deferred
Interest PIK Bond or a Collateral Debt Security (other than a Defaulted
Security) with a Moody’s Rating below “Ba3” and the Market Value of each
Defaulted Security;

 

(vi)                    the purchase price of each Pledged Security Granted and
the sale price of each Pledged Security subject to a sale since the date of the
later of the last Monthly Report and the last Note Valuation Report; and whether
such Pledged Security is a Collateral Debt Security, an Eligible Investment or
proceeds in the Collection Account;

 

(vii)                 the calculation showing compliance with each of the
Coverage Tests and the Collateral Quality Tests (including, with respect to the
S&P CDO Monitor Test, the weighted average rating, the default measure,
variability measure and correlation measure, the scenario loss rate and/or such
other information required to be computed with respect to the S&P CDO Monitor
Test), accompanied by a list setting forth the applicable maximum or minimum
value, percentage or ratio which must be maintained pursuant to this Agreement
with respect to each of the Coverage Tests and a list setting forth the results
of the calculation of each of the Coverage Tests with respect to the Collateral
Debt Securities; provided that each Monthly Report shall provide that the
foregoing calculations are reflected for informational purposes only and are not
binding upon the Issuer;

 

(viii)              the identity of each Collateral Debt Security that was
upgraded or downgraded or placed on watch for upgrade or downgrade by any Rating
Agency since the date of the later of the last Monthly Report and the last Note
Valuation Report; provided that the identity of each Collateral Debt Security
that was upgraded or downgraded for purposes of this clause (viii) shall not be
obtained from Bloomberg Financial Markets On-Line Data Retrieval Service or a
similar service and must be obtained from information provided directly by the
Rating Agencies;

 

(ix)                      the amount of Purchased Accrued Interest;

 

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(x)                         a description of any transactions with the
Collateral Advisor, the Issuer, the Collateral Administrator and the Collateral
Agent and any Affiliates thereof;

 

(xi)                      the Class A-1 Note Break-Even Loss Rate, the Class A-2
Note Break-Even Loss Rate, the Class B-1 Note Break-Even Loss Rate, the
Class B-2 Note Break-Even Loss Rate, the Class C-1 Note Break-Even Loss Rate,
the Class C-2 Note Break-Even Loss Rate and the Class D Note Break-Even Loss
Rate;

 

(xii)                   the Class A-1 Note Loss Differential, the Class A-2 Note
Loss Differential, the Class B-1 Note Loss Differential, the Class B-2 Note Loss
Differential, the Class C-1 Note Loss Differential, the Class C-2 Note Loss
Differential and the Class D Note Loss Differential;

 

(xiii)                the Class A-1 Note Scenario Default Rate, the Class A-2
Note Scenario Default Rate, the Class B-1 Note Scenario Default Rate, the
Class B-2 Note Scenario Default Rate, the Class C-1 Note Scenario Default Rate,
the Class C-2 Note Scenario Default Rate and the Class D Note Scenario Default
Rate; and

 

(xiv)               such other information as the Trustee, S&P or the Initial
Purchasers may reasonably request.

 

Upon receipt of each Monthly Report, the Trustee and the Collateral Advisor
shall compare the information contained therein to the information contained in
their respective records with respect to the Collateral and shall, within two
(2) Business Days after receipt of such Monthly Report, notify each of the
Issuer, each Hedge Counterparty and the Collateral Advisor if the information
contained in the Monthly Report does not conform to the information maintained
by the Trustee or the Collateral Advisor with respect to the Collateral, and
detail any discrepancies. In the event that any discrepancy exists, the Trustee
and the Issuer, or the Collateral Advisor on behalf of the Issuer, shall attempt
to promptly resolve the discrepancy. If such discrepancy cannot be promptly
resolved, the Trustee shall within five (5) Business Days after discovery of
such discrepancy cause the Independent Accountants of national reputation to
review such Monthly Report and the Trustee’s or the Collateral Agent’s records
to determine the cause of such discrepancy. If such review reveals an error in
the Monthly Report or the Trustee’s or the Collateral Agent’s records, the
Monthly Report or Trustee’s or the Collateral Agent’s records, as the case may
be, shall be revised accordingly and, as so revised, shall be utilized in making
further calculations.

 

Subject to the terms of this Agreement, the Collateral Agent shall rely on the
information supplied to it by the Collateral Advisor in relation to the
preparation of the Monthly Report and shall not be liable for the accuracy or
completeness of such information.

 

(c)                                            Each Note Valuation Report or
Monthly Report sent to any Holder or beneficial owner of any Note or Preferred
Share shall contain, or be accompanied by, the following notice:

 

“The Notes have not been and will not be registered under the United States
Securities Act of 1933, as amended (the “Securities Act”), and the Co-Issuers
have not been registered under the United States Investment Company Act of 1940,
as amended (the “1940 Act”). Each Holder of the Notes, other than those Holders
that are not “U.S. persons” (“U.S. Person”) within the meaning of Regulation S
(“Regulation S”) under the Securities Act and have acquired their Notes outside
the United States pursuant to Regulation S, is required to be (i) a “qualified
institutional buyer” as defined in Rule 144A under the Securities Act

 

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(“Qualified Institutional Buyer”) and (ii) a “qualified purchaser” (“Qualified
Purchaser”) within the meaning of Section 2(a)(51) of the 1940 Act that can make
all of the representations in the Trust Deed and the Note Agency Agreement
applicable to a holder that is a U.S. Person. The beneficial interest in the
Notes may only be transferred to a transferee that is a Qualified Institutional
Buyer and a Qualified Purchaser that can make all of the representations in the
Trust Deed and the Note Agency Agreement applicable to a holder that is a U.S.
Person, except that in the case of any such transfer in reliance on Regulation
S, only to a transferee that is not a U.S. Person. The Issuer has the right to
compel any Holder that does not meet the qualifications and the transfer
restrictions set forth in the Trust Deed and the Note Agency Agreement to sell
its interest in the Notes, or may sell such interest on behalf of such owner,
pursuant to the Trust Deed and the Note Agency Agreement.”

 

(d)                                 Additional Reporting Requirements. The
Collateral Advisor on behalf of the Issuer shall provide or cause to be provided
to Fitch the current portfolio of all Collateral Debt Securities in electronic
and modifiable form with the fields listed in Schedule N, no later than the
Fifteenth (15th) day of each month.

 

For all Collateral Debt Securities which are not rated by Fitch, the Issuer
shall provide, or cause to be provided to, Fitch with the following:

 

(i)                                     within thirty (30) days of the Closing
Date, the offering memoranda and the most recent remittance reports for such
Collateral Debt Securities held by the Issuer as of the Closing Date; and

 

(ii)                                  ongoing remittance reports for such
Collateral Debt Securities within ten (10) days of receipt of the remittance
report.

 

The information referenced above shall be sent via e-mail to
reporting.abscdo@fitchratings.com or hardcopy to Fitch Ratings, One State Street
Plaza, New York, New York 10004, Attention: Credit Products Surveillance –
Additional Reporting.

 

(e)                                  Payment Date Instructions. The Issuer (or
the Collateral Advisor on behalf of the Issuer) shall by Issuer Order instruct
the Collateral Agent to withdraw on the related Payment Date from the Collection
Account, and to pay or transfer, the amounts set forth in such Note Valuation
Report in the manner specified in, and in accordance with, the Priority of
Payments. The Issuer will be deemed to have given such instructions upon the
Collateral Advisor’s approval of the Note Valuation Report.

 

(f)                                    Redemption Date Instructions. Not later
than five (5) Business Days after receiving an Issuer Request (executed by the
Issuer or the Collateral Advisor on behalf of the Issuer) requesting information
regarding a redemption of the Notes of a Class as of a proposed Redemption Date
set forth in such Issuer Request, the Collateral Advisor on behalf of the Issuer
shall cause to be computed the following information and the Issuer shall
provide such information in a statement made available to the Co-Issuers, the
Collateral Advisor, the Trustee, the Initial Hedge Counterparty, the Principal
Note Paying Agent, the Preferred Share Fiscal and Paying Agent, and delivered by
e-mail to each Rating Agency and, so long as the Notes are listed on the Irish
Stock Exchange, the Irish Stock Exchange:

 

(i)                                     the aggregate principal amount of the
Notes of the Class or Classes to be redeemed as of such Redemption Date;

 

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(ii)        the amount of accrued interest due on such Notes as of the last day
of the Periodic Interest Accrual Period immediately preceding such Redemption
Date;

 

(iii)       the amount due and payable to the Initial Hedge Counterparty
pursuant to the Initial Hedge Agreement;

 

(iv)       the amount due and payable to any other Hedge Counterparty pursuant
to the applicable Hedge Agreement (other than the Initial Hedge Agreement); and

 

(v)        the amount in the Collection Account available for application to the
redemption of such Notes.

 

Section 4.08.          Release of Securities.

 

(a)          Subject to Article VI, the Issuer (or the Collateral Advisor on
behalf of the Issuer) may, by Issuer Order delivered to the Collateral Agent at
least two (2) Business Days prior to the settlement date for any sale of a
security certifying that the Issuer (or the Collateral Advisor on behalf of the
Issuer) has determined that a Collateral Debt Security has become a Credit Risk
Security (which certification shall contain a short statement of the reason for
such determination), a Withholding Tax Security, a Written Down Security, a
Defaulted Security or an Equity Security and, in each case, that the Issuer (or
the Collateral Advisor on behalf of the Issuer) has directed the Collateral
Agent to sell such security pursuant to Section 6.01(a), direct the Collateral
Agent to release such security and, upon receipt of such Issuer Order, the
Collateral Agent shall release any such security from the Lien of this Agreement
and deliver any such security, if in physical form, duly endorsed to the broker
or purchaser designated in such Issuer Order or, if such security is a Clearing
Corporation Security, cause an appropriate transfer thereof to be made, in each
case against receipt of the sales price therefor as set forth in such Issuer
Order; provided, however, that the Collateral Agent may deliver any such
security in physical form for examination in accordance with street delivery
custom.

 

(b)         If no Event of Default has occurred and is continuing and subject to
Article VI, the Issuer (or the Collateral Advisor on behalf of the Issuer) may,
by Issuer Order delivered to the Collateral Agent at least two (2) Business Days
prior to the date set for redemption or payment in full of a Collateral Debt
Security and certifying that such security is being redeemed or paid in full,
direct the Collateral Agent, or at the Collateral Agent’s instructions, the
Accountholder, to release any such security from the Lien of this Agreement and
deliver such security, if in physical form, duly endorsed, or, if such security
is a Clearing Corporation Security, to cause it to be presented to the
appropriate paying agent therefor on or before the date set for redemption or
payment, in each case against receipt of the redemption price or payment in full
thereof.

 

(c)          If no Event of Default has occurred and is continuing and subject
to Article VI, the Issuer (or the Collateral Advisor on behalf of the Issuer)
may, by Issuer Order delivered to the Collateral Agent at least two (2) Business
Days prior to the date set for an exchange, tender or sale, certifying that a
Collateral Debt Security is subject to an Offer and setting forth in reasonable
detail the procedure for response to such Offer, direct the Collateral Agent or,
at the Collateral Agent’s instructions, the Accountholder, to release any such
security from the Lien of this Agreement and deliver such security, if in
physical form, duly endorsed, or, if such security is a Clearing Corporation
Security, to cause it to be delivered, in accordance with such Issuer Order, in
each case against receipt of payment therefor.

 

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(d)        The Collateral Agent shall, upon receipt of an Issuer Order at such
time as there are no Notes Outstanding and all obligations of the Co-Issuers to
the Secured Parties have been satisfied, release the Collateral from the Lien of
this Agreement.

 

Section 4.09.        Reports by Independent Accountants.

 

(a)          On the Closing Date, the Issuer (or the Collateral Advisor on
behalf of the Issuer) shall appoint a firm of Independent certified public
accountants of recognized international reputation for purposes of preparing and
delivering the reports or certificates of such accountants required by this
Agreement. Upon any removal of or resignation by such firm, the Issuer (or the
Collateral Advisor on behalf of the Issuer) shall promptly appoint by Issuer
Order delivered to the Collateral Agent, the Trustee, each Hedge Counterparty
and each Rating Agency, a successor thereto that shall also be a firm of
Independent certified public accountants of recognized international reputation.
If the Issuer (or the Collateral Advisor on behalf of the Issuer ) shall fail to
appoint a successor to a firm of Independent certified public accountants which
has resigned within thirty (30) days after such resignation, the Issuer (or the
Collateral Advisor on behalf of the Issuer ) shall promptly notify each of the
Trustee and each Hedge Counterparty of such failure. If the Issuer (or the
Collateral Advisor on behalf of the Issuer ) shall not have appointed a
successor within ten (10) days thereafter, the Collateral Agent shall promptly
appoint a successor firm of Independent certified public accountants of
recognized international reputation. The fees of such Independent certified
public accountants and its successor shall be payable by the Issuer in
accordance with the Priority of Payments. Any engagement letter appointing such
Independent certified accountants shall contain appropriate limited recourse and
non-petition language as against the Issuer equivalent to that contained in this
Agreement.

 

(b)         No later than five (5) Business Days after the Closing Date, the
Issuer shall deliver to each Rating Agency an agreed upon procedures letter from
an Independent certified public accountant appointed by the Issuer in relation
to the Issuer’s compliance with its obligations under this Agreement and the
Trust Deed. On the Closing Date, the Issuer shall cause such Independent
certified public accountant to deliver to each Rating Agency a report containing
(i) a statement that the agreed upon procedures have been completed and
(ii) such accountant’s findings with respect to the Issuer’s compliance with its
obligations under this Agreement and the Trust Deed. All expenses relating to
the engagement of Independent certified public accountants for the performance
of services set forth in this Section 4.09(b) shall be borne by the Issuer.

