Document:

(Multicurrency-Cross Border)

                                     ISDA(R)

              INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.

                                MASTER AGREEMENT

                         DATED AS OF 8TH NOVEMBER 2006

     CITIGROUP CAPITAL                AND            SACYR VALLEHERMOSO
     MARKETS LIMITED                                 PARTICIPACIONES
                                                     MOBILIARIAS, S.L.U.

have entered and/or anticipate  entering into one or more  transactions  (each a
"Transaction")  that are or will be  governed by this  Master  Agreement,  which
includes the schedule (the  "Schedule"),  and the documents and other confirming
evidence (each a "Confirmation")  exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows:-

1.   INTERPRETATION

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

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

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

2.   OBLIGATIONS

(a)  GENERAL CONDITIONS

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

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

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          relevant   obligation  unless  otherwise  specified  in  the  relevant
          Confirmation or elsewhere in this Agreement.

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

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

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

     (i)  in the same currency; and

     (ii) in respect of the same Transaction,

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

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

(d)  DEDUCTION OR WITHHOLDING FOR TAX

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

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

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

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

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

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

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

     (ii) LIABILITY. If:-

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

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

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

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

(e)  DEFAULT  INTEREST;  OTHER  AMOUNTS.  Prior to the  occurrence  or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment  obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after  judgment) on the overdue  amount

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to the other party on demand in the same  currency as such overdue  amount,  for
the  period  from (and  including)  the  original  due date for  payment to (but
excluding) the date of actual  payment,  at the Default Rate. Such interest will
be  calculated on the basis of daily  compounding  and the actual number of days
elapsed.  If,  prior to the  occurrence  or  effective  designation  of an Early
Termination Date in respect of the relevant Transaction, a party defaults in the
performance  of any  obligation  required  to be  settled by  delivery,  it will
compensate  the other party on demand if and to the extent  provided  for in the
relevant Confirmation or elsewhere in this Agreement.

3.   REPRESENTATIONS

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

(a)  BASIC REPRESENTATIONS.

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

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

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

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

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

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

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(c)  ABSENCE OF LITIGATION. There is no pending or, to its knowledge, threatened
against it or any of its Affiliates any action,  suit or proceeding at law or in
equity or before any court,  tribunal,  governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this  Agreement  or any Credit  Support  Document to which it is a
party or its ability to perform its  obligations  under this  Agreement  or such
Credit Support Document.

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

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

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

4.   AGREEMENTS

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

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

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

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

     (iii) upon reasonable demand by such other party, any form or document that
     may be required or  reasonably  requested in writing in order to allow such
     other party or its Credit  Support  Provider  to make a payment  under this
     Agreement or any applicable  Credit Support  Document without any deduction
     or  withholding  for or on  account  of any Tax or with such  deduction  or
     withholding  at a reduced  rate (so long as the  completion,  execution  or
     submission  of such form or document  would not  materially  prejudice  the
     legal or commercial position of the party in receipt of such demand),  with
     any  such  form or  document  to be  accurate  and  completed  in a  manner
     reasonably  satisfactory  to such other party and to be executed  and to be
     delivered with any reasonably  required  certification,in  each case by the
     date  specified  in the  Schedule  or  such  Confirmation  or,  if  none is
     specified, as soon as reasonably practicable.

(b)  MAINTAIN AUTHORISATIONS.  It will use all reasonable efforts to maintain in
full force and effect all consents of any  governmental  or other authority that
are required to be obtained by it

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with respect to this Agreement or any Credit  Support  Document to which it is a
party  and  will use all  reasonable  efforts  to  obtain  any  that may  become
necessary in the future.

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

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

(e)  PAYMENT  OF STAMP TAX.  Subject  to  Section  11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or  performance of this
Agreement by a jurisdiction in which it is incorporated,

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

5.   EVENTS OF DEFAULT AND TERMINATION EVENTS

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

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

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

     (iii) CREDIT SUPPORT DEFAULT

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

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

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

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

     (v) DEFAULT UNDER  SPECIFIED  TRANSACTION.  The party,  any Credit  Support
     Provider of such party or any applicable Specified Entity of such party (1)
     defaults  under a Specified  Transaction  and,  after giving  effect to any
     applicable notice  requirement or grace period,  there occurs a liquidation
     of, an acceleration of obligations  under, or an early termination of, that
     Specified Transaction,  (2) defaults, after giving effect to any applicable
     notice  requirement or grace period,  in making any payment or delivery due
     on the last payment,  delivery or exchange date of, or any payment on early
     termination of, a Specified  Transaction (or such default  continues for at
     least  three  Local  Business  Days  if  there  is  no  applicable   notice
     requirement or grace period) or (3)  disaffirms,  disclaims,  repudiates or
     rejects,  in whole or in part, a Specified  Transaction  (or such action is
     taken by any person or entity  appointed  or empowered to operate it or act
     on its behalf);

     (vi) CROSS  DEFAULT.  If "Cross  Default" is  specified  in the Schedule as
     applying to the party, the occurrence or existence of (1) a default,  event
     of  default  or other  similar  condition  or event  (howeverdescribed)  in
     respect to such  party,  any Credit  Support  Provider of such party or any
     applicable  Specified  Entity of such party under one or more agreements or
     instruments relating to Specified Indebtedness of any of them (individually
     or  collectively)  in an aggregate  amount of not less than the  applicable
     Threshold  Amount (as specified in the Schedule) which has resulted in such
     Specified  Indebtedness becoming, or becoming capable at such time of being
     declared,  due and payable under such agreements or instruments,  before it
     would  otherwise  have been due and payable or (2) a default by such party,
     such Credit Support  Provider or such  Specified  Entity  (individually  or
     collectively)  in making one or more payments on the due date thereof in an
     aggregate  amount of not less than the  applicable  Threshold  Amount under
     such  agreements or  instruments  (after  giving  effect to any  applicable
     notice requirement or grace period);

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

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          (1) is dissolved (other than pursuant to a consolidation, amalgamation
          or  merger);  (2) becomes  insolvent  or is unable to pay its debts or
          fails or admits in writing its inability generally to pay its debts as
          they  become  due;  (3) makes a  general  assignment,  arrangement  or
          composition  with or for the benefit of its creditors;  (4) institutes
          or has  instituted  against  it a  proceeding  seeking a  judgment  of
          insolvency or  bankruptcy or any other relief under any  bankruptcy or
          insolvency law or other similar law affecting  creditors' rights, or a
          petition is presented for its winding-up or  liquidation,  and, in the
          case of any  such  proceeding  or  petition  instituted  or  presented
          against it, such  proceeding  or petition (A) results in a judgment of
          insolvency  or  bankruptcy  or the entry of an order for relief or the
          making of an order for its  winding-up  or  liquidation  or (B) is not
          dismissed,  discharged,  stayed or  restrained  in each case within 30
          days of the institution or presentation  thereof; (5) has a resolution
          passed for its winding-up,  official  management or liquidation (other
          than pursuant to a consolidation,  amalgamation or merger);  (6) seeks
          or become subject to the appointment of an administrator,  provisional
          liquidator, conservator, receiver, trustee, custodian or other similar
          official for it or for all or substantially all its assets;  (7) has a
          secured party take possession of all or  substantially  all its assets
          or has a distress, execution, attachment, sequestration or other legal
          process  levied,  enforced or sued on or against all or  substantially
          all its assets and such secured  party  maintains  possession,  or any
          such process is not dismissed,  discharged,  stayed or restrained,  in
          each case within 30 days  thereafter;  (8) causes or is subject to any
          event  with  respect  to it which,  under the  applicable  laws of any
          jurisdiction,  has an analogous  effect to any of the events specified
          in  clauses  (1) to  (7)  (inclusive);  or (9)  takes  any  action  in
          furtherance  of,  or  indicating  its  consent  to,  approval  of,  or
          acquiescence in, any of the foregoing acts; or

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

          (1) the resulting,  surviving or transferee entity fails to assume all
          the  obligations of such party or such Credit  Support  Provider under
          this  Agreement  or any  Credit  Support  Document  to which it or its
          predecessor  was a  party  by  operation  of  law  or  pursuant  to an
          agreement   reasonably   satisfactory  to  the  other  party  to  this
          Agreement; or

          (2) the  benefits  of any  Credit  Support  Document  fail  to  extend
          (without  the consent of the other party) to the  performance  by such
          resulting,  surviving or transferee  entity of its  obligations  under
          this Agreement.

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

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Upon Merger if the event is  specified  pursuant to (iv) below or an  Additional
Termination Event if the event is specified pursuant to (v) below:-

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

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

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

     (ii) TAX  EVENT.  Due to (x) any  action  taken by a taxing  authority,  or
     brought in a court of competent jurisdiction, on or after the date on which
     a Transaction  is entered into  (regardless of whether such action is taken
     or brought  with respect to a party to this  Agreement)  or (y) a Change in
     Tax Law, the party (which will be the Affected  Party) will,  or there is a
     substantial  likelihood  that it  will,  on the next  succeeding  Scheduled
     Payment Date (1) be required to pay to the other party an additional amount
     in respect of an  Indemnifiable  Tax under  Section  2(d)(i)(4)  (except in
     respect of interest under Section 2(e),  6(d)(ii) or 6(e)) or (2) receive a
     payment  from which an amount is required to be deducted or withheld for or
     on account of a Tax  (except in respect of  interest  under  Section  2(e),
     6(d)(ii)  or 6(e))  and no  additional  amount  is  required  to be paid in
     respect  of such Tax  under  Section  2(d)(i)(4)  (other  than by reason of
     Section 2(d)(i)(4)(A) or (B));

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

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

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     Support Provider or such Specified Entity, as the case may be,  immediately
     prior to such action (and, in such event, X or its successor or transferee,
     as appropriate, will be the Affected Party); or

     (v) ADDITIONAL TERMINATION EVENT. If any "Additional  Termination Event" is
     specified in the Schedule or any  Confirmation as applying,  the occurrence
     of such event (and, in such event,  the Affected Party or Affected  Parties
     shall be as specified for such Additional Termination Event in the Schedule
     or such Confirmation).

(c)  EVENT OF DEFAULT AND ILLEGALITY.  If an event or  circumstance  which would
otherwise  constitute  or give rise to an Event of Default also  constitutes  an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.

6.   EARLY TERMINATION

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

(b)  RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.

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

     (ii) TRANSFER TO AVOID  TERMINATION  EVENT.  If either an Illegality  under
     Section  5(b)(i)(1)  or a Tax Event  occurs and there is only one  Affected
     Party,  or if a Tax Event Upon Merger occurs and the Burdened  Party is the
     Affected  Party,  the Affected  Party will,  as a condition to its right to
     designate  an  Early  Termination  Date  under  Section  6(b)(iv),  use all
     reasonable  efforts  (which  will not  require  such party to incur a loss,
     excluding immaterial, incidental expenses) to transfer within 20 days after
     it gives notice under Section 6(b)(1) all its rights and obligations  under
     this  Agreement in respect of the Affected  Transactions  to another of its
     Offices or Affiliates so that such Termination Event ceases to exist.

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

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<PAGE>

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

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

     (iv) RIGHT TO TERMINATE. If:-

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

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

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

(c)  EFFECT OF DESIGNATION.

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

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

(d)  CALCULATIONS.

     (i)  STATEMENT.  On or as  soon as  reasonably  practicable  following  the
     occurrence  of  an  Early  Termination  Date,  each  party  will  make  the
     calculations  on its part,  if any,  contemplated  by Section 6(e) and will
     provide to the other party a statement (1) showing,  in reasonable  detail,
     such  calculations  (including  all relevant  quotations and specifying any
     amount  payable under Section 6(e)) and (2) giving  details of the relevant
     account to

                                       11
<PAGE>

     which any  amount  payable to it is to be paid.  In the  absence of written
     confirmation  from the source of a  quotation  obtained  in  determining  a
     Market Quotation, the records of the party obtaining such quotation will be
     conclusive evidence of the existence and accuracy of such quotation.

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

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

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

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

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

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

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<PAGE>

          the Non-defaulting Party will pay the absolute value of that amount to
          the Defaulting Party.

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

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

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

          (2) TWO AFFECTED PARTIES. If there are two Affected Parties:-

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

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

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

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

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<PAGE>

     (iv)  PRE-ESTIMATE.  The parties agree that if Market Quotation  applies an
     amount recoverable under this Section 6(e) is a reasonable  pre-estimate of
     loss and not a penalty.  Such amount is payable for the loss of bargain and
     the loss of  protection  against  future  risks  and  except  as  otherwise
     provided in this  Agreement  neither  party will be entitled to recover any
     additional damages as a consequence of such losses.

7.   TRANSFER

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

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

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

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

8.   CONTRACTUAL CURRENCY

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

(b)  JUDGMENTS.  To the extent  permitted by applicable  law, if any judgment or
order  expressed in a currency other than the  Contractual  Currency is tendered
(i) for the payment of any amount owing in respect of this  Agreement,  (ii) for
the payment of any amount  relating to any early  termination in respect of this
Agreement  or (iii) in respect of a judgment  or order of another  court for the
payment  of any  amount  described  in (i) or  (ii)  above,  the  party  seeking
recovery,  after recovery in full of the aggregate amount to which such party is
entitled  pursuant  to the  judgment  or  order,  will be  entitled  to  receive
immediately  from the other party the amount of any shortfall of the Contractual
Currency  received  by such  party as a  consequence  of sums paid in such other
currency  and  will  refund  promptly  to the  other  party  any  excess  of the

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<PAGE>

Contractual  Currency  received by such party as a  consequence  of sums paid in
such other  currency if such shortfall or such excess arises or results from any
variation  between  the rate of exchange  at which the  Contractual  Currency is
converted  into the  currency of the  judgment or order for the purposes of such
judgment or order and the rate of  exchange at which such party is able,  acting
in a reasonable  manner and in good faith in  converting  the currency  received
into the Contractual  Currency,  to purchase the  Contractual  Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange  payable in connection  with the purchase of or conversion  into the
Contractual Currency.

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

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

9.   MISCELLANEOUS

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

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

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

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

(e)  COUNTERPARTS AND CONFIRMATIONS.

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

     (ii) The parties  intend  that they are legally  bound by the terms of each
     Transaction  from the moment they agree to those terms  (whether  orally or
     otherwise). A Confirmation shall be entered into as soon as practicable and
     may be executed  and  delivered  in  counterparts  (including  by facsimile
     transmission)  or be created by an exchange of

                                       15
<PAGE>

     telexes or by an exchange of electronic messages on an electronic messaging
     system,  which in each case will be sufficient for all purposes to evidence
     a binding supplement to this Agreement. The parties will specify therein or
     through  another  effective  means  that any such  counterpart,  telex,  or
     electronic message constitutes a Confirmation.

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

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

10.  OFFICES; MULTIBRANCH PARTIES

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

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

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

11.  EXPENSES

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

12.  NOTICES

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

                                       16
<PAGE>

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

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

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

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

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

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

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

13.  GOVERNING LAW AND JURISDICTION

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

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

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

     (ii)  waives any  objection  which it may have at any time to the laying of
     venue of any Proceedings  brought in any such court,  waives any claim that
     such  Proceedings  have been brought in an  inconvenient  forum and further
     waives the right to object,  with  respect to such  Proceedings,  that such
     court does have any jurisdiction over such party.

Nothing in this Agreement  precludes  either party from bringing  Proceedings in
any other jurisdiction  (outside,  if this Agreement is expressed to be governed
by English law, the Contracting  Shares, as defined in Section 1(3) of the Civil
Jurisdiction  and  Judgments  Act  1982  or  any   modification,   extension  or
re-enactment  thereof  for the time  being in force)  nor will the

                                       17
<PAGE>

bringing of Proceedings in any one or more  jurisdictions  preclude the bringing
of Proceedings in any other jurisdiction.

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

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

14.  DEFINITIONS

As used in this Agreement:-

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

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

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

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

"APPLICABLE RATE" means:-

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

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

                                       18
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       19
<PAGE>

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

"LOSS"  means,  with  respect  to  this  Agreement  or  one or  more  Terminated
Transactions,  as the  case  may  be,  and a  party,  the  Termination  Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case  expressed as a negative  number)
in connection  with this  Agreement or that  Terminated  Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the  election of such party but without  duplication,  loss or
cost  incurred  as a  result  of  its  terminating,  liquidating,  obtaining  or
reestablishing any hedge or related trading position (or any gain resulting from
any of them).  Loss  includes  losses  and costs (or  gains) in  respect  of any
payment or delivery  required to have been made (assuming  satisfaction  of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid  duplication,  if Section 6(e)(i)(1) or (3)
or  6(e)(ii)(2)(A)  applies.  Loss does not  include a  party's  legal  fees and
out-of-pocket  expenses referred to under Section 11. A party will determine its
Loss as of the relevant  Early  Termination  Date, or, if that is not reasonably
practicable,  as of the earliest date thereafter as is reasonably practicable. A
party  may (but need not)  determine  its Loss by  reference  to  quotations  of
relevant  rates or  prices  from one or more  leading  dealers  in the  relevant
markets.

"MARKET  QUOTATION" means,  with respect to one or more Terminated  Transactions
and a party  making  the  determination,  an amount  determined  on the basis of
quotations from Reference  Market-makers.  Each quotation will be for an amount,
if any, that would be paid to such party  (expressed as a negative number) or by
such party  (expressed as a positive  number) in  consideration  of an agreement
between such party  (taking into account any existing  Credit  Support  Document
with  respect  to the  obligations  of such  party)  and the  quoting  Reference
Market-maker to enter into a transaction (the  "Replacement  Transaction")  that
would have the effect of  preserving  for such party the economic  equivalent of
any payment or delivery  (whether  the  underlying  obligation  was  absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such  Terminated  Transaction
or group of Terminated  Transactions  that would,  but for the occurrence of the
relevant Early  Termination  Date,  have been required after that date. For this
purpose,  Unpaid  Amounts in respect of the  Terminated  Transaction or group of
Terminated Transactions are to be excluded but, without limitation,  any payment
or delivery that would, but for the relevant Early  Termination  Date, have been
required (assuming  satisfaction of each applicable  condition  precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such  documentation  as such party and the Reference  Market-maker
may, in

                                       20
<PAGE>

good  faith,  agree.  The party  making the  determination  (or its agent)  will
request  each  Reference  Market-maker  to provide its  quotation  to the extent
reasonably  practicable as of the same day and time (without regard to different
time zones) on or as soon as  reasonably  practicable  after the relevant  Early
Termination  Date.  The day and  time as of  which  those  quotations  are to be
obtained  will  be  selected  in  good  faith  by the  party  obliged  to make a
determination  under  Section  6(e),  and,  if each party is so  obliged,  after
consultation  with the other.  If more than three  quotations are provided,  the
Market  Quotation will be the arithmetic mean of the quotations,  without regard
to the quotations  having the highest and lowest  values.  If exactly three such
quotations are provided,  the Market  Quotation will be the quotation  remaining
after disregarding the highest and lowest quotations.  For this purpose, if more
than one quotation has the same highest value or lowest value,  then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be  deemed  that  the  Market  Quotation  in  respect  of  such  Terminated
Transaction or group of Terminated Transactions cannot be determined.

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

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

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

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

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

"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its  seat,  (b) where an Office  through  which the party is acting  for
purposes of this  Agreement  is located,  (c) in which the party  executes  this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"SCHEDULED  PAYMENT  DATE"  means a date on which a payment or delivery is to be
made under  Section  2(a)(i)  with  respect to a  Transaction.

"SET-OFF" means set-off, offset,  combination of accounts, right of retention or
withholding  or  similar  right or  requirement  to which the payer of an amount
under Section 6 is entitled or subject  (whether  arising under this  Agreement,
another contract,  applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"SETTLEMENT  AMOUNT"  means,  with respect to a party and any Early  Termination
Date, the sum of:-

                                       21
<PAGE>

(a)  the  Termination  Currency  Equivalent  of the  Market  Quotation  (whether
positive or negative)  for each  Terminated  Transaction  or group of Terminated
Transactions for which a Market Quotation is determined; and

(b)  such party's Loss  (whether  positive or negative and without  reference to
any Unpaid  Amounts)  for each  Terminated  Transaction  or group of  Terminated
Transactions  for which a Market Quotation cannot be determined or would not (in
the  reasonable  belief  of  the  party  making  the  determination)  produce  a
commercially reasonable result.

"SPECIFIED ENTITY" has the meaning specified in the Schedule.

"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"SPECIFIED  TRANSACTION"  means,  subject to the Schedule,  (a) any  transaction
(including an agreement with respect thereto) now existing or hereafter  entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable  Specified  Entity of such party) and the other party to
this  Agreement  (or any Credit  Support  Provider  of such  other  party or any
applicable  Specified  Entity  of  such  other  party)  which  is  a  rate  swap
transaction,  basis swap,  forward rate transaction,  commodity swap,  commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option,  foreign  exchange  transaction,  cap  transaction,  floor
transaction, collar transaction, currency swap transaction,  cross-currency rate
swap transaction,  currency option or any other similar  transaction  (including
any option with respect to any of these  transactions),  (b) any  combination of
these  transactions  and (c) any other  transaction  identified  as a  Specified
Transaction in this Agreement or the relevant confirmation.

"STAMP TAX" means any stamp, registration, documentation or similar tax.

"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest,  penalties and additions thereto) that is
imposed by any  government  or other taxing  authority in respect of any payment
under this Agreement other than a stamp, registration,  documentation or similar
tax.

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

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

"TERMINATED  TRANSACTIONS"  means with respect to any Early Termination Date (a)
if resulting  from a Termination  Event,  all Affected  Transactions  and (b) if
resulting from an Event of Default,  all Transactions (in either case) in effect
immediately  before  the  effectiveness  of the  notice  designating  that Early
Termination  Date (or, if "Automatic  Early  Termination"  applies,  immediately
before that Early Termination Date).

"TERMINATION CURRENCY" has the meaning specified in the Schedule.

                                       22
<PAGE>

"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination  Currency,  such Termination  Currency amount and, in respect of
any amount  denominated in a currency other than the  Termination  Currency (the
"Other  Currency"),  the amount in the  Termination  Currency  determined by the
party  making the  relevant  determination  as being  required to purchase  such
amount of such Other Currency as at the relevant Early  Termination Date, or, if
the relevant Market  Quotation or Loss (as the case may be), is determined as of
a later date, that later date,  with the Termination  Currency at the rate equal
to the spot exchange rate of the foreign  exchange  agent  (selected as provided
below) for the purchase of such Other Currency with the Termination  Currency at
or about  11:00  a.m.  (in the  city in which  such  foreign  exchange  agent is
located) on such date as would be customary for the determination of such a rate
for the  purchase  of such  Other  Currency  for  value  on the  relevant  Early
Termination  Date or that later date.  The foreign  exchange agent will, if only
one party is obliged to make a determination  under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

"TERMINATION EVENT" means an Illegality,  a Tax Event or a Tax Event Upon Merger
or, if specified to be  applicable,  a Credit Event Upon Merger or an Additional
Termination Event.

