THE COLLATERAL MANAGER AND THE COLLATERAL MANAGEMENT AGREEMENT Under the Collateral Management Agreement to be entered into between the Issuer and the Collateral Manager on the Closing Date, the Collateral Manager will agree to select and manage the Collateral on behalf of the Issuer. The Indenture and the Collateral Management Agreement place significant restrictions on the Collateral Manager's ability to purchase or sell Collateral Obligations and the Collateral Management Agreement will require the Collateral Manager to comply with such restrictions. Accordingly. during certain periods or in certain specified circumstances, the Collateral Manager may be unable to purchase or sell Collateral Obligations or to take other actions that the Collateral Manager might consider in the best interests of the Co-Issuers and the Holders of the Notes. See "Risk Factors—Certain Conflicts of Interest—Collateral Manager Conflicts of Interest." The Collateral Manager The Collateral Manager, JCM, was formed under the laws of the State of Delaware on March 19, 2003. JCM is a wholly owned subsidiary of Jefferies Group. Inc.. a publicly traded holding company whose securities are traded on the NYSE. Jefferies Group. Inc.. together with its subsidiaries (collectively. "Jefferies Group"). is an investment bank and institutional securities firm. Jefferies Group provides clients with capital markets and financial advisory services. institutional brokerage, securities research and asset management. Jefferies Group provides trade execution in equity, high yield and international securities for institutional investors and high net worth investors. Jefferies & Company. Inc. ("Jefferies") is the principal operating subsidiary of Jefferies Group. As of September 30, 2006. Jefferies Group employed over 2.200 employees in offices worldwide. The principal place of business of JCM is 11110 Santa Monica Boulevard. I 1th Floor. Los Angeles, California 90025. telephone: 310-914-1252: