LISTING PARTICULARS

CONFIDENTIAL OFFERING CIRCULAR

TRICADIA CDO 2003-1, LTD.
U.S.$5,000,000 Class 1 Principal Protected Securities Due February 2016
U.S.$2,145,000 Class 2 Principal Protected Securities Due February 2016
U.S.$5,000,000 Class C-1 Notes Due February 2016
U.S.$2,145,000 Class C-2 Notes Due February 2016
22,022,000 Preference Shares, Par Value U.S.$0.001 Per Share

Tricadia CDO 2003-1, Ltd., a Cayman Islands exempted company incorporated with limited liability (the "Issuer"), will issue U.S.$5,000,000 face amount of Class 1 Principal
Protected Securities Due February 28, 2016 (the "Class 1 Principal Protected Securities"), U.S.$2,145,000 face amount of Class 2 Principal Protected Securities Due February
28, 2016 (the "Class 2 Principal Protected Securities" and, together with the Class 1 Principal Protected Securities, the "Principal Protected Securities") pursuant to the
Indenture dated as of the Closing Date (the "Indenture"), among the Issuer, Tricadia CDO 2003-1 Corp. (the "Co-Issuer" and, together with the Issuer, the "Co-Issuers") and
JPMorgan Chase Bank, as trustee (in such capacity the "Trustee") and as securities intermediary and 22,022,000 Preference Shares, par value U.S.$0.001 per share (the
"Preference Shares"), pursuant to the Issuer's Amended and Restated Memorandum of Association and Articles of Association (collectively, the "Issuer Charter") and in accordance
with (i) the Preference Share Paying Agency Agreement, dated as of the Closing Date, among JPMorgan Chase Bank, as preference share paying agent (in such capacity, the "Preference
Share Paying Agent") and preference share transfer agent (in such capacity, the "Preference Share Transfer Agent"), Maples Finance Limited, as share registrar (in such capacity, the
"Share Registrar") and the Issuer (the "Preference Share Paying Agency Agreement") and (ii) certain resolutions of the board of directors of the Issuer passed on or before the issuance
of the Preference Shares as memorialized in the board minutes relating thereto (the "Resolutions" and, together with the Issuer Charter and the Preference Share Paying Agency
Agreement, the "Preference Share Documents"). The Issuer will also issue (in the form of the C Note Components) U.S.$5,000,000 Class C-1 Notes Due February 2016 (the
"Class C-1 Notes") and U.S.$2,145,000 Class C-2 Notes Due February 2016 (the "Class C-2 Notes" and, together with the Class C-1 Notes, the "Class C Notes"; the Class C
Notes together with the Preference Shares and the Principal Protected Securities, the "Offered Securities"), pursuant to the Indenture.

INVESTORS INTERESTED IN PURCHASING OFFERED SECURITIES SHOULD REVIEW THE CONFIDENTIAL OFFERING CIRCULAR RELATING TO THE NOTES
ATTACHED HERETO (THE "NOTE OFFERING CIRCULAR") IN CONJUNCTION WITH THIS CONFIDENTIAL OFFERING CIRCULAR. This Confidential Offering
Circular constitutes the listing particulars for the purpose of the listing of the Preference Shares and the Principal Protected Securities on the Irish Stock Exchange. References
throughout this document to the "Confidential Offering Circular" shall be taken to read "Listing Particulars." Capitalized terms used herein and not otherwise defined herein have
the respective meanings specified in the Note Offering Circular.

The activities of the Issuer will be limited as described herein. The Issuer will receive all of the net proceeds of the offering of the Notes and the Offered Securities, which will be
used by the Issuer to purchase Portfolio Collateral and the Class C Collateral, to pay organizational expenses and the expenses of the issuance of the Notes and the Offered
Securities, and for certain other purposes.

As described herein, the use by the Issuer of payments received in respect of the Portfolio Collateral for the payment of dividends on the Preference Shares or
redemption of the Preference Shares will be subordinated to the use of such payments for the payment of interest on and principal of the Notes and will be payable,
with respect to any Payment Date, only after all required payments are made to the holders of the Notes, the Trustee, the Preference Share Paying Agent and the
Collateral Manager and, except as described herein, after the payment of all other fees and expenses of the Co-Issuers required to be made on such date. The ability of
the holders of the Offered Securities to vote on matters relating to the Issuer is limited.

No.: ___________________________ Recipient:________________________________

This Confidential Offering Circular is intended for the exclusive use of the recipient whose name appears above and such recipient's advisors, and may not be
reproduced or used for any other purpose or furnished to any other party.

NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, EACH PROSPECTIVE INVESTOR (AND EACH EMPLOYEE, REPRESENTATIVE OR OTHER
AGENT OF EACH PROSPECTIVE INVESTOR) MAY DISCLOSE TO ANY AND ALL PERSONS, WITHOUT LIMITATION OF ANY KIND, THE TAX TREATMENT
AND TAX STRUCTURE OF (I) THE ISSUER AND (II) ANY OF ITS TRANSACTIONS, AND ALL MATERIALS OF ANY KIND (INCLUDING OPINIONS OR OTHER
TAX ANALYSES) THAT ARE PROVIDED TO A PROSPECTIVE INVESTOR RELATING TO SUCH TAX TREATMENT AND TAX STRUCTURE.

For certain factors to be considered in connection with an investment in the Offered Securities, see "Special Considerations."

Application has been made to the Irish Stock Exchange to admit the Preference Shares and the Principal Protected Securities to the Official List of the Irish Stock Exchange.
There can be no assurance that such admission will be granted.
_____________________________

The Offered Securities are being offered in registered form to certain Non-U.S. persons in offshore transactions in reliance on Regulation S under the United States Securities Act
of 1933, as amended (the "Securities Act"), and, with respect to the Preference Shares, in the United States to certain "accredited investors" ("Accredited Investors") within the
meaning of Rule 501(a) of the Securities Act or to "qualified institutional buyers" ("Qualified Institutional Buyers") within the meaning of Rule 144A ("Rule 144A") under the
Securities Act that are, in either case, also "qualified purchasers" ("Qualified Purchasers") for purposes of Section 3(c)(7) of the United States Investment Company Act of 1940,
as amended (the "Investment Company Act").
_____________________________

The Offered Securities are offered by the Issuer through Bear, Stearns & Co. Inc. (in such capacity, the "Initial Purchaser") and CDC Securities (in such capacity, the "Co-
Placement Agent" and, together with the Initial Purchaser, the "Initial Purchasers"), to prospective purchasers from time to time in negotiated transactions at varying prices to
be determined in each case at the time of sale. The Offered Securities are offered when, as and if issued by the Issuer, subject to prior sale or withdrawal, cancellation or
modification of the offer without notice and subject to approval of certain legal matters by counsel and certain other conditions. The Initial Purchasers reserve the right to
withdraw, cancel or modify such offer and to reject orders in whole or in part. It is expected that delivery of the Offered Securities will be made on or about January 14, 2004 (the
"Closing Date"), against payment in immediately available funds. See "Plan of Distribution."
_____________________________

The Preference Shares and Principal Protected Securities sold to Non-U.S. Persons, if any, will be represented on the Closing Date by one or more permanent global securities
(the "Regulation S Global Preference Shares" and the "Regulation S Global Principal Protected Securities," respectively), which will be deposited with and registered in the
name of JPMorgan Chase Bank, London Branch, or its nominee, and any successor thereto, as common depository (the "Common Depository") for the respective accounts of
Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream"). The Preference Shares sold in
reliance on the exemption from registration provided by Section 4(2) of the Securities Act will be represented by definitive Preference Share certificates in fully registered form
(the "Restricted Preference Shares") registered in the name of the beneficial owner thereof. On the Closing Date, the Class C Notes will only be offered as C Note Components
of the Principal Protected Securities.
Bear, Stearns & Co. Inc. CDC Securities
Dated March 3, 2004

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Notwithstanding anything herein to the contrary, the Class C-1 Collateral and the Class C-2 Collateral will be
pledged to the Trustee solely as security for the Issuer's obligations under the Class C-1 Notes and the Class C-2
Notes, respectively, and the Class C Notes (including the C Note Components) will not be secured by the Trust
Estate or the Portfolio Collateral.
The Preference Shares represent equity interests in the Issuer and do not constitute secured obligations. Payments
in respect of the Preference Shares will be payable solely from certain assets of the Issuer. The Preference Shares
do not represent interests in or obligations of, and are not guaranteed or secured by the assets of, the Collateral
Manager, the Trustee, the Administrator, the Share Trustee, the Preference Share Paying Agent, the Initial
Purchasers or any of their respective affiliates.

All payments on the Offered Securities will be in U.S. dollars. Payments with respect to the Preference Shares
will be payable on each Payment Date, to the extent Collateral Interest Collections or Collateral Principal
Collections, as applicable, are available in accordance with the Priority of Payments. Payment of interest on the
Notes will be senior to payments of any excess Collateral Interest Collections on the Preference Shares, and
payments of principal on the Notes (other than the Class C Notes) will be senior to payment of any excess
Collateral Principal Collections on the Preference Shares. Notwithstanding anything herein to the contrary, the
Class C-1 Notes and the Class C-2 Notes will be payable solely from the Class C-1 Collateral and the Class C-2
Collateral, respectively, and the Class C Collateral will not secure the Preference Shares (including the Preference
Share Components).

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 TABLE OF CONTENTS

Page

SUMMARY OF TERMS ..............................................................................................................................1

SPECIAL CONSIDERATIONS ...................................................................................................................9
Additional Risks of Principal Protected Securities ...................................................................................9
Subordination of the Preference Shares ....................................................................................................9
Limited Liquidity and Restrictions on Transfer........................................................................................9
Equity Status of the Preference Shares ...................................................................................................10
Payments in Respect of the Preference Shares .......................................................................................10
Volatility of the Preference Shares .........................................................................................................11
Changes in Tax Law; No Gross-Up ........................................................................................................11
Additional Taxes .....................................................................................................................................11
Certain Tax Considerations for the Holders of the Preference Shares and Principal Protected
Securities.............................................................................................................................................11
ERISA .....................................................................................................................................................12
DESCRIPTION OF THE CLASS C NOTES .............................................................................................13
Payments .................................................................................................................................................13
Class C Collateral....................................................................................................................................14
Form, Registration and Transfer of the Class C Notes ...........................................................................14
Voting of Class C Notes..........................................................................................................................15
Ratings ....................................................................................................................................................15
DESCRIPTION OF THE PRINCIPAL PROTECTED SECURITIES .......................................................16
General ....................................................................................................................................................16
Risk Factors ............................................................................................................................................17
Status and Security..................................................................................................................................18
Payments .................................................................................................................................................18
Interest.....................................................................................................................................................18
Redemption .............................................................................................................................................18
Acts of Holders of Principal Protected Securities...................................................................................19
Voting of Principal Protected Securities .................................................................................................19
Cancellation ............................................................................................................................................19
Form, Denomination, Registration and Transfer ....................................................................................19
Exchange of Principal Protected Securities ............................................................................................20
Tax Characterization ...............................................................................................................................21
Rating......................................................................................................................................................21
DESCRIPTION OF THE PREFERENCE SHARES ..................................................................................22
Status and Security..................................................................................................................................22
Distribution on Preference Shares...........................................................................................................22
Redemption .............................................................................................................................................23
Partial Redemption..................................................................................................................................24
Legal Provisions Applicable to Distributions on the Preference Shares and the Preference
Share Redemption Price......................................................................................................................25
Form, Registration and Transfer of the Preference Shares .....................................................................25
The Preference Share Paying Agency Agreement ..................................................................................25
CERTAIN TAX CONSIDERATIONS .......................................................................................................27
General ....................................................................................................................................................27
U.S. Federal Tax Considerations ............................................................................................................28

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 Tax Treatment of Non-U.S. Holders of Preference Shares.....................................................................31
Information Reporting and Backup Withholding ...................................................................................31
Tax Shelter Reporting Requirements ......................................................................................................32
United States Income Taxation of the Principal Protected Securities.....................................................33
United States Income Taxation of Non-U.S. Holders of the Class C Notes with respect to the
Class C Collateral................................................................................................................................33
Cayman Islands Tax Considerations.......................................................................................................34
CERTAIN ERISA CONSIDERATIONS....................................................................................................36
Independent Review and Consultation with Counsel .............................................................................37
PLAN OF DISTRIBUTION........................................................................................................................38
TRANSFER RESTRICTIONS ...................................................................................................................41
LISTING AND GENERAL INFORMATION ...........................................................................................53
INDEX OF DEFINED TERMS ..................................................................................................................54

EXHIBIT A NOTE OFFERING CIRCULAR

iv
 SUMMARY OF TERMS

The following summary does not purport to be complete and is qualified in its entirety by reference to the
additional information appearing elsewhere in this Confidential Offering Circular, the Note Offering Circular
and related documents referred to herein and therein. Capitalized terms used but not defined herein have the
meanings ascribed to such terms in the Note Offering Circular.

The Issuer Tricadia CDO 2003-1, Ltd., a newly formed exempted limited
liability company incorporated under the laws of the Cayman Islands
(the "Issuer"). The activities of the Issuer will be limited to (i) the
acquisition of and investment in Portfolio Collateral, Class C
Collateral and other assets permitted by the Indenture, (ii) the
issuance of the Notes, which (other than the Class C Notes) will be
secured by the Portfolio Collateral and certain other assets pledged
by the Issuer under the Indenture, (iii) the issuance of the Preference
Shares and its ordinary shares, (iv) the issuance of the Principal
Protected Securities, (v) entering into the Cashflow Swap
Agreement, the Securities Lending Agreements, the Reporting
Agency Agreement, the Collateral Administration Agreement and
the Management Agreement and (vi) other activities incidental to the
foregoing, including the ownership of 100% of the stock of the Co-
Issuer.

The Issuer accepts responsibility for the information contained in this

document. To the best knowledge and belief of the Issuer, the
information contained in this Listing Particulars is in accordance
with the facts and does not omit anything likely to affect the import
of such information.

The Issuer will not have any material assets other than the Portfolio
Collateral, the Class C Collateral and certain other eligible assets.
The Portfolio Collateral and such other eligible assets will be
pledged to the Trustee as security for the Issuer's obligations under
the Notes.

The authorized share capital of the Issuer consists of (i) 22,022,000

Preference Shares, par value U.S.$0.001 per share, all of which
(including the Preference Share Components) will be issued on the
Closing Date and (ii) 250 ordinary shares (the "Issuer Shares"), par
value U.S.$1.00 per share, all of which will be issued prior to the
Closing Date.

The Issuer Shares will be held by Maples Finance Limited, a

licensed trust company incorporated in the Cayman Islands (the
"Share Trustee"), as trustee of a charitable trust.

Securities Offered In addition to the Notes being offered under the Notes Offering
Circular, the Issuer will issue, without duplication, (a)
U.S.$5,000,000 face amount of Class 1 Principal Protected Securities
Due February 28, 2016 (the "Class 1 Principal Protected
Securities") comprised of (i) components representing Class C-1
Notes having an aggregate initial principal amount of
U.S.$5,000,000 (the "C-1 Note Component") and (ii) components
representing in the aggregate 2,405,691 Preference Shares (the
"Class 1 Preference Share Component"), (b) U.S.$2,145,000 face

1
 amount of Class 2 Principal Protected Securities Due February 28,
2016 (the "Class 2 Principal Protected Securities" and, together
with the Class 1 Principal Protected Securities, the "Principal
Protected Securities") comprised of (i) components representing
Class C-2 Notes having an aggregate initial principal amount of
U.S.$2,145,000 (the "C-2 Note Component" and, together with the
C-1 Note Component, the "C Note Components") and (ii)
components representing in the aggregate 1,000,000 Preference
Shares (the "Class 2 Preference Share Component" and, together
with the Class 1 Preference Share Component, the "Preference
Share Components") and (c) 22,022,000 Preference Shares
(including the Preference Share Components), par value U.S.$0.001
per share (the "Preference Shares"). The Issuer will also issue, in
the form of the C Note Components, U.S.$5,000,000 of Class C-1
Notes Due February 2016 (the "Class C-1 Notes") and
U.S.$2,145,000 of Class C-2 Notes Due February 2016 (the "Class
C-2 Notes" and, together with the "Class C-1 Notes, the "Class C
Notes"; the Class C Notes, together with the Preference Shares and
the Principal Protected Securities, the "Offered Securities").

The Class C Notes (in the form of the C Note Components) and the
Principal Protected Securities will be issued on the Closing Date
pursuant to an indenture (the "Indenture"), dated as of the Closing
Date, among the Co-Issuers and JPMorgan Chase Bank, as trustee
(the "Trustee") and as securities intermediary. The Principal
Protected Securities (to the extent of the C Note Components) are
limited-recourse obligations of the Issuer. Notwithstanding anything
herein to the contrary, the Class C-1 Collateral and the Class C-2
Collateral will be pledged to the Trustee solely as security for the
Issuer's obligations under the Class C-1 Notes and Class C-2 Notes,
respectively, and the Class C Notes will not be secured by the Trust
Estate or the Portfolio Collateral.

The Issuer will issue the Preference Shares under the Issuer's
Amended and Restated Memorandum of Association and Articles of
Association (the "Issuer Charter") and in accordance with certain
resolutions of the board of directors of the Issuer passed on or before
the issuance of the Preference Shares as memorialized in the board
minutes relating thereto (the "Resolutions") and enter into the
Preference Share Paying Agency Agreement to be dated as of the
Closing Date (the "Preference Share Paying Agency Agreement"
and, together with the Issuer Charter and the Resolutions, the
"Preference Share Documents"), by and among the Issuer,
JPMorgan Chase Bank, as preference share paying agent and
preference share transfer agent (the "Preference Share Paying
Agent"), and Maples Finance Limited, as share registrar (the "Share
Registrar").

The Collateral Manager or one or more of its Affiliates is expected to

purchase at least 7,000,000 Preference Shares on the Closing Date
but neither the Collateral Manager nor any such Affiliates are
required to retain any Preference Shares.

Closing Date January 14, 2004 (the "Closing Date").

2
Rights of Holders of
Principal Protected Securities
Payments on the Class C Notes
Unless the Principal Protected Securities are explicitly addressed in
the same context, references herein or in the Note Offering Circular
to Class C-1 Notes, Class C-2 Notes or Preference Shares will
include a reference to the Principal Protected Securities to the extent
of the C Note Components and Preference Share Components, as
applicable, and references to the rights and obligations of the holders
of the Class C-1 Notes, Class C-2 Notes and the Preference Shares
(including with respect to any payments, distributions or redemptions
on or of such Class C-1 Notes, Class C-2 Notes or Preference Shares
or votes, notices or consents to be given by such holders) include the
rights and obligations of the holders of the Principal Protected
Securities to the extent of the C Note Components and the Preference
Share Components, as applicable. Unless the holders of Principal
Protected Securities are explicitly addressed in the same context,
references herein to holders of Notes or Preference Shares will
include a reference to the holders of Principal Protected Securities to
the extent of the C Note Components and the Preference Share
Components, as applicable, and the holders of Principal Protected
Securities will be entitled to participate in any vote or consent of, or
any direction or objection by the Preference Share Components.
The Class C-1 Notes will not bear interest. The only payment that
will be made on the Class C-1 Notes will be from the proceeds of the
Class C-1 Collateral on February 15, 2016 or, if such date is not a
Business Day, the next following Business Day (the "Class C Stated
Maturity") or on such earlier date that the Class 1 Treasury Note is
redeemed or payment thereon is made pursuant thereto; provided
that, if the Final Maturity Date is prior to the Class C Stated
Maturity, the Class C-1 Notes will be redeemed "in kind" through
delivery of the Class C-1 Collateral, pro rata, to the holders of Class
C-1 Notes or, in limited circumstances, will be redeemed from the
proceeds of the sale of the Class C-1 Collateral. Notwithstanding
anything herein to the contrary, the Class C-1 Notes (including the
C-1 Note Component) will mature and be payable on the Class C
Stated Maturity solely from the Class C-1 Collateral, but no
payments of Collateral Interest Collections or Collateral Principal
Collections pursuant to the Priority of Payments will be made on
such date.
The Class C-2 Notes will not bear interest. The only payment that
will be made on the Class C-2 Notes will be from the proceeds of the
Class C-2 Collateral on the Class C Stated Maturity or on such
earlier date that the Class 2 Treasury Note is redeemed or payment
thereon is made pursuant thereto; provided that, if the Final Maturity
Date is prior to the Class C Stated Maturity, the Class C-2 Notes will
be redeemed "in kind" through delivery of the Class C-2 Collateral,
pro rata, to the holders of Class C-2 Notes or, in limited
circumstances, will be redeemed from the proceeds of the sale of the
Class C-2 Collateral. Notwithstanding anything herein to the
contrary, the Class C-2 Notes (including the C-2 Note Component)
will mature and be payable on the Class C Stated Maturity solely
from the Class C-2 Collateral, but no payments of Collateral Interest
3

Payments on the Preference Shares
Payments on the Principal
Protected Securities
Redemption
Collections or Collateral Principal Collections pursuant to the
Priority of Payments will be made on such date.
The Preference Shares will not bear interest, but, to the extent legally
permitted under Cayman Islands law, will be entitled to receive
dividends in an amount equal to the Collateral Interest Collections, if
any, distributable to them in accordance with the Priority of
Payments under "Description of the Notes—Priority of Payments" in
the Note Offering Circular and "Description of the Preference
Shares—Distribution on Preference Shares" in this Confidential
Offering Circular. Such payments will be made on the Preference
Shares only after all payments of interest due on the Notes have been
made and all expenses of the Co-Issuers have been paid. Payments
on the Preference Shares will be subordinated to interest payments
on the Notes. See "Description of the Notes—Priority of Payments"
in the Note Offering Circular.
The Preference Shares are subordinated to the Notes and no
payments (whether by way of dividend or by way of redemption) of
Collateral Principal Collections will be made on the Preference
Shares until the Notes have been paid in full. The Preference Shares
will be entitled to the distribution (whether by way of dividend or by
way of redemption) of Collateral Principal Collections made
available in the Preference Share Distribution Account after the
Notes have been redeemed or otherwise paid in full and after the
payment of all expenses of the Co-Issuers.
Payments of principal, including redemption payments, on the
Principal Protected Securities will be made if and to the extent
payments, if any, are made on the underlying C Note Components
and Preference Share Components. On each Payment Date on which
payments are made on the Class C-1 Notes, Class C-2 Notes and the
Preference Shares, portions of such payments will be allocated to the
Principal Protected Securities in the proportion that (1) the principal
amount of the Class C-1 Notes represented by the C-1 Note
Component bears to the principal amount of the Class C-1 Notes as a
whole (including the C-1 Note Component), (2) the principal amount
of the Class C-2 Notes represented by the C-2 Note Component
bears to the principal amount of the Class C-2 Notes as a whole
(including the C-2 Note Component) and (3) the number of
Preference Shares represented by the Preference Share Components
bears to the total number of Preference Shares (including the
Preference Shares allocated to the Preference Share Components).
Such amounts will be paid to the holders of the applicable Principal
Protected Securities pro rata based on the outstanding principal
amount of the applicable C Note Components and Preference Share
Components of each Principal Protected Security.
The Preference Share Documents require that the Preference Shares
be redeemed, in whole but not in part, by the Issuer on the Payment
Date in February 2016. In addition, in the event of any redemption
of the Notes, in whole but not in part, under the circumstances
described in the Note Offering Circular, the Preference Share Paying
4
 Agent will receive the remaining balance, if any, of funds in the
Collection Account after payment of all amounts payable prior to the
Preference Shares in accordance with the Priority of Payments for
deposit into the Preference Share Distribution Account for payment
to the holders of the Preference Shares by way of redemption of all
outstanding Preference Shares. See "Description of the Preference
Shares—Distribution on Preference Shares" and "—Redemption."
In addition, the Notes (other than the Class C Notes) may be subject
to an Optional Redemption, a Partial Redemption, a Refinancing, a
Rating Confirmation Failure Redemption, an O/C Redemption, a
Clean-up Call or a repurchase. See "Description of the Notes—
Optional Redemption," "—Partial Redemption," "—Refinancing,"
"—Rating Confirmation Failure Redemption," "—O/C Redemption,"
"—Clean-up Call" and "Legal Structure—The Indenture—Purchase
of Notes" in the Note Offering Circular.

Partial Redemption At the request of any holder of Preference Shares (including the
Preference Share Components) which holds not less than 3,000,000
Preference Shares (such amount, the "PS Partial Redemption
Minimum Amount") (any such requesting holder, a "PS Minimum
Amount Holder") (which request will be given so as to be received
by the Issuer, the Trustee and the Collateral Manager not later than
60 days prior to the proposed Partial Redemption Date) on and after
the Payment Date in February 2007 (any Payment Date on or after
the Payment Date in February 2007 on which the Notes (other than
the Class C Notes) are redeemed in part, a "Partial Redemption
Date"), the Issuer will redeem each Note (other than the Class C
Notes), pro rata and in part, and, if such request for redemption is
accepted by the Issuer, the number of Preference Shares of the PS
Minimum Amount Holder specified by such PS Minimum Amount
Holder will be redeemed by the Issuer, from Partial Redemption Sale
Proceeds (a "Partial Redemption"). The percentage of the
aggregate principal amount of each Note (other than the Class C
Notes) to be redeemed in such case will equal the quotient of (x) the
number of Preference Shares so specified by the PS Minimum
Amount Holder (which will in no event exceed the number of
Preference Shares held by such PS Minimum Amount Holder)
divided by (y) the number of outstanding Preference Shares
immediately prior to such partial redemption (the "Partial
Redemption Percentage").

The Offering The Preference Shares and the Principal Protected Securities are
being offered (i) to certain non-U.S. persons in offshore transactions
in reliance on Regulation S under the Securities Act and (ii) with
respect to Preference Shares, in the United States to certain
"accredited investors" ("Accredited Investors") within the meaning
of Rule 501(a) of the Securities Act or to "qualified institutional
buyers" ("Qualified Institutional Buyers") within the meaning of
Rule 144A ("Rule 144A") under the Securities Act that are, in either
case, also "qualified purchasers" ("Qualified Purchasers") for
purposes of Section 3(c)(7) of the Investment Company Act. The
Principal Protected Securities are only being offered in reliance on
Regulation S under the Securities Act and may not be held by a U.S.
Person at any time. The Principal Protected Securities may only be

5

Ratings
Form, Registration and Transfer
of the Preference Shares and
Principal Protected Securities
held by persons which are eligible to own the Class C-1 Collateral
and Class C-2 Collateral pursuant to the Class 1 Treasury Note and
Class 2 Treasury Note, as applicable. The Class C Notes will only
be issued as C Note Components of the Principal Protected
Securities. See "Transfer Restrictions" herein and in the Note
Offering Circular.
It is a condition of the issuance of the Class C Notes and the
Principal Protected Securities on the Closing Date that (i) the Class C
Notes be issued with a rating of "Aaa" by Moody's Investors Service,
Inc. ("Moody's") with respect to the ultimate receipt of the face
amount thereof and (ii) the Principal Protected Securities be issued
with a rating of "Aaa" by Moody's with respect to the ultimate
receipt of the face amount thereof.
The Preference Shares and the Principal Protected Securities sold in
offshore transactions in reliance on Regulation S under the Securities
Act will be represented by one or more permanent global securities
in definitive, fully registered form ("Regulation S Global
Preference Shares" or "Regulation S Global Principal Protected
Securities," respectively), deposited with and registered in the name
of JPMorgan Chase Bank, London Branch, or its nominee, and any
successor thereto, as common depository (the "Common
Depository") for the respective accounts of Euroclear Bank,
S.A./N.V., as operator of the Euroclear System ("Euroclear"), and
Clearstream Banking, société anonyme ("Clearstream"). Beneficial
interests in a Regulation S Global Preference Share or a Regulation S
Global Principal Protected Security may not be held by a U.S. Person
at any time. The Principal Protected Securities may only be sold in
offshore transactions in reliance on Regulation S under the Securities
Act. The Principal Protected Securities may be transferred only to
persons which are eligible to own the Class C-1 Collateral and Class
C-2 Collateral pursuant to the Class 1 Treasury Note and Class 2
Treasury Note, as applicable.
Preference Shares sold in reliance on the exemption from registration
provided by Section 4(2) or Rule 144A of the Securities Act will
only be issued, offered and sold in definitive, fully registered,
certificated form ("Restricted Preference Shares") registered in the
name of the beneficial owner thereof.
On the Closing Date all of the Class C Notes will be issued in the
form of C Note Components. Upon an exchange of Principal
Protected Securities as described under "Description of the Principal
Protected Securities—Exchange of Principal Protected Securities,"
the Class C-1 Notes and the Class C-2 Notes will be represented by
one or more global securities ("Regulation S Global Class C-1
Notes" or "Regulation S Global Class C-2 Notes" and collectively,
the "Regulation S Global Class C Notes") and will be deposited
with and registered in the name of the Common Depository for the
respective accounts of Euroclear and Clearstream. Regulation S
Global Class C Notes may only be held through Euroclear or
6
 Clearstream. Beneficial interests in Regulation S Class C Notes may
not be held by a U.S. Person (as defined in Regulation S under the
Securities Act) at any time. The Class C Notes may only be sold in
offshore transactions in reliance on Regulation S under the Securities
Act and may not be held by a U.S. Person at any time.

Transfers of the Offered Securities are subject to certain restrictions.

See "Description of the Class C Notes — Form, Registration and
Transfer of the Class C Notes" herein, "Description of the Principal
Protected Securities — Form, Denomination, Registration and
Transfer" herein "Description of the Preference Shares—Form,
Registration and Transfer of the Preference Shares" herein and
"Transfer Restrictions" herein and in the Note Offering Circular.

The record date (the "Record Date") for each Payment Date with
respect to Preference Shares (including the Final Maturity Date) is
the Business Day immediately preceding such Payment Date;
provided, however, that if Restricted Preference Shares are issued,
the Record Date for such Restricted Preference Shares will be the
fifteenth day of the calendar month in which such Payment Date
occurs.

The Preference Shares will be issued in minimum lots of 100,000

Preference Shares and integral multiples of one Preference Share in
excess thereof. The Class C Notes will be issuable in a minimum
denomination of U.S.$20,000 and integral multiples of U.S.$1.00 in
excess thereof. The Principal Protected Securities will be issuable in
a minimum denomination of U.S.$50,000 or an integral multiple of
U.S.$1.00 in excess thereof.

A holder of Principal Protected Securities may exchange all or any

portion of its Principal Protected Securities (or beneficial interest
therein) for (x) a principal amount of beneficial interests in Class C-1
Notes and Class C-2 Notes, as applicable, equal to the principal
amount of the C Note Components thereof, and (y) Preference
Shares represented by the aggregate amount of the Class 1
Preference Share Component or Class 2 Preference Share
Component, as the case may be, comprising such Principal Protected
Securities (or beneficial interest therein) being exchanged. No
holder of a Class C-1 Note, Class C-2 Note or Preference Share
(including a holder that received such Class C Note or Preference
Share upon an exchange of a Principal Protected Security) will have
the right to exchange such Class C Notes and Preference Shares for a
Principal Protected Security.

The Preference Share

Paying Agent JPMorgan Chase Bank will act as preference share paying agent (in
such capacity, the "Preference Share Paying Agent") under the
Preference Share Paying Agency Agreement. The Preference Share
Paying Agent maintains its principal corporate trust offices at 600
Travis Street, 50th Floor, JPMorgan Chase Tower, Houston, Texas
77002, at which the Preference Shares may be surrendered for
payment or for transfer or exchange.

7
Governing Law The Preference Share Paying Agency Agreement will be governed
by, and construed in accordance with, the laws of the State of New
York. The Issuer Charter and the Preference Shares will be
governed by, and construed in accordance with, the laws of the
Cayman Islands.

Listing Application has been made to list the Preference Shares and the
Principal Protected Securities on the Irish Stock Exchange. There
can be no assurance that such application will be granted. See
"Listing and General Information" herein and in the Note Offering
Circular.

Tax Status See "Certain Tax Considerations" herein and in the Note Offering
Circular.

ERISA Considerations See "Certain ERISA Considerations" herein and in the Note Offering
Circular.

8
 SPECIAL CONSIDERATIONS

An investment in the Offered Securities involves certain risks. Prospective investors should carefully consider the
following factors in addition to the other matters set forth in this Confidential Offering Circular. In addition, the
matters set forth under the heading "Special Considerations" in the Note Offering Circular and elsewhere in the
Note Offering Circular are also risk factors to be considered prior to investing in the Offered Securities. There
can be no assurance that the Portfolio Collateral will not experience losses, that the Collateral Manager's
investment strategy will be achieved or that the investors in the Offered Securities will recover any or all of their
invested capital or receive any return on that capital.

Additional Risks of Principal Protected Securities

An investment in the Principal Protected Securities involves all of the risks of an investment in the Class C Notes
and the Preference Shares. In addition, an investment in the Principal Protected Securities is subject to additional
risks described under "Description of the Principal Protected Securities —Risk Factors."

Subordination of the Preference Shares

Payments on the Preference Shares are subordinated on each Payment Date to payments on the Notes. No
distribution of Collateral Interest Collections will be made to the holders of the Preference Shares until interest
due on the Notes has been paid in full, and no distribution of Collateral Principal Collections will be made to the
holders of the Preference Shares until the Notes have been redeemed or paid in full and certain fees and expenses
of the Issuer have been paid in full. To the extent that any losses are suffered by any of the holders of any
Securities, such losses will be borne in the first instance by holders of the Preference Shares and then by the
holders of the Notes in reverse order of seniority. In addition, if an Event of Default occurs, the Controlling Class
will be entitled to determine the remedies to be exercised under the Indenture. See "Legal Structure—Events of
Default" in the Note Offering Circular. Remedies pursued by the Controlling Class will likely be favorable to the
interests of the Controlling Class and therefore may be adverse to the interests of the Classes subordinate to the
Controlling Class (which will include the Preference Shares so long as any Note remains outstanding).

Limited Liquidity and Restrictions on Transfer

There is currently no market for the Preference Shares. The Initial Purchasers are under no obligation to make a
market in the Preference Shares, and, following the commencement of any market-making, may discontinue the
same at any time. There can be no assurance that a secondary market for the Preference Shares will develop, or if
a secondary market does develop, that it will provide the holders of the Preference Shares with liquidity of
investment or that it will continue for the life of the Preference Shares. Consequently, an investor in the
Preference Shares must be prepared to hold such Preference Shares until the Scheduled Redemption Date. In
addition, the Preference Shares are subject to certain transfer restrictions and can only be transferred to certain
transferees as described herein under "Description of the Preference Shares—Form, Registration and Transfer of
the Preference Shares," "Transfer Restrictions" and "Certain ERISA Considerations." Such restrictions on the
transfer of the Preference Shares may further limit the liquidity of the Preference Shares. Consequently, an
investor in the Preference Shares may find it difficult or uneconomic to liquidate its investment at any particular
time and must be prepared to hold the Preference Shares for an indefinite period of time or until the Scheduled
Redemption Date. The Preference Shares have not been registered under the Securities Act, under any U.S. state
securities or "blue sky" laws or under the securities laws of any other jurisdiction and are being issued and sold in
reliance upon exemptions from registration provided by such laws. No Preference Share may be sold or
transferred unless (i) such sale or transfer is exempt from the registration requirements of the Securities Act and
applicable state securities laws and (ii) such sale or transfer does not cause the Issuer to become subject to the
registration requirements of the Investment Company Act. See "Description of the Preference Shares—Form,
Registration and Transfer of the Preference Shares" and "Transfer Restrictions."

9
Optional Redemption or Partial Redemption of the Securities; Potential Illiquidity of the Preference Shares

A form of liquidity for the holders of the Preference Shares are the provisions for the optional redemption or
partial redemption of the Notes (other than the Class C Notes) and the Preference Shares. Subject to the
satisfaction of certain conditions, the Notes (other than the Class C Notes) and the Preference Shares may be
optionally redeemed, in whole and not in part, by the Issuer at the direction of the holders representing a Majority
of the outstanding Preference Shares on any Payment Date after the Payment Date in February 2007. See
"Description of the Preference Shares—Redemption" and "—Partial Redemption." In addition, any PS Minimum
Amount Holder may request that such holder's Preference Shares be redeemed. An Optional Redemption or a
Partial Redemption of the Notes (other than the Class C Notes) could require the Collateral Manager to liquidate
positions on behalf of the Issuer more rapidly than would otherwise be desirable, which could adversely affect the
realized value of the obligations sold. There can be no assurance that it will be possible for the holders of the
Preference Shares to exercise any optional redemption or partial redemption of the Notes (other than the Class C
Notes) and the Preference Shares as a result of the conditions that must be satisfied in connection therewith, or
that, upon such redemption, the amounts available to effect such Optional Redemption or Partial Redemption of
the Notes (other than the Class C Notes) would permit any payment to be made on the Preference Shares after all
other required payments have been made.

It is expected that on the Closing Date the Collateral Manager or one or more of its Affiliates will purchase at
least 7,000,000 Preference Shares but neither the Collateral Manager nor such Affiliate are required to retain any
Preference Shares.

Equity Status of the Preference Shares

The Preference Shares are equity in the Issuer and are not secured by the Trust Estate or the Portfolio Collateral
securing the Notes. As such, the holders of the Preference Shares will rank behind all of the creditors, whether
secured or unsecured and known or unknown, of the Issuer, including, without limitation, the holders of the
Notes. Any amounts paid by the Preference Share Paying Agent as distributions on the Preference Shares will be
paid out of profits of the Issuer legally available for distribution and/or out of the Issuer's share premium (i.e., the
amount by which the aggregate issue price of the outstanding Preference Shares exceeds their aggregate par
value). However, distributions may not be paid on the Preference Shares unless, immediately following the date
on which the distribution is proposed to be paid, the Issuer will be able to pay its debts as they fall due in the
ordinary course of business. The Preference Share Redemption Price will be paid out of the Issuer's profits
legally available for distribution, out of the Issuer's share premium or out of capital; provided that the Issuer may
only make such payment if, immediately following the date on which the payment is proposed to be made, the
Issuer will be able to pay its debts as they become due in the ordinary course of business. Given the cash flow
allocation under the Priority of Payments and the restrictions imposed by the Preference Share Documents on the
activities in which the Issuer may engage, the Issuer does not anticipate there being any circumstance under which
there are funds available for the payment of the Preference Share Redemption Price or other distributions on the
Preference Shares in accordance with the Priority of Payments while the Issuer is legally unable to make such
distributions under Cayman Islands law.

Payments in Respect of the Preference Shares

The Issuer will pledge substantially all of its assets to secure the Notes and certain other of its obligations. The
proceeds of such assets will only be available to make payments in respect of the Preference Shares as and when
such proceeds are released in accordance with "Description of the Notes—Priority of Payments" in the Note
Offering Circular and "Description of the Preference Shares—Distribution on Preference Shares" in this
Confidential Offering Circular. There can be no assurance that, after payment of amounts payable on the Notes
and other fees and expenses of the Co-Issuers in accordance with "Description of the Notes—Priority of
Payments" in the Note Offering Circular, the Issuer will have funds remaining to make distributions in respect of
the Preference Shares. See "Description of the Notes—Priority of Payments" in the Note Offering Circular.

10
Volatility of the Preference Shares

The Preference Shares represent a leveraged investment in the underlying Portfolio Collateral. Therefore, it is
expected that changes in the value of the Preference Shares will be greater than the change in the value of the
underlying Portfolio Collateral, which themselves are subject to credit, liquidity, interest rate and other risks.
Utilization of leverage is a speculative investment technique and involves certain risks to investors. The
indebtedness of the Issuer under the Notes will result in interest expense and other costs incurred in connection
with such indebtedness that may not be covered by proceeds received from the Portfolio Collateral. The use of
leverage generally magnifies the Issuer's opportunities for gain and risk of loss.

Changes in Tax Law; No Gross-Up

Under current United States tax law, interest payments received on the Portfolio Collateral (that are treated as debt
for United States tax purposes and meet certain conditions) are not expected to be subject to the imposition of
United States withholding tax. There can be no assurance, however, that, as a result of any change in any
applicable law, treaty, rule or regulation or interpretation thereof, the payments on the Portfolio Collateral might
not in the future become subject to United States or other withholding tax. Moreover, there can be no assurance
that payments on Portfolio Collateral issued by obligors outside the United States will not be, or become, subject
to the imposition of withholding taxes by foreign countries. In the event that any withholding tax should become
applicable to payments on the Portfolio Collateral, such tax would reduce the amounts available to make
payments on the Notes and distributions with respect to the Preference Shares. Under such circumstances, the
holders of the Preference Shares may suffer a loss of their entire investment in the Preference Shares. See
"Certain Tax Considerations" herein and in the Note Offering Circular.

Additional Taxes

The Issuer expects to conduct its affairs so that its net income will not become subject to United States federal
income tax. There can be no assurance, however, that its net income will not become subject to United States
federal income tax as the result of unanticipated activities by the Issuer, changes in law, contrary conclusions by
the United States tax authorities or other causes.

The Issuer also expects that payments received on the Trust Estate generally either will not be subject to, or will
be grossed up for, withholding taxes imposed by the United States or any other country from which such
payments are sourced. However, there can be no assurance that payments on the Trust Estate might not become
subject to United States or other withholding tax due to a change in law or other causes and fail to be grossed up
for such withholding taxes. Payments with respect to equity securities (which may be received by the Issuer
under certain circumstances because of the Issuer's ownership of Portfolio Collateral) likely will be subject to
withholding taxes imposed by the United States or any other country from which such payments are sourced. The
imposition of tax on the Issuer's net income, or of withholding tax, could materially impair the Issuer's ability to
pay principal of and interest on the Notes and to make payments in respect of the Preference Shares. The
Preference Shares will be the first Class of Securities to bear the effect of any such imposition. See "Certain Tax
Considerations" herein and in the Note Offering Circular.

Certain Tax Considerations for the Holders of the Preference Shares and Principal Protected Securities

The Issuer intends to treat the Preference Shares and the Preference Share Components as equity for U.S. Federal
income tax purposes. Because the Issuer expects to be a passive foreign investment company, a U.S. person
holding Preference Shares or Principal Protected Securities may be subject to additional taxes unless it elects to
treat the Issuer as a qualified electing fund and to recognize currently its proportionate share of the Issuer's
income. If the assets of the Issuer are not sufficient to repay the holders of the Preference Shares and Preference
Share Components in full, such holders will recognize a loss on their investment for U.S. tax purposes, which loss
will most likely not be available to offset income previously recognized by such persons. The Issuer also may be
a controlled foreign corporation or a foreign personal holding company, in which case U.S. persons holding
Preference Shares or Principal Protected Securities could be subjected to different tax treatments. Prospective

11
purchasers of the Preference Shares or Principal Protected Securities should be aware that income of the Issuer
may significantly exceed the Issuer's distributions on the Preference Shares for one or more periods, and that a
U.S. shareholder may owe tax on significant "phantom income." See "Certain Tax Considerations."

ERISA

Certain transactions involving the Issuer might be deemed to constitute "prohibited transactions" under the United
States Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the United States Internal
Revenue Code of 1986, as amended (the "Code"), with respect to any (a) "employee benefit plan" within the
meaning of Section 3(3) of ERISA (whether or not subject to ERISA, and including, without limitation, foreign,
church and governmental plans), (b) "plan" described by Section 4975(e)(1) of the Code or (c) entity whose
underlying assets include the assets of any such plan by reason of a plan's investment in such entity (each, a
"Benefit Plan Investor") that purchases Offered Securities, if assets of the Issuer were deemed to be "plan assets"
subject to ERISA or Section 4975 of the Code, as such term is defined in the Plan Asset Regulation issued by the
United States Department of Labor and found at 29 C.F.R. 2510.3-101 (the "Plan Asset Regulation"), of such
Benefit Plan Investors. The Issuer intends to restrict ownership of the Offered Securities by Benefit Plan
Investors so that no assets of the Issuer will be deemed to be such "plan assets." Specifically, the Offered
Securities may not be purchased by or transferred to, on behalf of or using the assets of, any Benefit Plan Investor
(including an insurance company general account, except as provided below). Each purchaser or transferee of
Offered Securities will be deemed to represent and warrant that, except as provided below, such purchaser or
transferee, upon such purchase or transfer is not, and throughout the holding of such Offered Securities will not
become or transfer its interest to, any Benefit Plan Investor. However, an insurance company investor will be
permitted to acquire an interest in Offered Securities with assets from its general account if it is deemed to
represent, warrant and covenant that at the time of acquisition and throughout its holding of the Offered
Securities, (i) it meets the requirements for exemption under one or more of Sections I, II or III of Department of
Labor PTCE 95-60, (ii) less than 25% of the assets in such general account are (or represent) assets of a Benefit
Plan Investor (other than such insurance company general account) and (iii) it is not the Collateral Manager, the
Issuer, the Co-Issuer, the Initial Purchasers or a service provider to the Issuer or an affiliate of the foregoing and
the value of the equity held by such general account would not otherwise be disregarded under 29 C.F.R. 2510.3-
101(f)(1). No Offered Securities may be transferred to a Benefit Plan Investor or an entity using Benefit Plan
Investor assets, except to insurance company general accounts meeting the requirements discussed above. Each
investor in the Offered Securities will be deemed to represent, warrant and covenant that it will not sell, pledge or
otherwise transfer such Offered Securities in violation of the foregoing.

Each purchaser will be further required or deemed, as appropriate, to represent, warrant and covenant that no
transfer of Offered Securities will be made to a Benefit Plan Investor except as provided herein, and that each
purchaser and any fiduciaries causing such purchaser to acquire such Offered Securities agree, to the fullest extent
permissible under applicable law, to indemnify and hold harmless the Issuer, the Co-Issuer, the Trustee, the
Preference Share Paying Agent, the Preference Share Transfer Agent, the Share Registrar, the Collateral Manager,
and their respective affiliates from any cost, damage or loss incurred by them as a result of such purchaser being
or being deemed to be a Benefit Plan Investor.

If 25% or more of the face amount of any Class of the Principal Protected Securities or 25% or more of the
aggregate number of Preference Shares (including the Preference Share Components) were acquired by Benefit
Plan Investors, or any Class A Notes or Class B-1L Notes were characterized as equity, resulting in the assets of
the Co-Issuers being deemed to be "plan assets," certain transactions that the Co-Issuers might enter into, or may
have entered into with respect to an employee benefit plan or plans or a party in interest thereto, in the ordinary
course of business might constitute non-exempt prohibited transactions under ERISA and/or Section 4975 of the
Code and might have to be rescinded. Additionally, the Co-Issuers or other "parties in interest" (as defined in
Section 3(14) of ERISA) or "disqualified persons" (as defined in Section 4975(e)(2) of the Code) may be subject
to other penalties with respect to the transaction. See "Certain ERISA Considerations" herein and in the Note
Offering Circular for a more detailed discussion of certain ERISA and related considerations with respect to
investment in the Offered Securities.

12
 DESCRIPTION OF THE CLASS C NOTES

The Class C Notes will be issued pursuant to the Indenture, initially in the form of the C Note Components of the
Principal Protected Securities. The following summary describes certain provisions of the Class C Notes and the
Indenture. This summary does not purport to be complete and is subject to, and qualified in its entirety by
reference to, the provisions of the Class C Notes, the Indenture and the Issuer Charter. Copies of the Indenture
may be obtained by prospective purchasers of Notes upon request in writing to the Trustee at 600 Travis Street,
50th Floor, JPMorgan Chase Tower, Houston, Texas 77002.

Payments

The Class C-1 Notes will not bear interest. The only payment that will be made on the Class C-1 Notes will be
from the net proceeds of the Class C-1 Collateral on February 15, 2016 (the "Class C Stated Maturity") or on
such earlier date that the Class 1 Treasury Note is redeemed or payment thereon is made pursuant thereto.
Notwithstanding anything herein to the contrary, the Class C-1 Notes (including the C-1 Note Component) will
mature and be payable on the Class C Stated Maturity solely from the Class C-1 Collateral, but no payments of
Collateral Interest Collections or Collateral Principal Collections pursuant to the Priority of Payments will be
made on such date.

The Class C-2 Notes will not bear interest. The only payment that will be made on the Class C-2 Notes will be
from the net proceeds of the Class C-2 Collateral on the Class C Stated Maturity or on such earlier date that the
Class 2 Treasury Note is redeemed or payment thereon is made pursuant thereto. Notwithstanding anything
herein to the contrary, the Class C-2 Notes (including the C-2 Note Component) will mature and be payable on
the Class C Stated Maturity solely from the Class C-2 Collateral, but no payments of Collateral Interest
Collections or Collateral Principal Collections pursuant to the Priority of Payments will be made on such date.

In the event that the Final Maturity Date is prior to the Class C Stated Maturity, the Class C Notes will be
redeemed "in kind" through delivery of the applicable Class C Collateral, pro rata, to the holders of Class C
Notes or, if the Trustee is advised by any holder of Class C Notes that such holder is not permitted, under the
Class 1 Treasury Note or Class 2 Treasury Note, applicable law or otherwise, to receive the applicable Class C
Collateral "in kind" or any Class C Noteholder fails to complete any documentation required for a transfer of the
Class C Collateral, the Issuer will direct the Trustee to liquidate such holder's portion of the Class C Collateral
and such holder's Class C Notes will be redeemed from the proceeds of the sale of the applicable Class C
Collateral, but in each case only upon payment by each holder of Class C Notes of its proportionate share of the
costs of such liquidation. In order for the holders of the Class C Notes to obtain delivery of the Class C
Collateral, each holder must be an eligible transferee of the Class C Collateral pursuant to its governing
instruments and applicable law.

Any distribution made on the Class C-1 Collateral prior to the earlier of the Class C Stated Maturity or the Final
Maturity Date shall be distributed to the holders in whose names the Class C-1 Notes are registered at the close of
business on the Record Date for the next Payment Date, pro rata, in the proportion that the outstanding face
amount of the Class C-1 Notes held by a holder bears to the aggregate outstanding face amount of all Class C-1
Notes. Any distribution made on the Class C-2 Collateral prior to the earlier of the Class C Stated Maturity or the
Final Maturity Date shall be distributed to the holders in whose names the Class C-2 Notes are registered at the
close of business on the Record Date for the next Payment Date, pro rata, in the proportion that the outstanding
face amount of the Class C-2 Notes held by a holder bears to the aggregate outstanding face amount of all Class
C-2 Notes.

References herein and in the Note Offering Circular to the aggregate outstanding amount of the Notes will not
include the aggregate outstanding amount of the Class C Notes. The aggregate outstanding amount of the Class C
Notes will be used solely for calculations relating to the Class C Notes or the Principal Protected Securities.

13
Class C Collateral

The "Class C Collateral" will consist of the Class C-1 Collateral and the Class C-2 Collateral. The "Class C-1
Collateral" will consist of (i) a United States Treasury zero (CUSIP #912833KG4) (the "Class 1 Treasury
Note"), on which no payments of interest will be made and a single scheduled payment of U.S.$5,000,000 will be
due at maturity on February 15, 2016, (ii) a segregated non-interest bearing trust account established for the
benefit of the Holders of the Class C-1 Notes (the "Class C-1 Collateral Account") and (iii) any proceeds
therefrom. The "Class C-2 Collateral" will consist of (i) a United States Treasury zero (CUSIP# 912833KG4)
(the "Class 2 Treasury Note" and, together with the Class 1 Treasury Note, the "Treasury Notes"), on which no
payments of interest will be made and a single scheduled payment of U.S.$2,145,000 will be due at maturity on
February 15, 2016, (ii) a segregated non-interest bearing trust account established for the benefit of the Holders of
the Class C-2 Notes (the "Class C-2 Collateral Account") and (iii) any proceeds therefrom. The Class C-1
Collateral and the Class C-2 Collateral is intended to support payment on the Class C Stated Maturity of the face
amount of the Class C-1 Notes and the Class C-2 Notes, respectively. The Class C-1 Notes and the Class C-2
Notes will be entitled to all payments received on the Class C-1 Collateral and the Class C-2 Collateral,
respectively, independent of the Priority of Payments. The Class C-1 Collateral and the Class C-2 Collateral will
only support payment of and will only be available with respect to the Class C-1 Notes and the Class C-2 Notes,
respectively. In the event that the Class C-1 Collateral is not sufficient to pay the principal amount of the Class
C-1 Notes (or the C-1 Note Component of the Principal Protected Securities), the Issuer will have no obligation
whatsoever to pay such deficiency. In the event that the Class C-2 Collateral is not sufficient to pay the principal
amount of the Class C-2 Notes (or the C-2 Note Component of the Principal Protected Securities), the Issuer will
have no obligation whatsoever to pay such deficiency.

Prior to the Closing Date, the Trustee will establish and maintain the Class C-1 Collateral Account and on the
Closing Date, the Trustee, on behalf of the Issuer, will purchase the Class C-1 Collateral with the proceeds from
the sale of the C-1 Note Component of the Class 1 Principal Protected Securities and deposit such Class C-1
Collateral in the Class C-1 Collateral Account. All proceeds, accessions, profits, income, benefits, substitutions
and replacements, whether voluntary or involuntary, of and to any of the Class C-1 Collateral will be deposited in
the Class C-1 Collateral Account. Prior to the Closing Date, the Trustee will establish and maintain the Class C-2
Collateral Account and on the Closing Date, the Trustee, on behalf of the Issuer, will purchase the Class C-2
Collateral with the proceeds from the sale of the C-2 Note Component of the Class 2 Principal Protected
Securities and deposit such Class C-2 Collateral in the Class C-2 Collateral Account. All proceeds, accessions,
profits, income, benefits, substitutions and replacements, whether voluntary or involuntary, of and to any of the
Class C-2 Collateral will be deposited in the Class C-2 Collateral Account.

Prior to investing in the Principal Protected Securities, a prospective investor or transferee must obtain copies of
the Class 1 Treasury Note or the Class 2 Treasury Note, as applicable, from the Trustee, the Initial Purchasers or
the transferor of such Class C-1 Notes or Class C-2 Notes, and review the Class 1 Treasury Note or Class 2
Treasury Note, as applicable, in order to understand the terms of the Class C-1 Collateral or the Class C-2
Collateral and to confirm that such investor is eligible to own such Class C Collateral. The Trustee is not
obligated and has no responsibility to monitor, enforce or otherwise verify an investor's eligibility.

Notwithstanding anything herein to the contrary, the Class C-1 Collateral and the Class C-2 Collateral will be
pledged to the Trustee solely as security for the Issuer's obligations under the Class C-1 Notes and the Class C-2
Notes, respectively, and the Class C Notes will not be secured by the Trust Estate or the Portfolio Collateral.

Form, Registration and Transfer of the Class C Notes

On the Closing Date all of the Class C Notes will be issued in the form of C Note Components. Upon an
exchange of Principal Protected Securities as described under "Description of the Principal Protected Securities—
Exchange of Principal Protected Securities," the Class C-1 Notes and the Class C-2 Notes will be represented by
one or more global securities ("Regulation S Global Class C-1 Notes " or "Regulation S Global Class C-2
Notes," respectively, and together, the "Regulation S Global Class C Notes") and will be deposited with and
registered in the name of the Common Depository for the respective accounts of Euroclear and Clearstream.

14
Regulation S Global Class C Notes may only be held through Euroclear or Clearstream. Beneficial interests in
Regulation S Global Class C Notes may not be held by a U.S. Person (as defined in Regulation S under the
Securities Act) at any time. The Class C Notes may only be sold in offshore transactions in reliance on
Regulation S under the Securities Act. Transfers of the Class C Notes are subject to certain other restrictions.
See "Transfer Restrictions" herein.

In the case of an exchange of a Principal Protected Security for the underlying Preference Share Components and
C Note Components described under "Description of the Principal Protected Securities—Exchange of Principal
Protected Securities," the holder of an interest in a Class C-1 Note or a Class C-2 Note, as the case may be, may
exchange its interest in such Class C-1 Note or Class C-2 Note, as the case may be, for an interest in the
underlying Class 1 Treasury Note or Class 2 Treasury Note, respectively, in accordance with the transfer
restrictions and other requirements of such Class 1 Treasury Note or Class 2 Treasury Note, as the case may be.
No service charge will be made for any such exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.

The Class C Notes will be issuable in a minimum denomination of U.S.$20,000 or an integral multiple of
U.S.$1.00 in excess thereof.

Voting of Class C Notes

Holders of Class C Notes will not be entitled to exercise any voting or consent rights under the Indenture, either
as a Class of Notes or as holders of Notes, except that if a proposed supplemental indenture materially and
adversely affects the rights of the Class C Notes as a separate Class and not as part of the Notes or Principal
Protected Securities, the holders of the Class C Notes will be entitled to vote as a separate Class on such
supplemental indenture in the manner described under "Legal Structure—The Indenture—Modification of
Indenture" in the Note Offering Circular.

Ratings

It is a condition of the issuance of the Class C Notes on the Closing Date that the Class C Notes be issued with a
rating of "Aaa" by Moody's Investors Service, Inc. ("Moody's") with respect to the ultimate receipt of the face
amount thereof.

15
 DESCRIPTION OF THE PRINCIPAL PROTECTED SECURITIES

General

The Principal Protected Securities will be issued by the Issuer pursuant to the Indenture. The Class 1 Principal
Protected Securities will consist of two components comprised of:

(1) components representing Class C-1 Notes having an aggregate initial principal amount of
U.S.$5,000,000 (the "C-1 Note Component"); and

(2) components representing in the aggregate 2,405,691 Preference Shares (the "Class 1 Preference
Share Component").

The Class 2 Principal Protected Securities will consist of two components comprised of:

(1) components representing Class C-2 Notes having an aggregate initial principal amount of
U.S.$2,145,000 (the "C-2 Note Component" and, together with the C-1 Note Component, the "C Note
Components"); and

(2) components representing in the aggregate 1,000,000 Preference Shares (the "Class 2 Preference
Share Component" and, together with the Class 1 Preference Share Component, the "Preference Share
Components").

Except as otherwise described herein, the terms of the Principal Protected Securities (including amounts due and
payable thereunder) will be (a) with respect to the C-1 Note Component, the terms of the Class C-1 Notes,
(b) with respect to the C-2 Note Component, the terms of the Class C-2 Notes and (c) with respect to each of the
Preference Share Components, the terms of the Preference Shares.

The number of Preference Shares included in the Preference Share Components is included in, and is not in
addition to, the number of Preference Shares authorized and issued by the Issuer as described elsewhere in this
Confidential Offering Circular. The Preference Shares included in the Preference Share Components will be
issued to the holders of Principal Protected Securities and will be represented by the relevant certificates
evidencing the Principal Protected Securities.

The aggregate outstanding principal amount of a Class of Principal Protected Securities will at all times equal the
aggregate outstanding principal amount of the related C Note Component represented thereby. After issuance, the
aggregate outstanding principal amount of a Class of Principal Protected Securities (and the related C Note
Component) will be reduced on the Class C Stated Maturity or on such earlier date that the applicable Treasury
Note is redeemed or payment thereon is made pursuant to the applicable Treasury Note, but the related Preference
Share Component associated with the face amount of the related Principal Protected Security will not change. In
addition to the U.S.$5,000,000 of C-1 Note Components, the U.S.$5,000,000 face amount of Class 1 Principal
Protected Securities will represent Class 1 Preference Share Components equivalent to U.S.$2,405,691 Preference
Shares, such that each U.S.$1.00 face amount of the U.S.$5,000,000 face amount of Class 1 Principal Protected
Securities will represent a Class 1 Preference Share Component equivalent to a proportional amount of such
Preference Shares. In addition to the U.S.$2,145,000 of C-2 Note Components, the U.S.$2,145,000 face amount
of Class 2 Principal Protected Securities will represent Class 2 Preference Share Components equivalent to
U.S.$1,000,000 Preference Shares, such that each U.S.$1.00 face amount of the U.S.$2,145,000 face amount of
Class 2 Principal Protected Securities shall represent a Class 2 Preference Share Component equivalent to a
proportional amount of such Preference Shares. At any time that a Class of Principal Protected Securities
represents interests only in the applicable Preference Share Component (including, on the Class C Stated Maturity
or on such earlier date that the applicable Treasury Note is redeemed or payment thereon is made pursuant to the
applicable Treasury Note), the Trustee, on behalf of the Issuer, will send a notice to the holders of such Class of

16
Principal Protected Securities informing them that the Holders of such Class of Principal Protected Securities
must deliver the certificate in respect of the Principal Protected Securities to the Preference Share Paying Agent
for exchange into the Preference Shares represented by such certificate in respect of the Preference Share
Component and, upon such delivery the Preference Share Paying Agent, in accordance with the Preference Share
Paying Agency Agreement, will deliver such certificate in respect of such Preference Shares to such holders
within five Business Days of delivery to it of such Principal Protected Securities.

Risk Factors

General

An investment in the Principal Protected Securities involves certain risks. In addition to the risks particular to
Principal Protected Securities described in the following paragraphs, the risks of ownership of the Principal
Protected Securities will include (a) with respect to the C-1 Note Component, the risks of ownership of the Class
C-1 Notes, (b) with respect to the C-2 Note Component, the risks of ownership of the Class C-2 Notes and (c)
with respect to the Preference Share Components, the risks of ownership of the Preference Shares.

Transfer of C Note Components and Preference Share Components

The C Note Components and Preference Share Components are not separately transferable. See "—Exchange of
Principal Protected Securities" herein.

Limited Liquidity

There is currently no market for the Principal Protected Securities. Although the Initial Purchasers may from time
to time make a market in the Principal Protected Securities, the Initial Purchasers have no current intention to do
so and are not under any obligation to do so. In the event that the Initial Purchasers commence any market-
making, they may discontinue the same at any time. There can be no assurance that a secondary market for the
Principal Protected Securities will develop, or if a secondary market does develop, that it will provide the holders
of the Principal Protected Securities with liquidity of investment or that it will continue for the life of the Principal
Protected Securities. The Principal Protected Securities may only be sold pursuant to Regulation S and in
addition are subject to certain other transfer restrictions and may only be transferred to certain transferees as
described under "—Form, Denomination, Registration and Transfer—Exchange of Principal Protected
Securities." Consequently, an investor in the Principal Protected Securities must be prepared to hold the Principal
Protected Securities for an indefinite period of time or until their Stated Maturity.

Value of Class C Collateral

The Class C-1 Notes are secured solely by the Class C-1 Collateral and are not secured by the Trust Estate of the
Issuer. The Class C-1 Collateral is intended to provide for a single payment of U.S.$5,000,000 on February 15,
2016, which is equal to the face amount of the Class C-1 Notes. The Class C-2 Notes are secured solely by the
Class C-2 Collateral and are not secured by the Trust Estate of the Issuer. The Class C-2 Collateral is intended to
provide for a single payment of U.S.$2,145,000 on February 15, 2016, which is equal to the face amount of the
Class C-2 Notes. If the holder of the Class C-1 Notes is unable to hold the Class C-1 Collateral, there can be no
assurance that the proceeds of the Class C-1 Collateral (if liquidated at that time) or the value of the Class C-1
Collateral will equal the face value of the Class C-1 Notes. If the holder of the Class C-2 Notes is unable to hold
the Class C-2 Collateral, there can be no assurance that the proceeds of the Class C-2 Collateral (if liquidated at
that time) or the value of the Class C-2 Collateral will equal the face value of the Class C-2 Notes.

In the event that the Class C-1 Collateral or the Class C-2 Collateral is not sufficient to pay the principal amount
of the Class C-1 Notes or the Class C-2 Notes, as applicable (or the C-1 Note Component of the Principal
Protected Securities or the C-2 Note Component of the Principal Protected Securities, respectively), the Issuer
will have no obligation whatsoever to pay such deficiency.

17
Transfer Restrictions

The Principal Protected Securities may not be held by any U.S. Person or by any person which is not eligible,
pursuant to applicable law and the Treasury Notes, to own the Class C Collateral.

Status and Security

The Principal Protected Securities (to the extent of the C Note Components) are limited recourse obligations of
the Issuer. All of the Principal Protected Securities of a Class are entitled to receive payments pari passu among
themselves. The Principal Protected Securities will be secured solely to the extent to which the underlying C
Note Components are secured.

Payments

The Principal Protected Securities will be entitled to receive payments only to the extent that payments are made
on the Class C Notes represented by the C Note Components or on the Preference Shares represented by the
Preference Share Components. On each Payment Date on which payments are made on the Class C-1 Notes, the
Class C-2 Notes or the Preference Shares, portions of such payments will be allocated to the Class 1 Principal
Protected Securities and the Class 2 Principal Protected Securities, as applicable, in the proportion that (1) the
principal amount of the Class C-1 Notes represented by the applicable C-1 Note Component bears to the principal
amount of the Class C-1 Notes as a whole (including the C-1 Note Component), (2) the principal amount of the
Class C-2 Notes represented by the applicable C-2 Note Component bears to the principal amount of the Class C-
2 Notes as a whole (including the C-2 Note Component) and (3) the number of Preference Shares represented by
the applicable Preference Share Components bears to the number of Preference Shares as a whole (including the
Preference Share Components). Such amounts will be paid to the holders of the Principal Protected Securities pro
rata based on the outstanding principal amount of the C Note Components and Preference Share Components of
each Principal Protected Security.

Payments on the Principal Protected Securities will be made by the Paying Agent to the holders of the Principal
Protected Securities, and will not be deposited in the Preference Share Distribution Account or paid through the
Preference Share Paying Agent. However, distributions and payments on the Preference Share Components will
be payable only to the extent that the Issuer is and remains solvent after such distributions are paid. Under
Cayman Islands law, a company is generally deemed solvent if it is able to pay its debts as they come due.

Interest

The Principal Protected Securities will not accrue interest. The Principal Protected Securities will receive
distributions with respect to the Preference Share Components in accordance with the Priority of Payments equal
to a portion (determined as described above under "—Payments") of the dividends and distributions on the
Preference Shares.

Redemption

The Principal Protected Securities will only be redeemed prior to their Stated Maturity when and in the same
manner as the Class C-1 Notes (in the case of the Class 1 Principal Protected Securities), the Class C-2 Notes (in
the case of the Class 2 Principal Protected Securities) and the Preference Shares are redeemed. The Class C Notes
will not be subject to an Optional Redemption, Partial Redemption, Clean-up Call, Refinancing or repurchase.

At any time that the Principal Protected Securities represent interests only in the Preference Share Components
(including, with respect to the Principal Protected Securities, on the Class C Stated Maturity), the Issuer will
notify the holders of such Principal Protected Securities and require the exchange of such Principal Protected
Securities for Regulation S Global Preference Shares.

18
Acts of Holders of Principal Protected Securities

Holders of Principal Protected Securities will be treated as holders of the Class C Notes and Preference Shares
represented by the C Note Components and Preference Share Components, as the case may be, for purposes of
any requests, demands, authorizations, directions, notices, consents, waivers or other actions under the Indenture.
Holders of Principal Protected Securities will be entitled to vote, or to direct the voting of Preference Share
Components of their Principal Protected Securities.

Voting of Principal Protected Securities

Holders of Principal Protected Securities will be entitled to exercise voting rights hereunder as follows: (i) as a
separate Class only to the extent provided in the Indenture and (ii) as part of any vote of the Preference
Shareholders, based on the proportion that the number of Preference Shares attributable to the applicable
Preference Share Components bears to the aggregate outstanding number of the issued Preference Shares
(including the Preference Share Components).

Except as provided in the next sentence, the interests of the holders of the Principal Protected Securities will be
deemed not to be adversely affected for the purpose of the voting rights described under "Legal Structure —The
Indenture—Modification of Indenture" in the Note Offering Circular and such holders thereof will not be entitled
to voting or consent rights separately as a Class but will be entitled to vote with respect to the applicable C Note
Components and Preference Share Component (as part of any vote or consent of the Preference Shareholders).
However, if a supplemental indenture materially and adversely affects the rights of the Principal Protected
Securities other than by affecting the applicable C Note Component or by affecting the applicable Preference
Share Component as part of the Preference Shares, the holders of the Principal Protected Securities will be
entitled to vote as a separate Class on such supplemental indenture. Except as provided in the preceding sentence,
(i) the Class C Notes and the C Note Components will vote as a single Class on any supplemental indenture which
materially and adversely affects the rights of the Class C Notes and the C Note Components and (ii) the
Preference Shares and the Preference Share Components will vote as a single Class on any supplemental
indenture which materially and adversely affects the rights of the Preference Shares and the Preference Share
Components.

Cancellation

All Principal Protected Securities that are paid in full or redeemed and surrendered for cancellation will forthwith
be canceled and may not be reissued or resold.

Form, Denomination, Registration and Transfer

The Class 1 Principal Protected Securities and the Class 2 Principal Protected Securities sold in offshore
transactions in reliance on Regulation S ("Regulation S Global Class 1 Principal Protected Securities" or
"Regulation S Global Class 2 Principal Protected Securities" respectively, and together, the "Regulation S
Global Principal Protected Securities") will be represented by one or more global securities and will be
deposited with and registered in the name of the Common Depository for the respective accounts of Euroclear and
Clearstream. Regulation S Global Principal Protected Securities may only be held through Euroclear or
Clearstream. Beneficial interests in Principal Protected Securities represented by a Regulation S Global Principal
Protected Security may not be held by a U.S. Person (as defined in Regulation S under the Securities Act) at any
time. The Principal Protected Securities may only be sold in offshore transactions in reliance on Regulation S
under the Securities Act. The Principal Protected Securities may not be held by Benefit Plan Investors (other than
Qualifying Insurance Companies).

Interests in the Regulation S Global Principal Protected Securities deposited with the Common Depository may be
transferred to the owners of such interests in the form of definitive Principal Protected Securities only if such
transfer complies with the provisions of the Indenture and (1) the Common Depository notifies the Issuer that it is
unwilling or unable to continue as Common Depository for the Principal Protected Securities, (2) Euroclear and

19
Clearstream notify the Issuer that they are not willing to permit transactions in the Principal Protected Securities,
(3) if the transferee of an interest in a Regulation S Global Principal Protected Security is required by law to take
physical delivery of securities in definitive form or (4) if the transferee is unable to pledge its interest in a
Regulation S Global Principal Protected Security.

The Indenture provides that if, notwithstanding the restrictions on transfer contained therein, the Issuer determines
that the owner of a Principal Protected Security is a Benefit Plan Investor that is not a Qualifying Insurance
Company, the Issuer may require, by notice to such holder, that such holder sell all of its right, title and interest to
such Security (or interest therein) to a person that is either (1) not a Benefit Plan Investor or (2) a Qualifying
Insurance Company, with such sale to be effected within 30 days after notice of such sale requirement is given. If
such owner (or holder of a beneficial interest therein) fails to effect the transfer required within such 30-day
period, (i) upon written direction from the Issuer, the Trustee shall, and is hereby irrevocably authorized by such
owner (or holder of a beneficial interest therein) to, cause its interest in such Principal Protected Security to be
transferred in a commercially reasonable sale (conducted by an investment bank selected by the Trustee in
accordance with Section 9-610(b) of the Uniform Commercial Code as in effect in the State of New York as
applied to securities that are sold on a recognized market or that may decline speedily in value) to a person that
certifies to the Trustee, in connection with such transfer, that such person is either (1) not a Benefit Plan Investor
or (2) a Qualifying Insurance Company and (ii) pending such transfer, no further payments will be made in
respect of such Principal Protected Security, and the Principal Protected Security shall not be deemed to be
outstanding for the purpose of any vote or consent of holders.

A Principal Protected Security may be transferred to a person who takes delivery in the form of an interest in a
Regulation S Global Principal Protected Security only upon receipt by the Trustee of a written certification from
the transferee (in the form(s) provided in the Indenture) to the effect that the transfer is being made to a non-U. S.
Person and in accordance with Regulation S.

The Principal Protected Securities may not be held by any U.S. Person or by any persons which are not eligible to
own the Class C-1 Collateral or the Class C-2 Collateral, as the case may be, pursuant to the related Treasury
Note and applicable law.

The Principal Protected Securities will be subject to certain other restrictions on transfer set forth under "Transfer
Restrictions."

Exchange of Principal Protected Securities

A holder of Principal Protected Securities may exchange all or any portion of its Principal Protected Securities (or
beneficial interest therein) for (i) a principal amount of Class C-1 Notes equal to the principal amount of the C-1
Note Component thereof or a principal amount of Class C-2 Notes equal to the principal amount of the C-2 Note
Component thereof, as applicable and (ii) Preference Shares represented by the aggregate amount of the Class 1
Preference Share Component or Class 2 Preference Share Component, as the case may be, comprising such
Principal Protected Securities (or beneficial interest therein) being exchanged, subject to delivery to the Trustee of
a written certification, at least 10 Business Days prior to the date on which such exchange shall become effective.
In the event that a holder of a Principal Protected Security requests the exchange of less than all of its Principal
Protected Securities (or beneficial interests therein), both the principal amount of the C Note Component of the
Principal Protected Securities retained by such Principal Protected Securityholder and the principal amount of
Class C Notes received in exchange must satisfy the minimum denominations for the Class C Notes. Unless a
Principal Protected Security has been exchanged for the applicable C Note Components described above, the
Principal Protected Securityholder may not exchange or transfer the C Note Components. The Trustee, upon
receipt of such duly completed certificate and such Principal Protected Security, will (i) cancel the Principal
Protected Security (or, by following the procedures of the Common Depository, decrease the principal amount of
the Principal Protected Security), (ii) authenticate and deliver, without charge, Class C-1 Notes or Class C-2
Notes, as applicable, in (or, by following the procedures of the Depository, increase the principal amount of the
applicable Regulation S Global Note by) the same principal amount as the applicable C Note Component
surrendered for exchange and (iii) direct the Preference Share Paying Agent to deliver (by making a notation of

20
the increase in number of shares on the Preference Share and by following the procedures of Euroclear and
Clearstream for delivery to the account of the holder of the Principal Protected Security) the certificate in respect
of the Preference Shares represented by the Class 1 Preference Share Component or Class 2 Preference Share
Component, as the case may be, of such Principal Protected Security surrendered for exchange. Thereafter, the
holder of a Principal Protected Security (or a beneficial interest therein) exchanged under this paragraph will be
the holder of the applicable Class C Notes and/or the Preference Shares (or beneficial interests therein) received
upon such an exchange. No holder of a Class C Note or a Preference Share (or a beneficial interest therein),
including any holder that received such Class C Note or certificate in respect of Preference Share (or beneficial
interest therein) upon an exchange of a Principal Protected Security, will have the right to exchange such Class C
Note or Preference Share (or beneficial interest therein) for a Principal Protected Security. No service charge will
be made for any such exchange, but the Trustee or the Preference Share Paying Agent may require payment of a
sum sufficient to cover any tax or other governmental charge payable in connection therewith. In the event that a
Principal Protected Securityholder requests the exchange of all of its Principal Protected Securities (or beneficial
interests therein), the amount of the applicable Class C Notes received in exchange need not satisfy the minimum
denominations.

In the case of an exchange of a Principal Protected Security for the underlying Preference Share Components and
C Note Components, the holder of an interest in a Class C-1 Note or a Class C-2 Note, as the case may be, may
exchange its interest in such Class C-1 Note or Class C-2 Note, as the case may be, for an interest in the
underlying Class 1 Treasury Note or Class 2 Treasury Note, respectively, in accordance with the transfer
restrictions and other requirements of such Class 1 Treasury Note or Class 2 Treasury Note, as the case may be.
No service charge will be made for any such exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.

At any time that the Principal Protected Securities represent interests only in the Preference Share Components,
the Issuer will notify the holders of such Principal Protected Securities and require the exchange of such Principal
Protected Securities for Regulation S Global Preference Shares.

Tax Characterization

The Issuer intends to treat the Preference Share Components as equity of the Issuer for U.S. Federal, state and
local income tax purposes. The Indenture will provide that each holder of a Principal Protected Security, by
accepting a Principal Protected Security, agrees to such treatment and further agrees not to take any action
inconsistent with such treatment.

The Issuer will treat the owners of the Class C Notes as the owners of the Class C Collateral for U.S. Federal
income tax purposes. By its acceptance of Class C Notes, each holder of Class C Notes will be deemed to have
agreed to treat itself as the owner of the Class C Collateral for U.S. Federal income tax purposes.

Rating

It is a condition of the issuance of the Principal Protected Securities on the Closing Date that the Principal
Protected Securities be issued with a rating of "Aaa" by Moody's with respect to the ultimate receipt of the face
amount thereof.

21
 DESCRIPTION OF THE PREFERENCE SHARES

The Preference Shares will be issued pursuant to the Issuer Charter and the Resolutions. The following summary
describes certain provisions of the Indenture, the Preference Share Paying Agency Agreement and the Issuer
Charter (which contain the rights of the Preference Shares). This summary does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the provisions of the Indenture, the Preference Share
Paying Agency Agreement, the Issuer Charter and the Note Offering Circular. Copies of the Indenture, the
Preference Share Paying Agency Agreement and the Issuer Charter may be obtained by prospective purchasers of
Preference Shares upon request in writing to the Preference Share Paying Agent at 600 Travis Street, 50th Floor,
JPMorgan Chase Tower, Houston, Texas 77002.

Status and Security

The Preference Shares will be part of the issued share capital of the Issuer, will not be secured obligations of the
Issuer and will only be entitled to receive amounts available for distribution after payment of all amounts payable
prior thereto under the Priority of Payments and certain other amounts payable by the Issuer.

Distributions with respect to the Preference Shares will be made on each Payment Date solely from the Collateral
Interest Collections and Collateral Principal Collections, to the extent available in accordance with the priorities
described under "Description of the Notes—Priority of Payments" in the Note Offering Circular and as specified
below under "—Distribution on Preference Shares." To the extent such proceeds are insufficient to meet
payments due in respect of the Notes, distributions to the holders of Preference Shares and expenses of the Co-
Issuers, following the liquidation and distribution of the Portfolio Collateral, the obligations of the Co-Issuers to
pay such deficiency in respect of the Notes and expenses of the Co-Issuers will be extinguished and no further
sums will be available for distributions on the Preference Shares.

Voting Rights

Holders of the Preference Shares will have no voting rights, either general or special, of the Issuer, except as set
forth in the Indenture and in the Preference Share Documents. Under the Indenture and the Preference Share
Documents, (i) holders of at least a Majority of the Preference Shares will be able to direct a redemption of the
Notes (other than the Class C Notes) and the Preference Shares, as more completely described under "—
Redemption" and (ii) the holders of the Preference Shares will have the right to consent to certain amendments to
the Indenture. See "Legal Structure—The Indenture" in the Note Offering Circular. Further, any amendments to
the Preference Share Paying Agency Agreement will require the consent of the holders of at least 66 2/3% of the
outstanding Preference Shares. The holders of the Preference Shares will also have a right to vote to remove the
Collateral Manager in certain circumstances and consent to the appointment of a successor Collateral Manager
pursuant to the Management Agreement, as more fully described under "The Management Agreement" in the
Note Offering Circular.

Distribution on Preference Shares

The Preference Shares will not accrue interest at a stated rate.

On each Payment Date, all Collateral Interest Collections and Collateral Principal Collections remaining after
application of such proceeds which take priority over distributions on the Preference Shares, as described in detail
in the Note Offering Circular under "Description of the Notes—Priority of Payments," will be distributed to the
Preference Share Paying Agent (or, with respect to the Preference Share Components, directly to the holders of
the Principal Protected Securities), for distribution to the holders of the Preference Shares, as dividends on or,
with respect to the Final Maturity Date, as the redemption price in respect of the Preference Shares.

