IMPORTANT NOTICE

IMPORTANT: You must read the following before continuing. The following applies to theprospectus following this page (the ‘‘Prospectus’’), and you are therefore advised to read thiscarefully before reading, accessing or making any other use of the Prospectus. In accessing theProspectus, you agree to be bound by the following terms and conditions, including anymodifications to them any time you receive any information from us as a result of such access.

NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER TO SELL OR ASOLICITATION OF AN OFFER TO BUY THE NOTES DESCRIBED IN THIS PROSPECTUS INANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO.

THE NOTES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITEDSTATES SECURITIES ACT OF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’) OR THESECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER RELEVANTJURISDICTION. IN ORDER TO BE ELIGIBLE TO READ THIS PROSPECTUS OR MAKE ANINVESTMENT DECISION WITH RESPECT OF THE NOTES DESCRIBED THEREIN, YOU MUSTNOT BE A ‘‘U.S. PERSON’’ WITH THE MEANING OF REGULATION S UNDER THESECURITIES ACT.

Under no circumstances shall this Prospectus constitute an offer to sell or the solicitation of anoffer to buy nor shall there be any sale of the notes in any jurisdiction in which such offer,solicitation or sale would be unlawful. This Prospectus may only be communicated to persons inthe United Kingdom in circumstances where section 21(1) of the Financial Services and MarketsAct 2000 does not apply to the Issuer and may only be circulated in Ireland in accordance withRegulation 9(1) ‘‘Excluded Offers’’ of the Irish Prospectus Directive (2003/71/EC) Regulation 2005.

This Prospectus may not be forwarded or distributed to and other person and may not bereproduced in any manner whatsoever, and in particular, may not be forwarded to any U.S. personwithout exception.

Any forwarding, distribution or reproduction of this Prospectus in whole or in part is unauthorised.Failure to comply with this directive may result in a violation of the Securities Act or the applicablelaws of other jurisdictions.

The Prospectus is being sent at your request and by accepting the e-mail and accessing theProspectus, you shall be deemed to have represented to us that you are not a U.S. person andthat you consent to delivery of the Prospectus by electronic transmission.

You are reminded that the Prospectus has been delivered to you on the basis that you are aperson into whose possession the Prospectus may be lawfully delivered in accordance with thelaws of the jurisdiction in which you are located and you may not, nor are you authorised to,deliver the Prospectus to any other person.

The materials relating to the offering do not constitute, and may not be used in connection with, anoffer or solicitation in any place where offers or solicitations are not permitted by law. If ajurisdiction requires that the offering be made by a licensed broker or dealer and the managers orany affiliate of the managers is a licensed broker or dealer in that jurisdiction, the offering shall bedeemed to be made by the managers or such affiliate on behalf of the Issuer in such jurisdiction.

This Prospectus has been sent to you in an electronic form. You are reminded that documentstransmitted via this medium may be altered or changed during the process of electronictransmission and consequently none of Citigroup Global Markets Limited, Deutsche Bank AG,London Branch, Societe Generale and Davy Stockbrokers nor any person who controls any ofsuch Managers nor any director, officer, employee, agent or affiliate of any such person acceptsany liability or responsibility whatsoever in respect of any difference between the Prospectusdistributed to you in electronic format herewith and the hard copy version available to you onrequest from Citigroup Global Markets Limited.

PROSPECTUS

f2,150,000,000 MORTGAGE BACKED FLOATING RATE NOTES DUE AUGUST 2043

FASTNET SECURITIES 2 PLC(incorporated in Ireland with limited liability under registered number 420155)