 

Section 4.10.          Reports to Rating Agencies. In addition to the
information and reports specifically required to be provided to S&P, Moody’s and
Fitch pursuant to the terms of this Agreement, the Issuer (or the Collateral
Advisor on behalf of the Issuer) shall provide S&P, Moody’s and Fitch with all
information or reports delivered to the Collateral Agent and the Trustee
hereunder, and such additional information as any Rating Agency may from time to
time reasonably request in order to maintain its then- current rating of the
Notes and the Issuer determines in its reasonable discretion may be obtained and
provided without unreasonable burden or expense. The Issuer (or the Collateral
Advisor on behalf of the Issuer) shall promptly notify the Trustee in writing if
the rating on any Class of Notes has been, or it is known by the Issuer that
such rating will be, changed or withdrawn. Upon receipt of such notice, the
Trustee, in the name and at the expense of the Co-Issuers, shall notify the
Irish Paying Agent, so long as any Notes are listed thereon, of any reduction or
withdrawal in the rating of such Notes.

 

Section 4.11.          Notices of Noteworthy Events. The Issuer shall provide
each Rating Agency notice of the following events: (a) removal of the Collateral
Advisor pursuant to the terms of the Collateral Advisory Agreement, the
Collateral Agent pursuant to the terms of this Agreement and the Trustee
pursuant to the terms of the Trust Deed, (b) appointment of any successor
investment adviser pursuant to the terms of the Collateral Advisory Agreement,
any successor collateral agent pursuant to the

 

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terms of this Agreement and any successor trustee pursuant to the terms of the
Trust Deed, (c) any delegation of duties by the Collateral Advisor under the
Collateral Advisory Agreement, by the Collateral Agent under this Agreement and
by the Trustee under the Trust Deed, (d) any modification of, or amendment to,
the organizational documents of the Issuer and the Co-Issuer, (e) any other
event of a similar nature as set forth in clauses (a), (b), (c) and (d) of this
Section 4.11, (f) any redemption of any Class of Notes and (g) any termination
of any party to a Transaction Document.

 

Section 4.12.          Amendments to the Transaction Documents. The Issuer shall
only consent to any modification of any Transaction Document in accordance with
the amendment provisions of such Transaction Document and shall only consent to
a modification of any organizational document of the Issuer or the Co-Issuer
after it has received a Rating Agency Confirmation with respect to such
modification of such organizational document. The Issuer shall not amend this
Agreement or any related defined terms in the Glossary pursuant to Section 11.01
until after it has received Rating Agency Confirmation with respect to such
amendment.

 

ARTICLE V

 

PRIORITY OF PAYMENTS

 

Section 5.01.          Disbursements of Money from Collection Account.

 

(a)        On any Payment Date that is not a Redemption Date, in accordance with
a Note Valuation Report prepared by the Collateral Advisor as of the last day of
the Due Period preceding such Payment Date, Collateral Interest Collections, and
Collateral Principal Collections, to the extent of Available Funds in the
Collection Account, shall be applied by the Collateral Agent in the following
order of priority (the “Priority of Payments”); provided, however, that with
respect to clauses (i) through (xxiv) (excluding clause (xx)) below, such
application shall be made, first, from Collateral Interest Collections and then,
except for clause (vii) and (xxiv), to the extent Collateral Interest
Collections are not sufficient for such payments, from Collateral Principal
Collections (subject to any limitations described herein):

 

(i)         to pay, in the following order, (A) taxes and filing fees and
registration fees (including, without limitation, annual return fees) payable by
the Co-Issuers, if any; and then (B) the amount of any due and unpaid Trustee
Fee and then (C) the amount of any due and unpaid Trustee Expenses, Collateral
Agent Expenses and Collateral Administrator Expenses and the amount of any due
and unpaid expenses of the Preferred Share Fiscal and Paying Agent and then the
amount of any due and unpaid expenses of the Administrator and any
Administrative Expenses, including amounts payable to the Collateral Advisor
under the Collateral Advisory Agreement; and then (D) to deposit to the Expense
Reserve Account the amount needed to bring the amount on deposit therein to
U.S.$25,000 (unless the Collateral Advisor directs that a lesser amount be
deposited to the Expense Reserve Account); provided that the cumulative amount
paid under (C) and (D) (excluding any Administrative Expenses due or accrued
with respect to the actions taken on or prior to the Closing Date and accounting
fees that the Trustee is required to pay (other than certain accountants’ fees
related to annual reviews) and fees the Trustee pays in connection with any
Events of Default and any default of the Collateral Debt Securities) may not
exceed U.S.$215,000 in the aggregate in any consecutive 12-month period;

 

(ii)        to pay the Senior Collateral Advisory Fee with respect to such
Payment Date and any Senior Collateral Advisory Fee with respect to a previous
Payment Date that was not paid on a previous Payment Date;

 

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(iii)       to pay any Hedge Counterparty any amounts due to such Hedge
Counterparty under any Hedge Agreement, not including any termination payments
payable under clause (xxi) below;

 

(iv)       to pay Periodic Interest on the Class A-1 Notes (including Defaulted
Interest and any interest thereon);

 

(v)        to pay, pari passu, Periodic Interest on the Class A-2A Notes and the
Class A-2B Notes (including Defaulted Interest and any interest thereon);

 

(vi)       if either of the Class A Coverage Tests is not satisfied as of the
preceding Calculation Date, to pay principal of the Class A-1 Notes then
Outstanding until such Class A Coverage Test is satisfied as of such Calculation
Date or until the Class A-1 Notes are paid in full, and then to pay, pari passu,
principal of the Class A-2A Notes and the Class A-2B Notes then Outstanding
until such Class A Coverage Test is satisfied as of such Calculation Date or
until the Class A-2 Notes are paid in full; provided that for purposes of
determining if the Class A Principal Coverage Test is satisfied, the denominator
of the Class A Principal Coverage Ratio shall be calculated after giving effect
to any payments of principal on the Class A Notes to be made pursuant to this
clause (vi); provided, further, that for purposes of determining if the Class A
Principal Coverage Test is satisfied, the numerator of the Class A Principal
Coverage Ratio shall be calculated after giving effect to (A) any Collateral
Principal Collections to be applied pursuant to clauses (i) through (v) above
and (B) any Collateral Principal Collections to be applied pursuant to this
clause (vi);

 

(vii)      to pay, from Collateral Interest Collections (if any), an amount
equal to the Interest Reserve Amount for deposit into the Interest Reserve
Account;

 

(viii)     to pay Periodic Interest on the Class B-1 Notes, based on the amount
of interest due on the Class B-1 Notes (including, any Defaulted Interest on the
Class B-1 Notes and any interest thereon);

 

(ix)       to pay Periodic Interest on the Class B-2 Notes, based on the amount
of interest due on the Class B-2 Notes (including, if no Class A Notes or
Class B-1 Notes are Outstanding, any Defaulted Interest on the Class B-2 Notes
and any interest thereon);

 

(x)        if either of the Class B Coverage Tests is not satisfied as of the
preceding Calculation Date, to pay principal (including any Class B-2 Cumulative
Applicable Periodic Interest Shortfall Amount) of the most senior Class of Notes
then Outstanding until such Class B Coverage Test is satisfied as of such
Calculation Date or until such most senior Class of Notes is paid in full, and
then to pay principal of the next most senior Class of Notes Outstanding until
such Class B Coverage Test is satisfied as of such Calculation Date or until
such next most senior Class of Notes is paid in full and so on, until such
Class B Coverage Test is satisfied or until the Class B-1 Notes and then the
Class B-2 Notes, in that order, are paid in full; provided that for purposes of
determining if the Class B Principal Coverage Test is satisfied, the denominator
of the Class B Principal Coverage Ratio shall be calculated after giving effect
to any payments of principal on the Notes made pursuant to clause (vi) above and
pursuant to this clause (x) on the related Payment Date; provided, further, that
for purposes of determining if the Class B Principal Coverage Test is satisfied,
the numerator of the Class B Principal Coverage Ratio shall be calculated after
giving effect to (A) any Collateral Principal Collections to be applied pursuant
to clauses (i) through (ix) above (excluding clause (vii)) and (B) any
Collateral Principal Collections to be applied to the Notes pursuant to this
clause (x) on the related Payment Date; and provided,

 

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further, that with respect to the Class B-2 Notes, payment of principal not
constituting Class B-2 Cumulative Applicable Periodic Interest Shortfall Amount
shall be paid before principal constituting Class B-2 Cumulative Applicable
Periodic Interest Shortfall Amount, if any, for the Class B-2 Notes;

 

(xi)       to pay the Class B-2 Cumulative Applicable Periodic Interest
Shortfall Amount, if any;

 

(xii)      to pay, pari passu, Periodic Interest on the Class C-1A Notes and the
Class C-1B Notes, based on the amount of interest due on the Class C-1 Notes
(including, if no Class A Notes or Class B Notes are Outstanding, any Defaulted
Interest on the Class C-1 Notes and any interest thereon);

 

(xiii)     to pay Periodic Interest on the Class C-2 Notes, based on the amount
of interest due on the Class C-2 Notes (including, if no Class A Notes, Class B
Notes or Class C-1 Notes are Outstanding, any Defaulted Interest on the
Class C-2 Notes and any interest thereon);

 

(xiv)     if either of the Class C Coverage Tests is not satisfied as of the
preceding Calculation Date, to pay principal (including any Class B-2 Cumulative
Applicable Periodic Interest Shortfall Amount or Class C Cumulative Applicable
Periodic Interest Shortfall Amount, as applicable) of the most senior Class of
Notes then Outstanding until such Class C Coverage Test is satisfied as of such
Calculation Date or until such most senior Class of Notes is paid in full, and
then to pay principal of the next most senior Class of Notes Outstanding until
such Class C Coverage Test is satisfied as of such Calculation Date or until
such next most senior Class of Notes is paid in full and so on, until such
Class C Coverage Test is satisfied or until the Class C-1 Notes and then the
Class C-2 Notes, in that order, are paid in full; provided that for purposes of
determining if the Class C Principal Coverage Test is satisfied, the denominator
of the Class C Principal Coverage Ratio shall be determined after giving effect
to any payments of principal on the Notes pursuant to clauses (vi) and .(x)
above and pursuant to this clause (xiv) on the related Payment Date; provided,
further, that for purposes of determining if the Class C Principal Coverage Test
is satisfied, the numerator of the Class C Principal Coverage Ratio shall be
calculated after giving effect to (A) any Collateral Principal Collections to be
applied pursuant to clauses (i) through (xiii) above (excluding clause (vii) and
(B) any Collateral Principal Collections to be applied to the Notes pursuant to
this clause (xiv) on the related Payment Date; and provided, further, that with
respect to (A) the Class B-2 Notes, payment of principal not constituting the
Class B-2 Cumulative Applicable Periodic Interest Shortfall Amount shall be paid
before principal constituting the Class B-2 Cumulative Applicable Periodic
Interest Shortfall Amount, if any; (B) the Class C-1 Notes, payment of principal
not constituting the Class C-1 Cumulative Applicable Periodic Interest Shortfall
Amount shall be paid before principal constituting the Class C-1 Cumulative
Applicable Periodic Interest Shortfall Amount, if any; and (C) the Class C-2
Notes, payment of principal not constituting the Class C-2 Cumulative Applicable
Periodic Interest Shortfall Amount shall be paid before principal constituting
the Class C-2 Cumulative Applicable Periodic Interest Shortfall Amount, if any;

 

(xv)      to pay the Class C-1 Cumulative Applicable Periodic Interest Shortfall
Amount, if any;

 

(xvi)     to pay the Class C-2 Cumulative Applicable Periodic Interest Shortfall
Amount, if any;

 

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(xvii)    to pay, pari passu, Periodic Interest on the Class D-1A Notes and the
Class D-1B Notes, based on the amount of interest due on the Class D Notes
(including, if no Class A Notes, Class B Notes or Class C Notes are Outstanding,
any Defaulted Interest on the Class D Notes and any interest thereon);

 

(xviii)   if either of the Class D Coverage Tests is not satisfied as of the
preceding Calculation Date, to pay principal (including any Class B-2 Cumulative
Applicable Periodic Interest Shortfall Amount, Class C Cumulative Applicable
Periodic Interest Shortfall Amount or Class D Cumulative Applicable Periodic
Interest Shortfall Amount, as applicable) of the most senior Class of Notes then
Outstanding until such Class D Coverage Test is satisfied as of such Calculation
Date or until such most senior Class of Notes is paid in full, and then to pay
principal of the next most senior Class of Notes Outstanding until such Class D
Coverage Test is satisfied as of such Calculation Date or until such next most
senior Class of Notes is paid in full and so on, until such Class D Principal
Coverage Test is satisfied or until the Class D Notes are paid in full; provided
that for purposes of determining if the Class D Principal Coverage Test is
satisfied, the denominator of the Class D Principal Coverage Ratio shall be
determined after giving effect to any payments of principal on the Notes
pursuant to clauses (vi), (x) and (xiv) above and pursuant to this clause
(xviii) on the related Payment Date; provided, further, that for purposes of
determining if the Class D Principal Coverage Test is satisfied, the numerator
of the Class D Principal Coverage Ratio shall be calculated after giving effect
to (A) any Collateral Principal Collections to be applied pursuant to clauses
(i) through (xvii) above (excluding clause (vii)) and (B) any Collateral
Principal Collections to be applied to the Notes pursuant to this clause (xviii)
on the related Payment Date; and provided, further, that with respect to (A) the
Class B-2 Notes, payment of principal not constituting the Class B-2 Cumulative
Applicable Periodic Interest Shortfall Amount shall be paid before principal
constituting the Class B-2 Cumulative Applicable Periodic Interest Shortfall
Amount, if any; (B) the Class C-1 Notes, payment of principal not constituting
the Class C-1 Cumulative Applicable Periodic Interest Shortfall Amount shall be
paid before principal constituting the Class C-1 Cumulative Applicable Periodic
Interest Shortfall Amount, if any; (C) the Class C-2 Notes, payment of principal
not constituting the Class C-2 Cumulative Applicable Periodic Interest Shortfall
Amount shall be paid before principal constituting the Class C-2 Cumulative
Applicable Periodic Interest Shortfall Amount, if any; and (D) the Class D
Notes, payment of principal not constituting the Class D Cumulative Applicable
Periodic Interest Shortfall Amount shall be paid before principal constituting
the Class D Cumulative Applicable Periodic Interest Shortfall Amount, if any;

