Source - RNS
RNS Number : 0307M
STANTON MBS I plc
07 October 2016
 

1.1      

NOTICE TO HOLDERS OF THE CONTROLLING CLASS

Regarding

APPOINTMENT OF SUCCESSOR COLLATERAL MANAGER

in respect of

STANTON MBS I p.l.c (the "Issuer")

€27,500,000 Class A2 Senior Secured Floating Rate Notes due 2054

 

(the "Controlling Class")

ISIN:  XS0202637418

Purpose of this Request:       With the impending resignation of the Second Collateral Manager, Cambridge Place Investment Management LLP, it is proposed that Cairn Capital Limited ("Cairn") is appointed as a Proposed Successor Collateral Manager. Pursuant to clause 19.3 of the Collateral Management Agreement (as amended and restated), in order for the resignation of the Second Collateral Manager to be effective, the proposed successor must be an Eligible Successor, as defined in the master interpretation and construction schedule dated 4 November 2004. This definition requires a direction in writing of at least a Majority of the Controlling Class. Instead of receiving a direction in writing of at least a Majority of the Controlling Class as required by the definition the Trustee will be given this comfort by an Extraordinary Resolution requiring a direction of 662/3 per cent. of the Controlling Class (an "Extraordinary Resolution").

NOTICE IS HEREBY GIVEN by the Issuer that a meeting of the Controlling Class of Noteholders convened by the Issuer will be held at the offices of Reed Smith LLP located at The Broadgate Tower, 20 Primrose Street, London EC2A 2RS United Kingdom on 31 October 2016 at 10 am (London time) (the "Meeting"). The Meeting is to be held for the purposes of considering and, if thought fit, passing the Extraordinary Resolution, the text of which is set out below, which will be proposed as an Extraordinary Resolution in accordance with Condition 13(a) (Meetings of Noteholders, Modification, Waiver and Substitution) and with the provisions of the Trust Deed.

The attention of the Controlling Class is directed to the notices dated 4 April 2016, 6 May 2016 and 11 July 2016.

The Second Collateral Manager is offering to pay a consent fee of $0.10 per €100,000 original principal amount of notes for the Controlling Class to consent to the appointment of the Proposed Successor Collateral Manager for their participation.

 

----------------------------------------------------------------------------------------------------------------

I. BACKGROUND:

 

Reference is made to the trust deed dated 4 November 2004 between the Issuer, U.S. Bank Trustees Limited (formerly ABN AMRO Trustees Limited), an English company with registration number 02379632 (the "Trustee") and others (the "Trust Deed") pursuant to which the Notes were constituted and issued.

Capitalised terms used but not otherwise defined herein shall have the meanings ascribed to them in the master interpretation and construction schedule dated 4 November 2004.

The attention of the Controlling Class is directed to the notice dated 4 April 2016 notifying the Class A1 Noteholders, then comprising the Controlling Class, of a meeting convened by the Issuer to be held on 26 April 2016 (the "Class A1 Meeting") to appoint a replacement Collateral Manager.

The Class A1 Meeting was held on 26 April and was adjourned due to a lack of quorum. The Class A1 Notes redeemed on 4 May 2016 and the Issuer requested the new Controlling Class to identify themselves by contacting the Issuer and Globic Advisors so that a new meeting could be convened to appoint the Proposed Successor Collateral Manager.

Events to Date:

 

1.   In connection with the issue of the Notes, the Issuer, the Trustee, ABN AMRO Bank N.V., London Branch (as Account Bank, Custodian and Collateral Administrator) and Uniqa Alternative Investments GmbH (as Collateral Manager) (the "Collateral Manager"), entered into a collateral management agreement dated 4 November 2004 (the "Collateral Management Agreement"). Following the resignation of Marcus Klug as managing director of the Collateral Manager, the appointment of the Collateral Manager was terminated, in accordance with clause 18.2(d) of the Collateral Management Agreement.

2.   ABN AMRO Bank N.V., London Branch has been replaced in the role of Account Bank, Custodian and Collateral Administrator by Elavon Financial Services Limited.

3.   Following termination of the original Collateral Manager appointment, a Deed of Amendment to the Collateral Management Agreement, the Trust Deed, the Agency Agreement, the Collateral Administration Agreement and the Master Interpretation and Construction Schedule dated 29 June 2006 was entered into between, among others, the Issuer, the Trustee and Cambridge Place Investment Management LLP (the "Second Collateral Manager") (the "Amendment Deed"). Pursuant to the Amendment Deed, the Second Collateral Manager replaced the Collateral Manager under the Collateral Management Agreement (as amended and restated).

4.   The Second Collateral Manager now wishes to resign as collateral manager under the Collateral Management Agreement (as amended and restated and set out in the Annex hereto).  It is proposed that Cairn Capital Limited is appointed as a Proposed Successor Collateral Manager (the "Proposed Successor Collateral Manager").

5.   Pursuant to clause 19.3 of the Collateral Management Agreement (as amended and restated), in order for the resignation of the Second Collateral Manager to be effective, the proposed successor must be an Eligible Successor, as defined in the master interpretation and construction schedule dated 4 November 2004. This definition requires a direction in writing of at least a Majority of the Controlling Class that such successor has the ability professionally and competently to perform duties similar to those imposed upon the Collateral Manager under the Collateral Management Agreement. Instead of receiving a direction in writing of at least a Majority of the Controlling Class as required by the definition the Trustee will be given this comfort by an Extraordinary Resolution.

II. NOTEHOLDER APPROVAL

An Extraordinary Resolution of the Controlling Class: (i) confirming the Proposed Successor Collateral Manager has the ability professionally and competently to perform duties similar to those imposed upon the Collateral Manager under the Collateral Management Agreement; (ii) approving the amendment and restatement of the Collateral Management Agreement in the form annexed hereto; and (iii) authorising and approving the termination of the role of the Irish Paying Agent from all Transaction Documents to which it is a party.

The Issuer has accordingly convened a Meeting of holders of the Controlling Class by this Notice to request approval by Extraordinary Resolution of the matters described in this Notice.

III. EXTRAORDINARY RESOLUTION

The Extraordinary Resolution to be proposed at the Meeting is in the following terms:

"That this Meeting of the holders of the €27,500,000 Class A2 Senior Secured Floating Rate Notes due 2054 (the "Controlling Class") issued by Stanton MBS I p.l.c. (the "Issuer") convened pursuant to Condition 13(a) of the Notes hereby:

(a) Approval of the Proposed Successor Collateral Manager and termination of the role of the Irish Paying Agent:

Authorises the Trustee to determine that the Proposed Successor Collateral Manager has the ability professionally and competently to perform duties similar to those imposed upon the Collateral Manager under the Collateral Management Agreement and to take such other steps as are necessary to effect the appointment of the Proposed Successor Collateral Manager as Collateral Manager;

Authorises and approves the termination of the role of the Irish Paying Agent from all Transaction Documents to which it is a party;

(b) Approval of Amendment and Restatement of Collateral Management Agreement:

Approves the amendment and restatement of the Collateral Management Agreement such that it is in the form annexed hereto and authorises the Trustee to take such other action as it considers necessary to effect the amendment and restatement of the Collateral Management Agreement in such form;

(c) Direction to the Trustee:

Authorises, directs, requests and empowers the Trustee: (i) to agree to the amendments referred to in paragraphs (a) and (b) of this Extraordinary Resolution, and (ii) to concur in and execute such other documents and do such things as the Trustee, in its absolute discretion, considers necessary, desirable or expedient to carry out and give effect to this Extraordinary Resolution.

Unless otherwise defined herein or the context otherwise requires, terms defined in the master interpretation and construction schedule dated 4 November 2004 shall have the same meanings when used in this Extraordinary Resolution."

IV. ADMINISTRATIVE

1.   Documents Available for Display

The Noteholders may, at any time during normal business hours on any weekday (Saturdays, Sundays and bank and other public holidays excepted) prior to the date of and commencement of the Meeting or any adjourned Meeting inspect copies of the following documents at the offices of the Issuer and the Principal Paying Agent:

(a) this Notice;

(b) the Trust Deed;

(c) the Collateral Management Agreement (as amended and restated);

(d) the Master Interpretation and Construction Schedule.

Copies of the foregoing documents will also be available for inspection during the Meeting.

2.   Voting and Quorum

The Class A2 Notes were issued in bearer form, represented by interests in a Global Bearer Note and deposited with a common depositary for Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, S.A. ("Clearstream, Luxembourg") (Clearstream, Luxembourg, together with Euroclear, the "Clearing Systems" and each a "Clearing System") on or about the Closing Date.

The provisions governing the convening and holding of meetings are set out in Schedule 11 to the Trust Deed, a copy of which is available for inspection as referred to above.

A.    For Notes held through Euroclear or Clearstream, Luxembourg:

This section A only applies to Notes held through Euroclear or Clearstream, Luxembourg.

Each person (a "Beneficial Owner") who is the owner of a particular principal amount of the Notes through the Clearing Systems or their respective account holders ("Accountholders") should note that such person is not considered to be a Noteholder for the purposes of Notes held through the Clearing Systems and will only be entitled to attend and vote at the Meeting in accordance with the procedures set out below and in accordance with the provisions of Schedule 11 of the Trust Deed.

If a Beneficial Owner or Accountholder wishes to obtain a voting certificate in respect of the Notes for a meeting he must at least 48 hours before the time fixed for the meeting deposit the Notes for that purpose with a Paying Agent or to the order of a Paying Agent with a bank or other depository nominated by the Paying Agent for the purpose or block them in an account with the Clearing System in accordance with the procedures of such Clearing System. The Paying Agent shall then issue a voting certificate in respect of it. Any questions with respect to obtaining the voting certificate can be directed to the Principal Paying Agent, whose contact details can be found below.

B.    General provisions relating to the Meeting:

No business (except choosing a chairman) shall be transacted at a meeting unless a quorum is present at the commencement of business. If a quorum is not present within 15 minutes from the time initially fixed for the meeting, the meeting shall, if convened at the request of Noteholders or if the Issuer and the Trustee agree, be dissolved. In any other case it shall be adjourned until such date, not less than 14 nor more than 42 days later, and time and place as the chairman may decide.

The quorum required at each Meeting is described in Paragraph 8 (Quorum and Adjournment) of Schedule 11 to the Trust Deed. Pursuant to Paragraph 8(c) of Schedule 11 to the Trust Deed the holder of a Global Bearer Note shall be treated as two persons for the purposes of any quorum requirements of a meeting of the relevant Noteholders.

Each question submitted to a meeting shall be decided by a show of hands unless a poll is (before, or on the declaration of the result of, the show of hands) demanded by the chairman, the Issuer, the Trustee or one or more persons holding or representing 2 per cent. of the Principal Amount Outstanding of the Notes of the relevant Class. The holder of a Global Bearer Note shall be treated as two persons for the purposes of the right to demand a poll at a meeting of the relevant Noteholders.

On a show of hands every person who is present in person and who produces a Note or a voting certificate or is a proxy has one vote. On a poll every such person has one vote for each €1,000 of Principal Amount Outstanding of Notes so produced or represented by the voting certificate so produced or for which he is a proxy or representative. Without prejudice to Condition 2(e), the holder of a Global Bearer Note shall be treated as having one vote for each €1,000 of Principal Amount Outstanding of Notes represented by such Global Bearer Note. Without prejudice to the obligations of proxies, a person entitled to more than one vote need not use them all or cast them all in the same way.

To be passed, the Extraordinary Resolution requires a majority in favour consisting of not less than 662/3 per cent. of the persons voting thereat upon a show of hands or if a poll is duly demanded by a majority consisting not less than 662/3 per cent. of the votes cast on such poll, as the case may be.

On any vote concerning the replacement or termination of the Collateral Manager, any Notes held by the Collateral Manager or any of its Affiliates will be excluded from voting.

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF NOTEHOLDERS. IF NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD SEEK THEIR OWN FINANCIAL AND LEGAL ADVICE, INCLUDING AS TO ANY TAX CONSEQUENCES, IMMEDIATELY FROM THEIR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL OR LEGAL ADVISER.

 

Contact Details

 

This Notice is given by Stanton MBS I p.l.c.:

 

Address:                       1st Floor

                                    1-2 Victoria Buildings

                                    Haddington Road

                                    Dublin 4

                                    Ireland

 

Attention:                 The Directors

 

Fax:                              +353 1 697 5375

Email:                           [email protected]

 

 

Contact Details of the Principal Paying Agent:

 

Address:                       Elavon Financial Services Limited

                                    5th Floor

                                    125 Old Broad Street

                                    London EC2N 1AR

 

 

Attention:                      CDO Relationship Management

 

Fax:                              +44 207 365 2577

Email:                           [email protected]

 

Date:                            7 October 2016

 

 

 

 

 

 

 

 

 

 

 

Dated [l] 2016

STANTON MBS I plc

(as Issuer)

U.S. BANK TRUSTEES LIMITED

(formerly ABN AMRO TRUSTEES LIMITED)

(as Trustee)

 

ELAVON FINANCIAL SERVICES LIMITED

(formerly Bank of America, N.A., London Branch and ABN AMRO Bank N.V., London Branch) (as Principal Paying Agent, Account Bank, Calculation Agent, Collateral Administrator and Custodian)

CANADIAN IMPERIAL BANK OF COMMERCE

(as Seller, Hedge Counterparty, Liquidity Facility Provider, Class A1 Notes Purchaser and Notes Placement Agent)

U.S. BANK, NATIONAL ASSOCIATION

(formerly Bank of America, National Association (as successor by merger to LaSalle Bank N.A.))

(as Registrar and Pledgee's Representative)

INVESTEC CAPITAL & INVESTMENTS (IRELAND) LIMITED

(formerly NCB STOCKBROKERS LIMITED)

(as Irish Paying Agent)

STRUCTURED FINANCE MANAGEMENT IRELAND LIMITED

(as Corporate Services Provider)

CAMBRIDGE PLACE INVESTMENT MANAGEMENT LLP

(as Outgoing Collateral Manager)

 

CAIRN CAPITAL LIMITED

(as Incoming Collateral Manager)

 

SECOND DEED OF AMENDMENT TO THE COLLATERAL

MANAGEMENT AGREEMENT

 

 

 



 

Table of Contents

Page

1......... DEFINITIONS AND INTERPRETATION.................................................................... 3

2......... CONFIRMATION BY THE PARTIES.......................................................................... 3

3......... CONFIRMATION BY THE INCOMING COLLATERAL MANAGER...................... 4

4......... RESIGNATION OF IRISH PAYING AGENT.............................................................. 4

5......... FULL FORCE AND EFFECT........................................................................................ 4

6......... AMENDMENT.............................................................................................................. 4

7......... REPRESENTATIONS AND WARRANTIES................................................................ 4

8......... EFFECTIVE DATE........................................................................................................ 5

9......... LIMITED RECOURSE................................................................................................... 5

10....... NOTICES....................................................................................................................... 5

11....... GOVERNING LAW AND JURISDICTION................................................................. 5

12....... CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999.......................................... 6

13....... COUNTERPARTS......................................................................................................... 6

SCHEDULE............................................................................................................................... 5

 


THIS DEED OF AMENDMENT is made on [●] 2016

BETWEEN

(1)        STANTON MBS I plc----, a public limited liability company incorporated under the laws of Ireland having its registered office at 1st Floor, 1-2 Victoria Buildings, Haddington Road, Dublin 4, Ireland, and registered under number 390893 (the "Issuer");

(2)        U.S. BANK TRUSTEES LIMITED, a private limited liability company, organised and existing under the laws of England and Wales with its registered address at L5, 125 Old Broad Street, London EC2N 1AR (formerly known as ABN AMRO Trustees Limited) in its capacity as trustee (the "Trustee", which expression shall include all other persons or companies from time to time being the trustee or trustees of the Trust Deed);

(3)        ELAVON FINANCIAL SERVICES LIMITED, (formerly Bank of America, N.A., London Branch and ABN AMRO Bank N.V., London Branch), a company incorporated under the laws of Ireland with registered number 418442 and its registered office at Block E, Cherrywood Business Park, Loughlinstown, Dublin, Ireland, acting through its UK branch (registered number BR009373) from its offices at 5th Floor, 125 Old Broad Street, London EC2N 1AR in its capacity as principal paying agent (the "Principal Paying Agent", which expression shall include any successor principal paying agent appointed under the Agency Agreement), as account bank (the "Account Bank", which expression shall include any successor account bank appointed under the Agency Agreement), as calculation agent (the "Calculation Agent", which expression shall include any successor calculation agent appointed under the Agency Agreement), as collateral administrator (the "Collateral Administrator", which expression shall include any successor collateral administrator appointed under the Agency Agreement) and as custodian (the "Custodian", which expression shall include any successor custodian appointed under the Agency Agreement);

(4)        CANADIAN IMPERIAL BANK OF COMMERCE, of Cottons Centre, Cottons Lane, London SEl 2QL, as seller under the Collateral Acquisition Agreement (the "Seller"), as hedge counterparty (the "Hedge Counterparty", which expression shall include any successor hedge counterparty appointed under the Hedge Agreement), as liquidity facility provider (the "Liquidity Facility Provider", which expression shall include any successor liquidity facility provider appointed under the Liquidity Facility Agreement), as purchaser of the Class A1 Delayed Draw Notes and the Class Al Revolving Notes under the Class A1 Notes Purchase Agreement (the "Class A1 Notes Purchaser") and as notes placement agent (the "Notes Placement Agent").

(5)        U.S. BANK, NATIONAL ASSOCIATION,  (formerly Bank of America, National Association (as successor by merger to LaSalle Bank National Association)) of One Federal Street, 3rd Floor, Boston, Massachusetts 02110, USA as registrar (the "Registrar", which expression shall include any successor registrar appointed under the Agency Agreement) and as the pledgee's representative under the Euroclear Pledge Agreement (the "Pledgee's Representative");

(6)        INVESTEC CAPITAL & INVESTMENTS (IRELAND) LIMITED, (formerly NCB Stockbrokers Limited) of The Harcourt Building, Harcourt Street, Dublin 2, Ireland as Irish paying agent (the "Irish Paying Agent" and, together with the Principal Paying Agent, the "Paying Agents" and each a "Paying Agent", which expression shall include any successor or additional paying agent appointed under the Agency Agreement);

(7)        STRUCTURED FINANCE MANAGEMENT IRELAND LIMITED, of 1st Floor, 1-2 Victoria Buildings, Haddington Road, Dublin 4, Ireland, as corporate services provider (the "Corporate Services Provider", which expression shall include any successor corporate services provider appointed under the Corporate Services Agreement);

(8)        CAMBRIDGE PLACE INVESTMENT MANAGEMENT LLP, of Lexicon House, 17 Old Court Place, London W8 4PL, (the "Outgoing Collateral Manager" which expression shall include any successor or substitute collateral manager appointed under the Collateral Management Agreement); and

(9)        CAIRN CAPITAL LIMITED, of 27 Knightsbridge, London, SW1X 7LY, United Kingdom (the "Incoming Collateral Manager", which expression shall include any successor or substitute collateral manager appointed under the Collateral Management Agreement).

WHEREAS:

(A)       On 29 June 2006, the Issuer, the Trustee and the Outgoing Collateral Manager, among others, entered into a deed of amendment to the Collateral Management agreement pursuant to which the Outgoing Collateral Manager was appointed as Collateral Manager (the "First Deed of Amendment").

(B)       The Outgoing Collateral Manager wishes to resign as the Collateral Manager and to transfer certain rights to the Incoming Collateral Manager in accordance with Clause 19.2 of the Collateral Management Agreement.

(C)       Pursuant to Clause 19.3 of the Collateral Management Agreement in order for the Outgoing Collateral Manager's resignation to be effective, the Incoming Collateral Manager must be an Eligible Successor. 

(D)       On or about [●] 2016 the Noteholders passed a resolution to approve that the Incoming Collateral Manager is an Eligible Successor and to approve the amendment and restatement of the Collateral Management Agreement in the form attached to the notice of [●] 2016.

(E)       Such resignation will become effective on the Effective Date (as defined below).

(F)       In addition, the Irish Paying Agent intends to resign from its role as Irish paying agent and the parties (other than the Outgoing Collateral Manager) intend to accept such resignation.

(G)       The Incoming Collateral Manager has satisfied the Rating Agency Condition.

(H)       The Incoming Collateral Manager needs to accede to certain documents in connection with the Notes and the parties are entering into this Deed to effect such accession. The parties (other than the Outgoing Collateral Manager) also intend to receive and accept the Irish Paying Agent's resignation from the Effective Date.

NOW THIS DEED WITNESSETH and it is hereby agreed and declared as follows:

2.         DEFINITIONS AND INTERPRETATION

In this Deed, except so far as the context otherwise requires and subject to any contrary indication, words and expressions defined and expressed to be construed in the master interpretation and construction schedule (the "Master Interpretation and Construction Schedule") signed for the purpose of identification on the Issue Date by, inter alios, the Issuer and the Trustee shall have the same meaning and construction mutatis mutandis herein and Clauses 2 to 6 (inclusive) of the Master Interpretation and Construction Schedule shall apply mutatis mutandis to this Deed.

3.         CONFIRMATION BY THE PARTIES

3.1       The Issuer, the Trustee, the Principal Paying Agent, the Account Bank, the Calculation Agent, the Collateral Administrator, the Custodian, the Seller, the Hedge Counterparty, the Liquidity Facility Provider, the Class A1 Notes Purchaser, the Notes Placement Agent, the Registrar, the Pledgee's Representative, the Irish Paying Agent, the Corporate Services Provider, the Outgoing Collateral Manager and the Incoming Collateral Manager (together the "Parties") confirm that they agree that the Incoming Collateral Manager shall replace the Outgoing Collateral Manager under the Collateral Management Agreement (as amended and restated by the First Deed of Amendment and this Deed), the Trust Deed, the Collateral Administration Agreement and the Agency Agreement and as if it were a signatory under the Master Interpretation and Construction Schedule (together the "Documents") with effect from the Effective Date.

3.2       All Parties to the Documents have signed up to this Deed thus making the Incoming Collateral Manager's appointment effective and binding on all signatories hereto with effect from the Effective Date.

3.3       The Parties agree and confirm that the Incoming Collateral Manager shall not be responsible for any claims or liabilities in respect of the Documents or for any liability of the Outgoing Collateral Manager whatsoever resulting directly or indirectly from any action or inaction of the Outgoing Collateral Manager relating to the performance (or otherwise) by the Outgoing Collateral Manager of its duties and obligations under any of the Documents.

3.4       The Parties unconditionally release and discharge the Outgoing Collateral Manager from all duties, obligations and liabilities whatsoever under the Documents and each Party agrees that its rights against the Outgoing Collateral Manager under the Documents are cancelled, provided that such release and discharge shall not affect any rights, liabilities or obligations of the Outgoing Collateral Manager accrued or (as applicable) due to be performed prior to or accruing up to the Effective Date. For the avoidance of doubt, the Outgoing Collateral Manager shall retain its right to receive the Subordinated Collateral Management Fee accrued up to the Effective Date and shall continue to have the benefit of any indemnities granted to the Collateral Manager in the Documents (including the indemnity set out in Clause 11.1 of the Collateral Management Agreement).

4.         CONFIRMATION BY THE INCOMING COLLATERAL MANAGER

The Incoming Collateral Manager agrees to be bound by all of its duties and the obligations under the Documents with effect from the Effective Date as if it were the Collateral Manager and acknowledges the Master Interpretation and Construction Schedule as if it were a signatory of it.

5.         RESIGNATION OF IRISH PAYING AGENT

Notwithstanding anything in the Agency Agreement or any Transaction Document, the parties (other than the Outgoing Collateral Manager) hereby agree and acknowledge that from the Effective Date:

5.1       the execution of this Deed by the Irish Paying Agent is accepted as formal valid written notice of the Irish Paying Agent's resignation as Irish paying agent, and no replacement Irish paying agent shall be appointed;

5.2       any resignation notice requirements under the Agency Agreement or any of the other Transaction Documents relating to the Irish Paying Agent's resignation are hereby waived and released in full; and

5.3       the Irish Paying Agent shall have no further duties or responsibilities under the Agency Agreement or any Transaction Documents to which it is a party.

6.         FULL FORCE AND EFFECT

The Documents shall remain in full force and effect following execution of this Deed as amended by this Deed.

7.         AMENDMENT

With effect from the Effective Date, the Collateral Management Agreement shall be amended so that it shall be read and construed for all purposes on the terms set out in the schedule hereto.

8.         REPRESENTATIONS AND WARRANTIES

Each Party (other than the Trustee) represents and warrants to each of the other Parties hereto that:

(a)        it has the power to execute, deliver and perform its obligations under this Deed;

(b)        all necessary corporate, shareholder and other action has been taken to authorise the execution, delivery and performance of this Deed; and

(c)        this Deed constitutes its valid and legally binding obligations enforceable against it in accordance with its terms (subject to insolvency, moratorium and similar laws affecting creditors' rights generally).

9.         EFFECTIVE DATE

This Deed will take effect from the date hereof (the "Effective Date").

10.       LIMITED RECOURSE

The provisions of Clause 26 (Limited Recourse) of the Trust Deed shall apply, mutatis mutandis, to this Deed.

11.       NOTICES

11.1     The provisions of Clause 27 (Notices) of the Trust Deed shall apply, mutatis mutandis, to this Deed.

11.2     The address for service of notices on the Incoming Collateral Manager is:

27 Knightsbridge

London

SW1X 7LY

United Kingdom          

Facsimile: +44 20 7259 4899

Attention: Cairn Legal

Email: [email protected]

with a copy to:

CAIRN CAPITAL NORTH AMERICA INC.

Address:           600 Summer Street
Stamford, CT  06897
United States

Email:               [email protected]

Attention:          Chief Executive Officer

 

12.       GOVERNING LAW AND JURISDICTION

The provisions of Clause 29 (Governing Law and Jurisdiction) of the Trust Deed shall apply, mutatis mutandis, to this Deed save for Clause 29.3 which shall not apply. The parties hereby acknowledge that the relevant address for service in regards the Incoming Collateral Manager is that contained in Clause 9 of this Deed.

13.       CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

A person who is not a party to this Deed shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

14.       COUNTERPARTS

This Deed may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

IN WITNESS WHEREOF this Deed has been executed as a deed by the parties hereto and is intended to be and is hereby delivered on the day first before written.