f344,000,000 CLASS A1 MORTGAGE BACKED FLOATING RATE NOTES DUE AUGUST 2043

Issue Price: 100 per cent

f1,656,000,000 CLASS A2 MORTGAGE BACKED FLOATING RATE NOTES DUE AUGUST 2043

Issue Price: 100 per cent

f50,000,000 CLASS B MORTGAGE BACKED FLOATING RATE NOTES DUE AUGUST 2043

Issue Price: 100 per cent

f44,000,000 CLASS C MORTGAGE BACKED FLOATING RATE NOTES DUE AUGUST 2043

Issue Price: 100 per cent

f56,000,000 CLASS D MORTGAGE BACKED FLOATING RATE NOTES DUE AUGUST 2043

Issue Price: 100 per cent

The e2,150,000,000 Mortgage Backed Floating Rate Notes due August 2043 of Fastnet Securities 2 plc (the ‘‘Issuer’’) issued pursuant to thisProspectus will comprise the e344,000,000 Class A1 Mortgage Backed Floating Rate Notes due August 2043 (the ‘‘A1 Notes’’),the e1,656,000,000 Class A2 Mortgage Backed Floating Rate Notes due August 2043 (the ‘‘A2 Notes’’ and together with the A1 Notes, the‘‘Senior Notes’’), the e50,000,000 Class B Mortgage Backed Floating Rate Notes due August 2043 (the ‘‘B Notes’’), the e44,000,000 Class CMortgage Backed Floating Rate Notes due August 2043 (the ‘‘C Notes’’) and the e56,000,000 Class D Mortgage Backed Floating Rate Notesdue August 2043 (the ‘‘D Notes’’ and together with the C Notes and the B Notes, the ‘‘Junior Notes’’ and together with the Senior Notes, the‘‘Notes’’).

Interest on the Notes is payable monthly in arrear on the 10th day (or if such day is not a business day, as defined under ‘‘SummaryInformation’’ below, the next following business day) of each calendar month in each year, the first such payment to be made on the InterestPayment Date (as defined under ‘‘Summary Information’’ below) being 10th August 2006. Interest on the Notes is payable at an annual rateequal to the sum of the European Interbank Offered Rate (‘‘EURIBOR’’) for one month deposit in euro (or, in the case of the first InterestPeriod (as defined under ‘‘Terms and Conditions’’ below), at an annual rate obtained by linear interpolation of EURIBOR for one month andtwo month deposits in euro) (‘‘Note EURIBOR’’) plus a margin of: 0.03 per cent. per annum in relation to the A1 Notes until the InterestPayment Date falling in June 2012 and thereafter, 0.06 per cent. per annum; 0.12 per cent. per annum in relation to the A2 Notes until theInterest Payment Date falling in June 2012 and thereafter 0.24 per cent. per annum; 0.15 per cent. per annum in relation to the B Notes untilthe Interest Payment Date falling in June 2012 and thereafter 0.30 per cent. per annum; 0.23 per cent. per annum in relation to the C Notesuntil the Interest Payment Date falling in June 2012 and thereafter 0.46 per cent. per annum; and 0.45 per cent. per annum in relation to theD Notes until the Interest Payment Date falling in June 2012 and thereafter 0.90 per cent. per annum.

The Notes constitute direct, secured and unconditional obligations of the Issuer and will be issued simultaneously. The Senior Notes will rankin priority to the Junior Notes in point of security and payment of interest and principal. The A1 Notes and the A2 Notes will rank pari passuin point of payment of interest and security without preference or priority amongst themselves (but the A1 Notes will rank in priority to the A2Notes in point of payment of principal prior to enforcement). The B Notes will rank in priority in point of security and payment of interest tothe C Notes and the C Notes will rank in priority in point of security and payment of interest to the D Notes. Subject to the satisfaction of thePro Rata Test (as defined in the ‘‘Summary Information’’ section below) the Junior Notes rank pari passu and pro rata in point of payment ofprincipal.

If any withholding or deduction for or on account of tax is applicable to payments of interest or principal on the Notes, such payment will bemade subject to such withholding or deduction without the Issuer being obliged to pay any additional amounts as a consequence.

Application has been made to the Irish Financial Services Regulatory Authority (‘‘IFSRA’’), as competent authority under Directive 2003/71/EC(the ‘‘Prospectus Directive’’), for this Prospectus to be approved. Application has been made to the Irish Stock Exchange Limited (the ‘‘ISE’’)for the Notes to be admitted to the official list and to trading on its regulated market. It is anticipated that the Notes will be admitted totrading on or about the Issue Date, however, there can be no assurance that listing will be granted.

The Notes will be obligations solely of the Issuer and will not be guaranteed by, or be the responsibility of, any other entity. In particular, theNotes will not be obligations of, and will not be guaranteed by Citigroup Global Markets Limited (‘‘Citigroup’’), Irish Life & Permanent plc(‘‘Irish Life & Permanent’’), any affiliate of Irish Life & Permanent, Citicorp Trustee Company Limited (the ‘‘Trustee’’) or the Managers (asdefined under ‘‘Subscription and Sale’’ below).