 

(xix)      to pay the Class D Cumulative Applicable Periodic Interest Shortfall
Amount, if any;

 

(xx)       to pay, in the following order, (A) the principal of the Class A-1
Notes until paid in full, and then (B) pari passu, the principal of the
Class A-2A Notes and the Class A-2B Notes until paid in full, and then (C) the
principal of the Class B-1 Notes until paid in full, and then (D) the principal
of the Class B-2 Notes until paid in full, and then (E) pari passu, the
principal of the Class C-lA Notes and the Class C-1B Notes until paid in full,
and then (F) the principal of the Class C-2 Notes until paid in full, and then
(G) pari passu, the principal of the Class D-1A Notes and the Class D-1B Notes
until paid in full; provided that the foregoing items (A) through (G) shall be
payable in an aggregate amount equal on any Payment Date to the lesser of
(1) the amount of Collateral Principal Collections received during the related
Due Period and (2) the amount of Available Funds then remaining in the
Collection Account;

 

(xxi)      to pay termination payments payable to any Hedge Counterparty upon
the termination of the related Hedge Agreement, if such termination occurred
solely as the result

 

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of an event of default or a termination event with respect to the Hedge
Counterparty as Defaulting Party or sole Affected Party, as the case may be;

 

(xxii)      to pay, in the following order, (A) any due and unpaid Trustee Fee,
Trustee Expenses, Collateral Agent Expenses and Collateral Administrator
Expenses, Preferred Share Fiscal and Paying Agent Expenses or Administrative
Expenses, including amounts payable to the Collateral Advisor under the
Collateral Advisory Agreement, in each case, in the same order of priority as
provided in clause (i) above and to the extent not previously paid in full under
clause (i) above, and (B) on a pro rata basis, any due and unpaid expenses and
other liabilities of the Co-Issuers to the extent not previously paid under
clause (i) above, in each case, whether as a result of an amount limitation
imposed thereunder or otherwise;

 

(xxiii)     to pay the Subordinate Collateral Advisory Fee with respect to such
Payment Date and any due and unpaid Subordinate Collateral Advisory Fee with
respect to a previous Payment Date that was not paid on a previous Payment Date;

 

(xxiv)     after the Payment Date occurring in August 2015, to pay from
remaining Collateral Interest Collections on any Payment Date the principal on
the Class D Notes, until paid in full, then the principal on the Class C-2
Notes, until paid in full, then the principal of the Class C-1 Notes, until paid
in full, then the principal on the Class B-2 Notes, until paid in full, then the
principal on the Class B-1 Notes, until paid in full, then the principal on the
Class A-2 Notes until paid in full and then the principal on the Class A-1 Notes
until paid in full; and

 

(xxv)      all Excess Funds to the Preferred Share Fiscal and Paying Agent, on
behalf of the Issuer for the payment of dividends or distributions on the
Preferred Shares in accordance with the Preferred Share Documents.

 

(b)         Notwithstanding the foregoing, on any Redemption Date or Auction
Call Redemption Date, the Collateral Agent shall pay, from the Collection
Account, in the following order: (i) the amounts set forth in clauses (i), (ii)
and (iii) of the Priority of Payments, (ii) the Redemption Price of each
Class of Notes in accordance with the Priority of Payments and (iii) the amounts
set forth in clauses (xxi) through (xxv) of the Priority of Payments.

 

(c)          Notwithstanding Section 5.01(a), if an acceleration of maturity has
occurred and is continuing in connection with an Event of Default, on the date
or dates determined by the Trustee, the Trustee shall pay, from all collections
from, and proceeds of the sale or liquidation of, the Collateral, in the
following order: (i) amounts corresponding to the amounts set forth in clauses
(i), (ii) and (iii) of the Priority of Payments, (ii) the Periodic Interest on
the Class A-1 Notes and then on the Class A-2 Notes (including any Defaulted
Interest on such Class A Notes) and then principal on the Class A-1 Notes until
paid in full and then principal on the Class A-2 Notes until paid in full,
(iii) the Periodic Interest on the Class B-1 Notes (including any Defaulted
Interest on the Class B-1 Notes) and then principal on the Class B-1 Notes until
paid in full, (iv) the Periodic Interest on the Class B-2 Notes (including any
Defaulted Interest on the Class B-2 Notes) and then principal on the Class B-2
Notes (including Class B-2 Cumulative Applicable Periodic Interest Shortfall
Amount, if any) until paid in full, (v) the Periodic Interest on the Class C-1
Notes (including any Defaulted Interest on the Class C-1 Notes) and then
principal on the Class C-1 Notes (including Class C-1 Cumulative Applicable
Periodic Interest Shortfall Amount, if any) until paid in full, (vi) the
Periodic Interest on the Class C-2 Notes (including any Defaulted Interest on
the Class C-2 Notes) and then principal on the Class C-2 Notes (including
Class C-2 Cumulative Applicable Periodic Interest Shortfall Amount, if any)
until paid in full, (vii) the Periodic Interest on the Class D Notes (including
any Defaulted Interest on the Class D Notes) and then principal on the Class D
Notes (including Class D Cumulative Applicable Periodic Interest Shortfall
Amount, if

 

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any) until paid in full, (viii) amounts corresponding to the amounts set forth
in clauses (xxi) through (xxiii) of the Priority of Payments and (viii) any
remaining amounts to the Preferred Share Fiscal and Paying Agent, for payment of
dividends or distributions on the Preferred Shares.

 

Section 5.02.          Additional Provisions.

 

(a)          (1)           On the applicable Stated Maturity Date of the Notes,
the Issuer (or the Collateral Advisor acting pursuant to the Collateral Advisory
Agreement on behalf of the Issuer) shall direct the Collateral Agent in writing
to (and the Collateral Agent shall, in the manner so directed by the Collateral
Advisor on behalf of the Issuer) liquidate any remaining Collateral Debt
Securities and any Hedge Agreements (for value on the applicable Stated Maturity
Date of the Notes) and deposit the proceeds thereof, if any, in the Collection
Account. On the applicable Stated Maturity Date of the Notes, all net proceeds
from such liquidation and all available Cash, after the payment of the amounts
referred to in clauses (i) through (xxiii) of the Priority of Payments in the
order set forth therein, shall be distributed to the Holders of the Preferred
Shares, whereupon all of the Preferred Shares will be redeemed pursuant to the
Issuer’s Articles.

 

(2)          Upon any Redemption or Auction Call Redemption, the Issuer (or the
Collateral Advisor acting pursuant to the Collateral Advisory Agreement on
behalf of the Issuer) shall direct the Collateral Agent in writing to (and the
Collateral Agent shall, in the manner so directed by the Collateral Advisor)
liquidate any remaining Collateral Debt Securities and any Hedge Agreements (for
value on the date of such Redemption or Auction Call Redemption, as the case may
be) and deposit the proceeds thereof, if any, in the Collection Account.

 

(b)         If on any Payment Date the amount available in the Collection
Account from amounts received in the related Due Period is insufficient to make
the full amount of the disbursements required by the statements furnished by the
Issuer pursuant to Section 4.07(a), the Collateral Agent shall make the
disbursements called for in the order and according to the Priority of Payments
set forth under Section 5.01(a), subject to Section 7.01, to the extent funds
are available therefor.

 

(c)          In the event that any Hedge Counterparty defaults in the payment of
its obligations to the Issuer under the relevant Hedge Agreement on any date
when such amount was due and payable, the Collateral Agent shall make a demand
on such Hedge Counterparty or any guarantor, if applicable, demanding payment by
12:30 p.m. on the Business Day following such date. The Collateral Agent shall
give notice to the Collateral Advisor, S&P and the Trustee and the Trustee shall
deliver such notice to the Noteholders upon the continuing failure by such Hedge
Counterparty to perform its obligations during the same Business Day following a
demand made by the Collateral Agent on such Hedge Counterparty, and shall take
such action with respect to such continuing failure directed to be taken by the
Trustee.

 

(d)         Notwithstanding any provision to the contrary contained herein, the
provisions of Articles II and VII and the other provisions hereof are subject to
the Priority of Payments specified in this Article V, and, in the event of any
inconsistency between the provisions of Article II, Article VII or the other
provisions hereof and the Priority of Payments, the Priority of Payments will
control.

 

(e)          As a condition to the payment of principal and interest on any Note
without U.S. federal back-up withholding, the Issuer shall require the delivery
of properly completed and signed applicable U.S. federal income tax
certifications (generally, an Internal Revenue Service Form W-9 (or applicable
successor 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 Internal Revenue Service
Form W-8BEN (or applicable successor

 

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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) from each Noteholder.

 

ARTICLE VI

 

SALE OF COLLATERAL DEBT SECURITIES

 

Section 6.01.          Sale of Collateral Debt Securities.

 

(a)          Subject to the satisfaction of the conditions specified in
Section 4.08 as applicable, if the Collateral Advisor, on behalf of the Issuer,
pursuant to this Section 6.01 and Section 6.02, shall direct the Collateral
Agent to sell any Defaulted Security, Equity Security, Credit Risk Security,
Written Down Security or Withholding Tax Security, the Collateral Agent shall
sell in the manner directed by the Collateral Advisor, any Defaulted Security,
Equity Security, Credit Risk Security, Written Down Security or Withholding Tax
Security.

 

(b)         A Defaulted Security, a Credit Risk Security, a Written Down
Security, a Withholding Tax Security or an Equity Security may be sold at any
time. In addition, if a Collateral Debt Security that is a Defaulted Security is
not sold within one year of such Collateral Debt Security becoming a Defaulted
Security, the Collateral Advisor, on behalf of the Issuer, shall use its best
efforts to effect the sale of such Collateral Debt Security on such later date
as such Collateral Debt Security may first be sold in accordance with its terms
and with applicable law; provided, however, that the Collateral Advisor may hold
Defaulted Securities up to three (3) years after such securities become
Defaulted Securities as long as the total amount of such securities does not
exceed 5% of the CDS Principal Balance and any amount over such 5% limit shall
be sold within one (1) year.

 

(c)          Any Equity Security must be sold within ninety (90) days after
receipt and any Equity Security which constitutes Margin Stock must be sold
within forty-five (45) days after receipt. Notwithstanding the foregoing, Equity
Securities that are received upon the exercise of convertible bonds must be sold
within five (5) Business Days of receipt (or within five (5) Business Days of
such later date as such Equity Security may first be sold in accordance with its
terms and applicable law).

 

(d)         In the event of a Redemption or Auction Call Redemption, the
Collateral Advisor shall direct the Collateral Agent to sell Collateral Debt
Securities without regard to the foregoing limitations; provided that the Sale
Proceeds therefrom and other amounts available therefor will be at least
sufficient to pay certain expenses, including all amounts due under any Hedge
Agreements, and redeem in whole the Notes at the applicable Redemption Prices;
and provided, further, that such Sale Proceeds are used to make such a
Redemption or Auction Call Redemption.

 

(e)          The Collateral Advisor shall sell any Collateral Debt Security
pursuant to this Section 6.01 only at a price that, in its judgment, is not
substantially less than the market value of such Collateral Debt Security at the
time of such sale.

 

Section 6.02.          Conditions Applicable to all Transactions.

 

(a)        Any transaction effected under this Article VI shall be conducted on
an arm’s-length basis, and, if effected with a Person affiliated with the
Collateral Advisor, the Issuer or the Collateral Agent, shall be effected in a
primary or secondary market transaction on terms as favorable to the Issuer as
would be the case if such Person were not so affiliated; provided, however, that
after the Closing Date, the Collateral Advisor and its Affiliates may, as
principals or for their own accounts, sell Collateral Debt Securities or enter
into any Hedge Agreements with the Issuer if and to the extent such

 

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transactions comply with the Investment Advisers Act; provided, further, that
the Collateral Advisor may, on behalf of the Issuer, sell Collateral Debt
Securities or enter into Hedge Agreements with other entities for which it, or
an Affiliate, acts as an investment advisor; provided, further, that the
Collateral Advisor will be permitted to acquire an obligation on behalf of the
Issuer to be included in the Collateral from its Permitted Affiliates as
principal or as agent or to sell an obligation to its Permitted Affiliates as
principal or agent subject to the Investment Advisers Act; and provided,
further, that the Collateral Advisor may acquire an obligation on behalf of the
Issuer to be included in the Collateral from itself or from any of its
Affiliates that are not Permitted Affiliates, or from funds or accounts for
which the Collateral Advisor or any of its Affiliates acts as investment adviser
or sell an obligation on behalf of the Issuer to itself, or to any of its
Affiliates that are not Permitted Affiliates or to funds or accounts for which
the Collateral Advisor or any of its Affiliates acts as an investment adviser;
provided, however, that any such acquisition or disposition must be approved by
the board of directors of the Issuer.