SCHEDULE

4 November 2004

AMENDED AND RESTATED PURSUANT TO A FIRST AMENDMENT AGREEMENT DATED 29 JUNE 2006 AND A SECOND AMENDMENT AGREEMENT

DATED          2016

STANTON MBS I P.L.C. (as Issuer)

CAIRN CAPITAL LIMITED (as Collateral Manager)

U.S. BANK TRUSTEES LIMITED (as Trustee)

ELAVON FINANCIAL SERVICES LIMITED

 (as Account Bank, Custodian and Collateral Administrator)

AMENDED AND RESTATED COLLATERAL MANAGEMENT AGREEMENT



 

Table of Contents

Page

1......... INTERPRETATION....................................................................................................... 5

2......... COLLATERAL MANAGER.......................................................................................... 6

3......... SELECTION, ACQUISITION AND DISPOSAL OF COLLATERAL DEBT SECURITIES AND ELIGIBLE INVESTMENTS......................................................................................... 13

4......... ISSUER ORDERS........................................................................................................ 18

5......... REPORTS.................................................................................................................... 19

6......... INDEPENDENT ACCOUNTANTS............................................................................ 19

7......... ACCOUNTS................................................................................................................ 20

8......... HEDGING.................................................................................................................... 27

9......... CONFLICTS OF INTEREST...................................................................................... 29

10....... LIMITATIONS ON THE RESPONSIBILITY AND OBLIGATIONS OF THE COLLATERAL MANAGER.................................................................................................................. 33

11....... INDEMNITIES............................................................................................................ 37

12....... CONFIDENTIALITY.................................................................................................. 39

13....... POWER OF ATTORNEY............................................................................................ 39

14....... FEES AND PAYMENTS............................................................................................. 40

15....... REPRESENTATIONS................................................................................................. 42

16....... AGREEMENTS............................................................................................................ 44

17....... THE STANTON NAME.............................................................................................. 46

18....... TERMINATION EVENTS........................................................................................... 46

19....... TERMINATION.......................................................................................................... 47

20....... ASSIGNMENTS.......................................................................................................... 48

21....... MISCELLANEOUS..................................................................................................... 50

22....... NOTICES..................................................................................................................... 52

23....... GOVERNING LAW AND JURISDICTION............................................................... 52

24....... NON-PETITION AND LIMITED RECOURSE.......................................................... 53

SCHEDULE 1  NOTICE INFORMATION

SCHEDULE 2 FORM OF ISSUER ORDER

SCHEDULE 3 ELIGIBILITY CRITERIA AND PORTFOLIO CRITERIA

SCHEDULE 4 COLLATERAL QUALITY TESTS

SCHEDULE 5 COVERAGE TESTS

SCHEDULE 6 MOODY'S DIVERSITY SCORE TEST MOODY'S DIVERSITY SCORE TEST

SCHEDULE 7 MOODY'S WEIGHTED AVERAGE RATING

SCHEDULE 8 S&P RECOVERY RATE AND S&P RATING

SCHEDULE 9 MOODY'S RECOVERY RATE

SCHEDULE 10 FITCH WEIGHTED AVERAGE RATING AND FITCH RECOVERY RATE

SCHEDULE 11 NOTCHING

SCHEDULE 12 FORM OF REVOLVING NOTE REPAYMENT NOTICE

SCHEDULE 13 PROVISIONS PURSUANT TO THE RULES OF THE FINANCIAL SERVICES AUTHORITY

SCHEDULE 14 COLLATERAL MANAGEMENT PROCEDURES

 

 



 

THIS AGREEMENT is made on 4 November 2004 amended and restated pursuant to a First Amendment Agreement dated 29 June 2006 and a Second Amendment Agreement dated                              2016

BETWEEN:

(1)        STANTON MBS I p.l.c., a public limited liability company incorporated under the laws of Ireland having its registered office at 1st Floor, 1-2 Victoria Buildings, Haddington Road, Dublin 4, Ireland, and registered under number 390893 (the Issuer);

(2)        CAIRN CAPITAL LIMITED, of 27 Knightsbridge, London SW1X 7LY, United Kingdom (the "Collateral Manager", which expression shall include any successor or substitute collateral manager appointed in accordance with the terms of the Collateral Management Agreement);

(3)        U.S. BANK TRUSTEES LIMITED a private limited liability company, organised and existing under the laws of England and Wales with its registered address at L5, 125 Old Broad Street, London EC2N 1AR (formerly known as ABN AMRO Trustees Limited), in its capacity as note trustee (the "Trustee", which expression shall include all other persons or companies from time to time being the trustee or trustees of the Trust Deed); and

(4)        ELAVON FINANCIAL SERVICES LIMITED (formerly Bank of America, N.A., London Branch and ABN AMRO Bank N.V., London Branch), a company incorporated under the laws of Ireland with registered number 418442 and its registered office at Block E, Cherrywood Business Park, Loughlinstown, Dublin, Ireland, acting through its UK branch (registered number BR009373) from its offices at 5th Floor, 125 Old Broad Street, London EC2N 1AR, in its capacity as account bank (the "Account Bank", which expression shall include any successor account bank appointed in accordance with the terms of the Agency Agreement), as custodian (the "Custodian", which expression shall include any successor custodian appointed in accordance with the terms of the Agency Agreement) and as collateral administrator (the "Collateral Administrator", which expression shall include any successor collateral administrator appointed in accordance with the terms of the Agency Agreement).

WHEREAS:

(A)       The Issuer intends to issue, or has issued, its €30,000,000 Class A1 Senior Secured Floating Rate Revolving Notes due 2054 (the Class A1 Revolving Notes), €81,000,000 Class Al Senior Secured Floating Rate Delayed Draw Notes due 2054 (the Class Al Delayed Draw Notes), €107,500,000 Class A1 Senior Secured Floating Rate Term Notes due 2054 (the Class A1 Term Notes and, together with the Class A1 Revolving Notes and the Class A1 Delayed Draw Notes, the Class A1 Notes), €27,500,000 Class A2 Senior Secured Floating Rate Notes due 2054 (the Class A2 Notes and, together with the Class A1 Notes, the Class A Notes), €15,000,000 Class B Senior Secured Floating Rate Notes due 2054 (the Class B Notes and, together with the Class A Notes, the Senior Notes), €12,000,000 Class C Deferrable Interest Secured Floating Rate Notes due 2095 (the Class C Notes), €10,000,000 Class D Deferrable Interest Secured Floating Rate Notes due 2095 (the Class D Notes and, together with the Class C Notes, the Mezzanine Notes) and €19,320,000 Subordinated Notes due 2095 (the Subordinated Notes and, together with the Senior Notes and the Mezzanine Notes, the Notes) pursuant to the trust deed dated on or about the Closing Date (the Trust Deed), between, inter alios, the Issuer and the Trustee.

(B)       As security for the Notes and any other obligations secured by the Trust Deed and the Euroclear Pledge Agreement, the Issuer intends to pledge or cause to be pledged certain Collateral Debt Securities and Eligible Investments and certain other assets to the Trustee for the benefit of the Secured Parties.

(C)       The Collateral Manager is willing to perform, on behalf of the Issuer and, for the purposes of Clause 2.14 only, the Trustee, certain duties with respect to the Mortgaged Property in the manner and on the terms set forth herein.

IT IS HEREBY AGREED AS FOLLOWS:

1.         INTERPRETATION

In this Agreement, except so far as the context otherwise requires and subject to any contrary indication, words and expressions defined and expressed to be construed in the master interpretation and construction schedule (the Master Interpretation and Construction Schedule) signed for the purpose of identification on or about the Closing Date by, inter alias, the Issuer, the Trustee and the Collateral Manager shall have the same meaning and construction mutatis mutandis herein and Clauses 2 to 6 (inclusive) of the Master Interpretation and Construction Schedule shall apply mutatis mutandis to this Agreement. Subject to the foregoing, in this Agreement, unless the context requires otherwise, words and phrases set out below shall bear the meaning given to them below;

"Affiliate" means with respect to a Person, (i) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (ii) any other Person who is a director, officer, employee, designated member, partner or general partner of (a) such Person or (b) any such other Person described in clause (i) above. For the purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote more than 50 per cent. of the securities having ordinary voting power for the election of directors of such Person or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise and Affiliated shall be construed accordingly; and

"Eligible Successor" means an institution that (i) has an ability professionally and competently to perform duties similar to those imposed upon the Collateral Manager, under this Agreement, as determined by the Trustee at the direction in writing of at least a Majority of the Most Senior Class of Notes, (ii) has the capacity to act as successor to the Collateral Manager and assumes all of the responsibilities, duties and obligations of the Collateral Manager under this Agreement and each other Transaction Document to which the Collateral Manager is expressed to be a party, and (iii) will perform its duties as Collateral Manager under this Agreement without causing the Issuer or the Collateral Manager to become subject to Tax in any jurisdiction where such successor is incorporated, established, doing business, has a permanent establishment or is otherwise considered tax resident; and

"Person" means an individual, company, corporation (including a business trust), partnership (including any limited partnership or any limited liability partnership), limited liability company, joint venture, association, joint stock company, trust (including any beneficiary unincorporated association or government or any agency or political subdivision thereof.

2.         COLLATERAL MANAGER

Appointment

2.1       Each of the Issuer and, for the purposes of Clause 2.14 only, the Trustee hereby appoints the Collateral Manager to perform such services and take such actions on its behalf as are set out in this Agreement and to exercise such other powers as are delegated to the Collateral Manager hereby together with such authority and powers as are reasonably incidental thereto. The Collateral Manager hereby accepts such appointment subject to and in accordance with the terms of this Agreement.

Authority and Obligations of the Collateral Manager

2.2       Subject to the terms of this Agreement, the Collateral Manager agrees, and is hereby authorised, to:

(a)        prior to the acquisition of any asset by the Issuer or by the Collateral Manager on behalf of the Issuer, prepare and deliver to the Issuer and the Trustee a written confirmation (the Collateral Report) (including any legal opinion obtained in relation thereto) that, as at the date of the Collateral Report, the asset to be acquired (i) meets the definition of Eligible Investment, or (ii) meets the definition of Collateral Debt Security and (A) the acquisition of such asset will not cause the Portfolio to breach the Portfolio Criteria or (B) other than in respect of any of the Coverage Tests, which must be satisfied, if any of the limitations set forth in the Portfolio Criteria are not met prior to the acquisition of such asset, such acquisition will not cause such limitation to be further from being met. In connection with any such acquisition and in connection with the selection and disposal of Collateral Debt Securities and Eligible Investments, the Collateral Manager shall render advice to the Issuer in accordance with the acquisition and disposal criteria set out in this Agreement;

(b)        request, on behalf of the Issuer, from each Rating Agency, if required for the purposes of any survey of the ratings allocated to the Rated Notes, a credit estimate with respect to any asset for which the Collateral Manager has prepared a Collateral Report and that the Collateral Manager would consider for acquisition on behalf of the Issuer, and, in such a case, shall provide the relevant Rating Agencies with any information (including any report, accounts or other financial information) reasonably requested by such Rating Agency from the Collateral Manager, to the extent such information is available to, or can be obtained by, the Collateral Manager and necessary for any of the Rating Agencies to provide such estimate;

(c)        for the purposes of the annual survey of the ratings allocated to the Rated Notes, provide the Rating Agencies with any information (including any report, accounts or other financial information) reasonably requested by any such Rating Agency from the Collateral Manager, to the extent such information is available to, or can be obtained by, the Collateral Manager;

(d)        effect the acquisition or disposal of the Collateral Debt Securities or Eligible Investments in accordance with the terns of this Agreement (including giving instructions to other persons to effect such acquisition or disposal on behalf of the Issuer);

(e)        issue instructions to the Custodian, the Account Bank and the Collateral Administrator to effect settlement of trades for any acquisition or disposal of Collateral Debt Securities or Eligible Investments, and execute, for such purposes, an Issuer Order, on behalf of the Issuer, substantially in the form set out in Schedule 2 and deliver all trade confirmations to the Custodian for settlement purposes;

(f)         undertake any disposal, conversion, exchange or tender of a Collateral Debt Security or an Eligible Investment on behalf of the Issuer (including giving instructions to other persons to undertake such transactions) subject to, in the case of a conversion, exchange or tender, the Collateral Manager having been advised by the Custodian that circumstances have arisen where such action can or must be taken;

(g)        advise the Issuer in respect of the entry into and close-out of any Collateral Hedge Swaps and the reduction of the notional amount of such Collateral Hedge Swaps from time to time pursuant to any termination (in whole or in part) of such Collateral Hedge Swaps, and, before the day on which the first of each of the Collateral Currency Swaps, Collateral Interest Rate Swaps and Credit Default Swaps is entered into by the Issuer, request the Rating Agencies to confirm that the Rating Agency Condition is satisfied in respect of the form of confirmation to be used in respect thereof;

(h)        liaise with the Collateral Administrator and provide assistance to the Collateral Administrator in respect of the preparation of the Monthly Reports, review and confirm the accuracy of the information contained in the Monthly Reports prior to their publication to the extent related to the Portfolio Criteria or the Eligibility Criteria and upon such review, inform the Collateral Administrator of any manifest error;.

(i)         determine to the extent practicable, from sources normally available to it, any information concerning whether a Collateral Debt Security has become a Credit Risk Security, a Credit Improved Security, a Defaulted Security or a Converted Security;

(j)         subject to compliance by the Issuer with Clause 16.3(b), use its reasonable efforts to enter into a binding agreement or agreements with a financial institution or institutions whose short-term unsecured debt obligations have a credit rating of at least (i) "P-1" by Moody's, "A-1" by S&P and "F-1" by Fitch or (ii) if no such ratings are available, in respect of which the Rating Agency Condition has been satisfied; to sell, not later than the Business Day immediately preceding the Redemption Date, against payment of the purchase price in immediately available funds, all or part of the Collateral Debt Securities, the net proceeds of which, together with the Eligible Investments maturing on or prior to the Redemption Date, the aggregate balance standing to the credit of each of the Accounts and all amounts received under the Hedge Agreement or from the Collateral Debt Securities on or prior to such Redemption Date shall be equal to or greater than the Total Redemption Amount, in accordance with Condition 7(j) and, if so entered into, will provide evidence thereof in a form reasonably satisfactory to the Trustee;

(k)        subject to and in accordance with the terms of the Class A1 Notes Purchase Agreement (or, following any transfer of the Class Al Delayed Draw Notes, in accordance with the terms of the agreement set out in the relevant Transfer Certificate) direct the Collateral Administrator to prepare and deliver to the Class Al Delayed Draw Noteholder, on behalf of the Issuer, a Funding Request (substantially in the form set out in Schedule 1 to the Class A1 Notes Purchase Agreement or, as the case may be, the relevant Transfer Certificate) at any time prior to the Delayed Draw Notes Final Funding Date whenever the conditions to a Funding as specified in the Class A1 Notes Purchase Agreement or, as the case may be, the relevant Transfer Certificate are satisfied;

(l)         subject to and in accordance with the terms of the Class A1 Notes Purchase Agreement (or, following any transfer of the Class Al Revolving Notes, in accordance with the terms of the agreement set out in the relevant Transfer Certificate) direct the Collateral Administrator to prepare and deliver to the Class Al Revolving Noteholder, on behalf of the Issuer, a Funding Request (substantially in the form set out in Schedule 1 to the Class A1 Notes Purchase Agreement or, as the case may be, the relevant Transfer Certificate) at any time during the. Reinvestment Period whenever the conditions to a Funding as specified in the Class A1 Notes Purchase Agreement or, as the case may be, the relevant Transfer Certificate are satisfied;

(m)       direct the Collateral Administrator to prepare and deliver to the Class A1 Revolving Noteholders, on behalf of the Issuer, with a copy to the Trustee and the Principal Paying Agent, on or before two Business Days prior to the Revolving Note Payment Date on which a Funding in respect of the Class A1 Revolving Notes is to be repaid, a Revolving Note Repayment Notice substantially in the form set out in Schedule 12;

(n)        as and when reasonably requested by the Issuer, use its reasonable endeavours to arrange for a responsible Officer of the Collateral Manager to attend a board meeting of the Issuer to report on the services provided by the Collateral Manager under this Agreement;

(o)        within two days of the Ramp-Up Effective Date, request the Rating Agencies to confirm the ratings on the Rated Notes within 20 days of the Ramp-Up Effective Date and, so long as any of the Rated Notes remains Outstanding and, subject to any obligation of confidentiality to which the Collateral Manager may be subject, to the extent the information is available to the Collateral Manager, to respond, on behalf of the Issuer, to any queries the Rating Agencies may reasonably have in relation to the Portfolio;

(p)        maintain and monitor on an on-going basis a record of compliance with the Portfolio Criteria including, but not limited to, the review of the information regularly maintained by the Collateral Administrator with respect to the Mortgaged Property or Accounts, as described in Clause 3 of the Collateral Administration Agreement;

(q)        liaise with the Corporate Services Provider and the Auditor for the preparation of any accounts (audited and unaudited) of the Issuer;

(r)        liaise with the Issuer and the Account Bank for the payment by the Issuer of any Administrative Expenses of the Issuer;

(s)        respond, on behalf of the Issuer, to any queries the Corporate Services Provider, the Auditor, the Agents, the Rating Agencies or any Noteholder (subject to such Noteholder providing evidence of ownership of Notes to the Collateral Manager and subject to compliance with the rules of the Irish Stock Exchange and applicable law) may reasonably have related to the Mortgaged Property or the cash flows of the Issuer related to the Transaction Documents;

(t)         advise the Issuer to request collateral from the Hedge Counterparty and/or the Liquidity Facility Provider (and if so advised the Issuer hereby covenants for the benefit of the Trustee to request that such collateral be posted by the relevant party) if the Hedge Counterparty or the Liquidity Facility Provider is so required to post such collateral pursuant to the terms of the Hedge Agreement or the Liquidity Facility Agreement (as the case may be) and promptly inform the Rating Agencies if, after being notified of the occurrence of a Rating Downgrade Event or a Further Downgrade Event, the Hedge Counterparty does not post collateral or otherwise comply with the relevant requirements under the Hedge Agreement following such a Rating Downgrade Event or Further Downgrade Event, and

(u)        not to perform any act within The United Kingdom (other than those acts of the Collateral Manager which are specifically contemplated by the Transaction Documents) which could expose the Issuer to a liability to pay stamp duty in respect of any Transaction Document.

Test Dates

2.3       Unless the Ramp-Up Effective Date has occurred, on the date falling six calendar months following the Closing Date or, if such day is not a Business Day, the following Business Day (the First Test Date) and on the date falling three calendar months after the First Test Date or if such date is not a Business Day, the following Business Day, (the Second Test Date), the Collateral Manager will inform Moody's if the following tests, calculated as of such day, are met:

Test                                                                 First Test Date           Second Test Date

Diversity Score Test                                         At least 13                    At least 13

Weighted Average Rating Factor Test               Not greater than 700    Not greater than 655

Weighted Average Spread Test                        At least 1.60%             At least 1.65%

If any of such tests is not met, the Collateral Manager will present Moody's with a report on the current and proposed Portfolio indicating the measures the Collateral Manager plans to take in respect of any prospective purchases of Collateral Debt Securities in order to bring such test back in compliance by the Ramp-Up Effective Date. Under such circumstances, the Collateral Manager shall use its reasonable efforts to bring the Portfolio back in compliance on or before the Ramp-Up Effective Date.

Services of Collateral Manager

2.4       Subject to and in accordance with the terms of this Agreement, the Collateral Manager agrees to manage and service the Collateral Debt Securities and Eligible Investments and to perform on behalf of the Issuer the duties that have been specifically delegated to the Collateral Manager in this Agreement or in the other Transaction Documents to which the Collateral Manager is a party (provided that the Collateral Manager shall have no obligation hereunder to perform any other duties other than as specified herein). To the extent necessary or appropriate to perform such duties, the Collateral Manager shall have the power to negotiate, execute and deliver all necessary and appropriate documents and instruments on behalf of the Issuer with respect thereto, including any purchase or sale agreement with respect to any Collateral Debt. Security or Eligible Investment and including any documentation required to be delivered or executed by the Issuer under or in respect of the Hedge Agreement.

Exercise of Rights and Remedies

2.5       Subject to Clause 2.7, the Collateral Manager shall render advice to the Issuer as to the exercise of its rights and remedies associated with the Collateral Debt Securities and Eligible Investments.

Directions

2.6       The Collateral Manager, subject to and in accordance with the terns of this Agreement, may, as agent of the Issuer at any time, take the following actions with respect to a Collateral Debt Security or an Eligible Investment:

(a)        retain such Collateral Debt Security or Eligible Investment;

(b)        dispose of such Collateral Debt Security or Eligible Investment in the open market or otherwise;

(c)        tender such Collateral Debt Security or Eligible Investment;

(d)        consent to any proposed amendment, modification or waiver of the terms of any Collateral Debt Security or Eligible Investment;

(e)        retain or dispose of any securities or other property (if other than cash) received with respect to such Collateral Debt Security or Eligible Investment;

(f)         waive or elect not to exercise remedies in respect of any default with respect to any Defaulted Security;

(g)        vote to accelerate the maturity of any Defaulted Security;

(h)        participate in a committee or group formed by creditors of an issuer of, or an obligor under, a Collateral Debt Security or Eligible Investment;

(i)         consent to or refuse to consent to any proposed amendment, modification or waiver of the terms of a Collateral Debt Security or Eligible Investment pursuant to an Offer;

(j)         retain or dispose of any securities or other property (if other than cash) received pursuant to an Offer; or

(k)        exercise any other rights or remedies with respect to such Collateral Debt Security or Eligible Investment as provided in the related Underlying Instruments or take any other action consistent with the terms of this Agreement which in the Collateral Manager's opinion is in the best interests of the Noteholders as a whole.

Remedies; Voting, etc.

2.7       Unless the holders of at least the Relevant Percentage of the Controlling Class have delivered a notice to the Collateral Manager indicating otherwise, the Collateral Manager will exercise or refrain from exercising any voting rights, or exercise any remedies, with respect to any Collateral Debt Security or Eligible Investment as it reasonably deems to be in the best interest of the Noteholders as a whole provided always where in the opinion of the Collateral Manager there is a conflict of interest between Classes of Noteholders, the Collateral Manager shall only have regard to the interests of the holders of the Controlling Class, whose interests shall prevail.

Investment Objectives

2.8       In performing its duties hereunder, the Collateral Manager will use all reasonable efforts to manage the Mortgaged Property in such a way so that timely payments are made on the Notes and no Event of Default occurs under the Conditions; provided that (i) the Collateral Manager shall not be responsible if such objectives are not achieved so long as it performs its duties under this Agreement in the manner provided for herein and (ii), there shall be no recourse to the Collateral Manager with respect to the Issuer's obligations under the Notes or any of the Transaction Documents.

Standard of Care

2.9       The Collateral Manager shall, subject to the terms and conditions hereof, perform its obligations, duties and discretions hereunder with reasonable care, in a manner consistent with practices and procedures followed by reputable institutional managers of international standing relating to assets of the nature and character of the Collateral Debt Securities (such standard of care is herein referred to as the Standard of Care). The Standard of Care may change from time to time to reflect changes by the Collateral Manager to its customary and usual administrative policies and procedures provided that such policies and procedures are more rigorous than the foregoing. To the extent not inconsistent with the foregoing, the Collateral Manager will follow its customary and usual administrative policies and procedures in performing its duties hereunder.

Compliance with Trust Deed

2.10     The Collateral Manager shall comply with all the terms and conditions of the Trust Deed affecting the duties and functions that have been delegated to it hereunder. The Collateral Manager shall not be bound by any amendment to the Trust Deed or any other Transaction Document until it has received written notice thereof and until it has received a copy of the amendment from the Issuer or the Trustee; provided that the Collateral Manager shall not be bound by any amendment to the Trust Deed or any other Transaction Document that (x) increases its duties, obligations or liabilities, or (y) affects the amount or priority of any fees or other amounts payable to it hereunder unless the Collateral Manager shall have consented thereto in writing.

Arm's Length Basis

2.11     Subject to Clause 10.6, the Collateral Manager shall cause any acquisition or disposal by or on behalf of the Issuer of any asset to be effected on an arm's length basis and for fair market value.

Support for Services

2.12     The Collateral Manager shall, at its own expense, maintain such equipment, materials and expertise, and employ such professional and other personnel, as shall be necessary to perform the services hereunder.

Assistance of Collateral Manager

2.13     It is agreed and acknowledged that, in the performance of certain functions specified in this Agreement and the Collateral Administration Agreement, the Collateral Administrator is only able to fulfil its duties following receipt from the Collateral Manager of certain information which the Collateral Manager is required to provide to the Collateral Administrator under this Agreement or the Collateral Administration Agreement, and following receipt of the relevant income statements and balance sheets of the Issuer. The Collateral Manager shall co-operate with and provide such assistance and such information as may be reasonably required by the Collateral Administrator and not otherwise available to the Collateral Administrator in connection with the Portfolio, the Accounts and the Custody Account, so as to enable the Collateral Administrator to carry out its duties in accordance with the terms of the Collateral Administration Agreement.

Collateral Manager to Act for Trustee

2.14     At any time after an Event of Default shall have occurred and be continuing, the Notes shall otherwise have become due and repayable or the Trustee shall have received any money which it proposes to pay under Clause 8 of the Trust. Deed to the Noteholders, the Trustee may, so far as permitted by any applicable law or by any regulation having general application, by notice in writing to the Issuer and the Collateral Manager, require the Collateral Manager pursuant to this Agreement to:

(a)        act thereafter for the Trustee in relation to all powers and duties of the Collateral Manager otherwise owing to the Issuer in respect of the Mortgaged Property pursuant to this Agreement mutatis mutandis on the terms provided in this Agreement (provided that, notwithstanding anything to the contrary in this Agreement, the Collateral Manager shall be obliged to act thereafter upon the directions of the Trustee unless otherwise directed by the Trustee and provided further that the Trustee's liability under any provisions herein contained for the indemnification, remuneration and expenses of the Collateral Manager shall be limited to the amounts for the time being held by the Trustee on the terms of the Trust Deed) and thereafter to hold all moneys, documents and records held by it in respect of the Notes on behalf of the Trustee; and/or

(b)        deliver up all moneys, documents and records held by it in respect of the Notes to the Trustee or as the Trustee shall direct in such notice, provided that such notice shall be deemed not to apply to any document or record which the Collateral Manager is obliged not to release by any applicable law, regulation having general application or court order.

Liquidity Drawings to Fund Acquisitions

2.15     (a)        Whenever the Collateral Manager concludes a trade for the acquisition of a Collateral Debt Security, it shall, promptly (and in any event by no later than 7.00 p.m. Vienna time on the day the agreement for such trade is concluded) notify the Collateral Administrator of the details of such trade, including the amount of the accrued interest On the Collateral Debt Security included in the purchase price which is to be funded by a drawing under the Liquidity Facility Agreement.

(b)        The Collateral Manager acknowledges that in the event that the Collateral Administrator receives such notification at any time after the third Business Day preceding the agreed settlement date for the trade, condition (e) of the requirements specified in Clause 3.2 shall be deemed not to have been satisfied in respect of that trade.

(c)        The Collateral Administrator undertakes with the Issuer that upon receipt of any notification referred to in paragraph (a) above before 2:00 p.m. (London time), it will on the same day submit a Liquidity Drawing Request in accordance with the provisions of the Liquidity Facility Agreement in respect of the amount specified in such notice. In the case of any such notification received after 2:00 p.m. (London time), the Collateral Administrator shall use all reasonable efforts to submit the duly completed Liquidity Drawing Request in accordance with the Liquidity Facility Agreement on the same day and shall, in any event, submit such Liquidity Drawing Request by no later than 2:00 p.m. (London time) on the next following Business Day.

FCA Disclosures

2.16     The provisions of Schedule 13 (Provisions Pursuant to the Rules of the Financial Conduct Authority) shall be deemed to be part of this Agreement.

Collateral Management Procedures

2.17     The Collateral Manager will carry out its duties under this Agreement in accordance with the Collateral Management Procedures set out in Schedule 12 (Collateral Management Procedures), as the same may be amended from time to time upon the agreement of the Issuer and the Collateral Manager with the prior consent of the Trustee.

2.18     Nothing in this Clause 2 shall require the Collateral Manager to carry out any duties in relation to the Transaction Documents which have been delegated by the Issuer specifically to Persons other than the Collateral Manager pursuant to the Transaction Documents.

2.19     The Collateral Manager may, on behalf of the Issuer, subject to the provisions of this Agreement and the Trust Deed consent to, or participate in, liquidations, re-organisations, amalgamations, mergers and sales affecting any of the underlying obligors.

3.         SELECTION, ACQUISITION AND DISPOSAL OF COLLATERAL DEBT SECURITIES AND ELIGIBLE INVESTMENTS

Satisfaction of Criteria

3.1       The Collateral Manager, with the assistance of the Collateral Administrator, shall determine whether any asset proposed to be acquired:

(a)        Meets the definition of Collateral Debt Security and (i) whether the acquisition of such asset will not cause the Portfolio to breach the Portfolio Criteria or (ii) other than in respect of any of the Coverage Tests, which must be satisfied, if any of the limitations set forth in the Portfolio Criteria are not met prior to the acquisition of such asset, whether such acquisition will not cause such limitation to be further from being met; or

(b)        meets the definition of Eligible Investment.

Acquisition Requirements

3.2       Any acquisition of an asset by the Collateral Manager on behalf of the Issuer shall be subject to the requirements that:

(a)        such asset (i) meets the definition of Eligible Investment or (ii) meets the definition of Collateral Debt Security and (A) the acquisition of such asset will not cause the Portfolio to breach the Portfolio Criteria or (B) other than in respect of any of the Coverage Tests, if any of the limitations set forth in the Portfolio Criteria are not met prior to the acquisition of such asset, such acquisition will not cause such limitation to be further from being met;

(b)        no Event of Default shall have occurred and be continuing, provided that the Collateral Manager may acquire an asset on behalf of the Issuer, subject to and in accordance with the terms of this Agreement, which is the subject of a commitment entered into prior to the receipt of notice by the Collateral Manager of the occurrence of an Event of Default;

(c)        the Collateral Manager is not prohibited from trading in such asset in accordance with applicable law;

(d)        such acquisition is made on an arm's length basis and for fair market value; and

(e)        there are sufficient funds standing to the credit of the Principal Collection Account or the Uninvested Proceeds Account or available to be drawn under the Liquidity Facility Agreement to fund the acquisition of that asset.

Acquisition Prior to the Ramp-Up Effective Date

3.3       The Collateral Manager shall use its reasonable efforts to invest in Collateral Debt Securities on behalf of the Issuer up to an Aggregate Principal Balance equal to or greater than €298,500,000 on or before the Ramp-Up Effective Date.

Acquisition During the Reinvestment Period

3.4       During the Reinvestment Period, Interest Proceeds, Principal Proceeds and Uninvested Proceeds available for such purpose in accordance with paragraphs (S), (T) and (W) of the Interest Proceeds Priority of Payment and/or paragraph (B) of the Reinvestment Period Principal Proceeds Priority of Payments, as the case may be, may be used by the Collateral Manager, on behalf of the Issuer, to acquire Collateral Debt Securities subject to and in accordance with the terms of this Agreement.