The A1 Notes and A2 Notes are expected, on issue, to be assigned an Aaa rating by Moody’s Investors Service Limited (‘‘Moody’s’’) and anAAA rating by Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies Inc. (‘‘S&P’’, and together with Moody’s, the‘‘Rating Agencies’’). The B Notes are expected, on issue, to be assigned an Aa3 rating by Moody’s and an AA rating by S&P. The C Notesare expected, on issue, to be assigned an A2 rating by Moody’s and an A rating by S&P. The D Notes are expected, on issue to beassigned a Baa2 rating by Moody’s and a BBB rating by S&P. A security rating is not a recommendation to buy, sell or hold securities andmay be subject to revision, suspension or withdrawal at any time by Moody’s and/or S&P.

Each class of Notes will initially be represented by a temporary global note in bearer form (each a ‘‘Temporary Global Note’’), withoutcoupons or talons, which is expected to be deposited with a common depositary for Euroclear Bank S.A./N.V., as operator of the EuroclearSystem (‘‘Euroclear’’) and Clearstream Banking, societe anonyme (‘‘Clearstream, Luxembourg’’) on or about 29 June 2006 (the ‘‘Issue Date’’).Each such Temporary Global Note will be exchangeable 40 days after the later of the Issue Date and the commencement of the offering ofthe Notes upon certification of non-U.S. beneficial ownership for interests in a permanent global note in bearer form (each a ‘‘PermanentGlobal Note’’ and together with each Temporary Global Note, the ‘‘Global Notes’’), without coupons or talons, for the relevant class of Noteswhich will also be deposited with a common depositary for Euroclear and Clearstream, Luxembourg. Save in certain limited circumstances,Notes in definitive form will not be issued in exchange for the Global Notes. All references in this Prospectus to ‘‘Notes’’ are references to thespecified Notes and all references to ‘‘Noteholders’’ are to the holders thereof.

A ‘‘Risk Factor’’ section is included in this Prospectus. Prospective Noteholders should be aware of the issues that are summarised in thatsection.

27 June 2006

Arranger

Citigroup

Lead Managers

Citigroup Deutsche Bank Societe GeneraleCorporate & Investment Banking

Co-Manager

Davy Stockbrokers

Except as set out below, the Issuer accepts responsibility for the information contained in thisProspectus. To the best of its knowledge and belief (having taken all reasonable care to ensurethat such is the case) the information contained in this Prospectus is in accordance with the factsand does not omit anything likely to affect the import of such information.

Irish Life & Permanent has provided the descriptions under the headings ‘‘The Originator’sGroup’’, ‘‘The Mortgage Manager’’, ‘‘The Subordinated Loan Provider’’ and ‘‘The Mortgage Pool’’and accepts responsibility for the information in those sections accordingly. To the best of theknowledge and belief of Irish Life & Permanent (having taken all reasonable care to ensure thatsuch is the case), the information contained in these sections is in accordance with the facts anddoes not omit anything likely to affect the import of such information.

The Notes have not been and will not be registered under the United States Securities Act of1933 (the ‘‘Securities Act’’) and include Notes in bearer form that are subject to U.S. tax lawrequirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within theUnited States or to any U.S. persons.

This Prospectus does not constitute an offer of, or an invitation by or on behalf of, the Issuer,Irish Life & Permanent, Citigroup or the Managers, to subscribe for or purchase any of the Notes.The distribution of this Prospectus and the offering of the Notes in certain jurisdictions may berestricted by law. Persons into whose possession this Prospectus comes are required by theIssuer, Irish Life & Permanent, Citigroup and the Managers to inform themselves about and toobserve such restrictions. For a description of certain further restrictions on offers and sales ofNotes and distribution of this Prospectus, see ‘‘Subscription and Sale’’ below.

No person is authorised to give any information or to make any representation concerning theissue of the Notes other than those contained in this Prospectus. Nevertheless, if any suchinformation is given by any broker, seller or any other person, it must not be relied upon as havingbeen authorised by the Issuer, Irish Life & Permanent, Citigroup or the Managers. Neither thedelivery of this Prospectus nor any offer, sale or solicitation made in connection herewith shall, inany circumstances, imply that the information contained herein is correct at any time subsequent tothe date of this Prospectus.

Any investment in the Notes does not have the status of a bank deposit and is not within thescope of the deposit protection scheme operated by IFSRA. The Issuer is not regulated by IFSRAby virtue of the issue of the Notes.

References in this document to ‘‘e’’ and ‘‘euro’’ are to the lawful currency for the time beingof the member states of the European Union that have adopted the single currency in accordancewith the treaty establishing the European Community, as amended by the Treaty on EuropeanUnion.