Payments on the Preference Shares will be made to such holders in whose names the Preference Shares are
registered at the close of business on the Record Date immediately preceding such Payment Date. Payments of

22
dividends and the redemption price on the Preference Shares will be made pro rata to registered holders of
Preference Shares according to the number of Preference Shares held. Payments in respect of the Preference
Shares are subject to certain requirements imposed by Cayman Islands law. Any amounts paid by the Preference
Share Paying Agent as distributions by way of dividends (or paid by the Preference Share Paying Agent on the
Preference Share Components as distributions by way of dividends) in respect of the Preference Shares will be
payable only if the Issuer has sufficient distributable profits and/or share premium. In addition, such distributions
and payments upon redemption of the Preference Shares will be payable only to the extent that the Issuer is and
remains solvent after such distributions are paid. Under Cayman Islands law, a company is generally deemed
solvent if it is able to pay its debts as they come due. The Issuer will notify the Preference Share Paying Agent in
writing if the conditions set forth in the preceding sentence are not, or are not expected following a distribution to
be, satisfied with respect to any portion of the dividend at least two Business Days prior to the relevant Payment
Date or Scheduled Redemption Date, as the case may be. Following receipt of such notice, such portion of such
amount will not be paid on the Preference Shares and will be held by the Preference Share Paying Agent on
behalf of the Issuer (x) in the case of a dividend, until the first succeeding Payment Date and (y) in the case of any
payment that would otherwise be payable on a redemption date, the next succeeding Business Day, in each case
prior to which the Issuer has given the Preference Share Paying Agent at least two Business Days' notice that such
conditions are again satisfied, subject to the availability of funds in the Preference Share Distribution Account.
Notwithstanding the above, the Preference Share Paying Agent shall not be deemed to make any representation or
determination regarding the permissibility or legality of any distribution to the Preference Shareholders, the
responsibility for which shall remain with the Issuer.

Redemption

The Preference Share Documents require that the Preference Shares be redeemed by the Issuer on the Payment
Date in February 2016. Subject to the satisfaction of certain conditions, the Notes (other than the Class C Notes)
and the Preference Shares may be optionally redeemed, in whole and not in part, by the Issuer at the written
direction of the holders of a Majority of the outstanding Preference Shares on any Payment Date after the
Payment Date in February 2007. Any such written direction must be given to the Trustee, the Issuer and the
Collateral Manager not less than 30 days prior to the Payment Date on which such redemption is to be made. See
"Description of the Notes—Optional Redemption" in the Note Offering Circular. The Notes may also be subject
to a Partial Redemption, a Refinancing, a Rating Confirmation Failure Redemption, an O/C Redemption, a Clean-
up Call or a repurchase. See "Description of the Notes—Partial Redemption," "—Rating Confirmation Failure
Redemption," "—Refinancing," "—O/C Redemption," "—Clean-up Call" and "Legal Structure—The Indenture—
Purchase of Notes" in the Note Offering Circular.

In the event that the Notes are redeemed in full under the circumstances described in the Note Offering Circular,
any funds in the Payment Account remaining after payment of the Redemption Prices of the Notes (and expenses
of the Co-Issuers) in accordance with the Priority of Payments will be paid to the Preference Share Paying Agent
(or, with respect to the Preference Share Components, directly to the holders of the Principal Protected Securities)
(for deposit into the Preference Share Distribution Account for payment to the holders of the Preference Shares)
in accordance with "—Distribution on Preference Shares."

If the Issuer does not have sufficient profits for Cayman Islands law purposes on any Payment Date to pay a
dividend for which it has cash available in accordance with the Priority of Payments, no dividend will be paid on
the Preference Shares on such Payment Date to the extent of the shortfall. Any such amounts will be held by the
Preference Share Paying Agent for the benefit of the Issuer until sufficient profits become available. Any
amounts so retained by the Preference Share Paying Agent will not be included in the Trust Estate and will not be
available to make payments pursuant to the Priority of Payments under the Indenture, including payments on the
Notes. The Preference Share Documents provide that payments of dividends and return of capital on redemption
of the Preference Shares, and for any payments to the holders of the Preference Shares upon a liquidation of the
Issuer, will rank after payment in full of the principal amount of, and any outstanding interest on, the Notes and
the other fees and expenses which are owed by the Issuer. On a liquidation of the Issuer, the Preference Shares
will rank after all creditors of the Issuer (secured or unsecured), which will include the Holders of the Notes, and
after the Issuer's ordinary shares. In addition, distributions on the Preference Shares (including any distribution

23
upon redemption of the Preference Shares) will be payable only to the extent that the Issuer is and remains solvent
after such distributions are paid.

The Preference Shares are subordinated to the Notes, and if the Securities are redeemed in whole or in part no
payments will be made on the Preference Shares until the Notes (and all amounts payable prior to the Preference
Shares in accordance with the Priority of Payments) have been paid in full. Upon payment of the Notes in full in
accordance with the Priority of Payments, the Preference Shares will be redeemed at the "Preference Share
Redemption Price" which is equal to the amount of the Excess Cash Flow on the Scheduled Redemption Date.
The "Excess Cash Flow" on the Scheduled Redemption Date is the funds distributed on such date by the Trustee
to the Preference Share Paying Agent (for the benefit of the Preference Shareholders) in accordance with clause
(xii) under "Description of the Notes—Priority of Payments—Final Maturity Date" in the Note Offering Circular.
The "Scheduled Redemption Date" is the Final Maturity Date.

Partial Redemption

At the request of any holder of Preference Shares (including the Preference Share Components) which holds not
less than 3,000,000 Preference Shares (such amount, the "PS Partial Redemption Minimum Amount") (any
such requesting holder, a "PS Minimum Amount Holder") (which request will be given so as to be received by
the Issuer, the Trustee and the Collateral Manager not later than 60 days prior to the proposed Partial Redemption
Date) on and after the Payment Date in February 2007 (any Payment Date on or after the Payment Date in
February 2007 on which the Notes (other than the Class C Notes) are redeemed in part, a "Partial Redemption
Date"), the Issuer will redeem each Note (other than the Class C Notes), pro rata and in part, and, if such request
for redemption is accepted by the Issuer, the number of Preference Shares of the PS Minimum Amount Holder
specified by such PS Minimum Amount Holder will be redeemed by the Issuer, from Partial Redemption Sale
Proceeds (a "Partial Redemption"). The percentage of the aggregate principal amount of each Note (other than
the Class C Notes) to be redeemed in such case will equal the quotient of (x) the number of Preference Shares so
specified by the PS Minimum Amount Holder (which will in no event exceed the number of Preference Shares
held by such PS Minimum Amount Holder) divided by (y) the number of outstanding Preference Shares
immediately prior to such partial redemption (the "Partial Redemption Percentage").

No Partial Redemption of the Notes (other than the Class C Notes) will occur at the request of a PS Minimum
Amount Holder unless (i) the Partial Redemption Sale Proceeds, would be sufficient to (a) pay the Partial
Redemption Percentage of the Optional Redemption Price (as if the Partial Redemption Date were the
Redemption Date) for each Class of Notes (other than the Class C Notes), and with respect to the Preference
Shares being redeemed, an amount not less than the price the PS Minimum Amount Holder paid for such
Preference Shares (unless the Holder of such Preference Shares otherwise consents), (b) reimburse the Cashflow
Swap Provider for any amounts that have been advanced by the Cashflow Swap Provider under the Cashflow
Swap Agreement on or prior to the related Partial Redemption Date, together with interest accrued thereon at a
rate equal to the Cashflow Swap Provider Accrual Rate and (c) pay all other amounts required to be paid in
accordance "Payments on the Notes—Priority of Payments—Partial Redemption Date," (ii) after giving effect to
such redemption the Reinvestment Criteria continue to be satisfied, (iii) each item of Portfolio Collateral in the
Trust Estate is sold strictly on a pro rata basis (adjusted taking into account the lowest whole denomination and
rounded down to the nearest U.S.$500,000), (iv) after giving effect to such redemption, the Interest Coverage
Ratio and each of the Overcollateralization Ratios will not have declined more than 0.05%, (v) each of the Rating
Agencies has confirmed that such Partial Redemption would not cause its then-current rating of the Notes of any
Class to be reduced, withdrawn or placed on credit watch negative and (vi) such Partial Redemption will not
cause greater than 25% of the outstanding Preference Shares (including the Preference Share Components) to be
held by Benefit Plan Investors (excluding, for purposes of such calculation, interests held by persons (other than
Benefit Plan Investors) that have discretionary authority or control with respect to the assets of the Issuer, or who
provide investment advice to the Issuer for a fee (direct or indirect) with respect to such assets, or any affiliate of
such a person). A redemption in part of the Notes (other than the Class C Notes) may be effected on more than
one occasion but not more than twice by any PS Minimum Amount Holder.

24
Legal Provisions Applicable to Distributions on the Preference
Shares and the Preference Share Redemption Price

Any distributions on the Preference Shares will be payable out of profits of the Issuer legally available for such
purpose and/or out of the Issuer's share premium; provided that such distributions may only be made by the
Preference Share Paying Agent if, immediately following the date on which the payment is proposed to be made,
the Issuer will be able to pay its debts as they fall due in the ordinary course of business.

Form, Registration and Transfer of the Preference Shares

The Preference Shares sold in offshore transactions in reliance on Regulation S will be represented by one or
more Regulation S Global Preference Shares and will be deposited with and registered in the name of the
Common Depository for the respective accounts of Euroclear and Clearstream. Regulation S Global Preference
Shares may only be held through Euroclear or Clearstream. Beneficial interests in Preference Shares represented
by a Regulation S Global Preference Share may not be held by a U.S. Person (as defined in Regulation S under
the Securities Act) at any time.

The Preference Shares sold in reliance on the exemption from registration provided by Section 4(2) or Rule 144A
of the Securities Act will be represented by one or more definitive, Preference Share certificates in fully registered
form (the "Restricted Preference Shares") registered in the name of the beneficial owner thereof.

The Preference Shares will be issued in minimum lots of 100,000 Preference Shares and integral multiples of one
Preference Share in excess thereof.

The Preference Shares are subject to certain restrictions on transfer as set forth in "Transfer Restrictions."

The Preference Share Paying Agency Agreement

Pursuant to the Preference Share Paying Agency Agreement, JPMorgan Chase Bank will be appointed as the
Preference Share Paying Agent. The Issuer may at any time and from time to time terminate the appointment of
the Preference Share Paying Agent and appoint one or more additional Paying Agents to perform the duties of the
Preference Share Paying Agent. The Issuer will give prompt notice to the Trustee of the appointment or
termination of the Preference Share Paying Agent and of the location and any change in the location of the
Preference Share Paying Agent's office or agency. The Preference Share Paying Agent will provide notice to the
holders of the Preference Shares of any such change of which it receives notice.

The Preference Share Paying Agent will make distributions on the Preference Shares and perform various fiscal
services on behalf of the Issuer. On or prior to the Closing Date, the Preference Share Paying Agent will establish
a segregated non-interest bearing account designated as the "Preference Share Distribution Account." The
Preference Share Paying Agent will deposit any funds received from the Trustee pursuant to the Priority of
Payments into the Preference Share Distribution Account.

Pursuant to the Preference Share Paying Agency Agreement, the Preference Share Paying Agent, on behalf of the
Issuer, will promptly give notice of the amount of all distributions thereunder for the relevant Payment Date to the
holders of the Preference Shares, the Issuer, the Collateral Manager, the Trustee and the Initial Purchasers. The
Preference Share Paying Agent will also make such information available to the holders of Preference Shares at
the offices of the Irish Paying Agent so long as the Preference Shares are listed on the Irish Stock Exchange.
Distributions to holders of the Preference Shares, if any, will be paid on each Payment Date (including the
Scheduled Redemption Date) to the persons in whose names the Preference Shares are registered at the close of
business on the Record Date for such Payment Date. Pursuant to the Preference Share Paying Agency
Agreement, distributions to the holders of Preference Shares will be paid pro rata in the proportion that the
number of Preference Shares held by such holder bears to the total number of outstanding Preference Shares
(including the Preference Share Components).

25
On the Scheduled Redemption Date, the Issuer will redeem all outstanding Preference Shares at the Preference
Share Redemption Price. Upon final redemption of the Preference Shares, the holders thereof must present and
surrender the certificates representing the Preference Shares at the office of the Preference Share Paying Agent
designated for such purpose in exchange for final payment. Pursuant to the Preference Share Paying Agency
Agreement, all redemption payments to a holder of Preference Shares will be made pro rata in the proportion that
the number of Preference Shares held by such holder bears to the total number of outstanding Preference Shares
(including the Preference Share Components).

The Preference Share Paying Agency Agreement provides for the terms of transfer of the Preference Shares.
Pursuant to the Preference Share Paying Agency Agreement, Maples Finance Limited will be appointed by the
Issuer to act as the "Share Registrar" and JPMorgan Chase Bank will be appointed by the Issuer to act as the
"Preference Share Transfer Agent" for the purposes of registering the Preference Shares and all transfers and
redemptions of the Preference Shares.

The payment of the fees and expenses of the Preference Share Paying Agent and Share Registrar is solely the
obligation of the Issuer. The Preference Share Paying Agency Agreement contains provisions for the
indemnification of the Preference Share Paying Agent for any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or
administration of the Preference Share Paying Agency Agreement.

The Preference Share Paying Agency Agreement will be governed by, and construed in accordance with, the laws
of the State of New York. The Issuer Charter and the Preference Shares will be governed by, and construed in
accordance with, the laws of the Cayman Islands.

26
 CERTAIN TAX CONSIDERATIONS

General

The following summary describes the principal U.S. Federal income tax and Cayman Islands tax consequences of
the purchase at initial issuance of the Preference Shares, and the ownership and disposition of the Preference
Shares. The summary does not purport to be a comprehensive description of all tax considerations that may be
relevant to a decision to purchase the Preference Shares. In particular, the summary does not address special tax
considerations that may apply to certain types of taxpayers, including securities dealers, securities traders who
account for their securities on a mark-to-market basis for tax purposes, banks, tax-exempt investors, insurance
companies, subsequent purchasers of Preference Shares, and persons that own (directly or indirectly) equity
interests in holders of Preference Shares. In addition, this summary does not describe any tax consequences
arising under the laws of any state, locality or taxing jurisdiction other than the U.S. Federal government and the
Cayman Islands. In general, the summary assumes that a holder acquires Preference Shares at original issuance
and holds such Preference Shares as a capital asset and not as part of a hedge, a straddle, or a conversion
transaction within the meaning of Section 1258 of the U.S. Internal Revenue Code of 1986, as amended (the
"Code"), a constructive sale transaction within the meaning of Section 1259 of the Code or an integrated
transaction. This summary is based on United States and Cayman Islands tax laws, regulations, rulings and
decisions in effect or available on the date of this Confidential Offering Circular. All of the foregoing are subject
to change, which change may apply retroactively and could affect the continued validity of this summary.

This summary is included herein for general information only and there can be no assurance that the tax
consequences of an investment in the Preference Shares will be favorable or that such consequences will be as
described herein.

As used in this section, the term "U.S. holder" means a beneficial owner of a Preference Share who is (i) a citizen
or resident of the United States, (ii) an entity taxable as a corporation or treated as a partnership for U.S. Federal
income tax purposes, which is created or organized in or under the laws of the United States, any state therein or
the District of Columbia, (iii) an estate (other than a foreign estate defined in Section 7701(a)(31)(A) of the Code)
or (iv) a trust if a court within the United States is able to exercise primary supervision over such trust's
administration and one or more U.S. persons have the authority to control all substantial decisions of such trust
and certain other trusts that were in existence on August 20, 1996 and that elect to continue to be treated as U.S.
Persons. The term "non-U.S. holder" means a beneficial owner of a Preference Share who is not a U.S. holder.

U.S. persons and non-U.S. persons who own an interest in a holder which is treated as a pass-through entity under
the Code will generally receive the same tax treatment, with respect to the material tax consequences of their
indirect ownership of the Preference Shares, as is described herein for direct U.S. holders and non-U.S. holders,
respectively. Nonetheless, such persons should consult their tax advisors with respect to their particular
circumstances, including for issues related to tax elections and information reporting requirements.

ACCORDINGLY, PROSPECTIVE PURCHASERS OF THE PREFERENCE SHARES SHOULD

CONSULT THEIR TAX ADVISORS AS TO THE U.S. FEDERAL INCOME TAX AND CAYMAN
ISLANDS TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERENCE SHARES, INCLUDING THE POSSIBLE APPLICATION OF STATE, LOCAL,
FOREIGN OR OTHER TAX LAWS.

The following summary does not describe the United States Federal income tax consequences that are expected to
be applicable to the purchase, ownership or disposition of the Principal Protected Securities or Class C Notes. No
U.S. holder is permitted to acquire the Principal Protected Securities or the Class C Notes.

For U.S. Federal income tax purposes, the Issuer, and not the Co-Issuer, will be treated as the issuer of the
Preference Shares.

27
U.S. Federal Tax Considerations

Tax Treatment of the Issuer

It is intended that the Issuer will operate in a manner such that it will not be subject to U.S. Federal income tax on
its net income. In that regard, the Issuer's contemplated activities generally are not intended to cause it to be
engaged in a trade or business in the United States and, accordingly, the Issuer is not expected to be subject to
U.S. Federal income tax on its net income or the "branch profits" tax. If the Issuer should be treated as engaged in
a trade or business in the United States, the Issuer would be potentially subject to substantial U.S. Federal income
taxes. The imposition of such taxes would materially affect the Issuer's financial ability to make payments on the
Preference Shares.

Although the Issuer is generally not intended to be subject to U.S. Federal income tax on its net income, certain
income derived by the Issuer may be subject to withholding taxes imposed by the United States or other countries.
It is not expected that the Issuer will derive material amounts of income that would be subject to United States
withholding taxes.

Tax Treatment of U.S. Holders of Preference Shares

Status of the Preference Shares. The Preference Shares will constitute equity interests in the Issuer for Federal
income tax purposes.

Investment in a Passive Foreign Investment Company. The Issuer will constitute a "passive foreign investment
company" (a "PFIC"). Accordingly, U.S. holders of Preference Shares will be considered U.S. shareholders in a
PFIC. In general, to avoid certain adverse tax rules (described below) that apply to deferred income from a PFIC,
a U.S. holder may desire to make an election to treat the Issuer as a "qualified electing fund" (a "QEF") with
respect to such holder. Generally, a QEF election should be made on or before the due date for filing a U.S.
holder's U.S. Federal income tax return for the first taxable year for which such U.S. holder held Preference
Shares. An electing U.S. holder will be required to include in gross income such holder's pro rata share of the
Issuer's ordinary earnings and to include as long-term capital gain such holder's pro rata share of the Issuer's net
capital gain (arising from realized gains upon sales of securities), whether or not distributed, assuming that the
Issuer does not constitute a "controlled foreign corporation" in which the shareholder is a "U.S. Shareholder" (as
defined below), or a "foreign personal holding company," as discussed below. A U.S. holder will not be eligible
for the preferential income tax rate on qualified dividend income or the dividends received deduction in respect of
such income or gain. In addition, any losses of the Issuer in a taxable year will not be available to such U.S.
holder. In certain cases in which a QEF does not distribute all of its earnings in a taxable year, U.S. holders of
Preference Shares may also be permitted to elect generally to defer payment of the taxes on the QEF's
undistributed earnings until such amounts are distributed or the Preference Shares are disposed of, subject to an
interest charge on the deferred amount.

Prospective purchasers of Preference Shares should be aware that it is expected that some of the Collateral Debt
Securities may be purchased by the Issuer with substantial original issue discount. As a result, the Issuer may
recognize significant ordinary income from such instruments but the receipt of cash attributable to such income
may be deferred, perhaps for a substantial period of time. Thus, absent an election to defer payment of taxes, U.S.
holders of Preference Shares that make a QEF election may owe tax on significant amounts of "phantom" income.

In addition, it should be noted that, if the Issuer invests in certain obligations that are not in registered form, a
U.S. holder of Preference Shares who makes a QEF election (i) may not be permitted to take a deduction for any
loss attributable to such obligations and (ii) may be required to treat earnings as ordinary income even though
such earnings would otherwise constitute capital gains.

Upon request, the Issuer will provide all information that a U.S. holder of Preference Shares making a QEF
election is required to obtain for U.S. Federal income tax purposes (e.g., the U.S. holder's pro rata share of
ordinary income and net capital gain) and will provide a "PFIC Annual Information Statement" as described in

28
U.S. Treasury Regulations, including all representations and statements required by such statement, and will take
other reasonable steps to facilitate such election.

If a U.S. holder does not make a timely QEF election and the PFIC rules are otherwise applicable, a U.S. holder
that has held such Preference Shares during more than one taxable year would be required to report any gain on
disposition of any Preference Shares as ordinary income and to compute the tax liability on such gain and certain
"excess distributions" as if the items had been earned ratably over each day in the U.S. holder's holding period for
the Preference Shares and would be subject to the highest ordinary income tax rate for each prior taxable year in
which the items were treated as having been earned, regardless of the rate otherwise applicable to the U.S. holder.
Such U.S. holder would also be liable for an additional tax equal to interest on the tax liability attributable to such
income allocated to prior years as if such liability had been due with respect to each such prior year. For purposes
of these rules, gifts, bequests or exchanges pursuant to corporate reorganizations and use of the Preference Shares
as security for a loan may be treated as a taxable disposition. An "excess distribution" is the amount by which
distributions during a taxable year in respect of a Preference Share exceed 125 percent of the average amount of
distributions in respect thereof during the three preceding taxable years (or, if shorter, the U.S. holder's holding
period for the Preference Share). In addition, a stepped-up basis in the Preference Shares upon the death of an
individual U.S. holder may not be available.

U.S. HOLDERS OF PREFERENCE SHARES SHOULD CONSIDER CAREFULLY WHETHER TO MAKE A

QEF ELECTION WITH RESPECT TO THE PREFERENCE SHARES AND THE CONSEQUENCES OF NOT
MAKING SUCH AN ELECTION.

Investment in a Controlled Foreign Corporation. Depending on the degree of ownership of the equity interests in
the Issuer by "U.S. Shareholders" (as defined below), the Issuer may constitute a controlled foreign corporation (a
"CFC"). In general, a foreign corporation will constitute a CFC if more than 50% of the shares of the
corporation, measured by reference to combined voting power or value, are held, directly or indirectly, by U.S.
Shareholders. A "U.S. Shareholder," for this purpose, is any person that is a U.S. person for U.S. Federal income
tax purposes that possesses (actually or constructively) 10% or more of the combined voting power of all classes
of shares of a corporation (persons who own interests in a U.S. pass-through entity which is a U.S. Shareholder
will also be subject to the CFC rules described below). It is possible that the IRS would assert that the Preference
Shares are voting securities and that U.S. holders possessing 10% or more of the combined voting power of the
Preference Shares are U.S. Shareholders for purposes of the CFC rules. If this argument were successful and
more than 50% of such interests were held by such U.S. Shareholders, the Issuer would be treated as a CFC.

If the Issuer should constitute a CFC, each U.S. Shareholder of the Issuer would be treated, subject to certain
exceptions, as receiving ordinary income at the end of the taxable year of the Issuer in an amount equal to that
person's pro rata share of the "subpart F income" and certain other income of the Issuer. Among other items, and
subject to certain exceptions, "subpart F income" includes dividends, interest, annuities, gains from the sale of
shares and securities, certain gains from commodities transactions, certain types of insurance income and income
from certain transactions with related parties. It is likely that predominantly all of the Issuer's income would be
subpart F income. If more than 70% of the Issuer's gross income is subpart F income in any year, 100% of its
income in such year would be treated as subpart F income. Prospective purchasers of the Preference Shares
should be aware that such income of the Issuer may significantly exceed the Issuer's distributions on the
Preference Shares for one or more periods, and that a U.S. Shareholder may owe tax on significant amounts of
"phantom income."

If the Issuer should be treated as a CFC, a U.S. Shareholder of the Issuer would be taxable on the subpart F
income of the Issuer under the rules applicable to a CFC described in the preceding paragraph and not under the
PFIC rules previously described. As a result, to the extent subpart F income of the Issuer includes net capital
gains, such gains will be treated as ordinary income of the U.S. Shareholder under the CFC rules, notwithstanding
the fact that the character of such gains generally would otherwise be preserved under the PFIC rules if a QEF
election had been made.

29
Investment in a Foreign Personal Holding Company. Depending on the degree of ownership of the equity
interests in the Issuer by individuals who are citizens or residents of the United States, the Issuer may be classified
as a foreign personal holding company ("FPHC") if the gross income of the Issuer consists primarily of "FPHC
income". In general, a foreign corporation such as the Issuer will be classified as a FPHC if, at any time during a
taxable year, more than 50% of the total combined voting power or total value of all classes of shares of such
corporation are owned (directly or indirectly) by not more than five individuals who are citizens or residents of
the U.S. For purposes of the ownership requirements, an individual who is a member of a partnership generally is
treated as owning stock owned directly or indirectly by other partners. "FPHC income" includes gross income
from dividends, interest, annuities, gains from the sale of shares and securities, certain gains from commodities
transactions, income from certain personal service contracts and certain rents. In the event the Issuer is classified
as a FPHC, U.S. holders of the Preference Shares would include in income for the taxable year as a dividend
(which is not eligible for the preferential tax rate on qualified dividend income) such holders' share of the
undistributed "FPHC income" of the Issuer. Such income would consist of the taxable income of the Issuer, less
the dividends paid deduction and with certain other adjustments. It is likely that predominantly all of the Issuer's
income would be FPHC income. Prospective purchasers of the Preference Shares should be aware that such
income of the Issuer may significantly exceed the Issuer's distributions on the Preference Shares for one or more
periods, and that a U.S. shareholder may owe tax on significant amounts of "phantom income." If the Issuer is
classified as a FPHC, a U.S. holder would be taxable on the undistributed FPHC income of the Issuer under rules
described in this paragraph, and not under the PFIC rules previously described. If the Issuer is classified as a CFC
as well as a FPHC, U.S. Shareholders would be taxable on the subpart F income of the Issuer under the CFC
rules, and the FPHC rules will apply only to any undistributed FPHC income of the Issuer other than such subpart
F income.

Distributions Payments on Preference Shares. The treatment of actual distributions of cash on the Preference
Shares, in very general terms, will vary depending on whether a U.S. holder has made a timely QEF election as
described above. See "—Investment in a Passive Foreign Investment Company." If a timely QEF election has
been made, distributions should be allocated first to amounts previously taxed pursuant to the QEF election (or
pursuant to the CFC rules or the FPHC rules, if applicable) and to this extent would not be taxable to U.S. holders.
Distributions in excess of such previously taxed amounts will be treated first as a nontaxable return of capital and
then as capital gain.

In the event that a U.S. holder does not make a timely QEF election, then, except to the extent that distributions
may be attributable to amounts previously taxed pursuant to the CFC or the FPHC rules, some or all of any
distributions with respect to the Preference Shares may constitute excess distributions, taxable as previously
described. See "—Investment in a Passive Foreign Investment Company."

Sale, Redemption or Other Disposition of Preference Shares. In general, a U.S. holder of a Preference Share will
recognize gain or loss upon the sale or other disposition of a Preference Share equal to the difference between the
amount realized and such holder's adjusted tax basis in the Preference Share. If a U.S. holder has made a timely
QEF election as described above, such gain or loss will be long-term capital gain or loss if the U.S. holder held
the Preference Shares for more than 12 months at the time of the disposition.

Initially, the tax basis of a U.S. holder should equal the amount paid for a Preference Share. Such basis will be
increased by amounts taxable to such holder by virtue of a QEF election, the CFC rules, or the FPHC rules and
decreased by actual distributions from the Issuer that are deemed to consist of such previously taxed amounts or
are treated as nontaxable returns of capital (as described above).

If a U.S. holder does not make a timely QEF election as described above, any gain realized on the sale or other
disposition of a Preference Share will be subject to an interest charge and taxed as ordinary income under the
special tax rules described above. See "—Investment in a Passive Foreign Investment Company."

If the Issuer is treated as a CFC and a U.S. holder is treated as a "U.S. Shareholder" therein, then any gain realized
by such holder upon the disposition of Preference Shares will be treated as ordinary income to the extent of the

30
current and accumulated earnings and profits of the Issuer. In this respect, earnings and profits would not include
any amounts previously taxed pursuant to a timely QEF election or pursuant to the CFC or FPHC rules.

Transfer and Other Reporting Requirements. U.S. holders of the Preference Shares will generally be required to
report to the IRS on Form 926 certain information relating to such holders' purchase of the Preference Shares. In
the event a U.S. holder fails to file any such required form, the U.S. holder could be subject to a penalty equal to
10% of the gross amount paid for the Preference Shares subject to a maximum penalty equal to $100,000 (except
in cases of intentional disregard). U.S. holders of Preference Shares are urged to consult with their own tax
advisers regarding these reporting requirements and any other reporting requirements, such as an IRS Form 5471,
which may apply to such holders.

Tax-Exempt Investors. Special considerations apply to pension plans and other investors ("Tax-Exempt
Investors") that are subject to tax only on their unrelated business taxable income ("UBTI"). A Tax-Exempt
Investor's income from an investment in the Preference Shares generally will not be treated as resulting in UBTI,
so long as such investor's acquisition of Preference Shares is not debt-financed. A Tax-Exempt Investor that
owns more than 50% of the equity of the Issuer and also owns Notes treated as debt should consider the
application of the special UBTI rules for interest received from controlled entities. Tax-Exempt Investors should
consult their own tax advisers regarding an investment in the Preference Shares.

Tax Treatment of Non-U.S. Holders of Preference Shares

Subject to the discussion below regarding "backup" withholding, a non-U.S. holder of the Preference Shares will
be exempt from any U.S. Federal income or withholding taxes with respect to gain derived from the sale,
exchange, or redemption of, or any distributions received in respect of, Preference Shares of the Issuer, unless
such gain or distributions are effectively connected with a U.S. trade or business of such holder, or, in the case of
a gain, such holder is a nonresident alien individual who holds the Preference Shares as a capital asset and who is
present in the United States for 183 days or more in the taxable year of the disposition, and certain other
conditions are satisfied.

Information Reporting and Backup Withholding

Under certain circumstances, the Code requires "information reporting" annually to the IRS and to each holder,
and "backup withholding" with respect to certain payments made on or with respect to the Preference Shares.
These requirements generally do not apply with respect to certain holders, including corporations, tax-exempt
organizations, qualified pension and profit sharing trusts, and individual retirement accounts. Backup
withholding will apply to a U.S. holder only if the U.S. holder (i) fails to furnish its Taxpayer Identification
Number ("TIN"), which for an individual would be his or her Social Security Number, (ii) furnishes an incorrect
TIN, (iii) is notified by the IRS that it has failed to properly report payments of interest and dividends or
(iv) under certain circumstances, fails to certify, under penalty of perjury, that it has furnished a correct TIN. The
application for exemption is available by providing a properly completed IRS Form W-9. Each U.S. holder
agrees that by such holder's or beneficial owner's acceptance of a Preference Share or an interest therein that such
holder or beneficial owner will provide (or cause to be provided) to the Issuer (or the Paying Agent) a properly
completed IRS Form W-9 signed under penalties of perjury.

A non-U.S. holder that provides the applicable IRS Form W-8BEN, IRS Form W-8IMY or other applicable form,
together with all appropriate attachments, signed under penalties of perjury, identifying the non-U.S. holder and
stating that the non-U.S. holder is not a United States person will not be subject to IRS reporting requirements and
U.S. backup withholding. In addition, IRS Form W-8BEN or other applicable form will be required from the
beneficial owners of interests in a non-U.S. holder that is treated as a partnership (or as a trust of certain types) for
U.S. Federal income tax purposes. Each non-U.S. holder agrees that by such holder's or beneficial owner's
acceptance of a Preference Share or an interest therein that such holder or beneficial owner will provide (or cause
to be provided) to the Issuer (or the Paying Agent) a properly completed IRS Form W-8BEN, W-8IMY or other
applicable form signed under penalties of perjury.

31
The payment of the proceeds on the disposition of a Preference Share by a holder to or through the U.S. office of
a broker generally will be subject to information reporting and backup withholding unless the holder either
certifies its status as a non-U.S. holder under penalties of perjury on the applicable IRS Form W-8BEN, IRS Form
W-8IMY or other applicable form (as described above) or otherwise establishes an exemption. The payment of
the proceeds on the disposition of a Preference Share by a non-U.S. holder to or through a non-U.S. office of a
non-U.S. broker will not be subject to backup withholding or information reporting unless the non-U.S. broker is
a "U.S. Related Person" (as defined herein). The payment of proceeds on the disposition of a Preference Share by
a non-U.S. holder to or through a non-U.S. office of a U.S. broker or a U.S. Related Person generally will not be
subject to backup withholding but will be subject to information reporting unless the holder certifies its status as a
non-U.S. holder under penalties of perjury or the broker has certain documentary evidence in its files as to the
non-U.S. holder's foreign status and the broker has no actual knowledge to the contrary.

For this purpose, a "U.S. Related Person" is (i) a "controlled foreign corporation" for U.S. Federal income tax
purposes, (ii) a foreign person 50% or more of whose gross income from all sources for the three-year period
ending with the close of its taxable year preceding the payment (or for such part of the period that the broker has
been in existence) is derived from activities that are effectively connected with the conduct of a U.S. trade or
business or (iii) a foreign partnership if at any time during its tax year one or more of its partners are United States
persons who, in the aggregate, hold more than 50% of the income or capital interest of the partnership or if, at any
time during its taxable year, the partnership is engaged in the conduct of a U.S. trade or business.

Backup withholding is not an additional tax and may be refunded (or credited against the holder's U.S. Federal
income tax liability, if any), provided that certain required information is furnished. The information reporting
requirements may apply regardless of whether withholding is required. Copies of the information returns
reporting such interest and withholding also may be made available to the tax authorities in the country in which a
non-U.S. holder is a resident under the provisions of an applicable income tax treaty or agreement.

Tax Shelter Reporting Requirements

Recently issued U.S. Treasury Regulations and other administrative guidance promulgated by the IRS prescribe
the circumstances under which certain holders of the Preference Shares could be required to file information
returns with the IRS (the "New Reporting Rules").

Prospective purchasers of the Preference Shares should consult their own tax advisors regarding the application to
them of the New Reporting Rules with respect to any investment in the Preference Shares.

In particular, the New Reporting Rules could apply to a U.S. holder of Preference Shares if such holder is a
"reporting shareholder" and the Issuer enters into one or more "reportable transactions". A U.S. holder of
Preference Shares could be treated as a "reporting shareholder" only if (i) such holder of Preference Shares owns
10% or more of the Preference Shares and makes a QEF election with respect to the Issuer, (ii) such holder of
Preference Shares owns 10% or more of the Preference Shares and the Issuer is treated as a CFC or (iii) the Issuer
is treated as a FPHC (without regard to whether such holder owns more or less than 10% of the Preference
Shares). Accordingly, a U.S. holder of Preference Shares that owns less than 10% of the Preference Shares can be
treated as a "reporting shareholder" of the Issuer only if the Issuer is a FPHC.

If a U.S. holder of Preference Shares is a "reporting shareholder," such holder would be required to file an
information return with the IRS (as described below) if the Issuer engages in any "reportable transaction". The
definition of "reportable transaction" is highly technical. In general, however, most of the Issuer's investment
activities are not expected to give rise to reportable transactions. Nevertheless, the Issuer may enter into certain
types of transactions, such as foreign currency transactions, that could be treated as "reportable transactions". If
the Issuer does engage in any "reportable transaction," any U.S. holder of Preference Shares that is a "reporting
shareholder" will be required to file IRS Form 8886 with such holder's U.S. Federal income tax return for each
taxable year in which such "reportable transaction" affects such holder's taxable income, and to file a copy of such
form with the IRS's Office of Tax Shelter Analysis. The Issuer intends to provide to reporting shareholders any
information necessary to complete such form.

32
In addition, any holder of Preference Shares, whether or not such holder is a "reporting shareholder," that
recognizes a loss on a sale or exchange of such holder's Preference Shares will be required to file IRS Form 8886
in the manner described above if the loss exceeds certain thresholds. In the case of a U.S. holder of Preference
Shares that is a corporation, the threshold is $10 million in any single taxable year or $20 million over the six-year
period beginning in the year the sale or exchange is entered into, while the threshold for individual taxpayers is $2
million in any single taxable year or $4 million over such six-year period.

United States Income Taxation of the Principal Protected Securities

The Issuer intends to treat each Class of the Principal Protected Securities as consisting of two separate securities
for U.S. Federal income tax purposes. Thus the Issuer intends to treat the Class 1 Principal Protected Securities as
consisting of Class C-1 Notes and Preference Shares and to treat the Class 2 Principal Protected Securities as
consisting of Class C-2 Notes and Preference Shares. By its acceptance of the Principal Protected Securities, each
such holder will be deemed to have agreed to treat itself as the owner of Class C Notes and Preference Shares for
U.S. Federal, state and local income tax purposes.

United States Income Taxation of Non-U.S. Holders of the Class C Notes with respect to the Class C
Collateral

The Issuer will treat the owners of the Class C Notes as the owners of the Class C Collateral for U.S. Federal
income tax purposes. By its acceptance of Principal Protected Securities or Class C Notes, each holder of
Principal Protected Securities or Class C Notes, as applicable, will be deemed to have agreed to treat itself as the
owner of the Class C Collateral for U.S. Federal, state and local income tax purposes.

Non-U.S. Holders of Class C Collateral

A non-U.S. holder of Class C Collateral will be exempt from U.S. Federal net income tax with respect to gain
derived from the sale, exchange, or redemption of, or any distributions received in respect of, Class C Collateral,
unless such gain or distributions are effectively connected with a U.S. trade or business of such holder, or in the
case of a gain, such holder is a nonresident alien individual who holds the Class C Collateral as a capital asset and
who is present in the United States for 183 days or more in the taxable year of the disposition, and certain other
conditions are satisfied.

The Class C Collateral will be treated as having been issued with original issue discount for U.S. Federal income
tax purposes. In general, a 30% U.S. Federal withholding tax applies to redemption payments attributable to
accrued original issue discount made to a non-U.S. holder in cases in which such payments are not effectively
connected to such holder's United States trade or business unless such non-U.S. holder complies with certain
certification requirements. Accordingly, upon redemption of the Class C Notes, the 30% U.S. Federal
withholding tax will apply to the portion of any amount received by such a non-U.S. holder that is attributable to
accrued original issue discount unless such non-U.S. holder certifies on IRS Form W-8BEN or other successor
form, under penalties of perjury, that such non-U.S. holder is not a United States person for U.S. Federal income
tax purposes and provides such holder's name and address and either (i) files such IRS Form W-8BEN or other
form with the Paying Agent or (ii) in the case of a Class C Note held on such non-U.S. holder's behalf by a
securities clearing organization, bank or other financial institution holding customers' securities in the ordinary
course of its trade or business, such organization, bank or institution furnishes the Paying Agent with a statement
that it has received the IRS Form W-8BEN or other successor form from such holder and furnishes the Paying
Agent with a copy thereof or, in certain cases, furnishes the Paying Agent with IRS Form W-8IMY. Special
certification rules apply to Class C Notes held by non-U.S. partnerships and certain other non-U.S. entities.

If redemption payments received by a non-U.S. holder are effectively connected with such holder's U.S. trade or
business, the 30% withholding tax will apply unless such holder provides to the Paying Agent a properly executed
IRS Form W-8ECI or other successor form stating that such payment is so effectively connected.

33
Information Reporting and Back-up Withholding.

Information reporting to the IRS generally will be required with respect to payments of principal of the Class C
Notes and proceeds of the sale of the Class C Collateral to holders other than corporations and other exempt
recipients. A "backup" withholding tax will apply to those payments if such holder fails to provide certain
identifying information (such as the holder's taxpayer identification number) to the Trustee. Non-U.S. holders
may be required to comply with applicable certification procedures to establish that they are not U.S. holders in
order to avoid the application of such information reporting requirements and backup withholding.

Cayman Islands Tax Considerations

The following discussion of certain Cayman Islands income tax consequences of an investment in the Preference
Shares is based on the advice of Maples and Calder as to Cayman Islands law. The discussion is a general
summary of present law, which is subject to prospective and retroactive change. It assumes that the Issuer will
conduct its affairs in accordance with assumptions made by, and representations made to, counsel. It is not
intended as tax advice, does not consider any investor's particular circumstances, and does not consider tax
consequences other than those arising under Cayman Islands law. Investors should consult their professional
advisers on the possible tax consequences of their subscribing for, purchasing, holding, selling or redeeming
Preference Shares under the laws of their countries of citizenship, residence, ordinary residence or domicile.

Under existing Cayman Islands laws, distributions in respect of the Preference Shares will not be subject to
taxation in the Cayman Islands and no withholding will be required on such distributions to any holder of a
Preference Share, and gains derived from the sale of a Preference Share will not be subject to Cayman Islands
income or corporation tax. The Cayman Islands currently have no income, corporation or capital gains tax and no
estate duty, inheritance tax or gift tax.

34
The Issuer has been incorporated under the laws of the Cayman Islands as an exempted company and, as such, has
obtained an undertaking from the Governor In Council of the Cayman Islands substantially in the following form:

"The Tax Concessions Law

(1999 Revision)
Undertaking as to Tax Concessions

In accordance with Section 6 of The Tax Concessions Law (1999 Revision), the Governor In Council undertakes
with:

Tricadia CDO 2003-1, Ltd. (the "Company")

(a) that no Law which is hereafter enacted in the Islands

imposing any tax to be levied on profits or income or gains or appreciations shall
apply to the Company or its operations; and

(b) in addition, that no tax to be levied on profits, income,

gains or appreciations or which is in the nature of estate duty or inheritance tax
shall be payable:

(i) on or in respect of the shares debentures or other

obligations of the Company; or

(ii) by way of the withholding in whole or in part of

any relevant payment as defined in Section 6(3) of the Tax Concessions
Law (1999 Revision).

These concessions shall be for a period of TWENTY years from the 15th
day of July, 2003.

Governor In Council"

The Cayman Islands does not have any double tax treaty arrangement with the U.S. or any other country.

THE PRECEDING DISCUSSION IS ONLY A SUMMARY OF CERTAIN OF THE TAX

IMPLICATIONS OF AN INVESTMENT IN THE PREFERENCE SHARES. CERTAIN OTHER
RELEVANT TAX CONSIDERATIONS ARE SUMMARIZED UNDER "CERTAIN TAX
CONSIDERATIONS" IN THE NOTE OFFERING CIRCULAR. PROSPECTIVE INVESTORS ARE
URGED TO CONSULT WITH THEIR OWN TAX ADVISORS PRIOR TO INVESTING TO
DETERMINE THE TAX IMPLICATIONS OF SUCH INVESTMENT IN LIGHT OF SUCH
INVESTOR'S CIRCUMSTANCES.

35
 CERTAIN ERISA CONSIDERATIONS

Except as described below, the Offered Securities may not be purchased by any Benefit Plan Investor.

Section 406 of ERISA and Section 4975 of the Code prohibit pension, profit sharing and other retirement plans
and accounts subject to ERISA or Section 4975 of the Code, and entities that are deemed to hold assets of the
foregoing ("ERISA Plans") from engaging in certain transactions involving their "plan assets" with persons that
are "parties in interest" under ERISA or "disqualified persons" under the Code with respect to the ERISA Plan.
With respect to ERISA Plans subject to Title I of ERISA, ERISA also imposes certain duties on persons who are
fiduciaries of ERISA Plans and prohibits certain transactions between ERISA Plans and "parties in interest" with
respect to such ERISA Plans. Under ERISA, any person who exercises any authority or control respecting the
management or disposition of the assets of an ERISA Plan subject to Title I of ERISA is considered to be a
fiduciary of such ERISA Plan. A violation of these "prohibited transaction" rules may generate excise tax and
other liabilities under ERISA and the Code for such person. Certain transactions involving the Co-Issuers might
be deemed to constitute prohibited transactions under ERISA and the Code with respect to an ERISA Plan that
purchased Offered Securities if assets of the Issuer were deemed to be assets of the ERISA Plan.

Under the Plan Asset Regulation, the assets of the Issuer would be treated as plan assets of an ERISA Plan for
purposes of ERISA and the Code only if the ERISA Plan acquired an "equity interest" in the Issuer and none of
the exceptions contained in the Plan Asset Regulation was applicable. An equity interest is defined under the Plan
Asset Regulation as an interest other than an instrument which is treated as indebtedness under applicable local
law and which has no substantial equity features.

The Preference Shares will be treated as equity for purposes of the Plan Asset Regulation. Under one exception
to the Plan Asset Regulation, however, the assets of the Issuer will not be treated as "plan assets" if Benefit Plan
Investor participation in the Issuer is not "significant." Benefit Plan Investor participation will not be "significant"
for purposes of the Plan Asset Regulation if less than 25% of each class of equity interests (excluding, for
purposes of such calculation, interests held by persons (other than Benefit Plan Investors) that have discretionary
authority or control with respect to the assets of the Issuer, or who provide investment advice to the Issuer for a
fee (direct or indirect) with respect to such assets, or any affiliate of such a person) is held by Benefit Plan
Investors. The Department of Labor has taken the position that for purposes of determining whether equity
participation in an entity is "significant" for purposes of the Plan Asset Regulation, only the proportion of an
insurance company general account's investment that represents plan assets should be taken into account.

If investment in the Offered Securities by Benefit Plan Investors (including through an insurance company
general account) was deemed "significant" for purposes of the Plan Asset Regulation, it could cause the
underlying assets of the Issuer to be ERISA Plan assets subject to ERISA. This in turn could cause transactions
involving the Issuer or its affiliates to constitute prohibited transactions under ERISA and the Code.

Accordingly, the purchase, holding and transfer of the Offered Securities will be restricted and each purchaser
thereof will be required to make certain representations and agree to additional transfer restrictions described
under "Transfer Restrictions." The Offered Securities may not be purchased by or transferred to, on behalf of or
using the assets of, any Benefit Plan Investor (including an insurance company general account, except as
provided below). Each purchaser or transferee of Offered Securities will be deemed to represent and warrant that,
except as provided below, such purchaser or transferee, upon such purchase or transfer is not, and throughout the
holding of such Offered Securities will not become or transfer its interest to, any Benefit Plan Investor. Each
purchaser and transferee of an Offered Security that is an insurance company investor permitted to acquire an
interest in the Offered Securities with assets from its general account will (in the case of a Regulation S Global
Preference Share or Regulation S Global Principal Protected Security) be deemed to represent, warrant and
covenant or (in the case of a Restricted Preference Share) will represent, warrant and covenant that at the time of
acquisition and throughout its holding of the Offered Securities, (i) if a source of the funds being used to effect its
purchase of the Offered Securities represented hereby (or interest therein) is its general account and (ii) on the
date it purchases the Offered Securities represented hereby (or interest therein) (1) it meets the requirements for

36
exemption under one or more Section I, II or III of Department of Labor PTCE 95-60, (2) less than 25% of the
assets of its general account are (or represent) assets of a Benefit Plan Investor (other than such insurance
company general account) and (3) it is not the Collateral Manager, the Issuer, the Co-Issuer, the Initial Purchasers
or a service provider to the Issuer or an affiliate of the foregoing and the value of the equity held by such general
account would not otherwise be disregarded under 29 C.F.R. 2510.3-101(f)(1). No Offered Securities may be
transferred to a Benefit Plan Investor or any entity using Benefit Plan Investor assets, except to insurance
company general accounts meeting the requirements discussed above. Each investor in the Offered Securities will
be deemed to represent, warrant and covenant that it will not sell, pledge or otherwise transfer such Offered
Securities in violation of the foregoing.

Purchasers will be further required or deemed, as appropriate, to represent, warrant and covenant that no sale,
pledge or transfer of an Offered Security will be made to a Benefit Plan Investor except as provided herein, and
that it and any fiduciaries causing it to acquire such Offered Securities agree, to the fullest extent permissible
under applicable law, to indemnify and hold harmless the Issuer, the Co-Issuer, the Trustee, the Preference Share
Paying Agent, the Collateral Manager, and their respective affiliates from any cost, damage or loss incurred by
them as a result of it being or being deemed to be a Benefit Plan Investor.

Independent Review and Consultation with Counsel

Any person or entity proposing to purchase Offered Securities with insurance company general account assets
should consult with its counsel with respect to, among other things, the potential applicability of ERISA and the
Code to such investments and whether any exemption would be applicable. Each investor must determine on its
own whether all conditions of the applicable exemption have been satisfied.

37
 PLAN OF DISTRIBUTION

Pursuant to a Purchase Agreement dated as of the Closing Date (the "Purchase Agreement") among the Co-
Issuers, Bear, Stearns & Co. Inc. (in such capacity, the "Initial Purchaser" ) and CDC Securities (in such
capacity, the "Co-Placement Agent" and, together with the Initial Purchaser, the "Initial Purchasers") (i) the
Co-Issuers have agreed to sell to the Initial Purchaser and the Initial Purchaser has agreed to purchase from the
Co-Issuers (directly or through an international affiliate) the Offered Securities and (ii) the Co-Issuers have
appointed the Co-Placement Agent to place, and the Co-Placement Agent has agreed to place, the Offered
Securities with eligible investors. The Purchase Agreement provides that the obligations of the Initial Purchaser
to pay for and accept delivery of the Offered Securities are subject to, among other things, the approval of certain
legal matters by counsel and certain other conditions. The Offered Securities will be offered by the Initial
Purchaser to prospective investors from time to time in individually negotiated transactions at varying prices to be
determined at the time of sale. The Offered Securities are offered when, as and if issued by the Issuer, subject to
prior sale or withdrawal, cancellation or modification of the offer without notice and subject to approval of certain
legal matters by counsel and certain other conditions. Each of the Initial Purchasers reserves the right to
withdraw, cancel or modify such offer and to reject orders in whole or in part. Pursuant to the Purchase
Agreement, the Co-Issuers will agree to indemnify each of the Initial Purchasers against certain liabilities,
including liabilities under the Securities Act, or to contribute to payments the Initial Purchasers may be required
to make in respect thereof. The Co-Placement Agent is not required to underwrite or purchase any Securities.
The Initial Purchaser may be located at Bear, Stearns & Co. Inc., 383 Madison Avenue, New York, New York
10179 and the Co-Placement Agent may be located at CDC Securities, 9 West 57th Street, 36th Floor, New York,
NY 10019.

Each purchaser of a Preference Share or a Principal Protected Security (other than the Initial Purchaser) will be
required to execute and deliver an investor letter in form and substance satisfactory to the Initial Purchasers and
the Issuer.

The Issuer has been advised by the Initial Purchasers that the Initial Purchasers propose to offer the Offered
Securities (i) to certain non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities
Act and (ii) with respect to the Preference Shares, to "accredited investors" within the meaning of Rule 501(a) of
the Securities Act ("Accredited Investors") in transactions exempt under Section 4(2) of the Securities Act or to
"qualified institutional buyers" ("Qualified Institutional Buyers") within the meaning of Rule 144A ("Rule
144A") under the Securities Act who are, in either case, also "qualified purchasers" ("Qualified Purchasers")
within the meaning of Section 3(c)(7) of the United States Investment Company Act of 1940, as amended (the
"Investment Company Act"). Any offer or sale of Preference Shares made in the United States will be made by
broker-dealers, including certain affiliates of the Initial Purchasers, which are registered as broker-dealers under
the Exchange Act. In connection with this issue, the Initial Purchasers may over-allot or effect transactions that
stabilize or maintain the market price of the Offered Securities. Such stabilizing, if commenced, may be
discontinued at any time.

The Offered Securities have not been and will not be registered under the Securities Act and may not be offered,
sold or delivered within the United States or to, or for the account or benefit of, a U.S. Person except, with respect
to the Preference Shares, to Accredited Investors and Qualified Institutional Buyers who are also Qualified
Purchasers in transactions exempt from the registration requirements of the Securities Act.

Each Initial Purchaser has agreed that it will not offer, sell or deliver any Offered Securities within the United
States or to, or for the account or benefit of, U.S. Persons except, with respect to the Preference Shares, to
Accredited Investors and Qualified Institutional Buyers who are also Qualified Purchasers. In addition, an offer
or sale of Offered Securities within the United States by a dealer (whether or not participating in the Offering)
may violate the registration requirements of the Securities Act if the offer or sale is made otherwise than pursuant
to Section 4(2) or Rule 144A of the Securities Act. Resales of the Preference Shares offered in reliance on
Section 4(2) or Rule 144A of the Securities Act are restricted as described under "Transfer Restrictions." As used
in this paragraph, the terms "United States" and "U.S." have the meanings given to them by Regulation S under

38
the Securities Act. Each Initial Purchaser has agreed that it will not offer, sell or deliver any Principal Protected
Securities within the United States or to, or for the account or benefit of, U.S. Persons.

United States

The Offered Securities have not been and will not be registered under the Securities Act and may not be offered or
sold within the United States or to, or for the account or benefit of, U.S. Persons except, with respect to the
Preference Shares, pursuant to an exemption from the registration requirements under the Securities Act.

(1) In the Purchase Agreement, each Initial Purchaser will represent and agree that it has not
offered or sold Offered Securities and will not offer or sell Offered Securities (i) as part of its distribution at any
time and (ii) with respect to the Preference Shares, otherwise until 365 days after the latter of the commencement
of the offering of the Preference Shares and the Closing Date, except in accordance with Rule 903 of Regulation S
or, as provided in paragraph (2) below. Accordingly, each Initial Purchaser will represent and agree that except as
provided in paragraph (2) below neither it, its Affiliates (if any) nor any persons acting on its or their behalf have
engaged or will engage in any directed selling efforts with respect to the Preference Shares, and it and they have
complied and will comply with the offering restrictions requirements of Regulation S.

(2) In the Purchase Agreement, each Initial Purchaser will agree that it will not, acting either
as principal or agent, offer or sell any Offered Securities in the United States and, with respect to the Preference
Shares, in registered form bearing a restrictive legend thereon, and it will not, acting either as principal or agent,
offer, sell, reoffer or resell any of such Preference Shares (or approve the resale of any of such Preference Shares)
inside the United States:

(a) except (i) through a U.S. broker dealer that is registered under the Exchange Act to
purchasers each of which such Initial Purchaser reasonably believes (A) is a Qualified
Institutional Buyer or an Accredited Investor, in either case, that are Qualified Purchasers and
(B) has such knowledge and experience in financial and business matters that it is capable of
evaluating and bearing the risks of investing in the Preference Shares or is represented by a
fiduciary or agent with sole investment discretion having such knowledge and experience or
(ii) otherwise, in accordance with the restrictions on transfer set forth in such Preference Shares,
the Purchase Agreement and this Confidential Offering Circular; or

(b) by means of any form of general solicitation or general advertisement, including but not
limited to (i) any advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio and (ii) any seminar
or meeting whose attendees have been advised by any general solicitation or general advertising.

Prior to the sale of any Preference Shares in registered form bearing a restrictive legend thereon,
the Initial Purchasers shall have provided each offeree that is a U.S. Person with a copy of the final Confidential
Offering Circular in the form the Issuer and the Initial Purchasers shall have agreed most recently shall be used
for offers and sales in the United States (the initial such form being this Confidential Offering Circular).

(3) In the Purchase Agreement, each Initial Purchaser will represent and agree that in
connection with each sale to a Qualified Institutional Buyer it has taken or will take reasonable steps to ensure
that the purchaser is aware that the Preference Shares have not been and will not be registered under the Securities
Act and that transfers of Preference Shares are restricted as set forth herein.

United Kingdom

Each Initial Purchaser agrees and represents that:

(1) it has not offered or sold and, prior to the expiry of a period of six months from the
Closing Date, will not offer or sell any Offered Securities to persons in the United Kingdom except to persons

39
whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995;

(2) it has only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of
Section 21 of the Financial Services and Markets Act 2000 ("FSMA")) received by it in connection with the issue
or sale of any Notes in circumstances in which Section 21(1) of FSMA would not, if each of the Co-Issuers were
not an authorized person, apply to the Co-Issuers; and

(3) it has complied and will comply with all applicable provisions of the Financial Services
and Markets Act 2000 with respect to anything done by it in relation to the Notes in, from or otherwise involving
the United Kingdom.

Cayman Islands

Each Initial Purchaser will represent and agree that it has not made and will not make any invitation to the public
in the Cayman Islands to subscribe for the Offered Securities.

General

No action has been or will be taken in any jurisdiction that would permit a public offering of the Offered
Securities or the possession, circulation or distribution of this Confidential Offering Circular or any other material
relating to the Issuer or the Offered Securities in any country or jurisdiction where action for that purpose is
required. Accordingly, the Offered Securities may not be offered or sold, directly or indirectly, and neither this
Confidential Offering Circular nor any other offering material or advertisements in connection with the Offered
Securities may be distributed or published, in or from any country or jurisdiction, except under circumstances that
will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

Purchasers of the Offered Securities may be required to pay stamp taxes and other charges in accordance with the
laws and practices of the country of purchase in addition to the purchase price.

40
 TRANSFER RESTRICTIONS

Because of the following restrictions, purchasers are advised to consult legal counsel prior to making any offer,
resale, pledge or transfer of the Offered Securities.

Each purchaser of Offered Securities will be deemed to have represented and agreed (and certain initial
purchasers of Restricted Preference Shares will be required to represent and warrant) as follows (terms used in
this paragraph that are defined in Rule 144A, Regulation D or Regulation S under the Securities Act, as
applicable, are used herein as defined therein):

(1) The purchaser either (i) with respect to the purchase of Preference Shares (A) is an Accredited Investor,
or Qualified Institutional Buyer who is, in either case, also a Qualified Purchaser, (B) is aware that the
initial sale of the Preference Shares to it is being made in reliance on the exemption from registration
provided by Section 4(2) or Rule 144A under the Securities Act and (C) is acquiring the Preference
Shares for its own account or for one or more accounts, each of which is an Accredited Investor or
Qualified Institutional Buyer and, in either case, a Qualified Purchaser, and as to each of which the
purchaser exercises sole investment discretion, and in a minimum denomination of not less than 100,000
Preference Shares for the purchaser and for each such account, or (ii) is not a U.S. person and is
purchasing the Offered Securities pursuant to Rule 903 or 904 of Regulation S. If the purchaser (or any
such account) is within clause (i), it is not a broker-dealer who owns and invests on a discretionary basis
less than U.S.$25 million and it is not a participant-directed employee plan, such as a 401(k) plan. The
purchaser has such knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of its investment in the Offered Securities, and the purchaser and any
accounts for which it is acting are each able to bear the economic risk of the purchaser's or its investment.
The purchaser understands that in the event that at any time the Issuer, Trustee or the Preference Share
Paying Agent determines that such purchaser was in breach, at the time given, of any of the
representations or agreements set forth in this paragraph (1), the Trustee or Preference Share Paying
Agent, as applicable, may consider the acquisition of the related Offered Securities void and require that
the related Offered Securities be transferred to a person designated by the Issuer.

(2) The purchaser understands that the Offered Securities are being offered only in transactions not involving
any public offering within the meaning of the Securities Act. The Offered Securities have not been and
will not be registered under the Securities Act and, if in the future the purchaser decides to offer, resell,
pledge or otherwise transfer the Offered Securities, such Offered Securities may be offered, resold,
pledged or otherwise transferred only in accordance with the legend on such Offered Securities described
below. The purchaser acknowledges that no representation is made by the Issuer or the Initial Purchasers
as to the availability of any exemption under the Securities Act or any state securities laws for resale of
the Offered Securities.

(3) The purchaser is not purchasing the Offered Securities with a view to the resale, distribution or other
disposition thereof in violation of the Securities Act. The purchaser understands that an investment in the
Offered Securities involves certain risks, including the risk of loss of all or a substantial part of its
investment under certain circumstances. The purchaser has had access to such financial and other
information concerning the Issuer and the Offered Securities as it deemed necessary or appropriate in
order to make an informed investment decision with respect to its purchase of the Offered Securities,
including an opportunity to ask questions of and request information from the Issuer and the Collateral
Manager.

(4) In connection with the purchase of the Offered Securities: (i) none of the Issuer, the Initial Purchasers,
the Collateral Manager, the Trustee, the Preference Share Paying Agent, the Administrator or the Share
Trustee is acting as a fiduciary or financial or investment advisor for the purchaser; (ii) the purchaser is
not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or
representations (whether written or oral) of the Issuer, the Initial Purchasers, the Collateral Manager, the

41
 Trustee, the Preference Share Paying Agent, the Administrator or the Share Trustee other than, in the case
of the Issuer, in a current offering memorandum for such Offered Securities and any representations
expressly set forth in a written agreement with such party; (iii) none of the Issuer, the Initial Purchasers,
the Collateral Manager, the Trustee, the Preference Share Paying Agent, the Administrator or the Share
Trustee have given to the purchaser (directly or indirectly through any other person) any assurance,
guarantee, or representation whatsoever as to the expected or projected success, profitability, return,
performance, result, effect, consequence, or benefit (including legal, regulatory, tax, financial, accounting
or otherwise) of its purchase; (iv) the purchaser has consulted with its own legal, regulatory, tax, business,
investment, financial, and accounting advisors to the extent it has deemed necessary, and it has made its
own investment decisions (including decisions regarding the suitability of any transaction pursuant to the
Indenture or the Preference Share Paying Agency Agreement) based upon its own judgment and upon any
advice from such advisors as it has deemed necessary and not upon any view expressed by the Issuer, the
Initial Purchasers, the Collateral Manager, the Trustee, the Preference Share Paying Agent, the
Administrator or the Share Trustee; and (v) the purchaser is purchasing the Offered Securities with a full
understanding of all of the terms, conditions and risks thereof (economic and otherwise), and it is capable
of assuming and willing to assume (financially and otherwise) those risks.

(5) Neither the purchaser nor any account for which the purchaser is acquiring Offered Securities was formed
for the purpose of acquiring any Offered Securities. The purchaser and each account for which the
purchaser is acquiring Offered Securities agrees that it shall not hold such Offered Securities for the
benefit of any other person and shall be the sole beneficial owner thereof for all purposes and that it shall
not sell participations in the Offered Securities or enter into any other arrangement pursuant to which any
other person shall be entitled to a beneficial interest in the distributions on the Offered Securities. The
purchaser understands and agrees that any purported transfer of the Offered Securities to a purchaser that
does not comply with the requirements of this clause (5) shall be null and void ab initio.

(6) The purchaser understands that the Preference Shares will bear the legend set forth below and that the
Principal Protected Securities will bear a similar legend. The Preference Shares may not at any time be
resold, pledged or transferred to U.S. Persons who are not both (i) either Accredited Investors or
Qualified Institutional Buyers and (ii) Qualified Purchasers. Before any Restricted Preference Shares
may be resold, pledged or otherwise transferred to a person who takes delivery in the form of an interest
in a Regulation S Global Preference Share or Restricted Preference Share, the transferee will be required
to provide the Preference Share Paying Agent with a written certification as to compliance with the
transfer restrictions. Before any interest in any Regulation S Global Preference Shares may be resold,
pledged or otherwise transferred to a person who takes delivery in the form of Restricted Preference
Shares, the transferee will be required to provide the Preference Share Paying Agent with a written
certification as to compliance with the transfer restrictions.

(7) The Preference Shares will bear a legend to the following effect unless the Issuer determines otherwise in
compliance with the Preference Share Paying Agency Agreement and applicable law:

THE PREFERENCE SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION, AND MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (A) (1) [TO A PERSON WHICH TAKES DELIVERY OF THE
PREFERENCE SHARES REPRESENTED HEREBY (OR AN INTEREST THEREIN) IN THE FORM
OF A RESTRICTED DEFINITIVE PREFERENCE SHARE AND WHOM THE SELLER
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"),]1 [TO A PERSON]2

1
Applicable to Regulation S Global Preference Shares.
2
Applicable to Restricted Definitive Preference Shares.

42
 PURCHASING FOR ITS OWN ACCOUNT, TO WHOM NOTICE IS GIVEN THAT THE RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON THE EXEMPTION FROM
SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A, OR TO AN "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(a) OF THE SECURITIES ACT (AN
"ACCREDITED INVESTOR") IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (SUBJECT TO THE DELIVERY OF
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE ISSUER MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT) OR (2) TO A NON-U.S. PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT ("REGULATION S"), (B) IN COMPLIANCE WITH THE CERTIFICATION AND
OTHER REQUIREMENTS SPECIFIED IN THE PREFERENCE SHARE PAYING AGENCY
AGREEMENT REFERRED TO HEREIN AND (C) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER RELEVANT
JURISDICTION.

THE ISSUER HAS NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT"). NO
TRANSFER OF THE PREFERENCE SHARES REPRESENTED HEREBY (OR AN INTEREST
THEREIN) MAY BE MADE (AND NONE OF THE ISSUER, THE PREFERENCE SHARE PAYING
AGENT, THE PREFERENCE SHARE TRANSFER AGENT OR THE SHARE REGISTRAR WILL
RECOGNIZE ANY SUCH TRANSFER) IF (A) SUCH TRANSFER WOULD BE MADE TO A
TRANSFEREE WHO IS A U.S. RESIDENT (WITHIN THE MEANING OF THE INVESTMENT
COMPANY ACT) BUT IS NOT A "QUALIFIED PURCHASER" AS DEFINED IN
SECTION 2(a)(51)(A) OF THE INVESTMENT COMPANY ACT AND RELATED RULES (A
"QUALIFIED PURCHASER") THAT TAKES DELIVERY OF THE PREFERENCE SHARES
REPRESENTED HEREBY (OR AN INTEREST THEREIN) IN THE FORM OF A RESTRICTED
DEFINITIVE PREFERENCE SHARE, (B) SUCH TRANSFER WOULD HAVE THE EFFECT OF
REQUIRING THE ISSUER OR THE TRUST ESTATE TO REGISTER AS AN INVESTMENT
COMPANY UNDER THE INVESTMENT COMPANY ACT, (C) SUCH TRANSFER WOULD BE
MADE TO A TRANSFEREE WHO IS A U.S. RESIDENT THAT IS A FLOW-THROUGH
INVESTMENT VEHICLE OTHER THAN A QUALIFYING INVESTMENT VEHICLE (EACH AS
DEFINED IN THE INDENTURE), (D) THE TRANSFEREE IS A BENEFIT PLAN INVESTOR (AS
DEFINED IN THE PLAN ASSET REGULATION ISSUED BY THE UNITED STATES
DEPARTMENT OF LABOR), INCLUDING FOR THIS PURPOSE AN INSURANCE COMPANY
GENERAL ACCOUNT OTHER THAN AN INSURANCE COMPANY GENERAL ACCOUNT WITH
RESPECT TO WHICH LESS THAN 25% OF ITS GENERAL ACCOUNT ASSETS CONSTITUTE
PLAN ASSETS WITHIN THE MEANING OF SECTION 401(c) OF ERISA.

BY ACCEPTING THE PREFERENCE SHARES REPRESENTED HEREBY, [EACH HOLDER

HEREOF IS DEEMED TO REPRESENT AND WARRANT]3[THE HOLDER HEREOF REPRESENTS
AND WARRANTS]4 THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING
OF SECTION 3(3) OF ERISA, A PLAN WITHIN THE MEANING OF SECTION 4975(e)(1) OF THE
CODE, AN ENTITY WHICH IS DEEMED TO HOLD THE ASSETS OF ANY SUCH PLAN
PURSUANT TO 29 C.F.R. §2510.3-101, WHICH PLAN OR ENTITY IS SUBJECT TO TITLE I OF
ERISA OR SECTION 4975 OF THE CODE (COLLECTIVELY, A "PLAN") OR ANY OTHER
BENEFIT PLAN INVESTOR OTHER THAN AN INSURANCE COMPANY. IF THE HOLDER OF
THE PREFERENCE SHARES REPRESENTED HEREBY (OR INTEREST THEREIN) IS AN

3
Applicable to Regulation S Global Preference Shares.
4
Applicable to Restricted Definitive Preference Shares.

43
 INSURANCE COMPANY, THEN SUCH HOLDER [IS DEEMED TO REPRESENT]5[REPRESENTS]6
THAT (1) IF A SOURCE OF THE FUNDS BEING USED TO EFFECT ITS PURCHASE OF THE
PREFERENCE SHARES REPRESENTED HEREBY (OR INTEREST THEREIN) IS ITS GENERAL
ACCOUNT, (2) ON THE DATE IT PURCHASES THE PREFERENCE SHARES REPRESENTED
HEREBY (OR INTEREST THEREIN), LESS THAN 25% OF THE ASSETS OF ITS "GENERAL
ACCOUNT" (AS DETERMINED BY SUCH INSURANCE COMPANY) CONSTITUTE PLAN
ASSETS, (3) THE ACQUISITION AND HOLDING OF THE PREFERENCE SHARES
REPRESENTED HEREBY (OR INTEREST THEREIN) WILL NOT CONSTITUTE OR OTHERWISE
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION IN VIOLATION OF SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE AND (4) IT IS NOT THE COLLATERAL MANAGER,
THE ISSUER, AN INITIAL PURCHASER OR A SERVICE PROVIDER TO THE ISSUER OR AN
AFFILIATE OF THE FOREGOING AND THE VALUE OF THE INTEREST HELD BY SUCH
GENERAL ACCOUNT WOULD NOT OTHERWISE BE DISREGARDED UNDER 29 C.F.R.
§2510.3-101(f). NO TRANSFER OF THE PREFERENCE SHARES REPRESENTED HEREBY (OR
INTEREST THEREIN) MAY BE MADE (AND NONE OF THE ISSUER, THE PREFERENCE
SHARE PAYING AGENT, THE PREFERENCE SHARE TRANSFER AGENT OR THE SHARE
REGISTRAR WILL RECOGNIZE ANY SUCH TRANSFER) IF THE TRANSFEREE IS A BENEFIT
PLAN INVESTOR (AS DEFINED IN SUCH REGULATION), INCLUDING FOR THIS PURPOSE AN
INSURANCE COMPANY GENERAL ACCOUNT OTHER THAN TO AN INSURANCE COMPANY
GENERAL ACCOUNT WITH RESPECT TO WHICH LESS THAN 25% OF SUCH GENERAL
ACCOUNT ASSETS CONSTITUTE PLAN ASSETS WITHIN THE MEANING OF SECTION 401(c)
OF ERISA.

IN ADDITION, NO TRANSFER OF THE PREFERENCE SHARES REPRESENTED HEREBY (OR

AN INTEREST THEREIN) MAY BE MADE (AND NONE OF THE ISSUER, THE PREFERENCE
SHARE PAYING AGENT, THE PREFERENCE SHARE TRANSFER AGENT OR THE SHARE
REGISTRAR WILL RECOGNIZE ANY SUCH TRANSFER) IF SUCH TRANSFER WOULD BE
MADE TO A TRANSFEREE THAT IS A U.S. RESIDENT AND IS (A) A DEALER DESCRIBED IN
PARAGRAPH (a)(1)(ii) OF RULE 144A WHICH OWNS AND INVESTS ON A DISCRETIONARY
BASIS LESS THAN U.S.$25,000,000 IN SECURITIES OF ISSUERS THAT ARE NOT AFFILIATED
PERSONS OF THE DEALER OR (B) A PLAN REFERRED TO IN PARAGRAPH (a)(1)(i)(D)
OR (a)(1)(i)(E) OF RULE 144A OR A TRUST FUND REFERRED TO IN PARAGRAPH (a)(1)(i)(F)
OF RULE 144A THAT HOLDS THE ASSETS OF SUCH A PLAN, UNLESS INVESTMENT
DECISIONS WITH RESPECT TO THE PLAN ARE MADE SOLELY BY THE FIDUCIARY,
TRUSTEE OR SPONSOR OF SUCH PLAN.

[THE PREFERENCE SHARES REPRESENTED HEREBY OR ANY BENEFICIAL INTEREST

THEREIN MAY NOT BE HELD BY A U.S. PERSON AT ANY TIME.]7 THE PREFERENCE
SHARES REPRESENTED HEREBY OR ANY INTEREST THEREIN MAY BE TRANSFERRED TO
A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN A [REGULATION S
GLOBAL PREFERENCE SHARE]8 [RESTRICTED DEFINITIVE PREFERENCE SHARE OR (IN
CERTAIN LIMITED CIRCUMSTANCES) A REGULATION S DEFINITIVE PREFERENCE
SHARE]9 ONLY UPON RECEIPT BY THE SHARE REGISTRAR OF (A) A TRANSFER
CERTIFICATE FROM THE TRANSFEROR AND TRANSFEREE SUBSTANTIALLY IN THE FORM
SPECIFIED IN THE PREFERENCE SHARE PAYING AGENCY AGREEMENT AND (B) A
WRITTEN ORDER GIVEN IN ACCORDANCE WITH THE APPLICABLE PROCEDURES

5
Applicable to Regulation S Global Preference Shares.
6
Applicable to Restricted Definitive Preference Shares.
7
Applicable to Regulation S Global Preference Shares.
8
Applicable to Restricted Definitive Preference Shares.
9
Applicable to Regulation S Global Preference Shares.

44
UTILIZED OR IMPOSED FROM TIME TO TIME BY THE COMMON DEPOSITORY,
EUROCLEAR AND/OR CLEARSTREAM, AS APPLICABLE.

THE PREFERENCE SHARES REPRESENTED HEREBY OR ANY INTEREST THEREIN MAY BE

TRANSFERRED IF, AFTER GIVING EFFECT TO SUCH TRANSFER, THE TRANSFEREE (OR, IF
THE TRANSFEROR RETAINS ANY PREFERENCE SHARES, THE TRANSFEROR) WOULD OWN
AT LEAST 100,000 PREFERENCE SHARES.

THE PURCHASER OF ANY PREFERENCE SHARES REPRESENTED HEREBY WILL BE

DEEMED TO UNDERSTAND AND AGREE THAT IF ANY PURPORTED TRANSFER OF SUCH
PREFERENCE SHARES TO A PURCHASER DOES NOT COMPLY WITH THE REQUIREMENTS
SET FORTH HEREIN OR THE PREFERENCE SHARE PAYING AGENCY AGREEMENT, THEN
THE PURPORTED TRANSFEROR OF SUCH PREFERENCE SHARES SHALL BE REQUIRED TO
CAUSE THE PURPORTED TRANSFEREE TO SURRENDER SUCH PREFERENCE SHARES OR
TO CAUSE THE PURPORTED TRANSFEREE TO DISPOSE OF SUCH PREFERENCE SHARES
PROMPTLY IN ONE OR MORE OPEN MARKET SALES TO ONE OR MORE PERSONS EACH OF
WHOM SATISFIES THE REQUIREMENTS OF THE REPRESENTATIONS, WARRANTIES AND
COVENANTS SET FORTH IN THIS LEGEND, AND SUCH PURPORTED TRANSFEROR SHALL
TAKE, AND SHALL CAUSE SUCH TRANSFEREE TO TAKE, ALL FURTHER ACTION
NECESSARY OR DESIRABLE, IN THE JUDGMENT OF THE ISSUER, TO ENSURE THAT SUCH
PREFERENCE SHARES ARE HELD BY PERSONS IN COMPLIANCE THEREWITH. ANY
TRANSFER IN VIOLATION OF THE FOREGOING PROVISIONS HEREOF OR OF THE
PREFERENCE SHARE PAYING AGENCY AGREEMENT WILL BE OF NO FORCE AND EFFECT,
WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE
TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE
ISSUER, THE PREFERENCE SHARE PAYING AGENT, THE PREFERENCE SHARE TRANSFER
AGENT OR ANY INTERMEDIARY.

[IF, NOTWITHSTANDING THE RESTRICTIONS SET FORTH HEREIN OR IN THE PREFERENCE

SHARE PAYING AGENCY AGREEMENT, THE ISSUER DETERMINES THAT ANY HOLDER OF
PREFERENCE SHARES (I) IS A U.S. PERSON AND (II) IS NOT A QUALIFIED PURCHASER, THE
ISSUER SHALL REQUIRE, BY NOTICE TO SUCH HOLDER, THAT SUCH HOLDER SELL ALL
OF ITS RIGHT, TITLE AND INTEREST IN SUCH PREFERENCE SHARES TO A PERSON THAT IS
(A) BOTH (1) A QUALIFIED INSTITUTIONAL BUYER OR AN ACCREDITED INVESTOR AND
(2) A QUALIFIED PURCHASER OR (B) A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION
IN RELIANCE ON REGULATION S, WITH SUCH SALE TO BE EFFECTED WITHIN 30 DAYS
AFTER NOTICE OF SUCH SALE REQUIREMENT IS GIVEN. IF SUCH HOLDER FAILS TO
EFFECT THE TRANSFER REQUIRED WITHIN SUCH 30-DAY PERIOD, (X) UPON WRITTEN
DIRECTION FROM THE ISSUER, THE PREFERENCE SHARE PAYING AGENT SHALL, AND IS
HEREBY IRREVOCABLY AUTHORIZED BY SUCH HOLDER TO, CAUSE SUCH PREFERENCE
SHARES TO BE TRANSFERRED IN A COMMERCIALLY REASONABLE SALE ARRANGED BY
THE ISSUER (CONDUCTED BY THE PREFERENCE SHARE PAYING AGENT IN ACCORDANCE
WITH SECTIONS 9-610(b) OF THE UCC AS APPLIED TO SECURITIES THAT ARE SOLD ON A
RECOGNIZED MARKET OR THAT MAY DECLINE SPEEDILY IN VALUE) TO A PERSON THAT
CERTIFIES TO THE ISSUER AND THE PREFERENCE SHARE PAYING AGENT AND THE
ISSUER, IN CONNECTION WITH SUCH TRANSFER, THAT SUCH PERSON IS BOTH (1) A
QUALIFIED INSTITUTIONAL BUYER OR AN ACCREDITED INVESTOR AND (2) A QUALIFIED
PURCHASER, AND (Y) PENDING SUCH TRANSFER, NO FURTHER PAYMENTS WILL BE
MADE IN RESPECT OF SUCH PREFERENCE SHARES AND SUCH PREFERENCE SHARES
SHALL NOT BE DEEMED TO BE OUTSTANDING FOR THE PURPOSE OF ANY VOTE OR
CONSENT OF THE PREFERENCE SHAREHOLDERS AND SHALL NOT BE TAKEN INTO

45
 ACCOUNT FOR THE PURPOSES OF CALCULATING ANY QUORUM OR MAJORITY
REQUIREMENTS RELATING THERETO.]10

The Class C Notes will bear a legend to the following effect unless the Issuer determines otherwise in
compliance with the Indenture and applicable law:

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION, AND MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO A NON-U.S. PERSON
IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT ("REGULATION S"), AND (B) IN COMPLIANCE WITH THE
CERTIFICATION AND OTHER REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED
TO HEREIN.

THE ISSUER HAS NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT"). NO
TRANSFER OF THIS NOTE (OR ANY INTEREST HEREIN) MAY BE MADE (AND NONE OF THE
ISSUER, THE TRUSTEE OR THE NOTE REGISTRAR WILL RECOGNIZE ANY SUCH
TRANSFER) IF (A) SUCH TRANSFER WOULD BE MADE TO A TRANSFEREE WHO IS A U.S.
RESIDENT, (B) SUCH TRANSFER WOULD HAVE THE EFFECT OF REQUIRING THE ISSUER
OR THE TRUST ESTATE TO REGISTER AS AN INVESTMENT COMPANY UNDER THE
INVESTMENT COMPANY ACT, (C) SUCH TRANSFER WOULD BE MADE TO A TRANSFEREE
THAT IS A FLOW-THROUGH INVESTMENT VEHICLE OTHER THAN A QUALIFYING
INVESTMENT VEHICLE (EACH AS DEFINED IN THE INDENTURE) OR (D) THE TRANSFEREE
IS A BENEFIT PLAN INVESTOR (AS DEFINED IN THE U.S. DEPARTMENT OF LABOR PLAN
ASSET REGULATION), INCLUDING FOR THIS PURPOSE AN INSURANCE COMPANY
GENERAL ACCOUNT OTHER THAN AN INSURANCE COMPANY GENERAL ACCOUNT WITH
RESPECT TO WHICH LESS THAN 25% OF ITS ASSETS CONSTITUTE PLAN ASSETS WITHIN
THE MEANING OF SECTION 401(c) OF ERISA.