 

Notwithstanding the foregoing, prior to selling any Collateral Debt Securities
to any Person affiliated with the Collateral Advisor (other than a Permitted
Affiliate), the Collateral Advisor shall use its reasonable efforts to solicit
bids from two non-affiliated Persons; provided that transactions with Permitted
Affiliates shall be conducted as arm’s-length transactions; and provided,
further, that in the event that the Collateral Advisor is unable, in its good
faith determination, to obtain two bids from non-affiliated Persons, the
Collateral Advisor shall use its reasonable efforts to solicit bids from a
non-affiliated Person; and provided, further, that in the event that the
Collateral Advisor in its good faith determination is unable to obtain a bid
from a non-affiliated Person, it shall use its reasonable efforts to obtain an
appraisal from a non-affiliated Person; and provided, further, that such
Collateral Debt Securities shall be sold to such Person affiliated with the
Collateral Advisor at the highest of the bids or the appraisal value so
obtained.

 

ARTICLE VII

 

SUBORDINATION

 

Section 7.01.          Subordination.

 

(a)        Notwithstanding anything in this Agreement, the Trust Deed, the Notes
or any other Transaction Document to the contrary, the Issuer, the Holders of
the Class A-2 Notes, the Class B-1 Notes, the Class B-2 Notes, the Class C-1
Notes, the C-2 Notes and the Class D Notes and the Holders of the Preferred
Shares and the Ordinary Shares, by virtue of the respective ownership of such
securities, agree for the benefit of the Holders of the Class A-1 Notes that the
Class A-2 Notes, the Class B-1 Notes, the Class B-2 Notes, the Class C-1 Notes,
the Class C-2 Notes, the Class D Notes, the Preferred Shares, the Ordinary
Shares and the Issuer’s rights in and to the Collateral (the “Class A-1
Subordinate Interests”) shall be subordinate and junior to the Class A-1 Notes
to the extent and in the manner set forth in this Agreement including as set
forth in Section 5.01(a) and hereinafter provided. If any Event of Default has
occurred and has not been cured or waived and acceleration occurs in accordance
with the Conditions and the Trust Deed, the Class A-1 Notes, to the extent set
forth in Section 5.01(c), shall be paid in full in Cash or, to the extent that
the Holders of 662/3% of the outstanding principal amount of the Class A-1 Notes
consent, other than in Cash, before any further payment or distribution is made
on account of the Class A-1 Subordinate Interests. The Holders of the Class A-2
Notes, the Class B-1 Notes, the Class B-2 Notes, the Class C-1 Notes, the
Class C-2 Notes and the Class D Notes have agreed in the Trust Deed, the Holders
of the Preferred Shares have agreed in the Preferred Share Fiscal and Paying
Agency Agreement and the holders of the Ordinary Shares have agreed in the
Declaration of Trust for the benefit of the Holders of the Class A-1 Notes, not
to cause the filing of a petition in bankruptcy against the Issuer or the
Co-Issuer for failure to pay to them amounts due under the Class A-2 Notes, the
Class B-1 Notes, the Class B-2 Notes, the Class C-1 Notes, the Class C-2 Notes,
the Class D Notes, the Preferred Shares and

 

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the Ordinary Shares or hereunder until the payment in full of the Class A-1
Notes and not before one (1) year and one (1) day have elapsed since such
payment or, if longer, the applicable preference period then in effect,
including any preference period established pursuant to the laws of the Cayman
Islands.

 

(b)             Notwithstanding anything in this Agreement, the Trust Deed, the
Notes or any other Transaction Document to the contrary, the Issuer, the Holders
of the Class B-1 Notes, the Class B-2 Notes, the Class C-1 Notes, the Class C-2
Notes, the Class D Notes and the Preferred Shares and the holders of the
Ordinary Shares, by virtue of the respective ownership of such securities, agree
for the benefit of the Holders of the Class A-2 Notes that the Class B-1 Notes,
the Class B-2 Notes, the Class C-1 Notes, the Class C-2 Notes, the Class D
Notes, the Preferred Shares, the Ordinary Shares and the Issuer’s rights in and
to the Collateral (the “Class A-2 Subordinate Interests”) shall be subordinate
and junior to the Class A-2 Notes to the extent and in the manner set forth in
this Agreement including as set forth in Section 5.01(a) and hereinafter
provided. If any Event of Default has occurred and has not been cured or waived
and acceleration occurs in accordance with the Conditions and the Trust Deed,
the Class A-2 Notes shall be paid in full in Cash or, to the extent 662/3% of
the outstanding principal amount of the Class A-2 Notes consent, other than in
Cash, before any further payment or distribution is made on account of the
Class A-2 Subordinate Interests. The Holders of the Class B-1 Notes, the
Class B-2 Notes, the Class C-1 Notes, the Class C-2 Notes and the Class D Notes
have agreed in the Trust Deed, the Holders of the Preferred Shares have agreed
in the Preferred Share Fiscal and Paying Agency Agreement and the holders of the
Ordinary Shares have agreed in the Declaration of Trust for the benefit of the
Holders of the Class A-2 Notes, not to cause the filing of a petition in
bankruptcy against the Issuer or the Co-Issuer for failure to pay to them
amounts due under the Class B-1 Notes, the Class B-2 Notes, the Class C-1 Notes,
the Class C-2 Notes, the Class D Notes, the Preferred Shares and the Ordinary
Shares or hereunder until the payment in full of the Class A-2 Notes and not
before one (1) year and one (1) day have elapsed since such payment or, if
longer, the applicable preference period then in effect, including any
preference period established pursuant to the laws of the Cayman Islands.

 

(c)             Notwithstanding anything in this Agreement, the Trust Deed, the
Notes or any other Transaction Document to the contrary, the Issuer, the Holders
of the Class B-2 Notes, the Class C-1 Notes, the Class C-2 Notes, the Class D
Notes and the Preferred Shares and the holders of the Ordinary Shares, by virtue
of the respective ownership of such securities, agree for the benefit of the
Holders of the Class B-1 Notes that the Class B-2 Notes, the Class C-1 Notes,
the Class C-2 Notes, the Class D Notes, the Preferred Shares, the Ordinary
Shares and the Issuer’s rights in and to the Collateral (the “Class B-1
Subordinate Interests”) shall be subordinate and junior to the Class B-1 Notes
to the extent and in the manner set forth in this Agreement including as set
forth in Section 5.01(a) and hereinafter provided. If any Event of Default
occurred and has not been cured or waived and acceleration occurs in accordance
with the Conditions and the Trust Deed, the Class B-1 Notes shall be paid in
full in Cash or, to the extent 662/3% of the outstanding principal amount of the
Class B-1 Notes consent, other than in Cash, before any further payment or
distribution is made on account of the Class B-1 Subordinate Interests. The
Holders of the Class B-2 Notes, the Class C-1 Notes, the Class C-2 Notes and the
Class D Notes have agreed in the Trust Deed, the Holders of the Preferred Shares
have agreed in the Preferred Share Fiscal and Paying Agency Agreement and the
holders of the Ordinary Shares have agreed in the Declaration of Trust for the
benefit of the Holders of the Class B-1 Notes, not to cause the filing of a
petition in bankruptcy against the Issuer or the Co-Issuer for failure to pay to
them amounts due under the Class B-2 Notes, the Class C-1 Notes, the Class C-2
Notes, the Class D Notes, the Preferred Shares and the Ordinary Shares or
hereunder until the payment in full of the Class B-1 Notes and not before one
(1) year and one (1) day have elapsed since such payment or, if longer, the
applicable preference period then in effect, including any preference period
established pursuant to the laws of the Cayman Islands.

 

(d)             Notwithstanding anything in this Agreement, the Trust Deed, the
Notes or any other Transaction Document to the contrary, the Issuer, the Holders
of the Class C-1 Notes, the Class C-2

 

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Notes, the Class D Notes and the Preferred Shares and the holders of the
Ordinary Shares, by virtue of the respective ownership of such securities, agree
for the benefit of the Holders of the Class B-2 Notes that the Class C-1 Notes,
the Class C-2 Notes, the Class D Notes, the Preferred Shares, the Ordinary
Shares and the Issuer’s rights in and to the Collateral (the “Class B-2
Subordinate Interests”) shall be subordinate and junior to the Class B-2 Notes
to the extent and in the manner set forth in this Agreement including as set
forth in Section 5.01(a) and hereinafter provided. If any Event of Default has
occurred and has not been cured or waived and acceleration occurs in accordance
with the Conditions and the Trust Deed, the Class B-2 Notes shall be paid in
full in Cash or, to the extent 662/3% of the outstanding principal amount of the
Class B-2 Notes consent, other than in Cash, before any further payment or
distribution is made on account of the Class B-2 Subordinate Interests. The
Holders of the Class C-1 Notes, the Class C-2 Notes and the Class D Notes have
agreed in the Trust Deed, the Holders of the Preferred Shares have agreed in the
Preferred Share Fiscal and Paying Agency Agreement and the holders of the
Ordinary Shares have agreed in the Declaration of Trust for the benefit of the
Holders of the Class B-2 Notes, not to cause the filing of a petition in
bankruptcy against the Issuer or the Co-Issuer for failure to pay to them
amounts due under the Class C-1 Notes, the Class C-2 Notes, the Class D Notes,
the Preferred Shares and the Ordinary Shares or hereunder until the payment in
full of the Class B-2 Notes and not before one (1) year and one (1) day have
elapsed since such payment or, if longer, the applicable preference period then
in effect, including any preference period established pursuant to the laws of
the Cayman Islands.

 

(e)           Notwithstanding anything in this Agreement, the Trust Deed, the
Notes or any other Transaction Document to the contrary, the Issuer, the Holders
of the Class C-2 Notes, the Class D Notes and the Preferred Shares and the
holders of the Ordinary Shares, by virtue of the respective ownership of such
securities, agree for the benefit of the Holders of the Class C-1 Notes that the
Class C-2 Notes, the Class D Notes, the Preferred Shares, the Ordinary Shares
and the Issuer’s rights in and to the Collateral (the “Class C-1 Subordinate
Interests”) shall be subordinate and junior to the Class C-1 Notes to the extent
and in the manner set forth in this Agreement including as set forth in
Section 5.01(a) and hereinafter provided. If any Event of Default has occurred
and has not been cured or waived and acceleration occurs in accordance with the
Conditions and the Trust Deed, the Class C-1 Notes shall be paid in full in Cash
or, to the extent 662/3% of the outstanding principal amount of the Class C-1
Notes consent, other than in Cash, before any further payment or distribution is
made on account of the Class C-1 Subordinate Interests. The Holders of the
Class C-2 Notes and the Class D Notes have agreed in the Trust Deed, the Holders
of the Preferred Shares have agreed in the Preferred Share Fiscal and Paying
Agency Agreement and the holders of the Ordinary Shares have agreed in the
Declaration of Trust for the benefit of the Holders of the Class C-1 Notes, not
to cause the filing of a petition in bankruptcy against the Issuer or the
Co-Issuer for failure to pay to them amounts due under the Class C-2 Notes, the
Class D Notes, the Preferred Shares and the Ordinary Shares or hereunder until
the payment in full of the Class C-1 Notes and not before one (1) year and one
(1) day have elapsed since such payment or, if longer, the applicable preference
period then in effect, including any preference period established pursuant to
the laws of the Cayman Islands.

 

(f)            Notwithstanding anything in this Agreement, the Trust Deed, the
Notes or any other Transaction Document to the contrary, the Issuer, the Holders
of the Class D Notes and the Preferred Shares and the holders of the Ordinary
Shares, by virtue of the respective ownership of such securities, agree for the
benefit of the Holders of the Class C-2 Notes that the Class D Notes, the
Preferred Shares, the Ordinary Shares and the Issuer’s rights in and to the
Collateral (the “Class C-2 Subordinate Interests”) shall be subordinate and
junior to the Class C-2 Notes to the extent and in the manner set forth in this
Agreement including as set forth in Section 5.01(a) and hereinafter provided. If
any Event of Default has occurred and has not been cured or waived and
acceleration occurs in accordance with the Conditions and the Trust Deed, the
Class C-2 Notes shall be paid in full in Cash or, to the extent 662/3% of the
outstanding principal amount of the Class C-2 Notes consent, other than in Cash,
before any further payment or distribution is made on account of the Class C-2
Subordinate Interests. The Holders of the

 

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Class D Notes have agreed in the Trust Deed, the Holders of the Preferred Shares
have agreed in the Preferred Share Fiscal and Paying Agency Agreement and the
holders of the Ordinary Shares have agreed in the Declaration of Trust for the
benefit of the Holders of the Class C-2 Notes, not to cause the filing of a
petition in bankruptcy against the Issuer or the Co-Issuer for failure to pay to
them amounts due under the Class D Notes, the Preferred Shares and the Ordinary
Shares or hereunder until the payment in full of the Class C-2 Notes and not
before one (1) year and one (1) day have elapsed since such payment or, if
longer, the applicable preference period then in effect, including any
preference period established pursuant to the laws of the Cayman Islands.