Acquisition After the Reinvestment Period

3.5       After the Reinvestment Period, Interest Proceeds available for such purpose in accordance with paragraphs (S), (T) and (W) of the Interest Proceeds Priority of Payment may be used by the Collateral Manager, on behalf of the Issuer, to acquire Collateral Debt Securities subject to and in accordance with the terms of this Agreement.

Discretionary Disposal

3.6       Subject to the terms of this Agreement, the Collateral Manager may, acting on behalf of the Issuer, in the open market or otherwise, dispose or procure the disposal of:

(a)        any Defaulted Security;

(b)        any Credit Risk Security;

(c)        any Converted Security;

(d)        any Credit Improved Security;

(e)        any Collateral Debt Security, if directed to do so by an Extraordinary Resolution of each Class of Noteholders.

Conditions Applicable to the Disposal and Subsequent Acquisition of Tradeable Securities during the Reinvestment Period

3.7       In addition to the ability of the Collateral Manager to dispose or procure the disposal of Collateral Debt Securities under Clause 3.6, the Collateral Manager (acting on behalf of the Issuer) may dispose of any Collateral Debt Security during the Reinvestment Period (a Tradeable Security)) subject to:

(a)        the Collateral Manager not having received notification and not having actual knowledge that an Event of Default has occurred and is continuing;

(b)        if the Class A1 Notes are not rated "Aaa" by Moody's, the Noteholders of the Controlling Class agreeing to such disposal through an Extraordinary Resolution;

(c)        the Collateral Administrator confirming to the Collateral Manager that the Aggregate Principal Balance of Tradeable Securities disposed of for a given year (for the avoidance of doubt, including the proposed disposal) does not exceed 15 per cent. of the Aggregate Principal Balance of the Collateral Debt Securities held by the Issuer at the beginning of that year for which purposes a year shall be deemed to be from and including 4 November in a year to but excluding 4 November in the following year;

(d)        the Collateral Manager certifying prior to such disposal to the Issuer and the Trustee in an Issuer Order that it believes in its sole but reasonable judgement (1) that the Principal Sale Proceeds thereof shall he in an amount which is no less than 98 per cent. of the Principal Balance of such Collateral Debt Security prior to such disposal and (2) that such Principal Sale Proceeds can be reinvested in Collateral Debt Securities within 30 Business Days from the date of settlement of the disposal of the Collateral Debt Security to be disposed of;

(e)        if the acquisition described in paragraph (d)(2) above does not take place within such time frame after the Collateral Manager using its reasonable efforts to effect such acquisition, the Collateral Manager shall use the Principal Sale Proceeds to either (a) repay the Class Al Revolving Notes subject to the satisfaction of the Revolving Note Repayment Condition on the immediately following Revolving Note Payment Date, or (b) after the Reinvestment Period, redeem the Notes in accordance with the Post Reinvestment Period Priority of Payments;

(f)         the Collateral Manager certifying prior to such disposal to the Issuer and the Trustee in an. Issuer Order that after giving effect to such disposal and any subsequent acquisition, the Portfolio Criteria will be met or if any of the limitations set forth in the Portfolio Criteria (other than any of the Coverage Tests) are not met prior to such disposal, the Collateral Manager certifying in an Issuer Order that each such limitation will not be further from being met after giving effect to such disposal and any, subsequent acquisition; and

(g)        if such disposal occurs after the Ramp-Up Effective Date, the Collateral Manager may only proceed with the subsequent acquisition if either (A) such disposal and the corresponding acquisition under paragraph (d)(2) above shall not result in the Class D Overcollateralisation Ratio falling below the Ramp-Up Effective Date Overcollateralisation Ratio on the day the acquisition takes place, or (B) the sum of the par amount of the assets purchased and the reduction in the aggregate amount of each Funding outstanding in respect of the Class Al Revolving Notes is no less than the par amount of the Collateral Debt Securities sold.

Conditions Applicable to the Disposal of Defaulted Securities, Credit Risk Securities, Converted Securities and Credit Improved Securities and Subsequent Acquisition of Collateral Debt Securities

3.8       Defaulted Securities, Credit Risk Securities, Credit Improved Securities and Converted Securities may be disposed of at any time by the Collateral Manager (acting on behalf of the Issuer) subject to:

(a)        the Collateral Manager not having received notification and not having actual knowledge that an Event of Default has occurred and is continuing;

(b)        the Collateral Manager certifying prior to such disposal to the Issuer and the Trustee in an Issuer Order that it believes in its sole but reasonable judgement that such security is a Defaulted Security, a Credit Risk Security, a Converted Security or a Credit Improved Security, as the case may be;

(c)        the Collateral Manager confirming prior to such disposal to the Issuer and the Trustee in an Issuer Order that it reasonably believes that the Principal Sale Proceeds thereof can be reinvested in Collateral Debt Securities within 30 Business Days (in the case of a Credit Improved Security) or 60 days (otherwise) from the date of settlement of the disposal of the Collateral Debt Security to be disposed of;

(d)        if the acquisition described in paragraph (c) above does not take, place within such timeframe as specified in paragraph (c) above after the Collateral Manager using its reasonable efforts to effect such acquisition, the Collateral Manager shall use the Principal Sale Proceeds either to (i) repay the Class Al Revolving Notes subject to the satisfaction of the Revolving Note Repayment Condition on the immediately following Revolving Note Payment Date, or (ii) after the Reinvestment Period, redeem the Notes in accordance with the Post Reinvestment Period Priority of Payments;

(e)        the Collateral Manager certifying prior to such disposal to the Issuer and the Trustee in an Issuer Order that after giving effect to such disposal and any subsequent acquisition, the Portfolio Criteria will be met or, if any of the limitations set forth in the Portfolio Criteria (other than any of the Coverage Tests) are not met prior to such disposal, the Collateral Manager certifying in an Issuer Order that each such limitation will not be further from being met after giving effect to such disposal and any subsequent acquisition;

(f)         if such disposal of Credit Improved Securities and the subsequent acquisition of Collateral Debt Securities occurs after the Ramp-Up Effective Date, the Collateral Manager may only proceed with such subsequent acquisition if either (A) such disposal and the corresponding acquisition under paragraph (c) above shall not result in the Class D Overcollateralisation Ratio falling below the Ramp-Up Effective Date Overcollateralisation Ratio on the day the acquisition takes place, or (B) the sum of the par amount of the assets purchased and the reduction in the aggregate amount of each Funding outstanding in respect of the Class A1 Revolving Notes is no less than the par amount of the Collateral Debt Securities sold; and

(g)        if such disposal of Credit Risk Securities, Defaulted Securities or Converted Securities and the subsequent acquisition of Collateral Debt Securities occurs after the Ramp-Up Effective Date, the Collateral Manager may only proceed with such subsequent acquisition if either (A) such disposal and the corresponding acquisition under paragraph (c) above shall not result in the Class D Overcollateralisation Ratio falling below the Ramp-Up Effective Date Overcollateralisation Ratio on the day the acquisition takes place, or (B) the sum of the par amount of the assets purchased and the reduction in the aggregate amount of each Funding outstanding in respect of the Class A1 Revolving Notes is no less than the Principal Sales Proceeds of the Collateral Debt Securities sold.

Suspension of Reinvestment Period

3.9       (a)        If the Collateral Manager reasonably determines that, in light of the composition of Collateral Debt Securities in the Portfolio, general market conditions and any other factors the Collateral Manager considers relevant, investments in additional Collateral Debt Securities would at any time during the Reinvestment Period either be impracticable or not beneficial to the Issuer, the Reinvestment Period shall be suspended for such period as determined by the Collateral Manager in its sole discretion.

(b)        The Reinvestment Period shall also be suspended on any Measurement Date after the Ramp-Up Effective Date on which any of the Coverage Tests are breached as determined by the Collateral Manager or the Collateral Administrator until such time as all of the Coverage Tests are satisfied, provided that the Collateral Manager, on behalf of the Issuer, shall honour any commitment to acquire Collateral Debt Securities arising before the suspension of the Reinvestment Period.

Disposal Following Optional Redemption of the Notes

3.10     Following the issue of any notice of an optional redemption of the Notes in accordance with Conditions 7(e), (g) or (i), the Collateral Manager, acting on behalf of the Issuer, may, at any time on behalf of the Issuer, dispose or cause the disposal of any Collateral Debt Security and/or Eligible Investment in the open market or otherwise without regard to the foregoing limitations in Clauses 3.6, 3.7 or 3.8, provided that:

(b)        the Sale Proceeds therefrom are used to pay all amounts referred to in Condition 7(e), (g) or (i), as the case may be, to redeem the relevant Class of Notes (in whole but not in part) and to pay all amounts ranking in priority thereto in accordance with the Priorities of Payments; and

(c)        all the Collateral Debt Securities and/or Eligible Investments to be sold pursuant to this Clause 3.10 will be sold in accordance with the requirements set forth in Condition 7.

Disposal on or prior to Stated Maturity

3.11     In the event of any redemption of the Notes in whole on or prior to their Stated Maturity in circumstances other than those specified in Clause 3.10, the Collateral Manager on behalf of the Issuer shall use all commercially reasonable efforts to procure liquidation of the Collateral Debt Securities and Eligible Investments so that the proceeds thereof are available in immediately available funds not later than one Business Day prior to the scheduled Redemption Date.

Enforcement of Security

3.12     Upon receipt of notification from the Trustee of the enforcement by the Trustee of the security over the Mortgaged Property, the Collateral Manager shall, if appointed by the Trustee in accordance with Clause 2.14, realise the Portfolio to the extent required by the Trustee and at the direction of the Trustee.

4.         ISSUER ORDERS

Disposals

4.1       If no Event of Default has occurred and is continuing and subject to Clause 3, the Collateral Manager (on behalf of the Issuer) may, by an Issuer Order executed by one Authorised Officer of the Collateral Manager delivered to the Trustee, the Collateral Administrator, the Account Bank and the Custodian at least two Business Days prior to the settlement date for any disposal of a Collateral Debt Security, dispose of such Collateral Debt Security against receipt of payment therefor. Upon receipt of such Issuer Order, subject to no Enforcement Notice being outstanding, the Trustee shall countersign the same (without âny duty of, and without any liability for, monitoring the compliance by the Collateral Manager with the requirements set out in Clause 3), which countersignature shall operate to release the applicable Collateral Debt Security from the security constituted pursuant by the Trust Deed and the Euroclear Pledge Agreement.

Offers and Options

4.2       In the event that any asset in the Portfolio (or any coupon or receipt relating thereto) is required to be presented and/or surrendered to the issuer thereof or any agent thereof in connection with the exercise of any option or other right thereunder or the acceptance of any Offer relating thereto, the Collateral Manager shall, subject to having received (where applicable) the relevant information pursuant to Clause 5, complete an Issuer Order setting out in reasonable detail the requirement to present and/or surrender such asset or any evidence thereof and the procedures required (if applicable) in order to exercise such option or accept such Offer, and subject to any contrary instructions from the Issuer, the Collateral Manager shall take all such other action (on behalf of the Issuer) as may be required in connection therewith and shall deliver such Issuer Order to the Trustee at least two Business Days prior to the date on which any presentation or surrender of such asset or other action is required. Upon receipt of such Issuer Order, subject to no Enforcement Notice being outstanding, the Trustee (without any duty of, and without any liability for, monitoring the compliance with such requirements or procedures) shall countersign the same, which countersignature shall operate to release the applicable Collateral Debt Security from the security constituted by the Trust Deed and the Euroclear Pledge Agreement and shall promptly thereafter forward a copy of such Issuer Order to the Custodian (with a copy to the Collateral Administrator) and delivery thereof shall constitute instructions to the Custodian to present and/or surrender such asset to the extent required pursuant to its terms in order to exercise any such option or accept any such Offer.

5.         REPORTS

The Custodian shall supply in a timely fashion to the Issuer, the Collateral Administrator and the Collateral Manager any information regularly maintained by the Custodian that the Issuer, the Collateral Administrator or the Collateral Manager may from time to time request and which the Custodian may lawfully supply with respect to the Mortgaged Property and which will or may reasonably be needed to complete the Monthly Reports and any other information reasonably available to the Custodian by reason of its acting as Custodian and which the Custodian may lawfully supply and which is required to be provided to enable the Collateral Manager to perform its obligations under this Agreement or to enable the Collateral Administrator to perform its obligations under the Collateral Administration Agreement. The Trustee or Custodian, as the case may be, shall promptly and in any event not later than two Business Days after receipt thereof, forward to the Collateral Manager and the Issuer, copies of notices and other writings received by it from the issuer or trustee of any Collateral Debt Security or Eligible Investment or from any clearing system and/or paying agent with respect to any Collateral Debt Security or Eligible Investment advising the holders of such security of any rights that, the holders might have with respect thereto (including, without limitation, notices of calls and redemptions of securities) as well as all periodic financial reports received from such issuer, trustee, clearing system and/or paying agent with respect to such issuer and/or such Collateral Debt Security or Eligible Investment.

6.         INDEPENDENT ACCOUNTANTS

Appointment

6.1       The Issuer confirms that it has appointed a firm of Independent registered auditors and chartered accountants of recognised international reputation for the purposes of preparing the annual audited accounts of the Issuer.

Resignation

6.2       Upon any resignation by any firm or representative referred to in Clause 6.1, the Issuer shall promptly notify the Collateral Manager and the Trustee and appoint a successor thereto that shall also be a Finn of Independent registered auditors and chartered accountants of recognised international reputation and shall notify such appointment to the Trustee, the Collateral Administrator, the Collateral Manager and the Rating Agencies. If the Issuer shall fail to appoint such a successor within 30 days after such resignation, the Trustee shall use its reasonable endeavours to promptly procure the appointment on behalf of the Issuer of a successor firm of Independent registered auditors and chartered accountants of recognised international reputation and notify such appointment to the Collateral Manager; the Issuer, the Collateral Administrator, the Noteholders and the Rating Agencies.

Fees

6.3       The reasonable fees of such Independent registered auditors and chartered accountants and any successor thereto as agreed by the Issuer in good faith shall be deemed to be Administrative Expenses and payable by the Issuer in accordance with the Priorities of Payments.

Information

6.4       The Collateral Manager and the Collateral Administrator shall, in so far as they are able and permitted to do so, obtain and provide to the Independent registered auditors and chartered accountants appointed pursuant to this Clause 6 all reports, data and other information (including, without limitation, any letters of representations) that such accountants or representative may require in connection with such appointment.

7.         ACCOUNTS

Establishment of Accounts and Custody Account

7.1       (a)        The Issuer shall, prior to the Closing. Date, establish at the Account Bank each of the Accounts (other than the Liquidity Downgrade. Drawing Account), which shall be held by the Account Bank in the name of the Issuer and shall be secured under the Trust Deed in favour of the Trustee for the benefit of the Secured Parties. All funds deposited from time to time in an Account pursuant to this Agreement shall be held by the Issuer as part of the Mortgaged Property and shall be applied for the purposes provided in the Transaction Documents. The Issuer agrees to give the Trustee immediate notice if any Account or any funds on deposit therein, or otherwise to the credit of any Account, shall become subject to any writ, order, judgement, warrant of attachment, execution or similar process.

(b)        No transfer or withdrawal from any Account shall be made to the extent that such transfer or withdrawal would result in that Account being over-drawn.

(c)        The Issuer shall, prior to the Closing Date, establish at the Custodian an account which shall be designated as the Custody Account, which shall be held by the Custodian in accordance with the provisions of the Agency Agreement and secured in favour of the Trustee for the benefit of the Secured Patties and into which the Issuer shall from time to time deposit Mortgaged Property in the form of securities, including but not limited to, Collateral Debt Securities and Eligible Investments. All securities or other assets deposited from time to time in the Custody Account shall be held by the Issuer as part of the Mortgaged Property and shall be applied for the purposes provided for in the Transaction Documents.

(d)        Each of the Issuer and the Custodian agrees to give the Trustee and the Collateral Manager immediate notice if the Custody Account or any securities on deposit therein, or otherwise credited to the Custody Account, shall become subject to any writ, order, judgement, warrant of attachment, execution or similar process.

Payments to and from the Accounts prior to the Enforcement of Security

7.2       The provisions of Clauses 7.3 to 7.10 below shall apply in respect of the Accounts prior to the security constituted by the Trust Deed and/or the Euroclear Pledge Agreement becoming enforceable:

Collection Accounts

(a)        Subject to paragraph (e) below, the Issuer shall procure the payment or transfer of all Interest Proceeds in euro into the Interest Collection Account immediately upon receipt thereof.

(b)        The Issuer shall procure the payment or transfer of the following amounts out of the Interest Collection Account:

(i)         on the Business Day prior to each Payment Date and on the Business Day prior to each Revolving Note Payment Date, to the Payment Account, the amount required to be transferred thereto on such date in accordance with Condition 3(b); and

(ii)        at any time, any amount to be applied by the Collateral Manager in the acquisition of Eligible Investments in accordance with Clause 7.10,

and will ensure that no other amount is paid out of the Interest Collection Account.

For the avoidance of doubt, Interest Proceeds withdrawn from the Payment Account as contemplated by item (W) of the Interest Proceeds Priority of Payments shall be deposited into the Principal Collection Account for the purchase of additional Collateral Debt Securities.

(c)        Subject to paragraphs (e) and (t) below, the Issuer shall procure the payment or transfer of all Principal Proceeds in euro into the Principal Collection Account immediately upon receipt thereof.

(d)        The Issuer shall procure the payment or transfer of the following amounts out of the Principal Collection Account:

(i)         on the Business Day prior to each Payment Date and the Business Day prior to each Revolving Note Payment Date, to the Payment Account, the amount required to be transferred thereto on such date as referred to in Clause 7.4;

(ii)        at any time, any interest received in respect of amounts standing to the credit of the Principal Collection Account, to the Interest Collection Account as Interest Proceeds; and

(iii)       at any time, any amount to be applied by the Collateral Manager in the acquisition of Eligible Investments subject to and in accordance with Clause 7.10,

and shall ensure that no other amount is paid out of the Principal Collection Account provided that, if upon acquisition of a Collateral Debt Security a Liquidity Drawing is duly made and the moneys are not received by the Issuer in time for settlement, the Issuer may use Principal Proceeds standing to the credit of the Principal Collection Account in an amount equal to the amount of such Liquidity Drawing to pay the purchase price of the relevant Collateral Debt Security and shall credit an amount equal to the Liquidity Drawing when received to the Principal Collection Account.

(e)        The Collateral Administrator, within one Business Day after receipt by the Issuer of any Distributions or other proceeds which are not cash, shall so notify the Issuer in writing (with a copy to the Collateral Manager) and the Collateral Manager shall use all reasonable commercial efforts to sell such Distributions or other proceeds for cash in an arm's length transaction to any Person and deposit the proceeds thereof in the Interest Collection Account (to the extent that, the Collateral Manager; acting reasonably, determines that such proceeds are in the nature of Interest Proceeds) or the Principal Collection Account (to the extent that, the Collateral Manager, acting reasonably, determines that such proceeds are in the nature of Principal Proceeds), provided that the Collateral Manager need not sell such Distributions or other proceeds if it delivers an Officer's certificate to the Trustee certifying that such Distributions or other proceeds constitute Collateral Debt. Securities or Eligible Investments.

(f)         Any Sale Proceeds received by the Issuer from the disposal of any Collateral Debt Security or Eligible Investment, instead of being deposited in the Principal Collection Account, may be simultaneously applied in the acquisition of Collateral Debt Securities or Eligible Investments if at that time the Issuer, or the Collateral Manager on behalf of the Issuer, is permitted to acquire Collateral Debt Securities or Eligible Investments, in each case, subject to and in accordance with the terms of this Agreement.

Payment Account

7.3       (a)        The Issuer shall procure the payment or transfer of the following amounts into the Payment Account:

(i)         on the Business Day prior to each Payment Date, from the Collection Accounts, all amounts standing to the credit thereof (other than (i) proceeds received after the end of the Due Period with respect to such Payment Date and (ii) amounts that the Issuer, or the Collateral Manager on behalf of the Issuer, is entitled to reinvest in accordance with the Transaction Documents, which may be retained in the Collection Accounts for subsequent reinvestment subject to and in accordance with the terms of this Agreement);

(ii)        on the Business Day prior to each Revolving Note Payment Date subject to the Coverage Tests being satisfied on the, preceding Revolving Note Determination Date, from the Interest Collection Account, an amount equal to the amount to be applied by the Issuer as referred to in Condition 3(b)(ii);.

(iii)       on the Business Day prior to each Revolving Note Payment Date subject to the Coverage Tests being satisfied on the preceding Revolving Note Determination Date, from the Principal Collection Account, an amount equal to the amount to be applied by the Issuer as referred to in Condition 3(b)(iv); and

(iv)       upon receipt thereof, any Liquidity Drawing made available to the Issuer in accordance with the terms of the Liquidity Facility Agreement.

(b)        The Issuer shall procure the payment or transfer of the following amounts out of the Payment Account:

(i)         subject to the prior application of amounts standing to the credit of the Liquidity Downgrade Drawing Account subject to and in accordance with the terms of the Liquidity Facility Agreement, on each Payment. Date, all amounts standing to the credit of the Payment Account, to be disbursed in accordance with the relevant Priorities of Payments;

(ii)        on each Revolving Note Payment Date, all amounts standing to the credit of the Payment Account; to be disbursed in accordance with Conditions 3(b)(ii) and 3(b)(iv);

(iii)       at any time, any interest received in respect of amounts standing to the credit of the Payment Account, to the Interest Collection Account as Interest Proceeds;

(iv)       on each day on which a Collateral Debt Security is to be acquired with the proceeds of a Liquidity Drawing, the amount of such Liquidity Drawing; and

(v)        subject to the prior crediting of such amount to the Payment Account in accordance with the terms of the Liquidity Facility Agreement, on the date the Liquidity Downgrade Drawing Account is opened, the amount of the Liquidity Downgrade Drawing,

and shall ensure that no other amount is paid out of the Payment Account. Expense Account

7.4       (a)        The Issuer shall procure the payment or transfer of the following amounts into the Expense Account:

(i)         on the Closing Date, an amount equal to €150,000 (which amount shall be deducted from the gross issue proceeds of the Notes); and

(ii)        on each Payment Date other than the Final Payment Date, the amount of Interest Proceeds required pursuant to paragraph (Q) of Condition 3(b)(i) and, to the extent that such amounts are not paid out of Interest. Proceeds, the amount of Principal Proceeds required pursuant to paragraph (A) of Condition 3(b)(iii).

(b)        The Issuer shall procure the payment or transfer of the following amounts out of the Expense Account:

(i)         at any time, to pay any costs and expenses related to the issuance of the Notes and any other costs and expenses payable, and not otherwise paid, by the Issuer on or about the Closing Date in respect of the entry into of the Transaction Documents;

(ii)        at any time, to pay any Administrative Expenses;

(iii)       at any time, any interest received in respect of amounts standing to the credit of the Expense Account, to the Interest Collection Account as Interest Proceeds;

(iv)       at any time, any amount to be applied by the Collateral Manager in the acquisition of Eligible Investments subject to and in accordance with Clause 7.10; and

(v)        on the Business Day prior to the Final Payment Date, all amounts standing to the credit of the Expense Account (other than any amounts of interest in respect of amounts standing to the credit of the Expense Account), to the Principal Collection Account as Principal Proceeds,

and shall ensure that no other amount is paid out of the Expense Account. Uninvested Proceeds Account

7.5       (a)        The Issuer shall procure the payment or transfer into the Uninvested Proceeds Account immediately upon receipt thereof of the net proceeds of the issuance of the Notes and any Funding in respect of the Class Al Delayed Draw Notes and the Class Al Revolving Notes, to the extent such proceeds have not been (A) invested in Collateral Debt Securities and/or Eligible Investments or (B) used to make payments otherwise due by the Issuer pursuant to any of the Transaction Documents.

(b)        The Issuer shall procure the payment or transfer of the following amounts out of the Uninvested Proceeds Account:

(i)         at any time during the Reinvestment Period, to acquire Collateral Debt Securities subject to and in accordance with the teens of this Agreement;

(ii)        in the event of the occurrence of any of the events described in paragraphs (H), (K), (N) and (O) of the Interest Proceeds Priority of Payments, on the Business Day prior to the Payment Date immediately following such event, such amount as is required by paragraphs (H), (K), (N) and/or (O), as the case may be, of the Interest Proceeds Priority of Payments, to the Payment Account for disbursement on that Payment Date in accordance with the relevant Priorities of Payments;

(iii)       at any time, any interest received in respect of amounts standing to the credit of the Uninvested Proceeds Account, to the Interest Collection Account as Interest Proceeds;

(iv)       at any time, any amount to be applied by the Collateral Manager in the acquisition of Eligible Investments subject to and in accordance with Clause 7.10; and

(v)        on the Business Day prior to the end of the Reinvestment Period, all amounts standing to the credit of the Uninvested Proceeds Account (other than any amounts of interest in respect of amounts standing to the credit of the Uninvested Proceeds Account), to the Principal Collection Account as Principal Proceeds,

and shall ensure that no other amount is paid out of the Uninvested Proceeds Account. Currency Accounts

7.6       (a)        The Issuer shall procure the payment or transfer of all amounts received in respect of any Non-Euro Obligations into the relevant Currency Account immediately upon receipt thereof.

(b)        The Issuer shall procure the payment or transfer of the following amounts out of the relevant Currency Account:

(i)         at any time, all amounts payable by the Issuer to the Hedge Counterparty under any Collateral Currency Swap;

(ii)        on the Business Day prior to any Redemption Date in the event of redemption of the Notes in whole, all amounts standing to the credit of the relevant Currency Account, to the extent not subject to the terms of a Collateral Currency Swap, after conversion into euro by the Issuer following consultation with the Collateral Manager, to the Principal Collection Account (in the case of amounts representing Principal Proceeds) or the Interest Collection Account (in the case of amounts representing Interest Proceeds); and

(iii)       all interest accrued on the relevant Currency Account, to the extent not subject to the terms of a Collateral Currency Swap. after conversion into euro by the Issuer following consultation with the Collateral Manager, to the Interest Collection Account as Interest Proceeds,

and shall ensure that no other amount is paid out of the relevant Currency Account. Reserved Collateral Management Fee Account

7.7       (a)        The Issuer shall procure the payment or transfer of all amounts referred to in item (U) of the Interest Proceeds Priority of Payments into the Reserved Collateral Management Fee Account immediately upon receipt thereof.

(b)        The Issuer shall procure the payment or transfer of the following amounts out of the Reserved Collateral Management Fee Account:

(i)         at any time, any amount to be applied by the Collateral Manager in the acquisition of Eligible Investments subject to and in accordance with Clause 7.10; and

(ii)        on the Business Day prior to the Final Payment Date, all amounts standing to the credit of the Reserved Collateral Management Fee Account, to the Principal Collection Account as Principal Proceeds,

and shall ensure that no other amount is paid out of the Reserved Collateral Management Fee Account.

Liquidity Downgrade Drawing Account

7.8       (a)        The Collateral Administrator shall, if required pursuant to the Liquidity Facility Agreement, open the Liquidity Downgrade Drawing Account.

(b)        The Issuer shall procure the payment or transfer of the Liquidity Downgrade Drawing together with any interest accrued thereon from the Payment Account into the Liquidity Downgrade Drawing Account subject to and in accordance with the terms of the Liquidity Facility Agreement.

(c)        The Issuer shall, for as long as the Liquidity Downgrade Drawing has not been repaid in full to the Liquidity Facility Provider, procure the payment or transfer of the following amounts out of the Liquidity Downgrade Drawing. Account:

(i)         at any time, an amount equal to each Liquidity Drawing to be made available under the Liquidity Facility Agreement, to the Payment Account;

(ii)        on each Payment Date, the interest accrued on the balance of the Liquidity Downgrade Drawing Account and credited thereto, to the Liquidity Facility Provider; and

(iii)       upon the Liquidity Downgrade Loan becoming repayable in full to the Liquidity Facility Provider, the Liquidity Downgrade Loan together with the interest accrued and paid thereon, to the Liquidity Facility Provider,

and shall ensure that no other amount is paid out of the Liquidity Downgrade Drawing Account:

Eligible Investments

7.9       The Collateral Manager may invest all funds standing to the credit of each Collection Account, the Expense Account, the Uninvested Proceeds Account and the Reserved Collateral Management Fee Account in Eligible Investments having stated maturities no later than the Business Day immediately preceding the Determination Date of the Due Period in which the date of the investment occurs or, in the case of Eligible Investments representing amounts required to be disbursed in accordance with Condition 3(b) on a Revolving Note Payment Date, no later than the Business Day immediately preceding the Revolving Note Determination Date of the Revolving Note Due Period in which the date of investment occurs, The Collateral Manager shall not in any way be held, liable by reason of any insufficiency of the amounts standing to the credit of any Account resulting from any loss relating to any such investments, except with respect to investments in obligations of the Collateral Manager or any Affiliate thereof.