IF THE HOLDER OF THIS NOTE IS AN INSURANCE COMPANY GENERAL ACCOUNT, THEN

SUCH HOLDER IS DEEMED TO REPRESENT THAT (1) ON THE DATE IT PURCHASES THIS
NOTE, LESS THAN 25% OF THE ASSETS OF ITS "GENERAL ACCOUNT" (AS DETERMINED BY
SUCH INSURANCE COMPANY) CONSTITUTE PLAN ASSETS, (2) THE ACQUISITION AND
HOLDING OF THIS NOTE WILL NOT CONSTITUTE OR OTHERWISE RESULT IN A NON-
EXEMPT PROHIBITED TRANSACTION IN VIOLATION OF SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE AND (3) IT IS NOT THE COLLATERAL MANAGER, THE ISSUER,
AN INITIAL PURCHASER OR A SERVICE PROVIDER TO THE ISSUER OR AN AFFILIATE OF
THE FOREGOING AND THE VALUE OF THE INTEREST HELD BY SUCH GENERAL ACCOUNT
WOULD NOT OTHERWISE BE DISREGARDED UNDER 29 C.F.R. §2510.3-101(f). NO
TRANSFER OF THE NOTES REPRESENTED HEREBY (OR INTEREST THEREIN) MAY BE
MADE (AND NONE OF THE ISSUER, THE TRUSTEE OR THE NOTE REGISTRAR WILL
RECOGNIZE ANY SUCH TRANSFER) IF THE TRANSFEREE IS A BENEFIT PLAN INVESTOR
(AS DEFINED IN THE U.S. DEPARTMENT OF LABOR PLAN ASSET REGULATION),
INCLUDING FOR THIS PURPOSE AN INSURANCE COMPANY GENERAL ACCOUNT OTHER
THAN AN INSURANCE COMPANY GENERAL ACCOUNT WITH RESPECT TO WHICH LESS
THAN 25% OF ITS ASSETS CONSTITUTE PLAN ASSETS WITHIN THE MEANING OF SECTION
401(c) OF ERISA.

10
Applicable to Restricted Definitive Preference Shares.

46
 THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN MAY NOT BE HELD BY A U.S. PERSON
AT ANY TIME. [THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN MAY BE
TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN A
DEFINITIVE NOTE ONLY UPON RECEIPT BY THE NOTE REGISTRAR OF (A) A TRANSFER
CERTIFICATE FROM THE TRANSFEROR AND TRANSFEREE SUBSTANTIALLY IN THE FORM
SPECIFIED IN THE INDENTURE AND (B) A WRITTEN ORDER GIVEN IN ACCORDANCE WITH
THE APPLICABLE PROCEDURES UTILIZED OR IMPOSED FROM TIME TO TIME BY THE
COMMON DEPOSITORY, EUROCLEAR AND/OR CLEARSTREAM, AS APPLICABLE.]11 [THIS
NOTE MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN
INTEREST IN A DEFINITIVE NOTE ONLY UPON RECEIPT BY THE NOTE REGISTRAR OF A
TRANSFEROR CERTIFICATE SUBSTANTIALLY IN THE FORM SPECIFIED IN THE
INDENTURE.]12

EXCEPT AS SPECIFICALLY SET FORTH IN THE INDENTURE, THIS NOTE (OR AN INTEREST
HEREIN) MAY NOT BE TRANSFERRED UNLESS, AFTER GIVING EFFECT TO THE TRANSFER,
THE TRANSFEREE IS HOLDING A PRINCIPAL AMOUNT WHICH IS EQUAL TO U.S.$20,000
AND INTEGRAL MULTIPLES OF U.S.$1.00 IN EXCESS THEREOF.

THE PURCHASER OF THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN WILL BE

DEEMED TO UNDERSTAND AND AGREE THAT IF ANY PURPORTED TRANSFER OF THIS
NOTE OR ANY BENEFICIAL INTEREST HEREIN TO A PURCHASER DOES NOT COMPLY
WITH THE REQUIREMENTS SET FORTH IN THIS NOTE OR THE INDENTURE, THEN THE
PURPORTED TRANSFEROR OF THIS NOTE OR BENEFICIAL INTEREST HEREIN SHALL BE
REQUIRED TO CAUSE THE PURPORTED TRANSFEREE TO SURRENDER THE TRANSFERRED
NOTE OR ANY BENEFICIAL INTEREST THEREIN OR TO CAUSE THE PURPORTED
TRANSFEREE TO DISPOSE OF SUCH NOTE OR BENEFICIAL INTEREST PROMPTLY IN ONE
OR MORE OPEN MARKET SALES TO ONE OR MORE PERSONS EACH OF WHOM SATISFIES
THE REQUIREMENTS OF THE REPRESENTATIONS, WARRANTIES AND COVENANTS SET
FORTH IN THIS LEGEND, AND SUCH PURPORTED TRANSFEROR SHALL TAKE, AND SHALL
CAUSE SUCH TRANSFEREE TO TAKE, ALL FURTHER ACTION NECESSARY OR DESIRABLE,
IN THE JUDGMENT OF THE ISSUER, TO ENSURE THAT SUCH NOTE OR ANY BENEFICIAL
INTEREST THEREIN IS HELD BY PERSONS IN COMPLIANCE THEREWITH. ANY TRANSFER
IN VIOLATION OF THE FOREGOING PROVISIONS OF THIS NOTE OR THE INDENTURE WILL
BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO
TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS
TO THE CONTRARY TO THE ISSUER, THE TRUSTEE OR ANY INTERMEDIARY.

IF, NOTWITHSTANDING THE RESTRICTIONS SET FORTH IN THIS NOTE OR THE

INDENTURE, THE ISSUER DETERMINES THAT THE OWNER OF THIS NOTE IS A BENEFIT
PLAN INVESTOR THAT IS NOT A QUALIFYING INSURANCE COMPANY (AS DEFINED IN
THE INDENTURE), THE ISSUER MAY REQUIRE, BY NOTICE TO SUCH HOLDER, THAT SUCH
HOLDER SELL ALL OF ITS RIGHT, TITLE AND INTEREST TO SUCH SECURITY TO A PERSON
THAT IS EITHER (1) NOT A BENEFIT PLAN INVESTOR OR (2) A QUALIFYING INSURANCE
COMPANY, WITH SUCH SALE TO BE EFFECTED WITHIN 30 DAYS AFTER NOTICE OF SUCH
SALE REQUIREMENT IS GIVEN. IF SUCH OWNER FAILS TO EFFECT THE TRANSFER
REQUIRED WITHIN SUCH 30-DAY PERIOD, (I) UPON WRITTEN DIRECTION FROM THE
ISSUER, THE TRUSTEE SHALL, AND IS HEREBY IRREVOCABLY AUTHORIZED BY SUCH
OWNER TO, CAUSE ITS INTEREST IN SUCH NOTE TO BE TRANSFERRED IN A
COMMERCIALLY REASONABLE SALE (CONDUCTED BY AN INVESTMENT BANK
SELECTED BY THE TRUSTEE IN ACCORDANCE WITH SECTION 9-610(b) OF THE UNIFORM

11
Applicable to Regulation S Definitive Class C Notes.
12
Applicable to Regulation S Global Class C Notes.

47
 COMMERCIAL CODE AS IN EFFECT IN THE STATE OF NEW YORK AS APPLIED TO
SECURITIES THAT ARE SOLD ON A RECOGNIZED MARKET OR THAT MAY DECLINE
SPEEDILY IN VALUE) TO A PERSON THAT CERTIFIES TO THE TRUSTEE, IN CONNECTION
WITH SUCH TRANSFER, THAT SUCH PERSON IS EITHER (1) NOT A BENEFIT PLAN
INVESTOR OR (2) A QUALIFYING INSURANCE COMPANY AND (II) PENDING SUCH
TRANSFER, NO FURTHER PAYMENTS WILL BE MADE IN RESPECT OF SUCH NOTE, AND
THIS NOTE SHALL NOT BE DEEMED TO BE OUTSTANDING FOR THE PURPOSE OF ANY
VOTE OR CONSENT OF HOLDERS.

THE PURCHASER OF ANY NOTE REPRESENTED HEREBY WILL BE DEEMED TO

UNDERSTAND AND AGREE THAT SUCH PURCHASER MAY NOT ENGAGE IN HEDGING
TRANSACTIONS WITH REGARD TO THIS NOTE UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.

THIS NOTE MAY NOT BE HELD BY OR TRANSFERRED TO A PERSON THAT IS NOT

ELIGIBLE TO OWN THE [CLASS C-1 COLLATERAL OR THAT HAS NOT REVIEWED THE
CLASS 1 TREASURY NOTE AND CONFIRMED THAT IT IS ELIGIBLE TO OWN THE CLASS C-1
COLLATERAL]13 [CLASS C-2 COLLATERAL OR THAT HAS NOT REVIEWED THE CLASS 2
TREASURY NOTE AND CONFIRMED THAT IT IS ELIGIBLE TO OWN THE CLASS C-2
COLLATERAL].14

[THIS NOTE IS A GLOBAL NOTE, WITHOUT COUPONS, TRANSFERABLE AND

EXCHANGEABLE ONLY AS DESCRIBED IN THE INDENTURE. THE RIGHTS ATTACHING TO
THIS GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
TRANSFER OR EXCHANGE ARE AS SPECIFIED IN THE INDENTURE.]15

The Principal Protected Securities will bear a legend to the following effect unless the Issuer determines
otherwise in compliance with the Indenture and applicable law:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER JURISDICTION, AND MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (A) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT
("REGULATION S"), AND (B) IN COMPLIANCE WITH THE CERTIFICATION AND OTHER
REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN.

THE ISSUER HAS NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT"). NO
TRANSFER OF THE SECURITIES REPRESENTED HEREBY (OR ANY INTEREST HEREIN) MAY
BE MADE (AND NONE OF THE ISSUER, THE TRUSTEE OR THE NOTE REGISTRAR WILL
RECOGNIZE ANY SUCH TRANSFER) IF (A) SUCH TRANSFER WOULD BE MADE TO A
TRANSFEREE WHO IS A U.S. RESIDENT, (B) SUCH TRANSFER WOULD HAVE THE EFFECT
OF REQUIRING THE ISSUER OR THE TRUST ESTATE TO REGISTER AS AN INVESTMENT
COMPANY UNDER THE INVESTMENT COMPANY ACT, (C) SUCH TRANSFER WOULD BE
MADE TO A TRANSFEREE THAT IS A FLOW-THROUGH INVESTMENT VEHICLE OTHER
THAN A QUALIFYING INVESTMENT VEHICLE (EACH AS DEFINED IN THE INDENTURE) OR
(D) THE TRANSFEREE IS A BENEFIT PLAN INVESTOR (AS DEFINED IN THE U.S.

13
Applicable to Regulation S Global Class C-1 Notes.
14
Applicable to Regulation S Global Class C-2 Notes.
15
Applicable to Regulation S Global Class C Notes.

48
 DEPARTMENT OF LABOR PLAN ASSET REGULATION), INCLUDING FOR THIS PURPOSE AN
INSURANCE COMPANY GENERAL ACCOUNT OTHER THAN AN INSURANCE COMPANY
GENERAL ACCOUNT WITH RESPECT TO WHICH LESS THAN 25% OF ITS ASSETS
CONSTITUTE PLAN ASSETS WITHIN THE MEANING OF SECTION 401(c) OF ERISA.

IF THE HOLDER OF THE SECURITIES REPRESENTED HEREBY IS AN INSURANCE

COMPANY, THEN SUCH HOLDER IS DEEMED TO REPRESENT THAT (1) ON THE DATE IT
PURCHASES THE SECURITIES REPRESENTED HEREBY, LESS THAN 25% OF THE ASSETS OF
ITS "GENERAL ACCOUNT" (AS DETERMINED BY SUCH INSURANCE COMPANY)
CONSTITUTE PLAN ASSETS, (2) THE ACQUISITION AND HOLDING OF THE SECURITIES
REPRESENTED HEREBY WILL NOT CONSTITUTE OR OTHERWISE RESULT IN A
NONEXEMPT PROHIBITED TRANSACTION IN VIOLATION OF SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE AND (3) IT IS NOT THE COLLATERAL MANAGER, THE ISSUER,
AN INITIAL PURCHASER OR A SERVICE PROVIDER TO THE ISSUER OR AN AFFILIATE OF
THE FOREGOING AND THE VALUE OF THE INTEREST HELD BY SUCH GENERAL ACCOUNT
WOULD NOT OTHERWISE BE DISREGARDED UNDER 29 C.F.R. §2510.3-101(f). NO
TRANSFER OF THE SECURITIES REPRESENTED HEREBY (OR INTEREST THEREIN) MAY BE
MADE (AND NONE OF THE ISSUER, THE TRUSTEE OR THE NOTE REGISTRAR WILL
RECOGNIZE ANY SUCH TRANSFER) IF THE TRANSFEREE IS A BENEFIT PLAN INVESTOR
(AS DEFINED IN THE U.S. DEPARTMENT OF LABOR PLAN ASSET REGULATION),
INCLUDING FOR THIS PURPOSE AN INSURANCE COMPANY GENERAL ACCOUNT OTHER
THAN AN INSURANCE COMPANY GENERAL ACCOUNT WITH RESPECT TO WHICH LESS
THAN 25% OF ITS ASSETS CONSTITUTE PLAN ASSETS WITHIN THE MEANING OF SECTION
401(c) OF ERISA.

THE SECURITIES REPRESENTED HEREBY OR ANY BENEFICIAL INTEREST HEREIN MAY

NOT BE HELD BY A U.S. PERSON AT ANY TIME. [THE SECURITIES REPRESENTED HEREBY
AND ANY BENEFICIAL INTEREST HEREIN MAY BE TRANSFERRED TO A PERSON WHO
TAKES DELIVERY IN THE FORM OF AN INTEREST IN A DEFINITIVE PRINCIPAL
PROTECTED SECURITY ONLY UPON RECEIPT BY THE NOTE REGISTRAR OF (A) A
TRANSFER CERTIFICATE FROM THE TRANSFEROR AND TRANSFEREE SUBSTANTIALLY IN
THE FORM SPECIFIED IN THE INDENTURE AND (B) A WRITTEN ORDER GIVEN IN
ACCORDANCE WITH THE APPLICABLE PROCEDURES UTILIZED OR IMPOSED FROM TIME
TO TIME BY THE COMMON DEPOSITORY, EUROCLEAR AND/OR CLEARSTREAM, AS
APPLICABLE.]16 [THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED TO A
PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN A DEFINITIVE
PRINCIPAL PROTECTED SECURITY ONLY UPON RECEIPT BY THE NOTE REGISTRAR OF A
TRANSFEROR CERTIFICATE SUBSTANTIALLY IN THE FORM SPECIFIED IN THE
INDENTURE.]17

EXCEPT AS SPECIFICALLY SET FORTH IN THE INDENTURE, THE SECURITIES

REPRESENTED HEREBY (OR AN INTEREST HEREIN) MAY NOT BE TRANSFERRED UNLESS,
AFTER GIVING EFFECT TO THE TRANSFER, THE TRANSFEREE IS HOLDING A PRINCIPAL
AMOUNT WHICH IS EQUAL TO U.S.$50,000 OR INTEGRAL MULTIPLES OF U.S.$1.00 IN
EXCESS THEREOF.

THE PURCHASER OF THE SECURITIES REPRESENTED HEREBY OR ANY BENEFICIAL

INTEREST HEREIN WILL BE DEEMED TO UNDERSTAND AND AGREE THAT IF ANY
PURPORTED TRANSFER OF THE SECURITIES REPRESENTED HEREBY OR ANY BENEFICIAL
INTEREST HEREIN TO A PURCHASER DOES NOT COMPLY WITH THE REQUIREMENTS SET

16
Applicable to Regulation S Global Principal Protected Securities.
17
Applicable to Regulation S Definitive Principal Protected Securities.

49
 FORTH HEREIN OR THE INDENTURE, THEN THE PURPORTED TRANSFEROR OF THE
SECURITIES REPRESENTED HEREBY OR BENEFICIAL INTEREST HEREIN SHALL BE
REQUIRED TO CAUSE THE PURPORTED TRANSFEREE TO SURRENDER THE TRANSFERRED
SECURITIES REPRESENTED HEREBY OR ANY BENEFICIAL INTEREST HEREIN OR TO
CAUSE THE PURPORTED TRANSFEREE TO DISPOSE OF THE SECURITIES REPRESENTED
HEREBY OR BENEFICIAL INTEREST PROMPTLY IN ONE OR MORE OPEN MARKET SALES
TO ONE OR MORE PERSONS EACH OF WHOM SATISFIES THE REQUIREMENTS OF THE
REPRESENTATIONS, WARRANTIES AND COVENANTS SET FORTH IN THIS LEGEND, AND
SUCH PURPORTED TRANSFEROR SHALL TAKE, AND SHALL CAUSE SUCH TRANSFEREE
TO TAKE, ALL FURTHER ACTION NECESSARY OR DESIRABLE, IN THE JUDGMENT OF THE
ISSUER, TO ENSURE THAT THE SECURITIES REPRESENTED HEREBY OR ANY BENEFICIAL
INTEREST HEREIN IS HELD BY PERSONS IN COMPLIANCE THEREWITH. ANY TRANSFER IN
VIOLATION OF THE FOREGOING PROVISIONS OF THE SECURITIES REPRESENTED HEREBY
OR THE INDENTURE WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND
WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE,
NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE
TRUSTEE OR ANY INTERMEDIARY.

IF, NOTWITHSTANDING THE RESTRICTIONS SET FORTH HEREIN OR THE INDENTURE, THE
ISSUER DETERMINES THAT THE OWNER OF THE SECURITIES REPRESENTED HEREBY IS A
BENEFIT PLAN INVESTOR THAT IS NOT A QUALIFYING INSURANCE COMPANY (AS
DEFINED IN THE INDENTURE), THE ISSUER MAY REQUIRE, BY NOTICE TO SUCH HOLDER,
THAT SUCH HOLDER SELL ALL OF ITS RIGHT, TITLE AND INTEREST TO SUCH SECURITY
TO A PERSON THAT IS EITHER (1) NOT A BENEFIT PLAN INVESTOR OR (2) A QUALIFYING
INSURANCE COMPANY, WITH SUCH SALE TO BE EFFECTED WITHIN 30 DAYS AFTER
NOTICE OF SUCH SALE REQUIREMENT IS GIVEN. IF SUCH OWNER FAILS TO EFFECT THE
TRANSFER REQUIRED WITHIN SUCH 30-DAY PERIOD, (I) UPON WRITTEN DIRECTION
FROM THE ISSUER, THE TRUSTEE SHALL, AND IS HEREBY IRREVOCABLY AUTHORIZED
BY SUCH OWNER TO, CAUSE ITS INTEREST IN SUCH SECURITY TO BE TRANSFERRED IN A
COMMERCIALLY REASONABLE SALE (CONDUCTED BY AN INVESTMENT BANK
SELECTED BY THE TRUSTEE IN ACCORDANCE WITH SECTION 9-610(b) OF THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN THE STATE OF NEW YORK AS APPLIED TO
SECURITIES THAT ARE SOLD ON A RECOGNIZED MARKET OR THAT MAY DECLINE
SPEEDILY IN VALUE) TO A PERSON THAT CERTIFIES TO THE TRUSTEE, IN CONNECTION
WITH SUCH TRANSFER, THAT SUCH PERSON IS EITHER (1) NOT A BENEFIT PLAN
INVESTOR OR (2) A QUALIFYING INSURANCE COMPANY AND (II) PENDING SUCH
TRANSFER, NO FURTHER PAYMENTS WILL BE MADE IN RESPECT OF THE SECURITIES
REPRESENTED HEREBY, AND THE SECURITIES REPRESENTED HEREBY SHALL NOT BE
DEEMED TO BE OUTSTANDING FOR THE PURPOSE OF ANY VOTE OR CONSENT OF
HOLDERS.

THE PURCHASER OF ANY SECURITIES REPRESENTED HEREBY WILL BE DEEMED TO

UNDERSTAND AND AGREE THAT SUCH PURCHASER MAY NOT ENGAGE IN HEDGING
TRANSACTIONS WITH REGARD TO THE SECURITIES REPRESENTED HEREBY UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT.

THE SECURITIES REPRESENTED HEREBY MAY NOT BE HELD BY OR TRANSFERRED TO A

PERSON THAT IS NOT ELIGIBLE TO OWN THE [CLASS C-1 COLLATERAL OR THAT HAS
NOT REVIEWED THE CLASS 1 TREASURY NOTE AND CONFIRMED THAT IT IS ELIGIBLE TO
OWN THE CLASS C-1 COLLATERAL]18 [CLASS C-2 COLLATERAL OR THAT HAS NOT

18
Applicable to Regulation S Global Class 1 Principal Protected Securities.

50
 REVIEWED THE CLASS 2 TREASURY NOTE AND CONFIRMED THAT IT IS ELIGIBLE TO
OWN THE CLASS C-2 COLLATERAL]19.

[THIS PRINCIPAL PROTECTED SECURITY IS A GLOBAL PRINCIPAL PROTECTED SECURITY,

WITHOUT COUPONS, TRANSFERABLE AND EXCHANGEABLE ONLY AS DESCRIBED IN THE
INDENTURE. THE RIGHTS ATTACHING TO THIS GLOBAL PRINCIPAL PROTECTED
SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS TRANSFER OR
EXCHANGE ARE AS SPECIFIED IN THE INDENTURE.]20

(8) The purchaser will not, at any time, offer to buy or offer to sell the Offered Securities by any form of
general solicitation or advertising, including, but not limited to, any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or broadcast over television or
radio or seminar or meeting whose attendees have been invited by general solicitations or advertisings.

(9) The purchaser is not a member of the public in the Cayman Islands.

(10) USA PATRIOT Act. The Issuer may impose additional transfer restrictions in order for the Issuer or the
Collateral Manager to comply with the USA PATRIOT Act and other similar laws, to the extent that they
are applicable to the Issuer or the Collateral Manager, and each holder of an Offered Security will be
deemed to have agreed to comply with such transfer restrictions. The Issuer shall notify the Collateral
Manager, the Trustee, the Preference Share Paying Agent, the Preference Share Transfer Agent and the
Share Registrar of the imposition of any such transfer restrictions.

Each purchaser of the Preference Shares represented by an interest in a Regulation S Global Preference Share or
the Principal Protected Securities will be deemed to have made the representations set forth in clauses (1), (3), (4),
(6), (7), (8), (9), and (10) above and to have further represented and agreed as follows:

(1) The purchaser is aware that the sale of Offered Securities to it is being made in reliance on the exemption
from registration provided by Regulation S under the Securities Act and understands that the Offered
Securities offered in reliance on Regulation S under the Securities Act will bear a legend similar to the
legend set forth above and, in the case of the Preference Shares, be represented by one or more Regulation
S Global Preference Shares.

(2) The purchaser is not a U.S. Person and is purchasing in an offshore transaction not involving any directed
selling efforts in the United States. The Offered Securities represented by a Regulation S Global
Principal Protected Security or an interest in a Regulation S Global Preference Share may not at any time
be held by or on behalf of U.S. Persons as defined in Regulation S under the Securities Act and may not
be transferred to a U.S. Person until, in the case of the Preference Shares, after the end of the Distribution
Compliance Period. The purchaser and each beneficial owner of the Offered Securities that it holds is
not, and will not be, a U.S. Person as defined in Regulation S under the Securities Act or a United States
resident for purposes of the Investment Company Act. Before any interest in an Offered Security
represented by a Principal Protected Security or an interest in a Regulation S Global Preference Share
may be offered, resold, pledged or otherwise, transferred to a person who takes delivery in the form of
Restricted Preference Shares or a Principal Protected Security, the transferee will be required to provide
the Preference Share Paying Agent with a written certification as to compliance with the transfer
restrictions.

In addition to the above, each purchaser of a Principal Protected Security will be deemed to have further
represented as follows:

19
Applicable to Regulation S Global Class 2 Principal Protected Securities.
20
Applicable Regulation S Global Principal Protected Securities.

51
(1) The purchaser has reviewed the applicable Treasury Note and has determined that it is eligible to own the
Class C Collateral. The purchaser will not transfer the Principal Protected Securities except to a person
that has reviewed the applicable Treasury Note and has determined that it is eligible to own the Class C
Collateral.

(2) The purchaser will not transfer the Principal Protected Securities to a U.S. Person as defined in
Regulation S under the Securities Act.

52
 LISTING AND GENERAL INFORMATION

1. Application has been made to list the Preference Shares and the Principal Protected Securities on the Irish
Stock Exchange.

2. For a period of 14 days from the date of this document, copies of the Issuer Charter, the Certificate of
Incorporation and By-laws of the Co-Issuer, the Management Agreement and the Preference Share Paying
Agency Agreement will be available for inspection at the registered offices of the Issuer and the offices of
Ernst &Young, Ernst & Young Building, Harcourt Centre, Harcourt Street, Dublin 2, Ireland (the "Irish
Paying Agent").

3. Copies of the Issuer Charter, the Certificate of Incorporation and By-laws of the Co-Issuer, the
Resolutions, the Preference Share Paying Agency Agreement and the Management Agreement will also
be available for inspection during the term of the Preference Shares at the office of the Preference Share
Paying Agent.

4. The Issuer represents that there has been no material adverse change in its financial position since its date
of creation.

5. The Issuer is not involved in any litigation or arbitration proceedings relating to claims or amounts which
are material in the context of the issue of the Offered Securities, nor, so far as the Issuer is aware, is any
such litigation or arbitration involving it pending or threatened.

6. The issuance of the Preference Shares will be authorized by the Board of Directors of the Issuer by
resolutions passed on or about January 14, 2004.

7. In connection with the listing of the Preference Shares and the Principal Protected Securities on the Daily
List of the Irish Stock Exchange, these Listing Particulars will be filed with the Registrar of Companies of
Ireland pursuant to Regulation 13 of the European Communities (Stock Exchange) Regulations, 1984
Ireland.

7. The Preference Shares sold in offshore transactions in reliance on Regulation S under the Securities Act
and represented by the Regulation S Global Preference Shares have been accepted for clearance through
Clearstream. The table below lists the common codes, CUSIP Numbers and the International Securities
Identification Numbers (ISIN) for the Offered Securities.

Regulation S Regulation S
Global Class 1 Global Class 2
Principal Principal
Protected Protected
Securities Securities
CUSIP CUSIP
G90450 AA 8 G90450 AB 6
Regulation S Regulation S
Global Class C-1 Global Class C-2
Note CUSIP Note CUSIP
G90450 AC 4 G90450 AD 2
Regulation S
Global Restricted
Preference Preference
Shares Shares
CUSIP CUSIP
G90450 20 9 89608N 20 7

53
 INDEX OF DEFINED TERMS

Following is an index of defined terms used in this Confidential Offering Circular and the page number where
each definition appears.

Accredited Investors......................................................................................................................................... i, 5, 38
Benefit Plan Investor ................................................................................................................................................12
C Note Components .............................................................................................................................................2, 16
C-1 Note Component............................................................................................................................................1, 16
C-2 Note Component............................................................................................................................................2, 16
CFC ..........................................................................................................................................................................29
Class 1 Preference Share Component.........................................................................................................................1
Class 1 Principal Protected Securities ........................................................................................................................ i
Class 1 Treasury Note ..............................................................................................................................................14
Class 2 Preference Share Component...................................................................................................................2, 16
Class 2 Principal Protected Securities .................................................................................................................... i, 2
Class 2 Treasury Note ..............................................................................................................................................14
Class C Collateral .....................................................................................................................................................14
Class C Notes .......................................................................................................................................................... i, 2
Class C Stated Maturity........................................................................................................................................3, 13
Class C-1 Collateral Account ...................................................................................................................................14
Class C-1 Notes....................................................................................................................................................... i, 2
Class C-2 Collateral Account ...................................................................................................................................14
Class C-2 Notes....................................................................................................................................................... i, 2
Class C-2 Preference Share Component.....................................................................................................................2
Clearstream............................................................................................................................................................. i, 6
Closing Date ........................................................................................................................................................... i, 2
Code....................................................................................................................................................................12, 27
Co-Issuer .................................................................................................................................................................... i
Co-Issuers ................................................................................................................................................................... i
Common Depository .............................................................................................................................................. i, 6
Co-Placement Agent............................................................................................................................................. i, 38
ERISA ......................................................................................................................................................................12
ERISA Plans.............................................................................................................................................................36
Euroclear ................................................................................................................................................................ i, 6
Excess Cash Flow.....................................................................................................................................................24
excess distribution ....................................................................................................................................................29
Fitch......................................................................................................................................................................6, 21
FPHC ........................................................................................................................................................................30
FPHC Income ...........................................................................................................................................................30
FSMA .......................................................................................................................................................................40
Indenture................................................................................................................................................................. i, 2
Initial Purchaser.................................................................................................................................................... i, 38
Initial Purchasers .................................................................................................................................................. i, 38
Investment Company Act ..................................................................................................................................... i, 38
Irish Paying Agent....................................................................................................................................................53
Issuer .......................................................................................................................................................................... i
Issuer Charter .......................................................................................................................................................... i, 2
Issuer Shares...............................................................................................................................................................1
Moody's ..........................................................................................................................................................6, 15, 21
non-U.S. holder ........................................................................................................................................................27
Note Offering Circular ............................................................................................................................................... i

54
Offered Securities................................................................................................................................................... i, 2
Partial Redemption ...............................................................................................................................................5, 24
Partial Redemption Date.......................................................................................................................................5, 24
Partial Redemption Percentage.............................................................................................................................5, 24
PFIC..........................................................................................................................................................................28
Plan Asset Regulation...............................................................................................................................................12
Preference Share Component ...................................................................................................................................16
Preference Share Components..............................................................................................................................2, 16
Preference Share Distribution Account ....................................................................................................................25
Preference Share Documents ................................................................................................................................... i, 2
Preference Share Paying Agency Agreement........................................................................................................... i, 2
Preference Share Paying Agent ..................................................................................................................................7
Preference Share Paying Agent................................................................................................................................ i, 2
Preference Share Redemption Price .........................................................................................................................24
Preference Share Transfer Agent ........................................................................................................................... i, 26
Preference Shares ................................................................................................................................................... i, 2
Principal Protected Securities..................................................................................................................................... i
Protected Securities ....................................................................................................................................................2
PS Minimum Amount Holder ..............................................................................................................................5, 24
PS Partial Redemption Minimum Amount...........................................................................................................5, 24
Purchase Agreement.................................................................................................................................................38
QEF ..........................................................................................................................................................................28
Qualified Institutional Buyers .......................................................................................................................... i, 5, 38
Qualified Purchasers......................................................................................................................................... i, 5, 38
Rating Agencies ...................................................................................................................................................6, 21
Record Date ................................................................................................................................................................7
Regulation S Global Class 1 Principal Protected Securities.....................................................................................19
Regulation S Global Class 2 Principal Protected Securities.....................................................................................19
Regulation S Global Class C Notes.................................................................................................................. i, 6, 14
Regulation S Global Class C-1 Notes ..................................................................................................................6, 14
Regulation S Global Class C-2 Notes ..................................................................................................................6, 14
Regulation S Global Preference Shares.................................................................................................................. i, 6
Regulation S Global Principal Protected Securities ......................................................................................... i, 6, 19
Resolutions.............................................................................................................................................................. i, 2
Restricted Preference Shares ............................................................................................................................ i, 6, 25
Rule 144A......................................................................................................................................................... i, 5, 38
Scheduled Redemption Date ....................................................................................................................................24
Securities Act ............................................................................................................................................................. i
Share Registrar .................................................................................................................................................. i, 2, 26
Share Trustee ..............................................................................................................................................................1
Standard & Poor's.................................................................................................................................................6, 21
subpart F income ......................................................................................................................................................29
Tax-Exempt Investors ..............................................................................................................................................31
TIN ...........................................................................................................................................................................31
Treasury Notes .........................................................................................................................................................14
Trustee .................................................................................................................................................................... i, 2
U.S............................................................................................................................................................................38
U.S. holder................................................................................................................................................................27
U.S. Related Person..................................................................................................................................................32
U.S. Shareholder.......................................................................................................................................................29
UBTI.........................................................................................................................................................................31
United States.............................................................................................................................................................38

55
EXHIBIT A: NOTE OFFERING CIRCULAR
 LISTING PARTICULARS
CONFIDENTIAL OFFERING CIRCULAR
U.S.$76,500,000 Class A-1LA Floating Rate Notes Due February 2016
U.S.$8,500,000 Class A-1LB Floating Rate Notes Due February 2016
U.S.$85,000,000 Class A-2L Floating Rate Notes Due February 2016
U.S.$35,000,000 Class A-3L Floating Rate Notes Due February 2016
U.S.$12,000,000 Class A-4L Floating Rate Notes Due February 2016
U.S.$20,000,000 Class B-1L Floating Rate Notes Due February 2016

TRICADIA CDO 2003-1, LTD.

TRICADIA CDO 2003-1 CORP.
The Class A-1LA Floating Rate Notes Due February 2016 (the "Class A-1LA Notes") in the aggregate principal amount of U.S.$76,500,000, the Class A-1LB Floating Rate
Notes Due February 2016 (the "Class A-1LB Notes" and, together with the Class A-1LA Notes, the "Class A-1L Notes") in the aggregate principal amount of U.S.$8,500,000,
the Class A-2L Floating Rate Notes Due February 2016 (the "Class A-2L Notes") in the aggregate principal amount of U.S.$85,000,000, the Class A-3L Floating Rate Notes Due
February 2016 (the "Class A-3L Notes" and, together with the Class A-1L Notes and the Class A-2L Notes, the "Senior Class A Notes") in the aggregate principal amount of
U.S.$35,000,000, the Class A-4L Floating Rate Notes Due February 2016 (the "Class A-4L Notes" and, together with the Senior Class A Notes, the "Class A Notes") in the
aggregate principal amount of U.S.$12,000,000, and the Class B-1L Floating Rate Notes Due February 2016 (the "Class B-1L Notes") in the aggregate principal amount of
U.S.$20,000,000 are being issued by Tricadia CDO 2003-1, Ltd. (the "Issuer"), a newly formed, exempted limited liability company incorporated under the laws of the Cayman
Islands and will be co-issued by Tricadia CDO 2003-1 Corp., a newly formed Delaware corporation (the "Co-Issuer" and, together with the Issuer, the "Co-Issuers"), on a
limited-recourse basis as described herein. The Notes will be issued and secured pursuant to an Indenture (the "Indenture"), dated as of the Closing Date, among the Co-Issuers and
JPMorgan Chase Bank, as trustee (in such capacity, the "Trustee") and as securities intermediary. The net proceeds of the offering of the Securities will be applied to purchase a
portfolio of U.S. dollar denominated CDO Securities and Synthetic Securities (each as defined herein) described herein (the "Portfolio Collateral"). The Portfolio Collateral will
be pledged to secure the Notes and certain other obligations of the Issuer and will be required to satisfy certain criteria described herein. Certain investment management,
administrative and related functions with respect to the Portfolio Collateral will be performed by Tricadia CDO Management, LLC, a limited liability company formed under the
laws of the State of Delaware (the "Collateral Manager").
(Continued on following page)
It is a condition to the issuance of the Notes that (i) the Class A-1LA Notes be rated "AAA" by Standard & Poor's Rating Services, a division of The McGraw-Hill Companies
("S&P"), "Aaa" by Moody's Investors Service, Inc. ("Moody's") and "AAA" by Fitch Ratings ("Fitch"), (ii) the Class A-1LB Notes be rated "AAA" by S&P, "Aaa" by Moody's
and "AAA" by Fitch, (iii) the Class A-2L Notes be rated "AAA" by S&P, "Aaa" by Moody's and "AAA" by Fitch, (iv) the Class A-3L Notes be rated at least "AA" by S&P, at
least "Aa2" by Moody's and at least "AA" by Fitch, (v) the Class A-4L Notes be rated at least "A-" by S&P, at least "A2" by Moody's and at least "A" by Fitch and (vi) the Class
B-1L Notes be rated at least "Baa1" by Moody's. See "Ratings."

Application has been made to the Irish Stock Exchange to admit the Notes (other than the Class C Notes) to the Official List of the Irish Stock Exchange. There can be no
assurance that such application will be granted.

For certain factors to be considered in connection with an investment in the Notes, see "Special Considerations" and "Notices to Purchasers."

No.: ______________________________ Recipient: ______________________________

The Notes are being offered in registered form to "qualified institutional buyers" within the meaning of Rule 144A ("Rule 144A") under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and to non-U.S. Persons (as defined in Regulation S under the Securities Act ("Regulation S")) in transactions outside the United States in
reliance on Regulation S ("Offshore Transactions"), all of whom (other than non-U.S. Persons purchasing in Offshore Transactions) are also "qualified purchasers" within the
meaning of Section 3(c)(7) of the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act").

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES AND NEITHER OF THE CO-ISSUERS HAS BEEN OR WILL BE REGISTERED UNDER THE INVESTMENT COMPANY ACT. THE NOTES MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED IN REGULATION S), EXCEPT TO "QUALIFIED INSTITUTIONAL
BUYERS" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT). THE NOTES MAY ALSO BE OFFERED OR SOLD TO NON-U.S. PERSONS IN
TRANSACTIONS OUTSIDE THE UNITED STATES IN RELIANCE ON REGULATION S. THE NOTES MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO U.S. PERSONS EXCEPT TO "QUALIFIED PURCHASERS" (WITHIN THE MEANING OF SECTION 3(c)(7) OF THE INVESTMENT COMPANY ACT)
IN A TRANSACTION THAT DOES NOT CAUSE EITHER OF THE CO-ISSUERS OR THE POOL OF PORTFOLIO COLLATERAL TO BE REQUIRED TO REGISTER
UNDER THE INVESTMENT COMPANY ACT. FOR CERTAIN RESTRICTIONS ON RESALE SEE "DELIVERY OF THE NOTES; TRANSFER RESTRICTIONS;
SETTLEMENT."

Prior to the offering of the Notes there has not been, and there are no plans for there to be, a public market for the Notes.

The Notes are offered by the Co-Issuers through Bear, Stearns & Co. Inc., as initial purchaser (in such capacity, the "Initial Purchaser"), and CDC Securities, as co-placement
agent (in such capacity, the "Co-Placement Agent" and, together with the Initial Purchaser, the "Initial Purchasers"), to prospective purchasers from time to time in negotiated
transactions at varying prices to be determined in each case at the time of sale. The Notes are offered when, as and if issued by the Co-Issuers subject to prior sale or withdrawal,
cancellation or modification of the offer without notice and subject to approval of certain legal matters by counsel and certain other conditions. It is expected that delivery of the
Notes will be made on or about January 14, 2004 (the "Closing Date"), against payment in immediately available funds.

The Notes sold to non-U.S. Persons, if any, will be represented by one or more permanent global notes in definitive, fully registered form without interest coupons (the
"Regulation S Global Notes"), which will be deposited with a custodian for, and registered in the name of a nominee of, The Depository Trust Company ("DTC") for the
accounts of Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream"). The Notes sold to U.S.
Persons, if any, will be represented by one or more permanent global notes in definitive, fully registered form without interest coupons (the "Rule 144A Global Notes"), which
will be deposited with a custodian for, and registered in the name of a nominee of, DTC.

Bear, Stearns & Co. Inc. CDC Securities

Dated February 17, 2004
(continued from previous page)

Concurrently with the closing of the sale of the Class A Notes and the Class B-1L Notes, the Issuer will also issue (i)
U.S.$5,000,000 Class C-1 Floating Rate Notes Due February 2016 (the "Class C-1 Notes") and U.S.$2,145,000
Class C-2 Floating Rate Notes Due February 2016 (the "Class C-2 Notes" and, together with the Class C-1 Notes,
the "Class C Notes"; the Class C Notes, together with the Class A Notes and the Class B-1L Notes, the "Notes"), (ii)
U.S.$5,000,000 face amount of Class 1 Principal Protected Securities Due February 28, 2016 (the "Class 1
Principal Protected Securities") comprised of the C-1 Note Component and the Class 1 Preference Share
Component, and U.S.$2,145,000 face amount of Class 2 Principal Protected Securities Due February 28, 2016
(the "Class 2 Principal Protected Securities" and, together with the Class 1 Principal Protected Securities, the
"Principal Protected Securities") comprised of the C-2 Note Component and the Class 2 Preference Share
Component, and (iii) 22,022,000 Preference Shares with a par value of U.S.$0.001 per share (the "Preference
Shares" and, together with the Notes and the Principal Protected Securities, the "Securities"), pursuant to the Issuer's
Memorandum of Association and Articles of Association (collectively, the "Issuer Charter") and in accordance with
(i) the Preference Share Paying Agency Agreement, dated as of the Closing Date, among JPMorgan Chase Bank, as
preference share paying agent (in such capacity, the "Preference Share Paying Agent"), Maples Finance Limited, as
share registrar (in such capacity, the "Share Registrar") and the Issuer (the "Preference Share Paying Agency
Agreement") and (ii) certain resolutions of the board of directors of the Issuer passed on or before the issuance of the
Preference Shares as memorialized in the board minutes relating thereto (the "Resolutions" and, together with the
Issuer Charter and the Preference Share Paying Agency Agreement, the "Preference Share Documents"). The Class
C Notes, the Principal Protected Securities and the Preference Shares are not being offered hereby.

To the extent of funds available therefor as described herein, the Class A-1LA Notes, the Class A-1LB Notes, the
Class A-2L Notes, the Class A-3L Notes, the Class A-4L Notes and the Class B-1L Notes will provide for the
payment of Periodic Interest (as defined herein) for each Periodic Interest Accrual Period (as defined herein) at
the rate of 0.75%, 0.75%, 0.75%, 1.85%, 2.25% and 3.00% per annum, respectively, above the London interbank
offered rate for three-month U.S. Dollar deposits (or with respect to the initial Periodic Interest Accrual Period,
the London interbank offered rate for four-month U.S. Dollar deposits), determined as described herein.

Principal of the Notes (other than the Class C Notes) will be payable at the times, in the amounts, and subject to
the priority of payment provisions described herein. The Notes (other than the Class C Notes) are subject to O/C
Redemption, Partial Redemption, Rating Confirmation Failure Redemption, Optional Redemption, Refinancing
and a Clean-up Call (each as defined herein) as described herein.

The Notes are limited-recourse obligations of the Issuer and the Class A Notes and the Class B-1L Notes are non-
recourse obligations of the Co-Issuer, payable solely from the Trust Estate (as defined herein) described herein.
The Class A-1LB Notes are subordinated (in respect of payment of principal only) to the Class A-1LA Notes, the
Class A-3L Notes are subordinated to the Class A-1L Notes and the Class A-2L Notes, the Class A-4L Notes are
subordinated to the Senior Class A Notes and the Class B-1L Notes are subordinated to the Class A Notes and, in
each case, to the payment of certain fees and expenses, to the extent described herein. The Class C Notes (which
are not offered hereby) are not subordinated to any of the other Classes of Notes and will be payable on the Class
C Stated Maturity or the Final Maturity Date solely from the Class C Collateral. To the extent the assets of the
Trust Estate are insufficient to pay in full all amounts due on the Notes (other than the Class C Notes), the Co-
Issuers shall have no further obligations in respect of the Notes (other than the Class C Notes) and any such
obligations which remain outstanding and unpaid shall be extinguished.

Except in respect of the information described below under "The Collateral Manager," "The Reporting Agent and
the Reporting Agency Agreement" and "Cashflow Swap Agreement" the Co-Issuers accept responsibility for the
information contained in this document. To the best of the knowledge and belief of the Co-Issuers, the
information contained in this document is in accordance with the facts and does not omit anything likely to affect
the import of such information. None of the Collateral Manager, the Reporting Agent or the Cashflow Swap
Provider nor any of their respective Affiliates makes any representation or warranty as to, or has independently
verified or assumes any responsibility for, the accuracy and completeness of the information contained herein
other than the information appearing in the sections "The Collateral Manager," "The Reporting Agent and the
-ii-
Reporting Agency Agreement" and "Cashflow Swap Provider." Neither of the Initial Purchasers has separately
verified the information contained in this Confidential Offering Circular.

-iii-
 NOTICES TO PURCHASERS

THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR THE SECURITIES LAWS OF ANY OTHER
JURISDICTION AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES, OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS,
UNLESS A REGISTRATION STATEMENT WITH RESPECT THERETO IS THEN EFFECTIVE UNDER
THE SECURITIES ACT OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE. THE CO-ISSUERS HAVE NO
OBLIGATION OR CURRENT INTENTION TO EFFECT SUCH REGISTRATION. THE CO-ISSUERS ARE
RELYING ON AN EXEMPTION FROM REGISTRATION UNDER THE INVESTMENT COMPANY ACT
CONTAINED IN SECTION 3(c)(7) THEREOF, AND NO TRANSFER OF A NOTE MAY BE MADE WHICH
WOULD CAUSE THE CO-ISSUERS TO BECOME SUBJECT TO THE REGISTRATION REQUIREMENTS
OF THE INVESTMENT COMPANY ACT. THE NOTES ARE ALSO SUBJECT TO CERTAIN OTHER
RESTRICTIONS ON TRANSFER DESCRIBED HEREIN. PROSPECTIVE PURCHASERS OF THE NOTES
SHOULD PROCEED ON THE ASSUMPTION THAT THEY MUST HOLD THEIR INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.

THE PURCHASER OF A NOTE, BY ITS ACCEPTANCE THEREOF, REPRESENTS,

ACKNOWLEDGES AND AGREES THAT IT WILL NOT RESELL, PLEDGE OR OTHERWISE TRANSFER
SUCH NOTE EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE
LAWS AND EXCEPT (A) IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER, WHOM THE SELLER HAS INFORMED, IN EACH CASE, THAT
THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A; (B)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 903 OR 904 OF REGULATION S
UNDER THE SECURITIES ACT; OR (C) TO THE CO-ISSUERS OR THEIR AFFILIATES, IN EACH CASE
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAW OF ANY STATE OF THE UNITED
STATES AND ANY OTHER APPLICABLE JURISDICTION. IN ADDITION, THE PURCHASER OF A
NOTE, BY ITS ACCEPTANCE THEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES THAT (A) IT
WILL NOT RESELL, PLEDGE OR OTHERWISE TRANSFER SUCH NOTE OTHER THAN TO A NON-U.S.
PERSON IN AN "OFFSHORE TRANSACTION" IN COMPLIANCE WITH REGULATION S EXCEPT TO A
"QUALIFIED PURCHASER" WITHIN THE MEANING OF SECTION 3(c)(7) OF THE INVESTMENT
COMPANY ACT IN A TRANSACTION THAT DOES NOT CAUSE EITHER OF THE CO-ISSUERS OR THE
POOL OF PORTFOLIO COLLATERAL TO BE REQUIRED TO REGISTER UNDER THE INVESTMENT
COMPANY ACT AND (B) IT WILL ALSO BE DEEMED TO HAVE MADE THE REPRESENTATIONS SET
FORTH UNDER "DELIVERY OF THE NOTES; TRANSFER RESTRICTIONS; SETTLEMENT." FURTHER,
THE NOTES MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER THE U.S.
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR SECTION
4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

THE NOTES ARE LIMITED-RECOURSE OBLIGATIONS OF THE ISSUER AND THE CLASS A
NOTES AND THE CLASS B-1L NOTES ARE NON-RECOURSE OBLIGATIONS OF THE CO-ISSUER.
PRINCIPAL OF AND INTEREST ON THE NOTES WILL BE PAID SOLELY FROM AND TO THE EXTENT
OF THE AVAILABLE PROCEEDS FROM THE DISTRIBUTIONS ON THE PORTFOLIO COLLATERAL,
THE CASHFLOW SWAP AGREEMENT (SOLELY WITH RESPECT TO THE SENIOR CLASS A NOTES)
AND, UNDER CERTAIN CIRCUMSTANCES, AMOUNTS ON DEPOSIT IN THE INITIAL DEPOSIT
ACCOUNT, WHICH ARE THE ONLY SOURCES OF PAYMENT OF PRINCIPAL OF, INTEREST ON AND
OTHER AMOUNTS PAYABLE IN RESPECT OF THE NOTES. TO THE EXTENT SUCH SOURCES OF
PAYMENT ARE INSUFFICIENT TO PAY IN FULL ALL AMOUNTS DUE ON THE NOTES, THE ISSUER
AND IN THE CASE OF THE CLASS A NOTES AND THE CLASS B-1L NOTES, THE CO-ISSUER SHALL

-iv-
HAVE NO FURTHER OBLIGATIONS IN RESPECT OF THE NOTES AND ANY OBLIGATIONS THAT
REMAIN OUTSTANDING SHALL BE EXTINGUISHED.

FOR THESE REASONS, AMONG OTHERS, AN INVESTMENT IN THE NOTES IS NOT

SUITABLE FOR ALL INVESTORS AND IS APPROPRIATE ONLY FOR AN INVESTOR CAPABLE OF (A)
ANALYZING AND ASSESSING THE RISKS ASSOCIATED WITH DEFAULTS, LOSSES AND
RECOVERIES ON, REINVESTMENT OF PROCEEDS OF AND OTHER CHARACTERISTICS OF DEBT
SECURITIES SUCH AS THE PORTFOLIO COLLATERAL, AND (B) BEARING SUCH RISKS AND
FINANCIAL CONSEQUENCES THEREOF AS THEY RELATE TO AN INVESTMENT IN THE NOTES.

THE NOTES ARE BEING OFFERED ONLY TO A LIMITED NUMBER OF INVESTORS THAT (A)
ARE WILLING AND ABLE TO CONDUCT AN INDEPENDENT INVESTIGATION OF THE
CHARACTERISTICS OF THE NOTES AND RISKS OF OWNERSHIP OF THE NOTES AND (B) ARE
USING THEIR INDEPENDENT JUDGMENT IN ASSESSING THE OPPORTUNITIES AND RISKS
PRESENTED BY THE NOTES FOR SUCH INVESTOR'S INVESTMENT PORTFOLIO AND IN
DETERMINING WHETHER THE ACQUISITION IS SUITABLE AND COMPLIES WITH SUCH
INVESTOR'S INVESTMENT OBJECTIVES AND POLICIES. OFFICERS AND OTHER
REPRESENTATIVES OF THE CO-ISSUERS AND THE INITIAL PURCHASERS WILL BE AVAILABLE
TO ANSWER QUESTIONS CONCERNING THE CO-ISSUERS, THE NOTES AND THE PORTFOLIO
COLLATERAL AND WILL, UPON REQUEST, MAKE AVAILABLE SUCH OTHER INFORMATION AS
INVESTORS MAY REASONABLY REQUEST.

THIS CONFIDENTIAL OFFERING CIRCULAR IS FURNISHED ON A CONFIDENTIAL BASIS

SOLELY FOR THE PURPOSE OF EVALUATING THE INVESTMENT OFFERED HEREBY. THE
INFORMATION IN THIS CONFIDENTIAL OFFERING CIRCULAR HAS BEEN PROVIDED BY THE CO-
ISSUERS AND OTHER SOURCES IDENTIFIED HEREIN. THE INFORMATION CONTAINED HEREIN
MAY NOT BE REPRODUCED OR USED IN WHOLE OR IN PART FOR ANY OTHER PURPOSE.

NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, ANY PERSON (AND EACH

EMPLOYEE, REPRESENTATIVE OR OTHER AGENT OF SUCH PERSON) MAY DISCLOSE TO ANY
AND ALL PERSONS, WITHOUT LIMITATION OF ANY KIND, THE TAX TREATMENT AND TAX
STRUCTURE OF (I) THE CO-ISSUERS AND (II) ANY OF THEIR TRANSACTIONS, AND ALL
MATERIALS OF ANY KIND (INCLUDING OPINIONS OR OTHER TAX ANALYSES) THAT ARE
PROVIDED TO SUCH PERSONS RELATING TO SUCH TAX TREATMENT AND TAX STRUCTURE.

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN

APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW
HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE
FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED
IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY
OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND
NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION
OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT
THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR
QUALIFICATIONS OF OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,
SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE,
TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY
REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
THIS CONFIDENTIAL OFFERING CIRCULAR IS NOT INTENDED TO FURNISH LEGAL,
REGULATORY, TAX, ACCOUNTING, INVESTMENT OR OTHER ADVICE TO ANY PROSPECTIVE
PURCHASER OF THE NOTES. THIS CONFIDENTIAL OFFERING CIRCULAR SHOULD BE REVIEWED
BY EACH PROSPECTIVE PURCHASER AND ITS LEGAL, REGULATORY, TAX, ACCOUNTING,
INVESTMENT AND OTHER ADVISORS.
-v-
 PROSPECTIVE PURCHASERS WHOSE INVESTMENT AUTHORITY IS SUBJECT TO LEGAL
RESTRICTIONS SHOULD CONSULT THEIR OWN LEGAL ADVISORS TO DETERMINE WHETHER
AND TO WHAT EXTENT THE NOTES CONSTITUTE LEGAL INVESTMENTS FOR THEM.

NO INVITATION MAY BE MADE TO THE PUBLIC IN THE CAYMAN ISLANDS TO SUBSCRIBE

FOR THE NOTES.

THE INITIAL PURCHASERS AND THE CO-ISSUERS (OR WITH RESPECT TO THE CLASS C
NOTES, THE ISSUER): (A) HAVE NOT OFFERED OR SOLD AND PRIOR TO THE DATE SIX MONTHS
AFTER THE ISSUE OF THE NOTES WILL NOT OFFER OR SELL ANY NOTES TO PERSONS IN THE
UNITED KINGDOM EXCEPT TO PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN
ACQUIRING, HOLDING, MANAGING OR DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT)
FOR THE PURPOSES OF THEIR BUSINESSES OR OTHERWISE IN CIRCUMSTANCES WHICH HAVE
NOT RESULTED AND WILL NOT RESULT IN AN OFFER TO THE PUBLIC IN THE UNITED KINGDOM
WITHIN THE MEANING OF THE PUBLIC OFFERS OF SECURITIES REGULATIONS 1995; (B) HAVE
ONLY COMMUNICATED OR CAUSED TO BE COMMUNICATED AND WILL ONLY COMMUNICATE
OR CAUSE TO BE COMMUNICATED ANY INVITATION OR INDUCEMENT TO ENGAGE IN
INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FINANCIAL SERVICES
AND MARKETS ACT 2000 ("FSMA") RECEIVED BY THEM IN CONNECTION WITH THE ISSUE OR
SALE OF ANY NOTES IN CIRCUMSTANCES IN WHICH SECTION 21(1) OF THE FSMA DOES NOT
APPLY TO THE CO-ISSUERS; AND (C) HAVE COMPLIED AND WILL COMPLY WITH ALL
APPLICABLE PROVISIONS OF THE FSMA WITH RESPECT TO ANYTHING DONE BY THEM IN
RELATION TO THE NOTES IN, FROM OR OTHERWISE INVOLVING THE UNITED KINGDOM.

THE DISTRIBUTION OF THIS CONFIDENTIAL OFFERING CIRCULAR AND THE OFFER OR

SALE OF NOTES MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS. NONE OF THE
ISSUER, THE CO-ISSUER OR EITHER INITIAL PURCHASER REPRESENTS THAT THIS DOCUMENT
MAY BE LAWFULLY DISTRIBUTED, OR THAT ANY NOTES MAY BE LAWFULLY OFFERED, IN
COMPLIANCE WITH ANY APPLICABLE REGISTRATION OR OTHER REQUIREMENTS IN ANY SUCH
JURISDICTION, OR PURSUANT TO AN EXEMPTION AVAILABLE THEREUNDER, OR ASSUME ANY
RESPONSIBILITY FOR FACILITATING ANY SUCH DISTRIBUTION OR OFFERING. IN PARTICULAR,
NO ACTION HAS BEEN TAKEN BY THE ISSUER, THE CO-ISSUER OR THE INITIAL PURCHASERS
WHICH WOULD PERMIT A PUBLIC OFFERING OF ANY NOTES OR DISTRIBUTION OF THIS
DOCUMENT IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED.
ACCORDINGLY, NO NOTES MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, AND
NEITHER THIS CONFIDENTIAL OFFERING CIRCULAR NOR ANY ADVERTISEMENT OR OTHER
OFFERING MATERIAL MAY BE DISTRIBUTED OR PUBLISHED IN ANY JURISDICTION, EXCEPT
UNDER CIRCUMSTANCES THAT WILL RESULT IN COMPLIANCE WITH ANY APPLICABLE LAWS
AND REGULATIONS. PERSONS INTO WHOSE POSSESSION THIS CONFIDENTIAL OFFERING
CIRCULAR OR ANY NOTES COME MUST INFORM THEMSELVES ABOUT AND OBSERVE ANY
SUCH RESTRICTIONS.

AVAILABLE INFORMATION

To permit compliance with Rule 144A under the Securities Act for resales of Notes, upon request, the Co-
Issuers will make available to Holders and prospective purchasers the information required to be delivered under
Rule 144A(d)(4) under the Securities Act if at the time of the request either the Issuer or the Co-Issuer is not a
reporting company under Section 13 or Section 15(d) of the U.S. Securities Exchange Act of 1934, as amended
(the "Exchange Act") or if either the Issuer or the Co-Issuer is not exempt from reporting pursuant to Rule 12g3-
2(b) under the Exchange Act. Copies of all such documents may be obtained from the office of the Trustee.
Neither of the Co-Issuers expect to become such a reporting company or to be so exempt from reporting.

___________________

-vi-
 Except as set forth in this Confidential Offering Circular, no securities dealer, salesperson or other person
is authorized to give any information or to make any representation regarding the Co-Issuers or the Securities not
contained in this Confidential Offering Circular and, if given or made, such information or representation must
not be relied upon as being authorized by the Co-Issuers or the Initial Purchasers. This Confidential Offering
Circular does not constitute an offer to sell or the solicitation of an offer to buy any of the Notes offered hereby to
any person (a) in any jurisdiction in which it is unlawful to make such offer or (b) who has not received a copy of
each current amendment or supplement hereto, if any. Neither the delivery of this Confidential Offering Circular
nor any sale made hereunder shall, under any circumstances, create any implication that the information herein is
correct as of any time subsequent to the date hereof or that there has been no change in the affairs of the Co-
Issuers or the Portfolio Collateral.

-vii-
 TABLE OF CONTENTS
Page

NOTICES TO PURCHASERS .................................................................................................................................iv

AVAILABLE INFORMATION ...............................................................................................................................vi
CONFIDENTIAL OFFERING CIRCULAR SUMMARY .......................................................................................1
SPECIAL CONSIDERATIONS ..............................................................................................................................16
THE ISSUER AND THE CO-ISSUER....................................................................................................................29
DESCRIPTION OF THE NOTES ...........................................................................................................................32
SECURITY FOR THE NOTES ...............................................................................................................................53
THE REPORTING AGENT AND THE REPORTING AGENCY AGREEMENT ...............................................66
CASHFLOW SWAP AGREEMENT ......................................................................................................................67
MATURITY AND PREPAYMENT CONSIDERATIONS ....................................................................................70
LEGAL STRUCTURE.............................................................................................................................................72
THE COLLATERAL MANAGER ..........................................................................................................................77
THE MANAGEMENT AGREEMENT...................................................................................................................80
SPECIAL CONSULTANT ......................................................................................................................................84
DELIVERY OF THE NOTES; TRANSFER RESTRICTIONS; SETTLEMENT ..................................................85
CERTAIN TAX CONSIDERATIONS ....................................................................................................................90
CERTAIN ERISA CONSIDERATIONS.................................................................................................................95
CERTAIN LEGAL INVESTMENT CONSIDERATIONS.....................................................................................98
RATINGS.................................................................................................................................................................99
USE OF PROCEEDS .............................................................................................................................................100
PLAN OF DISTRIBUTION...................................................................................................................................101
LISTING AND GENERAL INFORMATION ......................................................................................................104
CERTAIN LEGAL MATTERS .............................................................................................................................105
FINANCIAL STATEMENTS................................................................................................................................106
EXHIBIT 1 – MOODY'S WEIGHTED AVERAGE RECOVERY RATE ...........................................................107
EXHIBIT 2 – S&P WEIGHTED AVERAGE RECOVERY RATE......................................................................108
EXHIBIT 3 – FITCH SECTORS AND INDUSTRY CLASSIFICATIONS.........................................................109
EXHIBIT 4 – FITCH RECOVERY RATE MATRIX ...........................................................................................112
ANNEX A GLOSSARY OF CERTAIN DEFINED TERMS ...............................................................................113
ANNEX B INDEX OF DEFINED TERMS...............................................................................................................1

-viii-
 CONFIDENTIAL OFFERING CIRCULAR SUMMARY

The following summary does not purport to be complete and is qualified in its entirety by reference to the
more detailed information appearing elsewhere in this Confidential Offering Circular and the documents referred
to herein. A glossary of certain defined terms (the "Glossary") used herein appears as Annex A to this
Confidential Offering Circular.

The Issuer Tricadia CDO 2003-1, Ltd., a newly formed, exempted limited liability
company incorporated under the laws of the Cayman Islands (the
"Issuer"). The activities of the Issuer will be limited to (i) the
acquisition of and investment in Portfolio Collateral, Class C Collateral
and other assets permitted by the Indenture, (ii) the issuance of the
Notes, which (other than the Class C Notes) will be secured by the
Portfolio Collateral and certain other assets pledged by the Issuer under
the Indenture, (iii) the issuance of the Preference Shares and its ordinary
shares, (iv) the issuance of the Principal Protected Securities,
(v) entering into the Cashflow Swap Agreement, the Securities Lending
Agreements, the Reporting Agency Agreement, the Collateral
Administration Agreement and the Management Agreement and
(vi) other activities incidental to the foregoing, including the ownership
of 100% of the stock of the Co-Issuer.

The Co-Issuer Tricadia CDO 2003-1 Corp., a newly formed Delaware corporation (the
"Co-Issuer" and, together with the Issuer, the "Co-Issuers"). The Co-
Issuer's sole purpose will be co-issuing the Class A Notes and the Class
B-1L Notes. The Co-Issuer will not have any substantial assets and will
not pledge any assets to secure the Class A Notes and the Class B-1L
Notes. The Co-Issuer will be capitalized only to the extent of its
common equity of U.S.$250, will have no assets other than its equity
capital and will have no debt other than as Co-Issuer of the Class A
Notes and the Class B-1L Notes.

Securities Offered U.S.$76,500,000 aggregate principal amount of Class A-1LA Floating

Rate Notes Due February 2016 (the "Class A-1LA Notes"),
U.S.$8,500,000 aggregate principal amount of Class A-1LB Floating
Rate Notes Due February 2016 (the "Class A-1LB Notes" and, together
with the Class A-1LA Notes, the "Class A-1L Notes"),
U.S.$85,000,000 aggregate principal amount of Class A-2L Floating
Rate Notes Due February 2016 (the "Class A-2L Notes"),
U.S.$35,000,000 aggregate principal amount of Class A-3L Floating
Rate Notes Due February 2016 (the "Class A-3L Notes" and, together
with the Class A-1L Notes and the Class A-2L Notes, the "Senior
Class A Notes"), U.S.$12,000,000 aggregate principal amount of Class
A-4L Floating Rate Notes Due February 2016 (the "Class A-4L Notes"
and, together with the Senior Class A Notes, the "Class A Notes") and
U.S.$20,000,000 aggregate principal amount of Class B-1L Floating
Rate Notes Due February 2016 (the "Class B-1L Notes").

The Notes and the Principal Protected Securities will be issued on

January 14, 2004 (the "Closing Date") pursuant to an indenture (the
"Indenture"), to be dated as of the Closing Date, among the Co-Issuers
and JPMorgan Chase Bank, as trustee (in such capacity, the "Trustee")

-1-

Other Securities Issued
Rights of Principal Protected
Securityholders
Collateral Manager
and as securities intermediary. The Notes are limited-recourse
obligations of the Issuer and the Class A Notes and the Class B-1L
Notes are non-recourse obligations of the Co-Issuer, and all amounts
payable in respect of the Notes (other than the Class C Notes) will be
paid solely from and to the extent of the available proceeds from the
Trust Estate. To the extent that the assets of the Trust Estate are
insufficient to pay all amounts due on the Notes (other than the Class C
Notes), the Co-Issuers shall have no further obligations in respect of the
Notes (other than the Class C Notes) and any sums outstanding and
unpaid shall be extinguished. The Class C Notes, the Principal
Protected Securities and the Preference Shares are not offered hereby.
The Issuer will also issue (i) U.S.$5,000,000 Class C-1 Floating Rate
Notes Due February 2016 (the "Class C-1 Notes") and U.S.$2,145,000
Class C-2 Floating Rate Notes Due February 2016 (the "Class C-2
Notes" and, together with the Class C-1 Notes, the "Class C Notes"; the
Class C Notes, together with the Class A Notes and the Class B-1L Notes,
the "Notes"), (ii) U.S.$5,000,000 face amount of Class 1 Principal
Protected Securities Due February 28, 2016 (the "Class 1 Principal
Protected Securities") comprised of the C-1 Note Component and the
Class 1 Preference Share Component, and U.S.$2,145,000 face amount
of Class 2 Principal Protected Securities Due February 28, 2016 (the
"Class 2 Principal Protected Securities" and, together with the Class 1
Principal Protected Securities, the "Principal Protected Securities")
comprised of the C-2 Note Component and the Class 2 Preference
Share Component, and (iii) 22,022,000 preference shares (including the
Preference Share Components), par value U.S.$0.001 per share (the
"Preference Shares" and, together with the Notes and the Principal
Protected Securities, the "Securities").
Unless the Principal Protected Securities are explicitly addressed in the
same context, references herein to Class C Notes or Preference Shares
will include a reference to the Principal Protected Securities to the
extent of the C Note Components and Preference Share Components, as
applicable, and references to the rights and obligations of the holders of
the Class C Notes and the Preference Shares (including with respect to
any payments, distributions or redemptions on or of such Class C Notes
or Preference Shares or votes, notices or consents to be given by such
holders) include the rights and obligations of the holders of the
Principal Protected Securities to the extent of the C Note Components
and the Preference Share Components, as applicable. Unless the
holders of Principal Protected Securities are explicitly addressed in the
same context, references herein to holders of Notes or Preference
Shares shall include a reference to the holders of Principal Protected
Securities to the extent of the C Note Components and the Preference
Share Components, as applicable, and the holders of Principal Protected
Securities will be entitled to participate in any vote or consent of, or any
direction or objection by, the holders of Notes, the Class C Notes or the
Preference Shares to the extent of the C Note Components and the
Preference Share Components, as applicable.
Certain investment management, administrative and related functions
with respect to the Portfolio Collateral will be performed by Tricadia
-2-
 CDO Management, LLC ("Tricadia"), as collateral manager (in such
capacity, together with its successors in interest, the "Collateral
Manager"), pursuant to a collateral management agreement entered
into between the Issuer and the Collateral Manager on the Closing Date
(the "Management Agreement"). Tricadia is a newly formed affiliate
of Mariner Investment Group, Inc. Under the Management Agreement,
the Collateral Manager will manage the acquisition and disposition of
the Portfolio Collateral, including exercising rights and remedies
associated with the Portfolio Collateral, disposing of the Portfolio
Collateral and certain related functions. The Collateral Manager has
advised the Issuer that it or one of its Affiliates will purchase at least
7,000,000 Preference Shares on the Closing Date. For a summary of
the provisions of the Management Agreement and certain other
information concerning the Collateral Manager and key individuals
associated therewith who will be managing the Issuer's portfolio, see
"The Collateral Manager" and "The Management Agreement."

The Administrator Maples Finance Limited will act as administrator (in such capacity, the
"Administrator") for the Issuer in the Cayman Islands and will
perform certain administrative and related services for the Issuer. The
Administrator maintains its offices at P.O. Box 1093 GT, Queensgate
House, South Church Street, George Town, Grand Cayman, Cayman
Islands.

Final Maturity Date The Payment Date in February 2016 or such earlier date as the
Aggregate Principal Amount of each Class of Notes (other than the
Class C Notes) has been paid in full, including, without limitation, in
connection with an Optional Redemption or a Clean-up Call.

Use of Proceeds On the Closing Date, the proceeds from the sale of the Securities, will
be used by the Issuer (i) to fund the purchase of the Portfolio Collateral,
which will be pledged as security for the Notes (other than the Class C
Notes), (ii) to fund the purchase of the Class C Collateral, which will be
pledged as security for the Class C Notes, (iii) to fund the deposit (the
"Deposit") in an account with the Trustee (the "Initial Deposit
Account") on the Closing Date, which Deposit will be subsequently
invested in Portfolio Collateral on or prior to the Ramp-Up Completion
Date, (iv) to fund the deposit in an account with the Trustee (the
"Expense Reimbursement Account") on the Closing Date of
approximately U.S.$50,000, which amount will be available for
payment from time to time of future expenses of the Issuer pending the
receipt of collections in respect of the Portfolio Collateral as described
herein and (v) to fund an account with the Trustee (the "Closing
Expense Account") on the Closing Date, which will be used to pay fees
and other expenses related to the transaction. Amounts in the Initial
Deposit Account will be invested in Eligible Investments until they are
used to purchase Portfolio Collateral.

Form, Minimum The Notes sold to non-U.S. Persons, if any, in Offshore Transactions in
Denominations reliance on Regulation S) under the U.S. Securities Act of 1933, as
and Record Dates amended (the "Securities Act"), will be evidenced by one or more
permanent global notes in definitive, fully registered form without
interest coupons (the "Regulation S Global Notes") which will be

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 deposited with a custodian for, and registered in the name of, a nominee
of The Depository Trust Company ("DTC") for the accounts of
Euroclear Bank S.A./N.V., as operator of the Euroclear System
("Euroclear") and Clearstream Banking, société anonyme
("Clearstream"). The Notes sold to U.S. Persons, if any, will be
evidenced by one or more permanent global notes in definitive, fully
registered form without interest coupons (the "Rule 144A Global
Notes"), which will be deposited with a custodian for, and registered in
the name of, a nominee of DTC.

The Class A-1LA Notes, the Class A-1LB Notes, the Class A-2L Notes,
the Class A-3L Notes, the Class A-4L Notes and the Class B-1L Notes
will be issued in minimum denominations of U.S.$100,000 and integral
multiples of U.S.$1.00 in excess thereof. No Notes will be issued in
bearer form. The Notes are subject to certain restrictions on transfer.
The record date (the "Record Date") for each Payment Date with
respect to the Notes (including the Final Maturity Date) is the Business
Day immediately preceding such Payment Date; provided, however,
that if Definitive Notes are issued, the Record Date for such Definitive
Notes will be the fifteenth day of the calendar month in which such
Payment Date occurs. See "Delivery of Notes; Transfer Restrictions;
Settlement."

Class A-1LA Notes General. The Co-Issuers will issue U.S.$76,500,000 in aggregate
principal amount of Class A-1LA Notes to be secured by the Portfolio
Collateral pursuant to the Indenture.

Interest. Interest in respect of the Class A-1LA Notes will be payable

pari passu with the Class A-1LB Notes and the Class A-2L Notes.

The Class A-1LA Notes will provide for the payment of periodic
interest ("Periodic Interest" with respect to the Class A-1LA Notes) (to
the extent of funds available therefor as described herein) for each
Periodic Interest Accrual Period at a rate of 0.75% per annum above
LIBOR (the "Applicable Periodic Rate" with respect to the Class A-
1LA Notes) on February 28, May 30, August 30 and November 30 of
each year or, if any such day is not a Business Day, then on the next
succeeding Business Day (or if any such date is not a Business Day, the
next succeeding Business Day, unless that next succeeding Business
Day falls in a subsequent calendar month, in which event the relevant
Payment Date will be the next preceding Business Day) (each such
date, a "Payment Date"), commencing on the Payment Date in May
2004. Interest will be calculated on the basis of a year of 360 days and
the actual number of days elapsed.
Principal. On each Payment Date, principal of the Class A-1LA Notes
will be payable (to the extent of funds available therefor and in
accordance with the Class A-1L/A-2L Notes Principal Payment
Priority) until the Payment Date on which the Aggregate Principal
Amount of the Class A-1LA Notes has been paid in full. All
outstanding principal of the Class A-1LA Notes, together with the other
amounts described herein, will be due and payable on the Final
Maturity Date.

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Class A-1LB Notes General. The Co-Issuers will issue U.S.$8,500,000 in aggregate
principal amount of Class A-1LB Notes to be secured by the Portfolio
Collateral pursuant to the Indenture.

Interest. Interest in respect of the Class A-1LB Notes will be payable

pari passu with the Class A-1LA Notes and the Class A-2L Notes.

The Class A-1LB Notes will provide for the payment of periodic
interest ("Periodic Interest" with respect to the Class A-1LB Notes) (to
the extent of funds available therefor as described herein) for each
Periodic Interest Accrual Period at a rate of 0.75% per annum above
LIBOR (the "Applicable Periodic Rate" with respect to the Class A-
1LB Notes) on each Payment Date, commencing on the Payment Date
in May 2004. Interest will be calculated on the basis of a year of 360
days and the actual number of days elapsed.

Principal. On each Payment Date after the Class A-1LA Notes have
been paid in full, principal of the Class A-1LB Notes will be payable (to
the extent of funds available therefor and in accordance with the Class
A-1L/A-2L Notes Principal Payment Priority described herein) until the
Payment Date on which the Aggregate Principal Amount of the Class
A-1LB Notes has been paid in full. All outstanding principal of the
Class A-1LB Notes, together with the other amounts described herein,
will be due and payable on the Final Maturity Date. The Class A-1LB
Notes are subordinated in right of payment of principal to the Class A-
1LA Notes in accordance with the Class A-1L/A-2L Notes Principal
Payment Priority described herein.

Class A-2L Notes General. The Co-Issuers will issue U.S.$85,000,000 in aggregate
principal amount of Class A-2L Notes to be secured by the Portfolio
Collateral pursuant to the Indenture.

Interest. Interest in respect of the Class A-2L Notes will be payable

pari passu with the Class A-1L Notes.

The Class A-2L Notes will provide for the payment of periodic interest
("Periodic Interest" with respect to the Class A-2L Notes) (to the
extent of funds available therefor as described herein) for each Periodic
Interest Accrual Period at a rate of 0.75% per annum above LIBOR (the
"Applicable Periodic Rate" with respect to the Class A-2L Notes) on
each Payment Date, commencing on the Payment Date in May 2004.
Interest will be calculated on the basis of a year of 360 days and the
actual number of days elapsed.

Principal. On each Payment Date, principal of the Class A-2L Notes

will be payable (to the extent of funds available therefor and in
accordance with the Class A-1L/A-2L Notes Principal Payment
Priority) until the Payment Date on which the Aggregate Principal
Amount of the Class A-2L Notes has been paid in full. All outstanding
principal of the Class A-2L Notes, together with the other amounts
described herein, will be due and payable on the Final Maturity Date.

Class A-3L Notes General. The Co-Issuers will issue U.S.$35,000,000 in aggregate
principal amount of Class A-3L Notes to be secured by the Portfolio

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 Collateral pursuant to the Indenture.

Interest. No interest will be payable in respect of the Class A-3L Notes

on any Payment Date unless the Holders of the Class A-1L Notes and
the Class A-2L Notes have been paid the Cumulative Interest Amount
due to them on such Payment Date and, in the case of the Final
Maturity Date, until the Aggregate Principal Amount of the Class A-1L
Notes and the Class A-2L Notes has been paid in full.

The Class A-3L Notes will provide for the payment of periodic interest
("Periodic Interest" with respect to the Class A-3L Notes) (to the
extent of funds available therefor as described herein) for each Periodic
Interest Accrual Period at a rate of 1.85% per annum above LIBOR (the
"Applicable Periodic Rate" with respect to the Class A-3L Notes) on
each Payment Date, commencing on the Payment Date in May 2004.
Interest will be calculated on the basis of a year of 360 days and the
actual number of days elapsed.

Principal. On each Payment Date after the Class A-1L Notes and the
Class A-2L Notes have been paid in full, principal of the Class A-3L
Notes will be payable (to the extent of funds available therefor and in
accordance with the Priority of Payments) until the Payment Date on
which the Aggregate Principal Amount of the Class A-3L Notes has
been paid in full. All outstanding principal of the Class A-3L Notes,
together with the other amounts described herein, will be due and
payable on the Final Maturity Date. The Class A-3L Notes are
subordinated in right of payment to the Class A-1L Notes and the Class
A-2L Notes to the extent described herein.

Class A-4L Notes General. The Co-Issuers will issue U.S.$12,000,000 in aggregate
principal amount of Class A-4L Notes to be secured by the Portfolio
Collateral pursuant to the Indenture.

Interest. No interest will be payable in respect of the Class A-4L Notes

on any Payment Date unless the Holders of the Senior Class A Notes
have been paid the Cumulative Interest Amount due to them on such
Payment Date, the Overcollateralization Test with respect to the Senior
Class A Notes and the Interest Coverage Test have been satisfied and,
in the case of the Final Maturity Date, until the Aggregate Principal
Amount of the Senior Class A Notes has been paid in full.

The Class A-4L Notes will provide for the payment of periodic interest
("Periodic Interest" with respect to the Class A-4L Notes) (to the
extent of funds available therefor as described herein) for each Periodic
Interest Accrual Period at a rate of 2.25% per annum above LIBOR (the
"Applicable Periodic Rate" with respect to the Class A-4L Notes) on
each Payment Date, commencing on the Payment Date in May 2004.
The failure to pay in full Periodic Interest on the Class A-4L Notes as a
result of insufficient funds being available therefor will not constitute
an Event of Default so long as the Senior Class A Notes are
Outstanding. Any shortfall in the payment of Periodic Interest to the
Class A-4L Notes on any Payment Date will be payable, together with
interest thereon at the Applicable Periodic Rate, on one or more

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 subsequent Payment Dates (to the extent funds are available therefor
and subject to the Priority of Payments). Interest will be calculated on
the basis of a year of 360 days and the actual number of days elapsed.

Principal. On each Payment Date after the Senior Class A Notes have
been paid in full, principal of the Class A-4L Notes will be payable (to
the extent of funds available therefor and in accordance with the
Priority of Payments) until the Payment Date on which the Aggregate
Principal Amount of the Class A-4L Notes has been paid in full. All
outstanding principal of the Class A-4L Notes, together with the other
amounts described herein, will be due and payable on the Final
Maturity Date. The Class A-4L Notes are subordinated in right of
payment to the Senior Class A Notes to the extent described herein.

Class B-1L Notes General. The Co-Issuers will issue U.S.$20,000,000 in aggregate
principal amount of Class B-1L Notes to be secured by the Portfolio
Collateral pursuant to the Indenture.

Interest. No interest will be payable in respect of the Class B-1L Notes

on any Payment Date unless the Holders of the Class A Notes have
been paid the Cumulative Interest Amount due to them on such
Payment Date, the Overcollateralization Tests with respect to the Senior
Class A Notes and the Class A Notes and the Interest Coverage Test
have been satisfied, and, in the case of the Final Maturity Date, until the
Aggregate Principal Amount of the Class A Notes has been paid in full.

The Class B-1L Notes will provide for the payment of periodic interest
("Periodic Interest" with respect to the Class B-1L Notes) (to the
extent of funds available therefor as described herein) for each Periodic
Interest Accrual Period at a rate of 3.00% per annum above LIBOR (the
"Applicable Periodic Rate" with respect to the Class B-1L Notes) on
each Payment Date, commencing on the Payment Date in May 2004;
provided that interest will not be payable in respect of the Class B-1L
Notes on the Payment Date in May 2004 unless the full amount of
interest due on the Class B-1L Notes can be paid from available
Collateral Interest Collections in accordance with the Priority of
Payments; provided, further, that if the full amount of interest due on
the Class B-1L Notes can not be paid from Collateral Interest
Collections in accordance with the Priority of Payments, such
remaining amount will be deposited instead in the Initial Period Reserve
Account. The failure to pay in full Periodic Interest on the Class B-1L
Notes as a result of insufficient funds being available therefor will not
constitute an Event of Default so long as any Class A Notes are
Outstanding. Any shortfall in the payment of Periodic Interest to the
Class B-1L Notes on any Payment Date will be payable, together with
interest thereon at the Applicable Periodic Rate, on one or more
subsequent Payment Dates (to the extent funds are available therefor
and subject to the priority of distribution provisions described herein).
Interest will be calculated on the basis of a year of 360 days and the
actual number of days elapsed.