 

(g)           Notwithstanding anything in this Agreement, the Trust Deed, the
Notes or any other Transaction Document to the contrary, the Issuer, the Holders
of the Preferred Shares and the holders of the Ordinary Shares, by virtue of the
respective ownership of such securities, agree for the benefit of the Holders of
the Class D Notes that the Preferred Shares, the Ordinary Shares and the
Issuer’s rights in and to the Collateral (the “Class D Subordinate Interests”)
shall be subordinate and junior to the Class D Notes to the extent and in the
manner set forth in this Agreement including as set forth in Section 5.01(a) and
hereinafter provided. If any Event of Default has occurred and has not been
cured or waived and acceleration occurs in accordance with the Conditions and
the Trust Deed, the Class D Notes shall be paid in full in Cash or, to the
extent 662/3% of the outstanding principal amount of the Class D Notes consent,
other than in Cash, before any further payment or distribution is made on
account of the Class D Subordinate Interests. The Holders of the Preferred
Shares have agreed in the Preferred Share Fiscal and Paying Agency Agreement and
the holders of the Ordinary Shares have agreed in the Declaration of Trust for
the benefit of the Holders of the Class D Notes, not to cause the filing of a
petition in bankruptcy against the Issuer or the Co-Issuer for failure to pay to
them amounts due under the Preferred Shares and the Ordinary Shares or hereunder
until the payment in full of the Class D Notes and not before one (1) year and
one (1) day have elapsed since such payment or, if longer, the applicable
preference period then in effect, including any preference period established
pursuant to the laws of the Cayman Islands.

 

(h)           Notwithstanding anything in this Agreement, the Trust Deed, the
Notes or any other Transaction Document to the contrary, the Issuer and the
Holders of the Notes agree for the benefit of any Hedge Counterparty that the
Notes and the Issuer’s rights in and to the Collateral (the “Hedge Counterparty
Subordinate Interests”) shall be subordinate and junior to the rights of any
Hedge Counterparty with respect to payments to be made to any Hedge Counterparty
pursuant to a Hedge Agreement to the extent and in the manner set forth in
Section 5.01(a) and as hereinafter provided. If any Event of Default has
occurred and has not been cured or waived and acceleration occurs in accordance
with Condition 13 (Events of Default), including as a result of an Event of
Default specified in clause (g) or (h) of Condition 13 (Events of Default), all
amounts payable to any Hedge Counterparty pursuant to Section 5.01(a)(iii) shall
be paid in Cash or, to the extent any Hedge Counterparty consents, other than in
Cash, before any further payment or distribution is made on account of the Hedge
Counterparty Subordinate Interests.

 

ARTICLE VIII

 

HEDGE AGREEMENTS, INITIAL HEDGE AGREEMENT

 

Section 8.01.          Hedge Agreement Provisions.

 

(a)           [Intentionally Omitted.]

 

(b)           The Issuer may from time to time enter into one or more other
Hedge Agreements (other than the Initial Hedge Agreement), with respect to which
Rating Agency Confirmation from each Rating Agency shall have been obtained. The
Issuer (or the Collateral Advisor on behalf of the

 

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Issuer) may, from time to time, enter into, subject to the remainder of this
Section 8.01, one or more replacement Hedge Agreements in the event that any
Hedge Agreement is terminated prior to its scheduled expiration, and the
Collateral Agent may release funds in the Collection Account in accordance with
the Priority of Payments for such purpose; provided, however, that such released
funds shall not exceed the amount of any termination payment received in respect
of a terminated Hedge Agreement; and provided, further, that Rating Agency
Confirmation shall have been received. The notional amounts of the Hedge
Agreements may be reduced from time to time by the Issuer; provided that Rating
Agency Confirmation shall have been received. The Collateral Advisor shall not
cause the occurrence of a Notional Balance Reduction (as defined in the Hedge
Agreements) unless a Rating Agency Confirmation shall have been received. At
least five (5) Business Days before the effective date of any amendment to a
Hedge Agreement, the Issuer (or the Collateral Advisor on behalf of the Issuer)
shall provide each Rating Agency with a copy of such amendment. The Issuer shall
obtain Rating Agency Confirmation from Fitch, S&P and Moody’s prior to entering
into any such amendment.

 

(c)           In the event of any early termination of a Hedge Agreement with
respect to which the Hedge Counterparty is the sole Defaulting Party or Affected
Party (as defined in the Hedge Agreements), (i) any termination payment paid by
the Hedge Counterparty to the Issuer will be deposited in a single, segregated
account held in the United States in the name of the Collateral Agent (the
“Hedge Termination Receipts Account”) for the benefit of the Collateral Agent
for and on behalf of the Trustee for and on behalf of the Noteholders (other
than the Hedge Counterparty) under this Agreement and (ii) any Hedge Replacement
Proceeds received from a replacement counterparty will be deposited in a single,
segregated account held in the United States in the name of the Collateral Agent
(the “Hedge Replacement Account”) for the benefit of the Hedge Counterparty
under the terminated Hedge Agreement.

 

(d)           The Collateral Advisor will use its best efforts to cause the
Issuer, promptly following the early termination of a Hedge Agreement (other
than on a Redemption Date) and to the extent possible through application of
funds available in the Hedge Termination Receipts Account and the Hedge
Replacement Account, to enter into a replacement hedge agreement (a “Replacement
Hedge”); provided that Rating Agency Confirmation has been received.

 

(i)        If (A) the funds available in the Hedge Termination Receipts Account
exceed the costs of entering into a Replacement Hedge, (B) the Collateral
Advisor determines not to replace the terminated Hedge Agreement and Rating
Agency Confirmation is received or (C) the termination is occurring on a
Redemption Date, then amounts in the Hedge Termination Receipts Account (after
providing for the costs of entering into a Replacement Hedge, if any) shall
become part of Collateral Principal Collections and be distributed in accordance
with the Priority of Payments on the next following Payment Date (or on such
Redemption Date, in the event that the Notes are optionally redeemed thereon).

 

(ii)       If the termination of the applicable Hedge Agreement occurred as a
result of a credit rating failure described in Section 8.01(f) in respect of
such Hedge Counterparty and a Hedge Shortfall Amount exists, the Collateral
Agent shall demand that the applicable Hedge Counterparty pay to the Issuer such
Hedge Shortfall Amount, and upon receipt such payment shall become part of
Collateral Principal Collections. If the termination of the applicable Hedge
Agreement occurred for any other reason, the Hedge Shortfall Amount shall become
part of the Hedge Payment Amount to be paid in accordance with the Priority of
Payments on the next following Payment Date (or on such Redemption Date, in the
event that the Notes are optionally redeemed thereon).

 

(e)           The amounts in the Hedge Replacement Account will be applied
directly to the payment of Defaulted Hedge Termination Payments, if any, payable
by the Issuer to the Hedge

 

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Counterparty. To the extent not fully paid from Hedge Replacement Proceeds, a
Defaulted Hedge Termination Payment shall be payable to the Hedge Counterparty
on the next Payment Date in accordance with the Priority of Payments. To the
extent that the funds available in the Hedge Replacement Account exceed any such
Defaulted Hedge Termination Payments (or if there are no Defaulted Hedge
Termination Payments), the amounts in the Hedge Replacement Account shall become
part of Collateral Principal Collections and shall be transferred to the Note
Payment Account and distributed in accordance with the Priority of Payments on
the following Payment Date.

 

(f)            The Collateral Agent shall, upon receiving written notice from
the Collateral Advisor of the exposure calculated under the Credit Support Annex
(as defined below) to the Hedge Agreement, make a demand to the Hedge
Counterparty and its credit support provider, if applicable, for securities
having a value under such Credit Support Annex equal to the required credit
support amount.

 

If at any time the short-term rating of the Hedge Counterparty or its guarantor
from Moody’s is lower than “P-1” or is “P-1” and has been placed on and is
remaining on credit watch with negative implications by Moody’s or the long-term
rating of the Hedge Counterparty or its guarantor from Moody’s is lower than
“Al” or is “Al” and has been placed on and is remaining on credit watch with
negative implications by Moody’s or, if no short-term rating is available, the
long-term rating of the Hedge Counterparty or its guarantor from Moody’s is
withdrawn, suspended or downgraded below “Aa3” or is “Aa3” and has been placed
on and is remaining on credit watch with negative implications by Moody’s, or
the short-term rating of the Hedge Counterparty or its guarantor from Fitch is
lower than “F-1” or the long-term rating of the Hedge Counterparty or its
guarantor from Fitch is lower than “A” (each, a “Collateralization Event”), the
Issuer and the Hedge Counterparty shall amend the Hedge Agreement, solely at the
expense of the Hedge Counterparty, by incorporating provisions in the form of
the ISDA Credit Support Annex attached as an annex to the Hedge Agreement (the
“Credit Support Annex”) which shall require that the Hedge Counterparty maintain
collateral sufficient to prevent a downgrade or withdrawal by Moody’s or Fitch,
as the case may be (as confirmed at such time by Moody’s or Fitch, as the case
may be, in writing), of its then-current rating on the Notes; provided that if
the Hedge Counterparty has not within five (5) days following a
Collateralization Event incorporated the Credit Support Annex and provided
sufficient collateral, a Substitution Event (as defined below) shall be deemed
to have occurred and the Hedge Counterparty shall be required to take the
remedial action specified thereunder. In the event that (i) so long as any Notes
are Outstanding and rated by S&P, the short-term rating of the Hedge
Counterparty or its guarantor from S&P is withdrawn, suspended or downgraded
below “A-1” or, if no short-term rating is available, the long-term rating of
the Hedge Counterparty or its guarantor from S&P is withdrawn, suspended or
downgraded below “A+”, (ii) so long as any Notes are Outstanding and rated by
Fitch, the short-term rating of the Hedge Counterparty or its guarantor from
Fitch is withdrawn, suspended or downgraded below “F-1” or, if no short-term
rating is available, the long-term rating of the Hedge Counterparty or its
guarantor from Fitch is withdrawn, suspended or downgraded below “A” or
(iii) the short-term rating of the Hedge Counterparty or its guarantor from
Moody’s is “P-2” or lower or the long-term rating of the Hedge Counterparty or
its guarantor from Moody’s is “A3” or lower or, if no short-term rating is
available, the long-term rating of the Hedge Counterparty or its guarantor from
Moody’s is “A2” or lower (each, a “Substitution Event”), the Hedge Counterparty
will be required, within thirty (30) days following such Substitution Event,
while it continues in good faith to search for an eligible Substitute Party (as
defined below), to assign its rights and obligations under the Hedge Agreement
at no cost to the Issuer to a party (the “Substitute Party”) selected by the
Hedge Counterparty (i) whose short-term rating by Moody’s is not lower than
“P-1” and is not “P-1” and has been placed on and is remaining on credit watch
with negative implications and whose long-term rating by Moody’s is not lower
than “Al” or is not “Al” and has been placed on and is remaining on credit watch
with negative implications by Moody’s or, if no short-term rating is available,
whose long-term rating by Moody’s is at least “Aa3” and is not “Aa3” or has been
placed on and is remaining on credit watch with negative implications by
Moody’s, (ii) whose short-term rating by S&P is

 

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not lower than “A-1” or, if no short-term rating is available, whose long-term
rating by S&P is not lower than “A+” and who is not on credit watch with
negative implications by S&P and (iii) whose short-term rating by Fitch is not
lower than “F-1” or, if no short-term rating is available, whose long-term
rating by Fitch is not lower than “A” and who is not on credit watch with
negative implications by Fitch, and with respect to which each Rating Agency has
confirmed in writing that its then-current ratings on any Class of Notes rated
by such Rating Agency will not be adversely affected; provided that such right
shall be subject to the assumption by the Substitute Party of all of the Hedge
Counterparty’s obligations under the Hedge Agreement pursuant to an agreement
satisfactory to the Issuer. If the Hedge Counterparty fails to assign its rights
and obligations under the Hedge Agreement to a Substitute Party within thirty
(30) days following such Substitution Event, the Hedge Counterparty and the
Issuer shall, on or before such thirtieth (30th) day, have amended the Hedge
Agreement, solely at the expense of the Hedge Counterparty, to incorporate the
Credit Support Annex, which shall require that the Hedge Counterparty pledge and
assign to the Trustee collateral consisting of cash and/or eligible investments
in an amount sufficient to maintain the then-current rating of the Notes by each
Rating Agency (as confirmed in writing by each Rating Agency). Any costs
attributable to pledging and assigning any collateral and finding a suitable
Substitute Party shall be borne solely by the Hedge Counterparty and nothing in
this paragraph shall relieve the Hedge Counterparty from its obligations to
assign its rights and obligations under the Hedge Agreement to a Substitute
Party in accordance herewith or the terms of the Hedge Agreement.

 

(g)           The Issuer (or the Collateral Advisor on behalf of the Issuer)
shall enter into Hedge Agreements solely for the purpose of managing interest
rate and other risks in connection with the Issuer’s issuance of, and payments
on, the Notes and the Issuer’s ownership and disposition of the Collateral Debt
Securities.

 

(h)           The amounts payable to the Hedge Counterparties shall be limited
to the amounts payable under the Priority of Payments and the claims of each
Hedge Counterparty (if there is more than one) shall rank equally.

 

(i)            The Collateral Advisor and the Rating Agencies shall be notified
by the Issuer of any amendments to and modifications of the Hedge Agreements.

 

(j)            Each Hedge Agreement will provide with respect to the Issuer for
provisions substantially similar to Sections 10.06 and 10.15.