Trustee Not Liable for Receipts

7.10     Except as otherwise expressly provided herein, in the Trust Deed or in the Euroclear Pledge Agreement, the Trustee shall be under no obligation to demand payment or delivery of, or receive and collect, any money or other property payable or receivable pursuant to this Agreement.

8.         HEDGING

Collateral Currency Swaps

8.1       The Collateral Manager may acquire Non-Euro Obligations on behalf of the Issuer, provided that on or before the date of acquisition of each such Non-Euro Obligation the Collateral Manager on behalf of the Issuer enters into a Collateral Currency Swap pursuant to which:

(a)        on the effective date of such transaction, the Issuer pays to the Hedge Counterparty an initial exchange amount in euro in exchange for payment by the Hedge Counterparty of an initial exchange amount in the relevant currency equal to the purchase price of such Non-Euro Obligation;

(b)        on the date of termination of such transaction, the Issuer pays to the Hedge Counterparty a final exchange amount in the relevant currency in exchange for payment by the Hedge Counterparty to the Issuer of a final exchange amount denominated in euro, such final exchange amount to be converted into euro at the Collateral Currency Swap Exchange Rate;

(c)        the Issuer pays periodically to the Hedge Counterparty in the relevant currency of the Collateral Currency Swap a coupon on the notional amount and/or a predetermined amount equal to the amount by which the notional amount shall be reduced and the Hedge Counterparty pays periodically to the Issuer in euro a coupon on the notional amount of such Collateral Currency Swap and/or a predetermined amount equal to the amount by which the notional amount shall be reduced;

(d)        amounts payable by the Issuer to the Hedge Counterparty in respect of any Collateral Currency Swap shall be paid out of the amounts standing to the credit of the relevant Currency Account and, if insufficient, the Payment Account, subject to and in accordance with the relevant Priorities of Payments;

(e)        all amounts received by the Issuer from the Hedge Counterparty in respect of any Collateral Currency Swap shall be paid into the Interest Collection Account (to the extent such amounts constitute Interest Proceeds) or the Principal Collection Account (to the extent such amounts constitute Principal Proceeds); and

(f)         there will be optionality embedded in the Collateral Currency Swap to allow such Collateral Currency Swap to be terminated early and cancelled.

Amounts not Subject to a Collateral Currency Swap

8.2       Without prejudice to Clause 8.1, the Issuer, following consultation with the Collateral Manager, shall convert all amounts received by it in respect of any Non-Euro Obligation which are not the subject of a related Collateral Currency Swap into euro promptly upon receipt thereof at the then prevailing spot rate of exchange and shall procure that such amounts are paid into the Interest Collection Account (to the extent such amounts constitute Interest Proceeds) or the Principal Collection Account (to the extent such amounts constitute Principal Proceeds).

Collateral Interest Rate Swaps

8.3       The Collateral Manager may on behalf of the Issuer enter into Collateral Interest Rate Swaps pursuant to which the Issuer pays periodically to the Hedge Counterparty amounts calculated by reference to the interest payments received by the Issuer in respect of Fixed Rate Collateral Debt Securities and the Hedge Counterparty pays to the Issuer amounts calculated by reference to the EURIBOR rate payable by the Issuer in respect of the Notes. There will be optionality embedded in the Collateral Interest Rate Swaps to allow such Collateral Interest Rate Swaps to be terminated early and cancelled.

Credit Default Swaps

8.4       Subject to the Weighted Average Spread of the Portfolio being greater than 1.8 per cent. and the Class D Interest Coverage Ratio being greater than 109 per cent and, provided that after taking into account the premium obligations of the Issuer on any outstanding and proposed Credit Default Swaps, the Weighted Average Spread of the Portfolio is and is expected to continue to be for the life of the relevant Credit Default Swap above 1.7 per cent., in each case, as calculated at the time of the entry into of the relevant Credit Default Swap, the Collateral Manager may on behalf of the Issuer enter into Credit Default Swaps pursuant to which:

(a)        the Issuer pays to the Hedge Counterparty on each Payment Date a premium on the notional amount of the Credit Default Swap and the Hedge Counterparty pays to the Issuer, subject to satisfaction of the conditions precedent specified in the Hedge Agreement, a Cash Settlement Amount if a Credit Event occurs in respect of the Reference Entity;

(b)        amounts payable by the Issuer to the Hedge Counterparty in respect of any Credit Default Swap shall be paid on each Payment Date out of the amounts standing to the credit of the Payment Account subject to and in accordance with the relevant Priorities of Payments; and

(c)        amounts payable by the Hedge Counterpart), to the Issuer in respect of any Credit Default Swap shall be paid into the Principal Collection Account.

Different Collateral Hedge Swaps

8.5       If the Issuer and the Hedge Counterparty so agree (subject to the prior written approval of the Trustee and satisfaction of the Rating Agency Condition), a Collateral Hedge Swap may contain terms which are different from those described in Clauses 8.1, 8.3 or 8.4 (including, for the avoidance of doubt, in relation to the provisos relating to the Weighted Average Spread of the Portfolio and the Class D Interest Coverage Ratio contained in Clause 8.4).

Replacement Hedge Agreement

8.6       In the event that the Hedge Agreement is terminated or partially terminated as a result of an "Event of Default" or a "Termination Event" thereunder pursuant to which the Hedge Counterparty is the sole "Defaulting Party" or "Affected Party" (each such term as defined in the terminated Hedge Agreement) the Collateral Manager on behalf of the Issuer, will:

(a)        use commercially reasonable efforts, within 30 days of such termination or partial termination to enter into a replacement Hedge Agreement with a Hedge Counterparty on substantially the same terms as such terminated Hedge Agreement; and

(b)        procure that any Termination Receipts paid by the Hedge Counterparty to the Issuer are, at the discretion of the Collateral Manager, either (i) paid into the Principal Collection Account as Principal Proceeds or (ii) applied by the Issuer in payment of the costs of entering into such replacement Hedge Agreement.

Costs of Entering into Replacement Hedge Agreement

8.7       To the extent that the Termination Receipts referred to in Clause 8.6(b) are insufficient to pay the costs of entering into the replacement Hedge Agreement, the shortfall will be paid to the relevant replacement Hedge Counterparty in accordance with the Priorities of Payments on the next Payment Date.

Issuer to Consult

8.8       The Issuer agrees to consult with the Collateral Manager in relation to:

(a)        the exercise of its right to designate an Early Termination Date upon the occurrence of an Event of Default or Termination Event under the Hedge Agreement; and

(b)        all other rights in respect thereof, including, to the extent applicable, the calculation of any Termination Payment.

9.         CONFLICTS OF INTEREST

Without prejudice to Clause 2.9:

9.1       The Collateral Manager acting on behalf of the Issuer may acquire any obligations to be included in the Portfolio from the Collateral Manager or any of its Affiliates or any of their clients as principal or sell any obligation to the Collateral Manager or any of its Affiliates or any of their clients as principal provided such transaction is for market value and on arm's length terms, and subject always to the other obligations of the Collateral Manager under this Agreement provided that the Collateral Manager first obtains the approval in writing of the holders of at least the Majority of the Junior Class of Covered Notes.

9.2       Nothing herein shall prevent the Collateral Manager, its stockholders or any of their Affiliates from engaging in any other lawful business, or from rendering services of any kind to the Issuer and its Affiliates, the Trustee, any holders of the Notes or any other Person or entity to the extent permitted by applicable law. Without prejudice to the generality of the foregoing, the Collateral Manager, its Affiliates or any directors, designated members, officers, partners, limited partners, designated member, stockholders, employees and agents of the Collateral Manager or its Affiliates may, among other things (but subject always to compliance with its regulatory responsibilities):

(a)        serve as directors (whether supervisory or managing), officers, employees, agents, nominees or signatories for any obligor under any securities included in the Portfolio to the extent permitted by their respective organisational documents, as from time to time amended, or by any resolutions duly adopted by the Issuer, its Affiliates or any obligor under any securities included in the Portfolio, pursuant to their respective organisation documents, provided that such activity would not, in the opinion of the Collateral Manager, acting reasonably, have a material adverse effect on the Portfolio;

(b)        receive brokerage fees and commissions from the obligor under any securities included in the Pledged Securities, provided that either (i) receipt of such fees is approved in writing by the holders of at least the Majority of the Junior Class of Covered Notes; or (ii) the Collateral Manager or its Affiliate, as the case may be, deposits such fees into the Principal Collection Account and applies such amounts as Principal Proceeds towards the purchase price of any such Collateral Debt Security or Eligible Investment (in the case of the receipt of such amounts in respect of the acquisition of a Collateral Debt Security or an Eligible Security) or as Sale Proceeds (in the case of the receipt of such amount in respect of the disposal of a Collateral Debt Security or an Eligible Security). For the avoidance of doubt, neither the Collateral Manager nor any of its Affiliates shall have any right in respect of any such fee once so deposited;

(c)        be retained to provide services to the Issuer or its Affiliates or any other Person (other than the issuer of any obligations included in the Portfolio or any Affiliates thereof) that are unrelated to this Agreement and which may involve a potential conflict of interest with their respective duties to the Issuer under this Agreement, and be paid therefor; in each case on an arm's length basis;

(d)        be a secured or unsecured creditor of any obligor under any security included in the Portfolio;

(e)        make a market in any Collateral Debt Security or Eligible Investment;

(f)         serve as a member of any "creditors' committee" or informal workout group with respect to any security included in the Portfolio which has become, or, in the Collateral Manager's opinion, may become, Defaulted Security;

(g)        act as collateral manager, investment manager or investment advisor to any other Person, entity or fund;

(h)        maintain other relationships with issuers of any item of Portfolio or asset-backed bond obligations or other securities (subject as provided above).

9.3       Each of the Issuer and the Trustee acknowledges and agrees (subject to the other provisions of the Transaction Documents) that:

(a)        the Collateral Manager and any of its Affiliates may have proprietary interests and engage in any other business and furnish investment management and advisory services to others, including Persons which may have investment policies similar to those followed by the Collateral Manager with respect to the Portfolio and which may own securities of the same class as items of the Portfolio, or which are the same type, as the Portfolio or other securities of the obligors under the Portfolio, and as a result may compete with the Issuer for appropriate investment opportunities. The Collateral Manager will be free, in its sole discretion, to make recommendations to others, or to effect transactions on behalf of itself or for others, which may be the same as or different from those, effected with respect to the Portfolio (and as a result, there may be circumstances when purchases. or sales of securities for one or more clients have an adverse effect on other affiliated clients);

(b)        the obligors of securities owned by the Issuer may have publicly or privately traded securities, including securities that are senior to, or have interests different from or adverse to, the securities which secure the Securities, in which the Collateral Manager and its Affiliates are an investor or make a market;

(c)        the general trading activities of the Collateral Manager and its Affiliates are carried out without reference to positions owned by the Issuer and may have an effect on the value of such positions, or may result in the Collateral Manager and its Affiliates having an interest in an applicable obligor adverse to that of the Issuer;

(d)        from time to time at the Collateral Manager's discretion, certain of its officers or other of its employees engaged in advisory activities may consult with other officers and employees in other business areas of the Collateral Manager and its Affiliates, or act on and form investment policy committees comprised of such officers and/or employees, and that the performance by such officers and employees of obligations related to such advisory activities could conflict with their areas of primary responsibility within the Collateral Manager and its Affiliates. In connection with such advisory activities, such officers and employees may receive information regarding the Collateral Manager's proposed investment activities, whether in connection with its client, propriety or other activities which is not generally available to the public. However, there will be no obligation on the part of such officers or employees to make available for use by advisory accounts any information or strategies known to them or developed in connection with their client, proprietary or other activities. In addition, the Collateral Manager and its Affiliates will be under no obligation to make available for use by advisory accounts any research or analysis prior to its public dissemination. Furthermore, the Collateral Manager and its Affiliates shall have no obligation to recommend for purchase or sale by the Issuer any security that the Collateral Manager and its Affiliates or officers and employees may purchase for themselves or for any other clients. The Collateral Manager and its Affiliates shall have no obligation to seek to obtain any material non-public information about any issuer of securities, and will not affect transactions for the Issuer on the basis of any material non-public information that comes into its possession;

(e)        certain officers and employees of the Collateral Manager and its Affiliates may possess information relating to particular obligors who have issued items of Portfolio which information is known to such other of the employees of the Collateral Manager who are responsible for monitoring such Collateral Assets and performing the other obligations of the Collateral Manager under this Agreement, and the Issuer acknowledges that the Collateral Manager and its Affiliates shall have no obligation to disclose such information to such persons or to the Issuer.

9.4       Nothing contained in this Agreement shall prevent the Collateral Manager, or any of its Affiliates, acting either as principal or agent on behalf of others, from buying or selling or from recommending to or directing any other account to buy or sell, at any time, securities of the same kind or class, or securities of a different kind or class of the same obligor, as those directed by the Collateral Manager (acting on behalf of the Issuer) to be purchased or sold hereunder. It is understood that, to the extent permitted by applicable law, the Collateral Manager, its Affiliates, and any officer, partner, director, stockholder or employee of the Collateral Manager, or any such Affiliate or any member of their families or a Person or entity advised or managed by the Collateral Manager may have an interest in a particular transaction or in securities of the same kind or class, or securities of a different kind or class of the same issuer, as those whose purchase or sale the Collateral Manager may direct hereunder.

9.5       Unless the Collateral Manager determines in its sole discretion that such purchase or sale may be appropriate, the Collateral Manager may refrain from directing the purchase or sale hereunder of securities issued by (i) Persons of which the Collateral Manager, its Affiliates or any of their or their Affiliates' officers, partners, directors or employees are partners, directors or officers, (ii) Persons for which the Collateral Manager, or any of its Affiliates acts as financial adviser or underwriter or (iii) Persons about which the Collateral Manager, or any of its Affiliates have information which the Collateral Manager deems confidential, non-public, price sensitive or otherwise might prohibit it from trading such securities in accordance with applicable laws including, without limitation, any insider dealing laws. The Collateral Manager shall not be obliged to pursue with respect to the Portfolio any particular investment strategy opportunity of which it becomes aware.

9.6       Although the principals and employees of the Collateral Manager will devote as much time to the Issuer as the Collateral Manager deems appropriate, the principals and employees may have conflicts in allocating their time and services among the Issuer and the Collateral Manager's and its Affiliates' other accounts. In addition, the Collateral Manager and its Affiliates, in connection with their other business activities, will be entitled to acquire material non-public confidential information that may restrict the Collateral Manager, or its Affiliates from purchasing securities or selling securities for itself or their clients (including the Issuer) or otherwise using such information for the benefit of its clients (including the Issuer) or themselves.

9.7       The Collateral Manager may purchase securities for the Issuer that are issued by or held by persons for which the Collateral Manager or its Affiliates act as investment manager or adviser, provided that the Collateral Manager first obtains the approval in writing of the holders of at least the Majority of the Junior Class of Covered Notes.

Material Information

9.8       The Collateral Manager, in connection with its other business activities, may acquire material non-public confidential information that may restrict it from purchasing securities or selling securities for itself or its clients (including the Issuer) or otherwise using such information for the benefit of its clients or itself. It is the policy of the Collateral Manager to determine on a case-by-case basis whether to refuse to accept material non-public information that would have the effect of imposing trading restrictions or to accept such information on the understanding that trading restrictions will result therefrom until such information is disclosed to the public. The Issuer acknowledges that receipt of such information, including in connection with unrelated activities, could have an adverse effect on the ability of the Collateral Manager to perform the services to be provided by it hereunder.

10.       LIMITATIONS ON THE RESPONSIBILITY AND OBLIGATIONS OF THE COLLATERAL MANAGER

Limited Duties and Obligations; No Partnership or Joint Venture

10.1     The Collateral Manager shall not have any duties or obligations except those expressly set forth herein and in the Transaction Documents to which it is a party and except those imposed by any law or regulation applying to the Collateral Manager. Without limiting the generality of the foregoing, the Collateral Manager shall not (i) be subject to any fiduciary or other implied duties, (ii) have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or in any other Transaction Document, (iii) except as expressly set forth herein, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any issuer of any Collateral Debt Security or Eligible Investment or any of its Affiliates that is communicated to or obtained by the Collateral Manager or any of its Affiliates or (iv) be required to take any action where to do so would, in its reasonable opinion, result in a breach of any law or regulation or any obligation of confidentiality which is binding on it or its Affiliates. The Issuer agrees that the Collateral Manager shall be an independent contractor and that, except as expressly provided herein, the Collateral Manager shall not have authority to act for or represent the Issuer in any way and shall not otherwise be deemed to be the Issuer's agent. Nothing contained herein shall create or constitute the Issuer and the Collateral Manager as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, nor shall anything contained herein be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of any other such entity, nor shall there be any recourse to the Collateral Manager with respect to the Issuer's obligations.

Limits on Responsibility

10.2     The Collateral Manager will assume no responsibility under this Agreement other than to render the services specified in the Trust Deed and this Agreement in good faith and, subject to the Standard of Care described in Clause 2.9, will not be responsible for any action or inaction of the Issuer or the Trustee in following or declining to follow any advice or recommendation. The Collateral Manager, its Officers, partners, designated members, directors, employees, representatives, advisers and agents, and its Affiliates and their Officers, partners, designated members, directors, employees, representatives and agents, shall not be liable to the Issuer, the Trustee, the Noteholders or any other Person (in such case, the Claiming Parties) for any losses, claims, damages, expenses or other liabilities, joint or several, or any action in respect thereof, to which any such Claiming Party may become subject, whether commenced or threatened (collectively, Liabilities) incurred by such Claiming Party that arise out of or in connection with the performance by the Collateral Manager, its Officers, partners, designated members, directors, employees, representatives, advisers or agents, or its Affiliates or their Officers, partners, designated members, directors, employees, representatives or agents, of its duties under this Agreement, except to the extent of any act or omission by the Collateral Manager, its Officers, partners, designated members, directors, employees, representatives, advisers or agents, or its Affiliates or their Officers, partners, designated members, directors, employees, representatives or agents, under this Agreement or in connection therewith if there has been a. final judicial determination that such act or omission resulted from either (y) any material inaccuracy or misrepresentation iii, or material breach of, any of the warranties, representations, covenants or agreements made by the Collateral Manager, its Officers, partners, designated members, directors, employees, representatives, advisers or agents, or its Affiliates or their Officers, partners, designated members, directors, employees, representatives or agents, in this Agreement or the Trust Deed, or (z) any act or omission made by the Collateral Manager or its Officers, partners, designated members, directors, employees, representatives, advisers or agents, or its Affiliates or their Officers, partners, designated members, directors, employees, representatives or agents, which results in an immaterial breach of this Agreement constituting gross negligence or wilful misconduct, provided however that in no case shall any such person be liable for consequential, special or punitive damages, The matters described in sub-Clauses (y) and (z) above are each referred to as a Collateral Manager Breach or collectively referred to as Collateral Manager Breaches, provided that notwithstanding any of the foregoing, any act or omission falling within paragraph (z) above will be deemed to be a Collateral Manager Breach for the purposes of Clause 11.2 only (and for the avoidance of doubt, Clause 11.2 will apply only in respect of Liabilities incurred by a Collateral Indemnified Party as a direct result of such act or omission) but not for the purposes of Clause 18.2. The compliance of any action of the Collateral Manager with the provisions of this Agreement shall be determined as at the date of such action. The provisions of this Agreement shall not be deemed breached solely as a result of changes in the value of any Collateral Debt Security or any other asset following its acquisition by the Collateral Manager on behalf of the Issuer.

Several Obligations

10.3     The obligations of the Collateral Administrator and the Collateral Manager in this Agreement and each other Transaction Document shall be several obligations (and not joint obligations) and each of the Collateral Administrator and the Collateral Manager shall not have any liability or responsibility in respect of the performance or non-performance of any obligations by (or on behalf of) the other.

Reliance

10.4     The Collateral Manager (i) shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person and (ii) shall be entitled to rely upon, and shall not incur any liability for relying upon, any statement made to it orally (including by telephone) and believed by it to be made by the proper Person. The Collateral Manager may consult with legal counsel (which may be legal counsel for the Issuer or an issuer of any Collateral Debt Security or any of its Affiliates), Independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in good faith in accordance with the advice of any such legal counsel, accountants or experts. Any reasonable fees incurred by the Collateral Manager in connection with obtaining the advice of any such legal counsel, accountants or experts, shall be deemed to be Administrative Expenses.

Performance Through Agents

10.5     The Collateral Manager may perform any and all of its duties and exercise its rights and powers directly or by or through any one or more agents, including its Affiliates, selected by the Collateral Manager with reasonable care. The exculpatory provisions of the preceding paragraphs of this Clause 10 shall apply to any such agent; provided that the Collateral Manager shall not be relieved of any of its duties hereunder regardless of the performance of any services by such agents, and the Collateral Manager will be solely responsible for the fees and expenses payable to any such agent.

Brokerage

10.6     The Collateral Manager shall use commercially reasonable efforts to obtain prices at an open market value and execution for orders placed with respect to the Portfolio but shall not owe a duty of best execution under the rules of the FCA. Subject to obtaining an open market value and ensuring it is an arm's length transaction, the Collateral Manager may, in the allocation of business, take into consideration research and other brokerage services furnished to it or its Affiliates by brokers and dealers which are not its Affiliates. Such services may be furnished to the Collateral Manager or its Affiliates in connection with its other advisory activities or investment management operations. Transactions may be executed as part of concurrent authorisations to purchase or sell the same security for other accounts managed or advised by the Collateral Manager or its Affiliates. When these concurrent transactions occur, the objective of the Collateral Manager (and any of its Affiliates involved in such transactions) shall be to allocate the executions (together with associated fees and expenses) among the accounts in an equitable manner. The Collateral Manager may also effect client cross transactions where the Collateral Manager causes a transaction to be effected, on an arms-length basis, between the Issuer and another account advised by the Collateral Manager or any of its Affiliates. In addition, subject to certain limitations, the Collateral Manager may enter into agency cross transactions, on an arms-length basis, where any of its affiliates acts as broker for the Issuer and for the other party to the transaction, in which case any such affiliate will receive commissions from, and have a potentially conflicting division of loyalties and responsibilities regarding, both parties to the transaction.

Force Majeure and Good Faith Determinations

10.7     All of the parties hereto acknowledge and agree that neither the Collateral Manager nor the Collateral Administrator shall be responsible for any inability to acquire or dispose of any Collateral Debt Security or Eligible Investment or to perform any other action within the terms of their respective appointments as a result of factors beyond their control including the condition of certain financial markets, general economic conditions and international political events, nor for any determinations or judgements made in good faith hereunder in respect of the Collateral Debt Securities, Eligible Investments or Hedge Agreements.

Additional Activities of the Collateral Manager

10.8     Nothing herein shall prevent the Collateral Manager or any of its Affiliates from engaging in other businesses, or from rendering services of any kind to the Issuer and its Affiliates, the Trustee, the Noteholders or any other Person or entity to the extent permitted by applicable law. Without prejudice to the generality of the foregoing, the Collateral Manager and the directors, Officers, employees and agents of the Collateral Manager or its Affiliates may, among other things, and subject to any limitations specified in this Agreement:

(a)        receive fees for services of any nature rendered to the issuer of any obligations included in the Mortgaged Property; provided that in the reasonable judgement of the Collateral Manager such activity will not have a material adverse effect on the enforceability of the Mortgaged Property;

(b)        be a Secured Party of, and/or hold an equity interest in, the Issuer, its Affiliates or any issuer of any obligation included in the Mortgaged Property; provided that the Collateral Manager may not hold any such interest if the existence of such interest would violate other provisions of this Agreement or any provisions of any law, rule or regulation of any governmental body or agency having jurisdiction over the Issuer;

(c)        act as a director, Officer or employee of any obligor in respect of any Collateral Debt Security or Eligible Investment;

(d)        serve as a member of any "creditors' committee" with respect to any Collateral Debt Security or Eligible Investment included in the Mortgaged Property which has become or, in the Collateral Manager's reasonable opinion, may become a Defaulted Security;

(e)        underwrite, act as distributor or make a market in any Collateral Debt Security or Eligible Investment or make a market in the Notes;

(f)         invest, for its own account, in assets the same as, or similar to, Collateral Debt Securities or Eligible Investments;

(g)        engage in any other business and furnish investment management and advisory services to others, including Persons that may have investment policies similar to those followed by the Collateral Manager with respect to the Mortgaged Property, and to own or advise other Persons with respect to securities of the same class, or which are the same type, as the Collateral Debt Securities or other securities of the issuers of Collateral Debt Securities or Eligible Investments. The Collateral Manager will be free, in its sole discretion, to make recommendations to others, or to effect transactions on behalf of itself or for others, which may be the same as or different from those effected with respect to the Mortgaged Property.

Knowledge in Collateral Manager's Possession

10.9     The Issuer acknowledges that certain employees of the Collateral Manager and its Affiliates may possess information relating to certain issuers that have issued obligations included in the Mortgaged Property, that is not known to the employees of the Collateral Manager who are responsible for monitoring the Mortgaged Property and performing the other obligations of the Collateral Manager hereunder. The Collateral Manager will be required to act hereunder with respect to any information within its possession only if such information was known or should reasonably have been known to those employees of the Collateral Manager responsible for performing the obligations of the Collateral Manager hereunder.

11.       INDEMNITIES

Issuer Indemnity

11.1     The Issuer (the Indemnifying Issuer) will indemnify and hold harmless the Collateral Manager and each of the partners, designated members, Officers, directors, employees, representatives and agents of the Collateral Manager (each an Issuer Indemnified Party and collectively the Issuer Indemnified Parties), on an after-tax basis, from and against any and all Liabilities, insofar as there has been a final judicial determination that such Liability resulted from (i) any material inaccuracy or misrepresentation in, or material breach of, any of the warranties, representations, covenants or agreements made by the Issuer in this Agreement, (ii) any act or omission by the Issuer or any of its Officers or directors constituting gross negligence or wilful misconduct or (iii) the performance by each such Issuer Indemnified Party of its obligations under this Agreement, except (A) to the extent of any action taken or omitted to be taken by the Issuer Indemnified Party under this Agreement or in connection therewith if there has been a final judicial determination that such act or omission resulted from (y) any material inaccuracy or misrepresentation in, or material breach of, any of the warranties, representations; covenants or agreements made by the Collateral Manager in this Agreement or (z) any act or omission under this Agreement by such Issuer Indemnified Party constituting gross negligence or wilful misconduct and (B) for consequential, special or punitive damages; provided that no Issuer Indemnified Party will be indemnified for any Liabilities it incurs as a result of any acts or omissions by any Issuer Indemnified Party constituting a Collateral Manager Breach. Notwithstanding anything contained herein to the contrary, the obligations of the Issuer under this Clause 11 will be payable solely out of the Mortgaged Property in accordance with the Priorities of Payments.

For avoidance of doubt, failure by the Collateral Manager to perform its obligations in accordance with the Standard of Care described in Clause 2.9 which (i) does not constitute, a material breach and (ii) results in a Collateral Indemnified Party incurring any Liabilities, shall be deemed to be a Collateral Manager Breach for purposes of this Clause.

Collateral Manager Indemnity

11.2     Subject to Clause 10.2, the Collateral Manager will indemnify and hold harmless (the Collateral Manager in such case, the Indemnifying Collateral Manager) the Issuer, the Trustee and each of their respective Officers, directors, employees, representatives and agents (each such person being a Collateral Indemnified Party), on an after-tax basis, from and against any and all Liabilities incurred by the Collateral Indemnified Party that arise out of any act or omission by the Collateral Manager in connection with this Agreement if there has. been a final judicial determination that such act or omission resulted from a Collateral Manager Breach except to the extent that such Liabilities are incurred as a result of the wilful default or gross negligence of the relevant Collateral Indemnified Party, and will reimburse each such Collateral Indemnified Party for all Liabilities as such Liabilities are incurred in investigating, preparing, pursuing or defending any actions, caused by, or arising out of or in connection with, any Collateral Manager Breach.

Notice

11.3     The Issuer Indemnified Party or Collateral Indemnified Party, as the case may be, (together the Indemnified Parties) shall (or, with respect to Indemnified Parties that are directors, Officers, employees, representatives or agents, the Collateral Manager, the Issuer or the Trustee (as the case may be) shall cause such Indemnified Party to) promptly notify the Indemnifying Issuer or the Indemnifying Collateral Manager (together, the Indemnifying Parties) if the Indemnified Party receives a complaint, claim, compulsory process or other notice of any Liability giving rise to a claim for indemnification under this Clause 11, but failure so to notify the Indemnifying Party shall not relieve such Indemnifying Party of its obligations to indemnify the Indemnified Party or Indemnified Parties.