Principal. On each Payment Date after the first Payment Date,

principal of the Class B-1L Notes will be payable (to the extent of funds

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Class C Notes and Principal
Protected Securities
Application of Funds
Overcollateralization Tests
Applicability of
Overcollateralization Tests
available therefor and in accordance with the Priority of Payments)
from Collateral Interest Collections in an amount equal to the Class
B-1L Principal Payment until the Class B-1L Notes have been paid in
full. In addition, on each Payment Date after the Class A Notes have
been paid in full, principal of the Class B-1L Notes will be payable (to
the extent of funds available therefor and in accordance with the
Priority of Payments) until the Payment Date on which the Aggregate
Principal Amount of the Class B-1L Notes has been paid in full. All
outstanding principal of the Class B-1L Notes, together with the other
amounts described herein, will be due and payable on the Final
Maturity Date. The Class B-1L Notes are subordinated in right of
payment to the Class A Notes to the extent described herein.
The Class C Notes and the Principal Protected Securities will not bear
interest. The Preference Shares (including the Preference Share
Components) will receive distributions in accordance with the Priority
of Payments and the Amended and Restated Memorandum and Articles
of Association of the Issuer. The Class C Notes will not receive
distributions in accordance with the Priority of Payments and will not
be used in calculating the Collateral Quality Tests, the
Overcollateralization Tests, the Additional Overcollateralization Test or
the Interest Coverage Tests. The Class C Notes, the Principal Protected
Securities and the Preference Shares are not being offered hereby.
On each Payment Date and on the Final Maturity Date, Collateral
Interest Collections and Collateral Principal Collections, to the extent of
Available Funds in the Collection Account, will be applied by the
Trustee in the manner and order of priority set forth herein under
"Description of the Notes—Payments on the Notes—Priority of
Payments."
The Overcollateralization Tests are applicable until the Notes are retired
and all amounts payable in respect thereof are paid in full, and are
satisfied, if as of any Measurement Date (i) the Senior Class A
Overcollateralization Ratio is at least equal to the Senior Class A
Overcollateralization Percentage, (ii) the Class A Overcollateralization
Ratio is at least equal to the Class A Overcollateralization Percentage
and (iii) the Class B Overcollateralization Ratio is at least equal to the
Class B Overcollateralization Percentage.
On each Payment Date, if any Overcollateralization Test is not satisfied
as of the immediately preceding Calculation Date, amounts that are
junior in right of payment to such Overcollateralization Test, as
described under "Description of the Notes—Payments on the Notes—
Priority of Payments," will be applied to the payment of principal of
each applicable Class of Notes (or, in the case of the Class B-1L Notes,
first to pay accrued and unpaid interest from prior Payment Dates, then
to pay principal), until each such Class of Notes is paid in full, in the
order and according to the priorities described herein, to the extent
necessary to satisfy such Overcollateralization Test, in accordance with
the provisions described herein.
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Interest Coverage Test
Applicability of Interest
Coverage Test
Additional
Overcollateralization Test
O/C Redemption
Rating Confirmation Failure
Redemption
The Interest Coverage Test is applicable on each Payment Date after the
first Payment Date until the Senior Class A Notes are retired and all
amounts payable in respect thereof are paid in full, and is satisfied, if as
of any Calculation Date, the Interest Coverage Ratio (as described
under "Description of the Notes—Interest Coverage Test") is at least
2.20%.
On each Payment Date after the first Payment Date, if the Interest
Coverage Test is not satisfied as of the immediately preceding
Calculation Date, amounts that are junior in right of payment to the
Interest Coverage Test as described under "Description of the Notes—
Payment on the Notes—Priority of Payments," will be applied to the
payment of principal of the Senior Class A Notes, in the order and
according to the priorities described herein, until each such Class is paid
in full, to the extent necessary to satisfy the Interest Coverage Test in
accordance with the provisions described herein.
As described under "Description of the Notes—Additional
Overcollateralization Test," even if the Overcollateralization Tests and
the Interest Coverage Test are satisfied, on each Payment Date after the
first Payment Date, Collateral Interest Collections that would otherwise
be used for payments that are junior in right of payment to the
Additional Overcollateralization Test as described under "Description
of the Notes—Payment on the Notes—Priority of Payments," will be
applied, first, to pay the Class B-1L Periodic Rate Shortfall Amount, if
any, second, to pay the Aggregate Principal Amount of the Class B-1L
Notes, until the Class B-1L Notes are paid in full, third, to pay the
Aggregate Principal Amount of the Class A-4L Notes, until the Class
A-4L Notes are paid in full, fourth, to pay the Aggregate Principal
Amount of the Class A-3L Notes, until the Class A-3L Notes are paid in
full and, fifth, to pay the Aggregate Principal Amount of the Class A-1L
Notes and the Class A-2L Notes in accordance with the Class
A-1L/A-2L Notes Principal Payment Priority, in order to satisfy the
Additional Overcollateralization Test as described herein.
If on any Payment Date, any Overcollateralization Test or the
Additional Overcollateralization Test, or on any Payment Date after the
first Payment Date, the Interest Coverage Test, is not satisfied as of the
immediately preceding Calculation Date, certain Available Funds that
would otherwise be used for payment of amounts that are junior in right
of payment to such tests as described under "Description of the Notes—
Payments on the Notes—Priority of Payments," will be applied to the
redemption of the Notes (other than the Class C Notes) (or, in the case
of the Class B-1L Notes, first, to pay accrued and unpaid interest from
prior Payment Dates and, second, to pay principal) in the order and
according to the Priority of Payments (an "O/C Redemption") to the
extent necessary in order to satisfy such Overcollateralization Test, the
Additional Overcollateralization Test and the Interest Coverage Test, as
applicable. See "Description of the Notes—O/C Redemption."
Within five Business Days after the Ramp-Up Completion Date, the
Issuer will request each Rating Agency to confirm in writing within 25
Business Days after such request that such Rating Agency has not
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 reduced or withdrawn (without reinstating) the ratings assigned by such
Rating Agency on the Closing Date to the Notes (other than the Class C
Notes) (a "Rating Confirmation"). If the Issuer is unable to obtain a
Rating Confirmation by the 30th Business Day after the Ramp-Up
Completion Date (a "Rating Confirmation Failure"), on the next
Payment Date (which Payment Date, if such Rating Confirmation
Failure occurs, is expected to be the Payment Date in August 2004) and
on each subsequent Payment Date, certain Adjusted Collateral Interest
Collections and Adjusted Collateral Principal Collections will be
applied to the payment of, first, the principal of the Class A-1L Notes
and the Class A-2L Notes in accordance with the Class A-1L/A-2L
Notes Principal Payment Priority, second, the principal of the Class
A-3L Notes, third, the principal of the Class A-4L Notes, fourth, the
Class B-1L Periodic Rate Shortfall Amount, if any and, fifth, the
principal of the Class B-1L Notes, but only to the extent necessary to
receive a Rating Confirmation (a "Rating Confirmation Failure
Redemption"). See "Description of the Notes—Rating Confirmation
Failure."

Optional Redemption The Notes (other than the Class C Notes) are redeemable at the option
of the Issuer, with the consent of, or at the direction of, the holders
representing a Majority of the outstanding Preference Shares (an
"Optional Redemption"), in whole but not in part, on any Payment
Date on or after the Payment Date in February 2007 (the "Optional
Redemption Date," which date shall be considered the Final Maturity
Date) at a price equal to the applicable Optional Redemption Price for
such Notes. See "Description of the Notes—Optional Redemption."

Partial Redemption At the request of any holder of Preference Shares (including the
Preference Share Components) which holds not less than 3,000,000
Preference Shares (such amount, the "PS Partial Redemption
Minimum Amount") (any such requesting holder, a "PS Minimum
Amount Holder") (which request will be given so as to be received by
the Issuer, the Trustee and the Collateral Manager not later than 60 days
prior to the proposed Partial Redemption Date), the Issuer will redeem
each Note (other than the Class C Notes) on the applicable Partial
Redemption Date, pro rata and in part, and, if such request for
redemption is accepted by the Issuer, the number of Preference Shares
of the PS Minimum Amount Holder specified by such PS Minimum
Amount Holder will be redeemed by the Issuer, from Partial
Redemption Sale Proceeds (a "Partial Redemption"). The percentage
of the aggregate principal amount of each Note to be redeemed in such
case will equal the quotient of (x) the number of Preference Shares so
specified by the PS Minimum Amount Holder (which will in no event
exceed the number of Preference Shares held by such PS Minimum
Amount Holder) divided by (y) the number of outstanding Preference
Shares immediately prior to such partial redemption (the "Partial
Redemption Percentage").

Clean-up Call The Class A-3L Notes, the Class A-4L and the Class B-1L Notes are
redeemable at the option of the Issuer, with the consent of, or at the
direction of, the holders representing a Majority of the outstanding
Preference Shares (a "Clean-up Call"), in whole but not in part, on any

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 Payment Date (the "Clean-up Call Date," which date will be
considered the Final Maturity Date) on or after the Payment Date on
which the Aggregate Principal Amount of the Class A-1L Notes and the
Class A-2L Notes have been reduced to zero, at a price equal to the
Clean-up Call Price. See "Description of the Notes—Clean-up Call."

Refinancing Any Class or Classes of Notes (other than the Class C Notes) may be
redeemed from Refinancing Proceeds, in whole but not in part, by the
Issuer at the direction of the Collateral Manager on any Payment Date
after the Payment Date in February 2007 (a "Refinancing"). See
"Description of the Notes—Refinancing."

Security for the Notes The Notes are limited-recourse obligations of the Issuer and the Class A
Notes and the Class B-1L Notes are non-recourse obligations of the Co-
Issuer, and all amounts payable in respect of the Notes (other than the
Class C Notes) will be paid solely from and to the extent of the
available proceeds from assets available in the Trust Estate, consisting
of substantially all of the property of the Issuer, including the Portfolio
Collateral, the Issuers' rights under the Cashflow Swap Agreement
(solely with respect to the Senior Class A Notes), the Issuer's rights
under the Management Agreement, the Issuer's rights under the
Reporting Agency Agreement, the Issuer's rights under the Collateral
Administration Agreement, the Issuer's rights under any Securities
Lending Agreements, upon any default by any Securities Lending
Counterparty under the related Securities Lending Agreement, any
related Securities Lending Account, including, without limitation, any
related Securities Lending Collateral deposited therein, the Initial
Period Reserve Account, the Collection Account, the Initial Deposit
Account, the Expense Reimbursement Account, the Closing Expense
Account and the proceeds therefrom (collectively, the "Trust Estate").
All payments on the Notes (other than the Class C Notes) are subject to
the Priority of Payments. References herein to the Collection Account,
the Initial Deposit Account, the Expense Reimbursement Account, any
Securities Lending Accounts and the Closing Expense Account, when
used with respect to the contents of the Trust Estate, will include all
proceeds of such accounts and all Eligible Investments purchased with
funds on deposit in such accounts. The Class C Collateral will not be
part of the Trust Estate and will be pledged to the Trustee solely as
security for the Issuer's obligations under the Class C Notes and the
Class C Notes will not be secured by the Trust Estate. The Notes (other
than the Class C Notes) will not be secured by the Class C Collateral.

Portfolio Collateral The Portfolio Collateral will consist of a diversified portfolio of U.S.
dollar-denominated (i) CDO Securities and (ii) Synthetic Securities, in
each case having the characteristics set forth herein at the time of
purchase by the Issuer. The initial portfolio is expected to consist of the
Portfolio Collateral purchased on the Closing Date and the Portfolio
Collateral purchased by the Issuer on or prior to the earlier of (i) the
120th day following the Closing Date (the "Ramp-Up Completion
Date") and (ii) the date on which the Aggregate Principal Amount of
the Portfolio Collateral included in the Trust Estate is at least equal to
U.S.$250,000,000.

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Limited Sales of Portfolio
Collateral and Reinvestment
in Additional Portfolio
Collateral
Cashflow Swap Agreement
On the Closing Date, the Issuer will purchase (or enter into
commitments to purchase) Portfolio Collateral having an Aggregate
Portfolio Collateral Principal Balance of at least U.S.$200,000,000. On
or prior to the Ramp-Up Completion Date, the Issuer expects to
purchase the remainder of the initial Portfolio Collateral using funds on
deposit in the Initial Deposit Account. See "Security for the Notes—
Portfolio Collateral."
The Issuer may, at the direction of the Collateral Manager, sell Credit
Improved Portfolio Collateral, Credit Risk Portfolio Collateral and
Defaulted Portfolio Collateral in compliance with the restrictions
described herein. See "Security for the Notes—Sales of Portfolio
Collateral." During the period from and including the Closing Date to
and including the Payment Date in February 2009 (the "Reinvestment
Period"), the Sale Proceeds of any such sale of Portfolio Collateral
may, at the direction of the Collateral Manager be (i) invested in
additional Portfolio Collateral in accordance with the Reinvestment
Criteria, (ii) applied to repurchase Notes or (iii) applied to the
redemption of the Notes in accordance with the Priority of Payments.
See "Security for the Notes—Additional Portfolio Collateral and
Reinvestment Criteria" and "Legal Structure—The Indenture—
Purchase of Notes."
The Issuer will on the Closing Date enter into a cashflow swap
agreement with respect to the Senior Class A Notes (such agreement,
and any replacement therefor entered into in accordance with the
Indenture, the "Cashflow Swap Agreement") with CDC Financial
Products Inc., a Delaware corporation (the "Cashflow Swap
Provider"). Pursuant to the Cashflow Swap Agreement, (a) the Issuer
will pay a fee to the Cashflow Swap Provider on each Payment Date
through the Payment Date on which the Senior Class A Notes are paid
in full and (b) the Cashflow Swap Provider will make payments to the
Issuer in the amount equal to the Cashflow Swap Shortfall Amount.
Any Cashflow Swap Shortfall Amounts paid under the Cashflow Swap
Agreement by the Cashflow Swap Provider to the Issuer will accrue
interest at a rate equal to the Cashflow Swap Provider Accrual Rate, and
be repaid to the Cashflow Swap Provider in accordance with the
Priority of Payments. See "Description of the Notes—Payments on the
Notes—Priority of Payments."
To the extent the Co-Issuers would have insufficient funds available to
pay interest on the Senior Class A Notes on a Payment Date as a result
of any of the Portfolio Collateral deferring the payment of interest due
thereon in accordance with its terms (provided, that the Cashflow Swap
Shortfall Amount will not include any portion of the Deferred Shortfall
Amount or the Interest Shortfall Amount, as applicable, that is
attributable to any item of Portfolio Collateral that has become a
Deferred Interest PIK Bond and that has not been sold or disposed of
within two years of the date on which such Portfolio Collateral became
a Deferred Interest PIK Bond), interest on the Senior Class A Notes will
be payable from the amounts advanced by the Cashflow Swap Provider
under the Cashflow Swap Agreement.
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Accounts All Collateral Interest Collections and Collateral Principal Collections
(together with Reinvestment Income thereon) will be remitted to the
Trustee and deposited into the Collection Account and will be available,
to the extent described herein, for application in the manner and for the
purposes as described herein. All cash pledged to the Trustee on the
Closing Date to be applied to pay the purchase price of Portfolio
Collateral delivered or purchased after the Closing Date will be
deposited into the Initial Deposit Account. A Closing Expense Account
will be established by the Trustee to pay organizational, structuring,
legal and offering fees and other expenses related to the transaction. An
Expense Reimbursement Account of U.S.$50,000 will be established by
the Trustee for the payment of the Co-Issuers' administrative expenses
which become due and must be paid between Payment Dates. Any
amounts withdrawn from the Expense Reimbursement Account will be
reimbursed on each Payment Date in accordance with the Priority of
Payments described herein.

The Trustee JPMorgan Chase Bank will act as trustee (in such capacity, the
"Trustee") under the Indenture. The Trustee maintains its designated
corporate trust offices at 600 Travis Street, 50th Floor, JPMorgan Chase
Tower, Houston, Texas 77002, at which the Notes may be surrendered
for payment or for transfer or exchange.

Independent Accountants Deloitte & Touche will periodically perform certain procedures with
respect to the Portfolio Collateral and compliance with the
Overcollateralization Tests and the Interest Coverage Test as required
by the Indenture.

Certain Federal Income Tax Federal Income Tax Consequences to U.S. Holders of Notes. The
Consequences Notes (other than the Class C Notes) will be characterized as debt of the
Issuer for United States federal income tax purposes. See "Certain Tax
Considerations—U.S. Federal Tax Considerations—Tax Treatment of
U.S. Holders of Notes."

Federal Income Tax Consequences to Non-U.S. Holders. A Non-U.S.

Holder that has no connection with the United States other than holding
its Note (other than the Class C Notes)should not be subject to United
States federal withholding tax (provided certain tax representations are
made) or income tax on payments of principal and interest (including
original issue discount) in respect of a Note (other than the Class C
Notes). See "Certain Tax Considerations—U.S. Federal Tax
Considerations—Tax Treatment of non-U.S. Holders of Notes."

Federal Income Tax Consequences to the Issuer. The Issuer generally

expects not to be subject to United States federal withholding tax
(provided certain tax representations are made) or income tax on
interest income (including original issue discount) or gain from the
Portfolio Collateral or the Eligible Investments. See "Certain Tax
Considerations—U.S. Federal Tax Considerations—Tax Treatment of
the Issuer."

Certain ERISA Matters Fiduciaries and other persons investing "plan assets" of employee
benefit or other plans subject to the U.S. Employee Retirement Income

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 Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
U.S. Internal Revenue Code of 1986, as amended (the "Code") (each, a
"Plan"), should consider the fiduciary investment standards and
prohibited transaction rules of ERISA and Section 4975 of the Code
before authorizing an investment of "plan assets" of any Plan in the
Notes. Each person purchasing a Note will be deemed to have made
certain representations regarding the prohibited transaction rules of
ERISA and Section 4975 of the Code. See "Certain ERISA
Considerations."

Legal Investment Institutions whose investment activities are subject to legal investment
laws and regulations or to review by certain regulatory authorities may
be subject to conditions on investment in the Notes. See "Certain Legal
Investment Considerations."

Rating of Notes It is a condition to the issuance of the Notes that (i) the Class A-1LA
Notes be rated "AAA" by Standard & Poor's Rating Services, a division
of The McGraw-Hill Companies ("S&P"), "Aaa" by Moody's Investors
Service, Inc. ("Moody's") and "AAA" by Fitch Ratings ("Fitch" and,
together with S&P and Moody's, each, a "Rating Agency" and,
collectively, the "Rating Agencies"), (ii) the Class A-1LB Notes be
rated "AAA" by S&P, "Aaa" by Moody's and "AAA" by Fitch, (iii) the
Class A-2L Notes be rated "AAA" by S&P, "Aaa" by Moody's and
"AAA" by Fitch, (iv) the Class A-3L Notes be rated at least "AA" by
S&P, at least "Aa2" by Moody's and at least "AA" by Fitch, (v) the
Class A-4L Notes be rated at least "A-" by S&P, at least "A2" by
Moody's and at least "A" by Fitch and (vi) the Class B-1L Notes be
rated at least at least "Baa1" by Moody's.

The ratings of the Notes by S&P and Fitch address the likelihood of
timely payment of the Periodic Interest Amount on and the ultimate
payment of the Aggregate Principal Amount of the Class A-1L Notes,
the Class A-2L Notes and the Class A-3L Notes and the ultimate
payment of the Cumulative Interest Amount and the Aggregate
Principal Amount of the Class A-4L Notes. The ratings of the Notes
(other than the Class C Notes) by Moody's address the ultimate cash
receipt of all required payments as provided by the governing
documents, and are based on the expected loss to the Noteholders of
each Class (other than the Class C Notes) relative to the promise of
receiving the present value of such payments. A rating is not a
recommendation to purchase, hold or sell securities, in as much as such
rating does not comment as to market price or suitability for a particular
investor and may be subject to revision or withdrawal at any time by the
assigning rating organization. Ratings on the Notes (other than the
Class C Notes) are subject to revision or withdrawal at any time by the
assigning Rating Agency. In the event that any rating initially assigned
to the Notes (other than the Class C Notes) is subsequently lowered for
any reason, no Person or entity is obligated to provide any additional
support or credit enhancement with respect to the Notes. The Issuer has
not requested a rating on the Notes by any rating agency other than
S&P, Moody's and Fitch, although data with respect to the Portfolio
Collateral may have been provided to other rating agencies solely for
informational purposes. There can be no assurance that, if a rating is

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 assigned to a Class of Notes (other than the Class C Notes) by any other
rating agency, such rating will be equivalent to the rating assigned by
Moody's, S&P or Fitch. See "Ratings" and "Special Considerations—
Rating Confirmation."

Listing Application has been made to the Irish Stock Exchange to admit the
Notes (other than the Class C Notes) to the Official List. There can be
no assurance that such application will be granted.

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 SPECIAL CONSIDERATIONS

Prospective Holders of Notes should consider, among other things, the following factors in connection
with the purchase of the Notes.

1. Limited-Recourse Obligations. The Notes will be limited-recourse obligations of the Issuer and
the Class A Notes and the Class B-1L Notes will be non-recourse obligations of the Co-Issuer payable solely from
the Trust Estate; provided that only the Holders of the Senior Class A Notes are entitled to the benefits of the
Cashflow Swap Agreement. The Issuer, as a special purpose Cayman Islands company, will have no significant
assets other than the Portfolio Collateral, the Cashflow Swap Agreement, the Collection Account, the Initial
Deposit Account, the Expense Reimbursement Account, any Securities Lending Accounts and the Closing
Expense Account. The Co-Issuer will have no substantial assets, and no other person or entity except for the Co-
Issuers will be obligated to make any payments on the Notes. None of the Collateral Manager, the Collateral
Administrator, the Trustee, the Preference Share Paying Agent, the Initial Purchasers, the Cashflow Swap
Provider (except pursuant to the Cashflow Swap Agreement solely with respect to the Senior Class A Notes), the
Administrator, any Paying Agent, the Reporting Agent or any of their respective Affiliates or any other person or
entity will be obligated to make payments on the Notes. Consequently, Holders of the Notes must rely solely
upon distributions on the Trust Estate and, in the case of the Senior Class A Notes, the Cashflow Swap
Agreement, for the payment of amounts payable in respect of the Notes. If distributions on such collateral are
insufficient to make payments on the Notes, no other assets of the Issuer or any other person or entity will be
available for the payment of the deficiency, and the Co-Issuers shall have no further obligation to pay such
deficiency which will be extinguished.

2. Subordination. The Class A-1LB Notes are subordinated in right of payment of principal to the
Class A-1LA Notes, the Class A-3L Notes are subordinated to the Class A-1L Notes and the Class A-2L Notes,
the Class A-4L Notes are subordinated to the Senior Class A Notes, and the Class B-1L Notes are subordinated to
the Class A Notes, and, in each case, to the payment of certain fees and expenses of the Issuer. Notwithstanding
the foregoing, each payment applied to pay the principal amount of the Class A-1LA Notes, the Class A-1LB
Notes and the Class A-2L Notes will be allocated among the Holders of such Notes in accordance with the Class
A-1L/A-2L Notes Principal Payment Priority. Payments of principal and interest on the Notes are subject to the
Priority of Payments described herein. The failure to pay interest on the Class A-4L Notes will not constitute an
Event of Default so long as any Senior Class A Notes remain Outstanding. The failure to pay interest on the
Class B-1L Notes will not constitute an Event of Default so long as any Class A Notes remain Outstanding. Once
an Event of Default and acceleration have occurred, Holders of the Class A-4L Notes are not entitled to be paid
the Cumulative Interest Amount with respect thereto and the Aggregate Principal Amount thereof unless the
Senior Class A Notes have been paid in full, and Holders of the Class B-1L Notes are not entitled to be paid the
Cumulative Interest Amount with respect thereto and the Aggregate Principal Amount thereof unless the Class A
Notes have been paid in full. The Class C-1 Notes and the Class C-2 Notes are not senior or subordinated to any
of the other Classes of Notes and will be payable solely from the Class C-1 Collateral or the Class C-2 Collateral,
respectively. See "Description of Notes—Payments on the Notes—Priority of Payments."

In addition, if an Event of Default occurs, the Controlling Class will be entitled to determine the
remedies to be exercised under the Indenture, including the liquidation of the Trust Estate. Remedies pursued by
the Holders of the Class of Notes entitled to pursue such remedies could be adverse to the interests of the Holders
of Notes or Preference Shares subordinated to such Class.

3. Portfolio Collateral May Defer Interest. There is no limitation on the percentage of the
Aggregate Portfolio Balance which may consist of PIK Bonds. While the Cashflow Swap Provider will make
advances to the Issuer to cover the Cashflow Swap Shortfall Amount, the Issuer may have insufficient funds as a
result of such deferrals or payments "in-kind" to make payments on the Class A-4L Notes and the Class B-1L
Notes or distributions in respect of the Preference Shares. The Cashflow Swap Shortfall Amount will not include
any portion of the Deferred Shortfall Amount or the Interest Shortfall Amount, as applicable, that is attributable to

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any item of Portfolio Collateral that has become a Deferred Interest PIK Bond and that has not been sold or
disposed of within two years of the date on which such Portfolio Collateral became a Deferred Interest PIK Bond.
Because Deferred Interest PIK Bonds are not in default in accordance with their terms, Holders of the Securities
will have no remedies against the issuers of such Deferred Interest PIK Bonds. Moreover, the Issuer will not be
permitted to sell a Deferred Interest PIK Bond unless it has become Credit Risk Portfolio Collateral or Defaulted
Portfolio Collateral.

4. Nature of Portfolio Collateral; Defaults. The Portfolio Collateral are subject to credit, liquidity
and interest rate risks. The Portfolio Collateral pledged to secure the Notes will consist primarily of CDO
Securities and Synthetic Securities, certain of which will have greater credit and liquidity risk than investment
grade sovereign or corporate bonds.

The offering of the Notes has been structured to withstand certain assumed losses relating to defaults on
the underlying Portfolio Collateral. See "Ratings." There is no assurance that actual losses will not exceed such
assumed losses. If any losses exceed such assumed levels, however, payments or distributions on the Notes could
be adversely affected by defaults. To the extent an item of Portfolio Collateral becomes Defaulted Portfolio
Collateral and the Issuer sells or otherwise disposes of such Portfolio Collateral, it is not likely that the proceeds
of such sale or disposition will be equal to the unpaid principal and interest thereon which may defer or reduce, if
not eliminate, the availability of funds that would otherwise be distributable to the Holders of the Notes.

CDO Securities generally are limited-recourse obligations of the issuer thereof payable solely from the
Underlying Securities of such issuer or proceeds thereof. Consequently, holders of CDO Securities must rely
solely on distributions on the Underlying Securities or proceeds thereof for payment in respect thereof. If
distributions on the Underlying Securities are insufficient to make payments on the CDO Securities, no other
assets will be available for payment of the deficiency and following realization of the underlying assets, the
obligations of such issuer to pay such deficiency shall be extinguished. Such Underlying Securities may consist
of high yield debt securities, loans, structured finance securities, emerging market debt securities and other debt
instruments, generally rated below investment grade (or of equivalent credit quality) except for structured finance
securities. High yield debt securities are generally unsecured (and loans may be unsecured) and may be
subordinated to certain other obligations of the issuer thereof. The lower rating of high yield debt securities and
below investment grade loans reflects a greater possibility that adverse changes in the financial condition of an
issuer or in general economic conditions or both may impair the ability of the issuer to make payments of
principal or interest. Such investments may be speculative.

Issuers of CDO Securities may acquire interests in loans and other debt obligations by way of sale,
assignment or participation. The purchaser of an assignment typically succeeds to all the rights and obligations of
the assigning institution and becomes a lender under the credit agreement with respect to the debt obligation;
however, its rights can be more restricted than those of the assigning institution.

Purchasers of loans are predominantly commercial banks, investment funds, mutual funds and investment
banks. As secondary market trading volumes increase, new loans are frequently adopting standardized
documentation to facilitate loan trading which may improve market liquidity. There can be no assurance,
however, that future levels of supply and demand in loan trading will provide an adequate degree of liquidity or
that the current level of liquidity will continue. Because of the provision to holders of such loans of confidential
information relating to the borrower, the unique and customized nature of the loan agreement, and the private
syndication of the loan, loans are not as easily purchased or sold as a publicly traded security, and historically the
trading volume in the loan market has been small relative to the high yield debt market.

In purchasing participations, an issuer of CDO Securities will usually have a contractual relationship only
with the selling institution, and not the borrower. Each such issuer generally will have no right directly to enforce
compliance by the borrower with the terms of the loan agreement, nor any rights of set-off against the borrower,
nor have the right to object to certain changes to the loan agreement agreed to by the selling institution. Such
issuer may not directly benefit from the collateral supporting the related loan and may be subject to any rights of

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set-off the borrower has against the selling institution. In addition, in the event of the insolvency of the selling
institution, under the laws of the United States of America and the States thereof, such issuer may be treated as a
general creditor of such selling institution, and may not have any exclusive or senior claim with respect to the
selling institution's interest in, or the collateral with respect to, the loan. Consequently, such issuer may be subject
to the credit risk of the selling institution as well as of the borrower.

CDO Securities are subject to interest rate risk. The Underlying Securities of an issuer of CDO Securities
may bear interest at a fixed (floating) rate while the CDO Securities issued by such issuer may bear interest at a
floating (fixed) rate. As a result, there could be a floating/fixed rate or basis mismatch between such CDO
Securities and Underlying Securities which bear interest at a fixed rate, and there may be a timing mismatch
between the CDO Securities and Underlying Securities that bear interest at a floating rate as the interest rate on
such floating rate Underlying Securities may adjust more frequently or less frequently, on different dates and
based on different indices, than the interest rates on the CDO Securities. As a result of such mismatches, an
increase or decrease in the level of the floating rate indices could adversely impact the ability to make payments
on the CDO Securities.

5. Concentration Risk. The Issuer will invest in a pool of Portfolio Collateral consisting primarily
of U.S. dollar-denominated CDO Securities and Synthetic Securities. Although no significant concentration is
expected to exist on the Ramp-Up Completion Date with regard to the securities underlying the CDO Securities
with respect to any particular obligor, industry or country (other than the United States), the concentration of the
Portfolio Collateral (or the portfolios of securities underlying certain Portfolio Collateral) in any one obligor
would subject the Notes to a greater degree of risk with respect to defaults by such obligor, and the concentration
of the Portfolio Collateral (or the portfolios of securities underlying certain Portfolio Collateral) in any one
industry would subject the Notes to a greater degree of risk with respect to economic downturns relating to such
industry. In addition, the concentration of the Portfolio Collateral (or the portfolios of securities underlying
certain Portfolio Collateral) in any one country (other than the United States) would subject the Notes to special
risks related to regional economic conditions and sovereign risks. Further, the concentration of the Portfolio
Collateral will change after the Closing Date as the Underlying Securities backing the CDO Securities are traded,
paid or redeemed, and as the Portfolio Collateral is traded, paid or redeemed, the concentration with regard to the
CDO Securities will also be subject to change.

6. Insolvency Considerations with Respect to Issuers of Portfolio Collateral. The Portfolio

Collateral and Underlying Securities which are obligations of non-U.S. issuers may be subject to various laws
enacted in the countries of their issuance for the protection of creditors. These insolvency considerations will
differ depending on the country in which each issuer is located or domiciled and may differ depending on whether
the issuer is a non-sovereign or a sovereign entity.

Various laws enacted for the protection of creditors may apply to the Portfolio Collateral and the
obligations securing the Portfolio Collateral. The information in this and the following paragraph is applicable
with respect to U.S. issuers subject to United States federal bankruptcy law. Insolvency considerations may differ
with respect to other issuers. If a court in a lawsuit brought by an unpaid creditor or representative of creditors of
an issuer of an item of Portfolio Collateral or an obligation securing an item of Portfolio Collateral, such as a
trustee in bankruptcy, were to find that the issuer did not receive fair consideration or reasonably equivalent value
for incurring the indebtedness constituting the Portfolio Collateral or the obligation securing an item of Portfolio
Collateral and, after giving effect to such indebtedness, the issuer (i) was insolvent, (ii) was engaged in a business
for which the remaining assets of such issuer constituted unreasonably small capital or (iii) intended to incur, or
believed that it would incur, debts beyond its ability to pay such debts as they mature, such court could determine
to invalidate, in whole or in part, such indebtedness as a fraudulent conveyance, to subordinate such indebtedness
to existing or future creditors of such issuer, or to recover amounts previously paid by such issuer in satisfaction
of such indebtedness. The measure of insolvency for purposes of the foregoing will vary. Generally, an issuer
would be considered insolvent at a particular time if the sum of its debts were then greater than all of its property
at a fair valuation, or if the present fair saleable value of its assets was then less than the amount that would be
required to pay its probable liabilities on its existing debts as they became absolute and matured. There can be no

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assurance as to what standard a court would apply in order to determine whether the issuer was "insolvent" after
giving effect to the incurrence of the indebtedness constituting the Portfolio Collateral or the obligation securing
an item of Portfolio Collateral or that, regardless of the method of valuation, a court would not determine that the
issuer was "insolvent" upon giving effect to such incurrence. In addition, in the event of the insolvency of an
issuer of an item of Portfolio Collateral or an obligor or an issuer of an obligation securing an item of Portfolio
Collateral, payments made on such Portfolio Collateral could be subject to avoidance as a "preference" if made
within a certain period of time (which may be as long as one year) before insolvency.

In general, if payments on an item of Portfolio Collateral or an obligation securing an item of Portfolio

Collateral are avoidable, whether as fraudulent conveyances or preferences, such payments can be recaptured
either from the initial recipient (such as, in the case of the Portfolio Collateral, the Issuer) or from subsequent
transferees of such payments (such as the Holders of the Notes). To the extent that any such payments are
recaptured from the Issuer, the resulting loss will generally (subject to the Priority of Payments) be borne, first, by
the Holders of the Preference Shares, second, by the Holders of the Class B-1L Notes, third, by the Holders of the
Class A-4L Notes, fourth, by the Holders of the Class A-3L Notes and, fifth, by the Holders of the Class A-2L
Notes and the Class A-1L Notes in accordance with the Class A-1L/A-2L Notes Principal Payment Priority.
However, a court in a bankruptcy or insolvency proceeding would be able to direct the recapture of any such
payment from a Holder of Notes only to the extent that such court has jurisdiction over such Holder or its assets.
Moreover, it is likely that avoidable payments could not be recaptured directly from a Holder that has given value
in exchange for its Note, in good faith and without knowledge that the payments were avoidable. Nevertheless,
since there is no judicial precedent relating to recapture of avoidable payments in respect of structured securities
such as the Notes, there can be no assurance that a Holder of the Notes will be able to avoid recapture on this or
any other basis.

The Issuer does not intend to engage in conduct that would form the basis for a successful cause of action
based upon fraudulent conveyance, preference or equitable subordination. There can be no assurance, however,
as to whether any lending institution or other investor from which the Issuer acquired the Portfolio Collateral
engaged in any such conduct (or any other conduct that would subject the Portfolio Collateral and the Issuer to
Insolvency Laws) and, if it did, as to whether such creditor claims could be asserted in a U.S. court (or in the
courts of any other country) against the Issuer.

7. Emerging Markets Securities. A portion of the portfolios underlying certain CDO Securities will
consist of debt obligations of issuers located in emerging market countries. Because each such type of asset has
different risk characteristics, the concentration of the portfolio of Portfolio Collateral in any particular type of
asset may significantly affect the liquidity, credit exposure, currency exposure and maturity or the redemption
date, as applicable, of the Notes.

Investments in emerging markets securities involve certain special risks related to regional economic
conditions and sovereign risks which are not normally associated with investments in the securities of U.S.
issuers, including: (1) risks associated with political and economic uncertainty, including the risks of
nationalization or expropriation of assets, war and revolution; (2) lower levels of disclosure and regulation in
foreign securities markets than in the United States; (3) confiscatory taxation, taxation of income earned in
foreign nations or other taxes or restrictions imposed with respect to investments in foreign nations; (4) economic
and political risks, including potential foreign exchange controls (which may include suspension of the ability to
convert to U.S. Dollars and/or transfer currency from a given country and repatriation of investments); and
(5) uncertainties as to the status, interpretation and application of laws. In addition, there is often less publicly
available information about issuers located in Emerging Market Countries than about those in the United States.
Issuers located in Emerging Market Countries are not generally subject to uniform accounting, auditing and
financial reporting standards, and auditing practices and requirements may not be comparable to those applicable
to U.S. companies.

Emerging markets securities are generally unsecured and may be subordinated to certain other obligations
of the issuer thereof. Many of such securities have lower ratings than comparable U.S. securities, reflecting a

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greater possibility that adverse changes in the financial condition of an issuer or in general economic conditions or
both may impair the ability of the issuer to make payments of principal and interest. Such investments may be
speculative.

During periods of limited liquidity and higher price volatility of the markets for emerging markets
securities, the Issuer's ability to dispose of such securities at a price and time that the Collateral Manager on
behalf of the Issuer is required (or required to use commercially reasonable efforts) to do so may be impaired.
The Issuer's inability to dispose fully and promptly of positions in declining markets will cause its net asset value
to decline as the value of unsold positions is marked to lower prices. Accordingly, the ability of the Holders of
the Preference Shares to effect redemptions may also be impaired.

It also may be difficult to obtain and enforce a judgment relating to debt obligations issued by foreign
issuers, particularly issuers located in emerging market countries, in a court outside the United States. Further,
custody and clearance risks may be associated with emerging market debt securities that do not clear through
DTC or Euroclear in addition to those applicable to emerging market debt securities generally. There is a risk, for
example, that such securities could be counterfeit, or subject to a defect in title or claims to ownership by other
parties.

8. Potential Illiquidity of CDO Securities. There is no established, liquid secondary market for
many of the CDO Securities which the Issuer may purchase and the lack of such an established, liquid secondary
market may have an adverse effect on the market value of such CDO Securities and the Issuer's ability to dispose
of them. Such illiquidity may adversely affect the price and timing of the Issuer's liquidation of CDO Securities,
including the liquidation of CDO Securities following the occurrence of an Event of Default under the Indenture
or in connection with a redemption or refinancing of the Notes.

Further, Portfolio Collateral will be subject to certain transfer restrictions that may further restrict
liquidity. Therefore, no assurance can be given that if the Issuer were to dispose of a particular Portfolio
Collateral held by the Issuer, it could dispose of such investment at the previously prevailing market price. A
decrease in the market value of the Portfolio Collateral would adversely affect the Sale Proceeds that could be
obtained upon the sale of the Portfolio Collateral and could ultimately affect the ability of the Co-Issuers to effect
an Optional Redemption or pay the principal of the Notes, upon a liquidation of the Portfolio Collateral following
the occurrence of an Event of Default. See "Description of the Notes—Optional Redemption" and "Legal
Structure—The Indenture—Events of Default."

The market value of the Portfolio Collateral will generally fluctuate with, among other things, changes in
prevailing interest rates, general economic and political conditions, the condition of certain financial markets,
developments or trends in any particular industry and the financial condition of the issuers of the Portfolio
Collateral.

Any concentration of Portfolio Collateral in any one issuer, servicer or other characteristic may expose
the Issuer to greater risk than would be the case if the Portfolio Collateral were more diversified, which would
affect the Issuer's ability to make payments on the Notes. See "Security for the Notes―Portfolio Collateral."

The description of the Portfolio Collateral herein and the risks related thereto is general in nature and
prospective purchasers should review the descriptions and risk factors relating to each item of Portfolio Collateral
set forth in the underlying disclosure documents, transaction documents and servicing reports, copies of which are
available for inspection upon request to the Initial Purchaser. PROSPECTIVE PURCHASERS SHOULD
ASSESS FOR THEMSELVES THE RISKS INHERENT IN THE PORTFOLIO COLLATERAL.

9. Default and Recovery Rates on Portfolio Collateral. Reliable sources of statistical information
with respect to the default and recovery rates for the type of securities represented by the Portfolio Collateral do
not exist. The historical performance of a market is not necessarily indicative of its future performance. Should
increases in default rates or decreases in recovery rates occur with respect to the type of assets underlying the
Portfolio Collateral, the actual default or recovery rates of the Portfolio Collateral may exceed (and may

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significantly exceed) or may be significantly less than, the hypothetical default rates and recovery rates,
respectively, set forth herein under "Maturity and Prepayment Considerations." PROSPECTIVE PURCHASERS
OF THE NOTES SHOULD CONSIDER AND DETERMINE FOR THEMSELVES THE LIKELY LEVEL OF
DEFAULTS AND THE LEVEL OF RECOVERIES ON THE PORTFOLIO COLLATERAL DURING THE
TERM OF THE TRANSACTION.

10. Synthetic Securities. With respect to Synthetic Securities, the Issuer has a contractual relationship
only with the counterparty of such Synthetic Security, and not with the Reference Obligor of the Reference
Obligation. The Issuer generally will have no right to directly enforce compliance by the Reference Obligor with
the terms of the Reference Obligation nor any rights of set-off against the Reference Obligor, nor have any voting
rights with respect to the Reference Obligation. The Issuer will not directly benefit from the collateral supporting
the Reference Obligation and will not have the benefit of the remedies that would normally be available to a
holder of such Reference Obligation. In addition, in the event of the insolvency of the counterparty, the Issuer
will be treated as a general creditor of such counterparty, and will not have any claim with respect to the
Reference Obligation. Consequently, the Issuer will be subject to the credit risk of the counterparty as well as that
of the Reference Obligor. As a result, concentrations of Synthetic Securities in a single Synthetic Security
Counterparty may subject the Notes to an additional degree of risk with respect to defaults by such Synthetic
Security Counterparty as well as by the Reference Obligor. Additionally, while the Issuer expects that the returns
on a Synthetic Security will generally reflect those of the related Reference Obligation, as a result of the terms of
the Synthetic Security and the assumption of the credit risk of the Reference Obligor, a Synthetic Security may
have a different expected return, a different (and potentially greater) probability of default and expected loss
characteristics following a default, and a different expected recovery following default. Additionally, when
compared to the Reference Obligation, the terms of a Synthetic Security may provide for different maturities,
payment dates, interest rates, interest rate references, credit exposures, or other credit or non-credit related
characteristics. A Synthetic Security may also involve leveraged exposure to the related Reference Obligation.
Upon default on a Reference Obligation, or in certain circumstances, default or other actions by an issuer of a
Reference Obligation, the terms of the relevant Synthetic Security may permit or require the issuer of such
Synthetic Security to satisfy its obligations under the Synthetic Security by delivering to the Issuer the Reference
Obligation or an amount equal to the then current market value of the Reference Obligation. In addition, upon
maturity, default, acceleration or any other termination (including a put or call) of the Synthetic Security, the
terms of the Synthetic Security may permit or require the issuer of such Synthetic Security to satisfy its
obligations under the Synthetic Security by delivering to the Issuer securities other than the Reference Obligation
or an amount different than the then current market value of the Reference Obligation. See "Security for the
Notes—Portfolio Collateral." The Issuer will observe certain limitations on its ability to purchase Synthetic
Securities in order to ensure that it is not treated as a "dealer in securities" or otherwise treated as engaged in a
trade or business in the United States for U.S. federal income tax purposes.

11. Securities Lending. The Collateral Manager may from time to time instruct the Trustee to lend
items of Portfolio Collateral to Securities Lending Counterparties pursuant to one or more Securities Lending
Agreements. Each such loan will be on market terms. In the event a Securities Lending Counterparty defaults on
its obligation to return loaned items of Portfolio Collateral, because of insolvency or otherwise, (a) the Issuer or
the Trustee could experience delays and costs in gaining access to the loaned items of Portfolio Collateral and
could be unable to sell such loaned items of Portfolio Collateral when it otherwise would and (b) Holders of
Securities could suffer losses to the extent the Issuer or the Trustee is unable to reobtain the items of Portfolio
Collateral lent to the Securities Lending Counterparty. The shortfall could be due to, among other things,
discrepancies between mark-to-market and actual transaction prices for the loaned items of Portfolio Collateral
arising from limited liquidity or availability of the loaned items of Portfolio Collateral. The Rating Agencies may
downgrade any of the Notes below their then-current rating of the Notes if a Securities Lending Counterparty has
been downgraded by the Rating Agencies. See "Security for the Notes—Securities Lending."

12. Limited Authority to Dispose of Portfolio Collateral. The Portfolio Collateral may not be sold or
otherwise disposed of, except (i) in connection with an Optional Redemption, Partial Redemption or a
Refinancing, (ii) that the Issuer may sell Credit Improved Portfolio Collateral, Credit Risk Portfolio Collateral and

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Defaulted Portfolio Collateral at the direction of the Collateral Manager, (iii) in connection with the sale of any
Portfolio Collateral that has not matured prior to the Business Day preceding the Stated Maturity, (iv) in
accordance with a Proposed Plan and (v) that Synthetic Securities may be released from the lien of the Indenture
upon receipt of other Synthetic Securities with the same economic characteristics under certain limited
circumstances described under "Security for the Notes—Sales of Portfolio Collateral." Accordingly, the Issuer's
ability to sell existing Portfolio Collateral and buy additional Portfolio Collateral will be limited. See "Security
for the Notes—Additional Portfolio Collateral and Reinvestment Criteria."

The market value of the Portfolio Collateral will also generally fluctuate with, among other things,
general economic conditions, world political events, developments or trends in any particular industry, the
conditions of financial markets and the financial condition of the issuers of the Portfolio Collateral. In addition,
some of the Portfolio Collateral will have no or a limited trading market. Any permitted sales by the Issuer of
Portfolio Collateral could result in losses by the Issuer. Certain of the Portfolio Collateral is subject to restrictions
on transfer. The Issuer's investment in illiquid Portfolio Collateral may restrict its ability to dispose of
investments in a timely fashion and for a fair price as well as its ability to take advantage of market opportunities,
even in the limited circumstances in which the Issuer is permitted by the Indenture to sell Portfolio Collateral.
Illiquid Portfolio Collateral may trade at a discount from comparable, more liquid investments. If an Event of
Default should occur with respect to the Notes, there can be no assurance that the proceeds of any sale by the
Trustee of the Portfolio Collateral and the other collateral securing the Notes will be sufficient to pay in full the
principal of and interest on the Notes or any amounts payable to the Trustee. However, certain conditions set
forth in the Indenture must be satisfied before the Trustee is permitted to sell the Portfolio Collateral and other
collateral pledged as security for the Notes following such events. See "Legal Structure—The Indenture—Events
of Default" and "Security for the Notes."

13. Restrictions on Transfer. The Notes have not been registered under the U.S. Securities Act of
1933, as amended (the "Securities Act"), or under any U.S. state securities or "blue sky" laws or the securities
laws of any other jurisdiction and are being issued and sold in reliance upon exemptions from registration
provided by such laws. There is no market for the Notes being offered hereby and, as a result, a purchaser must
be prepared to hold the Notes for an indefinite period of time or until the maturity thereof. No Note may be sold
or transferred unless such sale or transfer (i) is exempt from the registration requirements of the Securities Act
(for example, in reliance on exemptions provided by Rule 144A or Regulation S) and applicable state securities
laws, (ii) will not constitute or result in a non-exempt "prohibited transaction" under ERISA or Section 4975 of
the Code and (iii) does not cause either of the Co-Issuers to become subject to the registration requirements of the
U.S. Investment Company Act of 1940, as amended (the "Investment Company Act"). Prospective transferees
of the Notes will be required pursuant to the terms of the Indenture to deliver a certificate to the Transfer Agent
and the Co-Issuers relating to compliance with the Securities Act, applicable state securities laws, ERISA, Section
4975 of the Code and the Investment Company Act. The Co-Issuers will not provide registration rights to any
purchaser of the Notes and neither of the Co-Issuers, the Trustee, nor any other person may register the Notes
under the Securities Act or any state securities or "blue sky" laws nor may the Co-Issuers or the Trustee take such
action with respect to the Portfolio Collateral. See "Description of the Notes—General." The Notes will be
owned by a relatively small number of purchasers and it is highly unlikely that an active secondary market for the
Notes will develop. Purchasers of the Notes may find it difficult or uneconomic to liquidate their investment at
any particular time.

Neither of the Co-Issuers has registered as an investment company under the Investment Company Act in
reliance on the exception provided under Section 3(c)(7) thereof for companies whose outstanding securities are
beneficially owned by "Qualified Purchasers" (as defined in Section 3(c)(7) of the Investment Company Act) and
which do not make a public offering of their securities in the United States. If the United States Securities and
Exchange Commission (the "SEC") or a court of competent jurisdiction were to find that the Issuer or the Co-
Issuer is required to register as an investment company, possible consequences include, but are not limited to, the
SEC applying to enjoin the violation, investors suing the Issuer or the Co-Issuer, as applicable, to recover any
damages caused by the violation and any contract to which the Issuer or the Co-Issuer, as applicable, is a party
made in violation or whose performance involves a violation of the Investment Company Act being unenforceable

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unless enforcing such contract would produce a more equitable result. Should the Issuer or the Co-Issuer be
subjected to any or all of the foregoing or to any other consequences, the Issuer or the Co-Issuer, as the case may
be, would be materially and adversely affected.

Each transferee of a Note (except with respect to a transfer pursuant to Regulation S) will be deemed to
make certain representations at the time of transfer relating to compliance with Section 3(c)(7) of the Investment
Company Act. See "Delivery of the Notes; Transfer Restrictions; Settlement."

The Indenture provides that if, notwithstanding the restrictions on transfer contained therein, the Issuer
determines any beneficial owner or Holder of a Note (other than a Note transferred to a non-U.S. Person in
reliance on Regulation S) is not a Qualified Institutional Buyer and a Qualified Purchaser, the Issuer will require
that such beneficial owner or Holder sell all of its right, title and interest in such Note to a Person who is so
qualified, with such sale to be effected within 30 days after notice of such sale requirement is given. If such sale
is not effected within such 30 days, upon written direction from the Issuer, the Trustee will be authorized to
conduct a commercially reasonable sale of such Note to a Person who does so qualify and pending transfer, no
further payments will be made in respect of such Note or any beneficial interest therein.

14. Final Maturity Date, Average Life and Prepayment Considerations; Optional Redemption. The
Final Maturity Date of each Class of Notes is the Payment Date in February 2016, subject to prior redemption or
refinancing under the circumstances described herein. The average life of each Class of Notes is expected to be
shorter than the number of years until the Final Maturity Date, and the average lives may vary due to various
factors affecting the early retirement of the Portfolio Collateral. Retirement of an item of Portfolio Collateral
prior to that item of Portfolio Collateral's respective final maturity will depend, among other things, on the
financial condition of the issuers and of the obligors with respect to the underlying assets and the respective
characteristics of the Portfolio Collateral and the underlying assets, including the existence and frequency of
exercise of any redemption or refinancing features, the prevailing level of interest rates, the redemption price, the
actual default rate and the actual amount collected on any Defaulted Portfolio Collateral and the frequency of
tender or exchange offers for such item of Portfolio Collateral. See "Maturity and Prepayment Considerations."

As described herein, the Notes (other than the Class C Notes) are subject to redemption, in whole but not
in part, at the option of the Issuer on any Payment Date commencing with the Payment Date in February 2007 at a
price equal to the Optional Redemption Price.

As described herein, each Class of Notes (other than the Class C Notes) is subject to Refinancing on any
Payment Date commencing with the Payment Date in February 2007, in whole but not in part, at the option of the
Collateral Manager.

As described herein, the Class A-3L Notes, the Class A-4L Notes and the Class B-1L Notes are subject to
redemption, in whole but not in part, at the option of the Issuer on any Payment Date on or after the Payment Date
on which the Aggregate Principal Amount of the Class A-1L Notes and the Class A-2L Notes has been reduced to
zero, at a price equal to the Clean-up Call Price.

As described herein, each Class of Notes (other than the Class C Notes) is subject to redemption in
reverse order of priority if the Additional Overcollateralization Test is not satisfied on any Payment Date, to the
extent necessary to satisfy the Additional Overcollateralization Test.

As described herein, the Issuer may acquire Notes (other than the Class C Notes) in the open market or
privately negotiated transactions or otherwise. See "Legal Structure—The Indenture—Purchase of Notes."

As described herein, at any time that the Notes are Outstanding, if any Overcollateralization Test or, after
the first Payment Date, the Interest Coverage Test is not satisfied on any Payment Date, amounts that are junior in
right of payment to such test or confirmation as described under "Description of the Notes—Payment in the Notes
—Priority of Payments," will be applied to the redemption of the Notes (or, in the case of the Class B-1L Notes,
first to pay accrued and unpaid interest from prior Payment Dates, then to pay principal), in the order described

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under "Description of the Notes—Payments on the Notes—Priority of Payments," to the extent necessary to
satisfy the Overcollateralization Tests and the Interest Coverage Test. In addition, any amounts on deposit in the
Initial Deposit Account not applied to purchase (or committed to purchase) Portfolio Collateral by the Ramp-Up
Completion Date will be applied as Collateral Principal Collections on the Payment Date in May 2004.

15. Rating Confirmation. Within five Business Days after the Ramp-Up Completion Date, the Issuer
will request a Rating Confirmation. There can be no assurance that the rating assigned by any Rating Agency to a
Class of Notes (other than the Class C Notes) on the Closing Date will be confirmed by such Rating Agency in
response to such confirmation request. If the Issuer is unable to obtain a Rating Confirmation by the 30th
Business Day after the Ramp-Up Completion Date, on the next Payment Date and on each subsequent Payment
Date, certain Adjusted Collateral Interest Collections and Adjusted Collateral Principal Collections will be
applied to the payment of, first, the principal of the Class A-1L Notes and Class A-2L Notes in accordance with
the Class A-1L/A-2L Notes Principal Payment Priority, second, the principal of the Class A-3L Notes, third, the
principal of the Class A-4L Notes, fourth, the Class B-1L Periodic Rate Shortfall Amount, if any and, fifth, the
principal of the Class B-1L Notes, but only to the extent necessary to receive a Rating Confirmation.

Since the Ramp-Up Completion Date may not occur until the first Business Day that is 120 days after the
Closing Date, and a Rating Confirmation Failure may not occur until the 30th Business Day after the Ramp-Up
Completion Date, the first Payment Date on which principal payments would be made on the Notes as a result of
such Rating Confirmation Failure, if any, is expected to be the Payment Date in August 2004.

16. Interest Rate Risk. The Notes will bear interest at a floating rate based on LIBOR, while up to 5%
of the Portfolio Collateral may bear interest at fixed rates of interest. Although the Issuer expects to purchase
Portfolio Collateral which pays interest at a floating rate (the "Floating Rate Collateral") having an Aggregate
Principal Amount of at least 95% of the Aggregate Principal Amount of all the Portfolio Collateral, the Floating
Rate Collateral may bear interest at rates which are based on different interest indices than three-month LIBOR or
the interest rates on the Floating Rate Collateral may be determined or adjustments may take effect on different
dates than is the case for the Notes. As a result, the Floating Rate Collateral may be insufficient to compensate
for changes in LIBOR. Any such mismatches may adversely affect the Issuer's ability to pay amounts due in
respect of the Notes.

17. The Issuer. The Issuer is a newly formed entity and has no prior operating history. The Issuer
has no significant assets other than the Portfolio Collateral, the Collection Account, the Initial Deposit Account,
the Expense Reimbursement Account, the Securities Lending Account, the Closing Expense Account and the
Cashflow Swap Agreement. The Issuer will not engage in any business activity other than the co-issuance of the
Notes (other than the Class C Notes) and the issuance of the Class C Notes, the Principal Protected Securities, the
Preference Shares and the ordinary shares as described herein, the acquisition of and investment in Portfolio
Collateral and Class C Collateral as described herein, the ownership of shares of the Co-Issuer, certain activities
conducted in connection with the payment of amounts in respect of the Notes, the Principal Protected Securities
and the Preference Shares and other activities incidental to the foregoing. Income derived from the collateral will
be the Issuer's sole source of cash. The Issuer is an exempted limited liability company incorporated under the
laws of the Cayman Islands. Because the Issuer is a Cayman Islands company and its directors reside in the
Cayman Islands, it may not be possible for investors to effect service of process within the United States on such
persons or to enforce against them or against the Issuer in United States courts judgments predicated upon the
civil liability provisions of the United States securities laws. None of the directors, securityholders, officers or
incorporators of the Co-Issuers, any of their respective affiliates or any other Person (other than the Issuer) will be
obligated to make payments on the Notes or the Preference Shares.

18. The Co-Issuer. The Co-Issuer is a newly-formed entity and has no prior operating history. The
Co-Issuer has no substantial assets. The Co-Issuer will not engage in any business activity other than the co-
issuance of the Notes.

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 19. Potential Conflicts of Interest. Conflicts of interest may arise as a result of various factors
involving the Collateral Manager, the Initial Purchasers and others. The following briefly summarizes some of
these conflicts, but is not intended to be an exhaustive list of all such conflicts. The Portfolio Collateral will be
comprised of up to 20% (by Principal Balance) of Synthetic Securities which will be in the form of one or more
credit-linked notes issued by one or more issuers (each a "CLN Issuer"). Payments to be made by each CLN
Issuer to the Issuer will be dependent on payments that such CLN Issuer receives from the related Synthetic
Security Counterparty under a swap agreement between such CLN Issuer and such Synthetic Security
Counterparty. A Synthetic Security Counterparty may be the Initial Purchaser or an Affiliate thereof. Each CLN
Issuer will be obligated to pay under the related Synthetic Securities regardless of whether there is a default under
the related swap agreement. However, if the related Synthetic Security Counterparty fails to make payments to a
CLN Issuer or otherwise defaults under the terms of such swap agreement and such CLN Issuer does not have
sufficient funds to make payments on the Synthetic Securities to the Issuer after liquidation of the collateral
pledged to support such Synthetic Security Counterparty's obligations, such Synthetic Securities may become
Defaulted Portfolio Collateral and funds available to make payments and distributions, as the case may be, on the
Securities will be reduced. An Affiliate of the Initial Purchaser may purchase the Synthetic Securities from the
CLN Issuers and sell such Synthetic Securities to the Issuer; provided that such Synthetic Securities satisfy the
definition of "Portfolio Collateral." Accordingly, conflicts of interest may arise between the Initial Purchaser's
role as Initial Purchaser and its (or its Affiliate's) role as a Synthetic Security Counterparty to a CLN Issuer. The
Cashflow Swap Provider is an Affiliate of the Co-Placement Agent, which may create certain conflicts of interest.

The items of Portfolio Collateral acquired on the Closing Date by the Issuer are expected to be purchased
from Bear, Stearns & Co. Inc. or its Affiliates. Certain items of Portfolio Collateral were acquired by Bear,
Stearns & Co. or its Affiliates, at fair market value, from one or more accounts managed by the Collateral
Manager or its Affiliates, which accounts purchased the assets in the open market in connection with the
transaction. Such Portfolio Collateral will be purchased by the Issuer at a price equal to the original purchase
price of the Portfolio Collateral, adjusted, as applicable, for the relevant benchmark rate, prepayments, defaults
and recoveries with respect to such Portfolio Collateral, accrued and unpaid interest thereon, or principal received
thereon. No independent third party verification of the prices has been obtained or will be obtained by the Issuer.
As of the Closing Date, the market value of such Portfolio Collateral may be higher or lower than the prices at
which the Issuer is purchasing the Portfolio Collateral. Certain of such securities will be securities acquired by
Bear, Stearns & Co. Inc. or its Affiliates in connection with the underwriting or placement thereof. In addition, it
is expected that certain of the Portfolio Collateral have been issued by Bear, Stearns & Co. Inc. or an Affiliate
thereof.

If Bear, Stearns & Co. Inc. were to become the subject of a case or proceeding under the United States
Bankruptcy Code, another applicable insolvency law or a stockbroker liquidation under the U.S. Securities
Investor Protection Act of 1970, the trustee in bankruptcy, other liquidator or the U.S. Securities Investor
Protection Corporation could assert that Portfolio Collateral acquired from Bear, Stearns & Co. Inc. was pledged
or collaterally assigned and not sold and so are property of the insolvency estate of Bear, Stearns & Co. Inc. The
Issuer does not expect that the purchase by the Issuer of the Portfolio Collateral under the circumstances described
in this Confidential Offering Circular will be deemed to be a pledge or collateral assignment as opposed to a sale
or absolute transfer.

The Collateral Manager or one or more of its Affiliates is expected to purchase at least 7,000,000
Preference Shares on the Closing Date, but neither the Collateral Manager nor any such Affiliates are required to
retain any Preference Shares. So long as Tricadia is the Collateral Manager, any Securities held by, or with
respect to which discretionary voting rights are held by Tricadia, its Affiliates or their respective employees, will
have no voting rights with respect to any vote in connection with the removal of the Collateral Manager or the
appointment of a successor thereto upon resignation or removal of Tricadia as Collateral Manager and will be
deemed not to be Outstanding in connection with any such vote. As a holder of Preference Shares, Tricadia may
exercise its option to initiate a Refinancing. See "Description of the Notes—Refinancing."

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 The Collateral Manager and its Affiliates may have ongoing relationships with, render services to, and
engage in transactions with, companies whose securities are pledged to secure the Notes and may own debt or
equity securities issued by issuers of, and of obligors on, Portfolio Collateral. As a result, officers or Affiliates of
the Collateral Manager may possess (and will have no obligation to share) information relating to issuers of
Portfolio Collateral which is not known to the individuals at the Collateral Manager responsible for monitoring
the Portfolio Collateral and performing the other obligations under the Management Agreement. The Collateral
Manager (including accounts and customers managed or serviced by the Collateral Manager or its Affiliates) may
invest in securities that are senior to, or have interests different from or adverse to, the securities that are pledged
to secure the Notes. The Collateral Manager may serve as investment adviser for, invest in, or be affiliated with,
other entities organized to issue collateralized debt obligations secured by debt obligations that are similar to the
Portfolio Collateral, and with the same or similar objectives as the Issuer. The Collateral Manager will at certain
times (i) be simultaneously seeking to purchase or sell investments for the Issuer and any similar entity for which
it serves as investment adviser in the future, or for its clients or Affiliates and/or (ii) be shorting certain securities
that will be the same as the securities included in the Portfolio Collateral. The recommendations made to others
by the Collateral Manager and transactions effected by the Collateral Manager on behalf of themselves or others
may be the same or different from those made or effected to or on behalf of the Issuer.

The Initial Purchasers or their respective Affiliates may have placed or underwritten or acted as
counterparty or structuring agent in respect of certain of the Portfolio Collateral securing the Notes when such
Portfolio Collateral were originally issued and may have provided or be providing financial advisory services and
other services to issuers of certain Portfolio Collateral.

There will be no restriction on the ability of the Trustee, the Preference Share Paying Agent, the
Collateral Administrator, the Initial Purchasers, the Reporting Agent, the Collateral Manager or any of their
respective Affiliates or employees to purchase the Securities (either upon initial issuance or through secondary
transfers) and to exercise any voting rights to which such Securities are entitled, except under those circumstances
described above with respect to Securities held by Tricadia, its Affiliates, or their respective employees, or with
respect to which such Persons hold discretionary voting rights.

20. Dependence on the Collateral Manager. The Issuer has no employees and is dependent on the
employees of the Collateral Manager to make decisions on the Issuer's behalf in accordance with the terms of the
Indenture and the Management Agreement. As a result, the success of the Issuer will be highly dependent on the
expertise of the Collateral Manager. Consequently, the loss of certain individuals employed by or affiliated with
the Collateral Manager to manage the Issuer's investment program could have a significant adverse effect on the
performance of the Issuer. See "The Collateral Manager."

21. Ratings of the Notes. The ratings of the Notes by S&P and Fitch address the likelihood of timely
payment of the Periodic Interest Amount on and the ultimate payment of the Aggregate Principal Amount of the
Class A-1L Notes, the Class A-2L Notes and the Class A-3L Notes and the ultimate payment of the Cumulative
Interest Amount and the Aggregate Principal Amount of the Class A-4L Notes. The ratings of the Notes (other
than the Class C Notes) by Moody's address the ultimate cash receipt of all required payments as provided by the
governing documents, and are based on the expected loss to the Noteholders of each Class relative to the promise
of receiving the present value of such payments. A rating is not a recommendation to purchase, hold or sell
securities, in as much as such rating does not comment as to market price or suitability for a particular investor
and may be subject to revision or withdrawal at any time by the assigning rating organization.

22. Certain Tax Considerations. Prospective purchasers of the Notes should review carefully the tax
considerations set forth in "Certain Tax Considerations" herein. Under the Eligibility Criteria, Portfolio Collateral
will be eligible for purchase by the Issuer if, at the time it is purchased, either the payments thereon are not
subject to U.S. withholding tax or foreign withholding tax or the issuer (and the guarantor, if any) is required to
make "gross-up" payments that cover the full amount of any such withholding taxes. However, there can be no
assurance that, as a result of any change in any applicable law, treaty, rule, regulation or interpretation thereof, the
payments on the Portfolio Collateral would not in the future become subject to withholding taxes imposed by the

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United States or another jurisdiction. In that event, if the obligors of such Portfolio Collateral were not then
required to make "gross-up" payments that cover the full amount of any such withholding taxes, the amounts
available to make payments on the Securities would accordingly be reduced. There can be no assurance that
remaining payments on the Portfolio Collateral would be sufficient to make timely payments of interest on and
payment of principal at the Stated Maturity of each Class of the Notes or that there would be amounts available to
pay dividends and make other distributions on the Preference Shares.

23. Certain ERISA Considerations. Prospective purchasers of the Notes should review carefully the
ERISA considerations set forth in "Certain ERISA Considerations" herein.

The Issuer will issue Principal Protected Securities, Class C Notes and Preference Shares (which Principal
Protected Securities, Class C Notes and Preference Shares are not offered hereby). The Issuer intends to restrict
ownership of the Principal Protected Securities, Class C Notes and Preference Shares (including the Preference
Share Components) by Benefit Plan Investors so that no assets of the Issuer will be deemed to be such "plan
assets"; specifically, the Issuer intends to restrict the acquisition of the Principal Protected Securities, Class C
Notes and Preference Shares (including the Preference Share Components) such that no Benefit Plan Investors
other than Qualifying Insurance Companies may purchase Principal Protected Securities, Class C Notes and
Preference Shares (including the Preference Share Components). However, there can be no assurance that the
ownership of each of the Principal Protected Securities, Class C Notes and Preference Shares (including the
Preference Share Components) by Benefit Plan Investors will always remain below the 25% threshold established
under the Plan Asset Regulation.

Although the Co-Issuers believe that the Notes (other than the Class C Notes) should be classified as
indebtedness (rather than as equity) for purposes of the Plan Asset Regulation (and thus will allow more than 25%
of each Class of the Notes (other than the Class C Notes) to be purchased by Benefit Plan Investors), there can be
no assurance that the Notes (other than the Class C Notes) will be so characterized, and the characterization of one
or more classes of the Notes (other than the Class C Notes) could change if the financial condition of the Co-
Issuers changes.

If any of the Class C Notes, the Principal Protected Securities or Preference Shares (including the
Preference Share Components) were to meet or exceed the 25% threshold described above, or any Class of the
Notes were characterized as equity and met or exceeded the 25% threshold described above, resulting in the assets
of the Co-Issuers being deemed to be "plan assets," certain transactions that the Co-Issuers might enter into, or
may have entered into with respect to an employee benefit plan or plans or a party in interest thereto, in the
ordinary course of business, might constitute non-exempt prohibited transactions under ERISA and/or Section
4975 of the Code and might have to be rescinded. Additionally, the Co-Issuers or other "parties in interest" (as
defined in Section 3(14) of ERISA) or "disqualified persons" (as defined in Section 4975(e)(2) of the Code) may
be subject to other penalties with respect to the transaction.

Additionally, the acquisition or holding of the Notes by or on behalf of an ERISA Plan (as hereinafter
defined), or a governmental, foreign or church plan subject to laws similar to the provisions of Section 406 of
ERISA or Section 4975 of the Code, could give rise to a prohibited transaction if the Co-Issuers, the Trustee, the
Collateral Manager, the Initial Purchasers, other persons providing services in connection with the Co-Issuers, or
any of their respective affiliates, is a "disqualified person" or "party in interest" with respect to that ERISA Plan or
governmental, foreign or church plan. If such transaction is not exempt from ERISA and the Code or, if
applicable, laws pertaining to governmental, foreign or church plans which are similar to ERISA and the Code,
the transaction may have to be rescinded and the Issuer or other "disqualified persons" or "parties in interest" may
be subject to other penalties with respect to the transaction. Therefore, each investor will be required or deemed
to represent and warrant that either (i) it is not and throughout the holding of such Notes will not become or
transfer its interest to, an ERISA Plan or a governmental, foreign or church plan which is subject to any federal,
state, foreign or local law that is similar to the provisions of Section 406 of ERISA or Section 4975 of the Code or
(b) its purchase and holding of the Notes will not result in a non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code (or, in the case of a governmental, foreign or church plan, any similar

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federal, foreign, state or local law) because such purchase and holding either (x) is not, and will not become,
subject to such laws or (y) is covered by a prohibited transaction exemption all of the conditions of which are and
will be satisfied upon the acquisition of, and throughout the period that it holds, such Notes.

See "Certain ERISA Considerations" herein for a more detailed discussion of certain ERISA and related
considerations with respect to an investment in the Notes.

24. Money Laundering Prevention. On October 26, 2001, The Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56
(2001) (the "USA PATRIOT Act"), was enacted into law, aimed at giving the U.S. Federal government new
powers in the war on terrorism. The USA PATRIOT Act also imposed significant new anti-money laundering
requirements on all financial institutions. Specifically, broker-dealers registered with the U.S. Securities and
Exchange Commission and the U.S. National Association of Securities Dealers, Inc. (the "NASD"), such as Bear,
Stearns & Co. Inc. and CDC Securities, are required to establish and maintain anti-money laundering programs,
which include, at a minimum, developing internal policies, procedures and controls; designating a compliance
officer; establishing an ongoing employee training program; and establishing an independent audit function to test
programs. Bear, Stearns & Co. Inc. and CDC Securities may disclose information regarding purchasers to such
parties (e.g., affiliates, attorneys, auditors, administrators or regulators) as it deems necessary or advisable to
facilitate the transfer of the Notes, including, but not limited to, in connection with anti-money laundering and
similar laws. Bear, Stearns & Co. Inc. and CDC Securities or other service providers may also release
information if directed to do so by the purchasers of the Notes, if compelled to do so by law or in connection with
any government or self-regulatory organization request or investigation. In connection with the establishment of
anti-money laundering procedures, the Issuer may implement additional restrictions on the transfer of Notes.

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 THE ISSUER AND THE CO-ISSUER

The Issuer

Tricadia CDO 2003-1, Ltd. (the "Issuer") was incorporated in the Cayman Islands on July 2, 2003 with
the registration number CR-127018, for the express purpose of issuing the Notes, the Principal Protected
Securities and the Preference Shares, acquiring and holding the assets described herein and engaging in the related
transactions contemplated hereby.

The Issuer has no prior operating experience. The business activities in which the Issuer may engage will
be limited by the Indenture to the issuance of the Notes, the Principal Protected Securities, the Preference Shares
and the ordinary shares described herein, the acquisition of and investment in Portfolio Collateral as described
herein, the execution and delivery of the Collateral Administration Agreement, the Management Agreement, the
Reporting Agency Agreement, the Cashflow Swap Agreement, Securities Lending Agreements and agreements
governing Synthetic Securities, the ownership of shares of the Co-Issuer and certain activities conducted in
connection with the payment of amounts in respect of the Notes, the Principal Protected Securities and the
Preference Shares. Cash flow derived from the Portfolio Collateral, the Cashflow Swap Agreement (solely with
respect to the Senior Class A Notes) and other collateral securing the Notes (other than the Class C Notes) will be
the Issuer's only sources of cash.

Clause 3 of the Issuer's Memorandum and Articles of Association sets out the objects of the Issuer, which
include the business to be carried out by the Issuer in connection with the Notes, the Principal Protected Securities
and the Preference Shares. The registered office of the Issuer is located at the offices of Maples Finance Limited,
P.O. Box 1093 GT, Queensgate House, South Church Street, George Town, Grand Cayman, Cayman Islands.

The proceeds of the offering of the Notes will be used, together with the proceeds of the sale of the
Preference Shares, to purchase Portfolio Collateral, to fund the deposits in the Initial Deposit Account, the
Expense Reimbursement Account and the Closing Expense Account and to pay organizational, structuring, legal
and offering fees and expenses. See "Use of Proceeds."

The Administrator

Certain administrative functions will be performed on behalf of the Issuer by Maples Finance Limited
(the "Administrator") in the Cayman Islands.

The Administrator may resign or be terminated upon 90 days' prior written notice to the Issuer, in the case
of resignation, or to the Administrator, in the case of termination. Upon the occurrence of either of such events,
the Issuer will promptly appoint a successor administrator.

Capitalization and Indebtedness

The initial capitalization and indebtedness of the Issuer as of the Closing Date, after giving effect to the
issuance of the Securities and the ordinary shares of the Issuer but before deducting expenses of the offering of
the Securities and organizational expenses of the Co-Issuers, is expected to be as follows:

Class A-1LA Notes U.S.$76,500,000

Class A-1LB Notes U.S.$8,500,000
Class A-2LA Notes U.S.$85,000,000
Class A-3L Notes U.S.$35,000,000
Class A-4L Notes U.S.$12,000,000
Class B-1L Notes U.S.$20,000,000
Class 1 Principal Protected Securities – Class 1 Pre 2,405,691
Share Component

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 Class 2 Principal Protected Securities – Class 2 Pre 1,000,000
Share Component
Ordinary Shares U.S.$250
Preference Shares U.S.$22,022,000
Class 1 Principal Protected Securities – C-1 Note U.S.$5,000,000
Component (principal amount)
Class 2 Principal Protected Securities – C-2 Note U.S.$2,145,000
Component (principal amount)
Total Capitalization U.S.$266,167,250

Share Capital

The Issuer's authorized share capital is U.S.$22,272 divided into 22,022,000 Preference Shares (including
the Preference Share Components) of par value U.S.$0.001 per share and 250 ordinary shares of par value
U.S.$1.00 per share. As of the Closing Date, the ordinary shares of the Issuer will have been issued and will be
fully paid-up. All of the issued and outstanding ordinary shares of the Issuer will be held in trust for the Holders
of the Notes, until there are no Notes Outstanding, upon which such shares will be held in trust for the benefit of
certain charitable entities. On the Closing Date, all of the Preference Shares will have been issued.

The Directors of the Issuer are responsible for the management and administration of the Issuer.
Currently, the Directors are Phillipa White, Guy Major and Wendy Ebanks. The Directors are all employees
and/or officers of the Administrator.

The Co-Issuer

The Co-Issuer was incorporated on July 3, 2003 with the registration number 3678151, under the laws of
the State of Delaware and its registered office is 615 South DuPont Highway, Dover, Delaware 19901. The Co-
Issuer will not have any substantial assets and will not pledge any assets to secure the Notes.

Paragraph 3 of the Co-Issuer's certificate of incorporation sets out the objects of the Co-Issuer, which
include the business to be carried out by the Co-Issuer in connection with the Notes (other than the Class C
Notes). The Co-Issuer will not have any interest in the Portfolio Collateral or other assets held by the Issuer.

The Co-Issuer will be capitalized only to the extent of its common equity of U.S.$250, will have no assets
other than its equity capital and will have no debt other than as Co-Issuer of the Notes (other than the Class C
Notes). The Issuer will own 100% of the stock of the Co-Issuer.

Since incorporation, neither the Issuer nor the Co-Issuer has commenced trading or established any
accounts, except as disclosed herein or accounts used to hold amounts received with respect to share capital and
fees.

The Issuer is not required by Cayman Islands law, and the Issuer does not intend, to publish annual
reports and accounts. The Co-Issuer is not required by Delaware law, and the Co-Issuer does not intend, to
publish annual reports and accounts. The Indenture, however, requires the Issuer to provide the Trustee, on an
annual basis, with a certificate reviewing the activities of the Issuer and of the Issuer's performance during the
preceding year and stating that, to the best of the certifying officer's knowledge, the Issuer has fulfilled all of its
obligations under the Indenture or, if there has been a default, specifying such default, the nature and status
thereof and any actions undertaken to remedy such default.

In connection with the listing of the Notes (other than the Class C Notes) on the Daily Official List of the
Irish Stock Exchange, this Offering Circular will be filed with the Registrar of Companies of Ireland pursuant to
Regulation 13 of the European Communities (Stock Exchange) Regulations, 1984 of Ireland.

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 The Co-Issuers accept responsibility for the information contained in this document. To the best
knowledge and belief of the each of the Co-Issuers, the information contained in this Listing Particulars is in
accordance with the facts and does not omit anything likely to affect the import of such information.

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 DESCRIPTION OF THE NOTES

General

The Notes and the Principal Protected Securities will be issued on the Closing Date pursuant to an
indenture (the "Indenture"), to be dated as of the Closing Date, among the Co-Issuers and JPMorgan Chase
Bank, as trustee (the "Trustee") and as securities intermediary. The following summaries generally describe
certain provisions of the Notes and the Indenture. The summaries do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, the provisions of the Notes and the Indenture. When
particular provisions or terms used in the Notes and the Indenture are referred to, the actual provisions of the
Notes and the Indenture (including definitions of terms) are incorporated by reference in this Offering Circular,
but will not be deemed to constitute a part of the listing particulars filed with the Irish Stock Exchange in
connection with the listing of the Notes (other than the Class C Notes). Copies of the Indenture may be obtained
by Holders of the Notes upon request to the Issuer or the Initial Purchaser.

The Indenture limits the amount of Notes that can be issued thereunder to the Class A-1LA Notes, the
Class A-1LB Notes, the Class A-2L Notes, the Class A-3L Notes, the Class A-4L Notes, the Class B-1L Notes
and the Class C Notes in the aggregate principal amounts set forth on the cover hereof or in the Junior Securities
Offering Circular, as the case may be. The Notes (other than the Class C Notes) will be issued in fully registered
form in minimum denominations of U.S.$100,000 and integral multiples of U.S.$1.00 in excess thereof.

The Notes are limited-recourse obligations of the Issuer and the Class A Notes and the Class B-1L Notes
are non-recourse obligations of the Co-Issuer and all amounts payable in respect of the Notes (other than the Class
C Notes) will be paid solely from and to the extent of the available proceeds from the Trust Estate (provided that
payments received under the Cashflow Swap Agreement will be applied solely with respect to payments of
interest on the Senior Class A Notes). The Class C Collateral will be pledged to the Trustee solely as security for
the Issuer's obligations under the Class C Notes and the Class C Notes will not be secured by the Trust Estate.
For the avoidance of any doubt, the Trust Estate will not include the Class C Collateral. To the extent the assets
of the Trust Estate are insufficient to pay all amounts due on the Notes on each Payment Date, on the Final
Maturity Date or otherwise, the Co-Issuers shall have no further obligations in respect of the Notes and any sums
outstanding and unpaid shall be extinguished. The Notes are not the obligations of the Trustee, the Preference
Share Paying Agent, the Collateral Administrator, the Collateral Manager, the Initial Purchasers, the
Administrator, any Paying Agent, the Reporting Agent or any of their respective Affiliates or any directors or
officers of the Co-Issuers.

The Record Date for each Payment Date with respect to the Notes (including the Final Maturity Date) is
the Business Day prior to such Payment Date; provided that if Definitive Notes are issued, the Record Date for
such Definitive Notes will be the fifteenth day of the calendar month in which such Payment Date occurs.
Payments of interest and principal or any other amount payable on or in respect of the Notes will be made on each
Payment Date by wire transfer to registered Holders of the Notes on the Record Date applicable to such Payment
Date to accounts maintained by such registered Holders as reflected in the Note Register. In the case of
redemption, notice will be mailed to each Holder of record no later than fifteen days before the Payment Date on
which the final principal payment is expected to be made to such Holder.

Under the terms of the Indenture, the Trustee will act as a paying agent (the "Paying Agent" and, together
with the Irish Paying Agent and any other paying agent appointed by the Co-Issuers from time to time, the
"Paying Agents"). Payments of principal of and interest on and other amounts in respect of the Notes will be
made by the Trustee to the Paying Agents from funds available in the Collection Account established under the
Indenture as described herein.

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 All distributions in respect of the Portfolio Collateral will be deposited directly into the Collection
Account and will be available to the extent described herein for the payment of amounts payable in respect of the
Notes and, under the circumstances set forth herein and in the Indenture, for the applications described herein.

The Notes are subject to restrictions on transfer. See "―Form, Transfer and Transfer Restrictions."
Subject to such restrictions, the Notes may be transferred or exchanged at the corporate office of the Transfer
Agent without the payment of any service charge, other than tax or other governmental charges payable in
connection therewith.

Payments on the Notes

Class A-1LA Notes

Interest in respect of the Class A-1LA Notes will be payable pari passu with the Class A-1LB Notes and
the Class A-2L Notes.