 

Section 8.02.          Initial Hedge Agreement. On or prior to the Closing Date,
the Issuer shall enter into an interest rate hedge agreement (the “Initial Hedge
Agreement”), dated as of the Closing Date, with the Initial Hedge Counterparty.
Under the Initial Hedge Agreement, on each Payment Date, the Issuer will pay an
amount equal to the Issuer Initial Hedge Payment Amount and, on the Business Day
preceding each of the Payment Dates, the Initial Hedge Counterparty will pay an
amount equal to the Initial Hedge Counterparty Payment Amount. Upon receipt of
each Initial Hedge Counterparty Payment Amount, such Initial Hedge Counterparty
Payment Amount shall be deposited in the Collection Account by the Collateral
Agent on the Business Day preceding each of the Payment Dates, commencing on the
first Payment Date following the Due Period in which such payments are received.

 

Section 8.03.          Acknowledgement of Custodian. Subject to a mutual
agreement with respect to a custodial arrangement, LaSalle Bank National
Association will act as the custodian of the Issuer under the Initial Hedge
Agreement and will comply with the Issuer’s instructions with respect to any
collateral posted pursuant to such Initial Hedge Agreement.

 

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ARTICLE IX

 

THE COLLATERAL AGENT

 

Section 9.01.          Appointment and Powers. Subject to the terms and
conditions hereof, the Issuer hereby appoints LaSalle Bank National Association
as the Collateral Agent and LaSalle Bank National Association hereby accepts
such appointment and agrees to act as Collateral Agent for and on behalf of the
Secured Parties to maintain custody and possession of the Collateral and to
perform the other duties of the Collateral Agent in accordance with the
provisions of this Agreement. The Trustee hereby authorizes (and the other
Secured Parties shall be deemed to have authorized) the Collateral Agent to take
such action on its behalf and to exercise such rights, remedies, powers and
privileges hereunder as are specifically authorized to be exercised by the
Collateral Agent by the terms hereof, together with such rights, remedies,
powers and privileges as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained in this Agreement, if an Event of Default
has occurred and is continuing, the Collateral Agent shall act upon and in
compliance with written instructions of the Trustee delivered pursuant to and in
accordance with this Agreement with respect to any and all matters upon which
the Trustee is permitted to act pursuant to this Agreement or the Trust Deed and
any such action taken by the Collateral Agent in compliance with any such
instruction shall be binding upon all of the Secured Parties.

 

Section 9.02.          Performance of Duties.

 

(a)           The Collateral Agent may perform any of its duties hereunder
directly or by or through agents or employees and shall be entitled to consult
with counsel and to act in reliance upon the advice of such counsel concerning
matters pertaining to the agencies created hereby and its duties hereunder, and
shall not be liable for any action taken or omitted to be taken by it in good
faith and in reasonable reliance upon and in accordance with the advice of
counsel selected by it. The Collateral Agent undertakes to perform only such
duties as are expressly set forth herein, and no implied covenants or
obligations shall be read into this Agreement against the Collateral Agent. No
provision hereof shall be construed to relieve the Collateral Agent from
liability to the Trustee or the Issuer for its own gross negligence, bad faith
or willful misconduct; provided that (i) the Collateral Agent shall not be
liable with respect to any action taken, suffered or omitted by it in good faith
(A) reasonably believed by it to be authorized or within the discretion or
rights or powers conferred on it by this Agreement or (B) in accordance with any
written direction or request of the Issuer or the Collateral Advisor (prior to
the occurrence of an Event of Default) or the Trustee (other than those that
require the consent of other parties and such consent has been withheld), unless
in either case the Collateral Agent was grossly negligent, acted in bad faith or
committed willful misconduct in ascertaining the pertinent facts or was grossly
negligent, acted in bad faith or committed willful misconduct in determining the
requirements imposed by this Agreement or such written direction or request; and
(ii) the Collateral Agent shall not be liable for any error of judgment made in
good faith by any of its officers or employees, unless the Collateral Agent was
grossly negligent, acted in bad faith or committed willful misconduct in
ascertaining the pertinent facts or in determining the requirements imposed by
this Agreement. Whenever in this Agreement it is provided that the absence of
the occurrence and continuation of an Event of Default is a condition precedent
to the taking of any action by the Collateral Agent at the request of the
Issuer, then notwithstanding that the satisfaction of such condition is a
condition precedent to the Issuer’s right to make such request or direction, the
Collateral Agent shall not be liable for acting in accordance with such request
or direction if it does not have knowledge of the occurrence and continuance of
such Event of Default.

 

(b)           Anything in this Agreement to the contrary notwithstanding, in no
event shall the Collateral Agent be liable under or in connection with this
Agreement for indirect, special, incidental,

 

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punitive or consequential losses or damages of any kind whatsoever, including,
but not limited to, lost profits, even if the Collateral Agent has been advised
of the possibility thereof and regardless of the form of action in which such
damages are sought.

 

(c)           In respect of the Collateral credited to and deposited in an
account with respect to which the Collateral Agent acts as Accountholder, the
Collateral Agent shall act in accordance with the terms of this Agreement and
the instructions of the Trustee.

 

(d)           The Collateral Agent shall not be required to take notice or be
deemed to have notice or knowledge of any Potential Event of Default or Event of
Default under the Transaction Documents unless an Authorized Officer of the
Collateral Agent shall have received written notice thereof. In the absence of
receipt of such notice, the Collateral Agent may conclusively assume that there
is no default or event of default under the Transaction Documents.

 

Section 9.03.          Reliance Upon Documents.

 

(a)             In the absence of bad faith on its part, the Collateral Agent
(i) may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any note, notice, resolution, consent,
certificate, affidavit, letter, telegram, teletype message, statement, order or
other document or instrument reasonably believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, (ii) shall not
be obligated to make any investigation into facts or matters stated in any such
document or instrument and (iii) shall have no liability in acting, or in
omitting to act, where such action or omission to act is in reliance upon any
statement or opinion contained in any such document or instrument. The
Collateral Agent assumes no responsibility for the correctness of the recitals
to this Agreement or for the validity, effectiveness, value, sufficiency or
enforceability of this Agreement against the other parties hereto, of the other
Transaction Documents against the parties thereto or of the other Collateral (or
any part thereof) against any parties thereto. The Collateral Agent shall have
no responsibility for maintaining the value of the Collateral or ensuring that
any Collateral is properly delivered to it; provided that the Collateral Agent
shall be responsible for holding the Collateral in accordance with the
provisions hereof. The Issuer shall take or cause to be taken all action
specified in Annex A hereto or recommended pursuant to any Opinion of Counsel
received by the Issuer pursuant to Section 10.02 as may be necessary or
appropriate to perfect and protect the security interests Granted hereby. In the
event that any item of Collateral is not of the type specified in Annex A
hereto, then the Issuer shall take such actions as are necessary to cause such
item of Collateral to be subject to a valid perfected security interest in
accordance with Section 2.01.

 

(b)             Notwithstanding any provision to the contrary contained in
Article V, in performing its obligations to transfer amounts and make payments
to any Person in accordance with Article V, the Collateral Agent is entitled to
rely upon the information furnished to it by the Issuer (or the Collateral
Advisor on behalf of the Issuer) pursuant to Article IV. If the Collateral Agent
has been given notice that a transfer or payment by the Collateral Agent under
Article V is required to be made on a specified date and on such specified date
the Collateral Agent shall not have received all information necessary for the
making of such transfer or payment, then the Collateral Agent shall promptly
give notice to the Issuer, the Collateral Advisor and the Administrator,
specifying, to the extent reasonably within the knowledge of the Collateral
Agent, such absence of information or any inability to confirm information
necessary for the making of such transfer or payment. In the absence of
information required to be furnished by the Issuer under Article IV, the
Collateral Agent shall act in accordance with written instructions furnished to
the Collateral Agent by the Issuer. If the Collateral Agent has been given
notice that a transfer or payment by the Collateral Agent under Article V is
required to be made on a specified date and on such specified date any
information necessary for the making of such transfer or payment is not
furnished by the Issuer and instructions necessary for the making of such
transfer or payment are not

 

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received from the Issuer in sufficient time to effect such transfer or payment,
then upon notice by the Collateral Agent to the Issuer, the Collateral Agent’s
obligations with respect to such transfer or payment shall be suspended and the
Collateral Agent shall not be liable for the failure to make such transfer or
payment. Notwithstanding the foregoing, the Collateral Agent may carry out
transfers and payments of amounts specified in Article V without specific
instructions from the Collateral Advisor or the Issuer if the Collateral Agent
has actual knowledge of the information required for the making of such transfer
and payments. For the avoidance of doubt, the parties hereto confirm that the
Collateral Agent shall be entitled to indemnification pursuant to Section 9.06
with respect to any actions taken by it pursuant to the preceding sentence.

 

Section 9.04.          Eligibility of Collateral Agent. Any Collateral Agent
shall be a bank or trust company (i) having its principal office in Chicago,
Illinois, or such other jurisdiction as the Issuer, the Administrator and the
Trustee may approve, (ii) having, and maintaining at all times, capital and
surplus of at least $200,000,000 (or its equivalent in another currency) as of
the effective date of appointment and (iii) that has, and maintains at all
times, a long-term unsecured debt rating of at least “Baal” by Moody’s, “BBB+”
by S&P and, if rated by Fitch, “BBB+” by Fitch. If at any time the Collateral
Agent shall cease to be eligible in accordance with the provisions of this
Section 9.04, it shall resign immediately in the manner and with the effect
specified in this Article IX.

 

Section 9.05.          Successor Collateral Agent.

 

(a)           Merger. Any Person into which the Collateral Agent may be
converted or merged, or with which it may be consolidated, or to which it may
sell or transfer its corporate trust business and assets as a whole or
substantially as a whole, or any Person resulting from any such conversion,
merger, consolidation, sale or transfer to which the Collateral Agent is a
party, shall (provided that it is otherwise qualified to serve as the Collateral
Agent hereunder) be and become a successor collateral agent hereunder and be
vested with all of the title to the Collateral and all of the trusts, powers,
discretions, immunities, privileges, estates, properties, rights, duties and
obligations as was its predecessor without the execution or filing of any
instrument or any further act, deed or conveyance on the part of any of the
parties hereto or any other Person, anything herein to the contrary
notwithstanding.

 

(b)           Resignation. The Collateral Agent and any successor collateral
agent may at any time resign by giving ninety (90) days’ written notice by
registered, certified or express mail to the Trustee, the Issuer and each Rating
Agency; provided that such resignation shall take effect only upon the date
which is the later of (i) the effective date of the appointment of a successor
collateral agent reasonably acceptable to the Trustee and (ii) the acceptance in
writing by such successor collateral agent of such appointment and of its
obligation to perform its duties hereunder in accordance with the provisions
hereof. Notwithstanding the preceding sentence, if on the ninetieth (90th) day
after written notice of resignation is given by the resigning Collateral Agent
as described above the appointment of a successor collateral agent or temporary
successor collateral agent has not yet become effective in accordance herewith,
the resigning Collateral Agent may petition a court of competent jurisdiction in
The City of New York for the appointment of a successor.

 

(c)           Removal. The Collateral Agent may be removed by the Holders of
662/3% of the aggregate principal amount of the Outstanding Notes at any time
prior to the Final Termination Date, with or without cause, by an instrument or
concurrent instruments in writing delivered to the Collateral Advisor, the
Administrator, the Trustee and each Rating Agency. A temporary successor may be
removed at any time to allow a successor collateral agent acceptable to the
Trustee to be appointed pursuant to Section 9.05(d). Any removal pursuant to the
provisions of this Section 9.05(c) shall take effect only upon the date which is
the latest of the effective date of the appointment of a successor collateral
agent acceptable to the Trustee and the acceptance in writing by such successor
collateral agent

 

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of such appointment and of its obligation to perform its duties hereunder in
accordance with the provisions hereof.

 

(d)           Acceptance of Successor. The Issuer shall have the sole right to
appoint each successor collateral agent, subject only to the requirements set
forth in Section 9.04 and to the approval of the Trustee, which approval shall
not be unreasonably withheld. If the Issuer and the Trustee shall not have
agreed within ten (10) days as to the selection of a successor collateral agent,
the Issuer shall have the right to appoint a temporary successor to act as the
Collateral Agent; provided that such temporary successor meets the requirements
set forth in Section 9.04. If by the ninetieth (90th) day after appointment of
such temporary successor collateral agent, the Trustee and the Issuer shall have
remained unable to agree as to the selection of a successor collateral agent,
such temporary successor shall automatically become the successor collateral
agent hereunder. Every temporary or permanent successor collateral agent
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and to the Trustee and the Issuer an instrument in writing accepting such
appointment hereunder and the relevant predecessor shall execute, acknowledge
and deliver such other documents and instruments as will effectuate such
appointment, whereupon such successor, without any further act, deed or
conveyance, shall become fully vested with all the trusts, powers, discretions,
immunities, privileges, estates, properties, rights, duties and obligations of
its predecessors.

 

Section 9.06.          Indemnification. The Issuer shall indemnify, defend and
hold the Collateral Agent and its directors, officers, employees and agents
(collectively with the Collateral Agent, the “Indemnitees”) harmless from and
against every loss, liability or expense, including, without limitation,
damages, fines, suits, actions, demands, penalties, costs, out-of-pocket or
incidental expenses, legal fees and expenses, the allocated costs and expenses
of in-house counsel and legal staff and the costs and expenses of defending or
preparing to defend against any claim (collectively, “Losses”), that may be
imposed on, incurred by, or asserted against, any Indemnitee for or in respect
of the Collateral Agent’s (a) execution and delivery of this Agreement,
(b) compliance or attempted compliance with or reliance upon any instruction or
other direction upon which the Collateral Agent is authorized to rely pursuant
to the terms of this Agreement and (c) performance under this Agreement, except
in the case of such performance only and with respect to any Indemnitee to the
extent that the Loss resulted from such Indemnitee’s gross negligence, willful
misconduct, bad faith or default. The obligation of the Issuer under this
Section 9.06 shall be subject to the Priority of Payments and shall survive the
termination of this Agreement and the resignation or removal of the Collateral
Agent. Each of the Issuer and the Trustee agrees that the Collateral Agent shall
not be liable as a result of the Collateral Agent’s following, in good faith and
in accordance with this Agreement, the written instructions given to it by the
Issuer or the Collateral Advisor. None of the Secured Parties shall have any
liability under this Section 9.06.