"TERMINATION  RATE" means a rate per annum equal to the  arithmetic  mean of the
cost (without  proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"UNPAID AMOUNTS" owing to any party means,  with respect to an Early Termination
Date,  the  aggregate  of (a) in respect  of all  Terminated  Transactions,  the
amounts that became  payable (or that would have become  payable but for Section
2(a)(iii)  to such  party  under  Section  2(a)(i)  on or  prior  to such  Early
Termination  Date and which remain unpaid as at such Early  Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii))  required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market  value of that which was (or would have been)  required to be
delivered  as of the  originally  scheduled  date  for  delivery,  in each  case
together with (to the extent  permitted under  applicable law) interest,  in the
currency  of such  amounts,  from  (and  including)  the date  such  amounts  or
obligations  were or would have been  required to have been paid or performed to
(but  excluding)  such Early  Termination  Date, at the  Applicable  Rate.  Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed.  The fair market value of any obligation referred
to in clause (b) above shall be  reasonably  determined  by the party obliged to
make the  determination  under Section 6(e) or, if each party is so obliged,  it
shall be the average of the Termination  Currency Equivalents of the fair market
values reasonably determined by both parties.

                                       23
<PAGE>

IN WITNESS  WHEREOF the parties have executed  this  document on the  respective
dates  specified  below with effect from the date specified on the first page of
this document.

             CITIGROUP                         SACYR VALLEHERMOSO
             GLOBAL MARKETS                    PARTICIPACIONES
             LIMITED                           MOBILIARIAS, S.L.U.

By: /s/  Julia Elliot                        By: /s/
   ................................             ................................
Name: Julia Elliot                           Name:
Title: Authorised Signatory                  Title:
Date:  11/08/06                              Date:

By:  /s/                                     By:
   ................................             ................................
Name:                                        Name:
Title:                                       Title:
Date:                                        Date:

                                       24
<PAGE>

                                    SCHEDULE

                                     to the

                              ISDA Master Agreement

                         dated as of 8th November, 2006,

                                     between

                        CITIGROUP GLOBAL MARKETS LIMITED,
            a company incorporated with limited liability in England
                                   ("Party A")

                                       and

             SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.U.,
          a corporation organized and existing under the laws of Spain
                                   ("Party B")

                                     PART 1
                             TERMINATION PROVISIONS

In this Agreement:

(a)  "SPECIFIED ENTITY" means in relation to Party A for the purpose of:

     Section 5 (a)(v),   Not applicable.
     Section 5 (a)(vi),  Not applicable.
     Section 5 (a)(vii), Not applicable.
     Section 5(b)(iv),   Not applicable.

     In relation to Party B for the purpose of:

     Section 5 (a)(v),   Any Affiliate.
     Section 5 (a)(vi),  Any Affiliate.
     Section 5 (a)(vii), Any Affiliate.
     Section 5(b)(iv),   Sacyr Vallehermoso, S.A.

(b)  "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
     this Agreement.

                                       19
<PAGE>

(c)  The "CROSS  DEFAULT"  provisions  of Section  5(a)(vi) of this  Agreement
     will apply to both parties, but shall exclude any payment default that
     results solely from wire transfer difficulties or an error or omission of
     an administrative or operational nature (so long as sufficient funds are
     available to the relevant party on the relevant date), provided that
     payment is made within three Business Days after such transfer difficulties
     have been corrected or the error or omission has been discovered..

     For purposes of Section 5(a)(vi), the following provisions apply:

     "SPECIFIED INDEBTEDNESS" shall have the meaning set forth in section 14 of
     the Agreement.

     "THRESHOLD AMOUNT" means

     (i)  with respect to Party A, 3% of the stockholders' equity of Citigroup
     Inc.; and

     (ii) with respect to Party B, 3% of Party B's shareholders' equity on a
     consolidated basis, as reported in its most recently audited financial
     statements.

(d)  The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) of this
     Agreement will apply to Party A and will apply to Party B.

(e)  The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will not
     apply to Party A and will not apply to Party B.

(f)  For the purpose of the "PAYMENTS ON EARLY TERMINATION" provisions of
     Section 6(e):

     (i) The Second Method will apply; and

     (ii) Market Quotation will apply.

(g)  "TERMINATION CURRENCY" means any single currency of any Transaction as may
     be selected by the party which is not the Defaulting Party or the Affected
     Party (as the case may be), or, in circumstances where there is more than
     one Affected Party, such currency of any Transaction as may be mutually
     agreed between the parties hereto or otherwise, failing such mutual
     agreement or in the event that such currency is not freely available and
     convertible, Euro ((euro)).

(h)  ADDITIONAL TERMINATION EVENT will not apply

                                       20
<PAGE>

                                     PART 2
                               TAX REPRESENTATIONS

(a)  PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this Agreement,
     Party A will make the following representation and Party B will make the
     following representation:

     It is not required by any applicable law, as modified by the practice of
     any relevant governmental revenue authority, of any Relevant Jurisdiction
     to make any deduction or withholding for or on account of any Tax from any
     payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
     Agreement) to be made by it to the other party under this Agreement. In
     making this representation, it may rely on (i) the accuracy of any
     representations made by the other party pursuant to Section 3(f) of this
     Agreement, (ii) the satisfaction of the agreement contained in Section
     4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness
     of any document provided by the other party pursuant to Section 4(a)(i) or
     4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of
     the other party contained in Section 4(d) of this Agreement, provided that
     it shall not be a breach of this representation where reliance is placed on
     clause (ii) and the other party does not deliver a form or documents under
     Section 4(a)(iii) by reason of material prejudice to its legal or
     commercial position.

(b)  PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of the Agreement,
     Party A and Party B make the representations specified below, if any:

     The following representation will not apply to Party A and will apply to
     Party B:

     If, with respect to any Transaction, a party is acting through an Office
     located outside the United Kingdom, it is fully eligible for the benefits
     of the "Business Profits" or "Industrial and Commercial Profits" provision,
     as the case may be, the "Interest" provision or the "Other Income"
     provision (if any) of the Specified Treaty with respect to any payment
     described in such provisions and received or to be received by it in
     connection with this Agreement and no such payment is attributable to a
     trade or business carried on by it through a permanent establishment in the
     Specified Jurisdiction.

     For purposes of the foregoing representation:

     "Specified Treaty" means The Double Tax Treaty between the United Kingdom
     and Spain, as amended.

     "Specified Jurisdiction" means the United Kingdom.

                                       21
<PAGE>

                                     PART 3
                         AGREEMENT TO DELIVER DOCUMENTS

For the purpose of Section 4(a) of this Agreement:

(a)  TAX FORMS, DOCUMENTS OR CERTIFICATES TO BE DELIVERED ARE:

  Party required
  to deliver          Form/Document/                     Date by which to
  document            Certificate                        be delivered
------------------------------------------------------------------------------

Party A and Party B   Any form, document or certificate  As soon as practicable
                      reasonably requested by the other  following written
                      party in order for such party to   demand
                      be able to make payments hereunder
                      without withholding taxes being
                      deducted.

(b) OTHER DOCUMENTS TO BE DELIVERED ARE:

  Party required
  to deliver        Form/Document/         Date by which to    Covered
  document          Certificate            be delivered        by Section 3(d)
------------------------------------------------------------------------------

(i)  Party A and    Such proof of the      As soon as          Yes
     Party B        names, true            practicable after
                    signatures and         execution of this
                    authority of persons   Agreement and, if
                    signing this           requested by the
                    Agreement on its       other party, as
                    behalf as the other    soon as
                    party may reasonably   practicable after
                    request.               execution of any
                                           Confirmation of
                                           any other
                                           Transaction.

(ii) Party B        A duly signed copy of  Upon execution of
                    the Credit Support     this Agreement.
                    Document referred to
                    in Part 4 of this
                    Schedule.

(iii) Party B       Party B's annual       Promptly upon       Yes
                    report containing      request.
                    audited consolidated
                    financial statements
                    prepared in
                    accordance with
                    accounting principles
                    that are generally
                    accepted in such
                    party's country of
                    organization and
                    certified by
                    independent certified
                    public accountants
                    for each fiscal year.

                                       22
<PAGE>

Party required
  to deliver        Form/Document/         Date by which to    Covered
  document          Certificate            be delivered        by Section 3(d)
------------------------------------------------------------------------------
(iv) Party B        Party B's unaudited    Promptly upon       Yes
                    consolidated           request.
                    financial statements,
                    the consolidated
                    balance sheet and
                    related statements of
                    income for each
                    fiscal quarter,
                    prepared in
                    accordance with
                    accounting principles
                    that are generally
                    accepted in such
                    party's country of
                    organization.

                                       23
<PAGE>

                                     PART 4
                                  MISCELLANEOUS

(a)  ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this Agreement:

     ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY A:

     With respect to a particular Transaction, all notices or communications to
     Party A shall be sent to the address or facsimile number indicated in the
     Confirmation of that Transaction.

     In addition, in the case of notices or communications relating to Section
     5, 6, 11 or 13 of this Agreement, a copy of any such notice or
     communication shall be addressed to the attention of:

     Address:       Citigroup Centre, 25 Canada Square, London E14 5LB

     Attention:     Head of Trading Legal Services, Europe

     Facsimile No:  +44 207 508 9118/9

     and:

     Address:       7 Water Street, 9th Floor, New York, New York 10004

     Attention:     Head of Legal Department

     Facsimile No.: +1 212 657 1452

     ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY B:

     Address:       SACYR VALLEHERMOSO PARTICIPACIONES MOBILIATIAS, S.L.U.
                    Po de le Castellana, 83-85
                    28046 Madrid

     Attention:    Jose Puelles Gallo
     Tel:          +34 91 556 5049
     Facsimile No: +34 91 556 7555

(b)  EFFECTIVENESS OF NOTICE. Section 12(a) is hereby amended by deleting the
     words "facsimile transmission or" in line 3 thereof.

(c)  PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:

     Party B appoints as its Process Agent:  to be advised

(d)  OFFICES. The provisions of Section 10(a) will apply to this Agreement.

(e)  MULTIBRANCH PARTY. For the purpose of Section 10(b) of this Agreement:

     Party A is not a Multibranch Party.

     Party B is not a Multibranch Party.

                                       24
<PAGE>

(f)  CALCULATION AGENT. The Calculation Agent will be Party A unless otherwise
     specified in a Confirmation in reference to the relevant Transaction.

(g)  CREDIT SUPPORT DOCUMENT. The Credit Support Document means: With respect
     to Party A, not applicable; and with respect to Party B, the Guarantee
     given by the Credit Support Provider in favor of Party A and substantially
     in the form of Exhibit I.

(h)  CREDIT SUPPORT PROVIDER. Credit Support Provider means: With respect to
     Party A, not applicable; and with respect to Party B, Sacyr Vallehermoso,
     S.A.

(i)  GOVERNING LAW. This Agreement will be governed by and construed in
     accordance with the laws of England and Wales.

(j)  JURISDICTION. Section 13(b) of the Agreement is hereby amended as follows:

     (i)   by inserting in line 1 of Section 13(b)(i) the word "exclusive"
           immediately after the phrase "submits to the"; and

     (ii)  by deleting the final paragraph thereof and replacing it with,
           "Nothing in this provision shall prohibit a party from bringing an
           action to enforce a money judgment in any other jurisdiction."

(k)  "AFFILIATE" will have the meaning specified in Section 14 of this
     Agreement provided, however that with regard to Party A, the term
     "Affiliate" shall not include any entity that controls or is under common
     control with Citigroup Global Markets Holdings Inc., but in any event such
     term shall include Citigroup Global Markets Holdings Inc. and any entity
     controlled by it.

(l)  NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
     will apply to all Transactions.

                                       25
<PAGE>

                                     PART 5
                                OTHER PROVISIONS

(a)  ISDA DEFINITIONS The definitions and provisions contained in the 2000 ISDA
     Definitions (published by the International Swaps and Derivatives
     Association, Inc.) (the "Definitions") are incorporated into any
     Confirmation which supplements and forms part of the Agreement; and all
     capitalized terms used in a Confirmation shall have the meaning set forth
     in the Definitions, unless otherwise defined in a Confirmation. In the
     event of any conflict between the provisions of the Definitions and the
     provisions of this Agreement, the provisions of this Agreement shall apply,
     and in the event of any conflict between the provisions of this Agreement
     and the Confirmation, the provisions of the Confirmation shall apply.

(b)  CHANGE OF ACCOUNT Section 2(b) of this Agreement is hereby amended by the
     addition of the following after the word "delivery" in the first line
     hereof:

     "to another account in the same legal and tax jurisdiction as the original
     account"

(c)  ESCROW PAYMENTS. If by reason of the time difference between the cities in
     which payments are to be made, it is not possible for simultaneous payments
     to be made on any date on which both parties are required to make payments
     hereunder, either party may at its option and in its sole discretion notify
     the other party that payments on that date are to be made in escrow. In
     this case the deposit of the payment due earlier on that date shall be made
     by 2:00 p.m. (local time at the place for the earlier payment) on that date
     with an escrow agent selected by the party giving the notice, accompanied
     by irrevocable payment instructions (i) to release the deposited payment to
     the intended recipient upon receipt by the escrow agent of the required
     deposit of the corresponding payment from the other party on the same date
     accompanied by the irrevocable payment instructions to the same effect or
     (ii) if the required deposit of the corresponding payment is not made on
     that same date, to return the payment deposited to the party that paid it
     into escrow. The party that elects to have payments made in escrow shall
     pay the costs of the escrow arrangements and shall cause those arrangements
     to provide that the intended recipient of the payment due to be deposited
     first shall be entitled to interest on that deposited payment for each day
     in the period of its deposit at the rate offered by the escrow agent for
     that day for overnight deposits in the relevant currency in the office
     where it holds that deposited payment (at 11:00 am. local time on that day)
     if that payment is not released by 5:00 p.m. on the date it is deposited
     for any reason other than the intended recipients' failure to make the
     escrow deposit it is required to make hereunder in a timely fashion.

(d)  SET-OFF.  Each party to this  Agreement  (such  party,  "Party X") agrees
     that, upon the insolvency of Party X or any of its Affiliates or the
     default of Party X or any of its Affiliates under any transaction with the
     other party hereto or any of such other party's Affiliates (such other
     party or any of its Affiliates, a "Non-Defaulting Party"), each
     Non-Defaulting Party may, without prior notice to Party X: (a) liquidate
     any transaction between Party X and any Non-Defaulting Party (which
     liquidation may include the conversion of amounts denominated in multiple
     currencies into a single currency if deemed necessary or desirable by the
     Non-Defaulting Party), (b) reduce any amounts due and owing to Party X
     under any transaction between Party X and any Non-Defaulting Party by
     setting off against such amounts any amounts due and owing to a
     Non-Defaulting Party by Party X, and (c) treat all security for, and all
     amounts due and owing to Party X under, any transaction between Party X and
     any Non-Defaulting Party as security for all transactions between Party X
     and any Non-Defaulting Party; PROVIDED, HOWEVER, that the exercise of the
     remedies described in clauses (a), (b) and (c) above (or in any other
     similar provision in any agreement between the parties) shall be deemed to
     occur immediately subsequent to, but independent of, the exercise of any
     netting, liquidation, set-off or other similar provision contained in any
     master agreement between the parties; PROVIDED FURTHER that each

                                       26
<PAGE>

     provision and agreement hereof shall be treated as independent from any
     other provision or agreement herein and shall be enforceable
     notwithstanding the unenforceability of any such other provision or
     agreement.

(e)  ADDITIONAL REPRESENTATIONS. For purposes of Section 3 of this Agreement,
     the following shall be added, immediately following paragraph (f) thereof:

     "(g) NO RELIANCE. It is acting for its own account, and it has made its own
          independent decisions to enter into that Transaction and as to whether
          that Transaction is appropriate or proper for it based upon its own
          judgment and upon advice from such advisors as it has deemed
          necessary. It is not relying on any communication (written or oral) of
          the other party as investment advice or as a recommendation to enter
          into that Transaction; it being understood that information and
          explanations related to the terms and conditions of a Transaction
          shall not be considered investment advice or a recommendation to enter
          into that Transaction. It has not received from the other party any
          assurance or guarantee as to the expected results of that Transaction.

     (h)  EVALUATION AND UNDERSTANDING. It is capable of evaluating and
          understanding (on its own behalf or through independent professional
          advice), and understands and accepts, the terms, conditions and risks
          of that Transaction. It is also capable of assuming, and assumes, the
          financial and other risks of that Transaction.

     (i)  STATUS OF PARTIES. The other party is not acting as a fiduciary or an
          advisor for it in respect of hat Transaction.

     (j)  NO AGENCY. It is entering into this Agreement and each Transaction as
          principal and not as agent.

     (k)  RISK MANAGEMENT. Party B alone represents that this Agreement has
          been, and each Transaction hereunder has been or will be, as the case
          may be, entered into for the purpose of managing its borrowings or
          investments, hedging its underlying assets or liabilities or in
          connection with its line of business (including financial
          intermediation services) and not for the purpose of speculation."

(f)  RECORDING OF CONVERSATIONS. Each party (i) consents to the recording of the
     telephone conversations of its trading and marketing personnel in
     connection with this Agreement or any potential Transaction; (ii) agrees to
     obtain any necessary consent of, and give notice of such recording to, such
     personnel and (iii) agrees that any such recordings may be submitted in
     evidence in any Proceeding relating to this Agreement.

(g)  ELECTRONIC CONFIRMATIONS Where a Transaction is confirmed by means of an
electronic messaging system that the parties have elected to use to confirm such
Transaction (i) such Confirmation will constitute a "Confirmation" as referred
to in this Agreement even when not so specified in the confirmation, (ii) such
Confirmation will supplement, form part of , and be subject to this Agreement
(unless such Confirmation expressly states otherwise) and (iii) the definitions
and provisions contained in the 1998 ISDA FX and Currency Option Definitions (as
published by the International Swaps and Derivatives Association, Inc) will be
incorporated into the Confirmation if the Transaction is an FX Transaction or a
Currency Option. In the event of any inconsistency between the Definitions
applicable pursuant to clause (iii) of this subsection and this Agreement, the
Confirmation will prevail for th purpose of the relevant Transaction.

                                       27
<PAGE>

(h)  LIMITATION OF LIABILITY. Without prejudice to the definition of 'Loss' and
     payments calculated by reference to the provisions in Section 6(e), no
     party shall be required to pay or be liable to the other party for any
     consequential, indirect or punitive damages, opportunity costs or lost
     profits (whether arising from its negligence or breach of contract or
     otherwise), save only that nothing shall exclude liability for fraud.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

CITIGROUP GLOBAL MARKETS LIMITED       SACYR VALLEHERMOSO
                                       PARTICIPACIONES MOBILIARIAS,
                                       S.L.U.

By: --------------------------------   By: --------------------------------

Print Name: ------------------------   Print Name: ------------------------

Title: -----------------------------   Title: -----------------------------

Date: ------------------------------   Date: ------------------------------

                                       By: --------------------------------

                                       Print Name: ------------------------

                                       Title: -----------------------------

                                       Date: ------------------------------

                                       28
<PAGE>

                                    EXHIBIT 1

                                    GARANTIA

GARANTIA de fecha de 8 de Noviembre de 2006 otorgada por Sacyr Vallerhermoso,
S.A. (en lo sucesivo, el "Garante"), a favor de Citigroup Global Markets Limited
(en adelante "CGML"), en relacion con las Operaciones (tal y como se define a
continuacion) que este realizara con Sacyr Vallehermoso Participaciones
Mobiliarias, S.L.U. (en lo sucesivo, la "Compania"). Por "Operaciones" se
entenderan todas aquellas Operaciones singulares que se cierren entre las partes
al amparo del ISDA Master Agreement de fecha 8 de Noviembre de 2006 entre
Citigroup y la Compania.

1.   GARANTIA. La presente Garantia tiene naturaleza de garantia a primera
     demanda, incondicional e irrevocable. Las obligaciones del Garante son
     solidarias con respecto de la Compania de tal manera que responde al mismo
     nivel que la Compania como obligado principal ante Citigroup.

     El Garante garantiza con caracter incondicional, irrevocable y a primera
     demanda a Citigroup, sus entidades sucesoras y/o cesionarios, el pago al
     vencimiento de todas y cada una de las obligaciones y responsabilidades de
     la Compania con Citigroup derivadas de las Operaciones (en adelante, "las
     Obligaciones"), bastando para su reclamacion la simple notificacion por
     Citigroup al Garante, sin necesidad de justificar el motivo del
     incumplimiento.

2.   CONSENTIMIENTO, RENUNCIAS Y RENOVACIONES. El Garante acepta que Citigroup
     podra recurrir a ellos para el pago de cualesquiera de las Obligaciones,
     independientemente de que Citigroup haya recurrido a cualquier garantia o
     colateral o haya procedido legalmente contra cualquier otro obligado
     principal o secundario respecto a cualesquiera de dichas Obligaciones.

3.   GASTOS. El Garante se compromete a reembolsar a la vista cualquier gasto
     relacionado directamente con la ejecucion o proteccion de los derechos de
     Citigroup en virtud de la presente Garantia.

4.   SUBROGACION. El Garante se compromete a no ejercer ningun derecho que
     pudiera corresponderle frente a la Compania hasta que la totalidad de las
     Obligaciones ante Citigroup se hayan liquidado por completo. Si cualquier
     importe se hubiera pagado al Garante contraviniendo el compromiso anterior,
     dicho importe se mantendra en deposito en beneficio de Citigroup y sera
     entregado a este para su aplicacion a las Obligaciones.

5.   VALIDEZ DE LA GARANTIA. La presente Garantia tiene caracter de
     incondicional, irrevocable y a primera demanda, y permanecera en vigor y
     sera vinculante para el Garante, sus sucesores y cesionarios hasta que la
     totalidad de la Obligaciones se hayan liquidado por completo.

6.   LEY Y JURISDICCION. La presente Garantia esta sometida a Derecho espanol.

                                       29
<PAGE>

7.   NOTIFICACIONES. La direccion del Garante a efectos de notificaciones es la
     siguiente:

     Sacyr Vallehermoso S.A.
     P(o) de la Castellana n(o) 83/85
     28046 Madrid
     Atencion: Jose Puelles Gallo
     Tel 34 91 545 50 49
     Fax: 34 91 556 7555

8.   MODIFICACIONES. No surtira efecto ninguna modificacion de la presente
     Garantia a menos que se efectue por escrito, con la firma del Garante, la
     Compania y Citigroup.

     Sacyr Vallehermoso S.A.