The Class A-1LA Notes will provide for the payment of periodic interest ("Periodic Interest" with
respect to the Class A-1LA Notes and, the amount of such periodic interest, the "Periodic Interest Amount" with
respect to the Class A-1LA Notes) (to the extent of funds available therefor as described herein) for each Periodic
Interest Accrual Period at a rate of 0.75% per annum above LIBOR (the "Applicable Periodic Rate" with respect
to the Class A-1L Notes) on February 28, May 30, August 30 and November 30 of each year, or, if any such day
is not a Business Day, then on the next succeeding Business Day, unless that next succeeding Business Day falls
in a subsequent calendar month, in which event the relevant Payment Date will be the next preceding Business
Day (each such date, a "Payment Date"), commencing on the Payment Date in May 2004. To the extent Periodic
Interest accrued at the Applicable Periodic Rate with respect to any Periodic Interest Accrual Period is not paid on
the related Payment Date, the amount of such interest shortfall will accrue interest at the Applicable Periodic Rate
and will be paid (to the extent funds are available therefor as described herein) on one or more subsequent
Payment Dates after payment of interest at the Applicable Periodic Rate with respect to the Periodic Interest
Accrual Period relating to such subsequent Payment Date (the amount of such shortfall, together with interest
thereon at the Applicable Periodic Rate, the "Periodic Rate Shortfall Amount" and, with the Periodic Interest
Amount for such subsequent Payment Date, the "Cumulative Interest Amount" with respect to such Payment
Date). Interest will be calculated on the basis of a year of 360 days and the actual number of days elapsed.

On each Payment Date, principal of the Class A-1LA Notes will be payable (to the extent of funds
available therefor and in accordance with the Class A-1L/A-2L Notes Principal Payment Priority) until the
Payment Date on which the Aggregate Principal Amount of the Class A-1LA Notes has been paid in full. All
outstanding principal of the Class A-1LA Notes, together with the other amounts described herein, will be due
and payable on the Final Maturity Date.

Class A-1LB Notes

Interest in respect of the Class A-1LB Notes will be payable pari passu with the Class A-1LA Notes and
the Class A-2L Notes.

The Class A-1LB Notes will provide for the payment of periodic interest ("Periodic Interest" with
respect to the Class A-1LB Notes and, the amount of such periodic interest, the "Periodic Interest Amount" with
respect to the Class A-1LB Notes) (to the extent of funds available therefor as described herein) for each Periodic
Interest Accrual Period at a rate of 0.75% per annum above LIBOR (the "Applicable Periodic Rate" with respect
to the Class A-1LB Notes) on each Payment Date commencing on the Payment Date in May 2004. To the extent
Periodic Interest accrued at the Applicable Periodic Rate with respect to any Periodic Interest Accrual Period is
not paid on the related Payment Date, the amount of such interest shortfall will accrue interest at the Applicable
Periodic Rate and will be paid (to the extent funds are available therefor as described herein) on one or more
subsequent Payment Dates after payment of interest at the Applicable Periodic Rate with respect to the Periodic
Interest Accrual Period relating to such subsequent Payment Date (the amount of such shortfall, together with

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interest thereon at the Applicable Periodic Rate, the "Periodic Rate Shortfall Amount" and, with the Periodic
Interest Amount for such subsequent Payment Date, the "Cumulative Interest Amount" with respect to such
Payment Date). Interest will be calculated on the basis of a year of 360 days and the actual number of days
elapsed.

On each Payment Date after the Class A-1LA Notes have been paid in full, principal of the Class A-1LB
Notes will be payable (to the extent of funds available therefor and in accordance with the Class A-1L/A-2L
Notes Principal Payment Priority) until the Payment Date on which the Aggregate Principal Amount of the Class
A-1LB Notes has been paid in full. All outstanding principal of the Class A-1LB Notes, together with the other
amounts described herein, will be due and payable on the Final Maturity Date. The Class A-1LB Notes are
subordinated in right of payment of principal to the Class A-1LA Notes, in accordance with the Class A-1L/A-2L
Notes Principal Payment Priority described herein.

Class A-2L Notes

Interest in respect of the Class A-2L Notes will be payable pari passu with the Class A-1L Notes.

The Class A-2L Notes will provide for the payment of periodic interest ("Periodic Interest" with respect
to the Class A-2L Notes and, the amount of such periodic interest, the "Periodic Interest Amount" with respect
to the Class A-2L Notes) (to the extent of funds available therefor as described herein) for each Periodic Interest
Accrual Period at a rate of 0.75% per annum above LIBOR (the "Applicable Periodic Rate" with respect to the
Class A-2L Notes) on each Payment Date commencing on the Payment Date in May 2004. To the extent Periodic
Interest accrued at the Applicable Periodic Rate with respect to any Periodic Interest Accrual Period is not paid on
the related Payment Date, the amount of such interest shortfall will accrue interest at the Applicable Periodic Rate
and will be paid (to the extent funds are available therefor as described herein) on one or more subsequent
Payment Dates after payment of interest at the Applicable Periodic Rate with respect to the Periodic Interest
Accrual Period relating to such subsequent Payment Date (the amount of such shortfall, together with interest
thereon at the Applicable Periodic Rate, the "Periodic Rate Shortfall Amount" and, with the Periodic Interest
Amount for such subsequent Payment Date, the "Cumulative Interest Amount" with respect to such Payment
Date). Interest will be calculated on the basis of a year of 360 days and the actual number of days elapsed.

On each Payment Date, principal of the Class A-2L Notes will be payable (to the extent of funds available
therefor and in accordance with the Class A-1L/A-2L Notes Principal Payment Priority) until the Payment Date
on which the Aggregate Principal Amount of the Class A-2L Notes has been paid in full. All outstanding
principal of the Class A-2L Notes, together with the other amounts described herein, will be due and payable on
the Final Maturity Date.

Class A-3L Notes

No interest will be payable in respect of the Class A-3L Notes on any Payment Date unless the Holders of
the Class A-1L Notes and the Class A-2L Notes have been paid the Cumulative Interest Amount due to them on
such Payment Date and, on the Final Maturity Date, unless the Aggregate Principal Amount of the Class A-1L
Notes and the Class A-2L Notes has been paid in full.

The Class A-3L Notes will provide for the payment of periodic interest ("Periodic Interest" with respect
to the Class A-3L Notes and, the amount of such periodic interest, the "Periodic Interest Amount" with respect
to the Class A-3L Notes) (to the extent of funds available therefor as described herein) for each Periodic Interest
Accrual Period at a rate of 1.85% per annum above LIBOR (the "Applicable Periodic Rate" with respect to the
Class A-3L Notes) on each Payment Date commencing on the Payment Date in May 2004. To the extent Periodic
Interest accrued at the Applicable Periodic Rate with respect to any Periodic Interest Accrual Period is not paid on
the related Payment Date, the amount of such interest shortfall will accrue interest at the Applicable Periodic Rate
and will be paid (to the extent funds are available therefor as described herein) on one or more subsequent
Payment Dates after payment of interest at the Applicable Periodic Rate with respect to the Periodic Interest
Accrual Period relating to such subsequent Payment Date (the amount of such shortfall, together with interest

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thereon at the Applicable Periodic Rate, the "Periodic Rate Shortfall Amount" and, with the Periodic Interest
Amount for such subsequent Payment Date, the "Cumulative Interest Amount" with respect to such Payment
Date). Interest will be calculated on the basis of a year of 360 days and the actual number of days elapsed.

On each Payment Date after the Class A-1L Notes and Class A-2L Notes have been paid in full, principal
of the Class A-3L Notes will be payable (to the extent of funds available therefor and in accordance with the
Priority of Payments) until the Payment Date on which the Aggregate Principal Amount of the Class A-3L Notes
has been paid in full. All outstanding principal of the Class A-3L Notes, together with the other amounts
described herein, will be due and payable on the Final Maturity Date. The Class A-3L Notes are subordinated in
right of payment to the Class A-1L Notes and the Class A-2L Notes, to the extent described herein.

Class A-4L Notes

No interest will be payable in respect of the Class A-4L Notes on any Payment Date unless the Holders of
the Senior Class A Notes have been paid the Cumulative Interest Amount due to them on such Payment Date and
the Overcollateralization Test with respect to the Senior Class A Notes and the Interest Coverage Test have been
satisfied and, on the Final Maturity Date, unless the Aggregate Principal Amount of the Senior Class A Notes has
been paid in full.

The Class A-4L Notes will provide for the payment of periodic interest ("Periodic Interest" with respect
to the Class A-4L Notes and, the amount of such periodic interest, the "Periodic Interest Amount" with respect
to the Class A-4L Notes) (to the extent of funds available therefor as described herein) for each Periodic Interest
Accrual Period at a rate of 2.25% per annum above LIBOR (the "Applicable Periodic Rate" with respect to the
Class A-4L Notes) on each Payment Date commencing on the Payment Date in May 2004. To the extent Periodic
Interest accrued at the Applicable Periodic Rate with respect to any Periodic Interest Accrual Period is not paid on
the related Payment Date, the amount of such interest shortfall will accrue interest at the Applicable Periodic Rate
and will be paid (to the extent funds are available therefor as described herein) on one or more subsequent
Payment Dates after payment of interest at the Applicable Periodic Rate with respect to the Periodic Interest
Accrual Period relating to such subsequent Payment Date (the amount of such shortfall, together with interest
thereon at the Applicable Periodic Rate, the "Periodic Rate Shortfall Amount" and, with the Periodic Interest
Amount for such subsequent Payment Date, the "Cumulative Interest Amount" with respect to such Payment
Date). The failure to pay in full Periodic Interest on the Class A-4L Notes as a result of insufficient funds being
available therefor will not constitute an Event of Default so long as the Senior Class A Notes are Outstanding.
Any shortfall in the payment of Periodic Interest to the Class A-4L Notes on any Payment Date will be payable,
together with interest thereon at the Applicable Periodic Rate, on one or more subsequent Payment Dates (to the
extent funds are available therefor and subject to the Priority of Payments). Interest will be calculated on the
basis of a year of 360 days and the actual number of days elapsed.

On each Payment Date after the Senior Class A Notes have been paid in full, principal of the Class A-4L
Notes will be payable (to the extent of funds available therefor and in accordance with the Priority of Payments)
until the Payment Date on which the Aggregate Principal Amount of the Class A-4L Notes has been paid in full.
All outstanding principal of the Class A-4L Notes, together with the other amounts described herein, will be due
and payable on the Final Maturity Date. The Class A-4L Notes are subordinated in right of payment to the Senior
Class A Notes, to the extent described herein.

Class B-1L Notes

No interest will be payable in respect of the Class B-1L Notes on any Payment Date unless the Holders of
the Class A Notes have been paid the Cumulative Interest Amount due to them on such Payment Date and the
Overcollateralization Tests with respect to the Senior Class A Notes and the Class A Notes and the Interest
Coverage Test have been satisfied, and, on the Final Maturity Date, unless the Aggregate Principal Amount of the
Class A Notes has been paid in full.

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 The Class B-1L Notes will provide for the payment of periodic interest ("Periodic Interest" with respect
to the Class B-1L Notes and, the amount of such periodic interest, the "Periodic Interest Amount" with respect
to the Class B-1L Notes) (to the extent of funds available therefor as described herein) for each Periodic Interest
Accrual Period at a rate of 3.00% per annum (the "Applicable Periodic Rate" with respect to the Class B-1L
Notes) on each Payment Date commencing on the Payment Date in May 2004; provided that interest will not be
payable in respect of the Class B-1L Notes on the Payment Date in May 2004 unless the full amount of interest
due on such Class B-1L Notes can be paid from Collateral Interest Collections in accordance with the Priority of
Payments; provided, further, that if the full amount of interest due on the Class B-1L Notes can not be paid from
Collateral Interest Collections in accordance with the Priority of Payments, such remaining amount will be
deposited instead in the Initial Period Reserve Account. To the extent Periodic Interest accrued at the Applicable
Periodic Rate with respect to any Periodic Interest Accrual Period is not paid on the related Payment Date, the
amount of such interest shortfall will accrue interest at the Applicable Periodic Rate and will be paid (to the extent
funds are available therefor as described herein) on one or more subsequent Payment Dates after payment of
interest at the Applicable Periodic Rate with respect to the Periodic Interest Accrual Period relating to such
subsequent Payment Date (the amount of such shortfall, together with interest thereon at the Applicable Periodic
Rate, the "Periodic Rate Shortfall Amount" and, with the Periodic Interest Amount for such subsequent
Payment Date, the "Cumulative Interest Amount" with respect to such Payment Date). The failure to pay in full
Periodic Interest on the Class B-1L Notes as a result of insufficient funds being available therefor will not
constitute an Event of Default so long as any Class A Notes are Outstanding. Interest will be calculated on the
basis of a year of 360 days and the actual number of days elapsed.

On each Payment Date after the first Payment Date, principal of the Class B-1L Notes will be payable (to
the extent of funds available therefor and in accordance with the Priority of Payments) from Collateral Interest
Collections in an amount equal to the Class B-1L Principal Payment until the Class B-1L Notes have been paid in
full. In addition, on each Payment Date after the Class A Notes have been paid in full, principal will be payable
on the Class B-1L Notes (to the extent of funds available therefor and in accordance with the Priority of
Payments) until the Payment Date on which the Aggregate Principal Amount of the Class B-1L Notes has been
paid in full. All outstanding principal of the Class B-1L Notes, together with the other amounts described herein,
will be due and payable on the Final Maturity Date. The Class B-1L Notes are subordinated in right of payment
to the Class A Notes, to the extent described herein.

Neither of the Co-Issuers will be required to pay additional amounts to Holders of any Class of Notes, if
taxes or related amounts are withheld from payments on the Notes or any payments on any item of Portfolio
Collateral or other investments of the Co-Issuers.

Class C Notes

The Class C Notes (which are not offered hereby) will not bear interest. The only payment that will be
made on the Class C-1 Notes will be from the proceeds of the Class C-1 Collateral on the Class C Stated
Maturity; provided that, if the Final Maturity Date is prior to the Class C Stated Maturity, the Class C-1 Notes
will be redeemed "in kind" through delivery of the Class C-1 Collateral, pro rata, to the holders of Class C-1
Notes or, in limited circumstances, will be redeemed from the proceeds of the sale of the Class C-1 Collateral.
The only payment that will be made on the Class C-2 Notes will be from the proceeds of the Class C-2 Collateral
on the Class C Stated Maturity; provided that, if the Final Maturity Date is prior to the Class C Stated Maturity,
the Class C-2 Notes will be redeemed "in kind" through delivery of the Class C-2 Collateral, pro rata, to the
holders of Class C-2 Notes or, in limited circumstances, will be redeemed from the proceeds of the sale of the
Class C-2 Collateral.

References herein to the aggregate outstanding amount of the Notes shall not include the aggregate
outstanding amount of the Class C Notes. The aggregate outstanding amount of the Class C Notes shall be used
solely for calculations relating to the Class C Notes or the Principal Protected Securities.

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 Determination of LIBOR

For purposes of calculating the Applicable Periodic Rate, the Issuer initially will appoint the Trustee, as
agent with respect to the determination of LIBOR (in such capacity, the "Calculation Agent"). LIBOR will be
determined by the Calculation Agent in accordance with the following provisions:

On the second London Business Day prior to the commencement of a Periodic Interest Accrual
Period (each such day, a "LIBOR Determination Date"), LIBOR shall equal the rate, as obtained by the
Calculation Agent, for three-month U.S. dollar deposits (or in the case of the initial Periodic Interest
Accrual Period, four-month U.S. dollar deposits) which appears on Telerate Page 3750 (as defined in the
2000 ISDA Definitions and as reported by Bloomberg Financial Markets Commodities News) or such
other page as may replace such Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination
Date.

If, on any LIBOR Determination Date, such rate does not appear on Telerate Page 3750 or such
other page as may replace such Page 3750, the Calculation Agent shall determine the arithmetic mean of
the offered quotations of the Reference Banks to leading banks in the London interbank market for three-
month U.S. dollar deposits (or in the case of the initial Periodic Interest Accrual Period, four-month U.S.
dollar deposits) in an amount determined by the Calculation Agent by reference to requests for quotations
as of approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by the
Calculation Agent to the Reference Banks. If, on any LIBOR Determination Date, at least two of the
Reference Banks provide such quotations, LIBOR shall equal such arithmetic mean of such quotations.
If, on any LIBOR Determination Date, only one or none of the Reference Banks provide such quotations,
LIBOR shall be deemed to be the arithmetic mean of the offered quotations that leading banks in The City
of New York selected by the Calculation Agent are quoting on the relevant LIBOR Determination Date
for three-month U.S. dollar deposits (or in the case of the initial Periodic Interest Accrual Period, four-
month U.S. dollar deposits) in an amount determined by the Calculation Agent that is representative of a
single transaction in such market at such time by reference to the principal London offices of leading
banks in the London interbank market; provided that if the Calculation Agent is required but is unable to
determine a rate in accordance with at least one of the procedures provided above, LIBOR shall be
LIBOR as determined on the previous LIBOR Determination Date. As used herein, "Reference Banks"
means four major banks in the London interbank market selected by the Calculation Agent.

As soon as possible after 11:00 a.m. (London time) on each LIBOR Determination Date, but in no event
later than 11:00 a.m. (London time) on the Business Day immediately following each LIBOR Determination
Date, the Calculation Agent will notify the Issuer and, the Trustee and (for so long as any Class of Notes is listed
on the Irish Stock Exchange) the Irish Stock Exchange, of LIBOR for the next Periodic Interest Accrual Period.
The Calculation Agent will also specify to the Issuer the quotations upon which LIBOR is based, and in any event
the Calculation Agent shall notify the Issuer before 5:00 p.m. (London time) on each LIBOR Determination Date
that either: (i) it has determined or is in the process of determining LIBOR or (ii) it has not determined and is not
in the process of determining LIBOR together with its reasons therefor.

Upon receipt of notice of LIBOR for each Periodic Interest Accrual Period from the Calculation Agent as
described in the preceding paragraph, the Trustee will determine the Applicable Periodic Rate for the Notes for
such Periodic Interest Accrual Period and notify the Irish Stock Exchange of the Periodic Rate for the Notes (for
so long as any such Class of Notes is listed on the Irish Stock Exchange). The determination of LIBOR by the
Calculation Agent and the Applicable Periodic Rate by the Trustee (in the absence of manifest error) will be final
and binding upon all parties.

The Calculation Agent may be removed by the Issuer at any time. If the Calculation Agent is unable or
unwilling to act as such or is removed by the Issuer, or if the Calculation Agent fails to determine LIBOR for a
Periodic Interest Accrual Period, the Issuer will promptly appoint as a replacement Calculation Agent a leading
bank which is engaged in transactions in U.S. dollar deposits in the international U.S. dollar market and which

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does not control or is not controlled by or under common control with the Issuer or its affiliates. The Calculation
Agent may not resign or be removed from its duties without a successor having been duly appointed.

Priority of Payments

The "Priority of Payments" is the order of priority of making payments described under this heading.

Adjusted Collateral Collections.

On each Payment Date (including the Final Maturity Date), in accordance with the Note Valuation Report
for the Calculation Date immediately preceding such Payment Date, (i) Collateral Interest Collections for the
related Due Period (to the extent of Available Funds in the Collection Account), (ii) payments received from the
Cashflow Swap Provider under the Cashflow Swap Agreement and (iii) to the extent the amount of the Collateral
Interest Collections is not sufficient, an amount up to the Collateral Principal Collections, in each case in respect
of such Payment Date, will be applied by the Trustee to pay each of the following in the order of priority set forth
below:

(A) (i) first, taxes and governmental fees and charges, if any, owed by the Issuer or the Co-Issuer and
(ii) second, the Trustee Administrative Expenses with respect to such Payment Date and any Trustee
Administrative Expenses with respect to a previous Payment Date that were not paid on such previous Payment
Date;

(B) the Preference Shares Administrative Expenses with respect to such Payment Date and any
Preference Shares Administrative Expenses that were not paid on a previous Payment Date;

(C) the Issuer Base Administrative Expenses with respect to such Payment Date and any Issuer Base
Administrative Expenses with respect to a previous Payment Date that were not paid on such previous Payment
Date and replenishment of the Expense Reimbursement Account to the extent any of the amounts referred to in
this clause (C) have already been paid from funds on deposit therein; provided that the aggregate of (A), (B) and
(C) will not exceed the greater of (i) one-quarter of U.S.$50,000, and (ii) one-quarter of 0.08% of the average of
(a) the Aggregate Portfolio Collateral Principal Balance as of the first day of the applicable Due Period and (b) the
Aggregate Portfolio Collateral Principal Balance as of the last day of such applicable Due Period; provided,
further, that (x) the amount deposited in the Expense Reimbursement Account pursuant to this clause (C) on any
Payment Date will not exceed the amount, if any by which $50,000 exceeds the amount then on deposit in the
Expense Reimbursement Account and (y) no amount will be deposited in the Expense Reimbursement Account
on the Final Maturity Date;

(D) the fee (including any accrued and unpaid fee) then due to the Cashflow Swap Provider
(excluding any Defaulted Cashflow Swap Termination Payment and Senior Cashflow Swap Termination
Payment) with respect to such Payment Date (after giving effect to the netting provisions thereof); and

(E) the Senior Management Fee with respect to such Payment Date and any unpaid Senior
Management Fee with respect to any previous Payment Date.

On each Payment Date, Collateral Interest Collections received by the Issuer during the related Due
Period plus any payments received from the Cashflow Swap Provider under the Cashflow Swap Agreement, net
of amounts payable on a Payment Date pursuant to clauses (A) through (E) above, represent the "Adjusted
Collateral Interest Collections" for such Payment Date.

On each Payment Date, in accordance with the Note Valuation Report for the Calculation Date
immediately preceding such Payment Date, Collateral Principal Collections received by the Issuer during the
related Due Period, net of amounts paid with Collateral Principal Collections pursuant to clauses (A) through (E)
above, represent the "Adjusted Collateral Principal Collections" for such Payment Date.

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 Collateral Interest Collections.

On each Payment Date (other than the Final Maturity Date), Adjusted Collateral Interest Collections for
such Payment Date will be applied by the Trustee to pay each of the following in the order of priority set forth
below:

(i) (a) first, the Senior Cashflow Swap Termination Payment, if any, to the Cashflow Swap
Provider and (b) second, on a pro rata basis, (1) the Cumulative Interest Amount with respect to the Class
A-1LA Notes and such Payment Date, (2) the Cumulative Interest Amount with respect to the Class A-
1LB Notes and such Payment Date and (3) the Cumulative Interest Amount with respect to the Class A-
2L Notes and such Payment Date;

(ii) the Cumulative Interest Amount with respect to the Class A-3L Notes and such Payment
Date;

(iii) to reimburse the Cashflow Swap Provider for any amounts that have been advanced by
the Cashflow Swap Provider under the Cashflow Swap Agreement, together with interest accrued thereon
at a rate equal to the Cashflow Swap Provider Accrual Rate from the date of each such advance;

(iv) the amount, if any, required to be paid in order to satisfy (a) the Senior Class A
Overcollateralization Test, such amount to be paid, first, to pay the Aggregate Principal Amount of each
of the Class A-1L Notes and the Class A-2L Notes in accordance with the Class A-1L/A-2L Notes
Principal Payment Priority and, second, to pay the Aggregate Principal Amount of the Class A-3L Notes,
until each such Class is paid in full and (b) on each Payment Date after the first Payment Date, the
Interest Coverage Test, such amount to be paid, first, to pay the Aggregate Principal Amount of each of
the Class A-1L Notes and the Class A-2L Notes in accordance with the Class A-1L/A-2L Notes Principal
Payment Priority and, second, to pay the Aggregate Principal Amount of the Class A-3L Notes, until each
such Class is paid in full;

(v) the Cumulative Interest Amount with respect to the Class A-4L Notes and such Payment
Date;

(vi) the amount, if any, required to be paid in order to satisfy the Class A
Overcollateralization Test, such amount to be paid, first, to pay the Aggregate Principal Amount of each
of the Class A-1L Notes and the Class A-2L Notes in accordance with the Class A-1L/A-2L Notes
Principal Payment Priority, second, to pay the Aggregate Principal Amount of the Class A-3L Notes and,
third, to pay the Aggregate Principal Amount of the Class A-4L Notes, until each such Class is paid in
full;

(vii) (A) on the Payment Date in May 2004, if the Adjusted Collateral Interest Collections
remaining after payment of amounts specified in clauses (i) through (vi) above are sufficient to pay the
Periodic Interest Amount in full, to the payment of the Periodic Interest Amount with respect to the Class
B-1L Notes and such Payment Date or, if not sufficient, such remaining amount, for deposit into the
Initial Period Reserve Account (and no Periodic Interest Amount with respect to the Class B-1L Notes
and such Payment Date will be paid) and (B) on each subsequent Payment Date, to the Periodic Interest
Amount with respect to the Class B-1L Notes and such Payment Date;

(viii) the amount, if any, required to be paid in order to satisfy the Class B
Overcollateralization Test or, if there has been a Rating Confirmation Failure, such amount to be paid,
first, to pay the Aggregate Principal Amount of each of the Class A-1L Notes and the Class A-2L Notes
in accordance with the Class A-1L/A-2L Notes Principal Payment Priority, second, to pay the Aggregate
Principal Amount of the Class A-3L Notes, third, to pay the Aggregate Principal Amount of the Class
A-4L Notes, fourth, to pay the Class B-1L Periodic Rate Shortfall Amount, if any and, fifth, to pay the

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 Aggregate Principal Amount of the Class B-1L Notes, in each case until each such Class is paid in full or
to the extent required to satisfy the Class B Overcollateralization Test or specified by a Rating Agency as
required to receive a Rating Confirmation, as the case may be;

(ix) (A) on each Payment Date after the Payment Date in May 2004 to the Holders of the
Class B-1L Notes of an amount equal to the applicable Cumulative Interest Amount;

(x) on each Payment Date occurring after the first Payment Date, principal on the Class B-1L
Notes, in an amount equal to the Class B-1L Principal Payment for each such Payment Date; provided
that if Collateral Interest Collections are not sufficient for such payment of principal on such Payment
Date, the resulting shortfall will be payable, to the extent of available Collateral Interest Collections, on
the next Payment Date; provided, further, that (x) no additional interest will accrue on such shortfall
amount (other than as a consequence of the principal amount of the Class B-1L Notes not being reduced
by the amount of such shortfall) and (y) the occurrence of such shortfall will not constitute an Event of
Default;

(xi) to the Cashflow Swap Provider of any Defaulted Cashflow Swap Termination Payment
due under the Cashflow Swap Agreement;

(xii) to the Issuer of (a) the Issuer Excess Administrative Expenses (in the order set forth in the
definition thereof) with respect to such Payment Date and (b) any Issuer Excess Administrative Expenses
(in the order set forth in the definition thereof) with respect to any previous Payment Date that were not
paid prior to such Payment Date;

(xiii) the Junior Management Fee with respect to such Payment Date and any unpaid Junior
Management Fee with respect to any previous Payment Date;

(xiv) the amount required to be paid in order to satisfy the Additional Overcollateralization
Test, such amount to be applied, first, to pay the Class B-1L Periodic Rate Shortfall Amount, if any,
second, to pay the Aggregate Principal Amount of the Class B-1L Notes, until the Class B-1L Notes are
paid in full, third, to pay the Aggregate Principal Amount of the Class A-4L Notes, until the Class A-4L
Notes are paid in full, fourth, to pay the Aggregate Principal Amount of the Class A-3L Notes, until the
Class A-3L Notes are paid in full and, fifth, to pay the Aggregate Principal Amount of the Class A-1L
Notes and the Class A-2L Notes in accordance with the Class A-1L/A-2L Notes Principal Payment
Priority; and

(xv) any remaining balance to the Preference Share Paying Agent (or, with respect to the
Preference Share Components, directly to the Principal Protected Securityholders) for payment to the
holders of the Preference Shares as dividends on the Preference Shares.

Collateral Principal Collections.

On each Payment Date (other than the Final Maturity Date), Adjusted Collateral Principal Collections
with respect to such Payment Date will be applied by the Trustee in the following order of priority:

(i) to the payment of the amounts described in clauses (i) through (viii) with respect to
Collateral Interest Collections, in the order described therein, in each case to the extent such amounts
have not been paid in full from Adjusted Collateral Interest Collections with respect to such Payment
Date; and

(ii) to pay principal of the Notes, first, to pay the Aggregate Principal Amount of the Class
A-1L Notes and the Class A-2L Notes in accordance with the Class A-1L/A-2L Notes Principal Payment
Priority, second, to pay the Aggregate Principal Amount of the Class A-3L Notes, third, to pay the

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 Aggregate Principal Amount of the Class A-4L Notes, fourth, to pay the Class B-1L Periodic Rate
Shortfall Amount, if any and, fifth, to pay the Aggregate Principal Amount of the Class B-1L Notes until
the Aggregate Principal Amount of each such Class is paid in full.

Final Maturity Date.

On the Final Maturity Date (including an Optional Redemption Date, a Clean-up Call Date or any
Payment Date on which the Aggregate Principal Amount of the Notes is paid in full as described herein), in
accordance with the Note Valuation Report for the Calculation Date immediately preceding the Final Maturity
Date (or in the case of an Optional Redemption or a Clean-up Call, in accordance with the related redemption date
statement delivered pursuant to the Indenture), Available Funds after payment of the amounts described in clauses
(A)-(E) as described under "―Adjusted Collateral Collections" above, will be applied by the Trustee to pay each
of the following in the order of priority set forth below:

(i) (x) first, the Senior Cashflow Swap Termination Payment, if any, to the Cashflow Swap
Provider, (y) second, on a pro rata basis, (1) the Cumulative Interest Amount with respect to the Class A-
1LA Notes and such Payment Date, (2) the Cumulative Interest Amount with respect to the Class A-1LB
Notes and such Payment Date, (3) the Cumulative Interest Amount with respect to the Class A-2L Notes
and such Payment Date and (z) third, any amounts that have been advanced by the Cashflow Swap
Provider under the Cashflow Swap Agreement, together with interest accrued thereon at a rate equal to
the Cashflow Swap Provider Accrual Rate from the date of each such advance, to reimburse the Cashflow
Swap Provider;

(ii) the Aggregate Principal Amount of the Class A-1L Notes and the Class A-2L Notes in
accordance with the Class A-1L/A-2L Notes Principal Payment Priority;

(iii) the Cumulative Interest Amount with respect to the Class A-3L Notes and such Payment
Date;

(iv) the Aggregate Principal Amount of the Class A-3L Notes;

(v) the Cumulative Interest Amount with respect to the Class A-4L Notes and such Payment
Date;

(vi) the Aggregate Principal Amount of the Class A-4L Notes;

(vii) the Cumulative Interest Amount with respect to the Class B-1L Notes and such Payment
Date;

(viii) the Aggregate Principal Amount of the Class B-1L Notes;

(ix) any Defaulted Cashflow Swap Termination Payment due to the Cashflow Swap Provider
under the Cashflow Swap Agreement not paid pursuant to clause (i) above, pro rata;

(x) the Issuer Excess Administrative Expenses (in the order set forth in the definition thereof)
with respect to such Payment Date and any such amounts that were due on any prior Payment Date but
remain unpaid;

(xi) the Junior Management Fee with respect to such Payment Date and any unpaid Junior
Management Fee with respect to any previous Payment Date; and

(xii) any remaining balance to the Preference Share Paying Agent (or, with respect to the
Preference Share Components, directly to the Principal Protected Securityholders) for payment, to the
holders of the Preference Shares as the redemption price in respect of the Preference Shares.

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 Partial Redemption Date.

On any Partial Redemption Date (after Adjusted Collateral Interest Collections and Adjusted Collateral
Principal Collections are applied by the Trustee on such Partial Redemption Date as described under "—Priority
of Payments—Adjusted Collateral Collections," "—Collateral Interest Collections" and "—Collateral Principal
Collections") Partial Redemption Sale Proceeds will be applied by the Trustee to pay each of the following in the
order of priority set forth below:

(i) any amounts that have been advanced by the Cashflow Swap Provider under the
Cashflow Swap Agreement, together with interest accrued thereon at a rate equal to the Cashflow Swap
Provider Accrual Rate from the date of each such advance, to reimburse the Cashflow Swap Provider;

(ii) (a) the Cumulative Interest Amount with respect to the Partial Redemption Percentage of
the Class A-1LA Notes and such Payment Date, (b) the Cumulative Interest Amount with respect to the
Partial Redemption Percentage of the Class A-1LB Notes and such Payment Date and (c) the Cumulative
Interest Amount with respect to the Partial Redemption Percentage of the Class A-2L Notes and such
Payment Date, pro rata;

(iii) (a) the Partial Redemption Percentage of the Aggregate Principal Amount of the Class
A-1LA Notes, (b) the Partial Redemption Percentage of the Aggregate Principal Amount of the Class
A-1LB Notes and (c) the Partial Redemption Percentage of the Aggregate Principal Amount of the Class
A-2L Notes, pro rata;

(iv) the Cumulative Interest Amount with respect to the Partial Redemption Percentage of the
Class A-3L Notes and such Payment Date;

(v) the Partial Redemption Percentage of the Aggregate Principal Amount of the Class A-3L
Notes;

(vi) the Cumulative Interest Amount with respect to the Partial Redemption Percentage of the
Class A-4L Notes and such Payment Date;

(vii) the Partial Redemption Percentage of the Aggregate Principal Amount of the Class A-4L
Notes;

(viii) the Cumulative Interest Amount with respect to the Partial Redemption Percentage of the
Class B-1L Notes and such Payment Date;

(ix) the Partial Redemption Percentage of the Aggregate Principal Amount of the Class B-1L
Notes;

(x) the Partial Redemption Percentage of the Issuer Excess Administrative Expenses with
respect to such Payment Date and the Partial Redemption Percentage of any Issuer Excess Administrative
Expenses with respect to a previous Payment Date that were not paid on a previous Payment Date; and

(xi) any amount remaining after payment of the amounts described above will be paid to the
PS Minimum Amount Holder to redeem the Preference Shares designated by the PS Minimum Amount
Holder in its request for a Partial Redemption, which request has been subsequently accepted by the
Issuer.

Class A-1L/A-2L Notes Principal Payment Priority.

Each payment applied to pay the principal amount of the Class A-1L Notes and the Class A-2L Notes will
be allocated among the Holders of the Class A-1L Notes and Class A-2L Notes as follows (the "Class A-1L/A-2L
Notes Principal Payment Priority"):

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 (i) 50% of such payment shall be distributed to the Holders of the Class A-2L Notes until the
Aggregate Principal Amount of the Class A-2L Notes is paid in full; and

(ii) 50% of such payment shall be distributed, first, to the Holders of the Class A-1LA Notes
until the aggregate outstanding amount of such Class has been paid in full and, second, to the Holders of
the Class A-1LB Notes until the Aggregate Principal Amount of such Class has been paid in full.

The amount and frequency of principal and interest payments in respect of the Notes will depend on,
among other things, the extent to which items of Portfolio Collateral become Defaulted Portfolio Collateral, are
subject to sinking fund provisions or are retired prior to the Final Maturity Date through mandatory or optional
redemption, maturity or other liquidation or disposition.

Overcollateralization Tests

The Overcollateralization Tests are applicable until the Notes (other than the Class C Notes) are retired
and all amounts payable in respect thereof are paid in full, and are satisfied if as of any Calculation Date (i) the
Senior Class A Overcollateralization Ratio is at least equal to the Senior Class A Overcollateralization
Percentage, (ii) the Class A Overcollateralization Ratio is at least equal to the Class A Overcollateralization
Percentage and (iii) the Class B Overcollateralization Ratio is at least equal to the Class B Overcollateralization
Percentage.

For purposes of the Overcollateralization Tests, any item of Portfolio Collateral loaned to a Securities
Lending Counterparty will be included in the Overcollateralization Tests; provided that if such Securities Lending
Counterparty is in default under the related Securities Lending Agreement, the Securities Lending Collateral shall
be included in the Overcollateralization Tests and such item of Portfolio Collateral shall not be included in the
Overcollateralization Tests.

The "Senior Class A Overcollateralization Percentage" is 114%, the "Class A Overcollateralization

Percentage" is 105% and the "Class B Overcollateralization Percentage" is 102.5%.

The "Senior Class A Overcollateralization Ratio" means, with respect to any Measurement Date, the
ratio (expressed as a percentage) obtained by dividing (a) the sum of (1) the Aggregate Principal Amount of the
Portfolio Collateral in the Trust Estate as of such Measurement Date plus (2) Collateral Principal Collections held
as cash in the Collection Account as of such Measurement Date and the Balance of Eligible Investments
purchased with Collateral Principal Collections, by (b) the sum of the Aggregate Principal Amount of the Senior
Class A Notes (including for this purpose any Periodic Rate Shortfall Amounts with respect to such Senior Class
A Notes not paid when due, until such amounts, if any, are paid in full) as of such Measurement Date.

The "Class A Overcollateralization Ratio" and the "Class B Overcollateralization Ratio" are
calculated in the same manner, but include in the denominator the Aggregate Principal Amount of the Class A-4L
Notes (in the case of the Class A Overcollateralization Ratio) and the Class A-4L Notes and the Class B-1L Notes
(in the case of the Class B Overcollateralization Ratio) (including, in each case any Cumulative Interest Amounts
with respect to such Class of Notes not paid when due, until any such amounts are paid in full).

Applicability of Overcollateralization Tests

On each Payment Date, if any Overcollateralization Test is not satisfied as of the immediately preceding
Calculation Date, amounts that are junior in right of payment to such Overcollateralization Test, as described
under "Description of the Notes—Payments on the Notes—Priority of Payments," will be applied to the payment
of principal of each applicable Class of Notes (or, in the case of the Class B-1L Notes, first, to pay accrued and
unpaid interest from prior Payment Dates, and then to pay principal) until each such Class of Notes is paid in full,
in the order and according to the priorities described herein, to the extent necessary to satisfy such
Overcollateralization Test, in accordance with the provisions described herein.

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Interest Coverage Test

The "Interest Coverage Test" is a test with respect to any Calculation Date after the first Payment Date
until the Senior Class A Notes are retired and all amounts payable in respect thereof are paid in full, and is
satisfied, as of such Calculation Date, if the Interest Coverage Ratio is at least 2.20%. For purposes of the Interest
Coverage Test any item of Portfolio Collateral loaned to a Securities Lending Counterparty shall be included in
the Interest Coverage Test; provided that such Securities Lending Counterparty is not in default under the related
Securities Lending Agreement. The "Interest Coverage Ratio" means, with respect to any Measurement Date, a
number (expressed as a percentage) calculated by dividing (1) four times the amount by which (i) the Collateral
Interest Collections received during the Due Period in which such Measurement Date occurs (other than Premium
received upon disposition of such Portfolio Collateral during such Due Period and otherwise included in the
Collateral Interest Collections), exceeds (ii) the aggregate Cumulative Interest Amount with respect to the Senior
Class A Notes with respect to such Payment Date, by (2) the Aggregate Principal Amount of the Senior Class A
Notes with respect to such Payment Date, as adjusted taking into account any O/C Redemption or Rating
Confirmation Failure Redemption to occur on such Payment Date.

Applicability of Interest Coverage Test

On each Payment Date after the first Payment Date, if the Interest Coverage Test is not satisfied as of the
immediately preceding Calculation Date, amounts that are junior in right of payment to the Interest Coverage Test
as described under "Description of the Notes—Priority of Payments," will be applied to the payment of principal
of the Senior Class A Notes in the order described under "Description of the Notes—Payments on the Notes—
Priority of Payments," to the extent necessary to satisfy the Interest Coverage Test (recalculated on such Payment
Date after taking into account such O/C Redemption or Rating Confirmation Failure Redemption) in accordance
with the provisions described herein.

Additional Overcollateralization Test

On each Payment Date after the first Payment Date, amounts that would otherwise be used for payments
that are junior in right of payment to the Additional Overcollateralization Test will be applied first, to pay the
Class B-1L Periodic Rate Shortfall Amount, if any, second, to pay the Aggregate Principal Amount of the Class
B-1L Notes, until the Class B-1L Notes are paid in full, third, to pay the Aggregate Principal Amount of the Class
A-4L Notes, until the Class A-4L Notes are paid in full, fourth, to pay the Aggregate Principal Amount of the
Class A-3L Notes, until the Class A-3L Notes are paid in full and, fifth, to pay the Aggregate Principal Amount of
the Class A-1L Notes and the Class A-2L Notes in accordance with the Class A-1L/A-2L Notes Principal
Payment Priority, in order to satisfy the Additional Overcollateralization Test. The "Additional
Overcollateralization Test" will be satisfied if

(a) the sum of:

(i) the Aggregate Principal Amount of the Portfolio Collateral in the Trust Estate as of the
Calculation Date relating to such Payment Date; plus

(ii) Collateral Principal Collections held as cash in the Collection Account and the Balance of
Eligible Investments purchased with Collateral Principal Collections;

equals or exceeds:

(b) 104.25% of the amount necessary, after giving effect to the amount applied to any O/C
Redemption of the Notes (other than the Class C Notes) to satisfy the Overcollateralization Tests and the Interest
Coverage Test on such Payment Date, to retire the Notes (other than the Class C Notes) and to pay any Periodic
Rate Shortfall Amount on the Notes (other than the Class C Notes).

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 In the calculation of the Additional Overcollateralization Test, only the lower of (x) the Market Value and
(y) 70% of the Principal Balance of any Portfolio Collateral (other than Defaulted Portfolio Collateral or Deferred
Interest PIK Bonds) rated below "B3" by Moody's or below "B-" by S&P will be included as Portfolio Collateral.

O/C Redemption

If on any Payment Date, any Overcollateralization Test or the Additional Overcollateralization Test, or on
any Payment Date after the first Payment Date, the Interest Coverage Test, is not satisfied as of the immediately
preceding Calculation Date, certain Available Funds that would otherwise be used for payment of amounts that
are junior in right of payment to such test as described under "Description of the Notes—Payments on the
Notes—Priority of Payments," will be applied to the redemption of the Notes (other than the Class C Notes) (or,
in the case of the Class B-1L Notes, first, to pay accrued and unpaid interest from prior Payment Dates and,
second, to pay principal) in the order and according to the priorities described under "Description of the Notes—
Payments on the Notes—Priority of Payments" (an "O/C Redemption") to the extent necessary in order to satisfy
such Overcollateralization Test, the Additional Overcollateralization Test and the Interest Coverage Test, as
applicable. Any such O/C Redemption will be effected at an amount equal to the principal amount of the Notes
being redeemed. The Trustee will give notice of an O/C Redemption to the Company Announcements Office of
the Irish Stock Exchange if any Class of Notes is then listed on the Irish Stock Exchange.

Rating Confirmation Failure Redemption

Within five Business Days after the Ramp-Up Completion Date, the Issuer will request each Rating
Agency to confirm in writing within 25 Business Days after such request that such Rating Agency has not
reduced or withdrawn (without reinstating) the ratings assigned by such Rating Agency on the Closing Date to the
Notes (other than the Class C Notes) (a "Rating Confirmation"). There can be no assurance that the rating
assigned by any Rating Agency to a Class on the Closing Date will be confirmed by such Rating Agency in
response to such confirmation request. Any failure to obtain a Rating Confirmation within 30 Business Days of
the Ramp-Up Completion Date is herein referred to as a "Rating Confirmation Failure." If there is a Rating
Confirmation Failure, on the next Payment Date and on each subsequent Payment Date, certain Adjusted
Collateral Interest Collections and Adjusted Collateral Principal Collections will be applied to the payment of,
first, the principal of the Class A-1 Notes and Class A-2 Notes in accordance with the Class A-1L/A-2L Notes
Principal Payment Priority, second, the principal of the Class A-3L Notes, third, the principal of the Class A-4L
Notes, fourth, the Class B-1L Periodic Rate Shortfall Amount, if any and, fifth, the principal of the Class B-1L
Notes, but only to the extent necessary to receive a Rating Confirmation (a "Rating Confirmation Failure
Redemption").

Since the Ramp-Up Completion Date may not occur until the first Business Day that is 120 days after the
Closing Date, and a Rating Confirmation Failure may not occur until the 30th Business Day after the Ramp-Up
Completion Date, the first Payment Date on which principal payments would be made on the Notes as a result of
such Rating Confirmation Failure, if any, is expected to be the Payment Date in August 2004.

Optional Redemption

The Notes (other than the Class C Notes) are redeemable at the option of the Issuer, with the consent of,
or at the direction of, holders representing a Majority of the outstanding Preference Shares (an "Optional
Redemption"), in whole but not in part, on any Payment Date (the "Optional Redemption Date," which date
shall be considered the Final Maturity Date) on or after the Payment Date in February 2007, at a price equal to the
applicable Optional Redemption Price for such Notes. With respect to an Optional Redemption, Preference
Shares owned by the Collateral Manager or any Affiliate (or with respect to which the Collateral Manager or any
Affiliate thereof has voting rights) thereof will not be disregarded and will be regarded as outstanding for the
purposes of determining whether the holders of the requisite number of Preference Shares have given the
necessary request, demand, authorization, direction, notice, consent or waiver hereunder. No Optional
Redemption may occur unless all Outstanding Notes (other than the Class C Notes) are redeemed and unless all
payments, fees and expenses, including any amounts due and owing to the Cashflow Swap Provider, are paid in

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full on the date of such redemption. The Issuer may use all Available Funds in the Collection Account to provide
for payment of the Optional Redemption Price. If there are not sufficient Available Funds in the Collection
Account as of the date that the notice of redemption is given to pay the Optional Redemption Price on the
Optional Redemption Date and all such payments, fees and expenses, the Collateral Manager will make
arrangements for the sale of, and on a timely basis will effect the sale of, all of the Portfolio Collateral. The
Trustee will give notice of an Optional Redemption to each Holder of Notes to be redeemed at the address in the
Note Register (with a copy to the Collateral Manager and the Rating Agencies) and, so long as any Class of Notes
is listed on the Irish Stock Exchange, the Irish Paying Agent.

Redemption of the Class C Notes

The Class C Notes are not subject to Optional Redemption, O/C Redemption, Clean-up Call, Refinancing,
repurchase or Partial Redemption. However, if the Final Maturity Date is prior to the Class C Stated Maturity, the
Class C Notes will be redeemed "in kind" through delivery of the Class C Collateral, pro rata, to the holders of
Class C Notes or, in limited circumstances, will be redeemed from the proceeds of the sale of the Class C
Collateral.

Redemption of the Principal Protected Securities

The redemption price of the Principal Protected Securities (the "Principal Protected Securities
Redemption Price") will be equal to the applicable redemption prices of the Notes and the Preference Shares
represented by the applicable C Note Components and Preference Share Components of the Principal Protected
Securities.

Partial Redemption

At the request of any holder of Preference Shares (including the Preference Share Components) which
holds not less than 3,000,000 Preference Shares (such amount, the "PS Partial Redemption Minimum
Amount") (any such requesting holder, a "PS Minimum Amount Holder") (which request will be given so as to
be received by the Issuer, the Trustee and the Collateral Manager not later than 60 days prior to the proposed
Partial Redemption Date), the Issuer will redeem each Note (other than the Class C Notes) on the applicable
Partial Redemption Date, pro rata and in part, and, if such request for redemption is accepted by the Issuer, the
number of Preference Shares of the PS Minimum Amount Holder specified by such PS Minimum Amount Holder
will be redeemed by the Issuer, from Partial Redemption Sale Proceeds (a "Partial Redemption"). The
percentage of the aggregate principal amount of each Note to be redeemed in such case will equal the quotient of
(x) the number of Preference Shares so specified by the PS Minimum Amount Holder (which will in no event
exceed the number of Preference Shares held by such PS Minimum Amount Holder) divided by (y) the number of
outstanding Preference Shares immediately prior to such partial redemption (the "Partial Redemption
Percentage").

No Partial Redemption of the Notes (other than the Class C Notes) will occur at the request of a PS
Minimum Amount Holder unless (i) the Sale Proceeds from the liquidation of a pro rata portion of each item of
the Portfolio Collateral corresponding to the Partial Redemption Percentage thereof on or prior to the related
Partial Redemption Date and the proceeds of the Partial Redemption Percentage of all Eligible Investments (the
"Partial Redemption Sale Proceeds"), would be sufficient to (a) pay the Partial Redemption Percentage of the
Optional Redemption Price (as if the Partial Redemption Date were the Redemption Date) for each Class of Notes
(other than the Class C Notes), and with respect to the Preference Shares being redeemed, an amount not less than
the price the PS Minimum Amount Holder paid for such Preference Shares (unless the Holder of such Preference
Shares consents), (b) reimburse the Cashflow Swap Provider for any amounts that have been advanced by the
Cashflow Swap Provider under the Cashflow Swap Agreement on or prior to the related Partial Redemption Date,
together with interest accrued thereon at a rate equal to the Cashflow Swap Provider Accrual Rate and (c) pay all
other amounts required to be paid in accordance with "Payments on the Notes—Priority of Payments—Partial
Redemption Date," (ii) after giving effect to such redemption the Reinvestment Criteria continue to be satisfied,
(iii) each item of Portfolio Collateral in the Trust Estate is sold strictly on a pro rata basis (adjusted taking into

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account the lowest whole denomination and rounded down to the nearest U.S. $500,000), (iv) after giving effect
to such redemption, the Interest Coverage Ratio and each of the Overcollateralization Ratios shall not have
declined more than 0.05%, (v) the Rating Condition has been satisfied and (vi) such Partial Redemption will not
cause greater than 25% of the Preference Shares (including the Preference Share Components) to be held by
Benefit Plan Investors (excluding, for purposes of such calculation, interests held by persons (other than Benefit
Plan Investors) that have discretionary authority or control with respect to the assets of the Issuer, or who provide
investment advice to the Issuer for a fee (direct or indirect) with respect to such assets, or any affiliate of such a
person). The Trustee will give notice of a Partial Redemption to each Holder of Notes to be redeemed at the
address in the Note Register (with a copy to the Rating Agencies) and, so long as any Class of Notes is listed on
the Irish Stock Exchange, the Irish Paying Agent.

A redemption in part of the Securities may be effected on more than one occasion but not more than twice
by any PS Minimum Amount Holder.

If a Partial Redemption is directed to be made, the Collateral Manager will make arrangements for the
sale of, and on a timely basis will effect the sale of, a portion of the Portfolio Collateral, in accordance with the
Indenture.

Clean-up Call

The Class A-3L Notes, the Class A-4L Notes and the Class B-1L Notes are redeemable at the option of
the Issuer, with the consent of, or at the direction of, the holders representing a Majority of the outstanding
Preference Shares (a "Clean-up Call"), in whole but not in part, on any Payment Date (the "Clean-up Call
Date," which date shall be considered the Final Maturity Date) on or after the Payment Date on which the
Aggregate Principal Amount of the Class A-1L Notes and the Class A-2L Notes have been reduced to zero, at a
price equal to the Clean-up Call Price. The Issuer may use all Available Funds in the Collection Account to
provide for payment of the Clean-up Call Price. No such Clean-up Call may occur unless all Outstanding Notes
are redeemed and unless all payments, fees and expenses, including any amounts due and owing to the Cashflow
Swap Provider, are paid in full. If there are not sufficient Available Funds in the Collection Account as of the
date the notice of redemption is distributed to pay the Clean-up Call Price and such other amounts on the Clean-
up Call Date, Trustee is required to sell Portfolio Collateral in an amount sufficient to provide Available Funds to
pay the Clean-up Call Price and such other amounts in full on the date of such redemption. The Trustee will give
notice of any Clean-up Call to the Company Announcements Office of the Irish Stock Exchange if any Class of
Notes is then listed on the Irish Stock Exchange.

Refinancing

Any Class or Classes of Notes (other than the Class C Notes) may be redeemed on any Payment Date on
or after the Payment Date in February 2007 from Refinancing Proceeds if the Collateral Manager notifies the Co-
Issuers and the Trustee in writing at least 60 days prior to the Refinancing Date to redeem such Class or Classes
of Notes (other than the Class C Notes) by obtaining a loan or an issuance of a replacement class of notes, the
terms of which loan or issuance will be negotiated by the Collateral Manager, from one or more financial
institutions or purchasers (which may include the Collateral Manager or its Affiliates) selected by the Collateral
Manager (a refinancing provided pursuant to such loan or issuance, a "Refinancing"). Prior to executing any
Refinancing, the Issuer will satisfy the Rating Condition with respect to such Refinancing.

The Issuer will obtain a Refinancing only if the Collateral Manager determines and certifies to the Trustee
that (i)(A) each financial institution participating in such Refinancing has long term unsecured debt obligations
(other than debt obligations whose ratings rely on the credit of a Person other than such institution) with a credit
rating from Moody's at least equal to the lesser of "Aa2" or the highest rating of any Notes (other than the Class C
Notes) then Outstanding and short term unsecured debt obligations with a credit rating from Moody's of at least
"P-1," with a credit rating from S&P at least equal to the highest rating of any Notes then Outstanding or short
term unsecured debt obligations with a credit rating from S&P of "A-1+" and with a credit rating from Fitch (if a
Fitch Rating has been assigned) of at least "F1" or (B) the Rating Condition with respect to such Refinancing has

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been satisfied, (ii) the proceeds from the Refinancing (the "Refinancing Proceeds") will be at least sufficient to
pay the Refinancing Price, (iii) the Refinancing Proceeds and other available funds are used (to the extent
necessary) to make such redemption and (iv) the agreements relating to the Refinancing contain limited-recourse
and non-petition provisions equivalent (mutatis mutandis) to those contained in the Indenture.

In connection with any Refinancing of a Class of Notes, the Issuer will not issue notes of any Class in an
Aggregate Principal Amount greater than the Aggregate Principal Amount of such Class of Notes immediately
prior to such Refinancing.

Purchase of Notes

The Issuer may acquire Notes (other than the Class C Notes) in the open market or privately negotiated
transactions or otherwise. See "Legal Structure—The Indenture—Purchase of Notes."

Form, Transfer and Transfer Restrictions

Upon issuance, the Notes sold to non-U.S. Persons, in Offshore Transactions (as defined in Regulation S)
in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"), will be
evidenced by one or more permanent global notes in definitive, fully registered form without interest coupons (the
"Regulation S Global Notes") which will be deposited with a custodian for, and registered in the name of, a
nominee of The Depository Trust Company ("DTC") for the accounts of Euroclear Bank S.A./N.V., as operator
of the Euroclear System ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream").

A beneficial interest in a Regulation S Global Note may be transferred to a Person who takes delivery in
the form of an interest in a Rule 144A Global Note only after the end of the Distribution Compliance Period upon
receipt by the Trustee of a written certification from the transferor and the transferee (in the forms provided in the
Indenture) to the effect that the transfer is being made to a Qualified Institutional Buyer which is also a Qualified
Purchaser in a transaction meeting the requirements of Rule 144A and in accordance with any applicable
securities laws of any state of the United States or any other jurisdiction. A beneficial interest in a Rule 144A
Note may be transferred to a Person who takes delivery in the form of an interest in a Regulation S Global Note
only upon receipt by the Trustee of a written certification from the transferee (in the form(s) provided in the
Indenture) to the effect that the transfer is being made to a non-U.S. Person and in accordance with Regulation S.
The "Distribution Compliance Period" is the period beginning on the later of the Closing Date and the date of
completion of the offering of the Notes and ending on the 40th day thereafter.

Upon deposit of the Regulation S Global Note of a Class with the Trustee, as custodian for DTC,
Euroclear or Clearstream, as the case may be, will credit each purchaser (or its agent or custodian) with a
principal amount of Notes of such Class equal to the principal amount thereof for which it has paid. The Holder
of the Regulation S Global Notes (which will be DTC or its nominee) shall be the only Person entitled to receive
payments in respect of the Notes represented by such Regulation S Global Notes, and the Co-Issuers will be
discharged by payment to, or to the order of, such Holder of such Regulation S Global Notes in respect of each
amount so paid. Each of the Persons shown in the records of Euroclear or of Clearstream as the beneficial owner
of a particular principal amount of Regulation S Global Notes must look solely to Euroclear or Clearstream, as the
case may be, for its share of each payment so made by the Co-Issuers to, or to the order of, the Holder of such
Regulation S Global Notes. No Person other than the Holder of the Regulation S Global Notes shall have any
claim against the Co-Issuers in respect of any payments due on the Regulation S Global Notes.

Payments on the Regulation S Global Notes will be made pursuant to certain procedures established by
DTC, provided that the final payment of principal and interest will be made upon presentation and endorsement of
such Regulation S Global Notes at the office of a Paying Agent.

Definitive fully registered notes ("Definitive Notes") will be issued and exchanged for each Regulation S
Global Note within 30 days of the occurrence of any of the following: (i) the Notes or any of them become
immediately due and payable following an Event of Default under the Indenture; (ii) either Euroclear or

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Clearstream is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or
otherwise) or announces an intention permanently to cease business and no alternative clearance system
satisfactory to the Issuer is available or (iii) as a result of any amendment to, or change in, the laws or regulations
of Cayman Islands or of any authority therein or thereof having power to tax or in the interpretation or
administration of such laws or regulations which becomes effective on or after the Closing Date, the Co-Issuers or
the Paying Agents are or will be required to make any deduction or withholding from any payment in respect of
the Notes which would not be required were the Notes in definitive registered form. Notwithstanding the
foregoing, interests in any Regulation S Global Note or any definitive registered Note purchased by a non-U.S.
Person in an Offshore Transaction in accordance with Regulation S may not be exchanged for a Definitive Note
until receipt by the Trustee from the owner of such beneficial interest of a certificate in the form provided by the
Indenture.

Upon issuance, the Notes sold to U.S. Persons, will be evidenced by one or more permanent global notes
in definitive, fully registered form without interest coupons (the "Rule 144A Global Notes"), which will be
deposited with a custodian for, and registered in the name of, DTC. So long as DTC or its nominee is the
registered holder of the Rule 144A Global Notes, DTC or such nominee, as the case may be, will be considered
the absolute owner or Holder of such the Notes represented by such Rule 144A Global Notes for all purposes
under the Indenture and such Notes. DTC or such nominee, as the case may be, will be the only Person entitled to
receive payments in respect of the Notes represented by such Rule 144A Global Notes and the Co-Issuers will be
discharged by payment to DTC or such nominee. Each of the Persons shown in the records of DTC as the
beneficial owner of a Rule 144A Global Note must look solely to DTC for its share of each payment made by the
Issuer to DTC. No Person other than DTC shall have any claim against the Co-Issuers in respect of any payment
due under the Rule 144A Global Notes.

Payments on the Rule 144A Global Notes will be made in accordance with the established procedures of
DTC and the Co-Issuers will have no liability therefor. In addition, no beneficial owner of an interest in a Rule
144A Global Note will be able to exchange or transfer such interest except in accordance with the applicable
procedures of DTC. None of the Issuer, the Co-Issuer, the Trustee, the Note Registrar or any Paying Agent will
have any responsibility or liability for any aspect of the records relating to or payments made on account of
beneficial ownership interests in the Rule 144A Global Notes or for maintaining, supervising or reviewing any
records relating thereto.

Definitive Notes will be issued and exchanged for each Rule 144A Global Note within 30 days of the
occurrence of any of the following: (i) the Notes or any of them become immediately due and payable following
an Event of Default under the Indenture; or (ii) DTC notifies the Issuer or the Trustee in writing that it is
unwilling or unable to discharge properly its responsibilities as a depository with respect to the Rule 144A Global
Notes or it ceases to be a "clearing agency" registered under the Exchange Act, and the Issuer is unable to locate a
qualified successor within 90 days after such notice.

Definitive Notes may be presented for registration of transfer (with the form of transfer endorsed thereon
duly executed), at the office of the Note Registrar, without service charge but upon payment of any taxes and
other governmental charges as described in the Indenture. Any registration of transfer will be effected upon the
Transfer Agent being satisfied with the documents of title and identity of the person making the request, upon
their receipt of any applicable certificates and opinions relating to transfer restrictions, as described below, and
subject to such reasonable regulations as the Issuer may from time to time agree with the Trustee, all as described
in the Indenture.

Pursuant to the Indenture, the Trustee has been appointed and will serve as the registrar with respect to
the Notes (in such capacity, the "Note Registrar") and will provide for the registration of Notes and the
registration of transfers of Notes in the register maintained by the Note Registrar (the "Note Register").

The Issuer has initially appointed the Trustee as Note Registrar, and has appointed the Trustee (in such
capacity, the "Transfer Agent") as an office or agent located in New York, New York at which the Definitive

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Notes may be presented for payment or for transfer or exchange. The Issuer reserves the right to vary or
terminate the appointment of the Note Registrar or to appoint additional or other registrars or to approve any
change in the office through which any Note Registrar acts; provided that there will at all times be an office or
agent located in New York, New York at which the Definitive Notes may be presented for payment or for transfer
or exchange.

For so long as any Class of Notes is listed on the Irish Stock Exchange and the rules of such exchange
shall so require, the Issuer will have a listing agent and a paying agent (which shall be the "Irish Paying Agent")
for the Notes in Ireland and payments on the Notes may be effected through the Irish Paying Agent. In the event
that the Irish Paying Agent is replaced at any time during such period, notice of the appointment of any
replacement will be given to the Company Announcements Office of the Irish Stock Exchange.

A beneficial interest in a Regulation S Global Note may only be transferred to (a) a non-U.S. Person in an
Offshore Transaction in accordance with Regulation S (and in accordance with certain certification requirements
in the Indenture) or (b) after the Distribution Compliance Period, a Person who takes delivery in the form of an
interest in a Rule 144A Global Note and who delivers a written certification (in the form provided in the
Indenture) to the effect that such Person is a Qualified Institutional Buyer and is acquiring such interest for its
own account (together with certain other requirements set forth in the Indenture). Upon any exchange of a portion
of a Regulation S Global Note for a Definitive Note, a transfer agent shall endorse such Regulation S Global Note
to reflect the reduction of the principal amount evidenced thereby.

Definitive Notes (or any interest therein) may only be transferred in accordance with the applicable laws
of any State of the United States and (a) in a transaction exempt from the registration requirements of the
Securities Act involving a Qualified Institutional Buyer who is a U.S. Person as transferee (in accordance with the
certification requirements of the Indenture) or (b) to a Person who takes delivery in the form of a beneficial
interest in a Regulation S Global Note and in such case only upon receipt by a transfer agent of a written
certification from the transferor (in the form provided in the Indenture) to the effect that such transfer is being
made to a non-U.S. Person in accordance with Regulation S. Upon any exchange of a Definitive Note for a
beneficial interest in a Regulation S Global Note, a transfer agent shall endorse such Regulation S Global Note to
reflect the increase in the principal amount evidenced thereby.

The Note Registrar for the Notes will not be required to accept for registration of transfer any Note except
upon presentation of a certificate representing that these restrictions on transfer have been complied with, and, if
requested by the Issuer or the Trustee, an opinion of counsel in form and substance satisfactory to the Issuer or the
Trustee to the effect that such transfer has been made in compliance with an applicable exemption from the
registration requirements of the Securities Act and in accordance with any applicable securities laws of any state
of the United States and any other jurisdiction. See "Delivery of the Notes; Transfer Restrictions; Settlement."

No Note may be sold or transferred unless such sale or transfer and subsequent holding will not constitute
or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code. See "Certain ERISA
Considerations."

In addition, sales or other transfers of the Notes may only be made to a purchaser or other transferee
(other than a non-U.S. Person in an Offshore Transaction under Regulation S) that is a Qualified Purchaser in a
sale or transfer that would not require the Co-Issuers to become subject to the requirements of the Investment
Company Act and the Notes will bear a legend to this effect. See "Delivery of the Notes; Transfer Restrictions;
Settlement."

Each prospective purchaser will be deemed to (i) represent that such prospective purchaser is a Qualified
Institutional Buyer and is purchasing or acquiring Notes solely for its own account or a non-U.S. Person,
(ii) represent that such prospective purchaser is a Qualified Purchaser or a non-U.S. Person and (iii) have made
the other representations described under "Delivery of the Notes; Transfer Restrictions; Settlement."

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 DTC is a limited purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to Section 17A of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
DTC was created to hold securities for its participants (the "DTC Participants") and to facilitate the clearance
and settlement of securities transactions between DTC Participants through electronic computerized book-entries,
thereby eliminating the need for physical movement of certificates. DTC Participants include securities brokers
and dealers, banks, trust companies and clearing corporations. Indirect access to the DTC system also is available
to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a DTC Participant, either directly or indirectly ("Indirect Participants").

Unless and until Definitive Notes are issued, all references to actions by holders of the Rule 144A Global
Notes holding through DTC will refer to actions taken by DTC upon instructions received from beneficial owners
of the Rule 144A Global Notes through DTC Participants, and all references herein to payments, notices, reports,
statements and other information to holders of Rule 144A Global Notes will refer to payments, notices, reports
and statements to DTC or its nominees, as the registered holder of the Rule 144A Global Notes, for distribution to
beneficial owners of Rule 144A Global Notes through DTC Participants in accordance with DTC procedures.

Clearstream is incorporated under the laws of Luxembourg as a professional depository. Clearstream

holds securities for its participating organizations ("Clearstream Participants") and facilitates the clearance and
settlement of securities transactions between Clearstream Participants through electronic book-entry changes in
accounts of Clearstream Participants, thereby eliminating the need for physical movement of certificates.
Clearstream provides to its Clearstream Participants, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities lending and borrowing. Clearstream
interfaces with domestic markets in several countries. As a professional depository, Clearstream is subject to
regulation by the Luxembourg Monetary Institute. Clearstream Participants are recognized financial institutions
around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the Initial Purchaser. Indirect access to Clearstream
is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Clearstream Participant, either directly or indirectly.

Euroclear was created to hold securities for participants of the Euroclear system ("Euroclear
Participants") and to clear and settle transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any
risk from lack of simultaneous transfers of securities and cash. The Euroclear system includes various other
services, including securities lending and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC described above. Euroclear is operated
by Euroclear Bank S.A./N.V. (the "Euroclear Operator"), under contract with Euroclear Clearance System, S.C.,
a Belgian cooperative corporation (the "Cooperative"). All operations are conducted by the Euroclear Operator,
and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear
Operator, not the Cooperative. The Cooperative establishes policy for the Euroclear system on behalf of
Euroclear Participants. Euroclear Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries and may include the Initial Purchaser. Indirect access to the
Euroclear system is also available to other firms that clear through or maintain a custodial relationship with a
Euroclear Participant, either directly or indirectly.

The Euroclear Operator is the Belgian branch of a New York banking corporation which is a member
bank of the Federal Reserve System. As such, it is regulated and examined by the Board of Governors of the
Federal Reserve System and the New York State Banking Department, as well as the Belgian Banking
Commission.

Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms
and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System and

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applicable Belgian law (collectively, the "Terms and Conditions"). The Terms and Conditions govern transfers
of securities and cash within the Euroclear system, withdrawal of securities and cash from the Euroclear system,
and receipts of payments with respect to securities in the Euroclear system. All securities in the Euroclear system
are held on a fungible basis without attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear Participants and has no
record of or relationship with persons holding through Euroclear Participants.

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 SECURITY FOR THE NOTES

Pursuant to the Indenture, the Notes (other than the Class C Notes) will be secured by a pledge of the
Trust Estate.

Portfolio Collateral

The "Portfolio Collateral" will consist of a portfolio of U.S. dollar-denominated CDO Securities and
Synthetic Securities satisfying the investment criteria described herein. The Portfolio Collateral will consist of
(i) the Portfolio Collateral acquired by the Issuer on or prior to the Ramp-Up Completion Date and (ii) the
Portfolio Collateral acquired by the Issuer thereafter as described under "—Additional Portfolio Collateral and
Reinvestment Criteria." The Portfolio Collateral will be pledged to the Trustee for the benefit of the Secured
Parties.

On the Closing Date, the Issuer will purchase (or enter into commitments to purchase) Portfolio Collateral
having an Aggregate Portfolio Collateral Principal Balance at least equal to U.S.$200,000,000. On or prior to the
Ramp-Up Completion Date, the Issuer expects to purchase the remainder of the initial Portfolio Collateral using
funds on deposit in the Initial Deposit Account.

To the extent that the full amount of the net proceeds to the Issuer from the issuance of the Securities is
not invested or committed for investment in Portfolio Collateral by the Ramp-Up Completion Date, the net
proceeds remaining uninvested and uncommitted for investment will be applied by the Issuer on the Payment
Date in May 2004 as Collateral Principal Collections.

Within five Business Days after the Ramp-Up Completion Date, the Issuer must deliver to the Rating
Agencies information sufficient to demonstrate that the Portfolio Collateral as of the Ramp-Up Completion Date
meet the required criteria set forth in the Indenture and request each Rating Agency to issue a Rating
Confirmation. See "Description of the Notes—Rating Confirmation Failure Redemption."

A CDO Security or Synthetic Security will constitute an item of Portfolio Collateral only if such security,
when pledged to the Trustee on the date of acquisition thereof by the Issuer:

(a) satisfies the definition of CDO Security or Synthetic Security;

(b) is an instrument that is a Registered Debt Obligation the payments with respect to which
are not by the terms of such instrument (i) payable in a currency other than U.S. dollars or (ii) convertible
at the option of the issuer thereof into a currency other than U.S. dollars;

(c) provides for periodic payments of interest in cash no less frequently than semi-annually;

(d) is not an item of Defaulted Portfolio Collateral, an item of Credit Risk Portfolio
Collateral or a Deferred Interest PIK Bond;

(e) provides for payment of principal at maturity;

(f) is not the subject of an Offer;

(g) is eligible under the related Underlying Instruments to be pledged, sold or assigned to and
by the Issuer;

(h) is not an obligation that provides for conversion into an Equity Portfolio Collateral at any
time;

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 (i) is collateral of a type subject to perfection under Article 9 of the Uniform Commercial
Code, as amended and in effect from time to time in the State of New York;

(j) either (A) is issued by an entity that is treated as a corporation and not as a U.S. real
property holding company for U.S. federal income tax purposes, (B) is treated as indebtedness for U.S.
federal income tax purposes or (C) the Issuer has received the advice of Schulte Roth & Zabel LLP or
Cadwalader Wickersham & Taft LLP or an opinion of counsel to the effect that the ownership of such
security will not cause the Issuer to be treated as engaged in a trade or business within the United States
for U.S. federal income tax purposes or otherwise subject the Issuer to U.S. federal income tax on a net
income basis;

(k) does not have a coupon or other payments that are subject to U.S. or foreign withholding
tax, unless the issuer of such Portfolio Collateral is required to make "gross-up" payments pursuant to the
related Underlying Instruments that cover the full amount of any such withholding tax on an after-tax
basis (including any tax on such additional payments);

(l) is not an obligation that represents the first loss position of the issuer thereof (except if
such obligation is a part of the sole class of obligation of such issuer);

(m) is not a combination security or similar security;

(n) (1) has a Moody's Rating of at least "Ba3," (2) has a S&P Rating of at least "BB-" (which
rating does not have a "p," "pi," "q," "t" or "r" subscript) and (3) has a Fitch Rating of at least "BB-";
provided, however, that with respect to any Synthetic Security, the rating shall be the rating of the related
Reference Obligation;

(o) has been rated by (i) Moody's and (ii) S&P with respect to ultimate payment in full of
principal and interest and such rating (x) is not an estimated rating (unless each of Moody's and S&P has
assigned a rating at the Issuer's request) and (y) is a rating monitored by Moody's and S&P;

(p) would not cause the Issuer, the Co-Issuer or the pool of Portfolio Collateral, upon
acquisition thereof, to be required to register under the Investment Company Act; and

(q) is not, and any item of Equity Portfolio Collateral acquired in connection with such
security is not, and does not provide for conversion into, Margin Stock.

The term "Portfolio Collateral" will not include any obligation pursuant to which future advances or
payments may be required to be made to the borrower or issuer. In order to ensure that the Issuer is not treated as
engaged in a U.S. trade or business for U.S. federal income tax purposes, the Issuer and the Collateral Manager
will observe certain additional restrictions and limitations on their activities and on the Portfolio Collateral that
may be purchased. Accordingly, although a particular prospective investment may satisfy the definition of
Portfolio Collateral, it may be ineligible for purchase by the Issuer and the Collateral Manager as a result of these
limitations and restrictions.

The Issuer will not act as agent, negotiator or structuror with respect to any Portfolio Collateral or
otherwise. The Issuer will therefore not receive payments associated with acting in such capacities.

Concentration Limitations

As of the Closing Date and, with respect to any Portfolio Collateral purchased after the Closing Date, as
of the date the Issuer enters into a commitment to purchase such Portfolio Collateral, after giving effect to such
purchase, each percentage specified below (each such percentage, a "Concentration Limitation" and,
collectively, the "Concentration Limitations") is required to be satisfied (or, in the case of a Concentration

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Limitation not satisfied prior to such purchase, the purchase must maintain or improve compliance with such
Concentration Limitation):

(i) not more than 15% of the Aggregate Portfolio Balance shall consist of Portfolio
Collateral having a Moody's Rating below "Baa3";

(ii) not more than 5% of the Aggregate Portfolio Balance consists of Fixed Rate Collateral;

(iii) not less than 95% of the Aggregate Portfolio Balance consists of Floating Rate Collateral;

(iv) not more than 5% of the Aggregate Portfolio Balance consists of Portfolio Collateral that
have a legal maturity later than the Stated Maturity; provided that such Portfolio Collateral will mature
not more than 35 years after the Closing Date;

(v) not more than 10% of the Aggregate Portfolio Balance consists of Emerging Market
CDO Securities;

(vi) not more than 20% of the Aggregate Portfolio Balance consists of Synthetic Securities;

(vii) not more than 10% of the Aggregate Portfolio Balance consists of Portfolio Collateral
which pays less frequently than quarterly; provided that not more than 7% of the Aggregate Portfolio
Balance consists of Portfolio Collateral which pays less frequently than quarterly and in the same Due
Period;

(viii) the Aggregate Principal Amount of all Portfolio Collateral managed by the same
collateral manager (together with the aggregate Principal Balance of any Synthetic Securities related
thereto) does not exceed 15% of the Aggregate Portfolio Balance;

(ix) (A) the Aggregate Principal Amount of all items of Portfolio Collateral that are issued by
the same issuer (together with the aggregate Principal Balance of any Synthetic Securities related thereto)
does not exceed 1.5% of the Aggregate Portfolio Balance if such item of Portfolio Collateral has a
Moody's Rating below "Baa3"; and (B) the Aggregate Principal Amount of all items of Portfolio
Collateral that are issued by the same issuer (together with the aggregate Principal Balance of any
Synthetic Securities related thereto) does not exceed 2.5% (or, with respect to no more than three issuers,
3.0%) of the Aggregate Portfolio Balance if such item of Portfolio Collateral has a Moody's Rating equal
to or above "Baa3";

(x) not more than 10% (which may be increased to 20% upon satisfaction of the Rating
Condition) of the Aggregate Principal Amount of all Portfolio Collateral may be loaned pursuant to
Securities Lending Agreements;

(xi) not more than 5% (which may be increased to 10% upon satisfaction of the Rating
Condition) of the Aggregate Principal Amount of all Portfolio Collateral may be loaned to any single
Securities Lending Counterparty; and

(xii) not more than 7.5% of the Aggregate Portfolio Balance consists of CDO of CDO
Securities or Asset Backed CDO Securities; provided that not more than 2.5% of the Aggregate Portfolio
Balance consists of CDO of CDO Securities.

Initial Investment Period

The Issuer at the direction of the Collateral Manager will, prior to the expiration of the Initial Investment
Period, use commercially reasonable efforts to purchase or enter into agreements to purchase the remainder of the

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Portfolio Collateral such that the Aggregate Portfolio Collateral Principal Balance (after giving effect to the
consummation of such agreements to purchase) on the Ramp-Up Completion Date will equal or exceed
U.S.$250,000,000 (without giving effect to any reductions of that amount that may have resulted from scheduled
principal payments or principal prepayments made with respect to the Portfolio Collateral on or before the Ramp-
Up Completion Date).

If the Issuer purchases (or enters into agreements to purchase) Portfolio Collateral such that the Aggregate
Portfolio Collateral Principal Balance (after giving effect to the consummation of such agreements to purchase)
equals or exceeds U.S.$250,000,000 (without giving effect to any reductions of that amount that may have
resulted from scheduled principal payments or principal prepayments made with respect to the Portfolio Collateral
on or before the Ramp-Up Completion Date) prior to 120 days after the Closing Date, the Collateral Manager will
declare such date to be the Ramp-Up Completion Date, by written notice to the Trustee and the Rating Agencies.

Within five (or with respect to clause (iii) below, ten) Business Days after the Ramp-Up Completion
Date, (i) the Issuer will deliver (or procure delivery to the Rating Agencies of) a certificate containing calculations
and other information that indicate (except to the extent of any exceptions stated therein) that (1) the Issuer has
purchased, or entered into agreements to purchase, Portfolio Collateral such that the Aggregate Portfolio
Collateral Principal Balance (after giving effect to the consummation of such agreements to purchase) on the
Ramp-Up Completion Date at least equals U.S.$250,000,000 (without giving effect to any reductions of that
amount that may have resulted from scheduled principal payments or principal prepayments made with respect to
the Portfolio Collateral on or before the Ramp-Up Completion Date), (2) each Collateral Quality Test was
satisfied on the Ramp-Up Completion Date, (3) the Coverage Tests were satisfied on the Ramp-Up Completion
Date and (4) the Portfolio Collateral satisfied the Concentration Limitations on the Ramp-Up Completion Date,
(ii) the Issuer will deliver to the Trustee and each Rating Agency a revised schedule, containing the information
with respect to each item of the Portfolio Collateral purchased by the Issuer (or which the Issuer has entered into
agreements to purchase) as of the Ramp-Up Completion Date, (iii) the Issuer shall deliver to the Trustee and each
Rating Agency an accountants' certificate (x) confirming the information contained in subclause (i) above, (y)
confirming the information with respect to each item of Portfolio Collateral as of the Ramp-Up Completion Date,
as amended or restated on or prior to such date, by reference to such sources as shall be specified therein, and (z)
specifying the procedures undertaken by them to review data and computations relating to this subsection (iii) and
(iv) the Issuer will seek a Rating Confirmation. In addition, on or after the Ramp-Up Completion Date, the
Collateral Manager on behalf of the Issuer may propose a Proposed Plan to the Rating Agencies to obtain a Rating
Confirmation.

If the Rating Agencies do not provide a Rating Confirmation by the 30th Business Day after the Ramp-
Up Completion Date, on the next Payment Date and on each subsequent Payment Date, Adjusted Collateral
Interest Collections and Adjusted Collateral Principal Collections shall be applied as specified under the Priority
of Payments, to the extent specified by each Rating Agency to receive a Rating Confirmation. If a Proposed Plan
is approved by the Rating Agencies, the Issuer will take the actions specified in such Proposed Plan including, if
applicable, the investment of net proceeds of the issuance of the Securities remaining uninvested on such 30th
Business Day in additional Portfolio Collateral or application thereof as Collateral Interest Collections or
Collateral Principal Collections on the next succeeding Payment Date.

The Collateral Quality Tests

Except as otherwise provided, measurement of the degree of compliance with each Collateral Quality
Test, the Overcollateralization Tests and the Concentration Limitations will be required (i) not later than the
Calculation Date of each month, for inclusion in the monthly reports as described in the Indenture, (ii) on the
Ramp-Up Completion Date, (iii) after the Ramp-Up Completion Date, on any day upon which the purchase of an
item of Portfolio Collateral occurs, (iv) on any Calculation Date occurring after the Ramp-Up Completion Date
and (v) after the Ramp-Up Completion Date, with reasonable notice, on any Business Day requested in writing by
a Rating Agency or by the Holders of at least 66-2/3%, by principal amount, of any Class of Notes (any such date,
a "Measurement Date").

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 The "Collateral Quality Tests" will be used primarily as criteria for purchasing Portfolio Collateral,
and will consist of the S&P CDO Monitor Test, the Diversity Test, the Moody's Rating Distribution Test, the
Weighted Average Spread Test, the Weighted Average Recovery Rate Test, the Fitch Sector Score Test and the
Fitch Weighted Average Rating Factor Test; provided that any item of Portfolio Collateral loaned to a Securities
Lending Counterparty will be included in the Collateral Quality Tests (so long as such Securities Lending
Counterparty is not in default under the related Securities Lending Agreement). See "—Additional Portfolio
Collateral and Reinvestment Criteria."