 

In the absence of a written request from the Issuer to return unclaimed funds to
the Issuer, the Collateral Agent shall from time to time deliver all unclaimed
funds to or as directed by applicable escheat authorities, as determined by the
Collateral Agent, in its sole discretion, in accordance with the customary
practices and procedures of the Collateral Agent. Any unclaimed funds held by
the Collateral Agent pursuant to this Section 9.06 shall be held uninvested and
without any liability for interest.

 

Section 9.07.          Compensation and Reimbursement. Each of the Co-Issuers
agrees (a) to pay to the Collateral Agent from time to time reasonable
compensation for all services rendered by it hereunder and (b) to reimburse the
Collateral Agent upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Collateral Agent in accordance with any
provision of, or carrying out its duties and obligations under, this Agreement
(including reasonable compensation and fees and the expenses and disbursements
of its agents, any Independent certified public accountants and Independent
counsel), except any expense, disbursement or advance as may be attributable to
gross negligence, bad faith or willful misconduct on the part of the Collateral
Agent. The compensation and reimbursement to

 

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the Collateral Agent under this Section 9.07 shall be an Administrative Expense
and the obligation of each of the Co-Issuers under this Section 9.07 shall
survive the termination of this Agreement and the resignation or removal of the
Collateral Agent. None of the Hedge Counterparties, the Principal Note Paying
Agent, the other Note Paying Agents, the Preferred Share Fiscal and Paying
Agent, the Trustee, the Initial Purchasers, the Placement Agent, the Collateral
Advisor and the Noteholders shall have any liability under this Section 9.07.

 

Section 9.08.                           Representations and Warranties of the
Collateral Agent. The Collateral Agent represents and warrants to the Issuer and
to the Trustee as follows:

 

(a)           Due Organization. The Collateral Agent is a national banking
association, duly organized and validly existing under the laws of the United
States and is duly authorized and licensed under applicable law to conduct its
business as presently conducted

 

(b)           Corporate Power. The Collateral Agent has all requisite right,
power and authority to execute and deliver this Agreement and to perform all of
its duties as Collateral Agent hereunder.

 

(c)           Due Authorization. The execution and delivery of this Agreement by
the Collateral Agent, and the performance by the Collateral Agent of its duties
hereunder, have been duly authorized by all necessary corporate proceedings and
no further approvals or filings, including any governmental approvals, are
required for the valid execution and delivery by the Collateral Agent, or the
performance by the Collateral Agent, of this Agreement.

 

(d)           Valid and Binding Agreement. The Collateral Agent has duly
executed and delivered this Agreement, and this Agreement constitutes the legal,
valid and binding obligation of the Collateral Agent, enforceable against the
Collateral Agent in accordance with its terms, except as (i) such enforceability
may be limited by bankruptcy, insolvency, reorganization and similar laws
relating to or affecting the enforcement of creditors’ rights generally and
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.

 

Section 9.09.                           Accounts. Notwithstanding anything else
contained herein, the Collateral Agent agrees that with respect to each of the
Accounts constituting: (a) a Securities Account, it will cause each
Accountholder establishing such Accounts to enter into an agreement whereby each
such Accountholder agrees that it will (i) comply with Entitlement Orders (i.e.,
orders directing the transfer or redemption of any Financial Assets credited to
such Accounts) relating to such Account issued by the Collateral Agent without
further consent by the Issuer; (ii) credit all Collateral to the applicable
Account; (iii) treat each item of property credited to such Account as a
Financial Asset; (iv) not enter into any agreement with any other Person
relating to any Account pursuant to orders made by such Person; (v) not accept
for credit to any Account any Collateral which is registered in the name of, or
payable to, any Person other than the Accountholder unless it has been endorsed
to such Accountholder or is endorsed in blank and (vi) such Accountholder has
agreed that it will waive any right of set-off unrelated to its fees for such
account; and (b) a Deposit Account (if any), it will cause each Accountholder
establishing such Accounts to enter into an agreement with the depository bank
that will provide that (i) the Accountholder is the customer with respect to
such Deposit Account; (ii) the Deposit Account is not in the name of any person
other than the Accountholder and (iii) the Accountholder has not consented to
the depository bank complying with instructions from any person other than the
Accountholder.

 

Section 9.10.                           Waiver of Setoffs. The Collateral Agent
hereby expressly waives any and all rights of setoff that the Collateral Agent
may otherwise at any time have under applicable law with respect to any Account
and agrees that amounts in the Collateral Account, the Collection Account, the

 

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Hedge Termination Receipt Account or the Hedge Replacement Account and the
amounts withdrawn under the Initial Hedge Agreement shall at all times be held
and applied in accordance with the provisions of Article V or otherwise as
expressly contemplated by this Agreement and the Account Control Agreement.

 

Section 9.11.         Provision of Information. Upon written request by the
Independent certified public accountants, the Collateral Agent shall provide to
such Independent certified public accountants such information contained in the
Note Register as is requested by them.

 

ARTICLE X

 

COVENANTS OF THE ISSUER

 

Section 10.01.       Preservation of Collateral.

 

(a)                             The Issuer or the Collateral Advisor, on behalf
of the Issuer, shall, at its own expense, take, or cause to be taken, such
action as is necessary and proper with respect to the Collateral in order to
preserve, maintain and service such Collateral and to cause (subject to the
rights of the Trustee) (i) the Accountholder to perform its obligations with
respect to such Collateral as provided in the Account Control Agreement and
(ii) the Collateral Agent to perform its obligations herein. The Issuer will do,
execute, acknowledge and deliver, or cause to be done, executed, acknowledged
and delivered such instruments of transfer, or take such other steps or actions
as may be necessary, to perfect the security interests Granted hereunder in the
Collateral, to ensure that such security interests rank prior to all other Liens
and to preserve the priority of such security interests and the validity and
enforceability thereof. Upon any delivery or substitution of Collateral, the
Issuer shall be obligated to create for the benefit of the Collateral Agent a
valid Lien on, and valid and perfected security interest in, the Collateral so
delivered in favor of the Collateral Agent and to deliver or transfer Control of
such Collateral to the Collateral Agent, free and clear of any other Lien,
together with satisfactory assurances thereof, and to pay any reasonable costs
incurred by the Trustee, the Collateral Agent, the Issuer (including its agents)
or otherwise in connection with such delivery.

 

(b)                            The Issuer shall defend the Collateral against
all claims of any kind or nature of all Persons at any time claiming the same or
any interest therein adverse to the interests of the Collateral Agent or the
Trustee, and the Issuer shall not cause, permit or suffer to exist any Lien upon
the Collateral other than the Liens Granted hereby.

 

(c)                             The Collateral Agent shall have the right to
enforce all rights of the Issuer under the Collateral Advisory Agreement, the
Collateral Administration Agreement, the Initial Hedge Agreement and other Hedge
Agreements (other than the Initial Hedge Agreement), if any.

 

Section 10.02.       Opinions as to Collateral. On each anniversary of the
Closing Date, the Issuer shall furnish (at the expense of the Issuer) to the
Trustee, each Rating Agency, the Collateral Advisor and the Collateral Agent an
Opinion of Counsel stating that either (a) in the opinion of such counsel, such
actions have been taken as are necessary to perfect the Lien and security
interest of the Collateral Agent, for and on behalf of the Secured Parties, with
respect to the Collateral including, without limitation, actions with respect to
the recording, filing, rerecording and refiling of this Agreement, any
supplements and any other requisite documents and with respect to the execution
and filing of any financing statements and continuation statements and reciting
the details of such action or (b) in the opinion of such counsel, no such action
is necessary to maintain such perfected Lien and security interest. Any Opinion
of Counsel shall describe each action that will, in the opinion of such counsel,
be required to perfect the Lien and security interest of the Collateral Agent,
with respect to the Collateral, specified in such Opinion of

 

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Counsel. Such Opinion of Counsel shall state the procedures with respect to the
delivery of Collateral which are sufficient for the creation and maintenance of
a perfected, first priority security interest therein in favor of the Collateral
Agent and specifying any additional procedures as shall, in the opinion of such
counsel, be necessary or appropriate for such creation and maintenance.

 

Section 10.03.                     Non-Interference; etc. The Issuer shall not
(a) waive, amend, modify or alter any of its rights or obligations under the
Collateral Advisory Agreement or any Hedge Agreement without the prior written
consent of each of the Trustee and the Collateral Agent, acting at the direction
of a majority of the Holders of the Notes, and unless Rating Agency Confirmation
from S&P has been received; (b) fail to pay any tax, assessment, charge or fee
levied or assessed against the Collateral, or to defend any action, if such
failure to pay or defend may adversely affect the priority or enforceability of
the Issuer’s right, title or interest in and to the Collateral or the Collateral
Agent’s Lien on, and security interest in, the Collateral; (c) except as
provided in clause (d) below, directly or indirectly avail itself of any right,
benefit, power, authority or remedy conferred on it pursuant to the provisions
of any Assigned Document, whether through action or inaction, except as may be
expressly directed from time to time by the Trustee and the Collateral Agent or
(d) take any action, or fail to take any action, if such action or failure to
take action will interfere with the enforcement of any rights under the
Collateral Advisory Agreement and each Hedge Agreement.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.01.                     Amendments.

 

(a)          Subject to Section 4.12 and Clause 7.3 of the Trust Deed, this
Agreement may be amended, changed, modified or altered only by written
instrument or written instruments signed by the Collateral Agent, the Trustee,
the Accountholder and the Issuer and upon receipt of Rating Agency Confirmation;
provided that to the extent that such amendment, change, modification or
alteration of this Agreement would have (i) an adverse effect (as evidenced by
an Opinion of Counsel) on the Preferred Shareholders, the Issuer shall not
consent to any such amendment, change, modification or alteration of this
Agreement without the approval of the Holders of a majority of the Outstanding
Preferred Shares in accordance with the Articles and (ii) a material adverse
effect (as evidenced by an Opinion of Counsel) on the obligations of the
Collateral Advisor, the Issuer shall not consent to any such amendment, change,
modification or alteration of this Agreement without the approval of the
Collateral Advisor; provided, further, that subject to the terms hereof, the
consent of the Trustee, the Collateral Agent, the Accountholder and the
Preferred Share Fiscal and Paying Agent shall not be unreasonably withheld or
delayed by any such Person with respect to any amendment which does not
adversely affect such Person (or, in the case of the Trustee, the Noteholders
or, in the case of the Preferred Share Fiscal and Paying Agent, the Preferred
Shareholders); provided, further, that to the extent that such amendment,
change, modification or alteration of this Agreement would have a material
adverse effect on the rights of any Hedge Counterparty to payments under the
Priority of Payments, no such amendment, change, modification or alteration to
this Agreement shall become effective without the prior written consent of such
Hedge Counterparty.

 

In executing or accepting any amendment, change, modification or alteration of
this Agreement as permitted by this Article XI, the Trustee shall be entitled to
receive, and (subject to Clause 11.4 of the Trust Deed) shall be fully protected
in relying in good faith upon, an Opinion of Counsel stating that the execution
or acceptance of such amendment, change, modification or alteration is
authorized or permitted by this Agreement and that all conditions precedent
thereto have been complied with. The Trustee may, but shall not be obligated to,
enter into or accept any such amendment, change,

 

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modification or alteration which affects the Trustee’s own rights, duties or
indemnities under this Agreement or otherwise.

 

(b)         This Agreement (including, without limitation, Annex A hereto) may
otherwise be amended by the Issuer, with notice to the Rating Agencies and upon
receipt of Rating Agency Confirmation from Fitch and S&P, any other party
hereto, any Hedge Counterparty, the Preferred Share Fiscal and Paying Agent and
the Preferred Shareholders (except as may be specifically provided herein)
(i) in order to further effectuate the Grant of or further perfect any Lien or
security interest of the Collateral Agent in any item of Collateral, any such
amendment that becomes effective as of a specified date after the Closing Date
to be accompanied by an Opinion of Counsel to the Issuer and a copy of such
amendment and the related Opinion of Counsel shall be provided to the Trustee,
(ii) to amend the terms herein for the purpose of facilitating compliance by the
Issuer with any more favorable exemption from registration under the Investment
Company Act, (iii) upon receipt of Rating Agency Confirmation from Moody’s and
S&P, to effect the appointment of a successor Trustee, (iv) upon receipt of
Rating Agency Confirmation from Moody’s and S&P, to take any action necessary or
advisable to prevent the Issuer, the Collateral Agent, any Note Paying Agent or
the Trustee from being subject to withholding or other taxes, fees or
assessments or to prevent the Issuer from being treated as engaged in a United
States trade or business or otherwise being subjected to United States federal,
state or local income tax on a net income tax basis, (v) to correct or amplify
the description of any property at any time subject to the Grant and Lien of
this Agreement, or to better assure, convey and confirm unto the Trustee any
property subject to the Grant and Lien of this Agreement, (vi) upon receipt of
Rating Agency Confirmation from Moody’s and S&P, to cure ambiguity or correct or
supplement any provision contained in this Agreement which may be defective or
inconsistent with any other provision contained in this Agreement or make any
modification that is of a formal, minor or technical nature or which is made to
correct a manifest error, (vii) upon receipt of Rating Agency Confirmation from
Moody’s and S&P, to correct, modify or supplement any provision which is
inconsistent with the Final Offering Circular; provided that any such
correction, modification or supplement made pursuant to this clause (vii) shall
be consistent with the Final Offering Circular and (viii) to make any change
required by the Irish Stock Exchange (so long as any of the Notes are listed
thereon) in order to permit or maintain the listing of the Notes thereon.