     Fdo.:_________________

                                       30
<PAGE>

                                                               [CITIGROUP LOGO]

                                                November 8, 2006

TO:
SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.
Attn:
Tel:
Fax:

FROM:
Documentation Unit
Telephone: 00 44 207 508 7641 / 1598
Facsimile:  00 44 207 508 1673 / 1674

Our Ref:

                                   TRANSACTION

The purpose of this letter agreement (this 'Confirmation') is to confirm the
terms and conditions of the Transaction entered into between SACYR VALLEHERMOSO
PARTICIPACIONES MOBILIARIAS, S.L. ('Counterparty') and Citigroup Global Markets
Limited ('Citigroup') on the Trade Date specified below (the 'Transaction').
This Confirmation constitutes a "Confirmation" as referred to in the ISDA Master
Agreement specified below.

Citigroup Global Markets Limited is authorised and regulated by the Financial
Services Authority. Citigroup Global Markets Limited is entering into this
Transaction as principal and not as an agent for any other party.

1. The definitions and provisions contained in the 2000 ISDA Definitions (the
"Swap Definitions") and in the 2002 ISDA Equity Derivatives Definitions (the
"Equity Definitions", and together with the Swap Definitions, the
"Definitions"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Swap Definitions and the Equity
Definitions, the Equity Definitions will govern. In the event of any
inconsistency between either set of Definitions and this Confirmation, this
Confirmation will govern.

References in the Swap Definitions to the term "Swap Transaction" shall be
deemed to be references to the term "Transaction" for the purposes of this
Confirmation..

This Confirmation evidences a complete and binding agreement between you and us
as to the terms of the Transaction to which this Confirmation relates. In
addition, you and we agree to use all reasonable efforts promptly to negotiate,
execute and deliver an agreement in the form of an ISDA Master Agreement, with
such modifications as you and we will in good faith agree. Upon the execution by
you and us of such an agreement, this Confirmation will supplement, form part
of, and be subject to that agreement. All provisions contained in, or
incorporated by reference in, that agreement upon its execution will govern this
Confirmation except as expressly modified below. Until we execute and deliver
that agreement, this Confirmation, together with all other documents referring
to an ISDA Master Agreement (each a 'Confirmation') confirming transactions
(each a 'Transaction') entered into between us (notwithstanding anything to the
contrary in a Confirmation), shall supplement, form a part of, and be subject
to, a single agreement (the 'Agreement') in the pre-printed form of the 1992
ISDA Master Agreement (Multicurrency - Cross Border) (the 'ISDA Form') as if, on
the Trade Date of the first such Transaction between us, we had executed a
single agreement in such form (but without any Schedule except for the election
of English Law as the governing law, USD as the Termination Currency, Credit
Event Upon Merger, Second Method and Market Quotation as applying and basic
Set-

                        Citigroup Global Markets Limited
       Registered Office: Citigroup Centre, Canada Square, Canary Wharf,
                                 London E14 5LB
                Registered in England Registered Number: 1763297
          Authorised and regulated by the Financial Services Authority

<PAGE>

Off provision contained in Section V A. of the User's Guide to the 1992 ISDA
Master Agreements - 1993 Edition published by ISDA being incorporated by
reference). The Agreement shall contain such other modifications (including
additional elections) to the ISDA Form (each, an 'Agreement Modification') as
may be agreed by the parties from time to time. Any Agreement Modification may
be set forth in any Confirmation (whether or not it would form part of the
Schedule to the ISDA Master Agreement and notwithstanding the termination or
expiry of the Transaction(s) detailed in any such Confirmation). To the extent
of any inconsistency between the provisions of the ISDA Form and this
Confirmation, this Confirmation will prevail for the purposes of this
Transaction. To the extent of any inconsistency between any Agreement
Modification and a prior Agreement Modification, the terms of the Agreement
Modification set forth in the most recent Confirmation shall govern.

Unless specified herein, information about the time of dealing and the amount or
basis of any charges shared with any third party in connection with this
Transaction will be made available on request.

2. The terms of the particular Transaction to which this Confirmation relates
are as follows:

GENERAL TERMS:

     Trade Date:              8 November 2006

     Effective Date:          13 November 2006

     Termination Date:        The Settlement Date

     Shares:                  The ordinary shares of REPSOL YPF S.A (RIC:
                              REP.MC)

     Exchange:                Madrid Stock Exchange

     Related Exchange:        MEFF

EQUITY AMOUNT(S):

     Equity Amount Payer:     Citigroup

     Equity Amount Receiver:  Counterparty

     Number of Shares:        38,625,904

     Initial Price            27.8312

     Equity Notional Amount:  EUR 1,075,005,259,40(being on the Trade Date the
                              Number of Shares multiplied by Initial Price.)

     Valuation Date:          January 9, 2007

FLOATING AMOUNT(S):

     Floating Amount Payer:   Counterparty

     Notional Amount:         The Equity Notional Amount

     Payment Date:            The Settlement Date

     Floating Rate Option:    EUR-EURIBOR-Telerate

     Designated Maturity:     Three months

                                                                           -2/6-
<PAGE>

     Spread:                  Plus 0.25 per cent

     Day Count Fraction:      Actual/360

     Reset Dates:             The first day of each Calculation Period

     Business Days:           TARGET Settlement Days

     Business Day Convention  Modified Following

SETTLEMENT TERMS:

     Physical Settlement:     Applicable

     Settlement Currency:     EUR

     Settlement Date:         Three Currency Business Days after the Valuation
                              Date

     Settlement Method
     Election:                Not Applicable

DIVIDENDS:

     Dividend Period:         Second Period

     Dividend Amount:         The Country Percentage of the gross cash dividend
                              per Share paid by the Issuer during the relevant
                              Dividend Period to holders of record of a Share
                              multiplied by the Number of Shares

     Country Percentage:      85%

     Dividend Payment Date:   The Settlement Date

     Extraordinary Dividend:  The characterization of a dividend or portion
                              thereof as an Extraordinary Dividend shall be
                              determined by the Calculation Agent

     Re-investment of
     Dividends:               Not Applicable

ADJUSTMENTS:

     Method of Adjustment:    Calculation Agent Adjustment

EXTRAORDINARY EVENTS:

     Consequences of Merger
     Events:

       a) Share for Share:    Modified Calculation Agent Adjustment

       b) Share for Other:    Modified Calculation Agent Adjustment

       c) Share for Combined: Modified Calculation Agent Adjustment

       Determining Party:     Citigroup

                                                                           -3/6-
<PAGE>

     Tender Offer:            Applicable including, for the avoidance of doubt,
                              the Tender Offers already launched over the
                              Shares or any modifications thereof.

     Consequences of Tender Offer:

       a) Share for Share:    Modified Calculation Agent Adjustment

       b) Share for Other:    Modified Calculation Agent Adjustment

       c) Share for Combined: Modified Calculation Agent Adjustment

       Determining Party:     Citigroup

     Composition of Combined
     Consideration:           Not Applicable

     Nationalization,
     Insolvency
     or Delisting:            Cancellation and Payment

       Determining Party:     Citigroup

     ADDITIONAL DISRUPTION EVENTS:

     Change in Law:           Applicable.
                              Section 12.9(a)(ii) of the Equity Definitions is
                              replaced in its entirety by the words:

                              'Change in Law' means that, on or after the Trade
                              Date (A) due to the adoption of or any change in
                              any applicable law or regulation (including,
                              without limitation, any tax law), or (B) due to
                              the promulgation of or any change in the
                              interpretation by any court, tribunal or
                              regulatory authority with competent jurisdiction
                              of any applicable law or regulation (including any
                              action taken by a taxing authority), the
                              Calculation Agent determines (following
                              receipt of a request from either party for such a
                              determination) in good faith (X) that it has
                              become illegal for a party to this Transaction to
                              hold, acquire or dispose of Hedge Positions
                              relating to this Transaction, or (Y) a party will
                              incur a materially increased cost in performing
                              its obligations under such Transaction (including,
                              without limitation, due to any increase in tax
                              liability, decrease in tax benefit or other
                              adverse effect on its tax position), provided
                              that this Section 12.9(a)(ii) shall not apply if
                              the Calculation Agent determines that such party
                              could have taken reasonable steps to avoid such
                              illegality.

    Insolvency Filing:        Applicable

    Failure to Deliver:       Applicable

Determining Party:           Citigroup with respect to all Additional Disruption
                              Events

OPTIONAL TERMIANTION:

(a) Counterparty may elect to terminate this Transaction (an "Optional
Termination") (provided that no Event of Default with respect to Counterparty,
or event which, with the giving of notice or the lapse of time, or both, would
constitute such an Event of Default, shall have occurred and be continuing, and
provided that no Early Termination Date has been designated), by giving
telephonic notice (the "Termination Notice") to Citigroup of such election not
less than two Scheduled Trading Days prior to

                                                                           -4/6-
<PAGE>

the early Valuation Date (the "Early Valuation Date") designated in the
Termination Notice and such Termination Notice shall be irrevocable. The Early
Valuation Date may be any Scheduled Trading Day prior to 9 January 2007. The
Termination Notice will be confirmed in writing by the terminating party
promptly after making such election, provided that failure to do so shall not in
any way affect or suspend the effectiveness of the Termination Notice.

(b) In the event that a Termination Notice is given pursuant to the immediately
preceding paragraph, (i) the Early Valuation Date shall be the Valuation Date
and the day which is three Currency Business Days following the Early Valuation
Date (the "New Termination Date") shall be both the Settlement Date and the
Termination Date; and (ii) the Calculation Period that commenced on the Floating
Amount Payer Period End Date immediately preceding the New Termination Date (or
that commenced on the Effective Date if the New Termination Date is a day on or
prior to the first Reset Date) shall be the final Calculation Period, the New
Termination Date shall be the Floating Amount Payer Period End Date for such
Calculation Period and the Floating Amount in respect of such Calculation Period
shall be payable on the New Termination Date.

(c) The operation of the paragraphs contained within this section shall not
affect or suspend any obligation of the parties hereto arising under this
Transaction on or prior to the New Termination Date. Upon the payment of all
amounts that are due and unpaid as of the New Termination Date (including
amounts required to be paid pursuant to the paragraphs within this section), the
obligation of each party to make any further payments with respect to this
Transaction will terminate.

OTHER TERMS:

Non-Reliance:                           Applicable

Agreements and Acknowledgments
Regarding Hedging Activities:           Applicable

Additional Acknowledgments:             Applicable

Calculation Agent:                      Citigroup

ACCOUNT DETAILS:

      Payments to Citigroup:            To be advised prior to payment

      Payments to Counterparty:         Please advise to expedite payment

     If you have any questions regarding this letter agreement, please contact
the Derivatives Operations Department at the telephone numbers indicated or the
facsimile numbers indicated on this Confirmation.

     Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.

                              Very truly yours,

                              CITIGROUP GLOBAL MARKETS LIMITED

                              By: -----------------------------------
                               Name:
                               Title:

                                                                           -5/6-
<PAGE>

Accepted and confirmed as
of the Trade Date:
SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.

      /s/
By: -----------------------------------
Name:
Title:

                                                                           -6/6-

                                                               [CITIGROUP LOGO]

                                                November 9, 2006

TO:
SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.
Attn:
Tel:
Fax:

FROM:
Documentation Unit
Telephone: 00 44 207 508 7641 / 1598
Facsimile:  00 44 207 508 1673 / 1674

Our Ref:

                                   TRANSACTION

The purpose of this letter agreement (this 'Confirmation') is to confirm the
terms and conditions of the Transaction entered into between SACYR VALLEHERMOSO
PARTICIPACIONES MOBILIARIAS, S.L. ('Counterparty') and Citigroup Global Markets
Limited ('Citigroup') on the Trade Date specified below (the 'Transaction').
This Confirmation constitutes a "Confirmation" as referred to in the ISDA Master
Agreement specified below.

Citigroup Global Markets Limited is authorised and regulated by the Financial
Services Authority. Citigroup Global Markets Limited is entering into this
Transaction as principal and not as an agent for any other party.

1. The definitions and provisions contained in the 2000 ISDA Definitions (the
"Swap Definitions") and in the 2002 ISDA Equity Derivatives Definitions (the
"Equity Definitions", and together with the Swap Definitions, the
"Definitions"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Swap Definitions and the Equity
Definitions, the Equity Definitions will govern. In the event of any
inconsistency between either set of Definitions and this Confirmation, this
Confirmation will govern.

References in the Swap Definitions to the term "Swap Transaction" shall be
deemed to be references to the term "Transaction" for the purposes of this
Confirmation..

This Confirmation evidences a complete and binding agreement between you and us
as to the terms of the Transaction to which this Confirmation relates. In
addition, you and we agree to use all reasonable efforts promptly to negotiate,
execute and deliver an agreement in the form of an ISDA Master Agreement, with
such modifications as you and we will in good faith agree. Upon the execution by
you and us of such an agreement, this Confirmation will supplement, form part
of, and be subject to that agreement. All provisions contained in, or
incorporated by reference in, that agreement upon its execution will govern this
Confirmation except as expressly modified below. Until we execute and deliver
that agreement, this Confirmation, together with all other documents referring
to an ISDA Master Agreement (each a 'Confirmation') confirming transactions
(each a 'Transaction') entered into between us (notwithstanding anything to the
contrary in a Confirmation), shall supplement, form a part of, and be subject
to, a single agreement (the 'Agreement') in the pre-printed form of the 1992
ISDA Master Agreement (Multicurrency - Cross Border) (the 'ISDA Form') as if, on
the Trade Date of the first such Transaction between us, we had executed a
single agreement in such form (but without any Schedule except for the election
of English Law as the governing law, USD as the Termination Currency, Credit
Event Upon Merger, Second Method and Market Quotation as applying and basic
Set-

                        Citigroup Global Markets Limited
       Registered Office: Citigroup Centre, Canada Square, Canary Wharf,
                                 London E14 5LB
                Registered in England Registered Number: 1763297
          Authorised and regulated by the Financial Services Authority

<PAGE>

Off provision contained in Section V A. of the User's Guide to the 1992 ISDA
Master Agreements - 1993 Edition published by ISDA being incorporated by
reference). The Agreement shall contain such other modifications (including
additional elections) to the ISDA Form (each, an 'Agreement Modification') as
may be agreed by the parties from time to time. Any Agreement Modification may
be set forth in any Confirmation (whether or not it would form part of the
Schedule to the ISDA Master Agreement and notwithstanding the termination or
expiry of the Transaction(s) detailed in any such Confirmation). To the extent
of any inconsistency between the provisions of the ISDA Form and this
Confirmation, this Confirmation will prevail for the purposes of this
Transaction. To the extent of any inconsistency between any Agreement
Modification and a prior Agreement Modification, the terms of the Agreement
Modification set forth in the most recent Confirmation shall govern.

Unless specified herein, information about the time of dealing and the amount or
basis of any charges shared with any third party in connection with this
Transaction will be made available on request.

2. The terms of the particular Transaction to which this Confirmation relates
are as follows:

GENERAL TERMS:

     Trade Date:              9 November 2006

     Effective Date:          14 November 2006

     Termination Date:        The Settlement Date

     Shares:                  The ordinary shares of REPSOL YPF S.A (RIC:
                              REP.MC)

     Exchange:                Madrid Stock Exchange

     Related Exchange:        MEFF

EQUITY AMOUNT(S):

     Equity Amount Payer:     Citigroup

     Equity Amount Receiver:  Counterparty

     Number of Shares:        3,945,000

     Initial Price            27.8460

     Equity Notional Amount:  EUR 109,852,541.80(being on the Trade Date the
                              Number of Shares multiplied by Initial Price.)

     Valuation Date:          January 9, 2007

FLOATING AMOUNT(S):

     Floating Amount Payer:   Counterparty

     Notional Amount:         The Equity Notional Amount

     Payment Date:            The Settlement Date

     Floating Rate Option:    EUR-EURIBOR-Telerate

     Designated Maturity:     Three months

                                                                           -2/6-
<PAGE>

     Spread:                  Plus 0.25 per cent

     Day Count Fraction:      Actual/360

     Reset Dates:             The first day of each Calculation Period

     Business Days:           TARGET Settlement Days

     Business Day Convention  Modified Following

SETTLEMENT TERMS:

     Physical Settlement:     Applicable

     Settlement Currency:     EUR

     Settlement Date:         Three Currency Business Days after the Valuation
                              Date

     Settlement Method
     Election:                Not Applicable

DIVIDENDS:

     Dividend Period:         Second Period

     Dividend Amount:         The Country Percentage of the gross cash dividend
                              per Share paid by the Issuer during the relevant
                              Dividend Period to holders of record of a Share
                              multiplied by the Number of Shares

     Country Percentage:      85%

     Dividend Payment Date:   The Settlement Date

     Extraordinary Dividend:  The characterization of a dividend or portion
                              thereof as an Extraordinary Dividend shall be
                              determined by the Calculation Agent

     Re-investment of
     Dividends:               Not Applicable

ADJUSTMENTS:

     Method of Adjustment:    Calculation Agent Adjustment

EXTRAORDINARY EVENTS:

     Consequences of Merger
     Events:

       a) Share for Share:    Modified Calculation Agent Adjustment

       b) Share for Other:    Modified Calculation Agent Adjustment

       c) Share for Combined: Modified Calculation Agent Adjustment

       Determining Party:     Citigroup

                                                                           -3/6-
<PAGE>

     Tender Offer:            Applicable including, for the avoidance of doubt,
                              the Tender Offers already launched over the
                              Shares or any modifications thereof.

     Consequences of Tender Offer:

       a) Share for Share:    Modified Calculation Agent Adjustment

       b) Share for Other:    Modified Calculation Agent Adjustment

       c) Share for Combined: Modified Calculation Agent Adjustment

       Determining Party:     Citigroup

     Composition of Combined
     Consideration:           Not Applicable

     Nationalization,
     Insolvency
     or Delisting:            Cancellation and Payment

       Determining Party:     Citigroup

     ADDITIONAL DISRUPTION EVENTS:

     Change in Law:           Applicable.
                              Section 12.9(a)(ii) of the Equity Definitions is
                              replaced in its entirety by the words:

                              'Change in Law' means that, on or after the Trade
                              Date (A) due to the adoption of or any change in
                              any applicable law or regulation (including,
                              without limitation, any tax law), or (B) due to
                              the promulgation of or any change in the
                              interpretation by any court, tribunal or
                              regulatory authority with competent jurisdiction
                              of any applicable law or regulation (including any
                              action taken by a taxing authority), the
                              Calculation Agent determines (following
                              receipt of a request from either party for such a
                              determination) in good faith (X) that it has
                              become illegal for a party to this Transaction to
                              hold, acquire or dispose of Hedge Positions
                              relating to this Transaction, or (Y) a party will
                              incur a materially increased cost in performing
                              its obligations under such Transaction (including,
                              without limitation, due to any increase in tax
                              liability, decrease in tax benefit or other
                              adverse effect on its tax position), provided
                              that this Section 12.9(a)(ii) shall not apply if
                              the Calculation Agent determines that such party
                              could have taken reasonable steps to avoid such
                              illegality.

    Insolvency Filing:        Applicable

    Failure to Deliver:       Applicable

Determining Party:           Citigroup with respect to all Additional Disruption
                              Events

OPTIONAL TERMIANTION:

(a) Counterparty may elect to terminate this Transaction (an "Optional
Termination") (provided that no Event of Default with respect to Counterparty,
or event which, with the giving of notice or the lapse of time, or both, would
constitute such an Event of Default, shall have occurred and be continuing, and
provided that no Early Termination Date has been designated), by giving
telephonic notice (the "Termination Notice") to Citigroup of such election not
less than two Scheduled Trading Days prior to

                                                                           -4/6-
<PAGE>

the early Valuation Date (the "Early Valuation Date") designated in the
Termination Notice and such Termination Notice shall be irrevocable. The Early
Valuation Date may be any Scheduled Trading Day prior to 9 January 2007. The
Termination Notice will be confirmed in writing by the terminating party
promptly after making such election, provided that failure to do so shall not in
any way affect or suspend the effectiveness of the Termination Notice.

(b) In the event that a Termination Notice is given pursuant to the immediately
preceding paragraph, (i) the Early Valuation Date shall be the Valuation Date
and the day which is three Currency Business Days following the Early Valuation
Date (the "New Termination Date") shall be both the Settlement Date and the
Termination Date; and (ii) the Calculation Period that commenced on the Floating
Amount Payer Period End Date immediately preceding the New Termination Date (or
that commenced on the Effective Date if the New Termination Date is a day on or
prior to the first Reset Date) shall be the final Calculation Period, the New
Termination Date shall be the Floating Amount Payer Period End Date for such
Calculation Period and the Floating Amount in respect of such Calculation Period
shall be payable on the New Termination Date.

(c) The operation of the paragraphs contained within this section shall not
affect or suspend any obligation of the parties hereto arising under this
Transaction on or prior to the New Termination Date. Upon the payment of all
amounts that are due and unpaid as of the New Termination Date (including
amounts required to be paid pursuant to the paragraphs within this section), the
obligation of each party to make any further payments with respect to this
Transaction will terminate.

OTHER TERMS:

Non-Reliance:                           Applicable

Agreements and Acknowledgments
Regarding Hedging Activities:           Applicable

Additional Acknowledgments:             Applicable

Calculation Agent:                      Citigroup

ACCOUNT DETAILS:

      Payments to Citigroup:            To be advised prior to payment

      Payments to Counterparty:         Please advise to expedite payment

     If you have any questions regarding this letter agreement, please contact
the Derivatives Operations Department at the telephone numbers indicated or the
facsimile numbers indicated on this Confirmation.

     Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.

                              Very truly yours,

                              CITIGROUP GLOBAL MARKETS LIMITED

                              By: -----------------------------------
                               Name:
                               Title:

                                                                           -5/6-
<PAGE>

Accepted and confirmed as
of the Trade Date:
SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.

      /s/
By: -----------------------------------
Name:
Title:

                                                                           -6/6-

                                                               [CITIGROUP LOGO]

                                                November 10, 2006

TO:
SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.
Attn:
Tel:
Fax:

FROM:
Documentation Unit
Telephone: 00 44 207 508 7641 / 1598
Facsimile:  00 44 207 508 1673 / 1674

Our Ref:

                                   TRANSACTION

The purpose of this letter agreement (this 'Confirmation') is to confirm the
terms and conditions of the Transaction entered into between SACYR VALLEHERMOSO
PARTICIPACIONES MOBILIARIAS, S.L. ('Counterparty') and Citigroup Global Markets
Limited ('Citigroup') on the Trade Date specified below (the 'Transaction').
This Confirmation constitutes a "Confirmation" as referred to in the ISDA Master
Agreement specified below.

Citigroup Global Markets Limited is authorised and regulated by the Financial
Services Authority. Citigroup Global Markets Limited is entering into this
Transaction as principal and not as an agent for any other party.

1. The definitions and provisions contained in the 2000 ISDA Definitions (the
"Swap Definitions") and in the 2002 ISDA Equity Derivatives Definitions (the
"Equity Definitions", and together with the Swap Definitions, the
"Definitions"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Swap Definitions and the Equity
Definitions, the Equity Definitions will govern. In the event of any
inconsistency between either set of Definitions and this Confirmation, this
Confirmation will govern.

References in the Swap Definitions to the term "Swap Transaction" shall be
deemed to be references to the term "Transaction" for the purposes of this
Confirmation..