S&P CDO Monitor

The "S&P CDO Monitor Test" will be satisfied on each Measurement Date if, after giving effect to the
purchase of Portfolio Collateral on such Measurement Date, with respect to each Class of Notes, the Default
Differential is positive or the Default Differential of the Proposed Portfolio is greater than the Default Differential
of the Current Portfolio.

The "Break-Even Default Rate" is, with respect to each Class, the maximum percentage of defaults that
the Current Portfolio or the Proposed Portfolio, as applicable, can sustain (as determined by the S&P CDO
Monitor), which, after giving effect to S&P assumptions on recoveries and timing and to the Priority of Payments,
will result in sufficient funds remaining for the ultimate payment of interest on and principal of such Class of
Notes in full by its Stated Maturity and, in the case of the Senior Class A Notes, the timely payment of interest on
such Class of Notes.

The "Current Portfolio" means the pool of Portfolio Collateral and Eligible Investments purchased with
Collateral Principal Collections existing immediately prior to the proposed acquisition of an item of Portfolio
Collateral.

The "Default Differential" is, with respect to each Class of Notes (other than the Class C Notes), the rate
calculated by subtracting the Scenario Default Rate at such time for such Class of Notes (other than the Class C
Notes) from the Break-Even Default Rate at such time for such Class of Notes (other than the Class C Notes).

The "Proposed Portfolio" means the pool of Portfolio Collateral and Eligible Investments resulting from
a proposed acquisition of an item of Portfolio Collateral.

The "Scenario Default Rate" is, with respect to each Class, an estimate of the cumulative default rate
that the Current Portfolio or Proposed Portfolio, as applicable, will experience, consistent with the rating assigned
to such Class on the Closing Date by S&P, determined by application of the S&P CDO Monitor at such time.

The "S&P CDO Monitor" is the analytical computer model used to estimate the default rate the Portfolio
Collateral is likely to experience and which will be provided to the Issuer by S&P on or before the Ramp Up
Completion Date, in connection with its rating confirmation, which calculates the projected cumulative default
rate of the Portfolio Collateral.

The S&P CDO Monitor Test calculates the cumulative default rate of a pool of Portfolio Collateral and
Eligible Investments consistent with a specified benchmark rating level based upon S&P proprietary corporate
debt default studies. In calculating each Default Differential, the S&P CDO Monitor Test considers each obligor's
most senior unsecured debt rating, the number of obligors in the portfolio, the obligor and industry concentrations
in the portfolio and the remaining weighted average maturity of the Portfolio Collateral and Eligible Investments
and calculates a cumulative default rate based on the statistical probability of distributions or of defaults on the
Portfolio Collateral and Eligible Investments. For purposes of calculating the S&P CDO Monitor Test, the S&P
ratings of Portfolio Collateral obligors in a single industry classification group may be reduced depending on the
level of concentration of Portfolio Collateral obligors in that group.

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 Diversity Score

The "Diversity Test" will be satisfied on each Measurement Date if the Diversity Score equals or exceeds
9.

The "Diversity Score" is a single number that indicates collateral concentration in terms of both obligor
and industry concentration in accordance with methodology prescribed by Moody's and more fully described in
the Indenture. A higher Diversity Score reflects a more diverse portfolio in terms of concentration.

Moody's Rating Distribution

The "Moody's Rating Distribution Test" will be satisfied on each Measurement Date if the "Moody's
Rating Distribution" does not exceed 550. The "Moody's Rating Distribution" will be determined in accordance
with the methodology prescribed by Moody's and described in the Indenture.

Weighted Average Spread

The "Weighted Average Spread Test" will be satisfied on each Measurement Date if the Weighted
Average Spread equals or exceeds 3.45%.

The "Weighted Average Spread" as of any date of determination, equals a fraction (expressed as a
percentage and rounded up to the nearest 0.001%) obtained by (a) multiplying (1) the Principal Balance of each
Floating Rate Collateral (excluding all Defaulted Portfolio Collateral and Deferred Interest PIK Bonds) held by
the Issuer as of the date of determination by (2) the then current per annum rate at which such Floating Rate
Collateral pays interest in excess of the three-month London interbank offered rate for U.S. dollar deposits (such
rate, the "spread"), (b) summing the amounts determined pursuant to clause (a) for all Floating Rate Collateral
(excluding all Defaulted Portfolio Collateral and Deferred Interest PIK Bonds) that are held by the Issuer as of
such date of determination and (c) dividing such sum by the Aggregate Principal Amount of all Floating Rate
Collateral (excluding all Defaulted Portfolio Collateral and Deferred Interest PIK Bonds) that are held by the
Issuer as of the date of determination; provided that for purposes of calculating the Weighted Average Spread, the
spread of any Floating Rate Collateral that bears interest on a floating rate index other than the London interbank
offered rate for three-month U.S. dollar deposits will be deemed to be the excess of (x) the then current per
annum rate at which such Floating Rate Collateral pays interest over (y) three-Month LIBOR then in effect with
respect to the Floating Rate Notes.

Weighted Average Recovery Rate

The "Weighted Average Recovery Rate Test" will be satisfied on each Measurement Date if (i) the
Moody's Weighted Average Recovery Rate equals or exceeds 34.25% and (ii) the S&P Weighted Average
Recovery Rate equals or exceeds (a) with respect to the Class A-1L Notes and the Class A-2L Notes, 34.50%, (b)
with respect to the Class A-3L Notes, 38.75%, (c) with respect to the Class A-4L Notes, 44.0% and (d) with
respect to the Class B-1L Notes, 51.0%.

The "Moody's Weighted Average Recovery Rate" equals a fraction (expressed as a percentage) the
numerator of which is the sum of the products obtained by multiplying the Principal Balance of each item of
Portfolio Collateral (excluding Defaulted Portfolio Collateral and Deferred Interest PIK Bonds) by (i) if such
Portfolio Collateral constitutes a CDO Security, or a Synthetic Security the Reference Obligation of which is a
CDO Security, with a Diversity Score in excess of 20, the applicable percentage set forth on Exhibit 1 hereto, or
(ii) if such Portfolio Collateral constitutes a CDO Security, or a Synthetic Security the Reference Obligation of
which is a CDO Security, with a Diversity Score of 20 or less, the applicable percentage set forth on Exhibit 1
hereto, and the denominator of which is the Aggregate Principal Amount of all of the Portfolio Collateral
(excluding Defaulted Portfolio Collateral and Deferred Interest PIK Bonds).

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 The "S&P Weighted Average Recovery Rate" equals a fraction (expressed as a percentage) the
numerator of which is the sum of the products obtained by multiplying the Principal Balance of each item of
Portfolio Collateral (excluding Defaulted Portfolio Collateral and Deferred Interest PIK Bonds) by (i) if such item
of Portfolio Collateral is not a Synthetic Security, or an item of Portfolio Collateral guaranteed by a corporate
guarantor or a monoline financial insurance company, the applicable percentage set forth on Exhibit 2 hereto,
(ii) if such item of Portfolio Collateral constitutes a Synthetic Security, the applicable percentage set forth on
Exhibit 2 hereto with respect to the related Reference Obligation, (iii) if such item of Portfolio Collateral is
guaranteed by a corporate guarantor, 40%, or (iv) if such item of Portfolio Collateral is guaranteed by a monoline
financial insurance company, 50%, and the denominator of which is the Aggregate Principal Amount of all of the
Portfolio Collateral (excluding Defaulted Portfolio Collateral and Deferred Interest PIK Bonds).

The "Fitch Weighted Average Recovery Rate" means the number obtained by summing the products
obtained by multiplying the Principal Balance of each item of Portfolio Collateral by its Fitch Applicable
Recovery Rate, dividing such sum by the aggregate Principal Balance of all such items of Portfolio Collateral,
multiplying the result by 100 and rounding up to the first decimal place. For purposes of the Fitch Weighted
Average Recovery Rate, the Principal Balance of an item of Defaulted Portfolio Collateral will be deemed to be
equal to its outstanding Principal Balance.

Fitch Sector

The "Fitch Sector " is without limitation, but subject to the approval of Fitch, each of the Fitch Sectors
set forth in Exhibit 3 hereto.

Fitch Weighted Average Rating Factor

The "Fitch Weighted Average Rating Factor" is the number (rounded down to the next hundredth)
determined on any Measurement Date by dividing (i) the summation of the series of products obtained (a) for any
item of Portfolio Collateral that is not an item of Defaulted Portfolio Collateral or Deferred Interest PIK Bond, by
multiplying (1) the Principal Balance on the Measurement Date of each such item of Portfolio Collateral by (2) its
respective Fitch Rating Factor on the Measurement Date and (b) for an item of Defaulted Portfolio Collateral and
Deferred Interest PIK Bond, by multiplying (1) the Fitch Applicable Recovery Rate for such an item of Defaulted
Portfolio Collateral or Deferred Interest PIK Bond by (2) the Principal Balance on such Measurement Date of
each such item of Defaulted Portfolio Collateral or Deferred Interest PIK Bond by (3) its respective Fitch Rating
Factor on such Measurement Date by (ii) the sum of (a) the aggregate Principal Balance on such Measurement
Date of all items of Portfolio Collateral that are not Defaulted Portfolio Collateral or Deferred Interest PIK Bonds
plus (b) the summation of the series of products obtained by multiplying (1) the Fitch Applicable Recovery Rate
for each item of Defaulted Portfolio Collateral or Deferred Interest PIK Bond by (2) the Principal Balance on the
Measurement Date of such item of Defaulted Portfolio Collateral or Deferred Interest PIK Bond. For purposes of
the Fitch Weighted Average Rating Factor, the Principal Balance of an item of Defaulted Portfolio Collateral will
be deemed to be equal to its outstanding principal amount.

"Fitch Rating Factor": For the purpose of computing the Fitch Weighted Average Rating
Factor, with respect to any item of Portfolio Collateral or Eligible Investment on any Measurement Date, the
number set forth in the table below opposite the Fitch Rating of such item of Portfolio Collateral or Eligible
Investment:

Fitch Fitch
Rating Rating
Fitch Rating Factor 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

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 Fitch Fitch
Rating Rating
Fitch Rating Factor Fitch Rating Factor
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

Sales of Portfolio Collateral

The Issuer is not permitted to sell any Portfolio Collateral except (i) in connection with an Optional
Redemption, a Partial Redemption or a Clean-up Call, (ii) that the Issuer may sell certain Portfolio Collateral at
the direction of the Collateral Manager in accordance with the next paragraph, (iii) that the Issuer is required to
sell any Portfolio Collateral that has not matured prior to the Business Day preceding the Stated Maturity, (iv) that
the Issuer may sell certain Portfolio Collateral in accordance with a Proposed Plan on or after the Ramp-up
Completion Date in order to obtain a Rating Confirmation and (v) that Synthetic Securities may be released from
the lien of the Indenture upon receipt of other Synthetic Securities with the same economic characteristics as
described in the following paragraph.

Pursuant to the Indenture, so long as no Event of Default has occurred and is continuing, the Collateral
Manager may direct the Trustee in writing to sell any Portfolio Collateral, if (x) such Portfolio Collateral qualifies
as Credit Improved Portfolio Collateral, Credit Risk Portfolio Collateral or Defaulted Portfolio Collateral at the
time the Issuer enters into a commitment with respect to such sale; provided that with respect to the sale of Credit
Improved Portfolio Collateral, unless the Sale Proceeds will be reinvested, such Sale Proceeds (excluding accrued
interest thereon) must not be less than the Aggregate Principal Amount of such Credit Improved Portfolio
Collateral and (y) the conditions applicable to each such type of Portfolio Collateral set forth in the Indenture
have been satisfied. During the Reinvestment Period, the Sale Proceeds of any such sale of Portfolio Collateral
may, at the direction of the Collateral Manager, be (i) invested in additional items of Portfolio Collateral so long
as any reinvestment in one or more additional Portfolio Collateral is in accordance with the Reinvestment Criteria,
(ii) applied to repurchase Notes or (iii) applied to the redemption of the Notes in accordance with the Priority of
Payments; provided that if the Collateral Manager decides to reinvest such Sale Proceeds in additional Portfolio
Collateral, the Collateral Manager will use commercially reasonable efforts to purchase such additional Portfolio
Collateral, prior to the later of (x) the end of the Due Period in which such security is sold or (y) 45 days from the
sale of such security; provided, further, that if such Sale Proceeds are the result of the sale of Defaulted Portfolio
Collateral, the Overcollateralization Tests must be satisfied; provided, further, that the Sale Proceeds received
from the sale of Credit Risk Portfolio Collateral may be reinvested without regard to the S&P CDO Monitor Test
so long as notice is provided to S&P and the Trustee.

After the end of the Reinvestment Period, Sale Proceeds received from the sale of any Portfolio Collateral
will not be reinvested in additional Portfolio Collateral or used to repurchase the Notes, but will instead be applied
as Principal Proceeds to payments of principal of the Notes, in accordance with the Priority of Payments.

Additional Portfolio Collateral and Reinvestment Criteria

General

During the Reinvestment Period, Sale Proceeds received in respect of the sale of any Credit Improved
Portfolio Collateral, Credit Risk Portfolio Collateral or Defaulted Portfolio Collateral may be reinvested, as
directed by the Issuer (or the Collateral Manager on behalf of the Issuer), in additional Portfolio Collateral if, in

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each case, after any such investment or reinvestment occurring on or after the Closing Date, the following criteria
(the "Reinvestment Criteria") are satisfied as of the date of commitment to purchase such additional Portfolio
Collateral, so long as the settlement with respect to such commitment is scheduled to occur not more than 45 days
from the date of such commitment:

(a) the Overcollateralization Tests, the Interest Coverage Tests and the Collateral Quality Tests must
be satisfied following any investment or reinvestment or, if any Overcollateralization Test, Interest Coverage Test
or Collateral Quality Test was not satisfied immediately prior to such investment or reinvestment, the level of
compliance with each such test must not be diminished as a result of giving effect to such investment or
reinvestment (provided that prior to the Ramp-Up Completion Date, the S&P CDO Monitor Test need not be
satisfied); provided that if any Sale Proceeds are the result of the sale of Defaulted Portfolio Collateral, the
Overcollateralization Tests must be satisfied; provided, further, that the Sale Proceeds received from the sale of
Credit Risk Portfolio Collateral may be reinvested without regard to the S&P CDO Monitor Test and the
Overcollateralization Tests so long as notice of such reinvestment is provided to S&P and the Trustee;

(b) the Concentration Limitations must be satisfied or, if, immediately prior to such investment or
reinvestment, any such limits were not satisfied, the extent of compliance with each such unsatisfied limit must
not be diminished after giving effect to such investment or reinvestment;

(c) no Event of Default shall have occurred and be continuing;

(d) certain procedures set forth in the Indenture relating to the perfection of the Trustee's security
interest in such additional Portfolio Collateral shall have taken place;

(e) after the Ramp-Up Completion Date, each item of additional Portfolio Collateral shall have (x) a
legal final maturity date which occurs on or prior to the legal final maturity date of the item of Portfolio Collateral
that it is replacing and (y) an average life less than or equal to the average life of the item of Portfolio Collateral
that it is replacing;

(f) any additional items of Portfolio Collateral purchased with Sale Proceeds resulting from the sale
of Credit Risk Portfolio Collateral or Defaulted Portfolio Collateral shall have an Aggregate Principal Amount of
not less than 100% of the Sale Proceeds of such item of Credit Risk Portfolio Collateral or Defaulted Portfolio
Collateral; and

(g) any additional items of Portfolio Collateral purchased with Sale Proceeds resulting from the sale
of Credit Improved Portfolio Collateral shall have an Aggregate Principal Amount of not less than 100% of the
Aggregate Principal Amount of such item of Credit Improved Portfolio Collateral.

No reinvestment in Portfolio Collateral may occur after the end of the Reinvestment Period unless the
commitment to purchase occurred prior to the end of the Reinvestment Period.

Securities Lending

Unless an Event of Default has occurred and is continuing, the Collateral Manager may from time to time
advise the Issuer to enter into Securities Lending Agreements.

The Issuer will, at the time any Securities Lending Agreement is entered into, establish at the Trustee a
securities account in respect of such Securities Lending Agreement in the name "Tricadia CDO 2003-1, Ltd.,
subject to the lien of JPMorgan Chase Bank, as Trustee." Each such account will be designated as a Securities
Lending Account (each such account, a "Securities Lending Account") and shall be held by the Trustee in
accordance with the Indenture. Prior to a default by the related Securities Lending Counterparty, the Trustee may
invest Securities Lending Collateral posted in cash in Eligible Investments as directed by the Collateral Manager.
Upon any default by any Securities Lending Counterparty under the related Securities Lending Agreement, the
Trustee shall, acting at the direction of the Collateral Manager, exercise its remedies under such Securities

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Lending Agreement, including liquidating the related Securities Lending Collateral. Proceeds of any such
liquidation shall be deposited in the Collection Account, allocated in the same manner as the Sale Proceeds from a
sale of the related loaned items of Portfolio Collateral would have been allocated in the event of their sale by the
Trustee pursuant to the terms of the Indenture; provided, however, if such liquidation occurs following the
Reinvestment Period and notwithstanding the provisions of the terms of the Indenture, such proceeds may be
reinvested, at the discretion of the Collateral Manager, in the items of Portfolio Collateral which satisfies the
definition of Portfolio Collateral. A Securities Lending Agreement shall be entered into subject to the following
conditions:

(a) no more than 10% (which may be increased to 20% with the consent of the Rating Agencies) of
the Aggregate Principal Amount of all Portfolio Collateral may be loaned pursuant to Securities Lending
Agreements; (b) no more than 5% (which may be increased to 10% with the consent of the Rating Agencies) of
the Aggregate Principal Amount of all Portfolio Collateral may be loaned to any single Securities Lending
Counterparty; (c) each Securities Lending Counterparty must post with the Trustee Securities Lending Collateral
to secure its obligations under the applicable Securities Lending Agreement, and all such Securities Lending
Collateral shall be deposited in a Securities Lending Account; such Securities Lending Collateral must always be
in an amount equal to at least 103.5% of the Market Value, calculated daily, of the loaned items of Portfolio
Collateral as monitored by the Collateral Manager; (d) a Securities Lending Agreement must terminate if within
30 days (i) the credit rating of the Securities Lending Counterparty is downgraded below either a long term debt
rating of "A1" (or "A1" and on negative credit watch) or a short term debt rating of "P-l" (or "P-1" and on
negative credit watch) by Moody's, or either a long term debt rating of "AA-" or a short term debt rating of
"A-1+" by S&P, or a short term debt rating of "F1" by Fitch (if rated by Fitch) or a long term debt rating of "AA-"
by Fitch, (ii) the security loaned pursuant to the Securities Lending Agreement becomes an item of Defaulted
Portfolio Collateral or (iii) a mandatory or optional redemption in whole or in part of the Notes occurs or (iv) the
Securities Lending Counterparty is the subject of an insolvency or similar proceeding or the Securities Lending
Counterparty defaults in the performance of any of its obligations under the related Securities Lending
Agreement; and (e) each Securities Lending Agreement shall be on market terms (except as may be required
below) and shall:

(i) require that the Securities Lending Counterparty return to the Issuer items of Portfolio
Collateral which are identical (in terms of issue and class) to the loaned items of Portfolio Collateral
unless the Issuer and the Trustee shall have received an opinion or written advice of tax counsel of
national recognized standing in the United States experienced in such matters to the effect that the
absence of such requirement in such Securities Lending Agreement will not cause the Issuer or the Co-
Issuer to be treated as engaging in a trade or business for United States federal income tax purposes or
subject to United States Income tax on a net basis or otherwise cause adverse tax consequences to the
Issuer or the Co-Issuer;

(ii) require that the Securities Lending Counterparty pay to the Issuer such amounts as are
equivalent to all interest and other payments which the owner of the loaned items of Portfolio Collateral is
entitled to receive for the period during which the items of Portfolio Collateral are loaned, and such
payments by the Securities Lending Counterparty to the Issuer shall not be subject to withholding tax
imposed by any jurisdiction unless the Securities Lending Counterparty is required under the Securities
Lending Agreement to make "gross-up" payments to the Issuer that cover the full amount of such
withholding on an after-tax basis;

(iii) satisfy any other requirements of Section 1058 of the Code and the Treasury regulations
promulgated thereunder;

(iv) have a term of 90 days or less (which may be increased upon satisfaction of the Rating
Condition) but shall not exceed the State Maturity of the Notes;

(v) be governed by the laws of New York;

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 (vi) provide that (A) the Securities Lending Counterparty shall agree that the Issuer's liability
to make any payment to the Securities Lending Counterparty pursuant to the Securities Lending
Agreement may only be satisfied out of amounts available for payment to such Securities Lending
Counterparty under the Indenture and that, to the extent that such funds are insufficient to pay such claims
(including those of the Securities Lending Counterparty), such claims shall be extinguished to the extent
of such insufficiency; (B) the Securities Lending Counterparty shall not be entitled to take any action or
institute any proceeding against the Issuer under any Insolvency Law applicable to the Issuer or which
would be likely to cause the Issuer to be subject to, or to seek the protection of, any Insolvency Law
applicable to the Issuer; provided that, the Securities Lending Counterparty may become a party to and
participate in any proceeding or action under any Insolvency Law applicable to the Issuer that is initiated
by any Person that is not an affiliate of the Securities Lending Counterparty; and (C) the Securities
Lending Counterparty will not exercise, and shall irrevocably waive, any right of set-off or lien against
the Issuer (except among the transactions governed by the Securities Lending Agreement);

(vii) satisfy the Rating Condition;

(viii) require that, in the event that the Securities Lending Counterparty loans the borrowed
Portfolio Collateral, it will do so under an agreement that meets the requirements set forth in clauses (i)-
(ii) above; and

(ix) permit the Issuer to assign its rights thereunder to the Trustee pursuant to the Indenture.

(b) There can be no assurance that any Securities Lending Agreements will be entered into and any
such Securities Lending Agreement may be subject to Rating Agency restrictions which differ from the conditions
set forth above.

(c) The Collateral Manager shall not direct the Issuer to purchase any item of Portfolio Collateral for
the primary purpose of lending such item of Portfolio Collateral pursuant to a Securities Lending Agreement.

Modifications, Waivers, Amendments and Consents with respect to the Portfolio Collateral

So long as no Event of Default shall have occurred and be continuing, the Collateral Manager, on behalf
of the Issuer, may agree to any modification, waiver or amendment of any term of an item of Portfolio Collateral
or take any other action (including any vote) which may be taken in accordance with the terms of such item of
Portfolio Collateral; provided, however, the Collateral Manager on behalf of the Issuer will not take any action (i)
that would cause a sale of an item of Portfolio Collateral except pursuant to a put, call or optional redemption
provision, (ii) that would cause an item of Portfolio Collateral to fail to satisfy the definition of Portfolio
Collateral as provided in the Indenture or (iii) that would require or cause the Issuer to assume, or would subject
the Issuer to, any obligation or liability (other than immaterial non-payment obligations).

Eligible Investments

Collateral Collections received by the Issuer will be invested as determined by the Issuer in Eligible
Investments. Each such Eligible Investment will mature (after giving effect to any applicable grace period) no
later than the second Business Day (or, in the case of direct Registered Debt Obligations described in clause (i) of
the definition of "Eligible Investments," no later than one Business Day) prior to the Payment Date next following
the Due Period in which the date of investment occurs, unless such Eligible Investment is issued by the Bank, in
which event such Eligible Investment may mature on the Business Day immediately preceding such Payment
Date. Each Eligible Investment must be denominated in U.S. Dollars. Eligible Investments will not include any
mortgage-backed security, interest-only security, any security purchased at a price in excess of 100% of par or
any security whose repayment is subject to substantial non-credit related risk as reasonably determined by the
Issuer. Each Eligible Investment must either be treated as indebtedness for U.S. federal income tax purposes, or
the Issuer must receive the advice of Schulte Roth & Zabel LLP or Cadwalader Wickersham & Taft LLP or an
opinion of counsel to the effect that such investment will not cause the Issuer to be treated as engaged in a trade or

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business in the United States for U.S. federal income tax purposes or otherwise subject the Issuer to U.S. federal
income tax on a net income tax basis. The maturity of an Eligible Investment will be the date on which the holder
of such a security may put (at par) the security to the issuer thereof for redemption if each put (at par) is either to
the issuer of such security or to another entity rated "P-1" by Moody's and "A-1+" by S&P. Eligible Investments
may include those investments with respect to which the Trustee or an Affiliate of the Trustee provides services.

The information contained herein with respect to the Portfolio Collateral has been derived from a variety
of sources, including the disclosure documents relating thereto and reports from the related trustee, servicer,
collateral manager, collateral administrator or other sources. The Issuer, the Trustee, the Collateral Manager and
the Initial Purchasers are limited in their ability to independently verify the information obtained from such
sources. Accordingly, none of the Co-Issuers, the Trustee, the Collateral Manager or the Initial Purchasers or any
of their affiliates make any representation with respect to the accuracy and completeness of such information.

Accounts

All Collections will be remitted to the Collection Account and will be available, to the extent described
herein, for application in the manner and for the purposes described herein. Funds held in the Collection Account
will be invested by the Trustee as soon as practicable in Eligible Investments pursuant to the direction of the
Issuer. All Eligible Investments in the Collection Account must mature on or before the Business Day prior to the
next Payment Date.

Funds held in the Initial Deposit Account pending investment in Portfolio Collateral will be invested by
the Trustee in Eligible Investments. Eligible Investments in the Initial Deposit Account are to mature on or before
the date on which such items of Portfolio Collateral are expected to be delivered. Any amounts in the Initial
Deposit Account not applied to the purchase of such items of Portfolio Collateral will be applied as Collateral
Principal Collections on the Payment Date in May 2004.

An Expense Reimbursement Account of U.S.$50,000 will be established by the Issuer and pledged to the
Trustee for the payment of Issuer administrative expenses which become due and must be paid between Payment
Dates. Any amounts withdrawn from the Expense Reimbursement Account will be reimbursed on each Payment
Date in accordance with the priority of the distribution provisions described herein. Funds held in the Expense
Reimbursement Account will be invested by the Trustee in Eligible Investments pursuant to the direction of the
Issuer. Eligible Investments in the Expense Reimbursement Account are to mature on or before the date on which
such funds are to be used by the Issuer for the payment of expenses.

A Closing Expense Account will be established by the Trustee. From the Closing Date to the Payment
Date in May 2004, funds deposited in the Closing Expense Account will be used to pay the fees, commissions and
expenses associated with the issuance of the Securities. Funds held in the Closing Expense Account will be
invested by the Trustee in Eligible Investments pursuant to the direction of the Issuer. On the Payment Date in
May 2004, any remaining funds in the Closing Expense Account (not being held for a pre-approved closing
expense) will be transferred to the Collection Account and applied as Collateral Interest Collections.

The Initial Period Reserve Account will be established by the Trustee, into which the Trustee will deposit
the amount described under clause (vii) of "Description of the Notes—Priority of Payments—Collateral Interest
Collections." All amounts in the Initial Period Reserve Account will be transferred to the Collection Account and
applied as Collateral Interest Collections on the Payment Date in August 2004. The Issuer will direct (which may
be in the form of standing instructions) the Trustee to, and the Trustee will, invest all funds on deposit in the
Initial Period Reserve Account in Eligible Investments pursuant to the direction of the Issuer.

At the time any Securities Lending Agreement is entered into, a Securities Lending Account in respect of
such Securities Lending Agreement will be established by the Trustee, into which the Trustee will deposit
Securities Lending Collateral pledged pursuant to the related Securities Lending Agreement. Prior to a default by
the related Securities Lending Counterparty, the Trustee may invest Securities Lending Collateral posted in cash
in Eligible Investments as directed by the Collateral Manager. The Issuer shall not have any legal, equitable or

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beneficial interest in any of the Securities Lending Accounts other than in accordance with the applicable
Securities Lending Agreement and applicable law.

Note Valuation Report

Not later than the sixth Business Day after each Calculation Date with respect to a Payment Date, the
Issuer shall provide to the Trustee, the Repository, Preference Share Paying Agent, the Reporting Agent, the
Initial Purchasers, each Rating Agency (but only so long as any Class of Notes is rated), the Cashflow Swap
Provider, the Collateral Manager, and upon written request thereof in the form attached to the Indenture certifying
that it is a Noteholder or Principal Protected Securityholder (and any collateral manager of such Noteholder or
Principal Protected Securityholder to whom such Noteholder or Principal Protected Securityholder has in writing
directed the Trustee to send a copy of such report) shown on the Note Register or holder of a beneficial interest
therein, as applicable, a Note Valuation Report setting forth certain information regarding payments due to the
Noteholders and Principal Protected Securityholders on such Payment Date and the Pledged Securities. In
addition, not later than the sixth Business Day after the 27th day of each month, commencing in April, 2004, the
Issuer shall provide to the Trustee, the Reporting Agent, the Collateral Manager, the Repository, the Preference
Share Paying Agent, each Rating Agency (but only so long as any Class of Notes is rated), the Cashflow Swap
Provider, the Initial Purchasers, the Collateral Manager, and upon written request thereof in the form attached to
the Indenture certifying that it is a Noteholder or Principal Protected Securityholder (and any collateral manager
of such Noteholder or Principal Protected Securityholder to whom such Noteholder or Principal Protected
Securityholder has in writing directed the Trustee to send a copy of such report) or holder of a beneficial interest
therein shown on the Note Register, as applicable, a monthly report containing additional information with respect
to the Pledged Securities included in the Trust Estate. The Indenture provides that the information contained in
these reports is confidential and may not be disclosed, except as provided therein.

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 THE REPORTING AGENT AND THE REPORTING AGENCY AGREEMENT

Pursuant to the Reporting Agency Agreement to be dated as of the Closing Date (the "Reporting Agency
Agreement") between the Issuer and Intex Solutions Inc. (''Intex" and, in such capacity, the "Reporting Agent"),
the Reporting Agent will prepare a monthly report on behalf of the Issuer for distribution to Holders of the
Securities with respect to the Underlying Securities. The report will contain, among other things, the following
information: (i) a description of each Underlying Security, including the name of the issuer, the applicable
interest rate, the maturity date, the current rating thereof (and any change in the rating since the last report), the
industry to which the issuer thereof belongs, the frequency of interest payments, and the percentage of the
outstanding Principal Balance of such Underlying Security as a percentage of all the Underlying Securities; (ii) a
list of the ten largest U.S. corporate debt securities, by Principal Balance, of all the Underlying Securities; (iii) a
list of the ten largest Emerging Market CDO Securities, by Principal Balance, of all the Underlying Securities;
(iv) the percentage of U.S. corporate Underlying Securities that belong to a particular rating category; (v) the
percentage of Emerging Market CDO Securities that belong to a particular rating category; (vi) the percentage of
the Underlying Securities that belong to a particular rating category; (vii) the percentage of the Underlying
Securities that belong to a particular geographic region; and (viii) a breakdown of the percentage of the
Underlying Securities that are issued by sovereign issuers and corporate issuers.

The payment of the fees and expenses of the Reporting Agent will be made in accordance with the
Priority of Payments.

Intex will not be liable, for any reason, for (i) any errors, omissions, delays or inaccuracies in the
underlying trustee reports which are reflected in the Intex reports (except due to the gross negligence or willful
misconduct of Intex), (ii) any interruption of certain data and products arising out of the installation, relocation,
use, or maintenance of Intex's distribution system, or other equipment, systems, or connection facilities (for which
Intex has taken reasonable precautions) or (iii) any interruption or delay in delivering Intex reports due to events
beyond the reasonable control of Intex. Intex makes no warranty whatsoever, express or implied, including
specifically any warranty of merchantability or fitness for a particular purpose as to the reports that will be
provided to any party, and each such party will disclaim any such warranty. Intex specifically disclaims any
knowledge of any purposes for which any party will use the Intex reports. In no event will Intex be liable for
direct, indirect, special, exemplary, incidental or consequential damages arising out of an entity's use of or
inability to use Intex's reports, even if advised of the possibility of such damages and whether such claims be
made in contract, tort or otherwise. Specifically, Intex will not be responsible for any costs, including, but not
limited to, those incurred as a result of lost profits or revenue, or for other similar consequential damages.

Intex Solutions Inc.

The information appearing in the next paragraph has been prepared by Intex and has not been
independently verified by the Co-Issuers, the Initial Purchasers or their respective Affiliates. None of the Co-
Issuers, the Initial Purchasers or their respective Affiliates assume any responsibility for the accuracy,
completeness or applicability of such information.

Intex is an independent provider of analytical software and databases to the asset securitization industry.
Founded in 1985 and based in Needham, Massachusetts, Intex has provided products and services to market
participants in the securitization industry for over a decade to issuers, investors, underwriters, broker/dealers,
banks, ratings agencies and trustees that have utilized Intex's products for applications such as trading, structuring,
portfolio management, risk management, research and bond administration/investor reporting.

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 CASHFLOW SWAP AGREEMENT

The Issuer will on the Closing Date enter into a cashflow swap agreement (such agreement, and any
replacement therefore entered into in accordance with the Indenture, the "Cashflow Swap Agreement") with
CDC Financial Products Inc., a Delaware corporation (the "Cashflow Swap Provider"), which is located at 9
West 57th Street, 36th Floor, New York, NY 10019.

Pursuant to the Cashflow Swap Agreement, on each Payment Date occurring through the first to occur of
(x) the Business Day after the day on which the Aggregate Principal Amount of the Senior Class A Notes and any
accrued interest thereon has been paid in full and (y) the Stated Maturity (a) in accordance with the Priority of
Payments, the Issuer shall pay certain fees to the Cashflow Swap Provider and (b) the Cashflow Swap Provider
will make payments to the Issuer in an amount equal to the Cashflow Swap Shortfall Amount (in the case of
clause (b), so long as no Cashflow Swap Cancellation Event has occurred and is continuing). Any Cashflow
Swap Shortfall Amounts paid under the Cashflow Swap Agreement by the Cashflow Swap Provider to the Issuer
will accrue interest at a rate equal to the Cashflow Swap Provider Accrual Rate, and be repaid to the Cashflow
Swap Provider in accordance with the Priority of Payments after the payment of interest on the Senior Class A
Notes and certain other amounts. See "Description of the Notes—Payments on the Notes—Priority of Payments."

The Cashflow Swap Agreement will provide that in the event that a Collateralization Event has occurred,
the Cashflow Swap Provider will be required, within five Business Days following the occurrence of such
Collateralization Event, to post, solely at the expense of the Cashflow Swap Provider, collateral which satisfies
the definition of Eligible Investments and other criteria specified by the Rating Agencies to the Issuer to secure
the Cashflow Swap Provider's obligations under the Cashflow Swap Agreement pursuant to an agreement
(provided that entering into such agreement satisfies the Rating Condition) and (ii) if a Substitution Event has
occurred, the Cashflow Swap Provider will be required, within 30 days following a Substitution Event, to assign
its rights and obligations in and under such Cashflow Swap Agreement to a Substitute Party; provided that no
such assignment shall be made unless (x) the Substitute Party will have assumed all of the Cashflow Swap
Provider's obligations under the Cashflow Swap Agreement and (y) each of the Cashflow Swap Provider and the
Substitute Party, as applicable, shall have paid in full (i) any amounts agreed to be paid to each other by such
Cashflow Swap Provider and Substitute Party, as applicable, in connection with such assignment and (ii) all costs
associated with such assignment.

The Cashflow Swap Agreement will provide that at any time following a Collateralization Event, the
Cashflow Swap Provider may designate a Payment Date as an early termination date; provided that (A) the
Cashflow Swap Provider has identified a counterparty (i) (x) whose short term issuer credit rating by S&P is not
lower than "A-1" and (y) whose short term rating by Moody's is "P-1" and such rating is not on credit watch with
negative implications and whose long term rating by Moody's is not lower than "Al" and such rating is not "A1"
and on credit watch with negative implications and if no short term rating is available, whose long term rating by
Moody's is not lower than "Aa3" and is not "Aa3" and on credit watch with negative implications by Moody's and
(z) whose short term rating by Fitch is not lower than "F1" (if rated by Fitch) and (ii) which has agreed in writing
satisfactory to the Issuer to enter into an agreement, effective as of such Payment Date, on terms substantially
identical to the terms of the Cashflow Swap Agreement and (B) the Rating Condition has been satisfied.

The Cashflow Swap Agreement will also provide that in the event that the Cashflow Swap Provider fails
to assign its rights and obligations under the Cashflow Swap Agreement to a Substitute Party within 30 days
following the occurrence of a Substitution Event, the Cashflow Swap Provider will (i) be required to post to the
Issuer, within five Business Days, solely at the expense of the Cashflow Swap Provider, collateral which satisfies
the definition of Eligible Investments and other criteria specified by the Rating Agencies (and the Rating
Condition has been satisfied), to secure the Cashflow Swap Provider's obligations under the Cashflow Swap
Agreement pursuant to an agreement (provided that entering into such agreement satisfies the Rating Condition)
until a Substitute Party has assumed all of the Cashflow Swap Provider's rights and obligations under the related
Cashflow Swap Agreement and (ii) continue to seek a Substitute Party to assume its obligations under the

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Cashflow Swap Agreement. Any costs attributable to posting, pledging and assigning any collateral, calculating
the mark-to-market value and finding a suitable Substitute Party shall be borne solely by the Cashflow Swap
Provider.

So long as the term of the Cashflow Swap Agreement shall not have expired, the Issuer will enforce the
obligations of the Cashflow Swap Provider under the Cashflow Swap Agreement.

The Cashflow Swap Agreement will be subject to termination by the Cashflow Swap Provider on the date
on which any of the following shall occur: (a) subject to clause (c) below, the liquidation of the Trust Estate in
accordance with the Indenture following an Event of Default, (b) any Optional Redemption or Clean-up Call,
(c) an Event of Default described in paragraph (viii) under "Legal Structure —the Indenture—Events of Default"
and (d) after the Class A-1L Notes and the Class A-2L Notes cease to be Outstanding, as of any Measurement
Date, the ratio (expressed as a percentage) obtained by dividing (1) the sum of (A) the Aggregate Principal
Amount of the Portfolio Collateral in the Trust Estate as of such Measurement Date plus (B) Collateral Principal
Collections held as cash in the Collection Account as of such Measurement Date and the Balance of Eligible
Investments purchased with Collateral Principal Collections by (2) the Aggregate Principal Amount of the Class
A-3L Notes is less than 100%.

No Cashflow Swap Agreement may be modified, amended, waived or assigned unless each of the Rating
Agencies shall have confirmed in writing that modifying or amending such agreement will not result in the
qualification, downgrade or withdrawal of the then current ratings assigned to any of the Outstanding Notes.

The Cashflow Swap Provider is an Affiliate of the Co-Placement Agent, which may create certain
conflicts of interest. See "Special Considerations—Potential Conflicts of Interest."

The Cashflow Swap Agreement will be governed by, and construed in accordance with, the laws of the
State of New York.

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The Cashflow Swap Provider

The following information has been prepared by the Cashflow Swap Provider and has not been
independently verified by the Co-Issuers, the Initial Purchasers, the Trustee or any other Person. The Cashflow
Swap Provider has assumed the responsibility for the accuracy, completeness or applicability of this information.

The Cashflow Swap Provider is a wholly owned subsidiary of CDC IXIS North America Inc., which is a
wholly-owned subsidiary of CDC Finance – CDC IXIS ("CDC IXIS"), a fully licensed bank under French law.

The Cashflow Swap Provider currently maintains ratings which do not trigger a Collateralization Event,
based upon a guarantee of its obligations by CDC IXIS. Pursuant to the terms of the guarantee, CDC IXIS
irrevocably and unconditionally guarantees the prompt payment when due of all obligations of the Cashflow
Swap Provider under financial transactions, including the Cashflow Swap Agreement, entered into with an
effective date on or after November 1, 2003 and a final scheduled termination date on or prior to January 23,
2017. Such guarantee is with recourse to Caisse des Dépôts et Consignations ("Caisse des Dépôts"). The
guarantee by its terms is governed by, and construed in accordance with, the law of the State of New York.
Caisse des Dépôts is a special national legislative public entity of the Republic of France, created in 1816 to
safeguard deposits requiring a high degree of safety. It operates under the supervision of an independent
Supervisory Board composed of representatives of the French Parliament, magistrates, the Director of the French
Treasury and the Governor of Banque de France, the French central bank.

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 MATURITY AND PREPAYMENT CONSIDERATIONS

The Final Maturity Date of each Class of Notes (other than the Class C Notes) is the Payment Date in
February 2016, in each case subject to prior redemption or refinancing under the circumstances described herein.
Portfolio Collateral constituting up to 5% of the Aggregate Portfolio Balance may mature after the Final Maturity
Date but within 35 years of the Final Maturity Date. The average life of each Class of Notes and the Principal
Protected Securities is expected to be shorter than the number of years until the Final Maturity Date, and the
average lives may vary due to various factors. The average life of each Class of Notes and the Principal Protected
Securities refers to the weighted amount of time that will elapse from the date of delivery of such Notes and
Principal Protected Securities until each dollar of the principal of such securities will be paid to the Noteholder or
Principal Protected Securityholder, as the case may be. Such average lives will be determined by the amount and
frequency of principal payments which in turn are dependent upon, among other things, the amount of principal
payments and other payments received at or in advance of the scheduled maturity of Portfolio Collateral (whether
through sale, maturity, redemption, prepayment, default or other liquidation or disposition). The actual average
life and final maturity of each Class of Notes and the Principal Protected Securities will be affected by the
financial condition of the issuers or other obligors of the underlying Portfolio Collateral and the characteristics of
such collateral and the assets underlying such collateral, including the existence and frequency of exercise of any
optional or mandatory redemption or refinancing features, the rate of principal payments (including prepayments)
of the underlying assets, the prevailing level of interest rates, the redemption price, the rate of defaults and
delinquencies on the underlying assets, the actual default rate and the actual level and timing of recoveries on any
Defaulted Portfolio Collateral. It is expected that a substantial amount (by Principal Balance) of the Portfolio
Collateral will be subject to mandatory redemption or optional redemption or prepayment by the issuer thereof or
obligor thereunder, whether through the exercise of a call or prepayment feature or upon the repayment or
prepayment of the underlying assets. See "Security for the Notes—Portfolio Collateral."

In addition, the Notes (other than the Class C Notes) are subject to O/C Redemption, Optional
Redemption, Partial Redemption, Rating Confirmation Failure Redemption, Refinancing, Clean-up Call and
failure of the Additional Overcollateralization Test as described herein. Any such redemption will affect the
average lives of the Notes (other than the Class C Notes).

Under the assumptions identified below, the Class A-1LA Notes are expected to have an average life of
approximately 7.6 years and an expected final payment occurring on the Payment Date in August 2011, the Class
A-1LB Notes are expected to have an average life of approximately 7.6 years and an expected final payment
occurring on the Payment Date in August 2011, the Class A-2L Notes are expected to have an average life of
approximately 7.6 years and an expected final payment occurring on the Payment Date in August 2011, the Class
A-3L Notes are expected to have an average life of approximately 7.6 years and an expected final payment
occurring on the Payment Date in August 2011, the Class A-4L Notes are expected to have an average life of
approximately 7.8 years and an expected final payment occurring on the Payment Date in November 2011 and the
Class B-1L Notes are expected to have an average life of approximately 7.1 years and an expected final payment
occurring on the Payment Date in November 2011. There can be no assurance that the average lives and expected
final payment of any Class of Notes will be as set forth above. Prospective purchasers should make their own
determinations of the payments expected to be made in respect of the Notes.

The hypothetical scenario used to determine the average lives of the Notes is as follows:
(i) approximately U.S.$250,000,000 in Aggregate Principal Amount of various assumed Portfolio Collateral
would be purchased on the Closing Date using all funds available to the Issuer on the Closing Date for the
purchase of Portfolio Collateral, (ii) 0.0% of the Portfolio Collateral (by Aggregate Principal Amount) will consist
of Fixed Rate Collateral; (iii) 100% of the Portfolio Collateral (by Aggregate Principal Amount) will consist of
Floating Rate Collateral, which will have margins over LIBOR ranging from 1.60% to 8.75%, with a weighted
average margin of 3.55%; (iv) the Portfolio Collateral have a weighted average coupon of 4.70%, except during
the period from the Closing Date through to the first Payment Date, the weighted average coupon will be 3.275%
(to take into account securities that will not be available for delivery on the Closing Date); (v) the Portfolio

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Collateral have scheduled maturity dates ranging from October 2009 to February 2035 and the Portfolio Collateral
has a weighted average life of 7.7 years; (vi) no Optional Redemption or Partial Redemption of the Notes will
occur; (vii) no Rating Confirmation Failure Redemption will occur; (viii) all Eligible Investments will bear
interest at a rate of LIBOR per annum; and (ix) LIBOR remains constant at 1.15%.

Further, the hypothetical scenario assumes that there are no losses. It is also assumed that the Scheduled
Distributions on Portfolio Collateral are timely received and that such distributions are invested or reinvested at
the indicated reinvestment rates until the next Payment Date without compounding. It is assumed that during any
period when the Overcollateralization Tests, the Interest Coverage Test or the Additional Overcollateralization
Test are not satisfied, principal payments (or, in the case of the Class B-1L Notes, payments of accrued and
unpaid interest and then principal) will be made in respect of the Notes to the extent necessary to satisfy the
Overcollateralization Tests, the Interest Coverage Test or the Additional Overcollateralization Test, as applicable
(to the extent funds are available therefor).

The Issuer Base Administrative Expenses are assumed to be 0.02% per annum, the Preference Shares
Administrative Expenses are assumed to be U.S.$5,000 per annum, and the Trustee Administrative Expenses are
assumed to be 0.05% per annum (subject to a minimum of U.S.$8,750 per Due Period), each as a percentage or
amount, as applicable, of either the Aggregate Principal Amount of the Portfolio Collateral as of the first day of
the Due Period relating to each Payment Date or the average of the Aggregate Principal Amount of the Portfolio
Collateral as of the first day of the Due Period relating to each Payment Date and the last day of the Due Period
relating to such Payment Date, as appropriate for the related fee and subject to the availability of funds in the
performance scenario. For the purpose of calculating the Issuer Base Administrative Expenses, the average
aggregate Principal Balance of the Portfolio Collateral on the first Calculation Date, is assumed to be
U.S.$225,000,000. It is further assumed that the Closing Date is January 14, 2004 and the Notes are purchased on
the Closing Date at par.

Cash received on or before a Calculation Date is assumed to be available on the following Payment Date.
Cash collected after the Calculation Date but before the immediately following Payment Date is assumed to be
reinvested in Eligible Investments until the second succeeding Payment Date. The accrual date on Portfolio
Collateral is assumed to be the full quarterly period before the Payment Date subsequent to the Closing Date.

The weighted average lives and expected final payment dates described above are included only for
illustrative purposes. The usefulness of these scenarios is limited by, among other things, the predictive value of
the underlying assumptions, the uncertain relevance of the assumptions as compared to other factors which have
not been identified or taken into account, and assumptions incorporated with respect to the timing of cash flows,
prepayments, defaults and recoveries on the Portfolio Collateral. The assumptions are inherently subject to
significant economic uncertainties, all of which are impossible to predict and beyond the control of the Co-
Issuers. There can be no assurance that any particular performance scenario will be realized, and the performance
of the Notes may be materially different from that shown. Such scenarios are not projections or forecasts and
were not prepared with a view to complying with published guidelines of the United States Securities and
Exchange Commission or the American Institute of Certified Public Accountants regarding projections or
forecasts. Under no circumstances should the inclusion of such information be regarded as a representation,
warranty or prediction with respect to their accuracy or the accuracy or appropriateness of the underlying
assumptions, or that the Notes will achieve or are likely to achieve any particular results. There can be no
assurance that the actual performance of the Notes will not vary materially from the scenario and assumptions set
forth herein or otherwise used by a prospective purchaser. Moreover, to the extent that the individual
characteristics of the assumed Portfolio Collateral used for such purposes differ from the individual characteristics
of the actual Portfolio Collateral purchased on the Closing Date, the actual performance of the Notes may differ.
Prospective purchasers should conduct such financial analysis as they deem prudent, which may include the
preparation of their own performance scenarios under a range of economic and other assumptions chosen by such
prospective purchasers or their advisers. Each prospective purchaser must make its own evaluation of the merits
and risks of investment in the Notes. See "Special Considerations—Nature of Portfolio Collateral; Defaults," "—
Default and Recovery Rates on Portfolio Collateral" and "Ratings."

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 LEGAL STRUCTURE

The Indenture

The following summaries generally describe certain provisions of the Indenture. The summaries do not
purport to be complete and are subject to, and qualified in their entirety by reference to, the provisions of the
Indenture.

Modification of Indenture. Except as set forth below, with the consent of the Requisite Noteholders, the
Trustee and the Co-Issuers may execute a supplemental indenture to add provisions to, or change in any manner
or eliminate any provisions of, the Indenture or modify in any manner the rights of the Holders of the Notes.
However, without the consent of the Holders of each Outstanding Note affected thereby, no supplemental
indenture may (i) change the maturity of the principal of or interest on any Note or reduce the principal amount
thereof or the Applicable Periodic Rate thereon (other than a reduction in the Applicable Periodic Rate in
connection with a Refinancing) or change the time or amount of any other amount payable in respect of any Note,
(ii) reduce the percentage in Aggregate Principal Amount of Holders of Notes whose consent is required for the
authorization of any supplemental indenture or for any waiver of compliance with certain provisions of the
Indenture or certain Events of Default, (iii) impair or adversely affect the Trust Estate securing the Notes, (iv)
permit the creation of any lien ranking prior to or on parity with the lien of the Indenture with respect to any part
of the Trust Estate or terminate the lien of the Indenture, (v) reduce the percentage of the Aggregate Principal
Amount of Holders of Notes whose consent is required to direct the Trustee to liquidate the Trust Estate, (vi)
modify any of the provisions of the Indenture with respect to supplemental indentures or waiver of Defaults and
their consequences except to increase the percentage of Outstanding Notes whose consent is required for any such
action or to provide that other provisions of the Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby, (vii) modify the provisions thereof relating to Priority of
Payments or subordination or the definition therein of the term "Outstanding," (viii) release the Cashflow Swap
Provider from all or any part of its obligations to make each and every payment under the Cashflow Swap
Agreement or (ix) modify any of the provisions of the Indenture in such a manner as to affect the calculation of
the amount of any payment of principal of or interest on or other amount in respect of any Note or to affect the
right of the Holders of Notes to the benefit of any provisions for the redemption of such Notes contained therein;
provided, however, that in connection with the appointment of a replacement Collateral Manager, a Majority of
the Holders of Notes, voting together as a single Class, may consent to increase the Senior Management Fee
(provided that the Junior Management Fee is decreased by a like amount until the Junior Management Fee is
reduced to zero), and otherwise modify the Indenture accordingly, if, as a result, the Senior Management Fee will
not be more than 0.25% per annum of the Aggregate Portfolio Collateral Principal Balance.

The Co-Issuers and the Trustee may also enter into supplemental indentures without obtaining the consent
of Noteholders, in order to (i) to correct or amplify the description of any property at any time subject to the lien
of the Indenture, or better to assure, convey and confirm unto the Trustee any property subject or required to be
subjected to the lien of the Indenture, or to subject to the lien of the Indenture additional property, (ii) evidence
the succession of any Person to the Co-Issuers, (iii) add to the covenants of the Co-Issuers or the Trustee for the
benefit of the Holders of the Notes or to surrender any right or power conferred upon the Co-Issuers, (iv) pledge
any property to or with the Trustee, (v) evidence and provide for the acceptance of appointment by a successor
trustee and to add to or change any of the provisions of the Indenture as shall be necessary to facilitate the
administration of the Trust Estate by more than one trustee, (vi) to cure any ambiguity, or to correct, modify or
supplement any provision which is defective or inconsistent with any other provision in the Indenture; provided
that such amendment shall not, as evidenced by an opinion of counsel, adversely affect in any material respect the
interests of any Noteholder or the Cashflow Swap Provider, (vii) take any action necessary or helpful to prevent
the Issuer or the Trustee from becoming subject to any withholding or other taxes or assessments or to reduce the
risk that the Issuer will be engaged in a United States trade or business or otherwise subject to United States
income tax on a net income basis, (viii) correct any manifest error in the Indenture, (ix) facilitate the delivery and
maintenance of the Notes (other than the Class C Notes) in accordance with the requirements of DTC, Euroclear

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or Clearstream, and facilitate the listing of all or any of the Notes (other than the Class C Notes) on one or more
securities exchanges, (x) modify the restrictions and procedures for resale and other transfers of the Notes in
accordance with any change in any applicable law or regulation (or the interpretation thereof) or to enable the Co-
Issuers to rely upon any less restrictive exemption from registration under the Securities Act or the Investment
Company Act or to remove restrictions on resale and transfer to the extent not required thereunder, in each case as
evidenced by an opinion of counsel; provided that (a) such amendment shall not adversely affect in any material
respect the interests of the Holders of the Notes and (b) with respect to a supplemental indenture that would have
a material adverse effect on the Cashflow Swap Provider, the Cashflow Swap Provider consents to such
amendment, (xi) evidence or implement any changes thereto required by applicable law and related regulations,
including, without limitation, the USA PATRIOT Act (to the extent that they are applicable to the Issuer or the
Co-Issuer), (xii) incorporate the terms and conditions of any Proposed Plan, (xiii) allow the Holders of any Class
of Notes (other than the Class C Notes) to elect to acquire bond insurance, a surety bond or similar credit
enhancement supporting the payment of principal and/or interest on such Class of Notes, (xiv) reduce the
Applicable Periodic Rate of a Class of Notes solely in connection with a Refinancing or (xv) conform the
Indenture to this Confidential Offering Circular.

Notwithstanding the foregoing, the Trustee will not be permitted to enter into any supplemental indenture
(except pursuant to clause (xii) or (xiv) above) (i) if such amendment would materially adversely affect the
interests of the Preference Shareholders without the consent of the holders representing at least 66-2/3% of the
outstanding Preference Shares, (ii) if, as a result of such supplemental indenture, the rating of any class of
Outstanding Notes (if then rated) would be reduced or withdrawn without the unanimous consent of the Holders
of that Class of Notes or (iii) if such modification would have a material adverse effect on the holders of any
Class of Notes, without the consent of the holders representing at least 66-2/3% of the Aggregate Principal
Amount of each such Class of Notes solely with respect to modifications that would have a material adverse
effect on such Class of Notes. Unless notified in writing prior to the execution of the supplement by a Majority of
any Class of Notes or the Preference Shares that such Class or the Preference Shares, as applicable, will be
materially and adversely affected, the Trustee shall be entitled to conclusively rely upon an opinion of counsel as
to whether the interests of any of the holders of any Class of Notes or the Preference Shares would be materially
and adversely affected by any such supplemental indenture (after giving notice of such change to such holders).

The Indenture provides that no amendment to any provision of the Indenture or any other transaction
document that materially adversely affects the obligations of any Synthetic Security Counterparty or the Cashflow
Swap Provider (in such capacities) will be of any effect without the consent of such Synthetic Security
Counterparty or the Cashflow Swap Provider, respectively, and the Issuer will not enter into any such amendment
unless such Synthetic Security Counterparty or the Cashflow Swap Provider has consented thereto (which consent
will not be unreasonably withheld). The Issuer will provide notice to the Irish Stock Exchange of any material
modification or amendment to the Indenture.

Holders of any Class of Notes (other than the Class C Notes) may elect to acquire bond insurance, a
surety bond or similar credit enhancement supporting the payment of principal and/or interest on such Class of
Notes (provided that notice of such acquisition is given to the Rating Agencies), on terms and conditions
acceptable to such Holders and at the sole expense of such Holders. Any Class of Notes subject to such
enhancement will be designated pursuant to a supplemental indenture as "Insured Notes" of such Class as further
provided in the Indenture.

Consolidation, Merger or Transfer of Assets, Incurrence of Indebtedness, Conduct of Business. Except

under the limited circumstances set forth in the Indenture, the Co-Issuers may not consolidate with, merge into, or
transfer or convey all or substantially all of its assets to, any other corporation, partnership, trust or other person
or entity (except for sales or exchanges of Portfolio Collateral as contemplated by the Indenture). In addition, the
Co-Issuers may not incur any indebtedness other than the Notes and trade debt incidental to the performance of its
obligations under the Indenture or engage in any business or activity other than the issuance of the Notes and the
Preference Shares and the other transactions and activities contemplated herein. Pursuant to the Indenture and the
Co-Issuer's organizational documentation, the Co-Issuers also may not, without the consent of the Requisite

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Noteholders, amend their organizational documentation if such amendment would have a material adverse effect
on the right of the Noteholders.

Purchase of Notes. Notwithstanding anything contained in the Indenture to the contrary, the Issuer may
acquire Notes (other than the Class C Notes) in the open market or privately negotiated transactions or otherwise
(and the Issuer will give prompt written notice thereof to the Trustee) either (i) sequentially, so that no Notes of a
subordinate Class may be acquired so long as any more senior Class of Notes is Outstanding or (ii) so long as
each Rating Agency has confirmed in writing that such purchase, as of the time of such purchase, will not result
in the qualification, downgrade or withdrawal of its then current ratings of the Notes, in such a manner that, with
respect to any Class of Notes, the relative proportions (measured by the ratio of the Aggregate Principal Amount
of a more senior Class of Notes over the Aggregate Principal Amount of each Class of Notes that is subordinate to
such senior Class of Notes) after such purchases of Notes will be no higher than the relative proportions prior to
such purchases. Any Notes acquired by the Issuer will be delivered to the Trustee for cancellation. So long as
any Class of Notes is listed on the Irish Stock Exchange and so long as the rules of the Irish Stock Exchange so
require, the Issuer shall notify the Exchange prior to the acquisition of any Notes.

Events of Default. An event of default ("Event of Default") is defined in the Indenture as being (i) a
default for four Business Days or more in the payment of any amount payable in respect of any Note when due
when funds in such amount are available for payment in accordance with the Indenture, (ii) a failure after four
Business Days to apply available amounts in accordance with the priority of distribution set forth in the Indenture,
(iii) a default for four Business Days or more in the payment of (A) the Periodic Interest Amount due on any
Senior Class A Notes on any Payment Date, (B) after the Senior Class A Notes are paid in full, the Periodic
Interest Amount due on the Class A-4L Notes on any Payment Date and (C) after the Class A Notes are paid in
full, the Periodic Interest Amount due on the Class B-1L Notes on any Payment Date, (iv) a default in the
payment of principal and the Cumulative Interest Amount due on any Class of Notes on the Final Maturity Date,
(v) a default in a material adverse respect in the performance, or a breach in a material respect of any covenant,
representation, warranty or other agreement of either of the Co-Issuers in the Indenture (other than the Collateral
Quality Tests, the Coverage Tests and the Concentration Limitations), or the failure of any representation or
warranty of either of the Co-Issuers made in the Indenture or in any certificate or other writing delivered pursuant
to or in connection with the Indenture to be correct in all material respects when the same shall have been made
and continuance of such default, breach or failure for a period of 30 days after written notice thereof to the Co-
Issuers by the Trustee or to the Co-Issuers and the Trustee by the Holders of at least a Majority of the Notes, (vi)
certain events of bankruptcy, insolvency, receivership or reorganization of either of the Co-Issuers, (vii) either of
the Co-Issuers or the Trust Estate becomes required to register as an "investment company" under the Investment
Company Act or (viii) with respect to a Measurement Date, the ratio (expressed as a percentage) obtained by
dividing (a) the sum of (1) the Aggregate Principal Amount of the Portfolio Collateral in the Trust Estate as of
such Measurement Date plus (2) Collateral Principal Collections held as cash in the Collection Account as of such
Measurement Date and the Balance of Eligible Investments purchased with Collateral Principal Collections by (b)
the sum of the Aggregate Principal Amount of the Class A-1LA Notes, the Class A-1LB Notes and the Class A-
2L Notes as of such Measurement Date is less than 100%. An event of insolvency could result if relief has been
ordered against the Co-Issuers in a case under applicable bankruptcy law and the Co-Issuers, the trustee, if any,
for either of the Co-Issuers or a creditor of either of the Co-Issuers were to file an involuntary petition against
either of the Co-Issuers. The filing of a petition against the Co-Issuers under applicable bankruptcy law could
adversely affect the rights of the Holders of Notes to receive timely payments.

If an Event of Default (other than an Event of Default specified in clause (vi) or (viii) above) under the
Indenture should occur and be continuing with respect to the Notes, the Trustee may with the consent of the
Requisite Noteholders, and shall, at the direction of the Requisite Noteholders, declare the principal of the Notes
(other than the Class C Notes) to be immediately due and payable. Such declaration may under certain
circumstances be rescinded by the Trustee with the consent of the Requisite Noteholders or at the direction of the
Requisite Noteholders. If an Event of Default specified in clause (vi) above should occur and be continuing, the
principal of the Notes shall become immediately due and payable without the necessity of notice or any other
action. If an Event of Default as specified in clause (viii) above occurs and is continuing, the Trustee may, with

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the consent of the Holders of at least 66-2/3% of the Aggregate Principal Amount of the Class A-1L Notes and
the Class A-2L Notes (voting as a single class), declare the Aggregate Principal Amount of the Notes to be
immediately due and payable, by a notice in writing to the Issuer. If the Notes are accelerated, or if the Final
Maturity Date has occurred, the Holders of the Notes shall be entitled to receive, as applicable, the Cumulative
Interest Amount and the Aggregate Principal Amount with respect thereto (as calculated and accrued through the
date of payment in full of the Aggregate Principal Amount of the applicable Class of Notes in the order of priority
set forth under "Description of the Notes—Payments on the Notes—Priority of Payments—Final Maturity Date").

If an Event of Default shall have occurred and be continuing or if the Final Maturity Date has occurred,
the Trustee shall retain the Trust Estate securing the Notes intact, collect and cause the collection of the proceeds
thereof and make and apply all payments and deposits and maintain all accounts in respect of the Notes in
accordance with the Indenture unless and until (i) the Requisite Noteholders have directed the Trustee to sell or
liquidate the Trust Estate or any portion thereof in the case of (A) an Event of Default resulting from failure to
pay interest or principal on a Note or (B) a sale or liquidation of all or a portion of the Trust Estate at or above the
aggregate par value of all Portfolio Collateral so liquidated or sold (and Defaulted Portfolio Collateral may be
liquidated or sold without reference to, or inclusion in the calculation of, such limitation), (ii) 100% of the
Noteholders have otherwise directed the Trustee to sell or liquidate the Trust Estate or any portion thereof or (iii)
the Trustee determines that the anticipated proceeds of a sale or liquidation of the Trust Estate (after deducting the
reasonable expenses of such sale or liquidation) would be sufficient to discharge in full the amounts then due and
unpaid on the Notes (other than the Class C Notes) for principal and interest.

Pursuant to the Indenture, as security for the payment by the Issuer of the compensation and expenses of
the Trustee and the Preference Share Paying Agent and any sums to which the Trustee and the Preference Share
Paying Agent may be entitled to receive as indemnification by the Issuer, the Issuer has granted the Trustee a
senior lien on the Trust Estate, which is senior to the lien of the Notes on the Trust Estate. This lien is exercisable
by the Trustee only if the Notes have been declared due and payable following an Event of Default, and the
acceleration of the maturity of such Notes as a result of such Event of Default has not been rescinded or annulled.

Subject to the provisions of the Indenture relating to the duties of the Trustee in case an Event of Default
with respect to the Notes shall occur and be continuing, the Trustee will be under no obligation to exercise any of
the rights or powers under the Indenture at the request or direction of any Holders of Notes, unless such Holders
shall have offered to the Trustee reasonable security or indemnity. Subject to such provisions for indemnification
and certain limitations contained in the Indenture, the Requisite Noteholders will have the right to direct the time,
method and place of conducting any proceeding of any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Notes; and, in certain cases, waive any default with respect to
such Notes, except a default in payment of any amount payable in respect of any Note or a default in respect of a
covenant or provision of the Indenture that cannot be modified without the waiver or consent of the Holder of
each Outstanding Note affected thereby.

Rights Under the Indenture. No Noteholder or Principal Protected Securityholder will have the right to
institute any proceeding with respect to the Indenture, unless (1) such holder previously has given to the Trustee
written notice of an Event of Default with respect to such Notes or Principal Protected Securities, (2) the
Requisite Noteholders have made written request upon the Trustee to institute such proceedings in its own name
as Trustee, (3) such holder or holders have delivered reasonable indemnity sufficient to the Trustee as provided in
the Indenture, (4) the Trustee has for 30 days failed to institute any such proceeding, and (5) no direction
inconsistent with such written request has been given to the Trustee during such 30-day period by the Requisite
Noteholders.

Satisfaction and Discharge of the Indenture. The Indenture will be discharged with respect to the
collateral securing the Notes and the Principal Protected Securities upon delivery to the Trustee for cancellation of
all of the Notes and the Principal Protected Securities or, within certain limitations, upon deposit with the Trustee
of cash or Eligible Investments sufficient for the amount thereof.

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 Trustee. JPMorgan Chase Bank, will be the Trustee under the Indenture for the Notes and the Principal
Protected Securities. The Issuer and its Affiliates may maintain other banking relationships in the ordinary course
of business with the Trustee. The Indenture provides that the Trustee may appoint one or more co-trustees in the
event that Holders of the Notes or the Principal Protected Securities have conflicting interests and in certain other
circumstances. The payment of the fees and expenses of the Trustee relating to the Notes or the Principal
Protected Securities is solely the obligation of the Co-Issuers. The Trustee or an Affiliate of the Trustee may
receive compensation in connection with the purchase of certain Eligible Investments as provided in the
Indenture, and in connection with the Trustee's administration of any securities lending activities of the Issuer.

The Trustee may resign at any time by giving written notice of such resignation to the Preference Share
Paying Agent, the Co-Issuers, the Noteholders, the Collateral Manager and the Rating Agencies. The Trustee
may be removed by at least 66-2/3% in Aggregate Principal Amount of the Notes (voting together as a single
Class) or, at any time when an Event of Default shall have occurred and be continuing or when a successor
Trustee has been appointed pursuant to the Indenture. No resignation or removal of the Trustee will become
effective until the acceptance of the appointment of a successor trustee that satisfies the Rating Condition.

Governing Law. The Indenture, the Management Agreement, the Reporting Agency Agreement, the
Collateral Administration Agreement, the Cashflow Swap Agreement, any Securities Lending Agreements and
the other documents relating to the Notes and the Principal Protected Securities will be construed in accordance
with the laws of the State of New York.

Notices. Notices to the Holders of the Notes will be given by first-class mail, postage prepaid, to the
registered Holders of the Notes at their address appearing in the Note Register. In addition, for so long as any
Class of Notes is listed on the Irish Stock Exchange and the rules of such exchange so require, notice given to the
Holders of any such Class of Notes will also be given to the Company Announcements Office of the Irish Stock
Exchange.

The Collateral Administration Agreement

Pursuant to the terms of the Collateral Administration Agreement (the "Collateral Administration
Agreement"), dated as of the Closing Date, among the Issuer, the Collateral Manager and JPMorgan Chase Bank
(in such capacity, the "Collateral Administrator"), relating to certain functions performed by the Collateral
Administrator for the Issuer with respect to the Indenture and the Portfolio Collateral, the Issuer will retain the
Collateral Administrator, to assist in the preparation of certain reports with respect to the Portfolio Collateral. The
compensation paid to the Collateral Administrator by the Issuer for such services will be in addition to the fees
paid to JPMorgan Chase Bank in its capacity as Trustee, will be treated as an expense of the Issuer under the
Indenture and will be subject to the priorities set forth under "Description of the Notes—Payments on the Notes—
Priority of Payments."

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 THE COLLATERAL MANAGER

The information appearing in this section (other than the information contained under the heading "General")
has been prepared by the Collateral Manager and has not been independently verified by the Co-Issuers, the
Initial Purchasers, the Trustee or any other Person.

General

Certain administrative and advisory functions relating to the Portfolio Collateral included in the
Trust Estate will be performed by Tricadia CDO Management, LLC under the Management Agreement as
described under "The Management Agreement."

Pursuant to the terms of the Management Agreement, the Collateral Manager will monitor the
Portfolio Collateral securing the Notes and, together with the Trustee, provide the Issuer with certain information
with respect to the composition and characteristics of the Portfolio Collateral, any disposition or tender of an item
of Portfolio Collateral, the selection of additional Portfolio Collateral, the reinvestment of the proceeds of any
disposition in Eligible Investments and the retention of the proceeds of any such disposition and the application
thereof toward the purchase of substitute Portfolio Collateral.

In accordance with the Coverage Tests and other requirements set forth in the Indenture and in
accordance with the provisions of the Management Agreement and the Indenture, the Collateral Manager will
select the portfolio of Portfolio Collateral and will instruct the Trustee in writing with respect to any acquisition,
disposition or tender of Portfolio Collateral and investment in or disposition of Eligible Investments.

The Collateral Manager will, among other things, have the right to vote or refrain from voting any
Portfolio Collateral or Equity Portfolio Collateral included in the Pledged Securities; to instruct the Trustee with
respect to enforcement of any Defaulted Portfolio Collateral; and to take any action with respect to any offer made
with respect to any such Equity Portfolio Collateral.

The Collateral Manager or one or more of its Affiliates is expected to purchase at least 7,000,000
Preference Shares on the Closing Date, but neither the Collateral Manager nor any such Affiliates are required to
retain any Preference Shares. See "Special Considerations—Potential Conflicts of Interest."

Tricadia CDO Management, LLC

Tricadia CDO Management, LLC ("Tricadia") specializes in the issuance and management of
structured product backed collateralized debt obligations. Tricadia is controlled by Mariner Investment Group,
Inc. ("Mariner"), an investment management company based in New York with more than U.S.$3.0 Billion of
capital and over 70 employees. Mariner has established a strong reputation in fixed income and relative-value
credit asset management strategies and Tricadia's experience in structured products is an extension of these
strategies. The Tricadia team currently manages approximately U.S.$300,000,000 in managed accounts and
hedge funds focused on structured product and credit arbitrage strategies. Tricadia has established a six person
CDO Management Committee to draw upon the experience of Mariner's partners and risk management
professionals.

Set forth below is information regarding the background, principal occupations and other
affiliations during the past five years or more of certain individuals affiliated with Tricadia, including those
individuals who will be primarily responsible for managing the Portfolio Collateral and for performing the
advisory and administrative functions under the Management Agreement. Their duties include providing the asset
management services described herein on behalf of Tricadia. These Persons may not necessarily continue to be so
employed and available to Tricadia during the entire term of the Management Agreement.

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Key Personnel

Michael Barnes, Partner. Mr. Barnes is a founding partner of Tricadia. Prior to the formation of Tricadia,
Mr. Barnes spent two years as Head of Structured Credit Arbitrage within UBS Principal Finance LLC, a wholly
owned subsidiary of UBS Warburg which conducts all proprietary trading on behalf of the firm. Mr. Barnes
joined UBS in November 2000 as part of the merger between UBS and PaineWebber Inc. Prior to joining UBS,
Mr. Barnes was Managing Director and Global Head of the Structured Credit Products Group of PaineWebber.
Prior to joining PaineWebber in 1999, he spent 12 years at Bear, Stearns & Co. Inc., the last five of which, he was
head of their Structured Transactions Group. Mr. Barnes received his A.B. from Columbia College.

Arif Inayat, Partner. Mr. Inayat is a founding partner of Tricadia. Mr. Inayat has 15 years experience in
engineering complex structured transactions in the fixed income, currency, equity, and commodities markets, with
a particular emphasis on leveraged credit products. Prior to the formation of Tricadia, Mr. Inayat was at UBS
Principal Finance LLC where he was an Executive Director responsible for the development of structured credit
arbitrage transactions. Prior to UBS, he was a partner at BroadStreet Group where he had broad responsibility
for managing the BroadStreet Group's structured product and CDO business lines. Prior to BroadStreet, Mr.
Inayat was a Managing Director at Crédit Agricole Indosuez where he was responsible for structured finance and
proprietary credit arbitrage. Mr. Inayat holds a B.S. in Electrical Engineering and Materials Science from Cornell
University.

Gerald Leitner, Ph.D., Head of Quantitative Analysis. Mr. Leitner is responsible for the analysis and structuring
of investment activities of Tricadia, Mariner and their affiliated companies. Since 1996, Mr. Leitner has provided
analytical consulting services to Mariner and other clients, through his own company, GL Technology Inc. In
addition to analyzing and creating customized financial models for a number of Mariner's structured products,
Mr. Leitner was engaged in developing analytical systems for Deutsche Bank AG. From 1992-1996, Mr. Leitner
was employed by PaineWebber Inc. as a Senior Vice President in its fixed income division where he specialized
in analytics. During the preceding two years, Mr. Leitner was employed by Fuji Securities, where he co-founded
a unit engaged in fixed income arbitrage trading. From 1987-1991 Mr. Leitner was employed by Bear, Stearns &
Co. Inc. in its fixed income analytics group. This group later became known as the F.A.S.T. group. From 1982 to
1987, Mr. Leitner was Assistant Professor of Computer Science at Columbia University. Mr. Leitner received a
Masters degree in mathematics from the University of Graz in 1976, as well as a Masters Degree and Ph.D. in
Computer Science from UCLA in 1978 and 1982 respectively.

Tony Tang, Principal. Mr. Tang is a principal of Tricadia. Prior to joining Tricadia, Mr. Tang was a Director at
ABN AMRO Inc., where he established the exotic credit derivatives trading desk in New York. Prior to joining
ABN, Mr. Tang was an exotic credit derivatives trader at JPMorgan. Mr. Tang also worked as a software
engineer at ATI Technology. Mr. Tang holds a MBA in Finance from University of Chicago, a MS in Physics and
Computer Science from Drexel University, and a BS from the University of Science and Technology of China
(USTC). Mr. Tang is a CFA charterholder.

Hoggie Kim, Vice President. Mr. Kim is involved in the structuring, analytics and valuation of structured credit
products. Prior to joining Tricadia, Mr. Kim spent three years at BroadStreet Group where he structured and
evaluated cash flow and synthetic CDO transactions. His responsibilities also included researching various asset
classes and capital structures, and interacting with Moody's, S&P and Fitch. Mr. Kim holds a B.A. in Economics
from Rice University.

César Naranjo, Quantitative Analyst. Mr. Naranjo is involved in designing and building proprietary models for
evaluating structured credit products. He has been with Mariner for two years as a program developer, while
concurrently obtaining his B.S. in Electrical and Computer Engineering from Carnegie Mellon University.

Matthew Shepard, CDO Surveillance Analyst. Mr. Shepard is responsible for the monitoring and surveillance of
CDOs. Prior to joining Tricadia, Mr. Shepard was an analyst at Deutsche Bank Securities in the Securitized
Products Group where he focused on securitization of revolving assets. His responsibilities included researching

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and analyzing various transactions and structures as well as communicating with rating agencies, traders and
investors. Mr. Shepard holds a BAS in Computer Science from the University of Pennsylvania.

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 THE MANAGEMENT AGREEMENT

The following summary describes certain provisions of the Management Agreement. The summary does not
purport to be complete and is subject to, and qualified in its entirety by reference to, the provisions of the
Management Agreement.

General

The Collateral Manager will perform certain investment management functions, including directing and
supervising the investment, and reinvestment, by the Issuer in Portfolio Collateral and Eligible Investments, and
will perform certain administrative functions on behalf of the Issuer in accordance with the applicable provisions
of the Management Agreement. The Collateral Manager will be authorized to supervise and direct the
investment, reinvestment and disposition of Portfolio Collateral, with full authority and at its discretion (without
specific authorization from the Issuer), on the Issuer's behalf and at the Issuer's risk.

Compensation

As compensation for rendering its services under the Management Agreement, the Collateral Manager
will be entitled to receive fees, payable quarterly (except in the case of the first Payment Date, in respect of which
the fee will cover the period from and including the Closing Date to but excluding the first Payment Date) in
arrears on each Payment Date in accordance with the Priority of Payments, in an amount equal to 0.15% per
annum (the "Senior Management Fee") and 0.31% per annum (the "Junior Management Fee" and, together
with the Senior Management Fee, the "Collateral Management Fee") of the Aggregate Portfolio Balance as of
the preceding Payment Date (or, in the case of the initial Payment Date, as of the Closing Date). The Collateral
Management Fee will be paid in accordance with the Priority of Payments. See "Description of the Notes—
Payment on the Notes—Priority of Payments."

The Collateral Management Fee will accrue from the Closing Date. To the extent not paid on any
Payment Date when due, (i) the Senior Management Fee will be deferred and will be payable on subsequent
Payment Dates in accordance with the Priority of Payments and (ii) the Junior Management Fee will be deferred
and will be payable on subsequent Payment Dates in accordance with the Priority of Payments. Any accrued but
unpaid Collateral Management Fee that is deferred due to the operation of the Priority of Payments will not
accrue interest. In addition, the Collateral Manager will be reimbursed for certain other amounts owed to it under
the Management Agreement pursuant to the Priority of Payments.

Removal

If the Management Agreement is terminated for any reason or the entity then serving as Collateral
Manager resigns or is removed, the Collateral Management Fee owing to such entity will be prorated for any
partial periods between Payment Dates and such prorated amount shall be due and payable on the first Payment
Date following the date of such termination, subject to the Priority of Payments.

The Collateral Manager may resign, upon 90 days' (or such shorter notice as is acceptable to the Issuer)
written notice to the Issuer, the Trustee and the Rating Agencies. If the Collateral Manager resigns, the Issuer
agrees to use its best efforts to appoint a successor Collateral Manager, and the effectiveness of such resignation
will be conditioned upon the appointment of such successor.

The Collateral Manager may be removed for "cause" (i) by the Issuer or the Trustee; provided that written
notice thereof shall have been given to the holders of the Securities and each Rating Agency stating that such
termination shall be effective only if directed in writing within 30 days after the date of such notice by the holders
of at least 66-2/3% of the aggregate outstanding number of the Preference Shares or by the Holders of at least
66-2/3% of the Aggregate Principal Amount of the Notes of the Controlling Class, but excluding in any such
calculation any Preference Shares or Notes held by the Collateral Manager or its Affiliates or any Securities over

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which the Collateral Manager or any of its Affiliates have discretionary voting authority, (ii) in the case of an
event described in clause (3) below, by the Issuer or the Trustee upon 10 days' prior written notice to the
Collateral Manager, or (iii) by the holders of at least 66-2/3% of the aggregate outstanding number of the
Preference Shares or by the holders of at least 66-2/3% of the Aggregate Principal Amount of the Notes of the
Controlling Class, but excluding in any such calculation any Preference Shares or Notes held by the Collateral
Manager or its Affiliates or any Securities over which the Collateral Manager or any of its Affiliates have
discretionary voting authority, upon 10 days' prior written notice to the Collateral Manager.