 

(c)          The Issuer shall cause the Administrator to give prior notice to
each Hedge Counterparty, the Collateral Advisor, the Principal Note Paying
Agent, the Preferred Share Fiscal and Paying Agent, the Trustee, the Collateral
Agent, the Accountholder and each Rating Agency of any amendment, change,
modification or alteration of this Agreement and provide copies of such
amendment, change, modification or alteration to the Preferred Share Fiscal and
Paying Agent, the Trustee and each Rating Agency.

 

Section 11.02.                     Notices.

 

(a)          All notices, certificates, directions, reports or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered in writing, either via facsimile or first class mail postage
prepaid addressed to the appropriate Notice Address. Each party hereto may, by
notice given in accordance herewith to each of the other parties hereto,
designate any further or different address to which subsequent notices,
certificates, directions, reports or other communications shall be sent.

 

(b)         For so long as any of the Securities are listed on the Irish Stock
Exchange and the rules of the Irish Stock Exchange so require, notices to the
Holders of such Securities (excluding the Note Valuation Reports or the Monthly
Reports) shall also be published in the Irish Stock Exchange’s Daily Official
List at the expense of the Issuer.

 

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(c)          Upon receipt of notice of an Event of Default and acceleration of
indebtedness from the Trustee, the Collateral Agent shall have the right, at the
direction of the Trustee, to exercise any and all rights and remedies
(i) granted to a secured party by the NY UCC or otherwise allowed by applicable
law and (ii) otherwise provided by this Agreement. Upon receipt of notice of an
Event of Default from the Trustee, the Collateral Agent shall give prompt notice
thereof to the Issuer and the Collateral Advisor.

 

Section 11.03.                       Severability. In the event any provision of
this Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof. The parties hereto further agree that the holding by any
court of competent jurisdiction that any right, power, privilege or remedy
pursued by the Trustee hereunder is unavailable or unenforceable shall not
affect in any way the ability of the Trustee to pursue any other right, power,
privilege or remedy available to it.

 

Section 11.04.                     Term of This Agreement. This Agreement shall
take effect on the Closing Date and shall continue in effect until the Final
Termination Date. On the Final Termination Date, this Agreement shall terminate,
all obligations of the parties hereunder shall cease and terminate and the
Collateral, if any, held hereunder and not to be used or applied in discharge of
any obligations of the Issuer in respect of the obligations of the Issuer in
respect of the Notes or otherwise under this Agreement shall be released to and
in favor of the Issuer; provided that the provisions of Sections 8.06, 8.07,
10.06, 10.07, 10.09 and 10.15 shall survive any termination of this Agreement
and the release of the Collateral upon such termination. Notwithstanding the
foregoing, if (a) after the termination of this Agreement or (b) at any time or
times subsequent to the payment of all or any part of the obligations of the
Issuer in respect of the Notes, the Trustee shall be required to repay any
amounts previously paid by or on behalf of the Issuer in reduction thereof by
virtue of an order of any court having jurisdiction in the premises, including,
without limitation, as a result of an adjudication that such amounts constituted
preferential payments or fraudulent conveyances, then this Agreement and the
obligations of the Issuer hereunder shall be reinstated and the Issuer
unconditionally agrees to pay to the Collateral Agent upon demand by the Trustee
or the Collateral Agent a sum in cash equal to the amount of any such repayment,
together with interest on such amount from the date of such repayment by the
Trustee to the date of payment to the Trustee. In all instances, the Collateral
Agent shall pay any amount received by it as aforesaid to the Trustee, subject
to the Priority of Payments.

 

Section 11.05.                     Assignments. This Agreement shall be a
continuing obligation of the Issuer and shall (a) be binding upon the Issuer and
its successors, transferees and assigns and (b) inure to the benefit of and be
enforceable by the Trustee, the Collateral Advisor, the Collateral Agent and the
Accountholder, and by their respective successors, transferees and assigns.
Except as contemplated or provided herein, the Issuer may not assign this
Agreement, or delegate any of its duties hereunder, without the prior written
consent of the Collateral Agent and the Trustee, and Rating Agency Confirmation
from S&P, and any such attempted assignment shall be null and void. Subject to
any restrictions on transfer or assignment in any Transaction Document, nothing
contained herein shall restrict the Trustee from assigning to any Person any or
all of its rights under this Agreement or with respect to any real or personal
property or other interests pledged to the Trustee, or in which the Trustee has
a Lien or security interest, in connection with the transactions contemplated
hereby.

 

Section 11.06.                     Non-Petition Agreement. Each of the parties
hereto covenants and agrees that, so long as any Note is outstanding and for a
period of one (1) year plus one (1) day (or, if longer, the applicable
preference period then in effect) after payment in full of all amounts payable
under or in respect of the Transaction Documents, it will not institute against,
or join any other Person in instituting against, the Issuer any bankruptcy,
reorganization, arrangement, insolvency or liquidation Proceedings, or other
Proceedings under any federal or state bankruptcy, insolvency or similar law.
Nothing in this

 

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Section 11.06 shall preclude, or be deemed to estop, any of the parties hereto
(a) from taking any action prior to the expiration of the aforementioned one
(1) year plus one (1) day period (or, if longer, the applicable preference
period then in effect) in (i) any case or proceeding voluntarily filed or
commenced by the Issuer or the Co-Issuer or (ii) any involuntary insolvency
proceeding filed or commenced by a Person other than any of the parties hereto,
or (b) from commencing against the Issuer or the Co-Issuer or any of its
properties any legal action which is not a bankruptcy, reorganization,
arrangement, insolvency, moratorium or liquidation proceeding.

 

Section 11.07.                     Trial by Jury Waived. EACH OF THE PARTIES
HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING ARISING DIRECTLY OR INDIRECTLY OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OF THE OTHER TRANSACTION
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER OR THEREUNDER. EACH
OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF ANY PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER TRANSACTION DOCUMENTS TO WHICH IT IS A PARTY BY, AMONG OTHER THINGS,
THIS WAIVER.

 

Section 11.08.                     Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK.

 

Section 11.09.                     Consents to Jurisdiction. Each of the parties
hereto irrevocably submits to the jurisdiction of the United States District
Court for the Southern District of New York, any court in the State of New York
located in the borough of Manhattan in the city and county of New York, and any
appellate court from any thereof, in any Proceeding brought against it and
related to or in connection with this Agreement, the other Transaction Documents
or the transactions contemplated hereunder or thereunder or for recognition or
enforcement of any judgment and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such Proceeding may be
heard or determined in such New York State court or, to the extent permitted by
law, in such federal court. Each of the parties hereto agrees that a final
judgment in any such Proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
applicable law. To the extent permitted by applicable law, each of the parties
hereto hereby waives and agrees not to assert by way of motion, as a defense or
otherwise in any such Proceeding, any claim that it is not personally subject to
the jurisdiction of such courts, that the Proceeding is brought in an
inconvenient forum, that the venue of the Proceeding is improper or that this
Agreement or any of the other Transaction Documents or the subject matter hereof
may not be litigated in or by such courts.

 

Section 11.10.                       Service of Process. The Issuer hereby
agrees that service of process on the Issuer in any such Proceeding brought in
the State of New York may be made upon CT Corporation System (the “Process
Agent”) at its offices at 111 Eighth Avenue, 13th Floor, New York, New York
10011 (or such other address as may be specified by the Process Agent from time
to time) and the Issuer hereby irrevocably appoints the Process Agent as its
authorized agent to accept such service of process and agrees that the failure
of the Process Agent to give any notice of any such service shall not impair or
affect the validity of such service or any judgment rendered in any Proceeding
based thereon. The Issuer hereby agrees that any such service (a) shall be
deemed in every respect effective service of process upon

 

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it in any such Proceeding and (b) shall, to the fullest extent enforceable by
applicable law, be taken and held to be valid personal service upon and personal
delivery to it.

 

Section 11.11.                     Time of Essence. All parties hereto agree
that time shall be of the essence in respect of the performance by the Issuer
and the Collateral Agent of their respective obligations hereunder.

 

Section 11.12.                     Counterparts. This Agreement may be executed
in any number of counterparts by the parties hereto, each of which shall be an
original, and all such counterparts shall constitute one and the same
instrument.

 

Section 11.13.                     Integration. This Agreement constitutes the
entire agreement and understanding among the parties hereto and supersedes any
and all prior agreements and understandings, oral or written, relating to the
subject matter hereof.

 

Section 11.14.                     Headings. The headings of Articles, Sections
and subsections herein are for convenience of reference only and shall not
affect the interpretation hereof.

 

Section 11.15.                     Limited Recourse. Notwithstanding any
provisions of this Agreement to the contrary, the payment obligations of the
Issuer set forth under this Agreement shall be non-recourse obligations of the
Issuer and shall be payable only from the Collateral or the proceeds thereof,
whether held by the Collateral Agent or any other Person on behalf of the
Issuer. No recourse shall be had for the payment of any amount owing in respect
of the Notes appertaining thereto against any officer, director, employee,
stockholder, director or incorporator of the Co-Issuers or of any Affiliate of
the Co-Issuers, the Collateral Agent, the Trustee, the Collateral Advisor, the
Accountholder or any Affiliate of any of the foregoing, in their respective
capacities as such, or successors or assigns of any of them for any amounts
payable under the Notes or this Agreement. Upon the exhaustion of the
Collateral, all further liability of the Co-Issuers shall be extinguished and no
further claims shall be made against the Co-Issuers in respect thereof.

 

Section 11.16.                     Payments in Accordance with the Priority of
Payments. Notwithstanding any provision herein to the contrary, the payment of
all principal, interest, fees, expenses, indemnities or other amounts payable by
or on behalf of the Issuer under this Agreement shall be made in accordance with
the Priority of Payments, Section 11.15 and the subordination provisions set
forth in this Agreement. In the event that the Issuer fails to pay any amount on
the date when due under this Agreement solely by reason of the limitation on the
payment of certain expenses set forth under the Priority of Payments under
Section 5.01, the Issuer shall not be deemed to have failed to pay such amount
(and a default shall not have occurred as the result thereof) for purposes of
this Agreement unless it fails to pay such amount on the date (inclusive of any
grace periods) on which it is permitted to be paid under the Priority of
Payments.

 

Section 11.17.                       Collateral Agent and Its Affiliates.
LaSalle Bank National Association and any of its Affiliates providing services
in connection with the transactions contemplated in the Transaction Documents
shall have only the duties and responsibilities expressly provided in each
capacity and shall not, by virtue of its or any of its Affiliates acting in any
other capacity, be deemed to have duties or responsibilities or be deemed to be
held to a standard of care other than as expressly provided with respect to each
such capacity. LaSalle Bank National Association (or its Affiliates) in its and
their various capacities in connection with the transactions contemplated in the
Transaction Documents, including as Collateral Agent, may enter into business
transactions, including the acquisition of investment securities as contemplated
by the Transaction Documents, from which it and/or such Affiliates may derive
revenues

 

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and profits in addition to the fees stated in the various Transaction Documents,
without any duty to account therefor.

 

Section 11.18.                  Judgment Currency. If, for the purposes of
obtaining judgment in any court, it is necessary to convert a sum due under this
Agreement in any currency (the “Original Currency”) into another currency (the
“Other Currency”), the parties hereto agree, to the fullest extent permitted by
law, that the rate of exchange to be used in effecting such conversion shall be
that at which, in accordance with normal banking procedures, the party seeking
such judgment could purchase the Original Currency with the Other Currency on
the Business Day preceding that on which final judgment is given. To the fullest
extent permitted by applicable law, the obligations of a party in respect of any
such amount due in the Original Currency under this Agreement to another party
(the “Recipient”) shall, notwithstanding any judgment in Other Currency, be
discharged only to the extent that on the Business Day following receipt by the
Recipient of any sum adjudged to be so due in the Other Currency the Recipient
may in accordance with normal banking procedures purchase the Original Currency
with the Other Currency. If the amount of the Original Currency so purchased is
less than the sum originally due to the Recipient in the Original Currency, the
party obligated to make such payment agrees, as a separate obligation and
notwithstanding any such judgment, to pay to the Recipient the amount of such
loss.

 

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IN WITNESS WHEREOF, the Issuer, the Collateral Agent, the Accountholder and the
Trustee have duly executed this Agreement as of the date first set forth above.

 

ISSUER:

N-STAR REAL ESTATE CDO I LTD

 

Executed as a Deed

 

 

 

By:

/s/ Derrie Boggess

 

 

Name:  Derrie Boggess

 

 

Title:    Director

 

 

 

Witness:

/s/ Ruth Yates

 

                    Ruth Yates

 

 

COLLATERAL AGENT:

LASALLE BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Lora J. Peloquin

 

 

Name:  Lora J. Peloquin

 

 

Title:    Vice President

 

 

 

 

ACCOUNT HOLDER:

LASALLE BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Lora J. Peloquin

 

 

Name:  Lora J. Peloquin

 

 

Title:    Vice President

 

 

 

 

TRUSTEE:

LASALLE BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Lora J. Peloquin

 

 

Name:  Lora J. Peloquin

 

 

Title:    Vice President

 

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