Actions of Indemnified Party

11.4     With respect. to any complaint, claim, compulsory process or other notice of any Liability made or threatened against an Indemnified Party for which such Indemnified Party is or maybe entitled to indemnification under this Clause 11, such Indemnified Party shall (or with respect to Indemnified Parties that are directors, Officers, employees, representatives or agents, the Collateral Manager, the Issuer or the Trustee (as the case may be) shall cause such Indemnified Party to):

(a)        provide the Indemnifying Party with such information and co-operation with respect to such claim as the Indemnifying Party may reasonably require;

(b)        co-operate and take all such steps as the Indemnifying Party may reasonably request to preserve and protect any defences to such claim;

(c)        in the event suit is brought with respect to such claim, upon reasonable prior notice, afford to the Indemnifying Party the right, which the Indemnifying Party may exercise in its sole discretion and at its expense, to participate in the investigation, defence and settlement of such claim, and, to the extent that it shall wish, and subject to the prior written agreement of the Indemnified Party, to assume defence thereof, with counsel satisfactory to such Indemnified Party (who shall not, except with the consent of the Indemnified Party, be counsel to the Indemnifying Party), and, after notice from the Indemnifying Party to such Indemnified Party of its election so to assume the defence thereof, the Indemnifying Party shall not be liable to such Indemnified Party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such Indemnified Party, in connection with the defence thereof other than reasonable costs of investigation; and

(d)        neither incur any material expense to defend against nor release or settle any such claim or make any admission with respect thereto (other than routine or non-contestable admissions or factual admissions the failure to make would expose such Indemnified Party to non-indemnified liability, or only if the Indemnified Party is the Collateral Manager or any of its directors, Officers, employees, representatives, agents or Affiliates, any liability in respect of which, in the good faith determination of such Indemnified Party, the Indemnifying Party is unlikely to have sufficient funds available to indemnify the Indemnified Party in full in accordance with the Priorities of Payments) nor permit a default or consent to the entry of any judgement in respect thereof, in each case without the prior written consent of the Indemnifying Party (which shall not be unreasonably withheld), provided in each case that the Indemnifying Party shall have advised such Indemnified Party that such Indemnified Party is entitled to be indemnified hereunder with respect to such claim.

Waiver of Indemnification

11.5     In the event that any Indemnified Party waives its right to indemnification hereunder, the Indemnifying Party shall not be entitled to appoint counsel to represent such Indemnified Party nor shall the Indemnifying Party reimburse such Indemnified Party for any costs of counsel to such Indemnified Party.

12.       CONFIDENTIALITY

The Collateral Manager shall keep confidential any and all information obtained in connection with the services rendered hereunder and shall not disclose any such information to non-Affiliated third parties except (a) with the prior written consent of the Issuer, (b) as required by law, regulation, court order or the rules or regulations of any self-regulating organisation, body or official having jurisdiction over the Collateral Manager, (c) to its professional advisers, (d) such information as shall have been publicly disclosed other than in violation of this Agreement, (e) such information concerning an issuer of, or obligor under, a Collateral Debt Security or Eligible Investment to the extent required to be disclosed in connection with the administration of such Collateral Debt Security or Eligible Investment or the proper discharge of its obligations hereunder, (f) such information as a Rating Agency or its professional advisers may reasonably request in connection with its rating of any of the Rated Notes, (g) such information as is necessary in order to obtain and/or maintain the listing of the Notes on the Irish Stock Exchange or to prospective investors in the Notes in the Preliminary Offering Circular and the Offering Circular, (h) such information that was or is obtained by the Collateral Manager on a non-confidential basis as long as the Collateral Manager does not know or have reason to know of any breach by such source of any confidentiality obligations with respect thereto or (i) as permitted to be disclosed by the Collateral Manager pursuant to the terms of this Agreement.

In no event, however, shall the Collateral Manager be required to disclose to any party any information with respect to particular Collateral Debt Securities or Eligible Investments which the Issuer or the Collateral Manager is obliged by the terns of any governing instruments or other underlying documentation for such Collateral Debt Securities or Eligible Investments to refrain from so disclosing.

13.       POWER OF ATTORNEY

The Issuer by way of security hereby makes, constitutes and appoints the Collateral Manager, with full power of substitution, as its true and lawful agent and attorney-in-fact, with. full power and authority in its name, place and stead, to sign, execute (under seal or under hand), certify, swear to, acknowledge, deliver, file, receive and record any and all documents that the Collateral Manager deems appropriate or necessary in connection with the Collateral Manager's powers and duties under this Agreement. The, foregoing power of attorney is hereby declared to be irrevocable, and it shall survive and not be affected by the subsequent bankruptcy or insolvency or dissolution of the Issuer; provided that the foregoing power of attorney will expire, and the Collateral Manager will cease to have any power to act as the Issuer's attorney-in-fact, upon termination of the appointment of the Collateral Manager under this Agreement. The Issuer shall execute and deliver to the Collateral Manager or cause to be executed and delivered to the Collateral Manager, all such other powers of attorney, proxies, dividend and other orders, and all such instruments as the Collateral Manager may reasonably request for the purpose of enabling the Collateral Manager to exercise the rights and powers which it is entitled to exercise pursuant to this Agreement.

14.       FEES AND PAYMENTS

Collateral Management Fee

14.1     (a)        The Issuer shall pay to the Collateral Manager, for services rendered and performance of its obligations under this Agreement, a senior collateral management fee as determined by the Collateral Administrator (the Senior Collateral Management Fee) accrued and payable in arrear on each Payment Date, in respect of each Due Period, equal to 0.1.00 per cent. per annum (calculated quarterly on the basis of a 365 day year and the actual number of days elapsed in such Due Period) of the average daily Aggregate Principal Balance of the Collateral Debt Securities during such Due Period plus any value added tax payable by the Collateral Manager to any Person subject to the Priorities of Payments. If on any Payment Date there are insufficient funds to pay the Senior Collateral Management Fee (and/or any other amounts due and payable to the Collateral Manager) in full, the amount not so paid shall be deferred and shall be payable on the first succeeding Payment Date on which funds are available therefor in accordance with and subject to the limitations contained in the Conditions. Any Senior Collateral Management Fee accrued but not paid prior to the termination, resignation or removal of the Collateral Manager will continue to be payable to the Collateral Manager on the Payment Date immediately following the effective date of such termination, resignation or removal and, if there are insufficient funds to pay such amount in full on such Payment Date, any amount not so paid will be payable on the first succeeding Payment Date on which sufficient funds are available subject to the Priorities of Payments.

(b)        The Issuer shall pay to the Collateral Manager, for services rendered and performance of its obligations under this Agreement, a subordinated collateral management fee as determined by the Collateral Administrator (the Subordinated Collateral Management Fee) accrued and payable in arrear on each Payment Date, in respect of each Due Period, equal to 0.250 per cent, per annum (calculated quarterly on the basis of a 365 day year and the actual number of days elapsed in such Due Period) of the average daily Aggregate Principal Balance of the Collateral Debt Securities during such Due Period plus any value added tax payable by the Collateral Manager to any Person subject to the Priorities of Payments. If on any Payment Date there are insufficient funds to pay the Subordinated Collateral Management Fee (and/or any other amounts due and payable to the Collateral Manager) in full, the amount not so paid shall be deferred and shall be payable on the first succeeding Payment Date on which funds are available therefor in accordance with and subject to the limitations contained in the Conditions. Any Subordinated Collateral Management Fee accrued but not paid prior to the termination, resignation or removal of the Collateral Manager will continue to be payable to the Collateral Manager on the Payment Date immediately following the effective date of such termination, resignation or removal and, if there are insufficient funds to pay such amount in full on such Payment Date, any amount not so paid shall be payable on the first succeeding Payment Date on which sufficient funds are available subject to the Priorities of Payments.

(c)        The Issuer shall pay to the Collateral Manager on the Final Payment Date for services rendered and performance of its obligations under this Agreement, the reserved collateral management fee (the Reserved Collateral Management Fee and together with the Senior Collateral Management Fee and the Subordinated Collateral Management Fee, the Collateral Management Fees) equal to the amount remaining in the Payment Account on that Payment Date after withdrawing from the Payment Account any amounts required to be withdrawn therefrom in priority thereto in accordance with the relevant Priorities of Payments.

(d)        In the event that a successor Collateral Manager is appointed in accordance with Clause 19, the amount of the Senior Collateral Management Fee may be amended by agreement between the Issuer and the Collateral Manager subject to approval in writing by the Relevant Percentage of the Controlling Class and satisfaction of the Rating Agency Condition.

Expenses

14.2     The Collateral Manager shall be responsible for all expenses (other than Administrative Expenses) incurred in the performance of its obligations under this Agreement other than (i) travel expenses and out of pocket expenses in an aggregate amount not exceeding €30,000, and (ii) legal expenses in respect of the issuance of the Notes in an aggregate amount not exceeding €60,000, in each case, incurred by it prior to the Closing Date, which shall be reimbursed to the Collateral Manager from the proceeds of the issuance of the Notes. The Issuer shall reimburse the Collateral Manager for any Administrative Expenses incurred by the Collateral Manager on behalf of the Issuer to the extent funds are available therefor in accordance with and subject to the Priorities of Payments and the limitations contained in the Conditions.

Manner of Payment to the Collateral Manager

14.3     Payments under this Agreement to the Collateral Manager will be made to its account most recently notified to the Account Bank for such purpose, in euro and in freely transferable and immediately available funds. The Collateral Manager may change its account for receiving a payment by giving notice to the Account Bank at least five Business Days prior to the scheduled Payment Date to which such change applies. All payments under this Agreement to the Collateral Manager will be made without set-off, deduction or counterclaim.

Payment on Termination

14.4     If this Agreement is terminated pursuant to Clause 19 or otherwise, the fees payable to the Collateral Manager shall be prorated for any partial periods between Determination Dates during which this Agreement was in effect and shall be due and payable on the first Payment Date following the date of such termination, subject to the limitations contained in the Conditions. Nothing in this Agreement shall relieve the Issuer of its obligation to pay fees to the Collateral Manager accrued to the date of the termination of the Collateral Manager's appointment.

Accession of Eligible Successor

14.5     In the event an Eligible Successor accedes to the role of Collateral Manager pursuant to Clause 19.3 of this Agreement, the Eligible Successor will be entitled to receive any Collateral Management Fee that accrues after the date on which the Eligible Successor accedes to the role of Collateral Manager; provided that any Collateral Management Fee accrued but not paid prior to the resignation or removal of the Collateral Manager will continue to be payable to the Collateral Manager on the Payment Dates following the effectiveness of such resignation or removal subject to and in accordance with the Priorities of Payments. For the avoidance of doubt, the Reserved Collateral Management Fee shall be payable in its entirety to such entity which is the Collateral Manager on the Final Payment Date.

15.       REPRESENTATIONS

Representations of Each Party

15.1     Each party hereby represents and warrants to each of the other parties hereto that as at the date of this Agreement:

(a)        Status: it is duly incorporated and validly existing under the laws of the jurisdiction of its incorporation;

(b)        Powers: it has the power to own its assets, to transact business in which it is presently engaged in, 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 has taken all necessary action to authorise such execution, delivery and performance; and this Agreement has been, and each other such document will be, duly executed and delivered by it;

(c)        No Violation or Conflict: such execution, delivery and performance shall not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgement of any court or other agency of government applicable to it or any of its assets or any agreement, instrument or undertaking to which it is a party or by which it or any of its assets is bound, and shall not result in or require the creation or imposition of any security interest or lien on any of its property, assets or revenue pursuant to the provisions of any such agreement, instrument or undertaking (other than the security interests created pursuant to the Trust Deed and the Euroclear Pledge Agreement);

(d)        Consents: all governmental and other consents that are required to have been obtained by it with respect to this Agreement have been obtained and are in full force and effect and all conditions of any such consents have been complied with;

(e)        Obligations Binding: this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium, liquidation or similar laws affecting creditors generally and general principles of equity);

(f)         Absence of Certain Events: no Termination Event or Potential Termination Event with respect to it has occurred and is continuing, and no Termination Event or Potential Termination Event would occur as a result of its entering into or performing its obligations under this Agreement; and

(g)        Absence of Litigation: there is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or its ability to perform its obligations under this Agreement.

Representations of the Collateral Manager

15.2     The Collateral Manager represents and warrants to each of' the other parties hereto that as at the date of this Agreement:

(a)        Absence of Certain Fee Arrangements: neither it nor any of its Affiliates has, and neither it nor any of its Affiliates will establish or maintain, any arrangements or relationships with any broker, broker-dealer, other securities intermediary or third-party pursuant to which it or any of its respective Affiliates is or may become entitled to receive any portion of' the commissions or fees paid to such Persons by their customers in respect of the acquisition of the Collateral Debt Securities and/or Eligible Investments by the Issuer, save as provided in Clauses 9, 10.6 and 10.8(a);

(b)        Disclosure: all written information provided by it, to the Issuer, the Notes Placement Agent or the Rating Agencies in connection with the issue and marketing of the Notes and with regard to it, and its investment management methodology, personnel and trading record is to the best of its knowledge, as at the date the information is provided, true, accurate and complete in every material respect;

(c)        Compliance with Investment Criteria: all assets proposed to be acquired by it on behalf of the. Issuer on and after the Closing Date (i) are either (A) Collateral Debt Securities, the acquisition of which will not, as at the date the Collateral Manager commits to purchase such asset on behalf of the Issuer, cause the Portfolio to breach the Portfolio Criteria or, other than in respect of any of the Coverage Tests, if any of the limitations set forth in the Portfolio Criteria are not met prior to the acquisition of such asset, such acquisition will not as at the date the Collateral Manager commits to purchase such asset on behalf of the Issuer, cause such limitation to be further from being met, or (B) Eligible Investments and (ii) satisfy or will satisfy, as the case may be, all terms and conditions applicable to such acquisitions as set forth herein or in the Trust Deed as at the date the Collateral Manager commits to purchase such asset on behalf of the Issuer;

(d)        Regulatory Compliance: the Collateral Manager is authorised to carry on its business in the United Kingdom and to render the services it has agreed to provide hereunder in the United Kingdom;

(e)        Limited Role: it does neither provide to the Issuer (i) managing, advisory, reporting or any other services different from or in addition to those agreed in the Transaction Documents, nor (ii) services provided by the Corporate Services Provider under the Corporate Services Agreement;

(f)         Other Customers: it offers to provide or provides services similar to those described in this Agreement to customers other than the Issuer;

(g)        Ordinary Course of Business: while performing the services described in the Transaction Documents, it is acting in its ordinary course of business;

(h)        No Amendment or Modification: no resolution by its members has been passed in order to amend or modify its constitutional documents save as disclosed to the Issuer; and

(i)         Eligible Successor: it complies with the requirements of limb (iii) of the definition of Eligible Successor.

Representations of the Issuer

15.3     The Issuer represents and warrants to each of the other parties hereto that:

(a)        Offering Memorandum: the Offering Memorandum as at the date thereof (including as at the date of any supplement thereto) and as of the Closing Date does not contain any untrue statement of a material fact and does not omit to state any material fact necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading. The preceding sentence does not apply to the section entitled "The Collateral Manager" contained in the Offering Memorandum; and

(b)        True Copies Delivered: true and complete copies of the Trust Deed and the Issuer's constitutional documents have been delivered to the Collateral Manager.

16.       AGREEMENTS

Basic Agreements

16.1     Each party agrees with the other parties that, so long as any party has or may have any obligation under this Agreement:

(a)        Maintain Authorisations: it will maintain in full force and effect all consents of any governmental or other authority that are material to its ability to perform its obligations under this Agreement and will use all reasonable efforts to obtain any such consents; and

(b)        Compliance 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.

Agreements of the Collateral Manager

16.2     The Collateral Manager agrees with the Issuer that:

(a)        Notice of Termination Event: it will promptly notify the Collateral Administrator, the Issuer, the Trustee and the Rating Agencies if any Termination Event shall occur with respect to it;

(b)        Notice of Breach of Representation, etc.: it will promptly notify the Issuer, the Trustee and the Rating Agencies if any representation, warranty or certification previously made by it, would, if repeated on any subsequent date, be incorrect or misleading in any material respect;

(c)        Obligations: unless otherwise specifically required by any provision of the Trust Deed or this Agreement or by applicable law, it shall use all reasonable efforts not to take any action that it knows (i) would materially adversely affect the Issuer under the laws of the Republic of Ireland or any other law known to it to be applicable to the Issuer, (ii) is not permitted under the Issuer's constitutional documents, (iii) violates any law, rule or regulation of any governmental body or agency having jurisdiction over the Issuer including any laws of the Republic of Ireland or other applicable securities law the violation of which has or could reasonably be expected to have a material adverse effect on the Issuer, any Mortgaged Property or any Noteholder, (iv) causes the Issuer to violate any material obligation of the Issuer under the terms of the Trust Deed, (v) causes the Issuer to become subject to Tax in a jurisdiction other than the Republic of Ireland;

(d)        Records: it shall maintain appropriate books of account and records relating to services performed hereunder, and such hooks of account and records shall be accessible for inspection by a representative of the Issuer, the Collateral Administrator, the Trustee, each Rating Agency and the Independent accountants appointed by the Issuer pursuant to Clause 6 at a mutually agreed time during normal business hours and upon not less than five Business Days' prior notice;

(e)        Public Announcements: at no time will it, without the prior written consent of the Notes Placement Agent (which consent shall not be unreasonably withheld), make a public announcement concerning the issuance of the Notes, its role hereunder or any other aspect of the transactions contemplated by this Agreement and the Trust Deed; and

(f)         Act in name of Issuer: when acting on behalf of Issuer pursuant to the. Transaction Documents, it will act in the name of and for the account of Issuer.

Agreements of the Issuer

16.3     The Issuer agrees with the Collateral Manager that:

(a)        Notice from the Issuer to the Collateral Manager and the Trustee of Certain Events: it will promptly notify the Collateral Manager and the Trustee (x) if any Termination Event has occurred with respect to the Issuer and (y) if any representation, warranty or certification previously made by the Issuer would, if repeated on any subsequent date, be incorrect or misleading in any material respect;

(b)        Notice of Optional Redemption: it will give sufficient advance notice to the Collateral Manager of the exercise of any right of optional redemption of the Notes to allow the Collateral Manager to comply with its obligations under Clause 2.2(j);

(c)        Delivery of Amended Documents: it will deliver a true and complete copy of each amendment to the Issuer's constitutional documents and the Trust Deed to the Collateral Manager as promptly as practicable after its adoption or amendment;

(d)        Amendments to Trust Deed: it will not permit any amendment to the Trust Deed or any other Transaction Document that (x) materially increases the duties, obligations or liabilities of the Collateral Manager or (y) affects the amount or priority of any fees payable to the Collateral Manager to become effective unless the Collateral Manager has been given prior written notice of such amendment and has consented thereto in writing; and

(e)        Permanent Residence: it shall at no time have a permanent residence in the United Kingdom.

17.       THE STANTON NAME

The Issuer hereby represents and warrants to the Trustee and the Collateral Manager that it has the benefit of a non-exclusive royalty-free licence to use the Trade Mark in the Territory for the purposes of the transactions contemplated by the Offering Memorandum and the Transaction Documents.

18.       TERMINATION EVENTS

Basic Termination Events

18.1     The occurrence at any time with respect to each party hereunder of any of the following events constitutes a Basic Termination Event with respect to such party:

(a)        Failure to Pay: failure by such party to make, when due, any payment to be made by it under this Agreement if such failure is not remedied on or before the tenth day after written notice of such failure is given to such party;

(b)        Breach of Agreement: failure by such party to comply with or perform any material agreement or obligation (other than a payment obligation) to be complied with or performed by such party in accordance with this Agreement and such failure (if remediable) is not remedied on or before the 30th day after written notice of such failure is given to such party;

(c)        Misrepresentation: a representation made or deemed to have been made by such party in or pursuant to this Agreement proves to have been incorrect or misleading in any material respect when made or deemed to have been made;

(d)        Certain Corporate Transactions: the party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another Person and at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee Person fails to assume all the obligations of such party under this Agreement by operation of law or pursuant to an agreement reasonably satisfactory to the other parties to this Agreement;

(e)        Bankruptcy: (A) such party, otherwise than for the purposes of such amalgamation or reconstruction as is referred to in paragraph (C) below, ceasing or, through an official action of the Board of Directors of such party, threatening to cease to carry on business; or (B) such party being unable to pay its debts as and when they fall due; or (C) an order being made or an effective resolution being passed for the winding up of such party except a winding up for the purposes of or pursuant to an amalgamation or reconstruction the terms of which have previously been approved by the Trustee in writing or by an Extraordinary Resolution of the Noteholders; or (D) (I) any steps being taken (whether out of court or otherwise) against such party under any applicable liquidation, insolvency, composition, reorganisation or other similar laws (including, but not limited to, application for an administration order or the appointment of an examiner) and such proceedings, in the case of the Collateral Manager, not being discharged or stayed within 90 days or, in the case of any other party, not, in the opinion of the Trustee, being disputed in good faith with a reasonable prospect of success, or (II) an administration order being granted or an administrative receiver or other receiver, administrator, liquidator, examiner or other similar official being appointed in relation to such party or in relation to the whole or any substantial part of the undertaking or assets of such party, or (III) an encumbrancer taking possession of the whole or any substantial part of the undertaking or assets of such party, or (IV) a distress, execution, diligence or other process being levied or enforced upon or sued out against the whole or any substantial part of the undertaking or assets of such party and such possession or process (as the case may be) not being discharged or not otherwise ceasing to apply within 90 days, in the case of the Collateral Manager, or 14 days, in the case of any other party, or (V) such party initiating or consenting to judicial proceedings relating to itself under applicable liquidation, insolvency, composition, reorganisation, examination or other similar laws or making a conveyance or assignment for the benefit of its creditors, generally; or (E) any event occurs which under any applicable laws has an analogous effect to any of the events referred to in paragraphs (A), (B), (C) or (D) above.

Collateral Manager Termination Events

18.2     The occurrence at any time with respect to the Collateral Manager of any of the following events constitutes a Collateral Manager Termination Event:

(a)        a default in the payment of any indebtedness by the Collateral Manager in an amount greater than €1,000,000 if such default is not remedied on or before the tenth day after written notice of such default has been given to the Collateral Manager;

(b)        an Event of Default as described in Condition 10(a)(iv); or

(c)        a Collateral Manager Breach.

19.       TERMINATION

Automatic Termination

19.1     This Agreement will automatically terminate upon the earliest to occur of:

(a)        the payment and redemption in full of the Notes; and

(b)        the liquidation of the Mortgaged Property and the final distribution of the proceeds of such liquidation as provided in the Conditions.

Any such termination shall be without prejudice to any accrued rights, remedies or liabilities at the time of such termination.

Resignation and Termination of the Collateral Manager

19.2     Subject to the appointment of a successor as provided below, the Collateral Manager may resign upon the lesser of (a) 60 days' and (b) such period as agreed in writing between the Issuer, the Trustee and the Collateral Manager, notice in writing to the Issuer and the Trustee. In addition, subject to the appointment of a successor as provided below, the appointment of the Collateral Manager may be terminated for "cause" upon 30 days' prior written notice by the Issuer acting alone and taking into account the Noteholders' interests or at the direction of at least a Majority of the Controlling Class. For this purpose, cause will mean: (i) a Basic Termination Event with respect to the Collateral Manager shall have occurred and is continuing, or (ii) a Collateral Manager Termination Event shall have occurred and is continuing.

Subject to the appointment of a successor as provided below, the appointment of the Collateral Manager may also be terminated upon 30 days' prior written notice by the Issuer at the direction of the holders of 100 per cent. of the Principal Amount Outstanding of each Class of Notes. If the Collateral Manager or its Affiliates hold any Notes, such Notes will be excluded from voting in relation to the replacement or termination of the Collateral Manager.

Resignation or Termination not Effective until Eligible Successor Appointed

19.3     No removal, termination or resignation of the Collateral Manager shalt be effective unless (i) a successor thereto has agreed in writing to assume all of its duties and obligations under this Agreement, (ii) 30 days' prior notice has been given to the Rating Agencies and the Trustee, (iii) the Rating Agency Condition has been met in relation to such successor, and (iv) such successor is an Eligible Successor.

Action Upon Termination

19.4     Upon the effective date of termination of the appointment of the Collateral Manager, the Collateral Manager shall as soon as practicable deliver to the Issuer all data, property and documents of the Trustee or the Issuer or otherwise relating to the Mortgaged Property then in the custody of the Collateral Manager unless the Collateral Manager shall be required by applicable laws to retain such documents relating to the Mortgaged Property, in which case the Collateral Manager shall deliver to the Issuer copies thereof.

Co-operation in Proceedings

19.5 The Collateral Manager agrees that, notwithstanding any termination, it shall reasonably co-operate in any Proceedings arising in connection with this Agreement, the Trust Deed or any of the Mortgaged Property (excluding any such Proceedings in which claims are asserted against the Collateral Manager or any Affiliate of the Collateral Manager) so long as the Collateral Manager shall have been offered reasonable security, indemnity or other provision against the cost, expenses and liabilities that might be incurred in connection therewith.

20.       ASSIGNMENTS

Assignment by the Collateral Manager

20.1     Notwithstanding Clause 19, the Collateral Manager may at the sole cost of the Collateral Manager and subject to the prior consent of the Issuer and the Trustee and by giving not less than twenty calendar days' prior notice in writing to the Issuer and the Trustee, assign its rights and transfer by novation its obligations in whole, but not in part, to an Affiliate of the Collateral Manager who is an Eligible Successor, provided that the Issuer and the Trustee have received a copy of the confirmation that the Rating. Agency Condition has been satisfied in respect of the proposed transfer or assignment to such Affiliate (such Rating Agency Condition will, at the request of the Rating Agencies, be subject to receipt by the Rating Agencies of enforceability and tax opinions from legal advisers to such Affiliate in a form satisfactory to the Rating Agencies). For the avoidance of doubt, the Collateral Manager may not assign its rights and transfer by novation its obligations under this Clause 20.1 if the Collateral Manager is already subject to resignation or removal proceedings pursuant to Clause 19.

20.2     [Reserved]

20.3     On the expiry of notice exercising the right referred to in Clause 20.1, the Issuer shall enter into a new investment management agreement (the "New Investment Management Agreement") with the new investment manager which shall be on substantially the same terms as this Agreement (with any amendments or additions necessary to provide that the Collateral Manager shall, and the new investment manager shall not (except as provided in Clause 20.7 of this Agreement or such similar provision in the New Investment Management Agreement) be liable for the Collateral Manager's acts and omissions in its capacity as Collateral Manager up until the date of its replacement in accordance with Clause 20, and that the new investment manager shall, and the Collateral Manager shall not (except as provided in Clause 20.7 of this Agreement), be liable for the new investment manager's acts and omissions in its capacity as investment manager of the Issuer from and including the date on which it replaces the Collateral Manager in accordance with Clause 20 and otherwise to comply with the requirements specified in Clause 20.1, together with such other amendments and additions as may be agreed between the new investment manager and the other parties to this Agreement), and shall execute such other documents and make other filings and notifications as may be reasonably necessary in connection therewith.

Assignment by the Issuer

20.4     The Issuer may not assign any of its rights under this Agreement (or any interest herein) without the prior written consent of the Collateral Manager and the Trustee, except in the case of an assignment of such rights by the Issuer to (i) an entity which is a successor to the Issuer as contemplated by Clause 21 of the Trust Deed, or (ii) the Trustee as contemplated by the Trust Deed and the Euroclear Pledge Agreement.

Successor to Collateral Manager's Business

20.5     Without prejudice to Clause 18.1(d), any corporation, partnership or limited liability company into which the Collateral Manager may be merged or converted or with which it may be consolidated, or any corporation, partnership, limited liability company or other entity resulting from any merger, conversion or consolidation to which the Collateral Manager shall be a party, or any corporation, partnership, limited liability company or other entity succeeding to all or substantially all of the collateral management business of the Collateral Manager shall be the successor to the Collateral Manager without any further action by the Collateral Manager, the Issuer, the Trustee, the Noteholders or any other Person provided that such successor must be an Eligible Successor and the representations contained in Clause 15 given by the Collateral Manager shall be deemed to be repeated on the date such entity becomes successor to the Collateral Manager.

Co operation in Proceedings

20.6     The Collateral Manager agrees that, notwithstanding any assignment of its rights and transfer by novation of its obligations pursuant to this Clause 20, it shall reasonably co operate in any Proceedings arising in connection with this Agreement, the Trust Deed or any of the Mortgaged Property (excluding any such Proceedings in which claims are asserted against the Collateral Manager or any Affiliate of the Collateral Manager) so long as it shall have been offered reasonable security, indemnity or other provision against the cost, expenses and liabilities that might be incurred in connection therewith.