For purposes of determining "cause" with respect to any such termination of the Management Agreement,
such term shall mean the occurrence and continuation of any one of the following events: (1) the Collateral
Manager willfully violates, or takes any action that it knows breaches, any provision of the Management
Agreement or the Indenture applicable to it; (2) the Collateral Manager breaches in any material respect any
provision of the Management Agreement or any terms of the Indenture applicable to it or any representation,
certificate or other statement made or given in writing by the Collateral Manager (or any of its directors or
officers) pursuant to the Management Agreement or the Indenture shall prove to have been incorrect in any
material respect when made or given, which breach or materially incorrect representation, certificate or statement
(i) has a material adverse effect on all the holders of the Securities and (ii) within 45 days of its becoming aware
(or receiving notice from the Trustee) of such breach, or such materially incorrect representation, certificate or
statement, the Collateral Manager fails to cure such breach, or to take such action so that the facts (after giving
effect to such actions) conform in all material respects to such representation, certificate or statement; (3) the
Collateral Manager is wound up or dissolved or there is appointed over it or over all or substantially all of its
assets a receiver, administrator, administrative receiver, trustee or similar officer; or the Collateral Manager
(w) ceases to, or admits in writing its inability to, pay its debts as they become due and payable, or makes a
general assignment for the benefit of or enters into any composition or arrangement with, its creditors generally;
(x) applies for or consents (by admission of material allegations of a petition or otherwise) to the appointment of a
receiver, trustee, assignee, custodian, liquidator or sequestrator (or other similar official) of the Collateral
Manager or of all or substantially all of its properties or assets, or authorizes such an application or consent, or
proceedings seeking such appointment are commenced without such authorization, consent or application against
the Collateral Manager and continue undismissed for 60 consecutive days; (y) authorizes or files a voluntary
petition in bankruptcy, or applies for or consents (by admission of material allegations of a petition or otherwise)
to the application of any bankruptcy, reorganization, arrangement, readjustment of debt, insolvency; or
dissolution, or authorizes such application or consent, or proceedings to such end are instituted against the
Collateral Manager without such authorization, application or consent and are approved as properly instituted and
remain undismissed for 60 consecutive days or result in adjudication of bankruptcy or insolvency; or (z) permits
or suffers all or substantially all of its properties or assets to be sequestered or attached by court order and the
order remains undismissed for 60 consecutive days; (4) the occurrence of certain Events of Default under the
Indenture that primarily result from any breach by the Collateral Manager of its duties under the Indenture or the
Management Agreement; (5) the occurrence of an act by the Collateral Manager that constitutes fraud or a felony
criminal offense in the performance of its obligations under the Management Agreement, or the Collateral
Manager is convicted, or any of its executive officers having responsibility over the management of the Portfolio
Collateral are convicted, of a criminal offense materially related to its primary business of managing of collateral
or investments or its investment advisory activities; (6) both (x) Michael Barnes and (y) Arif Inayat shall cease to
be affiliated with Tricadia or shall cease to be involved in the day-to-day management and operations of Tricadia
or shall be discharged by the Collateral Manager (each, a "former manager"), unless (i) within 60 days after such
event Tricadia notifies the Issuer and the Trustee of the appointment, as replacements for each such former
manager, of employees (each, a "replacement manager") of Tricadia each of whom has knowledge and
experience in the asset management industry comparable to or greater than that of each such former manager to
replace any such former manager and (ii) within 15 days after the receipt of such notice by the Issuer, the Issuer
shall have notified the Holders of all of the Securities and a Majority of the Preference Shares and a Majority of
the Controlling Class shall have approved the appointment of each such replacement manager in writing (each, an
"Approved Replacement Manager") (and during such 15-day period the Collateral Manager will make each
such replacement manager reasonably available for meetings with, and to respond to questions by, the Issuer and

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the holders of Securities); (7) the Issuer, the Co-Issuer or the pool of collateral has become required to be
registered as an investment company under the Investment Company Act; or (8) on any Calculation Date, the
Senior Class A Overcollateralization Percentage, the Class A Overcollateralization Percentage or the Class B
Overcollateralization Percentage is less than 90% of the required Senior Class A Overcollateralization Percentage,
the required Class A Overcollateralization Percentage or the required Class B Overcollateralization Percentage
then in effect, respectively. The Collateral Manager shall notify the Trustee, the Preference Share Paying Agent
and the holders of the Preference Shares if a "cause" event, or an event which with the giving of notice or the
lapse of time (or both) becomes "cause," occurs.

Any resignation or removal of the Collateral Manager will be effective only upon (i) the appointment by
the holders of at least 66-2/3% of the aggregate outstanding number of the Preference Shares (excluding the
Preference Shares owned by Tricadia CDO Management, LLC) (or if such holders fail to make such appointment
within 30 days after any such resignation or removal, by the Issuer, as directed by a Majority of the Controlling
Class) of a successor Collateral Manager that is an established institution with experience managing assets similar
to the Portfolio Collateral that (1) has demonstrated an ability to professionally and competently perform duties
similar to those imposed upon the Collateral Manager under the Management Agreement, (2) is legally qualified
and has the capacity to act as Collateral Manager under the Management Agreement as successor to the Collateral
Manager under the Management Agreement, (3) has agreed in writing to assume all of the responsibilities, duties
and obligations of the Collateral Manager under the Management Agreement and under the applicable terms of
the Indenture, (4) shall not cause the Issuer, the Co-Issuer or the pool of collateral to become required to register
as an investment company under the Investment Company Act and (5) has been approved by the Issuer, upon the
direction of a Majority of the Controlling Class; and (ii) satisfaction of the Rating Condition with respect to such
appointment. The Issuer, the Trustee and the successor Collateral Manager shall take such action (or cause the
outgoing Collateral Manager to take such action) consistent with the Management Agreement and the terms of the
Indenture applicable to the Collateral Manager as shall be necessary to effectuate any such succession. If the
Collateral Manager shall resign or be removed but a successor Collateral Manager shall not have assumed all of
the Collateral Manager's duties and obligations under the Management Agreement within 90 days after such
resignation or removal, then the Issuer, the Trustee, any holder of Securities or the resigning or terminated
Collateral Manager may petition any court of competent jurisdiction for the appointment of a successor Collateral
Manager.

Any Securities held by the Collateral Manager or any Affiliate of the Collateral Manager or any Securities
over which the Collateral Manager or any of its Affiliates have discretionary voting authority, in each case will
have no voting rights with respect to any vote in connection with the removal or replacement of the Collateral
Manager and will be deemed not to be outstanding in connection with any such vote; provided, however, that any
such Securities will have voting rights and will be deemed outstanding with respect to all other matters as to
which holders of Securities are entitled to vote.

Except for the delegation of certain of the Collateral Manager's duties pursuant to the Collateral
Administration Agreement, the Management Agreement shall not be delegated by the Collateral Manager, in
whole or in part, without (i) the prior written consent of the Issuer, (ii) the prior written consent of or affirmative
vote by a Majority of the Controlling Class and the holders of 66-2/3% of the aggregate outstanding number of
the Preference Shares and (iii) satisfaction of the Rating Condition with respect to such delegation.
Notwithstanding any authorization granted under this subsection or any consent obtained pursuant to this
subsection, no delegation of obligations or duties by the Collateral Manager shall (1) relieve the Collateral
Manager from any liability under the Management Agreement or (2) cause any third party to be a third party
beneficiary under the Management Agreement or any other document to which the Collateral Manager is a party.

The Management Agreement shall not be assigned by the Issuer without the prior written consent of the
Collateral Manager and the Trustee and the prior written consent of or affirmative vote by a Majority of the
Controlling Class and the holders of at least 66-2/3% of the aggregate outstanding number of the Preference
Shares, except in the case of assignment by the Issuer (i) to an entity which is a successor to the Issuer permitted
under the Indenture, in which case such successor organization shall be bound under the Management Agreement

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and by the terms of such assignment in the same manner as the Issuer is bound under the Indenture or (ii) to the
Trustee as contemplated by the Indenture. In the event of any assignment by the Issuer, the Issuer shall use
reasonable efforts to cause its successor to execute and deliver to the Collateral Manager such documents as the
Collateral Manager shall consider reasonably necessary to effect fully such assignment.

The Collateral Manager, its Affiliates and their respective members, principals, partners, managers,
directors, officers, stockholders, partners, agents and employees will not be liable to the Co-Issuers, the Trustee,
the Preference Share Paying Agent, the holders of the Securities or any other Person for any losses, claims,
damages, demands, charges, judgments, assessments, costs or other liabilities incurred by the Co-Issuers, the
Trustee, the Preference Share Paying Agent, the holders of the Securities or any other Person that arise out of or
in connection with the performance by the Collateral Manager of its duties under the Management Agreement or
the Indenture, or for any decrease in the value of the Trust Estate; provided that the Collateral Manager shall be
subject to liability: (i) by reason of acts or omissions of the Collateral Manager constituting bad faith, willful
misconduct or gross negligence in the performance, or reckless disregard, of the obligations of the Collateral
Manager under the Management Agreement and under the terms of the Indenture applicable to the Collateral
Manager; or (ii) with respect to any representation or warranty made by the Collateral Manager regarding the
information concerning the Collateral Manager provided by it for the inclusion in this Confidential Offering
Circular which information is contained solely under the section entitled "The Collateral Manager"; provided that
in no event shall the Collateral Manager or any of its Affiliates be liable for consequential, special, exemplary or
punitive damages. Any stated limitations on liability shall not relieve the Collateral Manager from any
responsibility it has under any state or federal statutes. Subject to the Priority of Payments, the Collateral
Manager will be entitled to indemnification by the Issuer under certain circumstances.

Various potential and actual conflicts of interest may arise from the overall investment activities of the
Collateral Manager and its Affiliates. In certain circumstances, the interests of the Issuer and/or the holders of the
Notes with respect to matters as to which the Collateral Manager is advising the Issuer may conflict with the
interests of the Collateral Manager or its affiliates. See "Special Considerations—Potential Conflicts of Interest."

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 SPECIAL CONSULTANT

The Collateral Manager may, from time to time, consult with Bank Leumi (Le Israel) Switzerland (in
such capacity, "Special Consultant") in connection with certain consulting and advisory functions with respect to
the Portfolio Collateral. The Co-Issuers will not be responsible for the fees, if any, due to the Special Consultant.

Bank Leumi (Le Israel) Switzerland is a Swiss Private Bank with over 50 years of experience in
international private banking. It is part of the Leumi Group with total assets of over 80 Billion USD and
operations worldwide. Bank Leumi (Le Israel) Switzerland, with its specialist team, provides expertise in
structuring and screening the market for financial products to high net worth individuals and institutional
customers. In 2003, the bank structured and distributed over 1.2 Billion USD of structured products.

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 DELIVERY OF THE NOTES; TRANSFER RESTRICTIONS; SETTLEMENT

The Notes have not been registered under the Securities Act or any state securities laws and, accordingly,
may not be reoffered, resold, pledged or otherwise transferred within the United States or to, or for the account or
benefit of, U.S. Persons, except in accordance with the restrictions described under "Notices to Purchasers."
Terms used in this paragraph have the meanings given to them by Regulation S.

Without limiting the foregoing, by holding a Note, each Holder will acknowledge and agree, among other
things, that such Holder understands that neither of the Co-Issuers is registered as an investment company under
the Investment Company Act, but that the Co-Issuers are exempt from registration as such by virtue of Section
3(c)(7) of the Investment Company Act, which in general excludes from the definition of an investment company
any issuer whose outstanding securities are beneficially owned solely by Qualified Purchasers and which has not
made and does not propose to make a public offering of its securities. Any sale or transfer which would violate
these provisions shall be void from the time of such sale or transfer, and no sale or transfer may be made if such
sale or transfer would require the Co-Issuers to become subject to the requirements of the Investment Company
Act.

Each transferee of a Note (except with respect to a transfer pursuant to Regulation S) will be deemed to
represent at time of transfer that the transferee is a Qualified Institutional Buyer and (i) that it is a Qualified
Purchaser, (ii) that it is not formed for the purpose of investing in the Notes, unless all of its beneficial owners are
Qualified Purchasers, (iii) that it is not a dealer described in paragraph (a)(1)(ii) of Rule 144A unless such
transferee owns and invests on a discretionary basis at least U.S.$25 million in securities of issuers that are not
affiliated Persons of such dealer, (iv) that it is not a plan referred to in paragraph (a)(1)(i)(D) or (E) of Rule 144A
or a trust fund referred to in paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of such plan, unless
investment decisions are made solely by the fiduciary, trustee or sponsor of such plan, (v) that it and each account
for which it is purchasing is purchasing Notes in at least the minimum denomination and (vi) that it will provide
written notice of the foregoing and any other applicable transfer restrictions to any transferee.

The Indenture provides that if, notwithstanding the restrictions on transfer contained therein, the Issuer
determines any beneficial owner or Holder of a Note (other than a Note transferred in reliance on Regulation S) is
not a Qualified Institutional Buyer and a Qualified Purchaser, the Issuer will require that such beneficial owner or
Holder sell all of its right title and interest in such Note to a Person who is so qualified, with such sale to be
effected within 30 days after notice of such sale requirement is given. If such sale is not effected within such 30
days, upon written direction from the Issuer, the Trustee will be authorized to conduct a commercially reasonable
sale of such Note to a Person who does so qualify and pending transfer, no further payments will be made in
respect of such note or any beneficial interest therein.

Except for interests in Notes represented by a Regulation S Global Note or a Rule 144A Global Note as
described herein, the Notes will be represented by definitive registered Notes registered in the name of the
purchaser thereof.

Unless determined otherwise by the Co-Issuers in accordance with applicable law, the Notes (other than
the Class C Notes) will bear the legend set forth below:

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
JURISDICTION, AND MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (A) (1) [AFTER THE END OF THE DISTRIBUTION COMPLIANCE PERIOD, TO A
PERSON WHICH TAKES DELIVERY OF THIS NOTE (OR INTEREST HEREIN) IN THE
FORM OF A RULE 144A NOTE AND WHOM THE SELLER REASONABLY BELIEVES IS
A "QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A

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 UNDER THE SECURITIES ACT ("RULE 144A")]1 [TO A PERSON]2, PURCHASING FOR
ITS OWN ACCOUNT, TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON THE EXEMPTION FROM
SECURITIES ACT REGISTRATION PROVIDED BY RULE 144A OR (2) TO A NON-U.S.
PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (B) IN
COMPLIANCE WITH THE CERTIFICATION AND OTHER REQUIREMENTS SPECIFIED
IN THE INDENTURE REFERRED TO HEREIN AND (C) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY
OTHER RELEVANT JURISDICTION.

NEITHER OF THE CO-ISSUERS HAS BEEN REGISTERED UNDER THE UNITED STATES
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT
COMPANY ACT"). NO TRANSFER OF THIS NOTE (OR ANY INTEREST HEREIN) MAY
BE MADE (AND NONE OF THE CO-ISSUERS, THE TRUSTEE OR THE NOTE
REGISTRAR WILL RECOGNIZE ANY SUCH TRANSFER) IF (A) SUCH TRANSFER
WOULD BE MADE TO A TRANSFEREE WHO IS A U.S. RESIDENT (WITHIN THE
MEANING OF THE INVESTMENT COMPANY ACT) BUT IS NOT A "QUALIFIED
PURCHASER" AS DEFINED IN SECTION 2(a)(51)(A) OF THE INVESTMENT COMPANY
ACT AND RELATED RULES OR A COMPANY EACH OF WHOSE BENEFICIAL
OWNERS IS A QUALIFIED PURCHASER (COLLECTIVELY, A "QUALIFIED
PURCHASER"), (B) SUCH TRANSFER WOULD HAVE THE EFFECT OF REQUIRING
EITHER OF THE CO-ISSUERS OR THE TRUST ESTATE TO REGISTER AS AN
INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OR (C) SUCH
TRANSFER WOULD BE MADE TO A TRANSFEREE WHO IS A FLOW-THROUGH
INVESTMENT VEHICLE OTHER THAN A QUALIFYING INVESTMENT VEHICLE
(EACH AS DEFINED IN THE INDENTURE).

IN ADDITION, NO TRANSFER OF THIS NOTE (OR ANY INTEREST HEREIN) MAY BE

MADE (AND NONE OF THE CO-ISSUERS, THE TRUSTEE OR THE NOTE REGISTRAR
WILL RECOGNIZE ANY SUCH TRANSFER) IF SUCH TRANSFER WOULD BE MADE TO
A TRANSFEREE THAT IS A U.S. RESIDENT AND IS (A) A DEALER DESCRIBED IN
PARAGRAPH (a)(1)(ii) OF RULE 144A WHICH OWNS AND INVESTS ON A
DISCRETIONARY BASIS LESS THAN U.S.$25,000,000 IN SECURITIES OF ISSUERS
THAT ARE NOT AFFILIATED PERSONS OF THE DEALER OR (B) A PLAN REFERRED
TO IN PARAGRAPH (a)(1)(i)(D) OR (a)(1)(i)(E) OF RULE 144A OR A TRUST FUND
REFERRED TO IN PARAGRAPH (a)(1)(i)(F) OF RULE 144A THAT HOLDS THE ASSETS
OF SUCH A PLAN, UNLESS INVESTMENT DECISIONS WITH RESPECT TO THE PLAN
ARE MADE SOLELY BY THE FIDUCIARY, TRUSTEE OR SPONSOR OF SUCH PLAN.

BY ACCEPTING THIS NOTE, EACH HOLDER HEREOF IS DEEMED TO REPRESENT

AND WARRANT THAT EITHER (A) IT IS NOT (AND FOR SO LONG AS IT HOLDS THIS
NOTE OR AN INTEREST HEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF
OF (AND FOR SO LONG AS IT HOLDS THIS NOTE OR AN INTEREST HEREIN WILL
NOT BE ACTING ON BEHALF OF), A PLAN OR ANY OTHER BENEFIT PLAN
INVESTOR OR (B) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT
CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION IN VIOLATION OF
SECTION 406 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS

1
Applicable to Regulation S Notes.
2
Applicable to Rule 144A Notes.

-86-
 AMENDED ("ERISA") OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"), (OR, IN THE CASE OF A GOVERNMENTAL OR CHURCH
PLAN, ANY SIMILAR FEDERAL, STATE OR LOCAL LAW).

[THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN MAY NOT BE HELD BY A U.S.
PERSON AT ANY TIME.]3 THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN MAY
BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN
INTEREST IN A [RULE 144A NOTE]4 [REGULATION S NOTE]5 OR (IN CERTAIN
LIMITED CIRCUMSTANCES) A DEFINITIVE NOTE ONLY UPON RECEIPT BY THE
NOTE REGISTRAR OF (A) A TRANSFER CERTIFICATE FROM THE TRANSFEROR AND
TRANSFEREE SUBSTANTIALLY IN THE FORM SPECIFIED IN THE INDENTURE AND
(B) A WRITTEN ORDER GIVEN IN ACCORDANCE WITH THE APPLICABLE
PROCEDURES UTILIZED OR IMPOSED FROM TIME TO TIME BY DTC, EUROCLEAR
AND/OR CLEARSTREAM, AS APPLICABLE.

THIS NOTE (OR AN INTEREST HEREIN) MAY NOT BE TRANSFERRED UNLESS,

AFTER GIVING EFFECT TO THE TRANSFER, THE TRANSFEREE (AND, IF IT RETAINS
AN INTEREST HEREIN, THE TRANSFEROR) IS HOLDING A PRINCIPAL AMOUNT
WHICH IS EQUAL TO U.S.$100,000 OR INTEGRAL MULTIPLES OF U.S.$1.00 IN EXCESS
THEREOF.

THE PURCHASER OF THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN WILL BE

DEEMED TO UNDERSTAND AND AGREE THAT IF ANY PURPORTED TRANSFER OF
THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN TO A PURCHASER DOES NOT
COMPLY WITH THE REQUIREMENTS SET FORTH IN THIS NOTE OR THE
INDENTURE, THEN THE PURPORTED TRANSFEROR OF THIS NOTE OR BENEFICIAL
INTEREST HEREIN SHALL BE REQUIRED TO CAUSE THE PURPORTED TRANSFEREE
TO SURRENDER THE TRANSFERRED NOTE OR ANY BENEFICIAL INTEREST
THEREIN OR TO CAUSE THE PURPORTED TRANSFEREE TO DISPOSE OF SUCH NOTE
OR BENEFICIAL INTEREST PROMPTLY IN ONE OR MORE OPEN MARKET SALES TO
ONE OR MORE PERSONS EACH OF WHOM SATISFIES THE REQUIREMENTS OF THE
REPRESENTATIONS, WARRANTIES AND COVENANTS SET FORTH IN THIS LEGEND,
AND SUCH PURPORTED TRANSFEROR SHALL TAKE, AND SHALL CAUSE SUCH
TRANSFEREE TO TAKE, ALL FURTHER ACTION NECESSARY OR DESIRABLE, IN
THE JUDGMENT OF THE ISSUER, TO ENSURE THAT SUCH NOTE OR ANY
BENEFICIAL INTEREST THEREIN IS HELD BY PERSONS IN COMPLIANCE
THEREWITH. ANY TRANSFER IN VIOLATION OF THE FOREGOING PROVISIONS OF
THIS NOTE OR THE INDENTURE WILL BE OF NO FORCE AND EFFECT, WILL BE
VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE
TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO
THE CO-ISSUERS, THE TRUSTEE OR ANY INTERMEDIARY.

[IF, NOTWITHSTANDING THE RESTRICTIONS SET FORTH IN THIS NOTE OR THE

INDENTURE, EITHER OF THE CO-ISSUERS DETERMINES THAT ANY HOLDER OF
THIS NOTE OR AN INTEREST HEREIN (I) IS A U.S. RESIDENT AND (II) IS NOT A
QUALIFIED PURCHASER, THE CO-ISSUERS SHALL REQUIRE, BY NOTICE TO SUCH
HOLDER, THAT SUCH HOLDER SELL ALL OF ITS RIGHT, TITLE AND INTEREST TO

3
Applicable to Regulation S Notes.
4
Applicable to Regulation S Notes.
5
Applicable to Rule 144A Notes.

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 THIS NOTE (OR INTEREST HEREIN) TO (A) A PERSON THAT IS BOTH (1) A
QUALIFIED INSTITUTIONAL BUYER AND (2) A QUALIFIED PURCHASER OR (B) A
NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN RELIANCE ON REGULATION
S, WITH SUCH SALE TO BE EFFECTED WITHIN 30 DAYS AFTER NOTICE OF SUCH
SALE REQUIREMENT IS GIVEN. IF SUCH HOLDER FAILS TO EFFECT THE TRANSFER
REQUIRED WITHIN SUCH 30-DAY PERIOD, (X) UPON WRITTEN DIRECTION FROM
THE ISSUER, THE TRUSTEE SHALL, AND IS HEREBY IRREVOCABLY AUTHORIZED
BY SUCH HOLDER TO, CAUSE ITS INTEREST IN THIS NOTE TO BE TRANSFERRED IN
A COMMERCIALLY REASONABLE SALE ARRANGED BY THE ISSUER (CONDUCTED
BY AN INVESTMENT BANK SELECTED BY THE TRUSTEE IN ACCORDANCE WITH
SECTION 9-610(b) OF THE UCC AS APPLIED TO SECURITIES THAT ARE SOLD ON A
RECOGNIZED MARKET OR THAT MAY DECLINE SPEEDILY IN VALUE) TO A
PERSON THAT CERTIFIES TO THE TRUSTEE AND THE CO-ISSUERS, IN CONNECTION
WITH SUCH TRANSFER, THAT SUCH PERSON IS BOTH (1) A QUALIFIED
INSTITUTIONAL BUYER AND (2) A QUALIFIED PURCHASER, AND (Y) PENDING
SUCH TRANSFER, NO FURTHER PAYMENTS WILL BE MADE IN RESPECT OF THE
INTEREST IN THIS NOTE HELD BY SUCH HOLDER AND THE INTEREST IN THIS
NOTE SHALL NOT BE DEEMED TO BE OUTSTANDING FOR THE PURPOSE OF ANY
VOTE OR CONSENT OF THE NOTEHOLDERS.]6

[UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE

DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
NOTE REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]7

Subject to the restrictions on transfer set forth in the Indenture and the Notes and except with respect to
transfer of an interest in a Regulation S Global Note or a Rule 144A Global Note (the procedure for which is set
forth in the Indenture), the Holder of any Notes may transfer the same in whole or in part (in a principal amount
equal to any authorized denomination) by surrendering such Notes at the corporate trust office of the Trustee or at
the office of any transfer agent, together with an executed instrument of assignment and transfer substantially in
the form attached to the Indenture. In exchange for any Notes properly presented for transfer with all necessary
accompanying documentation, the Trustee will authenticate and deliver at the corporate trust office of the Trustee
or the office of the transfer agent, as the case may be, to the transferee or send by first-class mail at the risk of the
transferee to such address as the transferee may request, a Note or Notes, for a like aggregate principal amount
and in such authorized denomination or denominations as may be requested. The presentation for transfer of any
Notes will not be valid unless made at the corporate trust office of the Trustee or at the office of a transfer agent
by the registered Holder in person, or by a duly authorized attorney-in-fact. The Holder of a Note will not be
required to bear the costs and expenses of effecting any transfer or registration of transfer, except that the relevant
Holder will be required to bear (i) the expenses of delivery by other than regular mail (if any) and (ii) if the Co-
Issuers so require, the payment of a sum sufficient to cover any duty, stamp tax or governmental charge or
insurance charges that may be imposed in relation thereto.

6
Applicable to Rule 144A Notes.
7
Applicable to Global Notes.

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Settlement

All payments in respect of the Notes shall be made in United States dollars in same-day funds.

-89-
 CERTAIN TAX CONSIDERATIONS

In General

All references to Notes in this section shall refer to all Classes of Notes other than the Class C Notes.

The following summary describes the principal United States Federal income tax and Cayman Islands tax
consequences of the purchase at initial issuance of the Notes (for purposes of this section, with respect to each
Class of Notes, the first price at which a substantial amount of Notes of such Class are sold to purchasers is
referred to herein as the "Issue Price"), and the ownership and disposition of the Notes. The summary does not
purport to be a comprehensive description of all tax considerations that may be relevant to a decision to purchase
the Notes. In particular, the summary does not address special tax considerations that may apply to certain types
of taxpayers, including securities dealers, securities traders who account for their securities on a mark-to-market
basis for tax purposes, banks, tax exempt investors, insurance companies, subsequent purchasers of Notes,
persons that own (directly or indirectly) equity interests in holders of Notes and holders that purchase the Notes
for prices other than the respective Issue Prices of the Notes. In addition, this summary does not describe any tax
consequences arising under the laws of any state, locality or taxing jurisdiction other than the U.S. federal
government and the Cayman Islands. In general, the summary assumes that a holder acquires Notes at original
issuance and holds such Notes as a capital asset and not as part of a hedge, a straddle, or a conversion transaction
within the meaning of Section 1258 of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), a
constructive sale transaction within the meaning of Section 1259 of the Code or an integrated transaction. This
summary is based on United States and Cayman Islands tax laws, regulations, rulings and decisions in effect or
available on the date of this Confidential Offering Circular. All of the foregoing are subject to change, which
change may apply retroactively and could affect the continued validity of this summary.

This summary is included herein for general information only and there can be no assurance that the tax
consequences of an investment in the Notes will be favorable or that such consequences will be as described
herein.

As used in this section, the term "U.S. holder" means a beneficial owner of a Note who is (i) a citizen or
resident of the United States, (ii) an entity taxable as a corporation or treated as a partnership for U.S. federal
income tax purposes, which is created or organized in or under the laws of the United States, any state therein or
the District of Columbia, (iii) an estate (other than a foreign estate defined in Section 7701(a)(31)(A) of the Code)
or (iv) a trust if a court within the United States is able to exercise primary supervision over such trust's
administration and one or more U.S. persons have the authority to control all substantial decisions of such trust
and certain other trusts that were in existence on August 20, 1996 and that elect to continue to be treated as U.S.
persons. The term "non-U.S. holder" means a beneficial owner of a Note who is not a U.S. holder.

U.S. persons and non-U.S. persons who own an interest in a holder which is treated as a pass-through
entity under the Code will generally receive the same tax treatment, with respect to the material tax consequences
of their indirect ownership of the Notes, as is described herein for direct U.S. holders and non-U.S. holders,
respectively. Nonetheless, such persons should consult their tax advisors with respect to their particular
circumstances, including for issues related to tax elections and information reporting requirements.

ACCORDINGLY, PROSPECTIVE PURCHASERS OF THE NOTES SHOULD CONSULT

THEIR TAX ADVISORS AS TO THE U.S. FEDERAL INCOME TAX AND CAYMAN ISLANDS TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE NOTES AND
THE POSSIBLE APPLICATION OF STATE, LOCAL, FOREIGN OR OTHER TAX LAWS.

For U.S. Federal income tax purposes, the Issuer, and not the Co-Issuer, will be treated as the issuer of the
Notes.

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U.S. Federal Tax Considerations

Tax Treatment of the Issuer

It is intended that the Issuer will operate in a manner such that it will not be subject to U.S. federal
income tax on its net income. In that regard, the Issuer's contemplated activities generally are not intended to
cause it to be engaged in a trade or business in the United States and, accordingly, the Issuer is not expected to be
subject to U.S. federal income tax on its net income or the "branch profits" tax. If the Issuer should be treated as
engaged in a trade or business in the United States, the Issuer would be potentially subject to substantial U.S.
federal income taxes. The imposition of such taxes would materially affect the Issuer's financial ability to make
payments of principal of and interest on the Notes or payments on the Preference Shares.

Although the Issuer is generally not intended to be subject to U.S. federal income tax on its net income,
certain income derived by the Issuer may be subject to withholding taxes imposed by the United States or other
countries. It is not expected that the Issuer will derive material amounts of income that would be subject to
United States withholding taxes.

Tax Treatment of U.S. Holders of Notes

Status of the Notes. Upon the issuance of the Notes, Schulte Roth & Zabel LLP will deliver an opinion
that, although there is no direct authority, the Class A-1LA Notes, the Class A-1LB Notes, the Class A-2L Notes,
the Class A-3L Notes, the Class A-4L Notes and the Class B-1L Notes will be characterized as debt for U.S.
federal income tax purposes. Such opinion will assume compliance with the Indenture and other related
documents. Investors should be aware that such opinion of counsel is not binding on the U.S. Internal Revenue
Service (the "IRS") or the courts. The Issuer will agree and, by their purchase of the Notes, holders and
beneficial owners of the Notes will be deemed to have agreed, to treat the Notes as debt for U.S. federal income
tax purposes. Except as otherwise indicated, the balance of this discussion assumes that the Notes are treated as
debt for U.S. Federal income tax purposes.

Interest, Discount or Premium on the Notes. In general, a U.S. holder of a debt instrument is required to
include payments of qualified stated interest (i.e., interest which is unconditionally payable at least annually at a
single fixed rate or at a floating rate that meets certain requirements) received thereon, in accordance with such
holder's method of accounting, as ordinary interest income. If, however, the issue price of the debt instrument is
less than the "stated redemption price at maturity" of such debt instrument by more than a de minimis amount, a
U.S. holder will be considered to have purchased such debt instrument with original issue discount ("OID"). The
"Stated Redemption Price at Maturity" is the sum of all payments to be received on the debt instrument other
than payments of qualified stated interest. If a U.S. holder acquires a debt instrument with OID, then, regardless
of such holder's method of accounting, the holder will be required to accrue OID on a constant yield basis and
include such accruals in gross income.

It is not anticipated that the Class A-1LA Notes, the Class A-1LB Notes, the Class A-2L Notes and the
Class A-3L Notes will be issued with OID. Therefore, U.S. holders of the Class A-1LA Notes, the Class A-1LB
Notes, the Class A-2L Notes or the Class A-3L Notes will include stated interest thereon as ordinary interest
income from sources outside the United States, in accordance with their method of accounting. However, if there
is more than a remote likelihood that interest payments will accrue and not be paid currently on the Class A-4L
Notes or the Class B-1L Notes, all interest payable on such Class of Notes and any discount attributable to the
difference between the Issue Price and the stated principal amount over the Issue Price of such Notes would be
treated as OID. In that case, a U.S. holder would be required to include OID in ordinary income on the basis of a
constant yield to maturity, whether or not such holder receives a cash payment on any payment date. The Issuer
believes that the likelihood of interest accruing on the Class A-4L Notes and the Class B-1L Notes is for this
purpose remote. Therefore, U.S. holders of such Notes should include stated interest thereon as ordinary interest
income from sources outside the United States, in accordance with each such holder's method of accounting. If
the Issuer in fact does not make a current interest payment on a Class A-4L Note or a Class B-1L Note, a holder

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of must thereafter accrue OID on the principal amount, including any unpaid interest, and on any accrued OID on
such Note.

Accrual of OID, if any, on the Notes may be subject to special rules that require use of a prepayment
assumption and apply to a debt instrument the payments on which may be accelerated by reason of prepayments
of other obligations securing that instrument.

In general, if the Issue Price of a Note exceeds the Stated Redemption Price at Maturity of such Note, a
U.S. holder will be considered to have purchased such Note at a premium. In this event, a U.S. holder may elect
to amortize the amount of such premium, using a constant rate, as an offset to interest income. It is not
anticipated that the Notes will be issued at a premium.

Sale, Exchange and Retirement of the Notes. In general, a U.S. holder of a Note will have a basis in such
Note equal to the cost of such Note to such holder increased by the amount of accrued OID, if any, and reduced
by (i) any amortized premium applied to reduce, or allowed as a deduction against, interest on such Note and (ii)
any payments other than payments of qualified stated interest on such Note. Upon a sale, exchange or retirement
of a Note, a U.S. holder will generally recognize gain or loss equal to the difference between the amount realized
on the sale, exchange or retirement (less any accrued interest, which would be taxable as such) and the holder's
adjusted tax basis in such Note. Generally, such gain or loss will be long term capital gain or loss if the U.S.
holder held the Note for more than one year at the time of disposition. Gain recognized by a U.S. holder on the
sale, exchange or retirement of a Note generally will be treated as from sources within the United States.

Tax Treatment of non-U.S. Holders of Notes

Subject to the discussion below regarding "backup" withholding, a non-U.S. holder of the Notes will be
exempt from any U.S. federal income or withholding taxes with respect to gain derived from the sale, exchange,
or redemption of, or any distributions received in respect of, Notes, unless such gain or distributions are
effectively connected with a U.S. trade or business of such holder, or, in the case of a gain, such holder is a
nonresident alien individual who holds the Notes as a capital asset and who is present in the United States for 183
days or more in the taxable year of the disposition, and certain other conditions are satisfied.

Information Reporting and Backup Withholding

Under certain circumstances, the Code requires "information reporting" annually to the IRS and to each
holder, and "backup withholding" with respect to certain payments made on or with respect to the Notes. These
requirements generally do not apply with respect to certain holders, including corporations, tax-exempt
organizations, qualified pension and profit sharing trusts, and individual retirement accounts. Backup
withholding will apply to a U.S. holder only if the U.S. holder (i) fails to furnish its Taxpayer Identification
Number ("TIN"), which for an individual would be his or her Social Security Number, (ii) furnishes an incorrect
TIN, (iii) is notified by the IRS that it has failed to properly report payments of interest and dividends or (iv)
under certain circumstances, fails to certify, under penalty of perjury, that it has furnished a correct TIN. The
application for exemption is available by providing a properly completed IRS Form W-9. Each U.S. holder
agrees that by such holder's or beneficial owner's acceptance of a Note or an interest therein that such holder or
beneficial owner will provide (or cause to be provided) to the Issuer (or the Trustee on behalf of the Issuer) a
properly completed IRS Form W-9 signed under penalties of perjury.

A non-U.S. holder that provides the applicable IRS Form W-8BEN, IRS Form W-8IMY or other
applicable form, together with all appropriate attachments, signed under penalties of perjury, identifying the non-
U.S. holder and stating that the non-U.S. holder is not a United States person will not be subject to IRS reporting
requirements and U.S. backup withholding. In addition, IRS Form W-8BEN or other applicable form will be
required from the beneficial owners of interests in a non-U.S. holder that is treated as a partnership (or as a trust
of certain types) for U.S. federal income tax purposes. Each non-U.S. holder agrees that by such holder's or
beneficial owner's acceptance of a Note or an interest therein that such holder or beneficial owner will provide (or

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cause to be provided) to the Issuer (or the Trustee on behalf of the Issuer) a properly completed IRS Form W-
8BEN, W-8IMY or other applicable form signed under penalties of perjury.

The payment of the proceeds on the disposition of a Note by a holder to or through the U.S. office of a
broker generally will be subject to information reporting and backup withholding unless the holder either certifies
its status as a non-U.S. holder under penalties of perjury on the applicable IRS Form W-8BEN, IRS Form W-
8IMY or other applicable form (as described above) or otherwise establishes an exemption. The payment of the
proceeds on the disposition of a Note by a non-U.S. holder to or through a non-U.S. office of a non-U.S. broker
will not be subject to backup withholding or information reporting unless the non-U.S. broker is a U.S. Related
Person. The payment of proceeds on the disposition of a Note by a non-U.S. holder to or through a non-U.S.
office of a U.S. broker or a U.S. Related Person generally will not be subject to backup withholding but will be
subject to information reporting unless the holder certifies its status as a non-U.S. holder under penalties of
perjury or the broker has certain documentary evidence in its files as to the non-U.S. holder's foreign status and
the broker has no actual knowledge to the contrary.

For this purpose, a "U.S. Related Person" is (i) a "controlled foreign corporation" for U.S. federal
income tax purposes, (ii) a foreign person 50% or more of whose gross income from all sources for the three-year
period ending with the close of its taxable year preceding the payment (or for such part of the period that the
broker has been in existence) is derived from activities that are effectively connected with the conduct of a U.S.
trade or business or (iii) a foreign partnership if at any time during its tax year one or more of its partners are
United States persons who, in the aggregate, hold more than 50% of the income or capital interest of the
partnership or if, at any time during its taxable year, the partnership is engaged in the conduct of a U.S. trade or
business.

Backup withholding is not an additional tax and may be refunded (or credited against the holder's U.S.
Federal income tax liability, if any), provided that certain required information is furnished. The information
reporting requirements may apply regardless of whether withholding is required. Copies of the information
returns reporting such interest and withholding also may be made available to the tax authorities in the country in
which a non-U.S. holder is a resident under the provisions of an applicable income tax treaty or agreement.

Tax Shelter Reporting Requirements

Pursuant to recently issued Treasury Regulations directed at tax shelter activity, taxpayers are required to
disclose to the IRS certain information on IRS Form 8886 if they participate in a "reportable transaction." A
transaction may be a "reportable transaction" based upon any of several indicia with respect to a holder, including
the existence of significant book-tax differences or the recognition of a loss in excess of certain thresholds.
Investors should consult their own tax advisors concerning any possible disclosure obligation with respect to their
investment in the Issuer.

Cayman Islands Tax Considerations

The following discussion of certain Cayman Islands income tax consequences of an investment in the
Notes is based on the advice of Maples and Calder as to Cayman Islands law. The discussion is a general
summary of present law, which is subject to prospective and retroactive change. It assumes that the Issuer will
conduct its affairs in accordance with assumptions made by, and representations made to, counsel. It is not
intended as tax advice, does not consider any investor's particular circumstances, and does not consider tax
consequences other than those arising under Cayman Islands law.

Under existing Cayman Islands laws:

(i) distributions in respect of the Notes will not be subject to taxation in the Cayman Islands
and no withholding will be required on such distributions to any holder of a Note, and gains derived from
the sale of a Note will not be subject to Cayman Islands income or corporation tax. The Cayman Islands

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 currently has no income, corporation or capital gains tax and no estate duty, inheritance tax or gift tax;
and

(ii) the holder of any Note (or the legal personal representative of such holder) whose Note is
brought into the Cayman Islands may in certain circumstances be liable to pay stamp duty imposed under
the laws of the Cayman Islands in respect of such Note. In addition, an instrument transferring title to a
Note, if brought to or executed in the Cayman Islands, would be subject to Cayman Islands stamp duty.

The Issuer has been incorporated under the laws of the Cayman Islands as an exempted company and, as
such, has obtained an undertaking from the Governor In Council of the Cayman Islands substantially in the
following form:

"The Tax Concessions Law

(1999 Revision)
Undertaking as to Tax Concessions

In accordance with Section 6 of The Tax Concessions Law (1999 Revision), the
Governor In Council undertakes with:

Tricadia CDO 2003-1, Ltd. (the "Company")

(a) that no Law which is hereafter enacted in the Islands imposing any tax to
be levied on profits or income or gains or appreciations shall apply to the
Company or its operations; and
(b) in addition, that no tax to be levied on profits, income, gains or
appreciations or which is in the nature of estate duty or inheritance tax
shall be payable:
(i) on or in respect of the shares debentures or other obligations of
the Company; or
(ii) by way of the withholding in whole or in part of any relevant
payment as defined in Section 6(3) of the Tax Concessions Law
(1999 Revision).
These concessions shall be for a period of TWENTY years from the 15th day of July,
2003.

Governor In Council"

The Cayman Islands does not have any double tax treaty arrangement with the U.S. or any other country.

THE PRECEDING DISCUSSION IS ONLY A SUMMARY OF CERTAIN OF THE TAX

IMPLICATIONS OF AN INVESTMENT IN THE NOTES. PROSPECTIVE PURCHASERS ARE URGED TO
CONSULT WITH THEIR OWN TAX ADVISORS PRIOR TO INVESTING TO DETERMINE THE TAX
IMPLICATIONS OF SUCH INVESTMENT IN LIGHT OF SUCH PURCHASER'S CIRCUMSTANCES.

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 CERTAIN ERISA CONSIDERATIONS

Subject to the following discussion, the Notes (other than the Class C Notes) may generally be acquired
by pension, profit sharing or other retirement plans and accounts subject to ERISA or Section 4975 of the Code,
and by entities that are deemed to hold assets of any of the foregoing (each, an "ERISA Plan").

Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in certain
transactions involving their "plan assets" with persons that are "parties in interest" under ERISA or "disqualified
persons" under the Code with respect to the ERISA Plan. With respect to ERISA Plans subject to Title I of
ERISA, ERISA also imposes certain duties on persons who are fiduciaries of ERISA Plans and prohibits certain
transactions between ERISA Plans and "parties in interest" with respect to such ERISA Plans. Under ERISA, any
person who exercises any authority or control respecting the management or disposition of the assets of an ERISA
Plan subject to Title I of ERISA is considered to be a fiduciary of such ERISA Plan. A violation of these
"prohibited transaction" rules may generate excise tax and other liabilities under ERISA and the Code for such
person. Certain transactions involving the Co-Issuers might be deemed to constitute prohibited transactions under
ERISA and the Code with respect to an ERISA Plan that purchased Securities if assets of the Issuer were deemed
to be assets of the ERISA Plan.

Notes

Under regulations issued by the United States Department of Labor, set forth in 29 C.F.R. § 2510.3-101
(the "Plan Asset Regulation"), the assets of the Co-Issuers would be treated as plan assets of an ERISA Plan for
purposes of ERISA and the Code only if the ERISA Plan acquired an "equity interest" in the Issuer and none of
the exceptions contained in the Plan Asset Regulation was applicable. An equity interest is defined under the Plan
Asset Regulation as an interest other than an instrument which is treated as indebtedness under applicable local
law and which has no substantial equity features. Although there is little guidance on how this definition applies,
the Co-Issuers believe that, at the time of their issuance, the Notes (other than the Class C Notes) should be
treated as indebtedness without substantial equity features for purposes of the Plan Asset Regulation. This
determination is based in part upon the traditional debt features of such Notes, including the reasonable
expectation of purchasers of such Notes (other than the Class C Notes) that they will be repaid when due, as well
as the absence of conversion rights, warrants and other typical equity features. It should be noted that the debt
treatment of the Notes (other than the Class C Notes) for ERISA purposes could change subsequent to their
issuance (i.e., they could be treated as equity) if the Co-Issuers incur losses or the rating of such Notes changes.
The risk of recharacterization is enhanced for subordinate classes of Notes. The Co-Issuers have not obtained an
opinion of counsel regarding the debt treatment of Notes under local law.

Additionally, the acquisition or holding of Notes by or on behalf of an ERISA Plan could give rise to a
prohibited transaction if the Co-Issuers, the Trustee, the Collateral Manager, the Initial Purchaser, other Persons
providing services in connection with the Co-Issuers, or any of their respective affiliates, is a "disqualified
person" or "party in interest" with respect to that ERISA Plan. Certain exemptions from the prohibited transaction
rules could be applicable, however, depending in part upon the type of ERISA Plan fiduciary making the decision
to acquire Notes and the circumstances under which such decision is made. Included among these exemptions are
Prohibited Transaction Class Exemption ("PTCE") 90-1, regarding investments by insurance company separate
accounts; PTCE 96-23, regarding transactions effected by "in-house asset managers"; PTCE 95-60, regarding
investments by insurance company general accounts; PTCE 91-38, regarding investments by bank collective
investment funds; and PTCE 84-14, regarding transactions effected by a "qualified professional asset manager."
However, even if the conditions specified in one or more of these exemptions are met, the scope of the relief
provided by these exemptions might or might not cover all acts which might be construed as prohibited
transactions. There can be no assurance that any of these, or any other exemption, will be available with respect
to any particular transaction involving the Notes.

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 Additionally, the acquisition or holding of Notes by or on behalf of foreign plans, governmental plans (as
defined in Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA), which are
not subject to ERISA and/or the Code, could give rise to similar liabilities under federal, state, foreign or local
law which may be similar to ERISA and the Code.

By acquiring a Note, each purchaser and transferee will be deemed to represent, warrant and covenant
that either (i) it is not acquiring such Note with the assets of an ERISA Plan or a foreign, governmental or church
plan subject to applicable law that is similar to Section 406 of ERISA or Section 4975 of the Code, and
throughout the holding of such Notes will not become or transfer its interest to any ERISA Plan or governmental,
foreign or church plan or to an entity using the assets thereof, or (ii) the acquisition and holding of such Note by
the purchaser or transferee, throughout the period that it holds such Note, will not result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code (or, in the case of a
governmental, church or foreign plan, any law similar to Section 406 of ERISA or Section 4975 of the Code),
because such purchase and holding either (x) is not, and will not become, subject to such laws or (y) is covered by
a prohibited transaction exemption all of the conditions of which are and will be satisfied upon its acquisition of,
and throughout the term that it holds, such Note. Each purchaser of a Note will be deemed to represent, warrant
and covenant that it will not sell, pledge or otherwise transfer such Note in violation of the foregoing.

Class C Notes, Preference Shares and Principal Protected Securities

Although not offered hereby, purchasers should note that the Issuer will also issue Principal Protected
Securities and Preference Shares under a separate Confidential Offering Circular (the "Junior Securities
Offering Circular"). None of the Class C Notes, the Principal Protected Securities or the Preference Shares
(including the Preference Share Components) will be treated as indebtedness for purposes of the Plan Asset
Regulation. Under one exception to the Plan Asset Regulation, however, the assets of the Issuer will not be
treated as "plan assets" if Benefit Plan Investor participation in the Issuer is not "significant." Benefit Plan
Investor participation will not be "significant" for purposes of the Plan Asset Regulation if less than 25% of each
class of equity interests (excluding, for purposes of such calculation, interests held by persons (other than Benefit
Plan Investors) that have discretionary authority or control with respect to the assets of the Issuer, or who provide
investment advice to the Issuer for a fee (direct or indirect) with respect to such assets, or any affiliate of such a
person) is held by Benefit Plan Investors. The Department of Labor has taken the position that for purposes of
determining whether equity participation in an entity is "significant" for purposes of the Plan Asset Regulation,
only the proportion of an insurance company general account's investment that represents plan assets should be
taken into account.

If investment in any of the Class C Notes, the Principal Protected Securities or the Preference Shares
(including the Preference Share Components) by Benefit Plan Investors (including through an insurance company
general account) was deemed "significant" for purposes of the Plan Asset Regulation, it could cause the
underlying assets of the Co-Issuers to be ERISA Plan assets subject to ERISA. This in turn could cause
transactions involving the Co-Issuers or their affiliates to constitute prohibited transactions under ERISA and the
Code.

Accordingly, the purchase, holding and transfer of each of the Class C Notes, the Principal Protected
Securities or the Preference Shares (including the Preference Share Components) will be restricted as follows.
Each of the Class C Notes, the Principal Protected Securities or the Preference Shares (including the Preference
Share Components) may not be purchased by or transferred to, on behalf of or using the assets of, any Benefit
Plan Investor (including an insurance company general account, except as provided below) and each purchaser or
transferee of Class C Notes, the Principal Protected Securities or the Preference Shares (including the Preference
Share Components) will be deemed to represent and warrant that, except as provided below, such purchaser or
transferee, upon such purchase or transfer is not, and throughout the holding of such Class C Notes, Principal
Protected Securities or Preference Shares (including the Preference Share Components), as applicable, will not
become or transfer its interest to, any Benefit Plan Investor. However, an insurance company investor will be
permitted to acquire an interest in any of the Class C Notes, the Principal Protected Securities or the Preference

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Shares (including the Preference Share Components) with assets from its general account if at the time of its
acquisition and throughout its holding of the Class C Notes, the Principal Protected Securities or the Preference
Shares (including the Preference Share Components), (i) it meets the requirements for exemption under one or
more of Sections I, II or III of Department of Labor PTCE 95-60, (ii) less than 25% of the assets in such general
account are (or represent) assets of an employee benefit plan, (iii) it is not the Collateral Manager, the Issuer, the
Co-Issuer, the Initial Purchaser, the Co-Placement Agent or a service provider to the Issuer or an affiliate of the
foregoing and the value of the equity held by such general account would not otherwise be disregarded under 29
C.F.R. 2510.3-101(f)(1) and (iv) the purchase and holding of such Class C Notes, Principal Protected Securities or
Preference Shares (including the Preference Share Components) will not otherwise result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code. No Class C Notes, Principal
Protected Securities or Preference Shares (including the Preference Share Components) may be transferred to a
Benefit Plan Investor or an entity using Benefit Plan Investor assets, except to insurance company general
accounts meeting the requirements discussed above. Each investor in any of the Class C Notes, Principal
Protected Securities or Preference Shares (including the Preference Share Components) will be deemed to
represent, warrant and covenant that it will not sell, pledge or otherwise transfer such Class C Notes, Principal
Protected Securities or Preference Shares (including the Preference Share Components) in violation of the
foregoing.

Purchasers will be further required or deemed, as appropriate, to represent, warrant and covenant that no
transfer of any of the Class C Notes, Principal Protected Securities or Preference Shares (including the Preference
Share Components) will be made to a Benefit Plan Investor except as provided herein, and that it and any
fiduciaries causing it to acquire such Class C Notes, Principal Protected Securities or Preference Shares (including
the Preference Share Components) agree, to the fullest extent permissible under applicable law, to indemnify and
hold harmless the Issuer, the Co-Issuer, the Trustee, the Collateral Administrator, the Collateral Manager, the
Initial Purchaser, the Co-Placement Agent and their respective Affiliates from any cost, damage or loss incurred
by them as a result of it being or being deemed to be a Benefit Plan Investor.

Independent Review and Consultation with Counsel

Any Person proposing to purchase Notes with ERISA Plan, Benefit Plan Investor or insurance company
general account assets should consult with its counsel with respect to, among other things, the potential
applicability of ERISA and the Code to such investments and whether any exemption would be applicable. Each
investor must determine on its own whether all conditions of the applicable exemption have been satisfied.
Purchasers of Notes using the assets of foreign plans, governmental plans and church plans, which are not subject
to ERISA and/or the Code, should consider applicable state or other laws, which may be similar to ERISA or the
Code. Moreover, each ERISA Plan fiduciary should determine whether, under the general fiduciary standards of
investment prudence and diversification, an investment in the Notes is appropriate for the ERISA Plan, taking into
account the overall investment policy of the ERISA Plan, the composition of the ERISA Plan's investment
portfolio, and the risk/return characteristics of the Notes.

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 CERTAIN LEGAL INVESTMENT CONSIDERATIONS

Institutions whose investment activities are subject to legal investment laws and regulations or to review
by certain regulatory authorities may be subject to restrictions on investments in the Notes. Any such institution
should consult its legal advisors in determining whether and to what extent there may be restrictions on its ability
to invest in the Notes. Without limiting the foregoing, any financial institution that is subject to the jurisdiction of
the Comptroller of Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the Office of Thrift Supervision, the National Credit Union Administration, any state
insurance commission, or any other federal or state agencies with similar authority should review any applicable
rules, guidelines and regulations prior to purchasing the Notes. Depository institutions should review and
consider the applicability of the Federal Financial Institutions Examination Council Supervisory Policy Statement
on Securities Activities, which has been adopted by the respective federal regulators.

None of the Co-Issuers or the Initial Purchasers make any representation as to the proper characterization
of the Notes for legal investment or other purposes, or as to the ability of particular investors to purchase the
Notes for legal investment or other purposes, or as to the ability of particular investors to purchase the Notes
under applicable investment restrictions. The uncertainties described above (and any unfavorable future
determinations concerning legal investment or financial institution regulatory characteristics of the Notes) may
affect the liquidity of the Notes. Accordingly, all institutions whose activities are subject to legal investment laws
and regulations, regulatory capital requirements or review by regulatory authorities should consult their own legal
advisors in determining whether and to what extent the Notes are subject to investment, capital or other
restrictions.

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 RATINGS

It is a condition to the issuance of the Notes that (i) the Class A-1LA Notes be rated "AAA" by Standard
& Poor's Rating Services, a division of The McGraw-Hill Companies ("S&P"), "Aaa" by Moody's Investors
Service, Inc. ("Moody's") and "AAA" by Fitch Ratings ("Fitch" and, together with S&P and Moody's, the
"Rating Agencies"), (ii) the Class A-1LB Notes be rated "AAA" by S&P, "Aaa" by Moody's and "AAA" by
Fitch, (iii) the Class A-2L Notes be rated "AAA" by S&P, "Aaa" by Moody's and "AAA" by Fitch, (iv) the Class
A-3L Notes be rated at least "AA" by S&P, at least "Aa2" by Moody's and at least "AA" by Fitch, (v) the Class A-
4L Notes be rated at least "A-" by S&P, at least "A2" by Moody's and at least "A" by Fitch and (vi) the Class B-
1L Notes be rated at least "Baa1" by Moody's. A security rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time by the assigning rating organization.

It is also expected that on the Closing Date the Class C Notes will be issued with a rating of at least "Aaa"
by Moody's as to the ultimate receipt of the face amount thereof and that the Principal Protected Securities will be
issued with ratings of at least "Aaa" by Moody's as to the ultimate receipt of the face amount thereof. The ratings
assigned by Moody's to the Class C Notes and the Principal Protected Securities address the ultimate receipt of
the face amount of the Class C Notes and the Principal Protected Securities, respectively.

The ratings of the Notes by S&P and Fitch address the likelihood of timely payment of the Periodic
Interest Amount on and the ultimate payment of the Aggregate Principal Amount of the Class A-1L Notes,
the Class A-2L Notes and the Class A-3L Notes and the ultimate payment of the Cumulative Interest
Amount and the Aggregate Principal Amount of the Class A-4L Notes. The ratings of the Notes (other
than the Class C Notes) by Moody's address the ultimate cash receipt of all required payments as provided
by the governing documents, and are based on the expected loss to the Noteholders of each Class relative to
the promise of receiving the present value of such payments. A rating is not a recommendation to
purchase, hold or sell securities, in as much as such rating does not comment as to market price or
suitability for a particular investor and may be subject to revision or withdrawal at any time by the
assigning rating organization.

In the event that any rating initially assigned to the Notes is subsequently lowered for any reason, no
Person is obligated to provide any additional support or credit enhancement with respect to the Notes. The Issuer
has not requested a rating on the Notes by any rating agencies other than S&P, Moody's and Fitch, although data
with respect to the Portfolio Collateral may have been provided to other rating agencies solely for informational
purposes. There can be no assurance that, if a rating is assigned to the Notes by any other rating agency, such
rating will be as high as that assigned by S&P, Moody's or Fitch.

The Indenture provides that the Issuer shall obtain an annual review of the ratings assigned to each Class
of Notes. The failure of S&P, Moody's and Fitch to review or confirm a rating or the withdrawal of a rating does
not constitute an Event of Default under the Indenture.

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 USE OF PROCEEDS

On the Closing Date, the proceeds from the sale of the Securities will be used by the Issuer (i) to fund the
purchase of the Portfolio Collateral, which will be pledged as security for the Notes (other than the Class C
Notes), (ii) to fund the purchase of the Class C Collateral, which will be pledged as security for the Class C Notes,
(iii) to fund the deposit (the "Deposit") in an account with the Trustee (the "Initial Deposit Account") on the
Closing Date, which Deposit will be subsequently invested in Portfolio Collateral on or prior to the Ramp-Up
Completion Date, (iv) to fund the deposit in an account with the Trustee (the "Expense Reimbursement
Account") on the Closing Date of approximately U.S.$50,000, which amount will be available for payment from
time to time of future expenses of the Issuer pending the receipt of collections in respect of the Portfolio
Collateral as described herein and (v) to fund an account with the Trustee (the "Closing Expense Account") on
the Closing Date, which will be used to pay fees and other expenses related to the transaction. Amounts in the
Initial Deposit Account will be invested in Eligible Investments until they are used to purchase Portfolio
Collateral. The net proceeds available to the Co-Issuers after the payment of applicable fees and expenses
(including, without limitation, the legal fees and expenses of counsel to the Co-Issuers, each of the Initial
Purchasers and the Collateral Manager, and the fees payable to each of the Initial Purchasers or their Affiliates in
connection with the placement of the Securities), are expected to be approximately U.S.$253,200,000.

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 PLAN OF DISTRIBUTION

Pursuant to a Purchase Agreement dated as of the Closing Date (the "Purchase Agreement")
among the Co-Issuers, Bear, Stearns & Co. Inc. (in such capacity, the "Initial Purchaser" ) and CDC Securities
(in such capacity, the "Co-Placement Agent" and, together with the Initial Purchaser, the "Initial Purchasers")
(i) the Co-Issuers have agreed to sell to the Initial Purchaser and the Initial Purchaser has agreed to purchase from
the Co-Issuers (directly or through an international affiliate) the Securities and (ii) the Co-Issuers have appointed
the Co-Placement Agent to place, and the Co-Placement Agent has agreed to place, the Securities with eligible
investors. The Purchase Agreement provides that the obligations of the Initial Purchaser to pay for and accept
delivery of the Notes are subject to, among other things, the approval of certain legal matters by counsel and
certain other conditions. The Notes will be offered by the Initial Purchaser to prospective investors from time to
time in individually negotiated transactions at varying prices to be determined at the time of sale. The Notes are
offered when, as and if issued by the Issuer, subject to prior sale or withdrawal, cancellation or modification of
the offer without notice and subject to approval of certain legal matters by counsel and certain other conditions.
Each of the Initial Purchasers reserves the right to withdraw, cancel or modify such offer and to reject orders in
whole or in part. Pursuant to the Purchase Agreement, the Co-Issuers will agree to indemnify each of the Initial
Purchasers against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the
Initial Purchasers may be required to make in respect thereof. The Co-Placement Agent is not required to
underwrite or purchase any Securities. The Initial Purchaser may be located at Bear, Stearns & Co. Inc., 383
Madison Avenue, New York, New York 10179 and the Co-Placement Agent may be located at CDC Securities, 9
West 57th Street, 36th Floor, New York, NY 10019.

Each purchaser of a Preference Share (other than the Initial Purchaser) will be required to execute
and deliver a Subscription Agreement in form and substance satisfactory to the Initial Purchasers and the Issuer.

The Co-Issuers have been advised by the Initial Purchasers that the Initial Purchasers propose to
sell the Notes (a) to Qualified Institutional Buyers in reliance on Rule 144A, and (b) to certain persons who are
not U.S. Persons in Offshore Transactions in reliance on Regulation S under the Securities Act.

An Affiliate of the Placement Agent will be the Cashflow Swap Provider as described under
"Cashflow Swap Agreement" herein.

United States

The Notes have not been and will not be registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or benefit of, U.S. Persons except pursuant to an
exemption from the registration requirements under the Securities Act.

(1) In the Purchase Agreement, each Initial Purchaser will represent and agree that it has not
offered or sold Notes and will not offer or sell Notes (i) as part of its distribution at any time and (ii) otherwise
until 40 days after the latter of the commencement of the offering of the Notes and the Closing Date, except in
accordance with Rule 903 of Regulation S or as provided in paragraph (2) below. Accordingly, each Initial
Purchaser will represent and agree that except as provided in paragraph (2) below neither it, its Affiliates (if any)
nor any Persons acting on its or their behalf have engaged or will engage in any directed selling efforts with
respect to Notes, and it and they have complied and will comply with the offering restrictions requirements of
Regulation S.

(2) In the Purchase Agreement, each Initial Purchaser will agree that it will not, acting either
as principal or agent, offer or sell any Notes in the United States other than Notes in registered form bearing a
restrictive legend thereon, and it will not, acting either as principal or agent, offer, sell, reoffer or resell any of
such Notes (or approve the resale of any of such Notes) inside the United States:

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 (a) except (i) through a U.S. broker dealer that is registered under the Exchange Act to
purchasers each of which such Initial Purchaser reasonably believes (A) is a Qualified
Institutional Buyer and (B) has such knowledge and experience in financial and business matters
that it is capable of evaluating and bearing the risks of investing in the Notes or is represented by
a fiduciary or agent with sole investment discretion having such knowledge and experience or
(ii) otherwise, in accordance with the restrictions on transfer set forth in such Notes, the Purchase
Agreement and this Confidential Offering Circular; or

(b) by means of any form of general solicitation or general advertisement, including but not
limited to (i) any advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio and (ii) any seminar
or meeting whose attendees have been advised by any general solicitation or general advertising.

Prior to the sale of any Notes in registered form bearing a restrictive legend thereon, the Initial
Purchasers shall have provided each offeree that is a U.S. Person with a copy of the final Confidential Offering
Circular in the form the Issuer and the Initial Purchasers shall have agreed most recently shall be used for offers
and sales in the United States (the initial such form being this Confidential Offering Circular).

(3) In the Purchase Agreement, each Initial Purchaser will represent and agree that in
connection with each sale to a Qualified Institutional Buyer it has taken or will take reasonable steps to ensure
that the purchaser is aware that the Notes have not been and will not be registered under the Securities Act and
that transfers of Notes are restricted as set forth herein.

United Kingdom

Each Initial Purchaser agrees and represents that:

(1) it has not offered or sold and, prior to the expiry of a period of six months from the
Closing Date, will not offer or sell any Notes to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer
to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995;

(2) it has only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of
Section 21 of the Financial Services and Markets Act 2000 ("FSMA")) received by it in connection with the issue
or sale of any Notes in circumstances in which Section 21(1) of FSMA would not, if each of the Co-Issuers were
not an authorized person, apply to the Co-Issuers; and

(3) it has complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.

Cayman Islands

Each Initial Purchaser will represent and agree that it has not made and will not make any
invitation to the public in the Cayman Islands to subscribe for the Notes.

General

No action has been or will be taken in any jurisdiction that would permit a public offering of the
Notes or the possession, circulation or distribution of this Confidential Offering Circular or any other material
relating to the Issuer or the Notes in any country or jurisdiction where action for that purpose is required.
Accordingly, the Notes may not be offered or sold, directly or indirectly, and neither this Confidential Offering

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Circular nor any other offering material or advertisements in connection with the Notes may be distributed or
published, in or from any country or jurisdiction, except under circumstances that will result in compliance with
any applicable rules and regulations of any such country or jurisdiction.

Purchasers of the Notes may be required to pay stamp taxes and other charges in accordance with
the laws and practices of the country of purchase in addition to the purchase price.

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 LISTING AND GENERAL INFORMATION

1. Application has been made to list the Notes (other than the Class C Notes) on the Irish Stock Exchange.

2. For a period of not less than 14 days from the date of this document, copies of the Memorandum and
Articles of Association of the Issuer, the Certificate of Incorporation and By-laws of the Co-Issuer, the
Indenture, the Management Agreement, the Collateral Administration Agreement, the Preference Share
Paying Agency Agreement, the Reporting Agency Agreement, the Administration Agreement and the
declaration of trust pursuant to which the share trustee holds the shares of the Issuer will be available for
inspection at the registered offices of the Issuer and the offices of the Irish Paying Agent. The portfolio
report prepared for each Payment Date will be obtainable at the offices of the Irish Paying Agent, where
copies thereof may be obtained upon request.

3. Copies of the Memorandum and Articles of Association of the Issuer, the Certificate of Incorporation and
By-laws of the Co-Issuer, the resolutions of the Board of Directors of the Issuer authorizing the issuance
of the Notes, the resolutions of the Board of Directors of the Co-Issuer authorizing the issuance of the
Notes (other than the Class C Notes), the Indenture, the Preference Share Paying Agency Agreement and
the Management Agreement will be available for inspection during the term of the Notes at the office of
the Trustee and at the registered offices of the Issuer and the Co-Issuer.

4. Each of the Co-Issuers represents that there has been no material adverse change in its financial position
since its date of creation.

5. The Co-Issuers are not involved in any litigation or arbitration proceedings relating to claims or amounts
which are material in the context of the issue of the Notes, nor, so far as the Co-Issuers are aware, is any
such litigation or arbitration involving it pending or threatened.

6. The issuance of the Notes will be authorized by the Board of Directors of the Issuer on or about January
14, 2004 and, in the case of the Class A Notes and the Class B-1L Notes, by the Co-Issuer on or about
January 14, 2004.

7. In connection with the listing of the Notes (other than the Class C Notes) on the daily official list of the
Irish Stock Exchange, these Listing Particulars will be filed with the Registrar of Companies of Ireland
pursuant to Regulation 13 of the European Communities (Stock Exchange) Regulations, 1984 Ireland.

8. Regulation S Global Notes have been accepted for clearance through Euroclear and Clearstream. The
table below lists the CUSIP Numbers and the International Securities Identification Numbers for
Regulation S Global Notes and Rule 144A Global Notes.

Regulation S Regulation S Restricted

CUSIP Numbers ISIN Numbers CUSIP Numbers
Class A-1LA G90451 AA 6 USG90451AA62 896087 AA 1
Class A-1LB G90451 AB 4 USG90451AB46 896087 AB 9
Class A-2L G90451 AC 2 USG90451AC29 896087 AC 7
Class A-3L G90451 AD 0 USG90451AD02 896087 AD 5
Class A-4L G90451 AE 8 USG90451AE84 896087 AE 3
Class B-1L G90451 AF 5 USG90451AF59 896087 AF 0

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 CERTAIN LEGAL MATTERS

The validity of the Notes and certain other legal matters, including certain matters relating to certain
United States federal tax consequences of the ownership of the Notes, will be passed upon for the Issuer and the
Initial Purchasers by Schulte Roth & Zabel LLP, New York, New York. Certain legal matters relating to Cayman
Islands law will be passed upon for the Issuer by Maples and Calder. As to all matters of Cayman Islands law,
Schulte Roth & Zabel LLP will rely on the opinions of Maples and Calder. Certain legal matters will be passed
upon for the Collateral Manager by Cadwalader, Wickersham & Taft LLP, New York, New York.

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 FINANCIAL STATEMENTS

The Issuer confirms that as of the date of this Confidential Offering Circular (a) the Issuer has not
commenced business, (b) no dividends have been declared or paid, (c) the directors have not approved any
financial statements for laying before a general meeting of the Issuer and (d) the auditor has not audited any
financial statements of the Issuer.

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 EXHIBIT 1 – MOODY'S WEIGHTED AVERAGE RECOVERY RATE

CDO Security, or Synthetic Security the Reference Obligation of which is a CDO Security, with a Diversity Score
in excess of 20

Rating of a Tranche*

Tranche as % of capital structure** Aaa Aa A Baa Ba B

Greater than 70% 85% 80% 65% 55% 45% 30%
Less than or equal to 70% but greater than 10% 75% 70% 60% 50% 40% 25%
Less than or equal to 10% but greater than 5% 65% 55% 50% 40% 30% 20%
Less than or equal to 5% but greater than 2% 55% 45% 40% 35% 25% 10%
Less than or equal to 2% 45% 35% 30% 25% 10% 5%

CDO Security, or Synthetic Security the Reference Obligation of which is a CDO Security, with a Diversity Score
of 20 or less

Rating of a Tranche*

Tranche as % of capital structure** Aaa Aa A Baa Ba B

Greater than 70% 85% 75% 60% 50% 45% 30%
Less than or equal to 70% but greater than 10% 70% 60% 55% 45% 35% 25%
Less than or equal to 10% but greater than 5% 60% 50% 45% 35% 25% 15%
Less than or equal to 5% but greater than 2% 50% 40% 35% 30% 20% 10%
Less than or equal to 2% 30% 25% 20% 15% 7% 4%

*
Initial rating, upon issuance of the respective item of Portfolio Collateral.
**
Initial capital structure, upon issuance of the respective item of Portfolio Collateral.

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 EXHIBIT 2 – S&P WEIGHTED AVERAGE RECOVERY RATE

If the Portfolio Collateral is a Synthetic Security, the S&P Weighted Average Recovery Rate will
be based on the Reference Obligation of such Synthetic Security.

If the Portfolio Collateral (other than a Synthetic Security or an item of Portfolio Collateral
guaranteed by a corporate guarantor or a monoline financial insurance company) is the senior-most tranche of
securities issued by the issuer of such Portfolio Collateral:

S&P Rating of Assets * S&P Rating of Liabilities

AAA AA A BBB BB B CCC

"AAA" 80.0% 85.0% 90.0% 90.0% 90.0% 90.0% 90.0%

"AA-," "AA" or "AA+" 70.0% 75.0% 85.0% 90.0% 90.0% 90.0% 90.0%

"A-," "A" or "A+" 60.0% 65.0% 75.0% 85.0% 90.0% 90.0% 90.0%

"BBB-," "BBB" or "BBB+" 50.0% 55.0% 65.0% 75.0% 85.0% 85.0% 85.0%

If the Portfolio Collateral (other than a Synthetic Security or an item of Portfolio Collateral
guaranteed by a corporate guarantor or a monoline financial insurance company) is not the senior-most tranche of
securities issued by the issuer of such Portfolio Collateral:

S&P Rating of Assets * S&P Rating of Liabilities (%)

AAA AA A BBB BB B CCC
"AA-," "AA" or "AA+" 55.0% 65.0% 75.0% 80.0% 80.0% 80.0% 80.0%

"A-," "A" or "A+" 40.0% 45.0% 55.0% 65.0% 80.0% 80.0% 80.0%

"BBB-," "BBB" or "BBB+" 30.0% 35.0% 40.0% 45.0% 50.0% 60.0% 70.0%

"BB-," "BB" or "BB+" 10.0% 10.0% 10.0% 25.0% 35.0% 40.0% 50.0%

"B-," "B" or "B+" 2.5% 5.0% 5.0% 10.0% 10.0% 20.0% 25.0%

"CCC+" and below 0.0% 0.0% 0.0% 0.0% 2.5% 5.0% 5.0%

*
Rating upon inclusion as an item of Portfolio Collateral.

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 EXHIBIT 3 – FITCH SECTORS AND INDUSTRY CLASSIFICATIONS

Each item of Portfolio Collateral is assigned one of eleven sectors: Real Estate, CMBS, RMBS
Prime, RMBS Subprime, Consumer ABS, Commercial ABS-Small Business, Commercial ABS-
Travel/Transportation, Commercial ABS-Other, CDO of Corporates, CDO of ABS and Corporates.

In addition, each item of Portfolio Collateral is assigned a subsector. The following includes the
sectors and subsectors which may be assigned to each item of Portfolio Collateral:

CMBS
Large Loan
Conduit
Credit Tenant Leases
RMBS Prime
Residential A
Alt A
RMBS Subprime
Home Equity
High LTV
Manufactured Housing
Residential B/C
Real Estate
REIT-Apartments
REIT-Diversified
REIT-Industrial/Office
REIT-Healthcare
REIT-Hotels
REIT-Retail
CDO of Corporates
Cashflow
Market Value
Synthetic
CDO of ABS
Cashflow
Market Value
Synthetic
Consumer ABS
Credit Cards
Auto Prime
Auto SubPrime
Consumer Loans
Student Loans
Charged Off Credit Cards
Motorcycles
Timeshare
RV/Boats
Other
Commercial ABS-
Small Business

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Equipment Leases
Franchise Loans
Inventory Financing
Small Business Loans
Tax Liens
Commercial ABS-
Travel/Transportation
Aircraft Loans/Leases
Dealer Floorplan
Rail Car
Rental Fleet
Taxi Medallion
Commercial ABS-
Other
12B1 Fees
Agriculture Loans
Future Flow
Healthcare Receivables
Intellectual Property
Other
Stadium Financing
Structured Settlements
Utility Stranded Costs
Weather Bonds
Corporate
Aerospace & Defense
Automobiles
Banking & Finance
Broadcasting/Media/Cable
Building & Materials
Business Services
Chemicals
Computers & Electronics
Consumer Products
Energy
Food, Beverage & Tobacco
Gaming, Leisure & Entertainment
Health Care & Pharmaceuticals
Industrial/Manufacturing
Lodging & Restaurants
Metals & Mining
Packaging & Containers
Paper & Forest Products
Real Estate
Retail (General)
Supermarkets & Drugstores
Telecommunications
Textiles & Furniture
Transportation

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Utilities

Note: Deals guaranteed by an insurer/guarantor should be categorized under Banking & Finance for purposes of Fitch sector.
LTV – Loan-to-value ratio. RV – Recreational vehicle.

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 EXHIBIT 4 – FITCH RECOVERY RATE MATRIX

Domicile Seniority AAA AA A BBB BB B

ABS Senior ( > 10% ) 60% 65% 75% 85% 90% 95%
ABS Senior ( < 10% ) 48% 56% 64% 72% 76% 80%
ABS Mezzanine IG ( > 10%) 30% 38% 46% 54% 65% 75%
ABS Mezzanine IG ( < 10%) 20% 27% 35% 42% 50% 55%
ABS Non IG ( > 10%) 15% 18% 21% 26% 32% 35%
ABS Non IG ( < 10%) 0% 4% 8% 12% 16% 20%
United States REITS 52% 55% 59% 62% 63% 65%
United States Senior Secured (Non IG) 56% 60% 63% 67% 68% 70%
United States Junior Secured (Non IG) 24% 26% 27% 29% 29% 30%
Senior Unsecured (Non
United States IG) 36% 38% 41% 43% 44% 45%
United States Subordinate (Non IG) 24% 26% 27% 29% 29% 30%
United States Senior Unsecured (IG) 44% 47% 50% 52% 54% 55%
United States Subordinate (IG) 24% 26% 27% 29% 29% 30%
Emerging Markets 20% 21% 23% 24% 24% 25%
Japan 16% 17% 18% 19% 20% 20%

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 ANNEX A

GLOSSARY OF CERTAIN DEFINED TERMS

Set forth below are definitions of certain defined terms used in this Confidential Offering Circular.

"Additional Overcollateralization Test": As described under "Description of the Notes—Additional

Overcollateralization Test."

"Adjusted Collateral Collections": With respect to any Payment Date, the sum of (i) the Adjusted
Collateral Interest Collections collected during the applicable Due Period and (ii) the Adjusted Collateral
Principal Collections collected during the applicable Due Period, as each is determined as of the Calculation Date
relating to such Payment Date.

"Adjusted Collateral Interest Collections": As defined under "Description of the Notes—Payments on

the Notes—Priority of Payments—Adjusted Collateral Collections."

"Adjusted Collateral Principal Collections": As defined under "Description of the Notes— Payments
on the Notes—Priority of Payments—Adjusted Collateral Collections."

"Administrator": Maples Finance Limited, or any successor appointed by the Issuer.

"Affiliate": With respect to any specified Person, any other Person controlling or controlled by or under
common control with such specified Person. For the purposes of this definition, "control," when used with
respect to any specified Person, means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing; provided that (for the avoidance of
doubt) the only Affiliate of the Issuer shall be the Co-Issuer and the only Affiliate of the Co-Issuer shall be the
Issuer.

"Aggregate Portfolio Balance": An amount equal to (i) prior to the Ramp-Up Completion Date (but
excluding the calculation with respect to the Ramp-Up Completion Date), U.S.$250,000,000 (unless the amount
in clause (ii) is greater, in which case clause (ii) shall apply) and (ii) with respect to the Ramp-Up Completion
Date and thereafter, the sum of, without duplication, (A) the Aggregate Portfolio Collateral Principal Balance, (B)
the aggregate principal payments on the Portfolio Collateral (including such amounts reinvested in Eligible
Investments) received (including any recoveries on Defaulted Portfolio Collateral), (C) Sale Proceeds (excluding
payments in respect of accrued interest), and (D) the Principal Balance of all Eligible Investments purchased with
the amounts set forth in clauses (A) through (C) above; provided that in each case under clauses (A) through (C)
such proceeds have not been used to amortize the Notes.

"Aggregate Portfolio Collateral Principal Balance": With respect to the Portfolio Collateral or a
specified portion thereof, the sum of the Principal Balances of all Portfolio Collateral or such specified portion
thereof.

"Aggregate Principal Amount": With respect to any date of determination, when used with respect to
any Portfolio Collateral, the Aggregate Portfolio Collateral Principal Balance of such Portfolio Collateral on such
date of determination. With respect to any date of determination, when used with respect to any Eligible
Investments, the Balance of such Eligible Investments on such date of determination. When used with respect to
any Class of Notes (other than the Class C Notes), as of any date of determination, the original principal amount
of such Class of Notes reduced by all prior payments, if any, made with respect to principal of such Notes. When
used with respect to the Notes (other than the Class C Notes) in the aggregate, the sum of the Aggregate Principal
Amount of each Class of Notes (other than the Class C Notes).

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 "Applicable Periodic Rate": With respect to each Class of Notes and for each Periodic Interest Accrual
Period as described under "Description of the Notes—Payments on the Notes."

"Asset Backed CDO Security": A CDO Security that entitles the holders thereof to receive payments
that depend (except for rights or other assets designed to assure the servicing or timely distribution of proceeds to
holders of the CDO Securities) on the credit exposure to, or cash flow from, a portfolio of collateral of which at
least 20% is constituted of Asset Backed Securities.

"Asset Backed Securities": Securities that entitle the holders thereof to receive payments that depend
primarily on the cash flow from a pool of specified financial assets, either fixed or revolving, that by their terms
convert into cash within a finite time period, together with rights or other assets designed to assure the servicing
or timely distribution of proceeds to holders of the securities.

"Available Funds": With respect to any Payment Date, the amount of any positive balance in the
Collection Account as of the Calculation Date relating to such Payment Date.

"Balance": On any date, with respect to cash or Eligible Investments in the Collection Account, the
Initial Deposit Account, the Initial Period Reserve Account, the Securities Lending Account, the Closing Expense
Account or the Expense Reimbursement Account, the aggregate (i) face amount or current balance, as the case
may be, of cash, demand deposits, time deposits, certificates of deposit, bankers' acceptances, federal funds and
commercial bank money market accounts; (ii) outstanding principal amounts of interest-bearing government and
corporate securities; and (iii) purchase price of non-interest-bearing government and corporate securities,
commercial paper and repurchase obligations.

"Bank": JPMorgan Chase Bank.

"Benefit Plan Investor" has the meaning specified in the Plan Asset Regulation of the U.S. Department
of Labor, 29 C.F.R. Section in 2510, 3-101(f).

"Business Day": Any day that is not a Saturday, Sunday or other day on which commercial banking
institutions in the City of New York, United States of America or in any other city in which the corporate trust
office is located are authorized or obligated by law or executive order to be closed. To the extent action is
required of the Irish Paying Agent, Dublin, Ireland shall be considered in determining "Business Day" for
purposes of determining when such Irish Paying Agent action is required.

"C Note Components": The C-1 Note Component and the C-2 Note Component.

"C-1 Note Component": The component of the Class 1 Principal Protected Securities representing Class
C-1 Notes having an aggregate initial principal amount of U.S.$5,000,000.

"C-2 Note Component": The component of the Class 2 Principal Protected Securities representing Class
C-2 Notes having an aggregate initial principal amount of U.S.$2,145,000.

"Calculation Agent": Initially, the Trustee.

"Calculation Date": The last day of each Due Period.

"Cashflow Swap Agreement": An agreement to be entered into on the Closing Date between the Issuer
and the Cashflow Swap Provider, as the same may be amended from time to time.

"Cashflow Swap Cancellation Event: With respect to any date of determination, that an Event of
Default described in clause (i), (vi) or (vii) under "Legal Structure—The Indenture—Events of Default" has
occurred and is continuing, provided that no Cashflow Swap Cancellation Event shall occur as the result of an
Event of Default arising solely as a result of the failure of the Cashflow Swap Provider to pay any amount due on
the Senior Class A Notes.

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 "Cashflow Swap Fee Payment: For each Payment Date, an amount equal to the product of (i) 0.10%
and (ii) the aggregate outstanding amount of the Senior Class A Notes as of the first day of the related Periodic
Interest Accrual Period (after giving effect to payment thereof on such first day of such Periodic Interest Accrual
Period) and (iii) the number of days during the Periodic Interest Accrual Period ending on such Payment Date
divided by 360.