This Confirmation evidences a complete and binding agreement between you and us
as to the terms of the Transaction to which this Confirmation relates. In
addition, you and we agree to use all reasonable efforts promptly to negotiate,
execute and deliver an agreement in the form of an ISDA Master Agreement, with
such modifications as you and we will in good faith agree. Upon the execution by
you and us of such an agreement, this Confirmation will supplement, form part
of, and be subject to that agreement. All provisions contained in, or
incorporated by reference in, that agreement upon its execution will govern this
Confirmation except as expressly modified below. Until we execute and deliver
that agreement, this Confirmation, together with all other documents referring
to an ISDA Master Agreement (each a 'Confirmation') confirming transactions
(each a 'Transaction') entered into between us (notwithstanding anything to the
contrary in a Confirmation), shall supplement, form a part of, and be subject
to, a single agreement (the 'Agreement') in the pre-printed form of the 1992
ISDA Master Agreement (Multicurrency - Cross Border) (the 'ISDA Form') as if, on
the Trade Date of the first such Transaction between us, we had executed a
single agreement in such form (but without any Schedule except for the election
of English Law as the governing law, USD as the Termination Currency, Credit
Event Upon Merger, Second Method and Market Quotation as applying and basic
Set-

                        Citigroup Global Markets Limited
       Registered Office: Citigroup Centre, Canada Square, Canary Wharf,
                                 London E14 5LB
                Registered in England Registered Number: 1763297
          Authorised and regulated by the Financial Services Authority

<PAGE>

Off provision contained in Section V A. of the User's Guide to the 1992 ISDA
Master Agreements - 1993 Edition published by ISDA being incorporated by
reference). The Agreement shall contain such other modifications (including
additional elections) to the ISDA Form (each, an 'Agreement Modification') as
may be agreed by the parties from time to time. Any Agreement Modification may
be set forth in any Confirmation (whether or not it would form part of the
Schedule to the ISDA Master Agreement and notwithstanding the termination or
expiry of the Transaction(s) detailed in any such Confirmation). To the extent
of any inconsistency between the provisions of the ISDA Form and this
Confirmation, this Confirmation will prevail for the purposes of this
Transaction. To the extent of any inconsistency between any Agreement
Modification and a prior Agreement Modification, the terms of the Agreement
Modification set forth in the most recent Confirmation shall govern.

Unless specified herein, information about the time of dealing and the amount or
basis of any charges shared with any third party in connection with this
Transaction will be made available on request.

2. The terms of the particular Transaction to which this Confirmation relates
are as follows:

GENERAL TERMS:

     Trade Date:              10 November 2006

     Effective Date:          15 November 2006

     Termination Date:        The Settlement Date

     Shares:                  The ordinary shares of REPSOL YPF S.A (RIC:
                              REP.MC)

     Exchange:                Madrid Stock Exchange

     Related Exchange:        MEFF

EQUITY AMOUNT(S):

     Equity Amount Payer:     Citigroup

     Equity Amount Receiver:  Counterparty

     Number of Shares:        5,215,000

     Initial Price            27.8212

     Equity Notional Amount:  EUR 145,087,523.58(being on the Trade Date the
                              Number of Shares multiplied by Initial Price.)

     Valuation Date:          January 9, 2007

FLOATING AMOUNT(S):

     Floating Amount Payer:   Counterparty

     Notional Amount:         The Equity Notional Amount

     Payment Date:            The Settlement Date

     Floating Rate Option:    EUR-EURIBOR-Telerate

     Designated Maturity:     Three months

                                                                           -2/6-
<PAGE>

     Spread:                  Plus 0.25 per cent

     Day Count Fraction:      Actual/360

     Reset Dates:             The first day of each Calculation Period

     Business Days:           TARGET Settlement Days

     Business Day Convention  Modified Following

SETTLEMENT TERMS:

     Physical Settlement:     Applicable

     Settlement Currency:     EUR

     Settlement Date:         Three Currency Business Days after the Valuation
                              Date

     Settlement Method
     Election:                Not Applicable

DIVIDENDS:

     Dividend Period:         Second Period

     Dividend Amount:         The Country Percentage of the gross cash dividend
                              per Share paid by the Issuer during the relevant
                              Dividend Period to holders of record of a Share
                              multiplied by the Number of Shares

     Country Percentage:      85%

     Dividend Payment Date:   The Settlement Date

     Extraordinary Dividend:  The characterization of a dividend or portion
                              thereof as an Extraordinary Dividend shall be
                              determined by the Calculation Agent

     Re-investment of
     Dividends:               Not Applicable

ADJUSTMENTS:

     Method of Adjustment:    Calculation Agent Adjustment

EXTRAORDINARY EVENTS:

     Consequences of Merger
     Events:

       a) Share for Share:    Modified Calculation Agent Adjustment

       b) Share for Other:    Modified Calculation Agent Adjustment

       c) Share for Combined: Modified Calculation Agent Adjustment

       Determining Party:     Citigroup

                                                                           -3/6-
<PAGE>

     Tender Offer:            Applicable including, for the avoidance of doubt,
                              the Tender Offers already launched over the
                              Shares or any modifications thereof.

     Consequences of Tender Offer:

       a) Share for Share:    Modified Calculation Agent Adjustment

       b) Share for Other:    Modified Calculation Agent Adjustment

       c) Share for Combined: Modified Calculation Agent Adjustment

       Determining Party:     Citigroup

     Composition of Combined
     Consideration:           Not Applicable

     Nationalization,
     Insolvency
     or Delisting:            Cancellation and Payment

       Determining Party:     Citigroup

     ADDITIONAL DISRUPTION EVENTS:

     Change in Law:           Applicable.
                              Section 12.9(a)(ii) of the Equity Definitions is
                              replaced in its entirety by the words:

                              'Change in Law' means that, on or after the Trade
                              Date (A) due to the adoption of or any change in
                              any applicable law or regulation (including,
                              without limitation, any tax law), or (B) due to
                              the promulgation of or any change in the
                              interpretation by any court, tribunal or
                              regulatory authority with competent jurisdiction
                              of any applicable law or regulation (including any
                              action taken by a taxing authority), the
                              Calculation Agent determines (following
                              receipt of a request from either party for such a
                              determination) in good faith (X) that it has
                              become illegal for a party to this Transaction to
                              hold, acquire or dispose of Hedge Positions
                              relating to this Transaction, or (Y) a party will
                              incur a materially increased cost in performing
                              its obligations under such Transaction (including,
                              without limitation, due to any increase in tax
                              liability, decrease in tax benefit or other
                              adverse effect on its tax position), provided
                              that this Section 12.9(a)(ii) shall not apply if
                              the Calculation Agent determines that such party
                              could have taken reasonable steps to avoid such
                              illegality.

    Insolvency Filing:        Applicable

    Failure to Deliver:       Applicable

Determining Party:           Citigroup with respect to all Additional Disruption
                              Events

OPTIONAL TERMIANTION:

(a) Counterparty may elect to terminate this Transaction (an "Optional
Termination") (provided that no Event of Default with respect to Counterparty,
or event which, with the giving of notice or the lapse of time, or both, would
constitute such an Event of Default, shall have occurred and be continuing, and
provided that no Early Termination Date has been designated), by giving
telephonic notice (the "Termination Notice") to Citigroup of such election not
less than two Scheduled Trading Days prior to

                                                                           -4/6-
<PAGE>

the early Valuation Date (the "Early Valuation Date") designated in the
Termination Notice and such Termination Notice shall be irrevocable. The Early
Valuation Date may be any Scheduled Trading Day prior to 9 January 2007. The
Termination Notice will be confirmed in writing by the terminating party
promptly after making such election, provided that failure to do so shall not in
any way affect or suspend the effectiveness of the Termination Notice.

(b) In the event that a Termination Notice is given pursuant to the immediately
preceding paragraph, (i) the Early Valuation Date shall be the Valuation Date
and the day which is three Currency Business Days following the Early Valuation
Date (the "New Termination Date") shall be both the Settlement Date and the
Termination Date; and (ii) the Calculation Period that commenced on the Floating
Amount Payer Period End Date immediately preceding the New Termination Date (or
that commenced on the Effective Date if the New Termination Date is a day on or
prior to the first Reset Date) shall be the final Calculation Period, the New
Termination Date shall be the Floating Amount Payer Period End Date for such
Calculation Period and the Floating Amount in respect of such Calculation Period
shall be payable on the New Termination Date.

(c) The operation of the paragraphs contained within this section shall not
affect or suspend any obligation of the parties hereto arising under this
Transaction on or prior to the New Termination Date. Upon the payment of all
amounts that are due and unpaid as of the New Termination Date (including
amounts required to be paid pursuant to the paragraphs within this section), the
obligation of each party to make any further payments with respect to this
Transaction will terminate.

OTHER TERMS:

Non-Reliance:                           Applicable

Agreements and Acknowledgments
Regarding Hedging Activities:           Applicable

Additional Acknowledgments:             Applicable

Calculation Agent:                      Citigroup

ACCOUNT DETAILS:

      Payments to Citigroup:            To be advised prior to payment

      Payments to Counterparty:         Please advise to expedite payment

     If you have any questions regarding this letter agreement, please contact
the Derivatives Operations Department at the telephone numbers indicated or the
facsimile numbers indicated on this Confirmation.

     Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.

                              Very truly yours,

                              CITIGROUP GLOBAL MARKETS LIMITED

                              By: -----------------------------------
                               Name:
                               Title:

                                                                           -5/6-
<PAGE>

Accepted and confirmed as
of the Trade Date:
SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.

    /s/
By: -----------------------------------
Name:
Title:

                                                                           -6/6-

                                                               [CITIGROUP LOGO]

                                                November 13, 2006

TO:
SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.
Attn:
Tel:
Fax:

FROM:
Documentation Unit
Telephone: 00 44 207 508 7641 / 1598
Facsimile:  00 44 207 508 1673 / 1674

Our Ref:

                                   TRANSACTION

The purpose of this letter agreement (this 'Confirmation') is to confirm the
terms and conditions of the Transaction entered into between SACYR VALLEHERMOSO
PARTICIPACIONES MOBILIARIAS, S.L. ('Counterparty') and Citigroup Global Markets
Limited ('Citigroup') on the Trade Date specified below (the 'Transaction').
This Confirmation constitutes a "Confirmation" as referred to in the ISDA Master
Agreement specified below.

Citigroup Global Markets Limited is authorised and regulated by the Financial
Services Authority. Citigroup Global Markets Limited is entering into this
Transaction as principal and not as an agent for any other party.

1. The definitions and provisions contained in the 2000 ISDA Definitions (the
"Swap Definitions") and in the 2002 ISDA Equity Derivatives Definitions (the
"Equity Definitions", and together with the Swap Definitions, the
"Definitions"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Swap Definitions and the Equity
Definitions, the Equity Definitions will govern. In the event of any
inconsistency between either set of Definitions and this Confirmation, this
Confirmation will govern.

References in the Swap Definitions to the term "Swap Transaction" shall be
deemed to be references to the term "Transaction" for the purposes of this
Confirmation..

This Confirmation evidences a complete and binding agreement between you and us
as to the terms of the Transaction to which this Confirmation relates. In
addition, you and we agree to use all reasonable efforts promptly to negotiate,
execute and deliver an agreement in the form of an ISDA Master Agreement, with
such modifications as you and we will in good faith agree. Upon the execution by
you and us of such an agreement, this Confirmation will supplement, form part
of, and be subject to that agreement. All provisions contained in, or
incorporated by reference in, that agreement upon its execution will govern this
Confirmation except as expressly modified below. Until we execute and deliver
that agreement, this Confirmation, together with all other documents referring
to an ISDA Master Agreement (each a 'Confirmation') confirming transactions
(each a 'Transaction') entered into between us (notwithstanding anything to the
contrary in a Confirmation), shall supplement, form a part of, and be subject
to, a single agreement (the 'Agreement') in the pre-printed form of the 1992
ISDA Master Agreement (Multicurrency - Cross Border) (the 'ISDA Form') as if, on
the Trade Date of the first such Transaction between us, we had executed a
single agreement in such form (but without any Schedule except for the election
of English Law as the governing law, USD as the Termination Currency, Credit
Event Upon Merger, Second Method and Market Quotation as applying and basic
Set-

                        Citigroup Global Markets Limited
       Registered Office: Citigroup Centre, Canada Square, Canary Wharf,
                                 London E14 5LB
                Registered in England Registered Number: 1763297
          Authorised and regulated by the Financial Services Authority

<PAGE>

Off provision contained in Section V A. of the User's Guide to the 1992 ISDA
Master Agreements - 1993 Edition published by ISDA being incorporated by
reference). The Agreement shall contain such other modifications (including
additional elections) to the ISDA Form (each, an 'Agreement Modification') as
may be agreed by the parties from time to time. Any Agreement Modification may
be set forth in any Confirmation (whether or not it would form part of the
Schedule to the ISDA Master Agreement and notwithstanding the termination or
expiry of the Transaction(s) detailed in any such Confirmation). To the extent
of any inconsistency between the provisions of the ISDA Form and this
Confirmation, this Confirmation will prevail for the purposes of this
Transaction. To the extent of any inconsistency between any Agreement
Modification and a prior Agreement Modification, the terms of the Agreement
Modification set forth in the most recent Confirmation shall govern.

Unless specified herein, information about the time of dealing and the amount or
basis of any charges shared with any third party in connection with this
Transaction will be made available on request.

2. The terms of the particular Transaction to which this Confirmation relates
are as follows:

GENERAL TERMS:

     Trade Date:              13 November 2006

     Effective Date:          16 November 2006

     Termination Date:        The Settlement Date

     Shares:                  The ordinary shares of REPSOL YPF S.A (RIC:
                              REP.MC)

     Exchange:                Madrid Stock Exchange

     Related Exchange:        MEFF

EQUITY AMOUNT(S):

     Equity Amount Payer:     Citigroup

     Equity Amount Receiver:  Counterparty

     Number of Shares:        5,590,000

     Initial Price            27.7841

     Equity Notional Amount:  EUR 155,312,874.72(being on the Trade Date the
                              Number of Shares multiplied by Initial Price.)

     Valuation Date:          January 9, 2007

FLOATING AMOUNT(S):

     Floating Amount Payer:   Counterparty

     Notional Amount:         The Equity Notional Amount

     Payment Date:            The Settlement Date

     Floating Rate Option:    EUR-EURIBOR-Telerate

     Designated Maturity:     Three months

                                                                           -2/6-
<PAGE>

     Spread:                  Plus 0.25 per cent

     Day Count Fraction:      Actual/360

     Reset Dates:             The first day of each Calculation Period

     Business Days:           TARGET Settlement Days

     Business Day Convention  Modified Following

SETTLEMENT TERMS:

     Physical Settlement:     Applicable

     Settlement Currency:     EUR

     Settlement Date:         Three Currency Business Days after the Valuation
                              Date

     Settlement Method
     Election:                Not Applicable

DIVIDENDS:

     Dividend Period:         Second Period

     Dividend Amount:         The Country Percentage of the gross cash dividend
                              per Share paid by the Issuer during the relevant
                              Dividend Period to holders of record of a Share
                              multiplied by the Number of Shares

     Country Percentage:      85%

     Dividend Payment Date:   The Settlement Date

     Extraordinary Dividend:  The characterization of a dividend or portion
                              thereof as an Extraordinary Dividend shall be
                              determined by the Calculation Agent

     Re-investment of
     Dividends:               Not Applicable

ADJUSTMENTS:

     Method of Adjustment:    Calculation Agent Adjustment

EXTRAORDINARY EVENTS:

     Consequences of Merger
     Events:

       a) Share for Share:    Modified Calculation Agent Adjustment

       b) Share for Other:    Modified Calculation Agent Adjustment

       c) Share for Combined: Modified Calculation Agent Adjustment

       Determining Party:     Citigroup

                                                                           -3/6-
<PAGE>

     Tender Offer:            Applicable including, for the avoidance of doubt,
                              the Tender Offers already launched over the
                              Shares or any modifications thereof.

     Consequences of Tender Offer:

       a) Share for Share:    Modified Calculation Agent Adjustment

       b) Share for Other:    Modified Calculation Agent Adjustment

       c) Share for Combined: Modified Calculation Agent Adjustment

       Determining Party:     Citigroup

     Composition of Combined
     Consideration:           Not Applicable

     Nationalization,
     Insolvency
     or Delisting:            Cancellation and Payment

       Determining Party:     Citigroup

     ADDITIONAL DISRUPTION EVENTS:

     Change in Law:           Applicable.
                              Section 12.9(a)(ii) of the Equity Definitions is
                              replaced in its entirety by the words:

                              'Change in Law' means that, on or after the Trade
                              Date (A) due to the adoption of or any change in
                              any applicable law or regulation (including,
                              without limitation, any tax law), or (B) due to
                              the promulgation of or any change in the
                              interpretation by any court, tribunal or
                              regulatory authority with competent jurisdiction
                              of any applicable law or regulation (including any
                              action taken by a taxing authority), the
                              Calculation Agent determines (following
                              receipt of a request from either party for such a
                              determination) in good faith (X) that it has
                              become illegal for a party to this Transaction to
                              hold, acquire or dispose of Hedge Positions
                              relating to this Transaction, or (Y) a party will
                              incur a materially increased cost in performing
                              its obligations under such Transaction (including,
                              without limitation, due to any increase in tax
                              liability, decrease in tax benefit or other
                              adverse effect on its tax position), provided
                              that this Section 12.9(a)(ii) shall not apply if
                              the Calculation Agent determines that such party
                              could have taken reasonable steps to avoid such
                              illegality.

    Insolvency Filing:        Applicable

    Failure to Deliver:       Applicable

Determining Party:           Citigroup with respect to all Additional Disruption
                              Events

OPTIONAL TERMIANTION:

(a) Counterparty may elect to terminate this Transaction (an "Optional
Termination") (provided that no Event of Default with respect to Counterparty,
or event which, with the giving of notice or the lapse of time, or both, would
constitute such an Event of Default, shall have occurred and be continuing, and
provided that no Early Termination Date has been designated), by giving
telephonic notice (the "Termination Notice") to Citigroup of such election not
less than two Scheduled Trading Days prior to

                                                                           -4/6-
<PAGE>

the early Valuation Date (the "Early Valuation Date") designated in the
Termination Notice and such Termination Notice shall be irrevocable. The Early
Valuation Date may be any Scheduled Trading Day prior to 9 January 2007. The
Termination Notice will be confirmed in writing by the terminating party
promptly after making such election, provided that failure to do so shall not in
any way affect or suspend the effectiveness of the Termination Notice.

(b) In the event that a Termination Notice is given pursuant to the immediately
preceding paragraph, (i) the Early Valuation Date shall be the Valuation Date
and the day which is three Currency Business Days following the Early Valuation
Date (the "New Termination Date") shall be both the Settlement Date and the
Termination Date; and (ii) the Calculation Period that commenced on the Floating
Amount Payer Period End Date immediately preceding the New Termination Date (or
that commenced on the Effective Date if the New Termination Date is a day on or
prior to the first Reset Date) shall be the final Calculation Period, the New
Termination Date shall be the Floating Amount Payer Period End Date for such
Calculation Period and the Floating Amount in respect of such Calculation Period
shall be payable on the New Termination Date.

(c) The operation of the paragraphs contained within this section shall not
affect or suspend any obligation of the parties hereto arising under this
Transaction on or prior to the New Termination Date. Upon the payment of all
amounts that are due and unpaid as of the New Termination Date (including
amounts required to be paid pursuant to the paragraphs within this section), the
obligation of each party to make any further payments with respect to this
Transaction will terminate.

OTHER TERMS:

Non-Reliance:                           Applicable

Agreements and Acknowledgments
Regarding Hedging Activities:           Applicable

Additional Acknowledgments:             Applicable

Calculation Agent:                      Citigroup

ACCOUNT DETAILS:

      Payments to Citigroup:            To be advised prior to payment

      Payments to Counterparty:         Please advise to expedite payment

     If you have any questions regarding this letter agreement, please contact
the Derivatives Operations Department at the telephone numbers indicated or the
facsimile numbers indicated on this Confirmation.

     Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.

                              Very truly yours,

                              CITIGROUP GLOBAL MARKETS LIMITED

                              By: -----------------------------------
                               Name:
                               Title:

                                                                           -5/6-
<PAGE>

Accepted and confirmed as
of the Trade Date:
SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.

    /s/
By: -----------------------------------
Name:
Title:

                                                                           -6/6-

                                                               [CITIGROUP LOGO]

                                                November 14, 2006

TO:
SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.
Attn:
Tel:
Fax:

FROM:
Documentation Unit
Telephone: 00 44 207 508 7641 / 1598
Facsimile:  00 44 207 508 1673 / 1674

Our Ref:

                                   TRANSACTION

The purpose of this letter agreement (this 'Confirmation') is to confirm the
terms and conditions of the Transaction entered into between SACYR VALLEHERMOSO
PARTICIPACIONES MOBILIARIAS, S.L. ('Counterparty') and Citigroup Global Markets
Limited ('Citigroup') on the Trade Date specified below (the 'Transaction').
This Confirmation constitutes a "Confirmation" as referred to in the ISDA Master
Agreement specified below.

Citigroup Global Markets Limited is authorised and regulated by the Financial
Services Authority. Citigroup Global Markets Limited is entering into this
Transaction as principal and not as an agent for any other party.

1. The definitions and provisions contained in the 2000 ISDA Definitions (the
"Swap Definitions") and in the 2002 ISDA Equity Derivatives Definitions (the
"Equity Definitions", and together with the Swap Definitions, the
"Definitions"), in each case as published by the International Swaps and
Derivatives Association, Inc., are incorporated into this Confirmation. In the
event of any inconsistency between the Swap Definitions and the Equity
Definitions, the Equity Definitions will govern. In the event of any
inconsistency between either set of Definitions and this Confirmation, this
Confirmation will govern.

References in the Swap Definitions to the term "Swap Transaction" shall be
deemed to be references to the term "Transaction" for the purposes of this
Confirmation..