Liability

20.7     The Collateral Manager (the "Outgoing Collateral Manager") and any new collateral manager appointed pursuant to Clause 20.1 (the "Incoming Collateral Manager") shall be jointly and severally liable to the Issuer, Trustee and Noteholders (each a "Manager Indemnified Party" and collectively the "Manager Indemnified Parties"), for any losses, claims, damages, expenses or other liabilities actually suffered by any Manager Indemnified Party insofar as there, has been final judicial determination (including the conclusion of any appeal proceedings) that such losses, claims, damages, expenses or other liabilities are incurred directly as a result of the representations contained in Clauses 15.1, 15.2(d), 15.2(g) and 15.2(i) (or, in each case, such similar representations contained in the New Investment Management Agreement) given by the Incoming Collateral Manager being untrue as at the date the Incoming Collateral Manager is appointed as collateral manager pursuant to Clause 20.1 (excluding any double counting for those costs already contemplated by Clause 20.1). Neither the Outgoing Collateral Manager nor the Incoming Collateral Manager shall have any liability pursuant to this Clause 20.7 for any punitive, special, consequential or indirect loss or damage incurred or suffered by any Manager Indemnified Party. Neither the Outgoing Collateral Manager nor the Incoming Collateral Manager shall be liable pursuant to this Clause 20.7 for any losses, claims, damages, expenses or other liabilities suffered by any Manager Indemnified Party which result from a change in the laws, treaties, regulations, rules, practice, procedure (Taxation or otherwise) (or in the interpretation, application or administration of the same) of any applicable jurisdiction (including payments being made net of Tax) after the date the representations contained in Clauses 15.1, 15.2(d), 15.2(g) and 15.2(i) are given by the Incoming Collateral Manager. Provided that this Clause 20.7 shall not limit i) any liabilities of the Outgoing Collateral Manager pursuant to Clause 10.2 of this Agreement (or the Incoming Collateral Manager pursuant to such similar provision in the New Investment Management Agreement as the case may be); or ii) any indemnities provided by the Outgoing Collateral Manager pursuant to Clause 11.2 of this Agreement (or the Incoming Collateral Manager pursuant to such similar provision in the New Investment Management Agreement as the case may be).

21.       MISCELLANEOUS

Benefit of the Agreement

21.1     The Collateral Manager agrees that its obligations hereunder shall be enforceable at the instance of the Issuer and the Trustee, for itself and as trustee for the Secured Parties as provided herein or in the Trust Deed.

Binding Nature of Agreement; Successors and Assigns

21.2     This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns as provided herein.

Entire Agreement

21.3     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.

Conflict with Trust Deed

21.4     In the event that this Agreement requires any action to be taken with respect to any matter and the Trust Deed requires that a different action be taken with respect to such matter, and such actions are mutually exclusive, the provisions of the Trust Deed in respect thereof shall prevail.

Priorities of Payments

21.5     The Collateral Manager agrees that the payment of all amounts to which it is entitled pursuant to this Agreement and the Conditions shall be made only in accordance with the Priorities of Payments and the Conditions.

Amendments

21.6     No amendment, modification or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by fax) and executed by each of the parties hereto.

Survival of Representations, Warranties, Indemnities and Confidentiality Obligations

21.7     Each representation and warranty made or deemed to be made herein or pursuant hereto, each indemnity provided for hereby and each confidentiality obligation, shall survive the termination of this Agreement.

Remedies Cumulative

21.8     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.

Counterparts

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

Severability

21.10   If any provision in this Agreement shall be invalid, illegal or unenforceable as written, such provision shall be construed in the manner most closely resembling the apparent intent of the parties with respect to such provision so as to be valid, legal and enforceable; provided that if there is no basis for such a construction, such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability and, unless the ineffectiveness of such provision substantially impairs the basis of the bargain for one of the parties to this Agreement, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.

Third Party Beneficiaries

21.11   A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any tent of this Agreement, but this does not affect any right or remedy of a third party which exists or is available apart from that Act, except that any of the Issuer Indemnified Parties may, subject to Clause 24 (Limited Recourse), enforce its rights under Clause 11 (Indemnities), as if it were a party to this Agreement, provided that the Indemnified Parties may not enforce their rights as contemplated by this Clause 21.11 unless such party agrees in writing with the Issuer, Trustee and the Collateral Manager that it will be bound by the provisions of clause 26 (Limited Recourse) of the Trust Deed as if it were a party to the Trust Deed and as if it were a Transaction Creditor; provided further that the Indemnified Parties may not enforce their rights as contemplated by this Clause 21.11 if the exercise of such rights would breach the provisions of clause 26 (Limited Recourse) of the Trust Deed had such entity been a party to this Agreement since the date of this Agreement.

No Waiver of Rights

21.12   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.

22.       NOTICES

Effectiveness

22.1     Unless expressly provided otherwise herein, all notices, requests, demands and other communications required or permitted under this Agreement shall be in writing (including by fax or email) and shall be deemed to have been duly given (in the case of delivery by hand) when delivered or (in the case of fax) at the time of transmission to the address or fax number set forth in Schedule 1.

Change of Details

22.2     Any party may alter the address, or fax number or email address to which communications or copies are to be sent by giving notice of such change in conformity with the provisions of this Clause 22 for the giving of notice.

23.       GOVERNING LAW AND JURISDICTION

Governing Law

23.1     This Agreement, and any matter arising between the parties under or in connection with this Agreement, will be governed by and construed in accordance with English law.

Jurisdiction

23.2     With respect to any suit, action or proceedings relating to this Agreement or any matter between the parties arising under or in connection with this Agreement (Proceedings), each party for the benefit of the other parties hereto irrevocably: (i) submits to the nonexclusive jurisdiction of the courts of England; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes any party from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction. Each of the Issuer and the Collateral Manager irrevocably and unconditionally agrees that a judgement in any Proceedings brought in the courts of England shall be conclusive and binding upon the Issuer or the Collateral Manager, as the case may he, and may be enforced in the courts of any other jurisdiction.

Service of Process

23.3     The Issuer hereby irrevocably appoints SFM Corporate Services Limited, of Blackwell House, Guildhall Yard, London EC2V SAE, England to receive service of process on its behalf as its authorised agent for service of process in England. If for any reason such agent shall cease to be such agent for service of process the Issuer shall forthwith appoint a new agent for service of process in England and deliver to the Trustee a copy of the new agent's acceptance of appointment within 30 days. Nothing in this Agreement shall affect the right to serve process in any other matter permitted by law.

Waiver of Immunity

23.4     To the extent that the Issuer or the Collateral Manager may in any jurisdiction claim for itself or its assets immunity from suit, execution, attachment (whether in aid of execution, before judgement or otherwise) or other legal process and to the extent that in any such jurisdiction there may be attributed to itself or its assets such immunity (whether or not claimed), the 'Issuer and the Collateral Manager each hereby irrevocably agrees not to .claim and hereby irrevocably waives such immunity to the full extent permitted by the laws of such jurisdiction.

24.       NON-PETITION AND LIMITED RECOURSE

Each of the parties hereto acknowledges and agrees to be bound by the provisions of Clause 26 of the Trust Deed.

IN WITNESS WHEREOF the parties have executed this document on the date specified above with effect from that date.

 

 

 

 

Issuer

Signed and delivered as a deed by

__________________________ as duly

authorised attorney for and on behalf of Stanton

MBS I Public Limited Company

___________________________

 

Signature of Witness: ________________________

 

Name of Witness: __________________________

 

Address of Witness: _________________________

 

Occupation of Witness: ________________________

 

Collateral Manager

CAIRN CAPITAL LIMITED

By:

 

Trustee

U.S. BANK TRUSTEES LIMITED

By:      

Authorised Signatory

By:      

Authorised Signatory

 

Account Bank, Custodian and Collateral Administrator

ELAVON FINANCIAL SERVICES LIMITED

By:      

Authorised Signatory

By:      

Authorised Signatory



SCHEDULE 1

 

NOTICE INFORMATION

STANTON MBS I p.l.c. 

Address:           1st Floor

                        1-2 Victoria Buildings

                        Haddington Road

                        Dublin 4

                        Ireland

 

Fax:                  +353 1 697 5375

Email:               [email protected]

Attention:          Directors

With a copy to:

Structured Finance Management Limited

Address:           35 Great St. Helen's
London EC3A 6AP

Fax:                  +44 207 398 6325

Email:               [email protected]

Attention:          Directors

CAMBRIDGE PLACE INVESTMENT MANAGEMENT LLP

Address:           Lexicon House
17 Old Court Place
London W8 4PL

Fax:                  +44 207 938 5706

Email:               [email protected]

Attention:          Group Counsel

U.S. BANK TRUSTEES LIMITED

Address:           L5, 125 Old Broad Street,

                        London EC2N 1AR

Fax:                  +44 207 365 2577

Email:               [email protected]

Attention:          CDO Relationship Management

 



 

ELAVON FINANCIAL SERVICES LIMITED

Address:           5th Floor, 125 Old Broad Street

                        London EC2N 1AR

Fax:                  +44 207 365 2577

Email:               [email protected]

Attention:          CDO Relationship Management



 

SCHEDULE 2

FORM OF ISSUER ORDER

[Date]

To:       U.S. Bank Trustees Limited

L5, 125 Old Broad Street,

London EC2N 1AR

(the Trustee)

            Elavon Financial Services Limited

            5th Floor, 125 Old Broad Street

            London EC2N 1AR

 

 (the Collateral Administrator, the Custodian and the Account Bank)

Dear Sirs

STANTON MBS I p.l.c. (the Issuer)

€30,000,000 Class Al Senior Secured Floating Rate Revolving Notes due 2054

€81,000,000 Class Al Senior Secured Floating Rate Delayed Draw Notes due 2054

€107,500,000 Class Al Senior Secured Floating Rate Term Notes due 2054

€27,500,000 Class A2 Senior Secured Floating Rate Notes due 2054

€15,000,000 Class B Senior Secured Floating Rate Notes due 2054

€12,000,000 Class C Deferrable Interest Secured Floating Rate Notes due 2095

€10,000,000 Class D Deferrable Interest Secured Floating Rate Notes due 2095

€19,320,000 Subordinated Notes due 2095

(the Notes)

This letter constitutes an Issuer Order pursuant to the terms of the agreement dated 4 November 2004 (the Collateral Management Agreement) between the Trustee, the Issuer, Cambridge Place Investment Management LLP (the Collateral Manager) and Elavon Financial Services Limited.

Terms not otherwise defined herein shall bear the same meaning as in the Collateral Management Agreement.

We hereby confirm that we are the Collateral Manager of the Issuer and certify that its actions proposed hereunder are permitted pursuant to the terms of the Collateral Management Agreement.

We hereby notify the Trustee as follows:

1          DISPOSAL OF COLLATERAL DEBT SECURITIES/ELIGIBLE INVESTMENTS

Collateral Debt Security/Eligible Investment to be disposed:       [●]

ISIN/CUSIP:   [●]

Face Amount to be disposed:

[●]

Sale Price (excluding Accrued Interest):

[●]

Accrued Interest:

[●]

Outstanding principal amount:

[●]

Disposal Date:

[●]

Delivery Instructions:

[●]

Securities Exchange (if any) on which disposal is to be effected:

[●]

Accrued interest forming part of the Sale Proceeds designated as:

Principal Proceeds/Interest Proceeds

Account to which proceeds shall be paid:

[●]

[Disposal of Tradeable Security during Reinvestment Period

We hereby certify that the Collateral Debt Security set out above is being sold pursuant to Clause 3.7 of the Collateral Management Agreement and certify that:

(a)        we have not received notification and do not have actual knowledge that an Event of Default has occurred and is continuing;

(b)        [[if the Class A1 Notes are not rated "Aaa" by Moody's] the Noteholders of the Controlling Class have agreed to such disposal through an Extraordinary Resolution;

(c)        the Collateral Administrator has confirmed to us that the Aggregate Principal Balance of Tradeable Securities disposed of in this year (for the avoidance of doubt, including the proposed disposal) does not. exceed 15 per cent. of the Aggregate Principal Balance of the Collateral Debt Securities held by the Issuer at the beginning of this year for which purposes a year shall be deemed to be from and including 4 November in a year to but excluding 4 November in the following year;

(d)        we believe in our sole but reasonable judgement (1) that the Principal Sale Proceeds thereof shall be in an amount which is no less than 98 per cent. of the Principal Balance of such Collateral Debt Security prior to such disposal and (2) that such Principal Sale Proceeds can be reinvested in the acquisition of Collateral Debt Securities within 30 Business Days from the date of settlement of the disposal of the Collateral Debt Security to be disposed; and

(e)        after giving effect to such disposal and any subsequent acquisition, the Portfolio Criteria will be met or, if any of the limitations set forth in the Portfolio Criteria (other than any of the Coverage Tests) are not met prior to such disposal, each such limitation will not be further from being met after giving effect to such disposal and any subsequent acquisition.]

[Disposal of Defaulted Securities, Credit Risk Securities, Converted Securities and. Credit Improved Securities

We hereby certify that the Collateral Debt Security set out above is being disposed pursuant to Clause 3.8 of the Collateral Management Agreement and certify that:

(a)        we have not received notification and do not have actual knowledge that an Event of Default has occurred and is continuing;

(b)        we believe in our sole but reasonable judgement that such security is [a Defaulted Security] [a Credit Risk Security] [a Converted Security] [a Credit Improved Security]; and

(c)        we reasonably believe that such Principal Sale Proceeds can be reinvested in the acquisition of Collateral Debt Securities within 30 Business Days (in the case of a Credit Improved Security) or 60 days (otherwise) from the date of settlement of the disposal of the Collateral Debt Security to be disposed; and

(d)        after giving effect to such disposal and any subsequent acquisition, the Portfolio Criteria will be met or, if any of the limitations set forth in the Portfolio Criteria (other than any of the Coverage Tests) are not met prior to such disposal, each such limitation will not be further from being met after giving effect to such disposal and any subsequent acquisition.]

[Disposal Following Optional Redemption of Notes

We hereby certify that the Collateral Debt Security and/or Eligible Investments set out above is being sold pursuant to Clause 3.10 of the Collateral. Management Agreement and in accordance with the requirements set forth in Condition 7 due to an optional redemption of the Notes in accordance with Conditions [7(e), (g) or (i)] [and that the Sale Proceeds therefrom will be used to pay all amounts referred to in Condition 7 (e), (g) or (i), as the case may be, to redeem the relevant Class of Notes (in whole but not in part) and to pay all amounts ranking in priority thereto in accordance with the Priorities of Payments]]

[Disposal on or Prior to Stated Maturity

We hereby certify that the Collateral Debt Securities are being sold upon the redemption of Notes in whole on or prior to their Stated Maturity.]

Accordingly, please countersign this letter to certify your release in accordance with the Trust Deed and the Euroclear Pledge Agreement of the security over the relevant Collateral Debt Securities/Eligible Investments and forward the same to the Custodian to instruct it to deliver the relevant securities as detailed above and to receive the Sale Proceeds and credit such proceeds to the Account specified above.

2.         ACQUISITION OF COLLATERAL DEBT SECURITIES/ELIGIBLE INVESTMENTS

Collateral

Debt Security/Eligible Investment to be acquired:

[●]

ISIN/CUSIP:

[●]

Rating (Moody's, S&P, Fitch):

[●]

Maturity Date:

[●]

Face Amount to he purchased:

[●]

Outstanding principal amount:

[●]

Purchase Price (excluding Accrued Interest):

 

Accrued Interest:

[●]

Settlement Date:

[●]

Selling Institution:

[●]

[Factor:

[●]

Delivery Instructions:

On the Settlement Date the securities shall be credited to the Custody Account, Account No: [s] held with Elavon Financial Services Limited as Custodian.

Account to be Credited:

The Custody Account

Account from which purchase price should be taken:

[●]

 

We hereby certify that the asset specified above is being acquired pursuant to Clause 3.2 of the Collateral Management Agreement and that:

(a)        such asset [meets the definition of Eligible Investment] [meets the definition of Collateral Debt Security and such acquisition will not cause [the Portfolio to breach the Portfolio Criteria] [the limitations set forth in the Portfolio Criteria (other than the Coverage Tests) to be further from being met]];

(b)        no Event of Default has occurred and is continuing;

(c)        we are not prohibited from trading in such asset in accordance with applicable law;

(d)        such acquisition is on an "arm's length" basis and for fair market value; and

(e)        there are sufficient funds standing to the credit of the [Principal Collection Account][Uninvested Proceeds Account] or available to be drawn under the Liquidity Facility Agreement to fund the acquisition of such asset.

3          REDEMPTION/PAYMENT IN FULL

Collateral Debt Security/Eligible Investment:

[●]

ISIN/CUSIP:

[●]

Face Amount:

[●]

Redemption Price (incl. Accrued Interest):

[●]

Redemption Date:

[●]

Delivery Instructions:

[●]

Securities Exchange, if any, on which [s] redemption is to be effected:

[●]

We hereby certify that the above Collateral Debt Security/Eligible Investment is being redeemed or paid in full. Accordingly, please instruct the Custodian to comply with the delivery instructions set out above against receipt of the Redemption Price.

4          OFFER/OPTION

Collateral Debt Security/Eligible Investment to which the Offer/Option relates:

[●]

ISIN/CUSIP:

[●]

Face Amount:

[●]

Offer/Strike Price:

[●]

Offer/Strike Price:

[●]

Delivery Instructions/Required Procedure:

[●]

 

We hereby certify that the above Collateral Debt Security/Eligible Investment is subject to an Offer for an exchange, tender or sale. Accordingly please instruct the Custodian to comply with the delivery instructions set out above.

Acknowledged by

US Bank Trustees Limited

 

L5, 125 Old Broad Street

London EC2N 1AR

 

Facsimile: +44 207 365 2577

Attention: CDO Relationship Management

 



 

SCHEDULE 3

ELIGIBILITY CRITERIA AND PORTFOLIO CRITERIA

1          Eligibility Criteria

Each Collateral Debt Security shall, on the relevant trade date, satisfy the following requirements (the Eligibility Criteria):

(a)        it is an RMBS, a CMBS, a CDO, an ABS or a Synthetic Credit Linked Security;

(i)         it is (i) a euro denominated debt security the payments with respect to which are not, by the terms thereof payable in a currency other than euro or (ii) a debt security denominated in an Eligible Currency other than euro the payments with respect to which are not by the terms thereof payable in a currency other than such Eligible Currency and in respect of which the Issuer enters into a fully cancellable Collateral Currency Swap on or prior to the acquisition of such Collateral Debt Security;

(ii)        it is a security issued by an obligor incorporated or organised under the laws of any state of the United States of America, a member state of the European Union (except Austria), the Cayman Islands or Jersey;

(iii)       it is not (i) a Defaulted Security, (ii) a Credit Impaired Security, (iii) a Deferred Interest PIK Obligation, or a security that is, on the relevant trade date, having interest deferred or (iv) a security which has a rating of below "Ba3" by Moody's, below "BB-" by S&P or below "BB-" by Fitch; provided that if the Collateral Debt Security is (A) a CDO, or (B) a Non Performing Loan Security issued by an obligor incorporated or organised under the laws of Italy, it must have a rating of at least "Baa3" by Moody's, at least "BBB-" by S&P or at least "BBB-" by Fitch;

(iv)       it provides for a fixed amount of principal payable in cash by the stated maturity of such security;

(v)        it is an interest beating security, such interest being payable at least semi-annually and such interest not being subject to a decreasing coupon or spread;

(vi)       it is eligible, under the instrument or agreement pursuant to which it was issued or created, to be acquired by the Issuer and to be subject to the security interest created in favour of the Trustee under the Trust Deed and the Euroclear Pledge Agreement;

(vii)      its purchase price is at least 80 per cent. of its par value (excluding accrued interest);

(viii)      it is not an Equity Security or Margin Stock or the subject of an offer of exchange or tender by its obligor or by any other person, for cash, securities or any other type of consideration and neither the holders of such securities nor the obligor thereof has exercised any optional redemption right with respect thereto;

(ix)       it is eligible for transfer to the Trustee and the Custodian by physical delivery or through Euroclear, Clearstream, Luxembourg or DTC in compliance with the requirements of the Trust Deed and the Euroclear Pledge Agreement;

(x)        it is a security with a public rating by Moody's and/or S&P and/or Fitch;

(xii)      either (i) no payments of principal, premium, if any, or interest 'thereon are the subject of withholding tax imposed by any jurisdiction. or (ii) if any such payments are subject to such withholding tax, the obligor thereunder is required to make "gross-up" payments pursuant to the relevant Underlying Instrument that over the full amount of any such withholding tax on an after-Tax basis;

(xiii)      no payments of stamp duty, transfer Taxes or registration Taxes are imposed by any jurisdiction in connection with the acquisition of such security by the Issuer or the creation of the security interest therein pursuant to the Trust Deed and the Euroclear Pledge Agreement;

(xiv)     ownership of such security will not subject the Issuer to net income Tax in any jurisdiction where it would not otherwise be subject to Tax;

(xv)      it is not subject to any lien, security interest or other encumbrance other than pursuant to the Trust Deed and the Euroclear Pledge Agreement;

(xvi)     it is not a security pursuant to which future advances may be required to be made to the obligor or counterparty thereof;

(xvii)     it is not a synthetic security other than a Synthetic Credit Linked. Security and in such case, (i) the Reference Obligor must have a minimum long teen rating of at least "A3" by Moody's or at least "A-" by Fitch and S&P and (ii) the underlying collateral of such Synthetic Credit Linked Security must have a minimum long term rating of at least "Aa3" by Moody's or at least "AA-" by S&P or at least "AA-" by Fitch, and (iii) such Synthetic Credit Linked Security must not be a single tranche Synthetic Credit Linked Security;

(xviii)    if it is a Synthetic Credit Linked Security, its Reference Obligation is not art Arbitrage CDO;

(xix)     it is not an Emerging Market Underlying Security, a Whole-Business Securitisation or an Underlying Combination Note;

(xx)      it is not a security with a legal maturity later than November 2095; and

(xxi)     it is not a security issued by the Collateral Manager or any of its Affiliates or issued by an issuer to which the Collateral Manager provides investment advice or management services.

2          Portfolio Criteria

On and after the Closing Date (or any other date as specified below) the acquisition of a Collateral Debt Security (i) must not cause the Portfolio to breach any of the following limitations (the Portfolio Criteria) or (ii) other than in respect of any of the Coverage Tests, if any of the limitations set forth in the Portfolio Criteria are not met prior to such commitment to acquire is made by the Collateral Manager, must not cause such limitation to be further from being met:

(a)        the Aggregate Principal Balance of all RMBS will be not more than 50 per cent. Of the Minimum Investment Amount;

(b)        the Aggregate Principal Balance of all Sub-Prime RMBS will be not more than 25 per cent. of the Minimum Investment Amount;

(c)        the Aggregate Principal Balance of all Non-Performing Loan Securities issued by obligors incorporated or organised under the laws of Italy will be not more than 10 per cent. of the Minimum Investment Amount and at least 33.3 per cent. of the Aggregate Principal Balance of such Collateral Debt Securities will consist of Collateral Debt Securities with a rating of "A3" or above by Moody's, "A-" or above by S&P or "A-" or above by Fitch;

(d)        the Aggregate Principal Balance of all Non-Conforming Securities linked to assets at least 50 per cent. of which are located in the United Kingdom will be not more than 15 per cent. of the Minimum Investment Amount;

(e)        the Aggregate Principal Balance of all CMBS will be not more than 50 per cent. of the Minimum Investment Amount;

(f)         the Aggregate Principal Balance of all Prime RMBS linked to assets at least 50 per cent, of which are located in any given country will be not more than 15 per cent. of the Minimum Investment Amount, provided however that, if such assets located in any given country are less than 50 per cent. of the total assets to which such Prime RMBS are linked, the Collateral Manager shall, in good faith, determine the geographic allocation and only if such geographic allocation is deemed to be "multi-jurisdictional European securitisation", such assets shall not be considered for the purpose of this item of the Portfolio Criteria;

(g)        the Aggregate Principal Balance of all CMBS issued by obligors incorporated or organised under the laws of any given country will be not more than 15 per cent. of the Minimum Investment Amount;

(h)        the Aggregate Principal Balance of all CDOs will be not more than 10 per cent. of the Minimum Investment Amount;

(i)         the Aggregate Principal Balance of all ABS will be not more than 5 per cent. of the Minimum Investment Amount;

(j)         the Aggregate Principal Balance of all PIK Obligations will be not more than 10 per cent. of the Minimum Investment Amount;

(k)        the Aggregate Principal Balance of all Collateral Debt Securities that bear interest at a fixed rate that are not the subject of a Collateral Interest Rate Swap will be not more than 5 per cent of the Minimum Investment Amount;

(l)         the Aggregate Principal Balance of all Non-Euro Obligations will not be more than 10 per cent. of the Minimum Investment Amount;

(m)       the Aggregate Principal Balance of Collateral Debt Securities with a rating of "Baa3" or above by Moody's or "BBB-" or above by S&P or "BBB-" or above by Fitch will be at least 85 per cent, of the Minimum Investment Amount;

(n)        the Aggregate Principal Balance of Collateral Debt Securities with a rating of below "Baa3" by Moody's, below "BBB-" by S&P and below "BBB-" by. Fitch will be not more than 15 per cent. of the Minimum Investment Amount;

(o)        the Aggregate Principal Balance of the five largest Collateral Debt Securities of the same tranche issued by a particular obligor and rated "Baa2" or above by Moody's, "BBB" or above by S&P or "BBB" or above by Fitch shall be not more than 3 1/3 per cent. of the Maximum Investment Amount;

(p)        except as provided in (o), the Aggregate Principal Balance of Collateral Debt Securities of the same tranche, issued by a particular obligor and rated "Aa3" or above by Moody's, "AA-" or above by S&P or "AA-" or above by Fitch will be not more than 3 per cent. of the Minimum Investment Amount;

(q)        except as provided in (o), the Aggregate Principal Balance of Collateral Debt Securities of the same tranche, issued by a particular obligor and rated "Baa2" to "Al" by Moody's, "BBB" to "A+" by S&P or "BBB" to "A+" by Fitch will be not more than 2.5 per cent. of the Minimum Investment Amount;

(r)        except as provided in (o), the Aggregate Principal Balance of Collateral Debt Securities of the same tranche, issued by a particular obligor and rated "Baa3" by Moody's or "BBB-" by S&P or "BBB-" by Fitch will be not more than 2.0 per cent. of the Minimum Investment Amount;

(s)        except as provided in (o), the Aggregate Principal Balance of Collateral Debt Securities of the same tranche, issued by a particular obligor and rated "Bal" or below by Moody's, "BB+" or below by S&P or "BB+" or below by Fitch will be not more than 1.5 per cent. of the Minimum Investment Amount;

(t)         the Aggregate Principal Balance of Collateral Debt Securities of multiple tranches of a single obligor will be not more than 4 per cent. of the Minimum Investment Amount;

(u)        the Aggregate Principal Balance of Collateral Debt Securities without a public rating by S&P will be not more than 20 per cent. of the Minimum Investment Amount;

(v)        the Aggregate Principal Balance of Collateral Debt Securities without a public rating by Moody's will be not more than 20 per cent. of the Minimum Investment Amount;

(w)       the Aggregate Principal Balance of Collateral Debt Securities with a legal maturity later than November 2045 will be not more than 45 per cent, of the Minimum Investment Amount;

(x)        the Aggregate Principal Balance of Collateral Debt Securities with a legal maturity later than November 2054 will be not more than 15 per cent. of the Minimum Investment Amount;

(y)        the Aggregate Principal Balance of Collateral Debt Securities in respect of which the Underlying Collateral consists of mortgage obligations more than 50 per cent. of which by value are linked to property in The Netherlands and which has a legal maturity date falling after the end of November 2054, will be less than 10 per cent. of the Minimum. Investment Amount;

(z)        on or after the Ramp-Up Effective Date, each of the Collateral Quality Tests will be satisfied;

(aa)      on or after the. Ramp-Up Effective Date, each of the Coverage Tests will be satisfied;

(bb)      the Aggregate Principal Balance of all the Collateral Debt Securities serviced by a single servicer (together with the Aggregate Principal Balance of any Synthetic Credit Linked Securities related thereto) plus the Aggregate Principal Balance of the Eligible Investments purchased with funds from the Principal Collection Account shall not exceed 7.5 per cent. of the Minimum Investment Amount provided that (a) if the servicer is rated at least "A-" or "S2" by Fitch, such limit shall be increased to 10 per cent. of the Minimum Investment Amount, and/or (b) if the servicer is rated at least "-AA--" or "S l" by Fitch, such limit shall be increased to 15 per cent. of the Minimum Investment Amount and further provided that this item (bb) shall not apply if the Rating Agency Condition in respect of Fitch is satisfied (the satisfaction of such condition not to be unreasonably withheld or delayed by Fitch);

(cc)      the percentage of the Aggregate Principal Balance of all Collateral Debt Securities (i) for which the public rating only refers to repayment of principal or (ii) which are rated below "BBB-" by S&P and/or Fitch and are subject to an Available Fund Cap, shall not exceed 5 per cent. of the Minimum Investment Amount; and

(dd)      the Aggregate Principal Balance of Collateral Debt Securities paying interest either quarterly or more frequently will not be less than 25 per cent. of the Minimum investment Amount.