"Cashflow Swap Provider": A counterparty listed as such in the Cashflow Swap Agreement and, at the
time such Cashflow Swap Agreement is entered into, whose (i) long term senior unsecured debt rating shall be at
least "Aa3" by Moody's and, if rated "Aa3," such rating is not on credit watch with negative implications, if such
counterparty does not have a short term rating by Moody's, (ii) short term rating shall be "P-1" by Moody's and
such rating is not on credit watch with negative implications and long term senior unsecured debt rating shall be at
least A1 by Moody's and, if rated "Aa1," such rating is not on credit watch with negative implications (if such
counterparty has a short term rating by Moody's), (iii) short term rating shall be at least "A-1" by S&P (or, if such
counterparty does not have a short term rating by S&P, whose long term senior unsecured debt rating shall be at
least "A+" by S&P) and (iv) whose short term rating shall be at least "F1" by Fitch (if rated by Fitch). Any
required ratings for a Cashflow Swap Provider shall be satisfied if the guarantor of such Cashflow Swap
Provider's obligations under the applicable Cashflow Swap Agreement satisfies such required ratings.

"Cashflow Swap Provider Accrual Rate ": (a) so long as the Class A-1L Notes or the Class A-2L Notes
are Outstanding, LIBOR plus 0.925% (or a lesser rate as determined in accordance with the Indenture) and (b)
thereafter, the Applicable Periodic Rate for the Class A-3L Notes.

"Cashflow Swap Shortfall Amount": For each Payment Date (so long as the Senior Class A Notes are
Outstanding), the amount equal to the lesser of: (i) the Interest Shortfall Amount and (ii) the Deferred Shortfall
Amount; provided, however, that the Cashflow Swap Shortfall Amount shall not include any portion of the
Deferred Shortfall Amount or the Interest Shortfall Amount, as applicable, that is attributable to any item of
Portfolio Collateral that has become a Deferred Interest PIK Bond and that has not been sold or disposed of within
two years of the date on which such item of Portfolio Collateral last became a Deferred Interest PIK Bond.

"CDO of CDO Securities": A CDO Security with respect to which all or substantially all of the assets
consist of other CDO Securities.

"CDO Security": A U.S. dollar-denominated collateralized bond obligation, a collateralized loan

obligation or a similar obligation; provided that "CDO Security" shall not include (i) any Market Value CDO
Security or (ii) any collateralized bond obligation, collateralized loan obligation or similar obligation secured by a
reference pool the assets of which are not disclosed to the holders of such obligation.

"Class": The Class A-1LA Notes, the Class A-1LB Notes, the Class A-2L Notes, the Class A-3L Notes,
the Class A-4L Notes, the Class B-1L Notes and the Class C Notes, as the case may be; provided that (i) the Class
C Notes shall not have any voting or consent rights and (ii) the Principal Protected Securities shall not vote as a
separate class but shall participate in any vote of the Preference Shares to the extent of the Preference Share
Components.

"Class 1 Preference Share Component": The component of the Class 1 Principal Protected Securities
representing in the aggregate 2,405,691 Preference Shares.

"Class 1 Principal Protected Securities": The U.S.$5,000,000 face amount of Principal Protected
Securities due February 28, 2016, comprised of the C-1 Note Component and the Class 1 Preference Share
Component.

"Class 1 Treasury Note": A United States Treasury zero (CUSIP# 912833KG4), on which no payments
of interest will be made, and on which a single scheduled payment of U.S.$5,000,000 will be due at maturity on
February 15, 2016.

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 "Class 2 Preference Share Component": The component of the Class 2 Principal Protected Securities
representing in the aggregate 1,000,000 Preference Shares.

"Class 2 Principal Protected Securities": The U.S.$2,145,000 face amount of Principal Protected
Securities due February 28, 2016, comprised of the C-2 Note Component and the Class 2 Preference Share
Component.

"Class 2 Treasury Note": A United States Treasury zero (CUSIP# 912833KG4), on which no payments
of interest will be made, and on which a single scheduled payment of U.S.$2,145,000 will be due at maturity on
February 15, 2016.

"Class A Overcollateralization Percentage": As described under "Description of the Notes—

Overcollateralization Tests."

"Class A Overcollateralization Ratio": As described under "Description of the Notes—

Overcollateralization Tests."

"Class A-1L Notes": The Class A-1LA Notes and the Class A-1LB Notes.

"Class A-1L/A-2L Notes Principal Payment Priority": As defined under "Description of the Notes—
Payments on the Notes—Priority of Payments."

"Class A-1LA Notes": The U.S.$76,500,000 Class A-1LA Floating Rate Notes Due February 2016.

"Class A-1LB Notes": The U.S.$8,500,000 Class A-1LB Floating Rate Notes Due February 2016.

"Class A-2L Notes": The U.S.$85,000,000 Class A-2L Floating Rate Notes Due February 2016.

"Class A-3L Notes": The U.S.$35,000,000 Class A-3L Floating Rate Notes Due February 2016.

"Class A-4L Notes": The U.S.$12,000,000 Class A-4L Floating Rate Notes Due February 2016.

"Class A Notes": The Class A-1LA Notes, the Class A-1LB Notes, the Class A-2L Notes, the Class
A-3L Notes and the Class A-4L Notes.

"Class B-1L Notes": The U.S.$20,000,000 Class B-1L Floating Rate Notes Due February 2016.

"Class B-1L Principal Payment": U.S.$150,000.

"Class B Overcollateralization Percentage": As described under "Description of the Notes—

Overcollateralization Tests."

"Class B Overcollateralization Ratio": As described under "Description of the Notes—

Overcollateralization Tests."

"Class C Collateral": The Class C-1 Collateral and the Class C-2 Collateral.

"Class C Noteholder": The Holder of a Class C Note.

"Class C Notes": The Class C-1 Notes and the Class C-2 Notes.

"Class C Stated Maturity": February 15, 2016; provided that if such date is not a Business Day, the
Class C Stated Maturity shall be the next following Business Day.

"Class C-1 Collateral": Collectively, the Class C-1 Collateral Account, the Class 1 Treasury Note and
any proceeds therefrom.

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 "Class C-1 Collateral Account": The segregated non-interest bearing trust account, which shall be held
in trust for the benefit of the Holders of the Class C-1 Notes.

"Class C-1 Notes": The U.S.$5,000,000 Class C-1 Notes Due February 2016, issued by the Issuer
pursuant to the Indenture.

"Class C-2 Collateral": Collectively, the Class C-2 Collateral Account, the Class 2 Treasury Note and
any proceeds therefrom.

"Class C-2 Collateral Account": The segregated non-interest bearing trust account, which shall be held
in trust for the benefit of the Holders of the Class C-2 Notes.

"Class C-2 Notes": The U.S.$2,145,000 Class C-2 Notes Due February 2016, issued by the Issuer
pursuant to the Indenture.

"Clean-up Call": A redemption of the Class A-3L Notes, the Class A-4L Notes and the Class B-1L
Notes as described under "Description of the Notes—Clean-up Call."

"Clean-up Call Date": The Payment Date (occurring on or after the Payment Date on which the
Aggregate Principal Amount of the Class A-1L Notes and the Class A-2L Notes has been reduced to zero) fixed
by the Issuer for a Clean-up Call.

"Clean-up Call Price": The sum of (i) the Cumulative Interest Amount of the Class A-3L Notes, the
Class A-4L Notes and the Class B-1L Notes with respect to the Clean-up Call Date and (ii) the Aggregate
Principal Amount of the Class A-3L Notes, the Class A-4L Notes and the Class B-1L Notes as of the Clean-up
Call Date.

"CLN Issuer": Each of the issuers of Synthetic Securities in the form of credit-linked notes included in
the Portfolio Collateral.

"Closing Date": January 14, 2004.

"Closing Expense Account": An account maintained by the Issuer with the Trustee into which an
amount necessary to pay closing expenses will be deposited on the Closing Date.

"Code": The United States Internal Revenue Code of 1986, as amended.

"Co-Issuer": Tricadia CDO 2003-1 Corp., a Delaware corporation.

"Co-Issuers": The Issuer and the Co-Issuer.

"Collateral Interest Collections": With respect to any Payment Date, the sum (without duplication) of
(i) all payments of interest with respect to any Portfolio Collateral (including, (x) with respect to Defaulted
Portfolio Collateral, any amount exceeding the par amount thereof and (y) any receipts of accrued interest and any
payments (other than principal, or with respect to Defaulted Portfolio Collateral) received pursuant to a consent or
similar solicitation) which are received during the applicable Due Period, (ii) any amount transferred from the
Initial Period Reserve Account on the Payment Date in August 2004, (iii) any amount transferred from the
Closing Expense Account on or before the first Payment Date after the payment of the closing expenses, (iv) the
Reinvestment Income, if any, in the Collection Account which is received during the applicable Due Period, as
determined as of the Calculation Date relating to such Payment Date, (v) all fees collected under any Securities
Lending Agreement during the applicable Due Period and the portion of any payment from a Securities Lending
Counterparty relating to an item of Portfolio Collateral that has been loaned pursuant to a Securities Lending
Agreement that would have constituted Collateral Interest Collections had such payment been made by the issuer
of such loaned Portfolio Collateral (other than the deposit, substitution or addition of Securities Lending
Collateral or as otherwise provided in the Indenture in respect of the proceeds of the liquidation of any Securities
Lending Collateral) and (vi) any Premium received with respect to any item of Portfolio Collateral, (x) so long as
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the Collateral Quality Tests and the Interest Coverage Tests have been satisfied and (y) so long as the
Overcollateralization Ratios are not less than the Overcollateralization Ratios as of the Ramp-Up Completion
Date, in each case immediately following the sale or redemption of such item of Portfolio Collateral. In addition,
any amounts on deposit in the Initial Deposit Account that constitute Reinvestment Income not applied to
purchase (or committed to purchase) Portfolio Collateral by the Ramp-Up Completion Date will be applied as
Collateral Interest Collections on the Payment Date in May 2004.

"Collateral Management Fee": The Junior Management Fee and the Senior Management Fee.

"Collateral Principal Collections": With respect to any Payment Date, (i) all payments of any principal
with respect to any Portfolio Collateral (other than (a) Reinvestment Income and (b) any payments received in
connection with a consent or similar solicitation but including principal received in connection with or any
payments received with respect to an item of Defaulted Portfolio Collateral in connection with a consent or
similar solicitation), (ii) all payments with respect to any Defaulted Portfolio Collateral in an aggregate amount
less than or equal to the par amount thereof, (iii) all Sale Proceeds which have not been reinvested (or committed
to be reinvested) in additional Portfolio Collateral (other than any Partial Redemption Sale Proceeds), (iv) all
amounts received from the Securities Lending Account or the Securities Lending Counterparty upon a default by
the Securities Lending Counterparty, (v) the portion of any payment from a Securities Lending Counterparty
relating to an item of Portfolio Collateral that has been loaned pursuant to a Securities Lending Agreement that
would have constituted Collateral Principal Collections had such payment been made by the Issuer of such loaned
Portfolio Collateral and (vi) any other amounts received by the Issuer that do not qualify as Collateral Interest
Collections. In addition, any amounts on deposit in the Initial Deposit Account (other than Reinvestment Income)
not applied to purchase (or committed to purchase) Portfolio Collateral by the Ramp-Up Completion Date will be
applied as Collateral Principal Collections on the Payment Date in May 2004.

"Collateral Quality Tests": Collectively, the S&P CDO Monitor Test, the Diversity Test, the Moody's
Rating Distribution Test, the Weighted Average Spread Test and the Weighted Average Recovery Rate Test;
provided, further, that any item of Portfolio Collateral loaned to a Securities Lending Counterparty shall be
included in the Collateral Quality Tests (so long as such Securities Lending Counterparty is not in default under
the related Securities Lending Agreement).

"Collateralization Event": An event under a Cashflow Swap Agreement that occurs when (so long as no
Substitution Event has occurred) (i)(x) the short term rating of the Cashflow Swap Provider or its guarantor from
Moody's is below "P-1" or is "P-1" and is on credit watch with negative implications by Moody's, or (y) the short
term rating of the Cashflow Swap Provider or its guarantor from S&P is below "A-1" or is "A-1" and is on credit
watch with negative implications by S&P or (ii)(x) if a short term rating is available, the long term rating of the
Cashflow Swap Provider or its guarantor from Moody's is below "A-1" or is "A-1" and is on credit watch with
negative implications by Moody's, or, if no short term rating is available, the long term rating of the Cashflow
Swap Provider or its guarantor from Moody's is withdrawn, suspended or downgraded below "Aa3," or is "Aa3"
and is on credit watch with negative implications, or (y) if a short term rating is available, the long term rating of
the Cashflow Swap Provider or its guarantor from S&P is below "A+" or is "A+" and is on credit watch with
negative implications by S&P, or, if no short term rating is available, the long term rating of the Cashflow Swap
Provider or its guarantor from S&P is withdrawn, suspended or downgraded below "AA-," or is "AA-" and is on
credit watch with negative implications, or (iii) the short term rating of the Cashflow Swap Provider or its
guarantor from Fitch is below "F1" (if rated by Fitch).

"Collection Account": The Collection Account established with the Trustee for use in connection with
the collection and disbursement of Collections.

"Collections": With respect to any Payment Date, the sum of (i) the Collateral Interest Collections
collected by the Issuer during the related Due Period and (ii) the Collateral Principal Collections collected by the
Issuer during the related Due Period, as each is determined as of the Calculation Date relating to such Payment
Date.

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 "Controlling Class": The Class A-1LA Notes and Class A-1LB Notes Outstanding (voting together as a
single class), so long as any Class A-1LA Notes and Class A-1LB Notes are Outstanding, then the Class A-2L
Notes Outstanding, so long as any Class A-2L Notes are Outstanding, then the Class A-3L Notes Outstanding, so
long as any Class A-3L Notes are Outstanding, then the Class A-4L Notes Outstanding, so long as any Class A-
4L Notes are Outstanding, then the Class B-1L Notes Outstanding, so long as any Class B-1L Notes are
Outstanding and then the Preference Shares.

"Co-Placement Agent": CDC Securities.

"Credit Improved Criteria": With respect to an item of Portfolio Collateral after acquisition by the
Issuer, (a) placement by Moody's, S&P or Fitch of such item of Portfolio Collateral on its credit watch list with
potential positive credit implications or the upgrade of the rating of such item of Portfolio Collateral by one or
more sub-categories from the rating in effect on the date such obligation became Portfolio Collateral; or
(b) placement by Moody's, S&P or Fitch of any other class of security issued together with such item of Portfolio
Collateral on its credit watch list with potential positive credit implications or the upgrade of the rating of such
security by one or more sub-categories from the rating in effect on the date the relevant item of Portfolio
Collateral issued together with such security became Portfolio Collateral.

"Credit Improved Portfolio Collateral": An item of Portfolio Collateral that, in the reasonable business
judgment of the Collateral Manager, has a market price that is greater than the price warranted by its terms and
credit characteristics (including, but not limited to, country, currency, ratings and business line) and has improved
in credit quality since its acquisition by the Issuer; provided that if, at the time of any proposed sale of such
Portfolio Collateral, the rating of the Class A-1LA Notes, the Class A-1LB Notes or the Class A-2L Notes issued
by Moody's on the Closing Date has been downgraded by one or more rating subcategories (and such rating has
not been reinstated) or the rating of the Class A-3L Notes, the Class A-4L Notes or the Class B-1L Notes issued
by Moody's on the Closing Date has been downgraded by two or more rating subcategories (and such rating has
not been reinstated or upgraded at least to a rating one subcategory below the rating issued by Moody's on the
Closing Date), such item of Portfolio Collateral must satisfy the Credit Improved Criteria.

"Credit Risk Criteria": With respect to an item of Portfolio Collateral after acquisition by the Issuer,
(a) placement by Moody's, S&P or Fitch of such item of Portfolio Collateral on its credit watch list with potential
negative or developing credit implications or deterioration of the rating of such item of Portfolio Collateral by one
or more sub-categories from the rating in effect on the date such obligation became Portfolio Collateral;
(b) placement by Moody's, S&P or Fitch of any other class of security issued together with such item of Portfolio
Collateral on its respective credit watch list with potential negative or developing credit implications or
deterioration of the rating of such security by one or more sub-categories from the rating in effect on the date the
related Portfolio Collateral issued together with such security became Portfolio Collateral; or (c) a decline in the
par amount of underlying collateral such that the aggregate par amount of the entire class of securities to which
such item of Portfolio Collateral belongs and all other securities secured by the same pool of collateral and that
rank senior in priority of payment to such class of securities exceeds the aggregate par amount of all collateral
(excluding defaulted collateral) securing such securities.

"Credit Risk Portfolio Collateral": An item of Portfolio Collateral that, in the reasonable business
judgment of the Collateral Manager, may have a significant risk of declining in credit quality and, with the
passage of time, could become a Defaulted Obligation; provided that if, at the time of any proposed sale of such
item of Portfolio Collateral, the rating of the Class A-1LA Notes, the Class A-1LB Notes or the Class A-2L Notes
by Moody's or S&P on the Closing Date has been downgraded by one or more rating subcategories (and such
rating has not been reinstated) or the rating of the Class A-3L Notes, the Class A-4L Notes or the Class B-1L
Notes issued by Moody's on the Closing Date has been downgraded by two or more subcategories (and such
rating has not been reinstated or upgraded at least to a rating one subcategory below the rating issued by Moody's
on the Closing Date), such Portfolio Collateral must satisfy the Credit Risk Criteria.

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 "Cumulative Interest Amount": With respect to a Payment Date and a Class of Notes, the sum of the
applicable Periodic Interest Amount with respect to such Payment Date and the applicable Periodic Rate Shortfall
Amount, if any, with respect to such Payment Date.

"Default": Any event or condition the occurrence or existence of which would, with the giving of notice
or lapse of time or both become, an Event of Default.

"Defaulted Cashflow Swap Termination Payment": Any termination payment required to be made by
the Issuer to the Cashflow Swap Provider pursuant to the Cashflow Swap Agreement in the event of a termination
of such Cashflow Swap Agreement in respect of which such Cashflow Swap Provider is the Defaulting Party or
the Affected Party (each as defined in the Cashflow Swap Agreement).

"Defaulted Portfolio Collateral": Any item of Portfolio Collateral:

(1) as to which (a) the issuer thereof has defaulted in the payment of principal or interest or
(b) pursuant to its Underlying Instruments, there has occurred any default or event of default which
entitles the holders thereof, with notice or passage of time or both, to accelerate the maturity (whether by
mandatory prepayment, mandatory redemption or otherwise) of all or a portion of the outstanding
principal amount of such security, unless (x) in the case of a default or event of default consisting of a
failure of the obligor on such security to make required interest payments (which shall not include interest
on any PIK Bond permitted under the terms of the Underlying Instruments to be deferred or paid in kind),
such security has resumed current payments of interest in cash (whether or not any waiver or restructuring
has been effected) and all such delinquent required payments have been paid in full in cash or (y) in the
case of any other default or event of default, such default or event of default is no longer continuing and
such security satisfies the criteria for inclusion of securities in the definition of Portfolio Collateral;

(2) that ranks pari passu with or subordinate to any other material indebtedness for borrowed
money owing by the issuer of such security (for purposes hereof, "Other Indebtedness") if such issuer
has defaulted in the payment of principal or interest (beyond any applicable grace or notice period in no
event to exceed five business days) with respect to such Other Indebtedness, provided, however, that such
Other Indebtedness of such issuer will not include series of such Other Indebtedness that may be issued
or owing by a separate special purpose entity if such issuer has defaulted in the payment of principal or
interest in respect of such Other Indebtedness (after giving effect to any applicable notice or grace period
or waiver, but in no event exceeding five Business Days or the Rating Condition has been satisfied with
respect to such Portfolio Collateral not being treated as Defaulted Portfolio Collateral), unless, in the case
of a default or event of default consisting of a failure of the obligor on such security to make required
interest payments, such Other Indebtedness has resumed current payments of interest (including all
accrued interest) in cash (whether or not any waiver or restructuring has been effected) and all such
delinquent required payments have been paid in full in cash;

(3) with respect to which any bankruptcy, insolvency or receivership proceeding has been
initiated in respect of the issuer of such Portfolio Collateral, or there has been proposed or effected any
distressed exchange or other debt restructuring where the issuer of such Portfolio Collateral has offered
the debt holders a new security package or securities that either (A) amounts to a diminished financial
obligation or (B) has the purpose of helping the issuer to avoid default; or

(4) as to which S&P has assigned a rating of "D," "SD" or "CC" (or S&P has withdrawn its
rating which prior to such withdrawal was "D," "SD" or "CC"), Moody's has assigned a rating of "Ca" or
lower or Fitch has assigned a rating of "CC" or below; or

(5) other than with respect to a PIK Bond that is in default because the aggregate outstanding
amount of the securities of the issuer of the same tranche of such item of Portfolio Collateral, securities
pari passau to such tranche, and securities senior to such tranche exceeds the par value of the underlying
assets of such issuer.

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 Any such item of Portfolio Collateral shall continue to be an item of Defaulted Portfolio Collateral only
until such time as the default or event of default has been cured or, in the case of a default or event of default
other than a payment default, waived, and such security then otherwise satisfies the criteria for inclusion of
securities in the Trust Estate described in the definition of "Portfolio Collateral," as applicable to such security.

"Defaulted Principal Balance": As of any Measurement Date, with respect to each item of Portfolio
Collateral that is subject to calculation with respect to its Defaulted Principal Balance, the least of (A) the Market
Value of such item of Portfolio Collateral (as provided to the Trustee by the Collateral Manager in accordance
with the Management Agreement), (B) (i) in the case of any such item of Portfolio Collateral that constitutes a
CDO Security with a Diversity Score in excess of 20, the applicable percentage set forth on Exhibit 1 hereto of
the Principal Balance of such CDO Security, and (ii) in the case of any such Portfolio Collateral that constitutes a
CDO Security with a Diversity Score of 20 or less, the applicable percentage set forth on Exhibit 1 hereto of the
Principal Balance of such CDO Security, (C) (i) if such item of Portfolio Collateral (other than, in each case, a
Synthetic Security or an item of Portfolio Collateral that is guaranteed by a corporate guarantor or a monoline
financial insurance company) is the senior-most tranche of the securities issued by the issuer of such Portfolio
Collateral, the applicable percentage set forth on Exhibit 2 hereto of the Principal Balance of such item of
Portfolio Collateral; (ii) if such item of Portfolio Collateral (other than, in each case, a Synthetic Security, or an
item of Portfolio Collateral that is guaranteed by a corporate guarantor or a monoline financial insurance
company) is not the senior-most tranche of the securities issued by the issuer of such item of Portfolio Collateral,
the applicable percentage set forth on Exhibit 2 hereto of the Principal Balance of such item of Portfolio
Collateral; (iii) if such Portfolio Collateral is a Synthetic Security, the applicable percentage set forth on Exhibit 2
hereto with respect to the related Reference Obligation of the Principal Balance of such Portfolio Collateral; (iv) if
such item of Portfolio Collateral is guaranteed by a corporate guarantor, 40% of the Principal Balance of such
item of Portfolio Collateral; and (v) if such item of Portfolio Collateral is guaranteed by a monoline financial
insurance company, 50% of the Principal Balance of such item of Portfolio Collateral and (D) the applicable
percentage set forth on Exhibit 4 hereto of the Principal Balance of such item of Portfolio Collateral.

"Deferred Interest PIK Bond": As of any date of determination, any PIK Bond that is not an item of
Defaulted Portfolio Collateral that has, in accordance with its terms, deferred or paid "in-kind" any amount of
interest for a period equal to:

(a) in the case of an item of Portfolio Collateral that has a Moody's Rating below "Baa3" (or, if rated
"Baa3," is on credit watch for possible downgrade), or, if rated by S&P, a rating by S&P below "BBB-" (or, if
rated "BBB-," is on credit watch for possible downgrade) or, if rated by Fitch, a rating below "BBB-," the shorter
of one accrual period or six months; and

(b) in all other cases, the shorter of two accrual periods or twelve months;

and has not, as of such date of determination, resumed timely payment of current interest in cash and repaid all
outstanding deferred or capitalized interest in cash. For the avoidance of doubt, an item of Portfolio Collateral will
not constitute a Deferred Interest PIK Bond if it resumes timely payment of current interest in cash and repays all
outstanding deferred or capitalized interest in cash on the Payment Date immediately succeeding the end of the
interest accrual period(s) set forth above.

"Deferred Shortfall Amount": For each Payment Date, the aggregate amount of all scheduled interest
payments on Portfolio Collateral which were, during the related Due Period, deferred or paid "in-kind" in
accordance with the terms of such Portfolio Collateral, which deferral or payment "in-kind" does not constitute an
event of default pursuant to the terms of the related Portfolio Collateral.

"Definitive Notes": With respect to any Class, the definitive fully registered Notes of each Class sold in
the United States to Qualified Institutional Buyers who are U.S. Persons or issued in lieu of a Regulation S Global
Note under the circumstances described herein.

"Deposit": The cash deposited in the Initial Deposit Account on the Closing Date (excluding any
Reinvestment Income thereon).
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 "Diversity Test": As described under "Security for the Notes―Portfolio Collateral."

"DTC": Depository Trust Company or any successor thereto.

"Due Date": Each date on which a distribution or payment is due on a Pledged Security (which includes
any Eligible Investment).

"Due Period": With respect to any Payment Date, the period beginning on the day following the sixth
Business Day prior to the preceding Payment Date (or, in the case of the Due Period that is applicable to the first
Payment Date, beginning on the Closing Date) and ending on the sixth Business Day prior to such Payment Date
(or, in the case of the Due Period that is applicable to the Stated Maturity, such Due Period shall end on the day
preceding such Stated Maturity).

"Eligible Investments": Any U.S. dollar-denominated investment that is one or more of the following
(including securities entitlements thereto):

(a) direct registered obligations of, and registered obligations fully guaranteed by, the United
States of America or any agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America or United States Securities
Entitlements other than obligations or securities entitlements of the Federal Home Loan Mortgage
Corporation; provided, however, that in the case of obligations or United States Securities Entitlements
that are rated, each such obligation shall, at the time of its inclusion in the Trust Estate, have a credit
rating of "AA-" or better or "A-1+," as applicable, by S&P (except that investments in an amount up to
20% of the Aggregate Principal Amount of the Outstanding Notes may be rated "A-1") and "Aa3" or
better (if such obligation has a long term rating) or "P-1" by Moody's and "AA-" or better and "F1" by
Fitch (if rated by Fitch), as applicable;

(b) demand and time deposits in, and certificates of deposit of, any depository institution or
trust company (including the Trustee) incorporated under the laws of the United States of America or any
state thereof and subject to the supervision and examination by federal and/or state banking authorities so
long as the commercial paper and/or debt obligations of such depository institution or trust company (or,
in the case of the principal depository institution in a holding company system, the commercial paper or
debt obligations of such holding company) at the time of such investment or contractual commitment
providing for such investment have a credit rating of "AA-" or better, in the case of debt obligations, or
"A-1+" in the case of commercial paper, by S&P (except that investments in an amount up to 20% of the
Aggregate Principal Amount of the Outstanding Notes may be rated "A-1"), "Aa3" or better (if such
obligation has a long term rating) or "P-1" by Moody's and "F1" by Fitch (if rated by Fitch);

(c) registered securities bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States of America or any state thereof that have a credit rating
of "AA-" or better by S&P and "Aa3" or better (if such obligation has a long term rating) or "P-1" by
Moody's, at the time of such investment or contractual commitment providing for such investment;

(d) repurchase obligations with respect to any security described in clause (a) above, entered
into with a depository institution or trust company (acting as principal) described in clause (b) above
(including the Trustee) or entered into with a corporation (acting as principal) whose short term debt has a
credit rating of "A-1+" (except that investments in an amount up to 20% of the Aggregate Principal
Amount of the Outstanding Notes may be rated "A-1") by S&P and "Aa3" or better (if such obligation has
a long term rating) or "P-1" by Moody's and "F1" by Fitch (if rated by Fitch), at the time of such
investment in the case of any repurchase obligation for a security having a maturity not more than 183
days from the date of its issuance or whose long term debt has a credit rating of "AA-" or better by S&P,
"Aa3" or better by Moody's and "AA-" or better by Fitch (if such obligation has a long term rating) at the
time of such investment in the case of any repurchase obligation for a security having a maturity more
than 183 days from the date of its issuance;

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 (e) commercial paper having at the time of such investment a credit rating of "A-l+" (except
that an amount up to 20% of the Aggregate Principal Amount of the Outstanding Notes may be rated
"A-1") by S&P and "Aa3" or better (if such obligation has a long term rating), "P-1" by Moody's or "F1"
by Fitch (if rated by Fitch) and that has a maturity of not more than 183 days from its date of issuance;
provided, however, that in the case of commercial paper with a maturity of longer than 91 days, the issuer
of such commercial paper (or, in the case of a principal depository institution in a holding company
system, the holding company of such system), if rated by S&P, must have at the time of such investment
a long term credit rating of "AA-" or better by S&P, "Aa3" or better (if such obligation has a long term
rating) by Moody's and "AA-" or better by Fitch (if rated by Fitch);

(f) off-shore money market funds, the investments of which are limited to any investments
described in clauses (a) through (e) above and which funds have, at all times, the highest credit rating
assigned to such investment category by S&P and Moody's; and

(g) such other Eligible Investments acceptable to the Rating Agencies;

provided, however, that: (i) Eligible Investments purchased with funds in the Collection Account shall be
purchased at or below par and be held until maturity (or sold only for an amount at least equal to the par amount
of such Eligible Investment) and shall include only such obligations or securities as mature no later than the
Business Day prior to the next Payment Date and Eligible Investments purchased with funds in the Initial Deposit
Account shall be held until maturity (or sold only for an amount at least equal to the par amount of such Eligible
Investment) and shall include only such obligations or securities as mature no later than the Business Day prior to
the date expected to be applied; (ii) none of the foregoing obligations or securities shall constitute Eligible
Investments if all, or substantially all, of the remaining amounts payable thereunder shall consist of interest and
not principal payments; (iii) none of the S&P ratings required above shall have a subscript of "r" or "t"; (iv) none
of the foregoing obligations or securities shall constitute Eligible Investments if such obligations or securities are
mortgage-backed securities; (v) no such obligation may be Margin Stock, securities which have a mandatory
conversion to equity or securities which are subject to an Offer; (vi) Eligible Investments will not include any
mortgage-backed security, interest-only security, any security purchased at a price in excess of 100% of par or
any security whose repayment is subject to substantial non-credit related risk as reasonably determined by the
Issuer; (vii) none of the foregoing obligations or securities shall constitute Eligible Investments if such obligations
or securities are subject to withholding tax if owned by the Issuer (unless the issuer thereof is required to make
gross-up payments to the Issuer covering the amount of withholding tax); and (viii) any such investment
purchased based on the S&P short term rating of "A-1" must mature no later than 30 days after the date of
purchase. Eligible Investments may include those investments with respect to which the Trustee or its Affiliates
provides services or receives compensation.

"Emerging Market CDO Security": A CDO Security that permits more than 20% of the assets in the
reference pool to be issued by obligors in Emerging Market Countries.

"Emerging Market Country": A jurisdiction with a long term foreign currency rating equal to or less
than "Aa3" from Moody's or with a foreign currency issuer credit rating less than "AA" by S&P.

"Equity Portfolio Collateral": Any security that does not entitle the holder thereof to receive periodic
payments of interest and one or more installments of principal.

"ERISA": The United States Employee Retirement Income Security Act of 1974, as amended.

"Event of Default": The meaning specified herein under "Legal Structure—The Indenture—Events of
Default."

"Excess Amounts": The meaning specified herein under "Description of the Notes—Payments on the
Notes—Priority of Payments—Final Maturity Date."

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 "Expense Reimbursement Account": An account maintained by the Issuer with the Trustee into which
U.S.$50,000 will be deposited on the Closing Date for the purpose of paying Issuer Base Administrative Expenses
which are paid between Payment Dates when they are due and payable during such time.

"Final Maturity Date": With respect to any Class of Notes, the Stated Maturity or such earlier date on
which the Aggregate Principal Amount of such Class (including any Cumulative Interest Amount) is paid in full.

"Fitch": Fitch Ratings.

"Fitch Rating": A rating assigned by Fitch or derived in accordance with methodology prescribed by
Fitch and described in the Indenture.

"Fixed Rate Collateral": An item of Portfolio Collateral which bears interest at a fixed rate.

"Floating Rate Collateral": An item of Portfolio Collateral which bears interest at a floating rate.

"Global Notes": Rule 144A Global Notes, together with Regulation S Global Notes.

"High Yield CDO Security": A CDO Security that permits more than 40% of the assets in the reference
pool to be high yield bonds and, for the avoidance of doubt, is not an Emerging Market CDO Security.

"Holder" and "Noteholder": The Person in whose name a Note is registered in the Note Register.

"Indenture": The Indenture to be dated as of January 14, 2004 among the Issuer, the Co-Issuer and
JPMorgan Chase Bank, as Trustee and as securities intermediary, pursuant to which the Notes and the Principal
Protected Securities will be issued, as it may be amended or supplemented from time to time.

"Initial Deposit Account": As described under "Security for the Notes―Accounts" herein.

"Initial Investment Period: The period beginning on the Closing Date and ending on the day
immediately preceding the Ramp-Up Completion Date.

"Initial Period Reserve Account": The non-interest bearing trust account established by the Trustee into
which the Trustee will deposit the amount described under clause (vii) of "Description of the Notes—Priority of
Payments—Collateral Interest Collections."

"Initial Purchaser": Bear, Stearns & Co. Inc.

"Initial Purchasers": Bear, Stearns & Co. Inc. and CDC Securities.

"Insolvency Law": Any applicable liquidation, insolvency, bankruptcy, rehabilitation, composition,

reorganization, conservation or other similar law now or hereafter in effect.

"Interest Coverage Ratio": As described under "Description of the Notes—Interest Coverage Test."

"Interest Coverage Test": With respect to any Calculation Date after the first Payment Date until the
Senior Class A Notes are retired and all amounts payable in respect thereof are paid in full, a test met when the
Interest Coverage Ratio as of such Calculation Date is at least 2.20%. For purposes of the Interest Coverage Test
any item of Portfolio Collateral loaned to a Securities Lending Counterparty shall be included in the Interest
Coverage Test; provided, that such Securities Lending Counterparty is not in default under the related Securities
Lending Agreement.

"Interest Shortfall Amount": For each Payment Date, the amount, if any, by which (i) the amount of
interest required to be paid to the Holders of the Senior Class A Notes on such Payment Date exceeds (ii) the
amount of Collateral Interest Collections (exclusive of amounts to be advanced pursuant to the Cashflow Swap
Agreement) available to be paid as interest to the Holders of the Senior Class A Notes on such Payment Date in
accordance with the Priority of Payments.
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 "Investment Company Act": The United States Investment Company Act of 1940, as amended.

"Investment Grade CDO Security": A CDO Security with respect to which at least 80% of the assets in
the underlying pool are corporate bonds and/or leveraged loans rated "Baa3" or higher by Moody's, "BBB-" or
higher by S&P and "BBB-" or higher by Fitch (in each case, if rated by such Rating Agency).

"Irish Paying Agent": Ernst & Young, or any successors thereto.

"Issuer": Tricadia CDO 2003-1, Ltd., an exempted limited liability company incorporated under the laws
of the Cayman Islands.

"Issuer Base Administrative Expenses": With respect to any Payment Date, the Co-Issuers'
administrative expenses paid or payable by the Issuer during the applicable Due Period, including, without
limitation, (i) rating agency surveillance fees and shadow rating fees, if any, (ii) reimbursement of expenses
(including indemnities) of the Collateral Manager pursuant to the Management Agreement, (iii) reimbursement of
fees and expenses (including indemnities) of the Collateral Administrator pursuant to the Collateral
Administration Agreement, (iv) reimbursement of expenses (including indemnities) of the Reporting Agent
pursuant to the Reporting Agency Agreement, (v) fees due to the Irish Stock Exchange and (vi) all expenses
(including indemnities) of the Administrator, the accountants and the Irish Paying Agent, each as determined as of
the Calculation Date relating to such Payment Date and as set forth in the Note Valuation Report.

"Issuer Excess Administrative Expenses": With respect to any Payment Date, (i) the Trustee
Administrative Expenses (including indemnities) for the Due Period relating to such Payment Date in excess of
the amount provided for in clause (ii) of the definition thereof, (ii) Preference Shares Administrative Expenses
(including indemnities) for the Due Period relating to such Payment Date in excess of the amount provided for in
clause (ii) of the definition thereof and (iii) other administrative expenses paid or payable by the Co-Issuers
during the applicable Due Period, as determined as of the Calculation Date relating to such Payment Date and as
set forth in the related Note Valuation Report, in excess of the amount of the Issuer Base Administrative Expenses
for the corresponding period.

"Junior Management Fee: The quarterly fee payable to the Collateral Manager in arrears on each
Payment Date in accordance with the Priority of Payments, in an amount equal to 0.31% per annum of the
Aggregate Portfolio Balance as of the preceding Payment Date (or, in the case of the initial Payment Date, as of
the Closing Date).

"Junior Securities Offering Circular": The Confidential Offering Circular pursuant to which the
Preference Shares and the Principal Protected Securities will be offered.

"Leveraged Loan CDO Security": A CDO Security that permits more than 40% of the assets in the
reference pool to be leveraged loans and, for the avoidance of doubt, is not an Emerging Market CDO Security.

"LIBOR": For any Periodic Interest Accrual Period, a floating rate equal to the London interbank offered
rate for three-month U.S. dollar deposits (or in the case of the initial Periodic Interest Accrual Period, four-month
U.S. dollar deposits), in each case as determined by the Calculation Agent as described herein under "Description
of the Notes—Payments on the Notes."

"LIBOR Determination Date": The second London Business Day prior to the commencement of a
Periodic Interest Accrual Period.

"London Business Day": Any day on which dealings in deposits in U.S. dollars are transacted in the
London interbank market.

"Majority": With respect to any Class or Classes of the Notes or the Principal Protected Securities, the
holders of greater than 50% of the Aggregate Principal Amount of the Notes of such Class or Classes or the
Principal Protected Securities and, with respect to the Preference Shares, the holders of greater than 50% of such
outstanding Preference Shares.
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 "Margin Stock": Means "margin stock" as defined under Regulation U issued by the Board of
Governors of the Federal Reserve System.

"Market Value": On any date of determination with respect to an item of Portfolio Collateral (including
Defaulted Portfolio Collateral) (A) the average of the bid prices provided by at least three independent broker-
dealers active in the trading of such item of Portfolio Collateral as provided by the Collateral Manager (B) if only
two determinations of such broker-dealers are made available, then the lower of the bid prices provided by such
broker-dealers to the Collateral Manager; or (C) if less than two determinations of such broker-dealers are made
available, then the bid side market value of such Portfolio Collateral as certified by the Collateral Manager to the
Trustee and determined by the Collateral Manager consistent with its customary practices.

"Market Value CDO Security": A collateralized bond obligation, collateralized loan obligation or
similar obligation whose overcollateralization is measured with reference to the market value of the Underlying
Securities securing such obligation.

"Measurement Date": (i) the Ramp-Up Completion Date, (ii) after the Ramp-Up Completion Date, on
any day upon which the purchase of an item of Portfolio Collateral occurs, (iii) on any Calculation Date occurring
after the Ramp-Up Completion Date and (iv) after the Ramp-Up Completion Date, with reasonable notice, on any
Business Day requested in writing by a Rating Agency or by the Holders of at least 66-2/3%, by Aggregate
Principal Amount, of any Class of Notes.

"Moody's": Moody's Investors Service, Inc. or any successor thereto.

"Moody's Rating": A rating assigned by Moody's or derived in accordance with methodology prescribed
by Moody's and described in the Indenture.

"Note Register": The register maintained by the Note Registrar for registration of the Notes.

"Note Registrar": JPMorgan Chase Bank.

"Note Valuation Report": With respect to each Payment Date, the report prepared by or on behalf of the
Issuer in accordance with the Indenture reflecting, among other things, the Collections made during the applicable
Due Period and the distributions to be made on such Payment Date.

"Notes": The Class A-1LA Notes, the Class A-1LB Notes, the Class A-2L Notes, the Class A-3L Notes,
the Class A-4L Notes and the Class B-1L Notes.

"O/C Redemption": The redemption of a Class or Classes of the Notes (including, with respect to the
Class B-1L Notes, the applicable Periodic Rate Shortfall Amount, as described herein) to the extent necessary
such that both the Overcollateralization Tests and the Interest Coverage Test are satisfied.

"Offer": With respect to any obligation, (a) any offer by the obligor of such obligation or by any other
person made to all of the holders of such class of obligation to purchase or otherwise acquire all such obligations
(other than pursuant to any redemption in accordance with the terms of the related Underlying Instruments) or to
exchange such obligation for any other obligation or other property or (b) any solicitation by the obligor of such
obligation or any other Person to amend, modify or waive any provision of such obligation or any related
Underlying Instrument.

"Offshore Transaction": The meaning given to such term in Regulation S.

"Optional Redemption Date": The Payment Date fixed by the Issuer for an Optional Redemption which
shall be no earlier than the Payment Date in February 2007.

"Optional Redemption Price": With respect to each Class of Notes, an amount equal to the aggregate of
(i) the Aggregate Principal Amount of such Class of Notes as of the Optional Redemption Date and (ii) the
applicable Cumulative Interest Amount with respect to the Optional Redemption Date.
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 "Outstanding": With respect to the Notes, as of the date of determination, "Outstanding" refers to all
Notes theretofore authenticated and delivered under the Indenture except:

(i) Notes theretofore canceled by the Note Registrar or delivered (or to be delivered pursuant
to the Indenture) to the Note Registrar for cancellation;

(ii) Notes or portions thereof for whose payment or redemption money in the necessary
amount has been theretofore irrevocably deposited with the Trustee or any Paying Agent in trust for the
Holders of such Notes; provided that if such Notes or portions thereof are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture or provision therefor satisfactory to the Trustee
has been made;

(iii) Notes in exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to the Indenture, unless proof satisfactory to the Trustee is presented that any such
Notes are held by a protected purchaser; and

(iv) Notes alleged to have been mutilated, destroyed, lost or stolen for which replacement
Notes have been issued as provided in the Indenture;

provided that in determining whether the Holders of the requisite Aggregate Principal Amount have given any
request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by or pledged to the
Issuer, the Co-Issuer, the Trustee or any other obligor upon the Notes or any Affiliate of the Issuer, the Co-Issuer,
the Trustee or of such other obligor, shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a responsible officer of the Trustee actually knows to be so
owned or pledged shall be so disregarded.

"Overcollateralization Ratio": The Senior Class A Overcollateralization Ratio, Class A

Overcollateralization Ratio or the Class B Overcollateralization Ratio, as the context may require.

"Overcollateralization Tests": With respect to any date of determination, a test met when the Senior
Class A Overcollateralization Ratio is at least equal to the Senior Class A Overcollateralization Percentage, the
Class A Overcollateralization Ratio is at least equal to the Class A Overcollateralization Percentage and the Class
B Overcollateralization Ratio is at least equal to the Class B Overcollateralization Percentage, each relating to
such date of determination.

"Partial Redemption Date": Any Payment Date on or after the Payment Date in February 2007 on
which the Notes (other than the Class C Notes) are redeemed in part as described under "Description of the
Notes—Partial Redemption."

"Partial Redemption Percentage": The meaning specified herein under "Description of the Notes—
Partial Redemption."

"Paying Agent": The Trustee, the Irish Paying Agent or any other depository institution or trust
company authorized by the Co-Issuers pursuant to the Indenture to pay principal of or any interest that may
become payable on any Class of Notes on behalf of the Co-Issuers.

"Payment Date": February 28, May 30, August 30 and November 30 of each year, commencing May 30,
2004 (or if any such date is not a Business Day, the next succeeding Business Day, unless that next succeeding
Business Day falls in a subsequent calendar month, in which event the relevant Payment Date will be the next
preceding Business Day).

"Periodic Interest": With respect to each Class of Notes, interest on such Class payable on each
Payment Date and accruing during each Periodic Interest Accrual Period at the Applicable Periodic Rate.

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 "Periodic Interest Accrual Period": With respect to any Payment Date, the period commencing on the
prior Payment Date (or the Closing Date in the case of the first Payment Date) and ending on the day preceding
such Payment Date.

"Periodic Interest Amount": With respect to each Class of Notes and any Payment Date, the aggregate
amount of interest accrued at the Applicable Periodic Rate during the related Periodic Interest Accrual Period on
the Aggregate Principal Amount of such Class on the first day of such Periodic Interest Accrual Period (after
giving effect to any payment of principal of such Class of Notes on such date).

"Periodic Rate Shortfall Amount": With respect to each Class of Notes and any Payment Date, any
shortfall or shortfalls in the payment of the Periodic Interest Amount on such Class of Notes with respect to any
preceding Payment Date or Payment Dates together with interest accrued thereon at the Applicable Periodic Rate
(net of all Periodic Rate Shortfall Amounts, if any, paid with respect to such Class of Notes prior to such Payment
Date).

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

"PIK Bond": Any debt security that, pursuant to the terms of the related Underlying Instruments, permits
the payment of interest thereon to be deferred and capitalized or otherwise provides that interest will accrue on
such deferred interest or that permits the issuance of identical securities in place of payments of interest in cash,
either (a) without the consent of the holder or holders thereof or (b) at the option of the holders of securities
secured by the same collateral pool but on a senior basis following a default or event of default with respect to
such senior securities.

"Plan Asset Regulation": The plan asset regulations of the U.S. Department of Labor, 29 C.F.R. Section
2510.3-101(f).

"Pledged Securities": On any date of determination, the Portfolio Collateral and the Eligible Investments
in the Trust Estate.

"Portfolio Collateral": As described under "Security for the Notes—Portfolio Collateral."

"Preference Share Components": The Class 1 Preference Share Component and the Class 2 Preference
Share Component.

"Preference Share Paying Agency Agreement": The Preference Share Paying Agency Agreement
dated as of the Closing Date among the Issuer, the Preference Share Paying Agent and the Share Registrar with
respect to the Preference Shares.

"Preference Share Paying Agent": JPMorgan Chase Bank, in its capacity as Preference Share Paying
Agent with respect to the Preference Shares (other than the Preference Share Components) pursuant to the
provisions of the Preference Share Paying Agency Agreement.

"Preference Shareholder": The registered holder of any Preference Share as set forth in the preference
share register maintained by the Share Registrar.

"Preference Shares": The 22,022,000 (including the Preference Share Components) Preference Shares
of the Issuer, par value U.S.$0.001 per share, issued pursuant to the Issuer's Amended and Restated Memorandum
of Association and Articles of Association.

"Preference Shares Administrative Expenses": With respect to any Payment Date (including without
limitation the Final Maturity Date), the sum of (i) a fee in an amount equal to one-quarter of U.S.$5,000 (or, upon
payment in full of the Notes, one-quarter of 0.015% of the Aggregate Principal Amount of the Portfolio Collateral
as of the Calculation Date relating to such Payment Date) representing the fees of the Preference Share Paying
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Agent and (ii) the Preference Share Paying Agent's administrative expenses for the Due Period relating to such
Payment Date (including indemnities), it being understood that the administrative expenses contemplated by
clause (ii) of this definition shall not exceed, in the aggregate for any calendar year, the sum of (a) after the
payment in full of the Notes, 0.04% times the Aggregate Principal Amount of the Portfolio Collateral as of the
Calculation Date relating to such Payment Date plus (b) U.S.$10,000.

"Premium": With respect to any item of Portfolio Collateral sold pursuant to the terms of the Indenture
or called pursuant to the terms thereof, the excess of (a) the sale or call price of such item of Portfolio Collateral
less any accrued interest with respect to such item of Portfolio Collateral over (b) the greater of (i) the Aggregate
Principal Amount of such item of Portfolio Collateral or (ii) the purchase price of such item of Portfolio Collateral
at the time of acquisition.

"Principal Balance": With respect to any Pledged Security, as of any date of determination, the
outstanding principal amount of such Pledged Security; provided that:

(a) the Principal Balance of any Synthetic Security shall be equal to the aggregate amount of
the repayment obligations of the Synthetic Security Counterparty payable to the Issuer through the maturity of
such Synthetic Security;

(b) the Principal Balance of any Equity Portfolio Collateral and the Class C Collateral shall
be deemed to be zero;

(c) the Principal Balance of any Deferred Interest PIK Bond shall not include any deferred or
capitalized interest; and

(d) for purposes of the calculation of the Overcollateralization Ratios, the Additional
Overcollateralization Test and Event of Default (viii), (i) if any item of Portfolio Collateral is an item of Defaulted
Portfolio Collateral or a Deferred Interest PIK Bond, its Principal Balance will be deemed to be the Defaulted
Principal Balance thereof and (ii) if any item of Portfolio Collateral (other than those included in clause (i) above)
was purchased at a purchase price of less than 75% of par, its Principal Balance shall be such purchase price until
such time as the Market Value of such item of Portfolio Collateral is greater than 90% of par for 30 consecutive
days.

"Principal Protected Securities": The Class 1 Principal Protected Securities and the Class 2 Principal
Protected Securities.

"Principal Protected Securityholder": With respect to the Principal Protected Securities, the Person in
whose name such Principal Protected Security is registered in the Note Register (with respect to the C Note
Components) and in whose name the Preference Share Component of such Principal Protected Security is
registered in the Share Register.

"Proposed Plan": A reasonable plan proposed by the Collateral Manager, on behalf of the Issuer, to the
Rating Agencies on or after the Ramp-Up Completion Date, to obtain a Rating Confirmation, which Proposed
Plan may include a proposal to (a) make payments of principal of and accrued interest on the aggregate
outstanding amount of the Notes in accordance with the Priority of Payments, (b) sell a portion of the Portfolio
Collateral, (c) subject to the terms of the Preference Share Paying Agency Agreement, issue additional Preference
Shares and use the proceeds of the sale of such Preference Shares to purchase Portfolio Collateral, (d) extend the
Ramp-Up Completion Date, (e) amend the Indenture (without the consent of any of the Holders of the Notes) to
modify certain requirements in the Indenture, including, without limitation, the requirements necessary to satisfy
each of the Collateral Quality Tests, each of the Coverage Tests and any of the Concentration Limitations in
which case all references herein to any Collateral Quality Test, Coverage Test, Concentration Limitation or any
other provision modified pursuant to the related Proposed Plan, from the date of and after giving effect to such
Rating Confirmation, shall be deemed to refer to such item as so modified or (f) any other action as may be
proposed in a Proposed Plan and in respect of which the Rating Agencies have provided their related
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confirmation. In accordance with the Indenture, the terms and conditions of any Proposed Plan proposed by the
Collateral Manager, on behalf of the Issuer, and in respect of which the Rating Agencies have provided their
related confirmation, as described above, will be set forth in a supplemental indenture.

"PS Minimum Amount Holder": Any holder of Preference Shares (including the Preference Share
Components) which holds not less than the PS Partial Redemption Minimum Amount and requests a redemption,
in whole or in part, of such Preference Shares (including the Preference Share Components).

"PS Partial Redemption Minimum Amount": 3,000,000 Preference Shares.

"Purchase Agreement": The Purchase Agreement, dated the Closing Date, among the Co-Issuers and
the Initial Purchasers.

"Qualified Institutional Buyer": A "qualified institutional buyer" as defined in Rule 144A(a)(1)

promulgated under the Securities Act.

"Qualified Purchaser": A "qualified purchaser" as defined in Section 3(c)(7) of the Investment

Company Act.

"Qualifying Insurance Company": An insurance company investor acquiring an interest in Class C

Notes, Principal Protected Securities or Preference Shares, as the case may be, with assets from its general
account if, at the time of acquisition and throughout its holding of the Class C Notes, the Principal Protected
Securities or the Preference Shares, as the case may be, (i) the investor is purchasing the Class C Notes, the
Principal Protected Securities or the Preference Shares, as the case may be, with assets of an "insurance company
general account" (within the meaning of the United States Department of Labor Prohibited Transaction Class
Exemption ("PTCE") 95-60), (ii) less than 25% of the assets in such general account are (or represent) assets of a
Benefit Plan Investor, (iii) it is not the Collateral Manager, the Issuer, the Co-Issuer, the Initial Purchaser, the Co-
Placement Agent or a service provider to the Issuer or an affiliate of the foregoing and the value of the equity held
by such general account would not otherwise be disregarded under 29 C.F.R. 2510.3-101(f)(1) and (iv) the
purchase and holding of such Class C Notes, Principal Protected Securities or Preference Shares, as the case may
be, will not otherwise result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Code.

"Rating Agencies": S&P, Moody's and Fitch, collectively.

"Ramp-Up Completion Date": The earlier of (i) the first Business Day which is more than 120 days
after the Closing Date or (ii) the date on which the Aggregate Principal Amount of the Portfolio Collateral
included in the Trust Estate is at least equal to U.S.$250,000,000.

"Rating Condition": A condition that is satisfied when each Rating Agency (or, if only one Rating
Agency is specified, such Rating Agency) has confirmed in writing to the Issuer, the Trustee and the Collateral
Manager that no immediate withdrawal, suspension or reduction with respect to any then current rating by such
Rating Agency of any Class of Notes (other than the Class C Notes) rated by such Rating Agency will occur as a
result of such action.

"Rating Confirmation": The written confirmation by a Rating Agency that such Rating Agency has not
reduced or withdrawn (without reinstating) any of its ratings assigned on the Closing Date to the Notes.

"Rating Confirmation Failure": A failure by the Issuer to obtain a Rating Confirmation within 30
Business Days after the Ramp-Up Completion Date.

"Record Date": The date as of which the Holders of Notes entitled to receive a payment of principal or
interest on the succeeding Payment Date are determined, such date as to any Payment Date being the Business
Day immediately preceding such Payment Date (or, with respect to the Class C Notes, the Business Day
immediately preceding the applicable date of payment); provided, however, if any Definitive Notes are issued, the

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Record Date for such Definitive Notes shall be the fifteenth day of the calendar month in which such Payment
Date occurs.

"Reference Obligation": A debt security or other obligation upon which a Synthetic Security is based;
provided that such debt security or other obligation is not itself a Synthetic Security, and at the time the Issuer
purchases the Synthetic Security such debt security or other obligation satisfies the definition of Portfolio
Collateral.

"Reference Obligor": The obligor on a Reference Obligation.

"Refinancing": The meaning specified herein under "Description of the Notes — Refinancing."

"Refinancing Date": The Payment Date fixed by the Issuer for a Refinancing, which shall be no earlier
than the Payment Date occurring in February 2007.

"Refinancing Price": With respect to any Class of Notes that is subject to a Refinancing, an amount
equal to the aggregate of (i) the Aggregate Principal Amount of such Class of Notes as of the Refinancing Date
and (ii) the applicable Cumulative Interest Amount with respect to such Refinancing Date.

"Refinancing Proceeds": The meaning specified herein under "Description of the Notes —
Refinancing."

"Registered Debt Obligation": A debt obligation that is issued after July 18, 1984, and that is in
registered form within the meaning of Section 881(c)(2)(B)(i) of the Code and the U.S. Treasury Regulations
promulgated thereunder.

"Regulation S Global Notes": With respect to any Class, the one or more global notes issued to non-
U.S. Persons in Offshore Transactions in reliance on Regulation S.

"Reinvestment Income": Any interest or other earnings on funds in the Collection Account, the Initial
Deposit Account, the Initial Period Reserve Account and the Expense Reimbursement Account.

"Reinvestment Period: The period from and including the Closing Date to and including the Payment
Date in February 2009.

"Reporting Agency Agreement": The Lease/License Agreement, dated as of the Closing Date, between
the Issuer and the Reporting Agent, pursuant to which the Reporting Agent will prepare a monthly report on
behalf of the Issuer for distribution to Holders of the Securities with respect to the Underlying Securities.

"Reporting Agent": Intex Solutions, Inc.

"Repository": The internet-based password protected electronic repository of transaction documents

relating to privately offered and sold collateralized debt obligation securities located at "www.cdolibrary.com."
This website does not form part of the document for the purposes of the listing of the Notes (other than the Class
C Notes) on the Irish Stock Exchange.

"Requisite Noteholders": The Holders of at least 66-2/3% of the Aggregate Principal Amount of the
Outstanding Notes voting as a single class; provided that upon the occurrence of a Default or an Event of Default
under the Indenture (i) for so long as any Class A-1L Notes and Class A-2L Notes remain Outstanding, "Requisite
Noteholders" shall mean the Holders of at least 66-2/3% of the Aggregate Principal Amount of the Outstanding
Class A-1L Notes and Class A-2L Notes voting as a single class, and (ii) when the Class A-1L Notes and the
Class A-2L Notes are no longer Outstanding, "Requisite Noteholders" shall mean the Holders of at least 66-2/3%
of the Aggregate Principal Amount of the Outstanding Class A-3L Notes, and (iii) when the Senior Class A Notes
are no longer Outstanding, "Requisite Noteholders" shall mean the Holders of at least 66-2/3% of the Aggregate
Principal Amount of the Outstanding Class A-4L Notes, and (iv) when the Class A Notes are no longer

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Outstanding, "Requisite Noteholders" shall mean the Holders of at least 66-2/3% of the Aggregate Principal
Amount of the Outstanding Class B-1L Notes.

"Rule 144A Global Notes": With respect to any Class of Notes (other than the Class C Notes), the one
or more permanent global notes issued to U.S. Persons.

"S&P": Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc., or any
successor thereto.

"S&P Rating": A rating assigned by S&P or derived in accordance with methodology prescribed by S&P
and described in the Indenture.

"Sale Proceeds": All proceeds received from the sale or other disposition with respect to Portfolio
Collateral or Securities Lending Collateral in accordance with the terms of the Indenture, net of or inclusive of, as
appropriate, termination or settlement payments paid or received in respect of any Securities Lending Agreement
terminated in connection with such sales, in each case, net of any reasonable amounts expended by, or any taxes
or duties payable by, the Issuer, the Collateral Manager or the Trustee in connection with such sale, disposition,
termination or settlement. Accrued interest on Sale Proceeds may be treated as Sale Proceeds (x) to the extent
necessary to pay accrued interest with respect to additional items of Portfolio Collateral only if such additional
items of Portfolio Collateral provide for interest payments to be made in the same Periodic Interest Accrual Period
as that in which the disposed item of Portfolio Collateral provides for the payment of interest or (y) to the extent
necessary to pay for the principal amount of or accrued interest on additional items of Portfolio Collateral if the
sold item of Portfolio Collateral paid interest before, and in the same Periodic Interest Accrual Period as, the date
of sale.

"Scheduled Distribution": With respect to any Pledged Security, for each Due Date after the date of
determination, the scheduled payment of principal and/or interest due on such Due Date with respect to such
Pledged Security, determined in accordance with the assumptions set forth in the Indenture.

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

"Securities Lending Account": As described under "Security for the Notes—Accounts."

"Securities Lending Agreement": A securities lending agreement in the form of a Master Securities
Loan Agreement prepared from time to time by the Bond Market Securities Association, complying with the
requirements of the Indenture and that satisfies the Rating Condition.

"Securities Lending Collateral": Collateral which satisfies the definition of Eligible Investments.

"Securities Lending Counterparty": Any financial institution, so long as, at the time of the execution of
the applicable Securities Lending Agreement, (i) the long term unsecured obligations of such institution are rated
at least "AA-" by S&P, at least "Aa3" by Moody's and, if rated by Fitch, at least "A-" by Fitch or (ii) the short
term unsecured obligations of such institution are rated at least "A-1" by S&P, "P-1" by Moody's and, if rated by
Fitch, at least "F1" by Fitch.

"Senior Cashflow Swap Termination Payment": A termination payment payable by the Issuer under
the Cashflow Swap Agreement (i) as a result of an Event of Default by the Issuer thereunder or (ii) as a result of a
"Termination Event" thereunder where the Issuer is the sole affected party.

"Senior Class A Notes": The Class A-1L Notes, the Class A-2L Notes and the Class A-3L Notes.

"Senior Class A Overcollateralization Percentage": As described under "Description of the Notes—

Overcollateralization Tests."

"Senior Class A Overcollateralization Ratio": As described under "Description of the Notes—

Overcollateralization Tests."
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 "Senior Management Fee": The quarterly fee payable to the Collateral Manager in arrears on each
Payment Date in accordance with the Priority of Payments, in an amount equal to 0.15% per annum of the
Aggregate Portfolio Balance as of the preceding Payment Date (or, in the case of the initial Payment Date, as of
the Closing Date).

"Share Registrar": Maples Finance Limited, or any successor appointed by the Issuer.

"Stated Maturity": With respect to the Notes (other than the Class C Notes) and the Principal Protected
Securities, the Payment Date in February 2016.

"Substitute Party": The new Cashflow Swap Provider to whom the existing Cashflow Swap Provider is
required to assign its rights and obligations within 30 days following a Substitution Event and who satisfies, at the
time of such assignment and assumption, the rating requirements set forth in the definition of "Cashflow Swap
Provider" herein.

"Substitution Event": An event under a Cashflow Swap Agreement upon which (A) the Cashflow Swap
Provider fails to post collateral within the five Business Days following a Collateralization Event, (B) the short
term S&P rating of the Cashflow Swap Provider or its guarantor is withdrawn, suspended or downgraded below
"A-1" or, if no short term S&P rating is available, the long term S&P rating of the Cashflow Swap Provider or its
guarantor is withdrawn, suspended or downgraded below "A+," (C) the short term Moody's rating of the
Cashflow Swap Provider or its guarantor is "P-2" or lower or the long term Moody's rating of such Cashflow
Swap Provider or its guarantor is "A3" or lower, or if no short term Moody's rating is available, the long term
Moody's rating of such Cashflow Swap Provider or its guarantor is "A2" or lower or (D) the short term Fitch
rating of the Cashflow Swap Provider or its guarantor is withdrawn, suspended or downgraded below "F-2".

"Synthetic Security": Any derivative financial instrument with respect to a Reference Obligation which
is in the form of a credit-linked note, purchased by the Issuer (directly or indirectly) from a Synthetic Security
Counterparty, which contains equivalent probability of default, recovery upon default (or a specific percentage
thereof), expected loss, maturity, interest rate and other non-credit characteristics as those of the related Reference
Obligation (without taking account of such considerations as they relate to the Synthetic Security Counterparty);
provided that (i) the Reference Obligation is a CDO Security, (ii) the ownership of such Synthetic Security will
not cause the Issuer to be treated as engaged in a trade or business in the United States for U.S. federal income tax
purposes or otherwise subject the Issuer to U.S. federal income tax on a net income tax basis, (iii) either (a)
amounts receivable by the Issuer will not be subject to U.S. or foreign withholding tax in respect of the Synthetic
Security or (b) the Synthetic Security Counterparty is required to make "gross-up" payments pursuant to the
related Underlying Instruments that cover the full amount of any such withholding tax on an after-tax basis
(including any tax on such additional payments), (iv) if the Synthetic Security provides for physical settlement,
the Synthetic Security shall provide (or contain a warranty by the Synthetic Security Counterparty) that, unless the
Issuer receives an indemnity acceptable to the Issuer from the Synthetic Security Counterparty with respect to the
following, delivery of any deliverable obligations thereunder to the Issuer and transfer of such deliverable
obligations by the Issuer to a third party will not require or cause the Issuer to assume, and will not subject the
Issuer to, any obligation or liability (other than immaterial, nonpayment obligations and any assignment or
transfer fee in respect of loans), (v) each Synthetic Security contains appropriate limited recourse and non-petition
provisions (to the extent that the Issuer has contractual payment or other obligations to the Synthetic Security
Counterparty) equivalent (mutatis mutandis) to those contained in the Indenture, and (vi) the purchase of such
derivative financial instrument by the Issuer has satisfied the Rating Condition.

"Synthetic Security Counterparty": An entity, whose long term senior unsecured debt or derivatives
counterparty rating shall be at least "Aa2" by Moody's, at least "A" by S&P and (if rated by Fitch) at least "AA-"
by Fitch, required to make payments on a Synthetic Security pursuant to the terms of such Synthetic Security or
any guarantee thereof to the extent that a Reference Obligor makes payments on a related Reference Obligation.

"Trust Estate": All money, instruments and other property and rights subject or intended to be subject to
the lien of the Indenture including all proceeds thereof, including the Portfolio Collateral, the Collection Account,

-133-
the Initial Deposit Account, the Expense Reimbursement Account, the Closing Expense Account and the Issuer's
rights under the Management Agreement, the Cashflow Swap Agreement, the Collateral Administration
Agreement, the Issuer's rights under the Reporting Agency Agreement, any Securities Lending Agreements and
upon any default by any Securities Lending Counterparty under the related Securities Lending Agreement, any
related Securities Lending Account, including, without limitation, any related Securities Lending Collateral
deposited therein.

"Trustee": JPMorgan Chase Bank, as trustee under the Indenture or any successor thereto.

"Trustee Administrative Expenses": With respect to any Payment Date (including without limitation
the Final Maturity Date), the sum of (i) a fee in an amount equal to one-quarter of 0.03% of the Aggregate
Principal Amount of the Pledged Securities as of the Calculation Date relating to such Payment Date, subject to a
minimum of U.S.$35,000 per annum and (ii) the Trustee's and the Collateral Administrator's administrative
expenses for the Due Period relating to such Payment Date, it being understood that the administrative expenses
contemplated by clause (ii) of this definition shall not exceed, in the aggregate for any calendar year,
U.S.$100,000.

"Underlying Instrument": With respect to any item of Portfolio Collateral, any loan participation
agreement, loan assignment agreement, indenture, pooling and servicing agreement, trust agreement, instrument,
or other agreement pursuant to which such item of Portfolio Collateral has been created or issued or of which the
holders of such item of Portfolio Collateral are the beneficiaries, and any instrument evidencing or constituting
such item of Portfolio Collateral (in the case of Portfolio Collateral evidenced by or in the form of instruments).

"Underlying Securities": The portfolio of securities underlying the Portfolio Collateral.

"Weighted Average Recovery Rate Test": As defined under "Security for the Notes—Portfolio
Collateral."

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 ANNEX B
INDEX OF DEFINED TERMS
Additional Overcollateralization Test.....................44, 113
Adjusted Collateral Collections ....................................113
Adjusted Collateral Interest Collections .................38, 113
Adjusted Collateral Principal Collections...............38, 113
Administrator......................................................3, 29, 113
Affiliate.........................................................................113
Aggregate Portfolio Balance.........................................113
Aggregate Portfolio Collateral Principal
Balance.....................................................................113
Aggregate Principal Amount ........................................113
Applicable Periodic Rate ...... 4, 5, 6, 7, 33, 34, 35, 36, 114
Approved Replacement Manager ...................................81
Asset Backed CDO Security.........................................114
Asset Backed Securities................................................114
Available Funds ............................................................114
Balance .........................................................................114
Bank..............................................................................114
Benefit Plan Investor ....................................................114
Break-Even Default Rate ................................................57
Business Day ................................................................114
C Note Components......................................................114
C-1 Note Component....................................................114
C-2 Note Component....................................................114
Caisse des Dépôts ...........................................................69
Calculation Agent ...................................................37, 114
Calculation Date ...........................................................114
Cashflow Swap Agreement ..............................12, 67, 114
Cashflow Swap Cancellation Event..............................114
Cashflow Swap Fee Payment .......................................115
Cashflow Swap Provider ..................................12, 67, 115
Cashflow Swap Provider Accrual Rate.........................115
Cashflow Swap Shortfall Amount ................................115
CDC IXIS .......................................................................69
CDO of CDO Securities ...............................................115
CDO Security ...............................................................115
Class .............................................................................115
Class 1 Preference Share Component ...........................115
Class 1 Principal Protected Securities...................... ii, 115
Class 1 Treasury Note...................................................115
Class 2 Preference Share Component ...........................116
Class 2 Principal Protected Securities...................... ii, 116
Class 2 Treasury Note...................................................116
Class A Notes ............................................................i, 116
Class A Overcollateralization Percentage...............43, 116
Class A Overcollateralization Ratio........................43, 116
Class A-1L Notes...............................................................i
Class A-1L Notes..........................................................116
Class A-1L/A-2L Notes Principal
Payment Priority ................................................42, 116
Class A-1LA Notes....................................................i, 116
Class A-1LB Notes ....................................................i, 116
Class A-2L Notes.......................................................i, 116
-1-
Class A-3L Notes.......................................................i, 116
Class A-4L Notes.......................................................i, 116
Class B Overcollateralization Percentage...............43, 116
Class B Overcollateralization Ratio........................43, 116
Class B-1L Notes.......................................................i, 116
Class B-1L Principal Payment......................................116
Class C Collateral .........................................................116
Class C Noteholder.......................................................116
Class C Notes ...........................................................ii, 116
Class C Stated Maturity................................................116
Class C-1 Collateral......................................................116
Class C-1 Collateral Account .......................................117
Class C-1 Notes ........................................................ii, 117
Class C-2 Collateral......................................................117
Class C-2 Collateral Account .......................................117
Class C-2 Notes ........................................................ii, 117
Clean-up Call....................................................10, 47, 117
Clean-up Call Date ...........................................10, 47, 117
Clean-up Call Price.......................................................117
Clearstream..............................................................i, 3, 48
Clearstream Participants .................................................51
CLN Issuer..............................................................25, 117
Closing Date ..............................................................i, 117
Closing Expense Account.................................3, 100, 117
Code.............................................................iv, 13, 90, 117
Co-Issuer....................................................................i, 117
Co-Issuers ..................................................................i, 117
Collateral Administration Agreement.............................76
Collateral Administrator .................................................76
Collateral Interest Collections ......................................117
Collateral Management Fee..........................................118
Collateral Management Fee............................................80
Collateral Manager ........................................................i, 2
Collateral Principal Collections....................................118
Collateral Quality Tests ..........................................57, 118
Collateralization Event .................................................118
Collection Account .......................................................118
Collections....................................................................118
Concentration Limitation................................................54
Concentration Limitations ..............................................54
Controlling Class ..........................................................119
Cooperative.....................................................................51
Co-Placement Agent..........................................i, 101, 119
Credit Improved Criteria ..............................................119
Credit Improved Portfolio Collateral............................119
Credit Risk Criteria.......................................................119
Credit Risk Portfolio Collateral ....................................119
Cumulative Interest Amount................. 33, 34, 35, 36, 120
Current Portfolio.............................................................57
Default ..........................................................................120
Default Differential.........................................................57
Defaulted Cashflow Swap Termination
Payment ...................................................................120
Defaulted Portfolio Collateral.......................................120
Defaulted Principal Balance .........................................121
Deferred Interest PIK Bond ..........................................121
Deferred Shortfall Amount ...........................................121
Definitive Notes......................................................48, 121
Deposit..............................................................3, 100, 121
Distribution Compliance Period .....................................48
Diversity Score ...............................................................58
Diversity Test .........................................................58, 122
DTC .................................................................i, 3, 48, 122
DTC Participants ............................................................51
Due Date .......................................................................122
Due Period ....................................................................122
Eligible Investments .....................................................122
Emerging Market CDO Security ..................................123
Emerging Market Country ............................................123
Equity Portfolio Collateral............................................123
ERISA................................................................iv, 13, 123
ERISA Plan.....................................................................95
Euroclear..................................................................i, 3, 48
Euroclear Operator..........................................................51
Euroclear Participants .....................................................51
Event of Default......................................................74, 123
Excess Amounts............................................................123
Exchange Act.............................................................vi, 51
Expense Reimbursement Account ....................3, 100, 124
Final Maturity Date.......................................................124
Fitch .....................................................................i, 99, 124
Fitch Rating ..................................................................124
Fitch Rating Factor .........................................................59
Fitch Sector Score...........................................................59
Fitch Weighted Average Rating Factor ..........................59
Fitch Weighted Average Recovery Rate.........................59
Fixed Rate Collateral ....................................................124
Floating Rate Collateral ..........................................24, 124
former manager...............................................................81
FSMA ......................................................................vi, 102
Global Notes .................................................................124
Glossary ............................................................................1
High Yield CDO Security.............................................124
Holder ...........................................................................124
Indenture ..............................................................i, 32, 124
Indirect Participants ........................................................51
Initial Deposit Account.....................................3, 100, 124
Initial Investment Period...............................................124
Initial Period Reserve Account .....................................124
Initial Purchaser .................................................i, 101, 124
Initial Purchasers ...............................................i, 101, 124
Insolvency Law.............................................................124
Interest Coverage Ratio ..........................................44, 124
Interest Coverage Test ............................................44, 124
Interest Shortfall Amount .............................................124
Intex ................................................................................66
Investment Company Act ....................................i, 22, 125
Investment Grade CDO Security ..................................125
Irish Paying Agent ..................................................50, 125
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IRS..................................................................................91
Issue Price.......................................................................90
Issuer ...................................................................i, 29, 125
Issuer Base Administrative Expenses ...........................125
Issuer Charter ....................................................................ii
Issuer Excess Administrative Expenses........................125
Junior Management Fee..........................................80, 125
Junior Securities Offering Circular.........................96, 125
Leveraged Loan CDO Security ....................................125
LIBOR ..........................................................................125
LIBOR Determination Date....................................37, 125
London Business Day...................................................125
Majority ........................................................................125
Management Agreement...................................................2
Margin Stock ................................................................126
Mariner ...........................................................................77
Market Value ................................................................126
Market Value CDO Security ........................................126
Measurement Date..................................................56, 126
Moody's .........................................................i, 14, 99, 126
Moody's Rating.............................................................126
Moody's Rating Distribution Test...................................58
Moody's Weighted Average Recovery
Rate ............................................................................58
NASD .............................................................................28
non-U.S. holder ..............................................................90
Note Register ..........................................................49, 126
Note Registrar...............................................................126
Note Valuation Report..................................................126
Noteholder ....................................................................124
Notes.........................................................................ii, 126
O/C Redemption .................................................9, 45, 126
Offer .............................................................................126
Offshore Transaction ....................................................126
Offshore Transactions..............................................i, 3, 48
OID.................................................................................91
Optional Redemption................................................10, 45
Optional Redemption Date ...............................10, 45, 126
Optional Redemption Price...........................................126
Other Indebtedness .......................................................120
Outstanding...................................................................127
Overcollateralization Ratio...........................................127
Overcollateralization Tests ...........................................127
Partial Redemption ...................................................10, 46
Partial Redemption Date...............................................127
Partial Redemption Percentage.........................10, 46, 127
Partial Redemption Sale Proceeds ..................................46
Paying Agent ..........................................................32, 127
Paying Agents.................................................................32
Payment Date......................................................4, 33, 127
Periodic Interest.................... 4, 5, 6, 7, 33, 34, 35, 36, 127
Periodic Interest Accrual Period...................................128
Periodic Interest Amount...................... 33, 34, 35, 36, 128
Periodic Rate Shortfall Amount............ 33, 34, 35, 36, 128
Person ...........................................................................128
PIK Bond ......................................................................128
Plan.................................................................................13
Plan Asset Regulation.............................................95, 128
Pledged Securities.........................................................128
Portfolio Collateral .................................................53, 128
Preference Share Components ......................................128
Preference Share Documents............................................. ii
Preference Share Paying Agency
Agreement ........................................................... ii, 128
Preference Share Paying Agent ................................. ii, 128
Preference Shareholder .................................................128
Preference Shares...................................................... ii, 128
Preference Shares Administrative
Expenses ..................................................................128
Premium........................................................................129
Principal Balance ..........................................................129
Principal Protected Securities .................................. ii, 129
Principal Protected Securities Redemption
Price ...........................................................................46
Principal Protected Securityholder ...............................129
Priority of Payments .......................................................38
Proposed Plan ...............................................................129
Proposed Portfolio ..........................................................57
PS Minimum Amount Holder...........................10, 46, 130
PS Partial Redemption Minimum Amount .......10, 46, 130
PTCE ..............................................................................95
Purchase Agreement .............................................101, 130
Qualified Institutional Buyer ........................................130
Qualified Purchaser ......................................................130
Qualifying Insurance Company ....................................130
Ramp-Up Completion Date ....................................11, 130
Rating Agencies................................................14, 99, 130
Rating Agency ................................................................14
Rating Condition...........................................................130
Rating Confirmation ...........................................9, 45, 130
Rating Confirmation Failure...............................9, 45, 130
Rating Confirmation Failure Redemption...................9, 45
Record Date ..............................................................4, 130
Reference Banks .............................................................37
Reference Obligation ....................................................131
Reference Obligor.........................................................131
Refinancing.......................................................11, 47, 131
Refinancing Date ..........................................................131
Refinancing Price..........................................................131
Refinancing Proceeds .............................................48, 131
Registered Debt Obligation ..........................................131
Regulation S ......................................................................i
Regulation S Global Notes ..............................i, 3, 48, 131
Reinvestment Criteria .....................................................61
Reinvestment Income ...................................................131
Reinvestment Period...............................................12, 131
replacement manager ......................................................81
Reporting Agency Agreement ................................66, 131
Reporting Agent......................................................66, 131
Repository.....................................................................131
-3-
Requisite Noteholders...................................................131
Resolutions........................................................................ii
Rule 144A..........................................................................i
Rule 144A Global Notes..................................i, 3, 49, 132
S&P ...............................................................i, 14, 99, 132
S&P CDO Monitor .........................................................57
S&P CDO Monitor Test .................................................57
S&P Rating...................................................................132
S&P Weighted Average Recovery Rate .........................59
Sale Proceeds................................................................132
Scenario Default Rate.....................................................57
Scheduled Distribution .................................................132
SEC.................................................................................22
Securities...........................................................................ii
Securities Act.............................................i, 3, 22, 48, 132
Securities Lending Account....................................61, 132
Securities Lending Agreement .....................................132
Securities Lending Collateral .......................................132
Securities Lending Counterparty ..................................132
Senior Cashflow Swap Termination
Payment ...................................................................132
Senior Class A Notes.................................................i, 132
Senior Class A Overcollateralization
Percentage..........................................................43, 132
Senior Class A Overcollateralization
Ratio...................................................................43, 132
Senior Management Fee .........................................80, 133
Share Registrar ..........................................................ii, 133
Special Consultant ..........................................................84
spread..............................................................................58
Stated Maturity .............................................................133
Stated Redemption Price at Maturity..............................91
Substitute Party.............................................................133
Substitution Event.........................................................133
Synthetic Security.........................................................133
Synthetic Security Counterparty...................................133
Terms and Conditions.....................................................52
TIN .................................................................................92
Transfer Agent................................................................49
Tricadia.......................................................................2, 77
Trust Estate.............................................................11, 133
Trustee ...........................................................i, 13, 32, 134
Trustee Administrative Expenses .................................134
U.S. holder......................................................................90
U.S. Related Person ........................................................93
Underlying Instrument..................................................134
Underlying Securities ...................................................134
USA PATRIOT Act........................................................28
Weighted Average Recovery Rate Test..................58, 134
Weighted Average Spread ..............................................58
Weighted Average Spread Test ......................................58
 PRINCIPAL OFFICES OF THE CO-ISSUERS

TRICADIA CDO 2003-1, LTD. TRICADIA CDO 2003-1 CORP.

c/o Maples Finance Limited c/o Puglisi & Associates
P.O. Box 1093 GT, Queensgate House 850 Library Avenue
South Church Street, George Town Suite 204
Grand Cayman, Cayman Islands Newark, Delaware 19711

TRUSTEE, PAYING AGENT AND COLLATERAL ADMINISTRATOR

JPMorgan Chase Bank

600 Travis Street, 50th Floor
JPMorgan Chase Tower
Houston, Texas 77002

REPORTING AGENT IRISH PAYING AGENT

AND IRISH LISTING AGENT

Intex Solutions Inc. Ernst & Young

110 A Street Ernst & Young Building
Needham, Massachusetts 02494 Harcourt Centre, Harcourt Street
Dublin 2, Ireland

LEGAL ADVISORS

To the Co-Issuers To the Collateral Manager

as to United States law
Schulte Roth & Zabel LLP Cadwalader, Wickersham & Taft LLP
919 Third Avenue 100 Maiden Lane
New York, New York 10022 New York, New York 10038

To the Issuer
as to Cayman Islands law To the Trustee, Paying Agent and
Maples and Calder Collateral Administrator
P.O. Box 309 GT, Ugland House
South Church Street, George Town Gardere Wynne Sewell, LLP
Grand Cayman, Cayman Islands 1000 Louisiana Street, Suite 3400
Houston, Texas 77002