This Confirmation evidences a complete and binding agreement between you and us
as to the terms of the Transaction to which this Confirmation relates. In
addition, you and we agree to use all reasonable efforts promptly to negotiate,
execute and deliver an agreement in the form of an ISDA Master Agreement, with
such modifications as you and we will in good faith agree. Upon the execution by
you and us of such an agreement, this Confirmation will supplement, form part
of, and be subject to that agreement. All provisions contained in, or
incorporated by reference in, that agreement upon its execution will govern this
Confirmation except as expressly modified below. Until we execute and deliver
that agreement, this Confirmation, together with all other documents referring
to an ISDA Master Agreement (each a 'Confirmation') confirming transactions
(each a 'Transaction') entered into between us (notwithstanding anything to the
contrary in a Confirmation), shall supplement, form a part of, and be subject
to, a single agreement (the 'Agreement') in the pre-printed form of the 1992
ISDA Master Agreement (Multicurrency - Cross Border) (the 'ISDA Form') as if, on
the Trade Date of the first such Transaction between us, we had executed a
single agreement in such form (but without any Schedule except for the election
of English Law as the governing law, USD as the Termination Currency, Credit
Event Upon Merger, Second Method and Market Quotation as applying and basic
Set-

                        Citigroup Global Markets Limited
       Registered Office: Citigroup Centre, Canada Square, Canary Wharf,
                                 London E14 5LB
                Registered in England Registered Number: 1763297
          Authorised and regulated by the Financial Services Authority

<PAGE>

Off provision contained in Section V A. of the User's Guide to the 1992 ISDA
Master Agreements - 1993 Edition published by ISDA being incorporated by
reference). The Agreement shall contain such other modifications (including
additional elections) to the ISDA Form (each, an 'Agreement Modification') as
may be agreed by the parties from time to time. Any Agreement Modification may
be set forth in any Confirmation (whether or not it would form part of the
Schedule to the ISDA Master Agreement and notwithstanding the termination or
expiry of the Transaction(s) detailed in any such Confirmation). To the extent
of any inconsistency between the provisions of the ISDA Form and this
Confirmation, this Confirmation will prevail for the purposes of this
Transaction. To the extent of any inconsistency between any Agreement
Modification and a prior Agreement Modification, the terms of the Agreement
Modification set forth in the most recent Confirmation shall govern.

Unless specified herein, information about the time of dealing and the amount or
basis of any charges shared with any third party in connection with this
Transaction will be made available on request.

2. The terms of the particular Transaction to which this Confirmation relates
are as follows:

GENERAL TERMS:

     Trade Date:              14 November 2006

     Effective Date:          17 November 2006

     Termination Date:        The Settlement Date

     Shares:                  The ordinary shares of REPSOL YPF S.A (RIC:
                              REP.MC)

     Exchange:                Madrid Stock Exchange

     Related Exchange:        MEFF

EQUITY AMOUNT(S):

     Equity Amount Payer:     Citigroup

     Equity Amount Receiver:  Counterparty

     Number of Shares:        7,415,000

     Initial Price            28.1264

     Equity Notional Amount:  EUR 208,557,391.84(being on the Trade Date the
                              Number of Shares multiplied by Initial Price.)

     Valuation Date:          January 9, 2007

FLOATING AMOUNT(S):

     Floating Amount Payer:   Counterparty

     Notional Amount:         The Equity Notional Amount

     Payment Date:            The Settlement Date

     Floating Rate Option:    EUR-EURIBOR-Telerate

     Designated Maturity:     Three months

                                                                           -2/6-
<PAGE>

     Spread:                  Plus 0.25 per cent

     Day Count Fraction:      Actual/360

     Reset Dates:             The first day of each Calculation Period

     Business Days:           TARGET Settlement Days

     Business Day Convention  Modified Following

SETTLEMENT TERMS:

     Physical Settlement:     Applicable

     Settlement Currency:     EUR

     Settlement Date:         Three Currency Business Days after the Valuation
                              Date

     Settlement Method
     Election:                Not Applicable

DIVIDENDS:

     Dividend Period:         Second Period

     Dividend Amount:         The Country Percentage of the gross cash dividend
                              per Share paid by the Issuer during the relevant
                              Dividend Period to holders of record of a Share
                              multiplied by the Number of Shares

     Country Percentage:      85%

     Dividend Payment Date:   The Settlement Date

     Extraordinary Dividend:  The characterization of a dividend or portion
                              thereof as an Extraordinary Dividend shall be
                              determined by the Calculation Agent

     Re-investment of
     Dividends:               Not Applicable

ADJUSTMENTS:

     Method of Adjustment:    Calculation Agent Adjustment

EXTRAORDINARY EVENTS:

     Consequences of Merger
     Events:

       a) Share for Share:    Modified Calculation Agent Adjustment

       b) Share for Other:    Modified Calculation Agent Adjustment

       c) Share for Combined: Modified Calculation Agent Adjustment

       Determining Party:     Citigroup

                                                                           -3/6-
<PAGE>

     Tender Offer:            Applicable including, for the avoidance of doubt,
                              the Tender Offers already launched over the
                              Shares or any modifications thereof.

     Consequences of Tender Offer:

       a) Share for Share:    Modified Calculation Agent Adjustment

       b) Share for Other:    Modified Calculation Agent Adjustment

       c) Share for Combined: Modified Calculation Agent Adjustment

       Determining Party:     Citigroup

     Composition of Combined
     Consideration:           Not Applicable

     Nationalization,
     Insolvency
     or Delisting:            Cancellation and Payment

       Determining Party:     Citigroup

     ADDITIONAL DISRUPTION EVENTS:

     Change in Law:           Applicable.
                              Section 12.9(a)(ii) of the Equity Definitions is
                              replaced in its entirety by the words:

                              'Change in Law' means that, on or after the Trade
                              Date (A) due to the adoption of or any change in
                              any applicable law or regulation (including,
                              without limitation, any tax law), or (B) due to
                              the promulgation of or any change in the
                              interpretation by any court, tribunal or
                              regulatory authority with competent jurisdiction
                              of any applicable law or regulation (including any
                              action taken by a taxing authority), the
                              Calculation Agent determines (following
                              receipt of a request from either party for such a
                              determination) in good faith (X) that it has
                              become illegal for a party to this Transaction to
                              hold, acquire or dispose of Hedge Positions
                              relating to this Transaction, or (Y) a party will
                              incur a materially increased cost in performing
                              its obligations under such Transaction (including,
                              without limitation, due to any increase in tax
                              liability, decrease in tax benefit or other
                              adverse effect on its tax position), provided
                              that this Section 12.9(a)(ii) shall not apply if
                              the Calculation Agent determines that such party
                              could have taken reasonable steps to avoid such
                              illegality.

    Insolvency Filing:        Applicable

    Failure to Deliver:       Applicable

Determining Party:           Citigroup with respect to all Additional Disruption
                              Events

OPTIONAL TERMIANTION:

(a) Counterparty may elect to terminate this Transaction (an "Optional
Termination") (provided that no Event of Default with respect to Counterparty,
or event which, with the giving of notice or the lapse of time, or both, would
constitute such an Event of Default, shall have occurred and be continuing, and
provided that no Early Termination Date has been designated), by giving
telephonic notice (the "Termination Notice") to Citigroup of such election not
less than two Scheduled Trading Days prior to

                                                                           -4/6-
<PAGE>

the early Valuation Date (the "Early Valuation Date") designated in the
Termination Notice and such Termination Notice shall be irrevocable. The Early
Valuation Date may be any Scheduled Trading Day prior to 9 January 2007. The
Termination Notice will be confirmed in writing by the terminating party
promptly after making such election, provided that failure to do so shall not in
any way affect or suspend the effectiveness of the Termination Notice.

(b) In the event that a Termination Notice is given pursuant to the immediately
preceding paragraph, (i) the Early Valuation Date shall be the Valuation Date
and the day which is three Currency Business Days following the Early Valuation
Date (the "New Termination Date") shall be both the Settlement Date and the
Termination Date; and (ii) the Calculation Period that commenced on the Floating
Amount Payer Period End Date immediately preceding the New Termination Date (or
that commenced on the Effective Date if the New Termination Date is a day on or
prior to the first Reset Date) shall be the final Calculation Period, the New
Termination Date shall be the Floating Amount Payer Period End Date for such
Calculation Period and the Floating Amount in respect of such Calculation Period
shall be payable on the New Termination Date.

(c) The operation of the paragraphs contained within this section shall not
affect or suspend any obligation of the parties hereto arising under this
Transaction on or prior to the New Termination Date. Upon the payment of all
amounts that are due and unpaid as of the New Termination Date (including
amounts required to be paid pursuant to the paragraphs within this section), the
obligation of each party to make any further payments with respect to this
Transaction will terminate.

OTHER TERMS:

Non-Reliance:                           Applicable

Agreements and Acknowledgments
Regarding Hedging Activities:           Applicable

Additional Acknowledgments:             Applicable

Calculation Agent:                      Citigroup

ACCOUNT DETAILS:

      Payments to Citigroup:            To be advised prior to payment

      Payments to Counterparty:         Please advise to expedite payment

     If you have any questions regarding this letter agreement, please contact
the Derivatives Operations Department at the telephone numbers indicated or the
facsimile numbers indicated on this Confirmation.

     Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.

                              Very truly yours,

                              CITIGROUP GLOBAL MARKETS LIMITED

                              By: -----------------------------------
                               Name:
                               Title:

                                                                           -5/6-
<PAGE>

Accepted and confirmed as
of the Trade Date:
SACYR VALLEHERMOSO PARTICIPACIONES MOBILIARIAS, S.L.

    /s/
By: -----------------------------------
Name:
Title:

                                                                           -6/6-EXHIBIT 4.5.1

                                SERIES SUPPLEMENT

                  CORPORATE BACKED CALLABLE TRUST CERTIFICATES

                J.C. PENNEY DEBENTURE-BACKED SERIES 2006-1 TRUST

                                     between

                               SELECT ASSET INC.,

                                  as Depositor,

                                       and

                         U.S. BANK NATIONAL ASSOCIATION,

                                   as Trustee,

                  CORPORATE BACKED CALLABLE TRUST CERTIFICATES

                          Dated as of November 9, 2006

<PAGE>

                                Table of Contents

                                                                Page

Section 1.  Incorporation of Standard Terms........................1

Section 2.  Definitions............................................1

Section 3.  Designation of Trust and Certificates..................4

Section 4.  Trust Certificates.....................................4

Section 5.  Distributions..........................................5

Section 6.  Miscellaneous..........................................6

Section 7.  Governing Law..........................................7

Section 8.  Counterparts...........................................7

Section 9.  Amendments.............................................7

SCHEDULE I     J.C. PENNEY DEBENTURE-BACKED SERIES 2006-1 UNDERLYING
               SECURITIES SCHEDULE
EXHIBIT A-1    FORM OF TRUST CERTIFICATE CLASS A-1
EXHIBIT A-2    FORM OF TRUST CERTIFICATE CLASS A-2
EXHIBIT B      FORM OF WARRANT AGENT AGREEMENT
EXHIBIT C      FORM OF INVESTMENT LETTER

                                       i
<PAGE>

                                SERIES SUPPLEMENT

                  CORPORATE BACKED CALLABLE TRUST CERTIFICATES

                   J.C. PENNEY DEBENTURE-BACKED SERIES 2006-1

            SERIES SUPPLEMENT, J.C. Penney Debenture-Backed Series 2006-1 Trust,
dated as of November 9, 2006 (the "Series Supplement"), by and between Select
Asset Inc., as Depositor (the "Depositor"), and U.S. Bank National Association,
as Trustee (the "Trustee").

                              W I T N E S S E T H:

            WHEREAS, the Depositor desires to create the Trust designated herein
(the "Trust") by executing and delivering this Series Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
the date hereof (the "Standard Terms" and, together with this Series Supplement,
the "Trust Agreement" in respect of the Trust), by and between the Depositor and
the Trustee, as modified by this Series Supplement;

            WHEREAS, the Depositor desires to deposit into the Trust the
Underlying Securities described on Schedule I attached hereto, the general terms
of which are described in the Prospectus Supplement under the heading
"Description of the Deposited Assets--Underlying Securities;"

            WHEREAS, in connection with the creation of the Trust and the
deposit therein of the Underlying Securities, it is desired to provide for the
issuance of trust certificates evidencing undivided interests in the Trust; and

            WHEREAS, the Trustee has joined in the execution of the Standard
Terms and this Series Supplement to evidence the acceptance by the Trustee of
the Trust.

            NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:

            Section 1. Incorporation of Standard Terms. Except as otherwise
provided herein, all of the provisions of the Standard Terms are hereby
incorporated herein by reference in their entirety, and this Series Supplement
and the Standard Terms shall form a single agreement between the parties. In the
event of any inconsistency between the provisions of this Series Supplement and
the provisions of the Standard Terms, the provisions of this Series Supplement
will control with respect to the J.C. Penney Debenture-Backed Series 2006-1
Certificates and the transactions described herein.

            Section 2. Definitions.

            (a) Except as otherwise specified herein or as the context may
otherwise require, the following terms shall have the respective meanings set
forth below for all purposes under this Series Supplement. Capitalized terms
used but not defined herein shall have the meanings

                                       1
<PAGE>

assigned to them in the Standard Terms. Terms defined in the Standard Terms but
not used herein shall not, unless otherwise indicated, apply to this Series
Supplement.

            "Allocation Discount Rate" shall mean (x) in the case of the P&I
Class and the calculation of the P&I Class Allocation with respect thereto,
7.00% per annum, and (y) in the case of the IO Strip Class and the calculation
of the IO Strip Class Allocation with respect thereto, 7.00% per annum.

            "Call Date" shall have the meaning set forth in the Warrant Agent
Agreement.

            "Call Price" shall mean the purchase price of an Underlying Security
to be paid by the holder of a Call Warrant to the Trust in connection with its
exercise of a Call Warrant as specified in the Warrant Agent Agreement pursuant
to which the applicable Call Warrant was issued.

            "Certificate Principal Balance" shall have the meaning specified in
Section 3 hereof.

            "Certificates" shall have the meaning specified in Section 3 hereof.

            "Class A-1 Certificates" shall mean the Certificates, in the form
attached hereto as Exhibit A-1, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates. The Class A-1 Certificates shall be a P&I Class for purposes
of the Trust Agreement.

            "Class A-2 Certificates" shall mean the Certificates, in the form
attached hereto as Exhibit A-2, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates. The Class A-2 Certificates shall be an IO Strip Class for
purposes of the Trust Agreement.

            "Class A-2 Rate" shall have the meaning set forth in Section 3
hereof.

            "Closing Date" shall mean November 9, 2006.

            "Collection Period" shall mean, (i) with respect to each March
Distribution Date, the period beginning on the day after the September
Distribution Date of the prior year (or in the case of the first Collection
Period, the Closing Date) and ending on such March Distribution Date, inclusive,
and (ii) with respect to each September Distribution Date, the period beginning
on the day after the March Distribution Date of such year and ending on such
September Distribution Date, inclusive; provided, however, that clauses (i) and
(ii) shall be subject to Section 4.01(j) of the Standard Terms.

            "Depository" shall mean The Depository Trust Company, its nominees
and their respective successors.

                                       2
<PAGE>

            "Distribution Date" shall mean March 1 and September 1 of each year
(or if such date is not a Business Day, the next succeeding Business Day),
commencing on the Initial Distribution Date, and ending on the earlier of the
Final Scheduled Distribution Date and any date on which all Underlying
Securities are redeemed, prepaid or liquidated in whole for any reason other
than at their maturity.

            "Final Scheduled Distribution Date" shall mean the Distribution Date
in March 2097.

            "Initial Distribution Date" shall mean the Distribution Date in
March 2007.

            "Maturity Date" shall have the meaning specified in Schedule I
hereto.

            "Prepaid Ordinary Expenses" shall be zero for this Series.

            "Prospectus Supplement" shall mean the final Prospectus Supplement,
dated October 27, 2006, relating to the offering of the Class A-1 Certificates.

            "Rating Agencies" shall mean Moody's and S&P.

            "Securities Intermediary" shall mean initially, U.S. Bank National
Association.

            "Series" shall mean Corporate Backed Callable Trust Certificates,
J.C. Penney Debenture-Backed Series 2006-1.

            "Trust Property" shall mean the Underlying Securities described on
Schedule I hereto, the Certificate Account and any additional Underlying
Securities sold to the Trust pursuant to Section 2.01(g) of the Standard Terms.

            "Underlying Securities" shall mean $27,500,000 aggregate principal
amount of 7 5/8% Debentures due 2097 issued by the Underlying Securities
Issuer, as set forth in Schedule I attached hereto.

            "Underlying Securities Guarantor" shall mean J.C. Penney Company,
Inc.

            "Underlying Securities Events of Default" shall mean, any event of
default on the Underlying Securities under the Underlying Securities Issuance
Agreement.

            "Underlying Securities Issuance Agreement" shall mean the Indenture,
dated as of April 1, 1994, between the Underlying Securities Issuer and U. S.
Bank National Association, as successor to First Trust of California, National
Association, successor trustee to Bank of America National Association Trust and
Saving Association and predecessor trustee to U.S. Bank, as supplemented and
pursuant to which the Underlying Securities were issued.

            "Underlying Securities Issuer" shall mean J.C. Penney Corporation,
Inc.

            "Underlying Securities Trustee" shall mean U. S. Bank National
Association, as successor to First Trust of California, National Association.

            "Underwriter" shall mean Lehman Brothers Inc.

                                       3
<PAGE>

            "Warrant Agent Agreement" shall mean that certain Warrant Agent
Agreement, dated as of the date hereof, between the Depositor and U.S. Bank
National Association, as Warrant Agent and as Trustee, as the same may be
amended from time to time.

      Section 3. Designation of Trust and Certificates. The Trust created hereby
shall be known as the "Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2006-1 Trust." The Certificates evidencing certain
undivided ownership interests therein shall be known as "Corporate Backed
Callable Trust Certificates, J.C. Penney Debenture-Backed Series 2006-1." The
Certificates shall consist of the Class A-1 Certificates and the Class A-2
Certificates (together, the "Certificates").

      (a) The Class A-1 Certificates shall be held through the Depository in
book-entry form and shall be substantially in the form attached hereto as
Exhibit A-1. The Class A-2 Certificates shall initially be held through the
Depository in book-entry form and, as set forth in Section 5.04(l) of the
Standard Terms, shall be held subsequent to the Closing Date in physical form or
through the Depository in book-entry form and shall be substantially in the form
attached hereto as Exhibit A-2. The Class A-1 Certificates shall be issued in
denominations of $25. The Class A-2 Certificates shall be issued in minimum
notional denominations of $100,000 and in integral multiples of $1 in excess
thereof; provided, however, that on any Call Date on which a Warrant Holder
shall purchase Underlying Securities in connection with the exercise of a Call
Warrant in accordance with the provisions of Section 4.08 of the Standard Terms,
Certificates may be issued in other denominations. Except as provided in the
Standard Terms, the Trust shall not issue additional Certificates or incur any
indebtedness.

      (b) The Class A-1 Certificates shall consist initially of 1,100,000
Certificates having an initial aggregate certificate principal balance (the
"Certificate Principal Balance") of $27,500,000. The Class A-2 Certificates,
which are an IO Strip Class of Certificates, shall have an initial aggregate
Notional Amount of $27,500,000.

      (c) The holders of the Class A-1 Certificates will be entitled to receive
on each Distribution Date the interest, if any, received on the Underlying
Securities, to the extent necessary to pay interest at a rate of 7.00% per annum
(the "Class A-1 Rate") on the outstanding Certificate Principal Balance of the
Class A-1 Certificates. The holders of the Class A-2 Certificates will be
entitled to receive on each Distribution Date the interest, if any, received on
the Underlying Securities, to the extent necessary to pay interest at a rate of
0.625% per annum (the "Class A-2 Rate") on the outstanding Notional Amount
thereof.

      Section 4. Trust Certificates. The Trustee hereby acknowledges receipt, on
or prior to the Closing Date, of:

      (a) the Underlying Securities set forth on Schedule I hereto and the
related Warrant Agent Agreement; and

      (b) all documents required to be delivered to the Trustee pursuant to
Section 2.01 of the Standard Terms.

                                       4
<PAGE>

      Section 5. Distributions.

      (a) Except as otherwise provided in Section 5(b) hereof, and in Sections
4.01(c), 4.01(d), 4.01(g), 4.01(h) and 4.01(i) of the Standard Terms, on each
applicable Distribution Date, on each Distribution Date, the Trustee shall apply
Available Funds in the Certificate Account as follows:

            (i) The Trustee will pay the interest portion of Available Funds:

                  (1) first, to the Trustee, as reimbursement for any
            Extraordinary Trust Expenses incurred by the Trustee in accordance
            with Section 7.06(b) of the Standard Terms and approved by 100% of
            the Certificateholders; and

                  (2) second, to the holders of the Class A-1 Certificates and
            the Class A-2 Certificates, accrued and unpaid interest on each such
            Class (as determined in accordance with Section 3(c)) pro rata in
            proportion to their entitlements thereto.

            (ii) the Trustee will pay the principal portion of Available Funds:

                  (1) first, to the Trustee, as reimbursement for any remaining
            Extraordinary Trust Expenses incurred by the Trustee in accordance
            with Section 7.06(b) of the Standard Terms and approved by 100% of
            the Certificateholders; and

                  (2) second, to the holders of the Class A-1 Certificates, an
            amount equal to the Certificate Principal Balance of the Class A-1
            Certificates (the Class A-2 Certificates are not entitled to
            distributions of principal).

            (iii) any Available Funds remaining in the Certificate Account after
      the payments set forth in clauses 5(a)(i) and 5(a)(ii) above shall be paid
      to the Trustee as reasonable compensation for services rendered to the
      Depositor, up to $1,000.

            (iv) the Trustee will pay any Available Funds remaining in the
      Certificate Account after the distributions in clauses 5(a)(i) through
      5(a)(iii) above to the holders of the Class A-1 Certificates and Class A-2
      Certificates pro rata in accordance with the ratio of the P&I Class
      Allocation to the IO Strip Class Allocation.

Any funds received in respect of the Underlying Securities from the Underlying
Securities Guarantor shall be included in Available Funds on the related
Distribution Date or Special Distribution Date. Any portion of the Available
Funds (i) that does not constitute principal of, or interest on, the Underlying
Securities, (ii) that is not received in connection with (A) an exercise of a
Call Warrant related to the Underlying Securities or (B) a tender offer,
redemption, prepayment or liquidation of the Underlying Securities and (iii) for
which allocation by the Trustee is not otherwise contemplated by this Series
Supplement, shall be remitted by the Trustee to the holders of the Class A-1
Certificates and the holders of the Class A-2 Certificates in accordance with
the ratio of the P&I Class Allocation to the IO Strip Class Allocation.

      (b)   Notwithstanding the foregoing, if the Underlying Securities:

                                       5
<PAGE>

            (i) are purchased from the Trust in connection with an exercise of a
      Call Warrant relating to the Underlying Securities, the Trustee shall
      apply the Call Price to the payment of the redemption price of the Class
      A-1 and/or Class A-2 Certificates in accordance with the provisions of
      Section 6 hereof;

            (ii) are redeemed, prepaid or liquidated, in whole or in part, due
      to the occurrence of an Underlying Securities Event of Default or an SEC
      Reporting Failure, Available Funds will be allocated to the holders of the
      Class A-1 Certificates and the holders of the Class A-2 Certificates in
      accordance with the ratio of the P&I Class Allocation to the IO Strip
      Class Allocation; and

            (iii) are redeemed, prepaid or liquidated in whole or in part for
      any reason other than due to (A) an exercise of a Call Warrant related to
      the Underlying Securities or (B) the occurrence of an Event of Default, an
      SEC Reporting Failure, or the Final Scheduled Distribution Date, the
      Trustee shall apply Available Funds in the manner described in Section
      4.01(g) of the Standard Terms in the following order of priority:

            (1)   first, to the Trustee, as reimbursement for any Extraordinary
                  Trust Expenses incurred by the Trustee in accordance with
                  Section 7.06(b) of the Standard Terms and approved by 100% of
                  the Certificateholders;

            (2)   second, to the holders of the Class A-1 Certificates and the
                  holders of the Class A-2 Certificates, an amount equal to any
                  accrued and unpaid interest thereon pro rata in proportion to
                  their entitlements thereto;

            (3)   third, to the holders of the Class A-1 Certificates, pro rata
                  in proportion to their outstanding Certificate Principal
                  Balances;

            (4)   fourth, to the Trustee, as reasonable compensation for
                  services rendered to the Depositor, any remainder up to
                  $1,000; and

            (5)   fifth, to the holders of the Class A-1 Certificates and the
                  Class A-2 Certificates pro rata in proportion to the ratio of
                  the P&I Class Allocation to the IO Strip Class Allocation.