For the purposes of determining compliance with the Eligibility Criteria and the Portfolio Criteria other than those related to the Collateral Quality Tests but including the Weighted Average S&P Recovery Rate Test, the Weighted Average Moody's Recovery Rate Test and the Weighted Average Fitch Recovery Rate Test, only public ratings will be used.

For the purposes of determining compliance with the Collateral Quality Tests (other than the Weighted Average S&P Recovery Rate Test, the Weighted Average Moody's Recovery Rate Test and the Weighted Average Fitch Recovery Rate Test), (a) public ratings, private ratings or credit estimates may be used and (b) if the asset is not rated by any given Rating Agency, such asset shall be notched in accordance with Schedule 11.

If the Issuer has previously entered into a commitment to acquire an obligation or security for inclusion in the Portfolio then the Issuer need not comply further with any of the Eligibility Criteria or Portfolio Criteria on the date of such acquisition if the Issuer complied with each of the Eligibility Criteria and Portfolio Criteria on the trade date on which the Issuer entered into such commitment.



 

SCHEDULE 4

COLLATERAL QUALITY TESTS

Collateral Quality Tests

The Collateral Quality Tests will be used primarily as criteria for acquiring Collateral Debt Securities. The Collateral Quality Tests will be comprised of (a) the Moody's Diversity Score Test, (b) the Moody's Weighted Average Rating Factor Test, (c) the Weighted Average Fitch Rating Factor Test, (d) the Weighted Average S&P Recovery Rate Test, (e) the Weighted Average Moody's Recovery Rate Test, (f) the Weighted Average Fitch Recovery Rate Test, (g) the Weighted Average Spread Test, (h) the Standard & Poor's CDO Monitor Test, (i) the Weighted Average Life Test, which are described below.

Measurement by the Collateral Administrator of the degree of compliance with the Collateral Quality Tests will be required on each Measurement Date.

(a)        Moody's Diversity Score Test

The Moody's Diversity Score Test shall be satisfied on any Measurement Date if the Diversity Score on such Measurement Date for all Collateral Debt Securities is equal to or greater than 17.0.

The Moody's Diversity Score as set forth in Schedule 6 is a single number that measures the portfolio correlation in terms of issuer, industry and rating concentration. A higher Diversity Score reflects a more diverse portfolio.

(b)        Moody's Weighted Average Rating Factor Test

The Moody's Weighted Average Rating Factor Test will be satisfied on any Measurement Date, if the Weighted Average Rating of all Collateral Debt Securities is not more than 610. Weighted Average Rating is defined in Schedule 7.

(c)        Weighted Average Fitch Rating Factor Test

The Weighted Average Fitch Rating Factor Test will be satisfied on any Measurement Date if the Fitch Weighted Average Rating of the Collateral Debt Securities does not exceed 7.25 per cent.

Fitch Weighted Average Rating is defined in Part A of Schedule 10.

(d)        Weighted Average S&P Recovery Rate Test

The Weighted Average S&P Recovery Rate Test will be satisfied as of any Measurement Date if the Weighted Average S&P Recovery Rate of all Collateral Debt Securities is greater than or equal to in respect of:

(i)         Notes rated "AAA" by S&P, 28.05 per cent.;

(ii)        Notes rated "AA" by S&P, 32.30 per cent.;

(iii)       Notes rated "A" by S&P, 37.08 per cent.; and

(iv)       Notes rated "BBB" by S&P, 44.11 per cent.

The Weighted Average S&P Recovery Rate of all Collateral Debt Securities, as of any Measurement Date, is the aggregate of the products obtained by multiplying the Principal Balance of each Collateral Debt Security by its S&P Recovery Rate (as defined in Schedule 8), dividing such sum by the Aggregate Principal Balance of all such Collateral Debt Securities, multiplying the result by 100 and rounding up to the first: decimal place. For the purposes of each Weighted Average S&P Recovery Rate, the Principal Balance of a Defaulted Security shall be deemed to be zero.

(e)        Weighted Average Moody's Recovery Rate Test

The Weighted Average Moody's Recovery Rate Test will be satisfied as of any Measurement Date if the Weighted Average Moody's Recovery Rate of all Collateral Debt Securities is greater than or equal to 28 per cent..

The Weighted Average Moody's Recovery Rate of all Collateral Debt Securities, as of any Measurement Date, is the aggregate of the products obtained by multiplying the Principal Balance of each Collateral Debt Security by the Moody's Recovery Rate corresponding to the applicable rating, tranche size and asset type set forth in Schedule 9, dividing such sum by the Aggregate Principal Balance of all such Collateral Debt Securities, multiplying the result by 100 and rounding to the first decimal place. For the purposes of each Weighted Average Moody's Recovery Rate, the Principal Balance of a Defaulted Security shall be zero.

(f)         Weighted Average Fitch Recovery Rate Test

The Weighted Average Fitch Recovery Rate Test will be satisfied on any Measurement Date if the Weighted Average Fitch Recovery Rate of all Collateral Debt Securities is greater than or equal to 40 per cent.

The Weighted Average Fitch Recovery Rate of all Collateral Debt Securities, as of any Measurement Date, is the aggregate of the products obtained by multiplying the Principal Balance of each Collateral Debt Security by its Fitch Recovery Rate as set out in Part B of Schedule 10, dividing such sum by the Aggregate Principal Balance of all such Collateral Debt Securities, multiplying the result by 100 and rounding up to the first decimal place. For the purposes of each Weighted Average Fitch Recovery Rate, the Principal Balance of a Defaulted Security shall be deemed to be zero.

(g)        Weighted Average Spread Test

The Weighted Average Spread Test will be satisfied as of any Measurement Date if (a)(i) the weighted average coupon minus the EURIBOR rate on such Measurement Date (Weighted Average Coupon) of all Fixed Rate Collateral Debt Securities (other than Collateral Debt Securities which the Collateral Manager reasonably believes will default with respect to payment when next due, Defaulted Securities and Deferred Interest PIK Obligations) multiplied by the outstanding Principal Balance of such Fixed Rate Collateral Debt Securities (the Fixed Par Amount) as of such date plus (ii) the weighted average spread (Weighted Average Spread) above EURIBOR (with respect to Collateral Debt Securities whose reference index is not EURIBOR, the equivalent spread over EURIBOR) of all Floating Rate Collateral Debt Securities (other than Collateral Debt Securities which the Collateral Manager reasonably believes will default with respect to payment when next due, Defaulted Securities and Deferred Interest PIK Obligations) multiplied by the outstanding Principal Balance of such Floating Rate Collateral Debt Securities (the Floating Par Amount) as of such date minus (iii) any premium payable by the Issuer in respect of each Credit Default Swap divided by (b) the sum of the Fixed Par Amount and the Floating Par Amount, is greater than the Required Weighted Average Spread. For the purposes of this definition, any Fixed Rate Collateral Debt Security that is the subject of a Collateral Interest Rate Swap shall be considered a Floating Rate Collateral Debt Security bearing interest at a floating rate equal to the implied spread over EURIBOR receivable by the Issuer pursuant to such Collateral Interest Rate Swap (so long as there is no default under such Collateral Interest Rate Swap), provided however that each Collateral Debt Security that is a CMBS, if subject to an Available Funds Cap, the interest coupon payable thereon will be deemed to be zero unless otherwise agreed from time to time by S&P and Fitch.

With respect to the calculation of Weighted Average Coupon and Weighted Average Spread, the coupon or spread of any Collateral Debt Security with a coupon that is only partially rated shall be the rated portion of the coupon or spread.

As of any Measurement Date, Required Weighted Average Spread means a rate equal to 1.70 per cent. per annum; provided that the Required Weighted Average Spread may be modified if the Rating Agency Condition is satisfied with respect to such modification.

(h)        Standard & Poor's CDO Monitor Test

The Standard & Poor's CDO Monitor Test will be satisfied on any Measurement Date during the Reinvestment Period if after giving effect to the disposal of a Collateral Debt Security or the acquisition of a Collateral Debt Security (or both) (i)(x) the Class Al Default Differential of the Proposed Portfolio is positive or (y) the Class Al Default Differential of the Proposed Portfolio is greater than the Class Al Default Differential of the Current Portfolio, (ii)(x) the Class A2 Default Differential of the Proposed Portfolio is positive or (y) the Class A2 Default Differential of the Proposed Portfolio is greater than the Class A2 Default Differential of the Current Portfolio, (iii)(x) the Class B Default Differential of the Proposed Portfolio is positive or (y) the Class B Default Differential of the Proposed Portfolio is greater than the Class B Default Differential of the Current Portfolio, (iv)(x) the Class C Default Differential of the Proposed Portfolio is positive or (y) the Class C Default Differential of the Proposed Portfolio is greater than the Class C Default Differential of the Current Portfolio, and (v)(x) the Class D Default Differential of the Proposed Portfolio is positive or (y) the Class D Default Differential of the Proposed Portfolio is greater than the Class D Default Differential of the Current Portfolio.

The Class A1 Break-Even Default Rate, at any time, is the maximum percentage of defaults that the Current Portfolio or the Proposed Portfolio, as applicable, can sustain, as determined by S&P through application of the Standard & Poor's CDO Evaluator, which after giving effect to S&P's assumptions on recoveries and timing and to the Priorities of Payments, will result in sufficient funds remaining for the payment of the Class A1 Notes in full by their stated maturity and the timely payment of interest, the Class A1 Revolving Notes Commitment Fee and the Class Al Delayed Draw Notes Commitment Fee.

The Class A1 Default Differential, at any time, is the rate calculated by subtracting the Class Al Scenario Default Rate at such time from the Class Al Break-Even Default Rate at such time.

The Class A1 Scenario Default Rate, at any time, is an estimate of the cumulative default rate for the Current Portfolio or the Proposed Portfolio, as applicable, consistent with a "AAA" rating of the Class A1 Notes by S&P, determined by application of the Standard & Poor's CDO Evaluator.

The Class A2 Break-Even Default Rate, at any time, is the maximum percentage of defaults that the Current Portfolio or the Proposed Portfolio, as applicable, can sustain, as determined by S&P through application of the Standard & Poor's CDO Evaluator, which after giving effect to S&P's assumptions on recoveries and timing and to the Priorities of Payments, will result in sufficient funds remaining for the payment of the Class A2 Notes in full by their stated maturity and timely payment of interest.

The Class A2 Default Differential, at any time, is the rate calculated by subtracting the Class A2 Scenario Default Rate at such time from the Class A2 Break-Even Default Rate at such time.

The Class A2 Scenario Default Rate, at any time, is an estimate of the cumulative default rate for the Current Portfolio or the Proposed Portfolio, as applicable, consistent with a "AAA" rating of the Class A2 Notes by S&P, determined by application of the Standard & Poor's CDO Evaluator.

The Class B Break-Even Default Rate, at any time, is the maximum percentage of defaults which the Current Portfolio or the Proposed Portfolio, as applicable, can sustain, as determined by S&P through application of the Standard & Poor's CDO Evaluator, which after giving effect to S&P's assumptions on recoveries and timing and to the Priorities of Payments, will result in sufficient funds remaining for the payment of the Class B Notes in full and the timely payment of interest on the Class B Notes.

The Class B Default Differential, at any time, is the rate calculated by subtracting the Class B Scenario Default Rate at such time from the Class B Break-Even Default Rate at such time.

The Class B Scenario Default Rate, at any time, is an estimate of the cumulative default rate for the Current Portfolio or the Proposed Portfolio, as applicable, consistent with an "AA" rating of the Class B Notes by S&P, determined by application of the Standard & Poor's CDO Evaluator at such time.

The Class C Break-Even Default Rate, at any time, is the maximum percentage of defaults which the Current Portfolio or the Proposed Portfolio, as applicable, can sustain, as determined by S&P through application of the Standard & Poor's CDO Evaluator, which after giving effect to S&P's assumptions on recoveries and timing and to the Priorities of Payments, will result in sufficient funds remaining for the payment of the Class C Notes in full and the ultimate payment of interest on the Class C Notes.

The Class C Default Differential, at any time, is the rate calculated by subtracting the Class C Scenario Default Rate as such time from the Class C Break-Even Default Rate at such time.

The Class C Scenario Default Rate, at any time, is an estimate of the cumulative default rate for the Current Portfolio or the Proposed Portfolio, as applicable, consistent with an "A" rating of the Class C Notes by S&P, determined by application of the Standard & Poor's CDO Evaluator at such time.

The Class D Break-Even Default Rate, at any time, is the maximum percentage of defaults which the Current Portfolio or the Proposed Portfolio, as applicable, can sustain, as determined by S&P through application of the Standard & Poor's CDO Evaluator, which after giving effect to S&P's assumptions on recoveries and timing and to the Priorities of Payments, will result in sufficient funds remaining for the payment of the Class D Notes in full and the ultimate payment of interest on the Class D Notes.

The Class D Default Differential, at any time, is the rate calculated by subtracting the Class D Scenario Default Rate at such time from the Class D Break-Even Default Rate at such time.

The Class D Scenario Default Rate, at any time, is an estimate of the cumulative default rate for the Current Portfolio or the Proposed Portfolio, as applicable, consistent with an "BBB" rating of the Class D Notes by S&P, determined by application of the Standard & Poor's CDO Evaluator at such time.

The Current Portfolio means the portfolio (measured by Principal Balance) of Collateral Debt Securities, Principal Proceeds and Uninvested Proceeds held as cash and Eligible Investments purchased with Principal Proceeds or Uninvested Proceeds, existing immediately prior to the sale, maturity or other disposal of a Collateral Debt Security or immediately prior to the acquisition of a Collateral Debt Security, as the case may be.

The Proposed Portfolio means the portfolio (measured by Principal Balance) of Collateral Debt Securities, Principal Proceeds and Uninvested Proceeds held as cash and Eligible Investments purchased with Principal Proceeds or Uninvested Proceeds, resulting from the sale, maturity or other disposal of a Collateral Debt Security or a proposed acquisition of a Collateral Debt Security, as the case may be.

(i)         Weighted Average Life Test

The Weighted Average Life Test will be satisfied on any Measurement Date occurring on or after the Ramp-Up Effective Date if the Weighted Average Life as of such Measurement Date is not greater than the number for such date set forth below:

Measurement Date falling on or after the Determination Date in respect of the Payment Dates falling in

Weighted Average Life

November 2005

8.5

November 2006

7.5

November 2007

7,5

November 2008

6.5

November 2009

6.5

November 2010

5.5

November 2011

5.5

November 2012

4.5

November 2013

4.5

November 2014

3.5

November 2015

2.5

November 2016

1.5

The Weighted Average Life equals, as of any Measurement Date, the number obtained by (i) for each Collateral Debt Security (other than Defaulted Securities), multiplying the euro amount (or in the case of Non-Euro Obligations, the euro amount received by the Issuer under the relevant Collateral Currency Swap) of each expected distribution of principal to be paid after such Measurement Date by the number of years (rounded to the nearest hundredth) from such Measurement Date until such expected distribution of principal is due; (ii) summing all of the products calculated pursuant to Clause (i); and (iii) dividing the sum calculated pursuant to Clause (ii) by the sum of all expected distributions of principal due on all the Collateral Debt Securities (other than Defaulted Securities) as of such Measurement Date.



 

SCHEDULE 5

COVERAGE TESTS

Coverage Tests

The Coverage Tests for the Notes will consist of (i) the Class B Coverage Tests (comprised of the. Class B Overcollateralisation Ratio Test and the Class B Interest Coverage Ratio Test); (ii) the Class C Coverage Tests (comprised of the Class C Overcollateralisation Ratio Test and the Class C Interest Coverage Ratio Test); and (iii) the Class D Coverage Tests (comprised of the Class D Overcollateralisation Ratio Test and the Class D Interest Coverage Ratio Test).

Overcollateralisation Ratio Tests

The Class B Overcollateralisation Ratio Test will be satisfied on any Measurement Date on which any Class B Note remains Outstanding if the Class B Overcollateralisation Ratio on such Measurement Date is equal to or greater than 112.3 per cent.

The Class C Overcollateralisation Ratio Test will be satisfied on any Measurement Date on which any Class C Note remains Outstanding if the Class C Overcollateralisation Ratio on such Measurement Date is equal to or greater than 107.7 per cent

The Class D Overcollateralisation Ratio Test will be satisfied on any Measurement Date on which any Class D Note remains Outstanding if the Class D Overcollateralisation Ratio on such Measurement Date is equal to or greater than 104.8 per cent.

The Class B Overcollateralisation Ratio Test, the Class C Overcollateralisation Ratio Test and the Class D Overcollateralisation Ratio Test shall together be referred to as the Overcollateralisation Ratio Tests and Overcollateralisation Ratio Test shall mean any of them.

Interest Coverage Ratio Tests

The Class B Interest Coverage Ratio Test will be satisfied on any Measurement Date on which any Class B Note remains Outstanding if the Class B Interest Coverage Ratio on such Measurement Date is equal to or greater than 115 per cent.

The Class C Interest Coverage Ratio Test will be satisfied on any Measurement Date on which any Class C Note remains Outstanding if the Class C Interest Coverage Ratio on such Measurement Date is equal to or greater than 111 per cent.

The Class D Interest Coverage Ratio Test will be satisfied on any Measurement Date on which any Class D Note remains Outstanding if the Class D Interest Coverage Ratio on such Measurement Date is equal to or greater than 107 per cent.

The Class B Interest Coverage Ratio Test, the Class C Interest Coverage Ratio Test and the Class D Interest Coverage Ratio Test shall together be referred to as the Interest Coverage Ratio Tests, and Interest Coverage Ratio Test shall mean any of them.

The principal amount of Notes to be redeemed on any Payment Date as of which the Interest Coverage Ratio Tests are not satisfied will be the amount that, if it had been paid in reduction of principal on the prior Payment Date, would have caused the Interest Coverage Ratio Tests to be satisfied on the relevant Determination Date. For the purposes of determining compliance with any Coverage Test, there will be excluded all accrued and unpaid payments of interest accrued on Collateral Debt Securities prior to the date of acquisition thereof by the Issuer and acquired with Principal Proceeds or Uninvested Proceeds and amounts of interest accrued and unpaid in respect of Non-Performing Loan Securities.

 



 

SCHEDULE 6

MOODY'S DIVERSITY SCORE TEST MOODY'S DIVERSITY SCORE TEST

The Moody's Diversity Score Test will be satisfied if the Moody's Diversity Score of all Collateral Debt Securities is equal to or exceeds 17.0. The Moody's Diversity Score Test will be satisfied if the Moody's Diversity Score of all Collateral Debt Securities is equal to or exceeds 17.0.

The formula used to calculate the Moody's Diversity Score under this methodology is set forth below: The formula used to calculate the Moody's Diversity Score under this methodology is set forth below:

 

Moody's assumes that the actual portfolio consists of n bonds; bond i has a face value F, and a default probability pi that is implied by the rating and maturity of the bond. The probability of survival for bond i is qi, which equals 1 - pi. In addition, the correlation coefficient of default between bond i and j is Pij. Consequently, the actual collateral pool can be replicated by D homogeneous securities with independent default risk.

 

To calculate the Moody's Diversity Score, portfolio parameters need to be input, including the rating profile, the par amount, the maturity profile and the default correlation assumptions.

The par amount of any Collateral Debt Security that provides for payment of interest but not principal is deemed to be zero.

In addition, Moody's assumes that the default correlation is associated with the credit quality of the Collateral Debt Security. For example, the default correlation among investment grade Collateral Debt Securities is lower than the default correlation among below investment grade Collateral Debt Securities. Finally, the cross correlation of defaults among various types of Collateral Debt Securities plays an important role as well. In order to take account of issuer concentration and vintage effects, the following assumptions apply (the Correlation Matrix):

(a)        If two Collateral Debt Securities are guaranteed by the same guarantor, assume a high correlation between them.

(b)        If two Collateral Debt Securities are issued in the same transaction and only one of them is guaranteed, then no adjustment need be made.

(c)        If two Collateral Debt Securities are guaranteed by the same guarantor, assume a 75 per cent. correlation between them if they are issued within one year of one another, a 50 per cent. correlation between them if they are not issued within one year but are issued within two years of one another and a 25 per cent. correlation otherwise.

(d)        If two Collateral Debt Securities are rated at least "Baa3" by Moody's and are not supported by the same Underlying Collateral and are guaranteed by the same guarantor and the same person transferred, or arranged for the transfer of, such Underlying Collateral to the issuer or issuers of such Collateral Debt Securities, assume a 75 per cent. correlation between them if they are issued within one year of one another, a 50 per cent. correlation between them if they are not issued within one year of one another but are issued within two years of one another and .a 25 per cent. correlation otherwise.

(e)        If two Collateral Debt Securities are not rated at least "Baa3" by Moody's and are not supported by the same Underlying Collateral and are guaranteed by the same guarantor and the same person transferred, or arranged for the transfer of, such Underlying Collateral to the issuer or issuers of such Collateral Debt Securities, assume a 100 per cent. correlation between them if they are issued within one year of one another, a 70 per cent. correlation between them if they are not issued within one year of one another but are issued within two years 'of one another and a 40 per cent. correlation otherwise.

The maximum correlation is determined in accordance with the following formula:

Pmin (1- Pmax)/Sqrt (Pmin x (1- Pmin x Pmax x (1- Pmax))

where,

Pmin means the probability of default for the bond with the lower default probability; and

Pmax means the probability of default for the bond with the higher default probability.

 



 

SCHEDULE 7

MOODY'S WEIGHTED AVERAGE RATING

The Weighted Average Rating of all Collateral Debt Securities on any Measurement Date is the number determined by dividing (i) the sum of the series of products obtained for Collateral Debt Securities (other than Collateral Debt Securities which the Collateral Manager reasonably believes will default with respect to payment when next due or Defaulted Securities) by multiplying the Principal Balance on such Measurement Date of each such Collateral Debt Security by its respective Moody's Rating Factor on such Measurement Date by (ii) the sum of the Aggregate Principal Balance on such Measurement Date of all Collateral Debt Securities (other than Collateral Debt Securities which the Collateral Manager reasonably believes will default with respect to payment when next due or Defaulted Securities).

The Moody's Rating Factor relating to any Collateral Debt Security is the applicable number set forth in the table below opposite the Moody's Rating of such Collateral Debt Security:

Moody's Rating

Moody's Rating Factor

"Aaa"

1

"Aa1"

10

"Aa2"

20

"Aa3"

40

"A1"

70

"A2"

120

"A3"

180

"Baal"

260

"Baa2"

360

"Baa3"

610

"Ba1"

940

"Ba2"

1,350

"Ba3"

1,766

"B1"

2,220

"B2"

2,720

"B3"

3,490

"Caa1"

4,770

"Caa2"

6,500

"Caa3"

8,070

"Ca or lower"

10,000

 

The Moody's Rating with respect to any Collateral Debt Security will be determined as follows; provided that, if a Collateral Debt Security is on credit watch for possible upgrade or downgrade by Moody's, for the purpose of calculating the Weighted Average Rating, such Collateral Debt Security will be deemed to have a Moody's Rating (i) one (1) subcategory above or below (as applicable) the existing Moody's Rating of such Collateral Debt Security if such Collateral Debt Security has a Moody's Rating of "A3" or higher, and (ii) two (2) subcategories above or below (as applicable) the existing Moody's Rating of such Collateral Debt Security if such Collateral Debt Security has a Moody's Rating of "Baal" or lower, in each case until such Collateral Debt Security is no longer on credit watch for possible upgrade or downgrade (as applicable) by Moody's, whereupon such Collateral Debt Security's actual Moody's Rating shall apply.

If such Collateral Debt Security is rated by Moody's, the Moody's Rating shall be such rating, or if such Collateral Debt Security is not rated by Moody's, but the Issuer or the Collateral Manager on behalf of the Issuer has requested that Moody's assign a rating to such Collateral Debt Security; the Moody's Rating shall be the rating so assigned by Moody's.

With respect to any Collateral Debt Security, if such Collateral Debt Security is not rated by Moody's, then the Issuer or the Collateral Manager on behalf of the Issuer may present such Collateral Debt Security to Moody's for an estimate of such Collateral Debt Security's rating, front which its corresponding Moody's Rating may be determined, which should be used to determine its Moody's Rating Factor.



 

SCHEDULE 8

S&P RECOVERY RATE AND S&P RATING

A S&P Recovery Rate shall be determined for each Collateral Debt Security as follows:

(a)        Collateral Debt Obligation other than Synthetic Credit Linked Securities

Senior Asset Class

Liability Rating

Rating of Collateral Debt Security upon acquisition by the Issuer thereof

"AAA"

"AA"

"A"

"BBB"

"BB"

"B"

"CCC"

"AAA"

80.0 per cent.

85.0 per cent.

90.0 per cent.

90.0 per cent.

90.0 per cent.

90.0 per cent.

90.0 per cent.

"AA"

70.0 per cent.

75.0 per cent.

85.0 per cent.

90.0 per cent.

90.0 per cent.

90.0 per cent.

90.0 per cent.

"A"

60.0 per cent.

65.0 per cent.

75.0 per cent.

85.0 per cent.

90.0 per cent.

90.0 per cent.

90.0 per cent.

"BBB"

50.0 per cent.

55.0 per cent.

65.0 per cent.

75.0 per cent.

85.0 per cent.

85.0 per cent.

85.0 per cent.

 

Junior Asset Class

Liability Rating

Rating of Collateral Debt Security upon acquisition by the Issuer thereof

"AAA"

"AA"

"A"

"BBB"

"BB"

"B"

"CCC"

"AA"

55.0 per cent.

65.0 per cent.

75.0 per cent.

80.0 per cent.

80.0 per cent.

80.0 per cent.

80.0 per cent.

"A"

40.0 per cent.

45.0 per cent.

55.0 per cent.

65.0 per cent.

800 per cent.

80.0 per cent.

80.0 per cent.

"BBB"

30.0 per cent.

35.0 per cent.

40.0 per cent.

45.0 per cent.

50.0 per cent.

60.0 per cent.

70.0 per cent.

"BB"

10.0 per cent.

10.0 per cent.

10.0 per cent.

25.0 per cent.

35.0 per cent.

40.0 per cent.

50.0 per cent.

"B"

2.5 per cent.

5.0 per cent.

5.0 per cent.

10.0 per cent.

10.0. per cent.

20.0 per cent.

25.0 per cent.

"CCC"

0.0 per cent.

0.0 per cent.

0.0 per cent.

0.0 per cent.

2.5 per cent.

5.0 per cent.

5.0 per cent.

 

(b)        Synthetic Credit Linked Securities.

The rating and. S&P Recovery Rate assigned by S&P with respect thereto.

A Collateral Debt Security is considered senior if it occupies the most senior position in the capital structure of the respective transaction. Collateral Debt Securities not fitting this criteria will be considered subordinated for the purposes of determining the Weighted Average S&P Recovery Rates.

The S&P Rating with respect to any Collateral Debt Security as of any date of determination shall be determined as follows:

(i)         if a Collateral Debt Security is on credit watch for possible upgrade or downgrade by S&P for purposes of the Standard & Poor's CDO Monitor Test, such Collateral Debt Security shall be deemed to have a S&P Rating one subcategory above or below (as applicable) the existing S&P Rating of such Collateral Debt Security until such Collateral Debt Security is no longer on credit watch for possible upgrade or downgrade (as applicable) by S&P, whereupon such Collateral Debt Security's actual rating by S&P shall apply;

(ii)        if a Collateral Debt Security is not a "pikable" obligation which is part of the highest rated tranche of the Underlying Collateral and such Collateral Debt Security is in technical default as evidenced by a notice of default from the collateral manager or the trustee of such Underlying Collateral, for the purposes of the Standard & Poor's CDO Monitor Test, such Collateral Debt Security shall be deemed to have an S&P Rating one subcategory below the existing S&P Rating of such Collateral Debt Security until such Collateral Debt Security is no longer in technical default as evidenced by a notice of default from the collateral manager or the trustee of such Underlying Collateral, whereupon such Collateral Debt Security's actual rating by S&P shall apply;

(iii)       if a Collateral Debt Security is a Non-PIK Obligation which is part of any other tranche (other than the highest rated tranche) of the Underlying Collateral and such Collateral Debt Security is in technical default as evidenced by a notice of default from the collateral manager or the trustee of such Underlying Collateral, for the purposes of the Standard & Poor's CDO Monitor Test, such Collateral Debt Security shall be deemed to have a S&P Rating two subcategories below the existing S&P Rating of such Collateral Debt Security until such Collateral Debt Security is no longer in technical default, whereupon such Collateral Debt Security's actual rating by S&P shall apply;

(iv)       if there is a credit rating of such Collateral Debt Security, or the guarantor who unconditionally and irrevocably guarantees such Collateral Debt Security, then the S&P Rating shall be such rating;

(v)        if no other security or obligation of the obligor is rated by S&P or Moody's, then the Issuer or the Collateral Manager on behalf of the Issuer, may apply to S&P for a credit estimate, which shall be its S&P Rating; and

(vi)       if there is no obligor credit rating published by S&P and such Collateral Debt Security is not rated by S&P, and no other security or obligation of the obligor is rated by S&P and neither the Issuer nor the Collateral Manager obtains a S&P Rating for such Collateral Debt Security pursuant to sub paragraph (v) above, then the S&P Rating of such Collateral Debt Security may be determined using the methods provided in Schedule 11.



 

SCHEDULE 9

MOODY'S RECOVERY RATE

(A)       Structured Finance Securities whose Underlying Collateral includes automobile receivables, car rental receivables, credit card receivables and student loan receivables.

 

Rating of a Tranche

Tranche as per cent. of capital structure

"Aaa"

"Aa"

"A"

"Baa"

"Ba"

"B"

>70 per cent

85 per cent.

80 per cent.

70 per cent.

60 per cent.

50 per cent.

40 per cent.

<=70 per cent. and >10 per cent

75 per cent.

70 per cent.

60 per cent.

50 per cent.

40 per cent.

30 per cent.

<=70 per cent. and >10 per cent

70 per cent.

65 per cent.

55 per cent.

45 per cent.

35 per cent.

25 per cent.

 

(B)       Structured Finance Securities that are RMBS.

 

Rating of a Tranche

Tranche as per cent. of capital structure

"Aaa"

"Aa"

"A"

"Baa"

"Ba"

"B"

>70 per cent

85 per cent.

80 per cent.

65 per cent.

55 per cent.

45 per cent.

30 per cent.

<=70 per cent. and >10 per cent

75 per cent.

70 per cent.

55 per cent.

45 per cent.

35 per cent.

25 per cent.

<=10 per cent. and >5 per cent.

65 per cent.

55 per cent.

45 per cent.

40 per cent.

30 per cent.

20 per cent.

<=5 per cent. and >2 per cent

55 per cent.

45 per cent.

40 per cent.

35 per cent.

25 per cent.

15 per cent.

<=2 per cent.

45 per cent.

35 per cent.

30 per cent.

25 per cent.

15 per cent.

10 per cent.

 



 

(C)       Structured Finance Securities that are not in (A) or (B) above or are CMBS.

 

Rating of a Tranche

Tranche as per cent. of capital structure

"Aaa"

"Aa"

"A"

"Baa"

"Ba"

"B"

>70 per cent

85 per cent.

80 per cent.

65 per cent.

55 per cent.

45 per cent.

30 per cent.

<=70 per cent. and >10 per cent

75 per cent.

70 per cent.

55 per cent.

45 per cent.

35 per cent.

25 per cent.

<=10 per cent. and >5 per cent.

65 per cent.

55 per cent.

45 per cent.

35 per cent.

25 per cent.

15 per cent.

<=5 per cent. and >2 per cent

55 per cent.

45 per cent.

35 per cent.

30 per cent.

20 per cent.

10 per cent.

<=2 per cent.

45 per cent.

35 per cent.

25 per cent.

20 per cent.

10 per cent.

5 per cent.

 

(D)       CDOs whose Underlying Collateral has a Moody's Diversity Score less than or equal to 20.

 

Rating of a Tranche

Tranche as per cent. of capital structure

"Aaa"

"Aa"

"A"

"Baa"

"Ba"

"B"

>70 per cent

80 per cent.

75 per cent.

60 per cent.

50 per cent.

45 per cent.

30 per cent.

<=70 per cent. and >10 per cent

70 per cent.

60 per cent.

55 per cent.

45 per cent.

35 per cent.

.25 per cent.

<=10 per cent. and >5 per cent.

60 per cent.

50 per cent.

45 per cent.

35 per cent.

25 per cent.

15 per cent.

<=5 per cent. and >2 per cent

50 per cent.

40 per cent.

35 per cent.

30 per cent.

20, per cent.

10 per cent.

<=2 per cent.

30 per cent.

25 per cent.

20 per cent.

15 per cent.

7 per cent.

4 per cent.

 



 

(E)       CDOs whose Underlying Collateral has a Moody's Diversity Score greater than 20.

 

Rating of a Tranche

Tranche as per cent. of capital structure

"Aaa"

"Aa"

"A"

"Baa"

"Ba"

"B"

>70 per cent

85 per cent.

80 per cent.

65 per cent.

55 per cent.

45 per cent.

30 per cent.

<=70 per cent. and >10 per cent

75 per cent.

70 per cent.

60 per cent.

50 per cent.

40 per cent.

25 per cent.

<=10 per cent. and >5 per cent.

65 per cent.

55 per cent.

50 per cent.

40 per cent.

30 per cent.

20 per cent.

<=5 per cent. and >2 per cent

55 per cent.

45 per cent.

40 per cent.

35 per cent.

25 per cent.

10 per cent.

<=2 per cent.

45 per cent.

35 per cent.

30 per cent.

25 per cent.

10 per cent.

5 per cent.

 

Moody's Recovery Rate means, on any Measurement Date, the aggregate of the products of (1) the recovery rate assigned to each Collateral Debt Security (other than Collateral Debt Securities which the Collateral Manager reasonably believes will default with respect to payment when next due or Defaulted Securities) determined pursuant to tables (A) through (E) above and (2) the Principal Balance of each Collateral Debt Security do each Measurement Date, divided by the Aggregate Principal Balance of the Collateral Debt Securities (other than Collateral Debt Securities which the Collateral Manager reasonably believes will default with respect to payment when next due or Defaulted Securities) on such Measurement Date.

 



 

SCHEDULE 10

FITCH WEIGHTED AVERAGE RATING AND FITCH RECOVERY RATE

Part A: Fitch Weighted Average Rating

The Fitch Weighted Average Rating is determined by taking the sum of the products obtained by multiplying the Principal Balance of each Collateral Debt Security other than a Defaulted Security by its Fitch Rating Factor, dividing such sum by the aggregate Principal Balance of all such Collateral Debt Securities, and rounding the result up to the nearest whole number.

For the purpose of computing the Fitch Weighted Average Rating, with respect to any Collateral Debt Security on any Measurement Date, the Fitch Rating Factor shall be the number set forth in the table below opposite the Fitch Rating of such Collateral Debt Security and Eligible Investment:

Fitch Rating

Fitch Rating Factor

Fitch Rating

Fitch Rating Factor

AAA

0.19

BB

13.53

AA+

0.57

BB-

18.46

AA

0.89

B+

22.84

AA-

1.15

B

27.67

A+

1.65

B-

34.98

A

1.85

CCC+

43.36

A-

2.44

CCC

48.52

BBB+

3.13

CC

77.00

BBB

3.74

C

95.00

BBB-

7.26

DDD-D

100.00

BB+

10.18

 

 

 

Part B: Fitch Recovery Rate

With respect to any Defaulted Security or Deferred Interest PIK Obligation on any Measurement Date, the Fitch Recovery Rate shall be an amount equal to the percentage corresponding to the domicile and seniority of such Defaulted Security or Deferred Interest PIK Obligation, as applicable, as set forth below; provided that, the applicable percentage shall be the percentage corresponding to the original rating of the most senior outstanding class of notes then rated by Fitch.

 

 



 

SCHEDULE 11

NOTCHING

1          General

If the Collateral Debt Security is not rated by a Rating Agency, such Rating Agency may, for purposes of conducting their analysis, proceed to notch such Collateral Debt Security' in accordance with the following criteria.

2          S&P Notching

With respect to any Collateral Debt Security that is in the reasonable opinion of the Collateral Manager primarily backed by European assets, if such Collateral Debt Security is not rated by S&P, the following notching provisions apply:

(A)       with respect to any Collateral Debt Securities which are in the following asset classes and are rated by both Moody's and Fitch:

ASSET CLASS

Lower of Rating by Moody's or Fitch AAA to BBB-/Baa3

Lower of Rating by Moody's or Fitch below BBB-/Baa3

Auto-Prime

1

2

Consumer Loans

1

2

Credit Card

1

2

Leases other than Italian Leases

1

2

Italian Leases

1

2

SME Loan Collateral Debt Obligations

1

2

Cash Flow Residential Mortgages - prime

1

2

Cash Flow Residential Mortgages - non prime

2

3

CMBS

2

3

Cashflow CBO/CLO backed by pool of corporate loans

1

2

 

(B)       with respect to any Collateral Debt Securities which are in the following asset classes:

 

ASSET CLASS

Lower of Rating by Moody's or Fitch AAA to BBB-/Baa3

Lower of Rating by Moody's or Fitch below BBB-/Baa3

Operating Company Securitisation Security rated by Moody's and Fitch

2

3

Non-Performing Loans provided that

1

n/a

 

provided that

(a)        in the case of Italian Leases the highest S&P Rating for a Collateral Debt Security that is an Italian Lease determined pursuant to this provision shall be "AA-" unless the originator of such Collateral Debt Security is rated "Baa3" or higher by Moody's and "BBB-" or higher by Fitch;

(b)        a Collateral Debt Obligation which is a Synthetic Credit Linked Security and is rated "Aaa" by Moody's and "AAA" by Fitch shall be "AA+' ;

(c)        a German RMBS that is not rated "Aaa" by Moody's and "AAA" by Fitch may not be determined by notching;

(d)        a European RMBS with multi-family properties and/or construction dwellings may not be determined by notching;

(e)        with respect to any Collateral Debt Security in respect of which the relevant obligor is organised in The Netherlands or in the opinion of the Collateral Manager is a Dutch RMBS, the relevant rating of Moody's and Fitch for the purposes of the foregoing shall be the lower of the ratings assigned by such Rating Agency to such obligor and any insurance company that guarantees payments in respect of such European RMBS;

(f)         Collateral Debt Securities may only be notched in accordance with the above provisions to the extent that the underlying assets of the Collateral Debt Securities that are notched belong to jurisdictions such as Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom; and

(g)        the Aggregate Principal Balance of Collateral Debt Securities not publicly rated by S&P, but notched utilising the aforementioned notching provisions will comprise no more than 20 per cent. of the Minimum Investment Amount.

3          Moody's Notching

(a)        For European Collateral Debt Securities

If the asset is not rated by Moody's, for the purposes of determining the Eligibility Criteria of such Collateral Debt Security and compliance with the Portfolio Criteria, the Moody's Rating for such asset shall be determined as follows:

If Collateral Debt Security is rated by S&P and Fitch, the Moody's rating will be assumed to be one subcategory below the Moody's equivalent of the lowest of the ratings assigned by S&P and Fitch if such Fitch Rating or S&P Rating is equal or above "BBB-". If the lowest of the S&P Rating and Fitch Rating is below `BBB-", then the 'notched' Moody's rating is, two subcategories below the lowest of such ratings. However, this general rule does not apply to CDOs, CMBS or German RMBS deals.

For CDOs, the above notching convention is only applicable where Moody's has rated the senior tranche of the deal (and there may be certain exemptions here). Notching will not take place in respect of CDOs of CDO/ABS/CMBS/RMBS (resecuritisations).

For CMBS, the Moody's rating will be 2.5 subcategories below the lowest of the ratings assigned by S&P and Fitch if such Fitch Rating or S&P Rating is equal or above "BBB-", provided that other certain criteria, as determined by Moody's on a case-by-case basis are met.

With German RMBS deals, notching is allowed for S&P and Fitch rated "AAA" tranches only - with the 'notched' Moody's rating as one subcategory below the "AAA".

In situations where Moody's does not accept notched ratings, an estimated rating shall be provided by Moody's upon request.

(b)        For U.S. Collateral Debt Securities

The following notching conventions are with respect to S&P. (The figures represent the number of notches to be subtracted from the S&P rating. For example, a "1" applied to an S&P rating of "BBB" implies a Moody's rating of "Baa3".)

ASSET CLASS

AA to AA-

A+ to BBB-

Below BBB

Asset Backed

1

2

3

Agricultural and Industrial Equipment loans

2

3

4

Aircraft and Auto leases

1

2

3

Arena and Stadium Financing

1

2

3

Auto loan

1

2

3

Boat, Motorcycle, RV, Truck

1

2

3

Computer, Equipment and small-ticket item leases

1

2

3

Consumer Loans

1

3

4

Credit Card

1

2

3

Cross-border transactions

1

2

3

Entertainment Royalties

1

2

3

Floorplan

1

2

3

Franchise Loans

1

2

4

Future Receivables

1

1

2

Health Care Receivables

1

2

3

Manufactured Housing

1

2

3

Mutual Fund Fees

1

2

4

Small Business Loans

1

2

3

Stranded Utilities

1

2

3

Structured Settlements

1

2

3

Student Loan

1

2

3

Tax Liens

1

2

3

Trade Receivables

2

3

4

Residential Mortgage Related

 

 

 

Home Equity Loans

1

2

3

Jumbo A

1

2

3

Residential B & C

1

2

3

The following notching conventions are with respect to Fitch:

 

 

 

Residential Mortgage Related

Jumbo A

2

3

4

The following notching conventions are with respect to S&P and Fitch.

ASSET CLASS

Tranche Rated by Fitch and S&P, no tranche in deal rated by Moody's

Tranche Rated by Fitch and/or S&P, at least one other tranche in deal rated by Moody's

Commercial Mortgage Backed Securities

Conduit#

2 notches from lower of Fitch/S&P

1.5* notches from lower of Fitch/S&P

Credit Tenant Lease

Follow corporate notching practice

Follow corporate notching practice

Large Loan

No Notching Permitted

 

# For this purpose, conduits are defined as fixed rate, sequential pay, multi-borrower transactions having a Herfindahl score of 40 or higher at the loan level with all collateral (conduit loans, A notes, large loans, CTLs and any other real estate collateral) factored in.

* A 1.5 notch haircut implies, for example, that if the S&P/Fitch Rating were `BBB", then the Moody's rating factor would be halfway between the "Baa3" and "Ba1" rating factors.

CDOs - No notching permitted.  (Moody's must in all cases assign a rating or a rating estimate to the CDO tranche to be included in a resecuritsation transaction).

(c)        General consideration

The S&P Ratings and the Fitch Ratings to be used for purposes of notching should comply with the following criteria:

·          Such rating must be "conventional" in the sense that they address the full return of interest and principal,

·          Such rating must be nonexclusive; i.e., are not for the benefit of a single investor and remain valid if the rated instrument is transferred to other buyers,

·          Such rating must be actual ratings, as opposed to rating estimates,

·          Such rating must be monitored throughout the life of the collateral debt instrument.

4          Fitch Notching

If the asset is not rated by Fitch, for the purposes of determining the Eligibility Criteria of such Collateral Debt Security and compliance with the Portfolio Criteria, (i) if there is a publicly available rating for such item by Moody's or S&P (but not both), the rating by Fitch shall be the rating that corresponds to S&P or Moody's rating, as the case may be; (ii) if there is a publicly available rating for such item by Moody's and S&P, the rating by Fitch shall be the rating that corresponds to the lower of the Moody's or S&P rating; or (iii) if the rating cannot be assigned pursuant to (i) or (ii) above, the Issuer or the Collateral Manager, on behalf of the Issuer, shall apply to Fitch for a private rating which shall then be the rating by Fitch.

If any such asset has been put on rating watch negative or negative credit watch for possible downgrade by the Rating Agency whose rating is used under (i) or (ii) above, then the rating used to determine the Fitch Rating above shall be one rating subcategory below such rating by that Rating Agency, and (y) if such asset has been put on rating watch positive or positive credit watch for possible upgrade by such Rating Agency, then the rating used to determine the rating by Fitch above shall he one rating subcategory above such rating by that. Rating Agency, and (z) notwithstanding the above, Fitch reserves the right to issue a rating estimate for any asset in the Portfolio at any time.

5          Table of Equivalent Ratings

For the purposes of such notching, the following shall be a table of equivalent ratings (which may be adjusted in good faith by the Collateral Manager upon consultation with the Rating Agencies):

Fitch

Moody's

S&P

"AAA"

"Aaa"

"AAA"

"AA+"

"Aa1"

"AA+"

"AA" "Aa2"

"AA"

 

"AA-"

"Aa3"

"AA-"

"A+"

"A1"

"A+"

"A"

"A2"

"A"

"A"

"A3"

"A-"

"BBB+"

"Baa1"

"BBB+"

"BBB"

"Baa2"

"BBB"

"BBB-"

"Baa3"

"BBB-"

"BB+"

"Ba1"

"BB+"

"BB"

"Ba2"

"BB"

"BB-"

"Ba3"

"BB-"

"B+"

"B1"

"B+"

"B"

"B2"

"B"

"B-"

"B3"

"B-"

"CCC+"

"Caa1"

"CCC+"

"CCC"

"Caa2"

"CCC"

"CCC-"

"Caa3"

"CCC-"

"CC"

"Ca"

"CC"

"C"

"C"

"C"

"DDD"

"WR"

"D"

"DD"

 

 

"D"

 

 



 

SCHEDULE 12

FORM OF REVOLVING NOTE REPAYMENT NOTICE

[Date]

To:       [●]

(the Class A1 Revolving Noteholder)

Copy to:

U.S. BANK TRUSTEES LIMITED

L5, 125 Old Broad Street

London EC2N 1AR

United Kingdom

(the Trustee)

CAIRN CAPITAL LIMITED

27 Knightsbridge

London SW1X 7LY

United Kingdom

(the Collateral Manager)

Dear Sirs

STANTON MBS I p.l.c. (the Issuer)

€30,000,000 Class Al Senior Secured Floating Rate Revolving Notes due 2054

€81,000,000 Class Al Senior Secured Floating Rate Delayed Draw Notes due 2054

€107,500,000 Class Al Senior Secured Floating Rate Term Notes due 2054

€27,500,000 Class A2 Senior Secured Floating Rate Notes due 2054

€15,000,000 Class B Senior Secured Floating Rate Notes due 2054

€12,000,000 Class C Deferrable Interest Secured Floating Rate Notes due 2095

€10,000,000 Class D Deferrable Interest Secured Floating Rate Notes due 2095

€19,320,000 Subordinated Notes clue 2095 (the Notes)

This letter constitutes a Revolving Note Repayment Notice pursuant to the terms of the agreement dated 4 November 2004 as amended and restated on 29 June 2006 and further amended and restated on [●] 2016 (the Collateral Management Agreement) between the Trustee, the Issuer, Cairn Capital Limited and Elavon Financial Services Limited.

Terms not otherwise defined herein shall bear the same meaning as in the Collateral Management Agreement.

We hereby give notice on behalf of the Issuer of the repayment of €[●] in aggregate in respect of the Class Al Revolving Notes on the next following Revolving Note Payment Date, being the Revolving Note Payment Date falling in [●]. Such amount shall be paid to the account of the Class Al Revolving Noteholder as specified in the Register on the relevant Record Date.

Yours faithfully,

______________________

Elavon Financial Services Limited as Collateral Administrator

for and On behalf of STANTON MBS I plc

 



 

SCHEDULE 13

PROVISIONS PURSUANT TO THE RULES OF THE FINANCIAL CONDUCT AUTHORITY

1          The Collateral Manager is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA"). The following provisions are included by the Collateral Manager pursuant to the FCA's requirements and relate to the customer relationship between the Issuer and the Collateral Manager. The Collateral Manager will treat the Issuer as a professional client for the purposes of the FCA Rules because the Issuer is a special purpose vehicle. Words or expressions defined in the FCA Rules shall have the same meanings when they are used in this Schedule 13.

2          The Agreement shall come into force on the date hereof.

3          The Issuer's investment objectives, and the investment powers and authorities of the Collateral Manager, are as set out in the main body of this Agreement. Save as provided therein:

3.1       the Collateral Manager may advise on or effect transactions in unregulated collective investment schemes or under which the Issuer incurs obligations as an underwriter or sub-underwriter;

3.2       there are no other restrictions on the way in which the Issuer's assets may be invested or the extent of the discretion granted hereunder to the Collateral Manager, including (without limitation) no restrictions on the types of investments in which the Issuer intends to invest or the markets on which the Issuer wishes transactions to be executed, and no restrictions on the value of any one investment or the proportion of the Portfolio which any one investment or any particular kind of investment may constitute.

4          The Collateral Manager may act as principal in any transaction or dealing with the Issuer.

5          The Collateral Manager will owe the Issuer a duty of Best Execution in the circumstances set out in the FCA Rules. A copy of the Collateral Manager's best execution policy has been provided to the Issuer.

6          Without prejudice to its rights under the other provisions of this Agreement the Issuer confirms that it does not wish to receive from the Collateral Manager confirmations and periodic statements as contemplated in the FCA Rules.

7          In the course of providing services under this Agreement, the Collateral Manager may advise or provide other services to the Issuer in respect of which the Collateral Manager or any of its Associates has directly or indirectly a Material Interest or a conflict of interest. Examples of such Material Interests, and potential conflicts of interest, are set out in Clause 9 of the Agreement. Where a conflict of interest or Material Interest arises, the parties agree that the Collateral Manager may ensure fair treatment for the Issuer by acting in accordance with Clause 9 of this Agreement.

8          The Collateral Manager will not maintain custody of any cash or other assets of the Issuer.

9          The Collateral Manager will account to the Issuer and the Trustee in respect of transactions executed for the account of the Portfolio to the extent expressly required by this Agreement. In all other respects, the Collateral Administrator shall report and account to the Issuer and the Collateral Manager in relation to the Collateral Debt Securities pursuant to the terms of the Collateral Administration Agreement.

10        The Collateral Manager will not have authority to commit the Issuer to incur additional liabilities for the purpose of supplementing the Collateral Debt Securities (including by borrowing on its behalf) except as expressly stated the Agreement.

11        The procedures required in order for the Collateral Manager to obtain the approval and instructions of the Issuer and the Trustee in relation to the Collateral Debt Securities are contained in [Clauses 2.16, 3, 16, and Schedule 12].

12        The fees, costs and expenses payable to the Collateral Manager for services rendered and performance of its obligations are set out in Clause 14 of this Agreement. Save for any fee, commission, mark-up, mark-down or other amount earned by the Collateral Manager or any of its Associates which is received in respect of any service or activity which is permitted under this Agreement, the said fees and amounts payable under Clause 14 will not be supplemented or abated by any other remuneration receivable by the Collateral Manager (or to its knowledge by any of its Associates) in connection with any transaction effected by the Collateral Manager with or for the Issuer. The Collateral Manager may share its fees with any other person (including its Associates). The Collateral Manager will on request notify the Issuer of the basis of any such shared fees or charges. This paragraph 12 is without prejudice to the provisions of Clause 9 of the Agreement.

13        The provisions relating to termination of the Collateral Manager's appointment are set out in Clause 19 of the Agreement. Termination will be without prejudice to the completion of transactions already initiated on behalf of the Issuer, subject as stated in Clause 19.

14        A formal complaint relating to the Collateral Manager should be made in writing to the Collateral Manager (for the attention of the Compliance Officer) at the Collateral Manager's address set out at the beginning of this Agreement. The Issuer has no right to complain directly to the Financial Ombudsman Service because it is not an eligible complainant. The Issuer is not an eligible claimant under the FCA Rules relating to the Financial Services Compensation Scheme.

15        Nothing in this Agreement shall affect any obligation or liability owed by the Collateral Manager under the regulatory system which cannot be excluded or modified by agreement or notice.

16        The Collateral Manager will treat the Trustee, to the extent that as a result of exercising its rights under Clause 2.14 of this Agreement (Collateral Manager to act for Trustee) it may fall to be categorised under the FCA's client classification rules, as a professional client.

 

 

SCHEDULE 14

COLLATERAL MANAGEMENT PROCEDURES

Following the delivery of each Monthly Report by the Collateral Administrator to, amongst others, the Issuer and Collateral Manager, the Collateral Manager shall prepare a summary (the "Collateral Manager Summary"), comprising such information, description, interpretation or explanation of the contents of such Monthly Report as the Collateral Manager considers necessary for the Issuer to have an informed view on the contents of such Monthly Report and the investment management activities undertaken by the Collateral Manager (on behalf of the Issuer) in respect of (i) the Portfolio during the period to which such Monthly Report, relates and (ii) any changes to the Portfolio the Collateral Manager is considering making during the next monthly period.

A Collateral Manager Summary shall be submitted to the Issuer for submission to its board of directors for consideration and the approval of any actions recommended therein as soon as practicable following receipt by the Collateral Manager of the Monthly Report.

In connection with the above procedures, the Collateral Manager shall attend such board and other meetings as the Issuer shall from time to time reasonably request (such request to state whether the Collateral Manager is to be in attendance by person or telephone). Attendance of the Collateral Manager at such meetings shall be at the cost and expense of the Issuer. The Board of Directors will discuss with the Collateral Manager any issues the Board feels are relevant arising out of the Monthly Report and any Collateral Manager Summary given to and will monitor generally the status and performance of the Portfolio and the Collateral Manager's activities.

Date:    2 June 2006

Ref:      1206/365798

 



 

Signatories

Issuer:

Signed and delivered as a deed by

__________________________ as duly

authorised attorney for and on behalf of Stanton

MBS I Public Limited Company

___________________________

 

Signature of Witness: ________________________

 

Name of Witness: __________________________

 

Address of Witness: _________________________

 

Occupation of Witness: ________________________

 

Trustee:

EXECUTED as a DEED                                )

for and on behalf of                                           )

U.S. BANK TRUSTEES LIMITED             )

By:      

By:

 

 

 

Principal Paying Agent, Account Bank,

Calculation Agent, Collateral Administrator,

Custodian:

 

EXECUTED as a DEED                                )

for and on behalf of                                           )

ELAVON FINANCIAL                                 )

SERVICES LIMITED                                  )

By:

By:

 

 

Seller:

EXECUTED as a DEED                                )

for and on behalf of                                           )

CANADIAN IMPERIAL                              )

BANK OF COMMERCE                             )

By:      

By:      

Witnessed by:

 

 

 

Hedge Counterparty:

EXECUTED as a DEED                                )

for and on behalf of                                           )

CANADIAN IMPERIAL                              )

BANK OF COMMERCE                             )

By:      

By:      

Witnessed by:

 

 

Liquidity Facility Provider:

EXECUTED as a DEED                                )

for and on behalf of                                           )

CANADIAN IMPERIAL                              )

BANK OF COMMERCE                             )

By:      

By:      

Witnessed by:

 

 

 

Class A1 Notes Purchaser:

EXECUTED as a DEED                                )

for and on behalf of                                           )

CANADIAN IMPERIAL                              )

BANK OF COMMERCE                             )

By:      

By:      

Witnessed by:

 

Notes Placement Agent:

EXECUTED as a DEED                                )

for and on behalf of                                           )

CANADIAN IMPERIAL                              )

BANK OF COMMERCE                             )

By:      

By:      

Witnessed by:

 

 

 

 

Registrar and Pledgee's Representative:

EXECUTED as a DEED                                )

for and on behalf of                                           )

U.S. BANK,                                                    )

NATIONAL ASSOCIATION                       )

By:

 

 

 

 

Irish Paying Agent:

EXECUTED as a DEED                                )

for and on behalf of                                           )

INVESTEC CAPITAL &                              )

INVESTMENTS (IRELAND) LIMITED   )

 

By:

By:      

 

Corporate Services Provider:          

PRESENT when the COMMON SEAL of       )

STRUCTURED FINANCE                          )

MANAGEMENT IRELAND                       )

LIMITED
was affixed hereto
and this DEED was DELIVERED:                       _________________________________
                                                                                 DIRECTOR

                                                                                 _________________________________
                                                                                 DIRECTOR/COMPANY SECRETARY

 

 

Outgoing Collateral Manager:

EXECUTED as a DEED                                )

for and on behalf of                                           )

CAMBRIDGE PLACE INVESTMENT      )

MANAGEMENT LLP                                  )

By:

By:

 

 

 

 

 

Incoming Collateral Manager:

EXECUTED as a DEED                                )

for and on behalf of                                           )

CAIRN CAPITAL                                         )

LIMITED                                                       )

By:

By:

 

 

 

This announcement has been issued through the Companies Announcement Service of

the Irish Stock Exchange.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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