      Section 6. Mandatory Redemption Upon Exercise of Call Warrants. On any
Call Date on which a Call Warrant Holder purchases Underlying Securities from
the Trust in connection with an exercise of a Call Warrant, a principal amount
of Class A-1 Certificates and a Notional Amount of Class A-2 Certificates equal,
in each case, to the principal amount of the Underlying Securities so purchased
shall be redeemed at a redemption price equal to (i) with respect to each Class
A-1 Certificate being redeemed, its par value (i.e., an amount equal to $25 per
Class A-1 Certificate) plus any accrued and unpaid interest to the Call Date,
and (ii) with respect to each Class A-2 Certificate being redeemed, the present
value of all amounts payable on such Notional Amount of Class A-2 Certificates
for the period from the related Call Date to the Final Scheduled Distribution
Date using a discount rate of 8.25% per annum (assuming no delinquencies,
deferrals, redemptions or prepayments on such called Underlying Securities) plus
accrued and unpaid interest to the date of redemption on the Notional Amount of
such Class A-2 Certificates; provided that the exercising Call Warrant holder
pays the Call Price to the Trustee

                                       6
<PAGE>

on or prior to such Call Date. In the event that less than all of the Underlying
Securities are purchased at any time, the Trustee or DTC will select the Class
A-1 Certificates and Class A-2 Certificates to be redeemed by lot from first,
the Class A-1 Certificates to be redeemed by lot from among all of the Class A-1
Certificates then outstanding and, second, if the aggregate principal amount of
Underlying Securities purchased exceeds the aggregate principal balance of the
Class A-1 Certificates outstanding as of the Call Date, the Class A-2
Certificates to be redeemed by lot from among all of the Class A-2 Certificates
then outstanding.

      Section 7. Miscellaneous.

      (a) All directions, demands and notices hereunder shall be in writing and
shall be delivered as set forth in the Standard Terms (unless written notice is
otherwise provided to the Trustee).

      Section 8. Governing Law. THIS SERIES SUPPLEMENT AND THE TRANSACTIONS
DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED WITHIN
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS PROVISIONS
THEREOF.

      Section 9. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
such counterparts shall constitute but one and the same instrument.

      Section 10. Amendments. Notwithstanding anything in the Trust Agreement to
the contrary, in addition to the other restrictions on modification and
amendment contained therein, the Trustee shall not enter into any amendment or
modification of the Trust Agreement which would adversely affect in any material
respect the interests of the holders of any class of Certificates without the
consent of the holders of 100% of such class of Certificates; provided, however,
that no such amendment or modification will be permitted which would cause the
Trust to be taxed as an association or publicly traded partnership taxable as a
corporation for federal income tax purposes. Unless otherwise agreed, the
Trustee shall provide five Business Days written notice to each Rating Agency
before entering into any amendment or modification of the Trust Agreement
pursuant to this Section 10.

                                       7
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of the
date first written above.

                                SELECT ASSET INC.,
                                     as Depositor

                                By: /s/ Charles Weaver
                                   ----------------------------------
                                   Name:   Charles Weaver
                                   Title:

                                U.S. BANK NATIONAL ASSOCIATION,

                                     not in its individual capacity but solely
                                     as Trustee on behalf of the Corporate
                                     Backed Callable Trust Certificates, J.C.
                                     Penney Debenture-Backed Series 2006-1 Trust

                                By: /s/ Janet P. O'Hara
                                   ----------------------------------
                                   Name:   Janet P. O'Hara
                                   Title:  Assistant Vice President

                                       8
<PAGE>

                                                                      SCHEDULE I

                J.C. PENNEY DEBENTURE-BACKED SERIES 2006-1 TRUST

                         UNDERLYING SECURITIES SCHEDULE

Underlying Securities:               7 5/8% Debentures due March 1, 2097

Issuer:                              J.C. Penney Corporation, Inc.

Underlying Securities Guarantor:     J.C. Penney Company, Inc.

CUSIP Number:                        708160BL9

Principal Amount Deposited:          $27,500,000

Original Issue Date:                 February 20, 1997

Principal Amount of
Underlying Securities
Originally Issued:                   $500,000,000

Maturity Date:                       March 1, 2097

Interest Rate:                       7 5/8%

Interest Payment Dates:              March 1 and September 1

                                      I-1
<PAGE>

                                   EXHIBIT A-1
                       FORM OF TRUST CERTIFICATE CLASS A-1

                              CLASS A-1 CERTIFICATE

NUMBER 1                                          1,100,000 $25 PAR CERTIFICATES
                                                           CUSIP NO. 21988S 20 9

SEE REVERSE FOR CERTAIN DEFINITIONS

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL OWNERSHIP
INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN,
AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE
AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

THE CERTIFICATEHOLDER, BY ITS ACCEPTANCE OF THIS CERTIFICATE, COVENANTS AND
AGREES TO TENDER ANY AND ALL CERTIFICATES SELECTED FOR REDEMPTION TO THE TRUSTEE
UPON THE WARRANT HOLDER'S EXERCISE OF CALL WARRANTS AND PAYMENT OF THE CALL
PRICE FOR THE RELATED UNDERLYING SECURITIES IN ACCORDANCE WITH THE PROVISIONS
HEREOF AND OF THE WARRANT AGENT AGREEMENT.

                                     A-1-1
<PAGE>

                                SELECT ASSET INC.

                                1,100,000 $25 PAR

                  CORPORATE BACKED CALLABLE TRUST CERTIFICATES,

                   J.C. PENNEY DEBENTURE-BACKED SERIES 2006-1

7.00% INTEREST RATE

evidencing a proportionate undivided beneficial ownership interest in the Trust,
as defined below, the property of which consists principally of $27,500,000
aggregate principal amount of 7 5/8% Debentures due 2097, issued by J.C. Penney
Corporation, Inc (the "Underlying Securities Issuer") and all payments received
thereon (the "Trust Property"), deposited in trust by Select Asset Inc. (the
"Depositor").

      THIS CERTIFIES THAT CEDE & CO. is the registered owner of 1,100,000 Class
A-1 Certificates issued by the Corporate Backed Trust Certificates, J.C. Penney
Debenture-Backed Series 2006-1 Trust (the "Trust"), having an aggregate
Certificate Principal Balance of $27,500,000, representing a nonassessable,
fully-paid, proportionate undivided beneficial ownership interest in the J.C.
Penney Debenture-Backed Series 2006-1 Trust, formed by the Depositor.

      The Trust was created pursuant to a Standard Terms for Trust Agreements,
dated as of November 9, 2006 (the "Standard Terms"), between the Depositor and
U.S. Bank National Association, not in its individual capacity but solely as
Trustee (the "Trustee"), as supplemented by the Series Supplement in respect of
the Corporate Backed Callable Trust Certificates, J.C. Penney Debenture-Backed
Series 2006-1 Trust, dated as of November 9, 2006 (the "Series Supplement" and,
together with the Standard Terms, the "Trust Agreement"), between the Depositor
and the Trustee. This Certificate does not purport to summarize the Trust
Agreement and reference is hereby made to the Trust Agreement for information
with respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Trustee
with respect hereto. A copy of the Trust Agreement may be obtained from the
Trustee by written request sent to the Corporate Trust Office. Capitalized terms
used but not defined herein have the meanings assigned to them in the Trust
Agreement.

      This Certificate is one of the duly authorized Certificates designated as
the "Corporate Backed Callable Trust Certificates, J.C. Penney Debenture-Backed
Series 2006-1, Class A-1" (herein called the "Certificates"). This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Trust Agreement, to which Trust Agreement the Holder of this Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound. The
Trust Property consists of: (i) Underlying Securities described in the Trust
Agreement, and (ii) all payments on or collections in respect of the Underlying
Securities accrued on or after November 9, 2006, together with any and all
income, proceeds and payments with respect thereto; provided, however, that any
income from the investment of Trust funds in certain permitted investments
("Eligible Investments") does not constitute Trust Property.

                                     A-1-2
<PAGE>

      Subject to the terms and conditions of the Trust Agreement (including the
availability of funds for distributions) and until the obligation created by the
Trust Agreement shall have terminated in accordance therewith, distributions
will be made on each Distribution Date, to the Person in whose name this
Certificate is registered on the applicable Record Date, in an amount equal to
such Certificateholder's proportionate undivided beneficial ownership interest
in the amount required to be distributed to the Holders of the Certificates on
such Distribution Date. The Record Date applicable to any Distribution Date is
the close of business on the day immediately preceding such Distribution Date
(whether or not a Business Day). If a payment with respect to the Underlying
Securities is made to the Trustee after the date on which such payment was due,
then the Trustee will distribute any such amounts received on the next occurring
Business Day.

      Each Certificateholder, by its acceptance of a Certificate, covenants and
agrees that such Certificateholder will not, until the date which is one year
and one day after the termination of the Trust, institute against the Trust, or
join in any institution against the Trust of, any bankruptcy proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Certificates or the Trust Agreement.

      Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available funds,
or check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon, except that with respect to Certificates registered on the
Record Date in the name of the nominee of the Clearing Agency (initially, such
nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.

      Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

      Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not entitle
the Holder hereof to any benefit under the Trust Agreement or be valid for any
purpose.

      THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

                                     A-1-3
<PAGE>

      IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed as of the date set forth below.

                                      CORPORATE BACKED CALLABLE TRUST
                                      CERTIFICATES, J.C. PENNEY DEBENTURE-BACKED
                                      SERIES 2006-1 TRUST

                                      By: U.S. Bank National Association not in
                                      its individual capacity but solely as
                                      Trustee,

                                      By:
                                         -----------------------------
                                          Authorized Signatory

Dated:  November 9, 2006

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2006-1, described in the Trust Agreement referred to
herein.

U.S. Bank National Association
not in its individual capacity but solely as Trustee,

By:
   ---------------------------
     Authorized Signatory

                                     A-1-4
<PAGE>

                            (REVERSE OF CERTIFICATE)

The Certificates are limited in right of distribution to certain payments and
collections respecting the Underlying Securities, all as more specifically set
forth herein and in the Trust Agreement. The registered Holder hereof, by its
acceptance hereof, agrees that it will look solely to the Trust Property (to the
extent of its rights therein) for distributions hereunder.

The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Trustee with the consent of
the Holders of Class A-1 Certificates in the manner set forth in the Series
Supplement and the Standard Terms. Any such consent by the Holder of this
Certificate (or any predecessor Certificate) shall be conclusive and binding on
such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange hereof or in lieu
hereof whether or not a notation of such consent is made upon this Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

The Certificates are issuable in fully registered form only in denominations of
$100,000.

As provided in the Trust Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies of the Certificate Registrar maintained by the Trustee in
the Borough of Manhattan, the City of New York, duly endorsed by or accompanied
by an assignment in the form below and by such other documents as required by
the Trust Agreement, and thereupon one or more new Certificates of the same
class in authorized denominations evidencing the same principal amount will be
issued to the designated transferee or transferees. The initial Certificate
Registrar appointed under the Trust Agreement is U.S. Bank National Association.

No service charge will be made for any registration of transfer or exchange, but
the Trustee may require exchange of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.

The Depositor and the Trustee and any agent of the Depositor or the Trustee may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Depositor, the Trustee, nor any such
agent shall be affected by any notice to the contrary.

It is the intention of the parties to the Trust Agreement that the Trust created
thereunder shall constitute a fixed investment trust for federal income tax
purposes under Treasury Regulation Section 301.7701-4, and the Certificateholder
agrees to treat the Trust, any distributions therefrom and its beneficial
interest in the Certificates consistently with such characterization.

The Trust and the obligations of the Depositor and the Trustee created by the
Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the payment in full at maturity or sale by the Trust
after a payment default on or an acceleration or other early payment of the
Underlying Securities and the distribution in full of all amounts due to the
Class A-1 Certificateholders and Class A-2 Certificateholders; (ii) the exercise
of all outstanding Call

                                     A-1-5
<PAGE>

Warrants by the Warrant Holders; (iii) the Final Scheduled Distribution Date and
(iv) the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date hereof.

An employee benefit plan subject to the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), a plan described in Section 4975(e) of the Code,
an entity whose underlying assets include plan assets by reason of any such
plan's investment in the entity, including an individual retirement account or
Keogh plan (any such, a "Plan") may purchase and hold Certificates if the Plan
can represent and warrant that its purchase and holding of the Certificates
would not be prohibited under ERISA or the Code.

                                     A-1-6
<PAGE>

                                   ASSIGNMENT

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ______________________ Attorney to transfer said
Certificate on the books of the Certificate Register, with full power of
substitution in the premises.

Dated:

                                                                   *

                                                        Signature Guaranteed:

                                                                   *

*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed by
an "eligible guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Certificate Registrar in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.

                                     A-1-7
<PAGE>

                                   EXHIBIT A-2

                       FORM OF TRUST CERTIFICATE CLASS A-2

                              CLASS A-2 CERTIFICATE

NUMBER 1                                                  CUSIP NO. 21988S AA 8

                       SEE REVERSE FOR CERTAIN DEFINITIONS

            THIS CLASS A-2 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER
SUCH ACT IS IN EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT. THE
CLASS A-2 CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE
WITH THE TERMS OF THE SERIES SUPPLEMENT.

            EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.

            THE NOTIONAL AMOUNT OF THIS CLASS A-2 CERTIFICATE IS AS SET FORTH
HEREIN. ACCORDINGLY, THE NOTIONAL AMOUNT OF THIS CLASS A-2 CERTIFICATE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

            UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

            THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL
OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE OR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

            THE CERTIFICATEHOLDER, BY ITS ACCEPTANCE OF THIS CERTIFICATE,
COVENANTS AND AGREES TO TENDER ANY AND ALL

                                     A-2-1
<PAGE>

CERTIFICATES SELECTED FOR REDEMPTION TO THE TRUSTEE UPON THE WARRANT HOLDER'S
EXERCISE OF CALL WARRANTS AND PAYMENT OF THE CALL PRICE FOR THE RELATED
UNDERLYING SECURITIES IN ACCORDANCE WITH THE PROVISIONS HEREOF AND OF THE
WARRANT AGENT AGREEMENT.

                                     A-2-2
<PAGE>

                                SELECT ASSET INC.

                  CORPORATE BACKED CALLABLE TRUST CERTIFICATES,

                   J.C. PENNEY DEBENTURE-BACKED SERIES 2006-1

                           $27,500,000 NOTIONAL AMOUNT

0.625% INTEREST RATE

evidencing a proportionate undivided beneficial ownership interest in the Trust,
as defined below, the property of which consists principally of $27,500,000
aggregate principal amount of 7 5/8% Debentures due 2097, issued by J.C. Penney
Corporation, Inc. and all payments received thereon (the "Trust Property"),
deposited in trust by Select Asset Inc. (the "Depositor").

            THIS CERTIFIES THAT CEDE & CO. is the registered owner of Class A-2
Certificates issued by the Corporate Backed Callable Trust Certificates, J.C.
Penney Debenture-Backed Series 2006-1 Trust (the "Trust"), having an aggregate
Notional Amount of $27,500,000, representing a nonassessable, fully-paid,
proportionate undivided beneficial ownership interest in the Trust, formed by
the Depositor.

            The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of November 9, 2006 (the "Standard Terms"), between the
Depositor and U.S. Bank National Association, not in its individual capacity but
solely as Trustee (the "Trustee"), as supplemented by the Series Supplement,
Corporate Backed Callable Trust Certificates, J.C. Penney Debenture-Backed
Series 2006-1 Trust, dated as of November 9, 2006 (the "Series Supplement" and,
together with the Standard Terms, the "Trust Agreement"), between the Depositor
and the Trustee. This Certificate does not purport to summarize the Trust
Agreement and reference is hereby made to the Trust Agreement for information
with respect to the interests, rights, benefits, obligations, proceeds and
duties evidenced hereby and the rights, duties and obligations of the Trustee
with respect hereto. A copy of the Trust Agreement may be obtained from the
Trustee by written request sent to the Corporate Trust Office. Capitalized terms
used but not defined herein have the meanings assigned to them in the Trust
Agreement.

            This Certificate is one of the duly authorized Certificates
designated as the "Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2006-1, Class A-2" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The Trust Property consists of: (i) Underlying Securities described in
the Trust Agreement, and (ii) all payments on or collections in respect of the
Underlying Securities accrued on or after November 9, 2006, together with any
and all income, proceeds and payments with respect thereto; provided, however,
that any income from the investment of Trust funds in certain permitted
investments ("Eligible Investments") does not constitute Trust Property.

            Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the obligation
created by the Trust Agreement

                                     A-2-3
<PAGE>

shall have terminated in accordance therewith, distributions of interest will be
made on this Certificate on each Distribution Date.

            Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the obligation
created by the Trust Agreement shall have terminated in accordance therewith,
distributions will be made on each Distribution Date, to the Person in whose
name this Certificate is registered on the applicable Record Date, in an amount
equal to such Certificateholder's proportionate undivided beneficial ownership
interest in the amount required to be distributed to the Holders of the
Certificates on such Distribution Date.

            The Record Date applicable to any Distribution Date is the close of
business on the day immediately preceding such Distribution Date (whether or not
a Business Day). If a payment with respect to the Underlying Securities is made
to the Trustee after the date on which such payment was due, then the Trustee
will distribute any such amounts received on the next occurring Business Day.

            Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not, until the date which
is one year and one day after the termination of the Trust, institute against
the Trust, or join in any institution against the Trust of, any bankruptcy
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates or the Trust
Agreement.

            Distributions made on this Certificate will be made as provided in
the Trust Agreement by the Trustee by wire transfer in immediately available
funds, or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon, except that with respect to Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except as
otherwise provided in the Trust Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.

            Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.

            Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.

            THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

                                     A-2-4
<PAGE>

            IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed as of the date set forth below.

                                           CORPORATE BACKED CALLABLE TRUST
                                           CERTIFICATES, J.C. PENNEY
                                           DEBENTURE-BACKED SERIES 2006-1 TRUST

                                           By: U.S. Bank National Association
                                           not in its individual capacity but
                                           solely as Trustee,

                                           By:
                                              ---------------------------------
                                               Authorized Signatory

Dated:  November 9, 2006

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Corporate Backed Callable Trust Certificates, J.C. Penney
Debenture-Backed Series 2006-1, described in the Trust Agreement referred to
herein.

U.S. Bank National Association
not in its individual capacity but solely as Trustee,

By:
   ---------------------------
     Authorized Signatory

                                     A-2-5
<PAGE>

                            (REVERSE OF CERTIFICATE)

            The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered Holder
hereof, by its acceptance hereof, agrees that it will look solely to the Trust
Property (to the extent of its rights therein) for distributions hereunder.

            The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the holders of Class A-2 Certificates in the
manner set forth in the Series Supplement and the Standard Terms. Any such
consent by the Holder of this Certificate (or any predecessor Certificate) shall
be conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

            The Certificates are issuable in fully registered form only in
denominations of $100,000 and in integral multiples of $1 in excess thereof,
provided, however, that the Certificates will only be transferable in an
aggregate Notional Amount equal to or greater than $100,000.

            As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registerable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Trustee in the Borough of Manhattan, the City of New York, duly endorsed
by or accompanied by an assignment in the form below and by such other documents
as required by the Trust Agreement, and thereupon one or more new Certificates
of the same class in authorized denominations evidencing the same Notional
Amount will be issued to the designated transferee or transferees. The initial
Certificate Registrar appointed under the Trust Agreement is U.S. Bank National
Association.

            No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.

            The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.

            It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and its
beneficial interest in the Certificates consistently with such characterization.

                                     A-2-6
<PAGE>

            The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall terminate
upon the earliest to occur of (i) the payment in full at maturity or sale by the
Trust after a payment default on or an acceleration or other early payment of
the Underlying Securities and the distribution in full of all amounts due to the
Class A-1 Certificateholders and Class A-2 Certificateholders; (ii) the exercise
of all outstanding Call Warrants by the Warrant Holders; (iii) the Final
Scheduled Distribution Date and (iv) the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof.

            An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan described in Section 4975(e)
of the Code, an entity whose underlying assets include plan assets by reason of
any such plan's investment in the entity, including an individual retirement
account or Keogh plan (any such, a "Plan") may purchase and hold Certificates if
the Plan can represent and warrant that its purchase and holding of the
Certificates would not be prohibited under ERISA or the Code.

                                     A-2-7
<PAGE>

                                   ASSIGNMENT

   FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

(Please print or type name and address, including postal zip code, of assignee)
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing ____________________ Attorney to transfer said
Certificate on the books of the Certificate Register, with full power of
substitution in the premises.

Dated:

                                                                    *

                                                         Signature Guaranteed:

                                                                    *

*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed by
an "eligible guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Certificate Registrar in addition
to, or in substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.

                                     A-2-8
<PAGE>

                                    EXHIBIT B
                         FORM OF WARRANT AGENT AGREEMENT

                             WARRANT AGENT AGREEMENT

                           SELECT ASSET INC. WARRANTS

                               Series 2006-1 Trust

                  WARRANT AGENT AGREEMENT, dated as of November 9, 2006 (the
"Warrant Agent Agreement"), by and between SELECT ASSET INC., as Warrant
Originator (the "Warrant Originator"), and U.S. Bank National Association, as
Warrant Agent (the "Warrant Agent").

                              W I T N E S S E T H:

                  In consideration of the mutual covenants expressed herein, the
Warrant Originator and the Warrant Agent have duly authorized the execution and
delivery of this Warrant Agent Agreement to provide for the issuance of Call
Warrants, issuable as provided herein.

                                    ARTICLE I

                                   DEFINITIONS

                  Capitalized terms used herein but not defined herein have the
meanings set forth in the Trust Agreement. As used herein, unless the context
otherwise requires, the following terms have the following respective meanings:

                  "Standard Terms":  As defined in Section 2.1 hereof.

                  "Business Day": As defined in the Trust Agreement.

                  "Call Date": Any Business Day that any Holder of Call Warrants
designates as a Call Date occurring on or after the Scheduled Call Commencement
Date, or prior thereto, on any Business Day (i) following an announcement by the
Underlying Securities Issuer of any redemption, prepayment or unscheduled
payment of principal on the Underlying Securities (but on or before the date any
such redemption, prepayment or unscheduled payment is made), (ii) following
notification from the Trustee to Certificateholders of an Event of Default or an
SEC Reporting Failure (but on or before the date of any proposed sale of the
Underlying Securities pursuant to Section 3.11 or 4.1(i) of the Standard Terms)
or (iii) during the period following an announcement by the Underlying
Securities Issuer or an Affiliate thereof of any proposed tender offer for some
or all of the Underlying Securities (but on or before the date such tender offer
expires or is consummated).

                  "Call Notice":  As defined in Section 3.1(a)(ii) hereof.

                  "Call Price": With respect to each Call Warrant being
exercised, an amount equal to the sum of (i) $1,000 (correlating to the
aggregate principal balance of Class A-1 Certificates that will be redeemed with
the proceeds of the exercise of the Call Warrant); (ii) accrued and unpaid
interest to the date of redemption on the principal balance of such Class A-1
Certificates; (iii) the present value of all amounts payable on $1,000 Notional
Amount of Class A-2 Certificates for the period from the related Call Date to
the Final Scheduled Distribution

<PAGE>

Date using a discount rate of 8.25% per annum, assuming no delinquencies,
deferrals, redemptions or prepayments on the Called Underlying Securities and
(iv) accrued and unpaid interest to the date of redemption on the Notional
Amount of such Class A-2 Certificates.

                  "Call Warrants":  As defined in Section 2.2 hereof.

                  "Called Underlying Securities": As defined in Section 3.1(b)
hereof.

                  "Certificated Call Warrant": A definitive physical Call
Warrant in fully registerable form.

                  "Depositor": As defined in the recitals.

                  "Depositor Order":  As defined in the Trust Agreement.

                  "Depository":  The Depository Trust Company

                  "Global Call Warrant": Means a definitive, fully registered
Call Warrant deposited with the Warrant Agent as custodian for, and registered
in the name of, a nominee of the Depository.

                  "Investor Representation Letter": A letter substantially in
the form of Exhibit A attached hereto, duly completed as appropriate.

                  "Issue Date":  November 9, 2006

                  "Participant": A broker, dealer, bank, other financial
institution or other Person for whom, from time to time, a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.

                  "Person": Any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.

                  "Purchaser": Any Person who acquires a Call Warrant
represented by an interest in a Global Call Warrant or Certificated Call
Warrant.

                  "QIB": As defined in Section 4.1 hereof.

                  "Rating Agencies": Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, Inc. and Moody's Investors Service, Inc.
and any successor thereto.

                  "Registered Warrant Amount": The Warrant Amount represented by
the Global Call Warrants.

                  "Responsible Officer": With respect to the Trustee, any
officer within the Corporate Trust Office of the Trustee with direct
responsibility for administration of this Agreement and the Trust Agreement,
including any Vice President, Assistant Vice President, Assistant Treasurer or
any other officer of the Trustee customarily performing functions similar

                                      B-2
<PAGE>

to those performed by any of the above designated officers and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's actual knowledge of and familiarity with the
particular subject.

                  "Rule 144A": As defined in Section 4.1 hereof.

                  "Securities Act": The United States Securities Act of 1933, as
amended.

                  "Scheduled Call Commencement Date": The fifth anniversary of
the Issue Date.

                  "Trust": As defined in the recitals.

                  "Trust Agreement": As defined in Section 2.1 hereof.

                  "Trustee": As defined in Section 2.1 hereof, or any successor
thereto under the Trust Agreement.

                  "Warrant Agent": As defined in the recitals, or any successor
thereto under this Warrant Agent Agreement.

                  "Warrant Agent Agreement": As defined in the recitals.

                  "Warrant Holder": As defined in Section 3.1(a) hereof.

                  "Warrant Originator": As defined in the recitals.

                                   ARTICLE II

                            CREATION OF CALL WARRANTS

                  SECTION 2.01. The Trust.

                  (a) Select Asset Inc. (the "Depositor") and U.S. Bank National
Association, not in its individual capacity but solely as Trustee (the
"Trustee"), will form the Corporate Backed Callable Trust Certificates, J.C.
Penney Debenture-Backed Series 2006-1 Trust (the "Trust") pursuant to the
Standard Terms for Trust Agreements, dated as of November 9, 2006 (the "Standard
Terms"), as supplemented by the Series Supplement thereto, dated as of the date
hereof (the "Series Supplement" and, together with the Standard Terms, the
"Trust Agreement") in respect of the Corporate Backed Callable Trust
Certificates, J.C. Penney Debenture-Backed Series 2006-1 Certificates.

                  (b) The sole asset of the Trust will be $27,500,000 aggregate
principal amount of 7?% Debentures (the "Underlying Securities") issued by J.C.
Penney Corporation, Inc. (the "Underlying Securities Issuer").

                                      B-3
<PAGE>

                  SECTION 2.02. The Warrants.

                  (a) The Call Warrants shall consist initially of 27,500 call
warrants with respect to the Underlying Securities, each relating to $1,000
principal amount of Underlying Securities (the "Call Warrants").

                  (b) The Call Warrants shall initially be issued as one or more
Global Call Warrants in definitive, fully registered form without coupons, and
DTC shall be the Depository. Upon issuance, the Global Call Warrants shall
initially be deposited with the Trustee in its capacity as custodian on behalf
of DTC. Such Global Call Warrants shall initially be registered in the name of
Cede & Co. or another nominee designated by DTC. Global Call Warrants shall
clear and settle in book-entry only form through the facilities of the
Depository. Unless and until it is exchanged in whole or in part for
Certificated Call Warrants, a Global Call Warrant may not be transferred except
as a whole by the Depository for such Global Call Warrant to a nominee of such
Depository, or by a nominee of such Depository to such Depository or another
nominee of such Depository, or by such Depository or any such nominee to a
successor of such Depository or a nominee of such successor. The Registered
Warrant Amount of Call Warrants may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for DTC for such
Global Call Warrant, as provided in this Section.

                                   ARTICLE III

                            EXERCISE OF CALL WARRANTS

                  SECTION 3.01. Manner of Exercise.

                  (a) Call Warrants may be exercised by any holder thereof
(each, a "Warrant Holder") on any Call Date. The Warrant Holder shall represent
and agree to the following conditions that apply to any exercise of Call
Warrants:

                           (i) Each exercise of Call Warrants shall relate to at
                  least 500 Call Warrants (or $500,000 aggregate principal
                  amount of Underlying Securities).

                           (ii) A written notice (each, a "Call Notice")
                  specifying the number of Call Warrants being exercised and the
                  related Call Date shall be delivered to the Warrant Agent and
                  the Trustee at least five but not more than 30 Business Days
                  before such Call Date.

                           (iii) Except in the case of any exercise of Global
                  Call Warrants, the Warrant Holder shall surrender the Call
                  Warrants with respect to the Called Underlying Securities to
                  the Warrant Agent at its office specified in Section 7.3
                  hereof no later than 10:00 a.m. (New York City time) on such
                  Call Date.

                           (iv) Except as otherwise provided herein, in
                  connection with a Call Notice relating to a tender offer for,
                  or redemption of, Underlying Securities, the Warrant Holder
                  shall have made payment to the Warrant Agent, by wire transfer
                  or other immediately available funds acceptable to the Warrant
                  Agent, in the

                                      B-4
<PAGE>

                  amount of the Call Price, no later than 10:00 a.m. (New York
                  City time) on the Call Date.

                           (v) The Warrant Holder shall be solvent at the time
                  of any exercise of the Call Warrants.

                  (b) Upon exercise of Call Warrants, any Warrant Holder shall
be entitled to delivery of the Called Underlying Securities. The "Called
Underlying Securities" shall be the Underlying Securities with a principal
amount equal to $1,000 per Call Warrant exercised on the related Call Date.

                  (c) The Warrant Agent shall notify the Trustee immediately
upon its receipt of a Call Notice and upon receipt of payment of the Call Price.
The Warrant Agent shall transfer the amount of any paid Call Price to the
Trustee in immediately available funds, for deposit in the Certificate Account
and application pursuant to the Trust Agreement on the applicable Call Date
(and, pending such transfer, shall hold such amount for the benefit of the
Warrant Holder in a segregated trust account).

                  (d) Delivery of a Call Notice does not give rise to an
obligation on the part of the Warrant Holder to pay the Call Price. If, by 10:00
a.m. (New York City time) on the Call Date, the Warrant Holder has not paid the
Call Price, except in connection with a Call Notice relating to a tender offer
for, or redemption of, Underlying Securities, then the Call Notice shall
automatically expire and none of the Warrant Holder, the Warrant Agent or the
Trustee shall have any obligation with respect to the Call Notice. The
expiration of a Call Notice shall in no way affect the Warrant Holder's right to
deliver a Call Notice at a later date. The Call Price for a call in connection
with a tender offer or redemption shall be deducted from the proceeds of a
tender offer or a redemption by the Trust, deposited in Available Funds and
distributed to Certificateholders pursuant to Series Supplement.

                  SECTION 3.02 Transfer of Called Underlying Securities.

                  (a) As soon as practicable after each surrender of the Call
Warrants on the Call Date and upon satisfaction of all other requirements
described in Section 3.1 hereof and upon satisfaction of all other requirements
described in the Call Warrants, the Warrant Agent shall instruct the Trustee to
cause the Called Underlying Securities represented by the number of Call
Warrants being exercised to be registered on the book-entry system of the
related depository in the registered name or names furnished by the Warrant
Holder, or, as applicable, transfer the Called Underlying Securities to the
Warrant Holder.

                  (b) If such exercise is of less than all the outstanding Call
Warrants, (i) with respect to the Certificated Call Warrants, the Warrant Agent
shall authenticate new Call Warrants, of like tenor, representing the
outstanding Certificated Call Warrants and the Warrant Agent shall deliver such
Certificated Call Warrant to the Holders thereof and (ii) with respect to Global
Call Warrants registered with a Depository, the Warrant Agent shall modify the
schedule thereto accordingly to reflect the outstanding Call Warrants
represented by one or more Global Call Warrant for such Holders possessing a
beneficial interest therein.

                                      B-5
<PAGE>

                  (c) If any Call Warrant is exercised in connection with a
partial redemption of the Underlying Securities, the Trustee shall, to the
extent possible, deliver to the exercising Warrant Holder, Underlying Securities
that have been selected for redemption.

                  SECTION 3.03. Cancellation and Destruction of Call Warrants.
All Call Warrants surrendered to the Warrant Agent for the purpose of exercise
pursuant to Section 3.1 hereof and actually exercised, or for the purpose of
transfer or exchange pursuant to Article V, shall be canceled by the Warrant
Agent, and no Call Warrant (other than that reflecting any such transfer or
exchange) shall be issued in lieu thereof. The Warrant Agent shall destroy all
canceled Call Warrants.

                  SECTION 3.04. No Rights as Holder of Trust Securities
Conferred by Call Warrants. The Call Warrants shall not entitle the Warrant
Holder to any of the rights of a holder of any securities which may be issued by
the Trust, including, without limitation, the right to receive the payment of
any amount on or in respect of any such securities or to enforce any of the
covenants of the Trust Agreement applicable to any holders of such securities.

                  SECTION 3.05. No Rights of Trustee in Call Warrants; Delivery
of Underlying Securities. The Trustee, as holder of the Underlying Securities,
(a) shall have no right, title or interest in the Call Warrants created
hereunder and (b) shall hereinafter accept delivery of the Underlying Securities
from the Depositor subject to the terms of this Warrant Agent Agreement, which
restricted acceptance shall be acknowledged in a writing evidencing receipt by
the Trustee as holder of such Underlying Securities.

                  SECTION 3.06. Pro Rata Reduction of Call Warrants if Partial
Redemption of Underlying Securities. If Underlying Securities are redeemed in
part by the Underlying Securities Issuer and the Warrant Holders do not exercise
their Call Warrants in connection with such partial redemption, the number of
Call Warrants held by each Warrant Holder shall be reduced proportionately so
that the aggregate principal amount of Underlying Securities callable by Call
Warrants shall equal the amount of outstanding Underlying Securities held by the
Trustee after giving effect to such partial redemption; provided, that, in no
event shall partial Call Warrants be issued in the event of any such
proportionate reduction. The Warrant Agent shall make such adjustments to its
records as shall be necessary to reflect such reductions, shall round the
adjusted number of Call Warrants downward, as appropriate, to ensure that each
Call Warrant relates to Underlying Securities having a principal amount of
$1,000 and shall notify each Warrant Holder of such adjustments.

                  SECTION 3.07. Selection of Called Underlying Securities in the
event of a Call in Connection with a Partial Redemption. If a Warrant Holder
exercises Call Warrants in connection with a partial redemption of the
Underlying Securities, the Trustee shall, to the extent possible, select Called
Underlying Securities for transfer to the Warrant Holder that have been selected
by the Underlying Securities Issuer for redemption. If more than one Warrant
Holder exercises Call Warrants in such circumstances, such Called Underlying
Securities that have been selected for redemption shall be allocated among such
Warrant Holders in proportion to the number of Call Warrants exercised by each.

                                      B-6
<PAGE>

                                   ARTICLE IV

                            RESTRICTIONS ON TRANSFER

                  SECTION 4.01. Restrictive Legends. No Call Warrant may be
offered, resold, assigned or otherwise transferred (including by pledge or
hypothecation) unless such offer, resale, assignment or transfer is to a
qualified institutional buyer (a "QIB"), as such term is defined in Rule 144A
promulgated under the Securities Act ("Rule 144A"), in accordance with Rule 144A
(or in the case of the initial sale by the Warrant Originator, in reliance on
Section 4(2) under the Securities Act) acquiring the Call Warrants for its own
account or for the account of a QIB. Prior to any offer, resale, assignment or
transfer of any Certificated Call Warrant, the prospective transferee shall be
required to deliver to the Warrant Agent an executed copy of a Investor
Representation Letter with respect to any Call Warrant to be transferred
substantially in the form of Exhibit A attached hereto. Each Call Warrant
(including each Call Warrant issued upon the transfer of any Call Warrant) shall
be issued with a legend in substantially the following form (unless the Warrant
Agent shall have received an opinion of counsel reasonably satisfactory to the
Warrant Originator and the Warrant Agent that such legend is no longer required
to ensure compliance with the Securities Act):

                  "THIS CALL WARRANT (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER
SUCH ACT IS IN EFFECT OR TO A QUALIFIED INSTITUTIONAL BUYER (AS SUCH TERM IS
DEFINED IN RULE 144A PROMULGATED UNDER THE SECURITIES ACT) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT. THE CALL WARRANT REPRESENTED HEREBY
MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THE CALL
WARRANTS.

                  EACH PURCHASER OF THIS CALL WARRANT IS HEREBY NOTIFIED THAT
THE SELLER OF THIS CALL WARRANT MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."

                  SECTION 4.02. Representation of Warrant Holder. Each Purchaser
of a Call Warrant shall represent and agree, or in the case of a Global Call
Warrant be deemed to represent and agree, as follows:

                  (a) In connection with the purchase of the Call Warrants:

                           (i) The Purchaser represents that in making its
                  investment decision to acquire the Call Warrants, the
                  Purchaser has not relied on representations, warranties,
                  opinions, projections, financial or other information or
                  analysis, if any, supplied to it by any person, including the
                  Warrant Originator or Warrant Agent, or any of their
                  respective affiliates, except as expressly contained in
                  written information, if any.

                                      B-7
<PAGE>

                           (ii) The Purchaser has such knowledge and experience
                  in financial and business matters as to be capable of
                  evaluating the merits and risks of an investment in the Call
                  Warrants, and the Purchaser is able to bear the substantial
                  economic risks of such an investment. The Purchaser has relied
                  upon its own tax, legal and financial advisors in connection
                  with its decision to purchase the Call Warrants.

                           (iii) The Purchaser (A) is a QIB and (B) is acquiring
                  the Call Warrants for its own account or for the account of an
                  investor of the type described in clause (A) above as to each
                  of which the Purchaser exercises sole investment discretion.
                  The Purchaser is purchasing the Call Warrants for investment
                  purposes and not with a view to, or for, the offer or sale in
                  connection with, a public distribution or in any other manner
                  that would violate the Securities Act or the securities or
                  blue sky laws of any state.

                           (iv) The Purchaser understands that the Call Warrants
                  have not been and will not be registered under the Securities
                  Act or under the securities or blue sky laws of any state, and
                  that (x) if it decides to resell, pledge or otherwise transfer
                  any Security, such resale, pledge or other transfer must
                  comply with the provisions of the Warrant Agent Agreement
                  relating to the Call Warrants (including, without limitation,
                  the provisions of Section 4.1 of the Warrant Agent Agreement)
                  and (y) it will, and each subsequent holder will be required
                  to, notify any purchaser of any Call Warrant from it of the
                  resale restrictions referred to in clause (x) above.

                           (v) The Purchaser understands that each of the Call
                  Warrants will bear a legend described in Section 4.1 of the
                  Warrant Agent Agreement unless otherwise agreed by the Warrant
                  Originator and the Warrant Agent.

                           (vi) The Purchaser understands that no subsequent
                  transfer of the Call Warrants is permitted unless (A) such
                  transfer is of at least 500 Call Warrants (or Call Warrants
                  relating to $500,000 aggregate principal amount of Underlying
                  Securities) and (B) the Purchaser causes the proposed
                  transferee to provide to the Depositor and the Trustee such
                  documentation as may be required pursuant to Section 4.1 of
                  the Warrant Agent Agreement, or such other written statement
                  as the Warrant Agent shall reasonably prescribe.

                           (vii) The Purchaser is a person or entity (a
                  "Person") who is either:

                           (A)      a citizen or resident of the United States,
                                    (2) a corporation, partnership or other
                                    entity organized in or under the laws of the
                                    United States or any political subdivision
                                    thereof, (3) an estate the income of which
                                    is includible in gross income for federal
                                    income tax purposes regardless of source, or
                                    (4) a trust if a court within the United
                                    States is able to exercise primary
                                    supervision of the administration of the
                                    trust and one or more United States persons
                                    have the authority to control all
                                    substantial decisions of the trust, or

                                      B-8
<PAGE>

                           (B)      a Person not described in (A), whose
                                    ownership of such Call Warrant is
                                    effectively connected with such Person's
                                    conduct of a trade or business within the
                                    United States within the meaning of the
                                    Internal Revenue Code of 1986, as amended
                                    (the "Code"), and its ownership of any
                                    interest in such Call Warrant will not
                                    result in any withholding obligation with
                                    respect to any payments with respect to the
                                    Call Warrants by any Person (other than
                                    withholding, if any, under Section 1446 of
                                    the Code), or

                           (C)      a Person not described in (A) or (B) above,
                                    who is not a Person: (1) that owns, directly
                                    or indirectly, 10% or more of the total
                                    combined voting power of all classes of
                                    stock in the Underlying Securities Issuer
                                    (as defined in the Prospectus Supplement)
                                    entitled to vote, (2) that is a controlled
                                    foreign corporation related to the
                                    Underlying Securities Issuer within the
                                    meaning of Section 864(d)(4) of the Code, or
                                    (3) that is a bank extending credit pursuant
                                    to a loan agreement entered into in the
                                    ordinary course of its trade or business.

                           (viii) The Purchaser agrees that (I) if it is a
                  Person described in clause (A) above, it will furnish to the
                  Depositor and the Trustee a properly executed IRS Form W-9,
                  and (II) if it is a Person described in clause (B) above, it
                  will furnish to the Depositor and the Trustee a properly
                  executed IRS Form W-8ECI, and (III) if it is a Person
                  described in clause (C) above, it will furnish to the
                  Depositor and the Trustee a properly executed IRS Form W-8BEN
                  (or, if the Purchaser is treated as a partnership for federal
                  income tax purposes, a properly executed IRS Form W-8IMY with
                  appropriate certification for all partners or members
                  attached). The Purchaser also agrees that it will provide a
                  new IRS form upon the expiration or obsolescence of any
                  previously delivered form, and that it will provide such other
                  certifications, representations or Opinions of Counsel as may
                  be requested by the Depositor and the Trustee.

                           (ix) The Purchaser agrees that if at some time in the
                  future it wishes to transfer or exchange any of the Call
                  Warrants, it will not transfer or exchange any of the Call
                  Warrants unless such transfer or exchange is in accordance
                  with the terms of this Agreement and other documents
                  applicable to the Call Warrant. The Purchaser understands that
                  any purported transfer of the Call Warrants (or any interest
                  therein) in contravention of any of the restrictions and
                  conditions in the agreements, as applicable, shall be void,
                  and the purported transferee in such transfer shall not be
                  recognized by any Person as a holder of such Call Warrants,
                  for any purpose.

                  SECTION 4.03. Notice of Proposed Transfer. Prior to any
transfer of any Certificated Call Warrant or portion thereof (other than to a
Participant in compliance with Rule 144A), the Warrant Holder will give five (5)
Business Days (or such lesser period acceptable to

                                      B-9
<PAGE>

the Warrant Agent) prior written notice to the Warrant Agent of such Warrant
Holder's intention to effect such transfer. Each transfer must relate to a whole
number of Call Warrants.

                                    ARTICLE V

                REGISTRATION AND TRANSFER OF CALL WARRANTS, ETC.

                  SECTION 5.01. Warrant Register; Ownership of Call Warrants.
The Warrant Agent will keep a register in which the Warrant Agent will provide
for the registration of Call Warrants and the registration of transfers of Call
Warrants representing numbers of Call Warrants. The Warrant Agent may treat the
Person in whose name any Call Warrant is registered on such register as the
owner thereof for all purposes, and the Warrant Agent shall not be affected by
any notice to the contrary.

                  SECTION 5.02.     Transfer and Exchange of Call Warrants.

                  (a) The Warrant Agent shall register the transfer or exchange
of any Global Call Warrant without requiring any additional certification.

                  (b) Beneficial interests in a Global Call Warrant may be
transferred in accordance with the rules and procedures of DTC and any other
applicable Depositories.

                  (c) Exchange of Global Call Warrant for Certificated Call
Warrant. Global Call Warrants shall be exchangeable for Certificated Call
Warrants only if (i) the Depository advises the Depositor in writing that it is
no longer willing or able to properly discharge its responsibilities with
respect to the Call Warrants and the Depositor is unable to locate a qualified
successor within 60 calendar days or (ii) the Depositor, at its option, advises
the Warrant Originator or the Warrant Agent in writing that it elects to
terminate the book-entry system through the Depository. Any Global Call Warrant
that is exchangeable pursuant to the preceding sentence will be exchangeable for
Certificated Call Warrants of like tenor and Warrant Amount, as applicable, in
any authorized denomination or denominations and registered in the names of such
Person or Persons as the Depository shall direct. Upon such exchange, the
Warrant Agent shall execute and authenticate such Certificated Call Warrants and
register the same in the name of, and deliver the same to, such Person or
Persons consistent with the provisions hereof.

                  If a Holder of a beneficial interest in a Call Warrant
represented by a Global Call Warrant wishes to exchange its interest in such
Global Call Warrant for a Certificated Call Warrant, or to transfer its interest
in such Global Call Warrant to a Person who wishes to take delivery thereof in
the form of one or more Certificated Call Warrants, such Holder may exchange,
transfer or cause the transfer of such Call Warrant upon receipt by the Warrant
Agent of:

                           (i) instructions given in accordance with the
                  Depository's procedures from a Participant directing the
                  Warrant Agent to reduce the principal amount of the Global
                  Call Warrant with instructions to issue Certificated Call
                  Warrants and

                           (ii) an Investor Representation Letter certifying
                  that the transfer is being made to a QIB in accordance with
                  Rule 144A under the Securities Act,

                                      B-10
<PAGE>

                  the Warrant Agent shall instruct the Depository to reduce the
         principal amount of the Global Call Warrant; and the Warrant Agent
         shall authenticate and deliver Certificated Call Warrants in principal
         amounts equal to the related reduction in principal amount of the
         Global Call Warrant.

                  (d) Exchange of Certificated Call Warrant for Global Call
Warrant. If a Holder of Certificated Call Warrant wishes at any time to exchange
its interest in such Certificated Call Warrant for a corresponding beneficial
interest in the Global Warrant, or to transfer its interest in such Certificated
Call Warrant to a Person who wishes to take delivery thereof in the form of a
corresponding beneficial interest in the Global Call Warrant, upon receipt by
the Warrant Agent of:

                           (i) such Certificated Call Warrant properly endorsed
                  for such transfer and written instructions from such Warrant
                  Holder directing that the corresponding Global Call Warrant be
                  credited with a beneficial interest equal to the principal
                  amount of such Certificated Call Warrant,

                           (ii) a written order containing information regarding
                  the participant account with the Depositor to be credited with
                  such increase and any other information required by the
                  Depositor, and

                           (iii) an Investor Representation Letter certifying
                  that the transfer is being made to a QIB in accordance with
                  Rule 144A under the Securities Act,

                  the Warrant Agent shall cancel the Certificated Call Warrant,
         record the transfer in accordance with the instructions of the Warrant
         Holder and instruct the Depository to credit or cause to be credited to
         the securities account of the transferee beneficial interests in the
         Call Warrants equal to the principal amount of the related canceled
         Certificated Call Warrants.

                  SECTION 5.03. Replacement of Call Warrants. Upon receipt of
evidence reasonably satisfactory to the Warrant Agent of the loss, theft,
destruction or mutilation of any Call Warrant and, in the case of any such loss,
theft or destruction of any Call Warrant, upon delivery of an indemnity bond in
such reasonable amount as the Warrant Agent may determine, or, in the case of
any such mutilation, upon the surrender of such Call Warrant for cancellation to
the Warrant Agent, the Warrant Agent shall execute and deliver in lieu thereof,
a new Call Warrant of like tenor bearing a number not contemporaneously
outstanding.

                  SECTION 5.04. Execution and Delivery of Call Warrants by
Trustee. The Warrant Agent hereby agrees (subject to compliance with Article IV)
to execute and deliver any new Call Warrants issued in accordance with Section
3.2 or this Article V.

                                   ARTICLE VI

                                  WARRANT AGENT

                  SECTION 6.01. Limitation on Liability. The Warrant Agent shall
be protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by

                                      B-11
<PAGE>

it in connection with its administration of the Call Warrants in reliance upon
any instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document in good faith believed by it to be genuine and to be signed,
executed and, where necessary, verified and acknowledged, by the proper Person
or Persons.

                  SECTION 6.02. Duties of Warrant Agent. The Warrant Agent
undertakes only the specific duties and obligations imposed hereunder upon the
following terms and conditions, by all of which the Depositor, the Trust, the
Trustee and each Warrant Holder shall be bound:

                  (a) The Warrant Agent may consult with legal counsel (who may
be legal counsel for the Warrant Originator), and the opinion of such counsel
shall be full and complete authorization and protection to the Warrant Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion, provided the Warrant Agent shall have exercised reasonable care in the
selection by it of such counsel.

                  (b) Whenever in the performance of its duties hereunder, the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established prior to taking or suffering any action hereunder, such
fact or matter may be deemed to be conclusively proved and established by a
Depositor Order or a certificate signed by the Trustee and delivered to the
Warrant Agent; and such certificate shall be full authorization to the Warrant
Agent for any action taken or suffered in good faith by it hereunder in reliance
upon such certificate.

                  (c) The Warrant Agent shall be liable hereunder only for its
own negligence, willful misconduct or bad faith.

                  (d) The Warrant Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained herein or be required to
verify the same.

                  (e) The Warrant Agent shall not have any responsibility in
respect of and makes no representation as to the validity of the Call Warrants
or the execution and delivery thereof (except the due execution hereof by the
Warrant Agent); nor shall it be responsible for any breach by any party of any
covenant or condition contained in the Call Warrants; nor shall it by any act
thereunder be deemed to make any representation or warranty as to the Called
Underlying Securities to be purchased thereunder.

                  (f) The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Principal Executive Officer, Principal Financial Officer, President, Senior
Vice President, a Vice President, a Managing Director, a Director, Treasurer, an
Assistant Treasurer, Controller, an Assistant Controller, Secretary or an
Assistant Secretary of the Warrant Originator , and to apply to such officers
for advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.

                  (g) The Warrant Agent and any shareholder, director, officer
or employee of the Warrant Agent may buy, sell or deal in any of the Call
Warrants or otherwise act as fully and

                                      B-12
<PAGE>

freely as though it were not Warrant Agent hereunder, so long as such persons do
so in full compliance with all applicable laws. Nothing herein shall preclude
the Warrant Agent from acting in any other capacity for any other legal entity.

                  (h) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents.

                  (i) The Warrant Agent shall act solely as the agent of the
Warrant Holders hereunder. The Warrant Agent shall not be liable except for the
failure to perform such duties as are specifically set forth herein, and no
implied covenants or obligations shall be read into the Call Warrants against
the Warrant Agent, whose duties shall be determined solely by the express
provisions thereof. The Warrant Agent shall not be deemed to be a fiduciary.

                  (j) The Warrant Agent shall not be under any obligation or
duty to institute, appear in or defend any action, suit or legal proceeding in
respect hereof, unless first indemnified to its satisfaction, but this provision
shall not affect the power of the Warrant Agent to take such action as the
Warrant Agent may consider proper, whether with or without such indemnity. The
Warrant Agent shall promptly notify the Warrant Originator in writing of any
claim made or action, suit or proceeding instituted against it arising out of or
in connection with the Call Warrants.

                  SECTION 6.03. Change of Warrant Agent. The Warrant Agent may
resign and be discharged from its duties hereunder upon thirty (30) days notice
in writing mailed to the Warrant Originator by registered or certified mail, and
to the Warrant Holders by first-class mail at the expense of the Warrant
Originator; provided, that, no such resignation or discharge shall become
effective until a successor Warrant Agent shall have been appointed hereunder.
The Warrant Originator may remove the Warrant Agent or any successor Warrant
Agent upon thirty (30) days notice in writing, mailed to the Warrant Agent or
successor Warrant Agent, as the case may be, and to the Warrant Holders by
first-class mail; provided, further, that no such removal shall become effective
until a successor Warrant Agent shall have been appointed hereunder. If the
Warrant Agent shall resign or be removed or shall otherwise become incapable of
acting, the Warrant Originator shall promptly appoint a successor to the Warrant
Agent, which may be designated as an interim Warrant Agent. If an interim
Warrant Agent is designated, the Warrant Originator shall then appoint a
permanent successor to the Warrant Agent, which may be the interim Warrant
Agent. If the Warrant Originator shall fail to make such appointment of a
permanent successor within a period of thirty (30) days after such removal or
within sixty (60) days after notification in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the Warrant
Holder, then the Warrant Agent or registered Warrant Holder may apply to any
court of competent jurisdiction for the appointment of such a successor. Any
successor to the Warrant Agent appointed hereunder must be rated in one of the
four highest rating categories by the Rating Agencies. Any entity which may be
merged or consolidated with or which shall otherwise succeed to substantially
all of the trust or agency business of the Warrant Agent shall be deemed to be
the successor Warrant Agent without any further action.

                                      B-13
<PAGE>

                  SECTION 6.04. Warrant Agent Transfer Fee. The Warrant Agent
will assess a fee of $50.00 upon the issue of any new Call Warrant, such fee to
be assessed upon the new Call Warrant Holder.

                                   ARTICLE VII

                                  MISCELLANEOUS

                  SECTION 7.01. Remedies. The remedies at law of the Warrant
Holder in the event of any default or threatened default by the Warrant Agent in
the performance of or compliance with any of the terms of the Call Warrants are
not and will not be adequate and, to the full extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms thereof or otherwise.

                  SECTION 7.02. Limitation on Liabilities of Warrant Holder.
Nothing contained in this Warrant Agent Agreement or the Call Warrants shall be
construed as imposing any obligation on the Warrant Holder to purchase any of
the Underlying Securities except in accordance with the terms hereof or thereof.

                  SECTION 7.03. Notices. All notices and other communications
under this Warrant Agent Agreement shall be in writing and shall be delivered,
or mailed by registered or certified mail, return receipt requested, by a
nationally recognized overnight courier, postage prepaid, addressed (a) if to
any Warrant Holder, at the registered address of such Warrant Holder as set
forth in the register kept by the Warrant Agent or (b) if to the Warrant Agent,
to 100 Wall Street, Suite 1600, New York, New York 10005, Attention: Corporate
Trust or to such other address notice of which the Warrant Agent shall have
given to the Warrant Holder and the Trustee or (c) if to the Warrant Originator
to Select Asset Inc., 745 Seventh Avenue, New York, New York 10019; provided,
that, the exercise of any Call Warrants shall be effective in the manner
provided in Article III. The Warrant Agent shall forward to the Warrant Holder
any notices received by it hereunder by facsimile within one Business Day of
receipt thereof.

                  SECTION 7.04.     Amendment.

                  (a) This Warrant Agent Agreement may be amended from time to
time by the Warrant Originator and the Warrant Agent without the consent of any
Warrant Holder, upon receipt of an opinion of counsel satisfactory to the
Warrant Agent that the provisions hereof have been satisfied and that such
amendment would not cause the Trust to be taxed as an association or publicly
traded partnership taxable as a Corporation under the Code, for any of the
following purposes: (i) to cure any ambiguity or to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein or to provide for any other terms or modify any other provisions with
respect to matters or questions arising under the Call Warrants which shall not
adversely affect in any material respect the interests of the Warrant Holders or
any holder of a Certificate; provided, however, that no amendment altering the
timing or amount of any payment of the Call Price shall be effected without the
consent of each Warrant Holder; or (ii) to evidence and provide for the
acceptance of appointment hereunder of a Warrant Agent other than U.S. Bank
National Association.

                                      B-14
<PAGE>

                  (b) Without limiting the generality of the foregoing, any Call
Warrant may also be modified or amended from time to time by the Warrant Agent
with the consent of Warrant Holders of 66-2/3% of the outstanding Call Warrants,
upon receipt of an opinion of counsel satisfactory to the Warrant Agent that the
provisions hereof (including, without limitation, the following proviso) have
been satisfied, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Call Warrants or of modifying
in any manner the rights of the Warrant Holders; provided, however, that no such
amendment shall alter the terms on which Call Warrants are exercisable or the
amounts payable upon exercise of a Call Warrant without the consent of the
Trustee and 100% of the affected Warrant Holders. Notwithstanding any other
provision hereof or of the Call Warrants, this Section 7.4(b) shall not be
amended without the consent of 100% of the affected Warrant Holders.

                  (c) Promptly after the execution of any such amendment or
modification, the Warrant Agent shall furnish a copy of such amendment or
modification to each Warrant Holder, to the Trustee and to the Rating Agencies.
It shall not be necessary for the consent of Warrant Holders to approve the
particular form of any proposed amendment, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof shall be
subject to such reasonable regulations as the Warrant Agent may prescribe. Any
consent by a Warrant Holder (or any predecessor Warrant Holder) shall be
conclusive and binding on such Warrant Holder and upon all future Warrant
Holders of the same Call Warrant and of any Call Warrant issued upon the
transfer thereof or in exchange thereof or in lieu thereof, whether or not
notation of such consent is made upon the Call Warrant.

                  SECTION 7.05. Expiration. The right to exercise the Call
Warrants shall expire on the earliest to occur of (a) the cancellation thereof,
(b) the termination of the Trust Agreement, or (c) the liquidation, disposition,
or maturity of all of the Underlying Securities.

                  SECTION 7.06. Descriptive Headings. The headings in this
Warrant Agent Agreement are for purposes of reference only and shall not limit
or otherwise affect the meaning hereof.

                  SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT
OF LAWS.

                  SECTION 7.08. Judicial Proceedings; Waiver of Jury. Any
judicial proceeding brought against the Warrant Originator or the Warrant Agent
with respect to this Warrant Agent Agreement may be brought in any court of
competent jurisdiction in the County of New York, State of New York or of the
United States of America for the Southern District of New York and, by execution
and delivery of the Call Warrants, the Warrant Agent (a) accepts, generally and
unconditionally, the nonexclusive jurisdiction of such courts and any related
appellate court, and irrevocably agrees that the Warrant Originator and the
Warrant Agent shall be bound by any judgment rendered thereby in connection with
this Warrant Agent Agreement or the Call Warrants, subject to any rights of
appeal, and (b) irrevocably waives any objection that the Warrant Originator or
the Warrant Agent may now or hereafter have as to the venue of

                                      B-15
<PAGE>

any such suit, action or proceeding brought in such a court or that such court
is an inconvenient forum.

                  SECTION 7.09. Nonpetition Covenant; No Recourse. Each of (i)
the Warrant Holder by its acceptance thereof, and (ii) the Warrant Agent agrees
that it shall not (and, in the case of the Warrant Holder, that it shall not
direct the Warrant Agent to), until the date which is one year and one day after
the payment in full of the Class A-1 Certificates and the Class A-2
Certificates, acquiesce, petition or otherwise invoke or cause the Trustee, the
Warrant Originator, or any such other entity to invoke the process of the United
States of America, any State or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government for the purpose of commencing or
sustaining a case by or against the Trustee, the Warrant Originator or any such
other entity under a federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Trust, the Depositor or any such other entity or
all or any part of the property or assets of Trustee, the Warrant Originator or
any such other entity or ordering the winding up or liquidation of the affairs
of the Trustee, the Warrant Originator or any such other entity. Each of (i) the
Warrant Holder, by its acceptance thereof, and (ii) the Warrant Agent agrees
that it shall not have any recourse to the Trustee or the Warrant Originator.

               [Remainder of this page intentionally left blank.]

                                      B-16
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed hereto by their respective duly authorized officers as of the date
first above written.

                                      SELECT ASSET INC.,
                                      as Warrant Originator

                                      By: _____________________________________
                                      Name:
                                      Title:

                                      U.S. BANK NATIONAL
                                      ASSOCIATION, as Warrant
                                      Agent

                                      By: _____________________________________
                                      Name:
                                      Title:

                                      B-17

<PAGE>

                                    EXHIBIT C

                            FORM OF INVESTMENT LETTER

              QUALIFIED INSTITUTIONAL BUYER AND ACCREDITED INVESTOR

                                                   Dated:

U.S. Bank National Association,
     as Trustee
     100 Wall Street
     New York, New York 10005

Lehman Brothers Inc.,
     as Initial Purchaser
     745 Seventh Avenue
     New York, New York 10019

Select Asset Inc.,
     as Depositor
     745 Seventh Avenue

     New York, New York 10019

Ladies and Gentlemen:

            In connection with our proposed purchase of $______________
aggregate Notional Amount of Class A-2 Certificates (the "Class A-2
Certificates") representing an interest in the Corporate Backed Callable Trust
Certificates, J.C. Penney Debenture-Backed Series 2006-1 Trust (the "Trust"),
the undersigned, by executing this letter (the "Purchaser") confirms that:

      1.    The Purchaser understands that substantial risks are involved in an
            investment in the Class A-2 Certificates. The Purchaser represents
            that, in making its investment decision to acquire the Class A-2
            Certificates, the Purchaser has not relied on representations,
            warranties, opinions, projections, financial or other information or
            analysis, if any, supplied to it by any person or entity, including
            the Initial Purchaser, the Depositor or the Trustee or any of their
            affiliates, except as expressly contained in written information, if
            any. The Purchaser is purchasing the Class A-2 Certificates for
            investment purposes and not with a view to, or for, the offer or
            sale in connection with a public distribution or in any other manner
            that would violate the Securities Act or the securities or blue sky
            laws of any state of the United States. The Purchaser has such
            knowledge and experience in financial and business matters as to be
            capable of evaluating the merits and risks of purchasing any of the
            Class A-2 Certificates. The Purchaser is aware that it may be
            required to bear the substantial economic risk of an investment in
            the Class A-2 Certificates for an indefinite period of time and such
            Purchaser is able to bear such risk for an indefinite period. The
            Purchaser has relied upon its own tax, legal and financial advisors
            in connection with its decision to purchase the Class A-2
            Certificates.

                                      C-1
<PAGE>

      2.    The Purchaser is not an "affiliate" (as defined in Rule 144 under
            the Securities Act) of the Depositor and is either:

            (i) (A) a "Qualified Institutional Buyer" (a "QIB"), within the
            meaning of Rule 144A under the Securities Act of 1933, as amended
            (the "Securities Act" and "Rule 144A") and has delivered to you the
            certification contained herein as to the fact that it is a QIB and
            (B) acquiring the Class A-2 Certificates for its own account, for
            the account of an Accredited Investor (as defined in Rule 501(a)
            under the Securities Act), or for the account of a QIB as to each of
            which the Purchaser exercises sole investment discretion. The
            Purchaser is aware that the Class A-2 Certificates are being sold to
            it in reliance on the exemption from the provisions of Section 5 of
            the Securities Act provided by Rule 144A; or

            (ii) an Accredited Investor and, if the Class A-2 Certificates are
            to be purchased for one or more accounts ("investor accounts") for
            which it is acting as fiduciary or agent, each such investor account
            is an Accredited Investor on a like basis or a QIB; in the normal
            course of its business, such Purchaser invests in or purchases
            securities similar to the Class A-2 Certificates.

      3.    The Purchaser acknowledges that neither the Depositor nor the
            Initial Purchaser, or any person representing the Depositor or the
            Initial Purchaser, has made any representation to such purchaser
            with respect to the Trust, the Underlying Securities or the offering
            or sale of any Class A-2 Certificates.

      4.    The Purchaser understands that the Class A-2 Certificates are being
            offered in a transaction not involving any public offering in the
            United States within the meaning of the Securities Act, that the
            Class A-2 Certificates have not been and will not be registered
            under the Securities Act or under the securities or blue sky laws of
            any state, and that (i) if in the future it decides to offer,
            resell, pledge or otherwise transfer the Class A-2 Certificates,
            such Class A-2 Certificates shall only be offered, resold, assigned
            or otherwise transferred (A) to the Trust, (B) pursuant to an
            effective registration statement under the Securities Act, (C) to a
            QIB, in accordance with Rule 144A or (D) to any person or entity
            (including an Accredited Investor within the meaning of Rule 501(a)
            under the Securities Act) pursuant to another available exemption
            from registration provided under the Securities Act, and, in each of
            cases (A) through (D), in accordance with any applicable securities
            laws of any state of the United States and other jurisdictions and
            (ii) the purchaser will, and each subsequent holder is required to,
            notify any subsequent purchaser of such Class A-2 Certificates from
            it of the resale restrictions referred to in clause (i) above. Upon
            the transfer of Class A-2 Certificates held in the form of global
            certificates to an Accredited Investor, the transferor's interest in
            such global certificates shall be exchanged for a Class A-2
            Certificate in definitive form. Thereafter, upon transfer of a
            definitive Class A-2 Certificate to a QIB, such Class A-2
            Certificate may be exchanged for a beneficial interest in a global
            certificate.

      5.    The Purchaser understands that each Class A-2 Certificate will,
            unless otherwise agreed to by the Depositor and the Trustee, bear a
            legend substantially to the following effect:

                                      C-2
<PAGE>

                  "THIS CLASS A-2 CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
                  MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
                  WHILE A REGISTRATION UNDER SUCH ACT IS IN EFFECT OR PURSUANT
                  TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT. THE CLASS
                  A-2 CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
                  ACCORDANCE WITH THE TERMS OF THE SERIES SUPPLEMENT.

                  EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY
                  NOTIFIED THAT THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE
                  RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
                  THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."

      6.    The Purchaser understands that no subsequent transfer of the Class
            A-2 Certificates is permitted unless (A) such transfer is of a Class
            A-2 Certificate with a denomination of at least $100,000 and (B) it
            causes its proposed transferee to provide to the Trustee and the
            Initial Purchaser a letter substantially in the form of Exhibit C to
            the Series Supplement and otherwise satisfactory to the Trustee and
            Initial Purchaser, as applicable, or such other written statement as
            the Depositor shall prescribe.

      7.    The Purchaser agrees that if at some time in the future it wishes to
            transfer or exchange any of the Class A-2 Certificates, it will not
            transfer or exchange any of the Class A-2 Certificates unless such
            transfer or exchange is in accordance with Section 5.04 of the Trust
            Agreement. The Purchaser understands that any purported transfer of
            the Class A-2 Certificates (or any interest therein) in
            contravention of any of the restrictions and conditions in the Trust
            Agreement, as applicable, shall be void, and the purported
            transferee in such transfer shall not be recognized by the Trust or
            any other Person as a Certificateholder, as the case may be, for any
            purpose.

      8.    The purchaser (i) acknowledges that the Depositor, the Initial
            Purchaser, the Trustee and others will rely upon the truth and
            accuracy of the foregoing acknowledgments, representations and
            agreements and agrees that the Depositor, the Initial Purchaser and
            the Trustee are irrevocably authorized to produce this letter or a
            copy hereof to any interested party in any administrative or legal
            proceeding or official inquiry with respect to the matters covered
            hereby, and (ii) agrees that, if any of the acknowledgments,
            representations, warranties and agreements made or deemed to have
            been made by such purchaser's purchase of the Class A-2 Certificates
            are no longer accurate, such purchaser shall promptly notify the
            Depositor and the Initial Purchaser. If the purchaser is acquiring
            any Class A-2 Certificates as a fiduciary or agent for one or more
            investor accounts, it represents that it has sole investment
            discretion with respect to each such account and it has full power
            to make the foregoing acknowledgments, representations

                                      C-3
<PAGE>

            and agreements on behalf of each such account and that each such
            investor account is eligible to purchase the Class A-2 Certificates.

      You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.

                                         Very truly yours,

                                         By:
                                            --------------------------
                                         Name:
                                         Title:

                                      C-4

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