In connection with the issue of the Notes, Citigroup (the ‘‘Stabilising Manager’’) (or personsacting on behalf of the Stabilising Manager) may over allot notes (provided that, in the case of anynotes to be admitted to trading on the regulated market of the ISE, the aggregate principal amountof Notes allotted does not exceed 105 per cent of the aggregate principal amount of the relevanttranche) or effect transactions with a view to supporting the market price of the Notes at a levelhigher than that which might otherwise prevail. However, there is no assurance that the StabilisingManager (or persons acting on behalf of the Stabilising Manager) will under take stabilisationaction. Any loss or profit sustained as a consequence of any such over-allotment or stabilisationshall be for the account of the Stabilising Manager. Any stabilisation action may begin on or afterthe date on which adequate public disclosure on the terms of the offer or the relevant tranche ofNotes is made and, if begun, may be ended at any time, but not later than the 30 days after theissue date of the relevant tranche of Notes and 60 days after the date of the allotment of therelevant tranche of Notes. Such stabilisation shall be in compliance with all applicable laws,regulations and rules. No such stabilisation shall take place in or from Ireland.

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TABLE OF CONTENTS

SUMMARY INFORMATION ........................................................................................................ 4RISK FACTORS .......................................................................................................................... 13CREDIT AND LIQUIDITY STRUCTURE..................................................................................... 23USE OF PROCEEDS.................................................................................................................. 29THE ISSUER............................................................................................................................... 30THE ORIGINATOR’S GROUP .................................................................................................... 32THE MORTGAGE MANAGER .................................................................................................... 34THE SUBORDINATED LOAN PROVIDER ................................................................................. 34THE MORTGAGE POOL ............................................................................................................ 35AVERAGE LIVES OF THE NOTES ............................................................................................ 51AMORTISATION TABLE............................................................................................................. 52TERMS AND CONDITIONS OF THE NOTES............................................................................ 54TAXATION .................................................................................................................................. 75SUBSCRIPTION AND SALE....................................................................................................... 77GENERAL INFORMATION ......................................................................................................... 79INDEX ......................................................................................................................................... 80

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SUMMARY INFORMATION

The information in this Summary Information section is a summary of the principal features ofthe issue of the Notes. This summary should be read in conjunction with, and is qualified in itsentirety by references to, the detailed information contained elsewhere in this Prospectus.

The Issuer

Fastnet Securities 2 plc is a public limited company incorporated in Ireland with registerednumber 420155. The issued share capital of the Issuer comprises 40,000 ordinary shares of e1fully paid up, 39,994 of which are directly held by Wilmington Trust SP Services (London) Limited(in its capacity as ‘‘Share Trustee’’) and the remaining 6 are held by six nominees on trust for theShare Trustee. The Share Trustee, directly or indirectly, holds all of the issued shares on adiscretionary trust for certain charitable purposes.

The Issuer intends to acquire mortgages over residential properties situated in Ireland (the‘‘Mortgages’’) from Irish Life & Permanent, such acquisition to be financed by the issue of theNotes.

The Mortgage Manager

Irish Life & Permanent (in this capacity, the ‘‘Mortgage Manager’’) will be appointed under theterms of the mortgage management agreement dated on or about the Issue Date and madebetween the Issuer, Irish Life & Permanent, the Trustee, and the Mortgage Manager (the‘‘Mortgage Management Agreement’’) as agent for the Issuer and the Trustee, to manage theMortgage Pool (as defined under ‘‘The Mortgage Pool’’ below) on behalf of the Issuer and theTrustee, including, inter alia, to manage all cash transactions and maintain all cash managementledgers as agent for the Issuer and the Trustee, the collection of payments under the Mortgages,the operation of the arrears procedures and the setting of interest rates under the Mortgages andto report on a quarterly basis to the Trustee and the Issuer on the Mortgage Pool and themanagement of the Mortgages and other matters relating to the administrative functions asdescribed herein (see ‘‘The Mortgage Pool’’ below).

The Mortgage Manager is not responsible for payment of principal or interest on the Notes.

The Trustee

The Trustee will be appointed pursuant to a trust deed (the ‘‘Trust Deed’’) to be entered intoon the Issue Date between the Issuer and the Trustee to represent, inter alia, the interests of theNoteholders. The Trustee will hold for the benefit of, inter alios, the Noteholders, the securitygranted by the Issuer under the Deed of Charge (as defined under ‘‘Security for the Notes’’ below).

The Notes

The Notes: e344,000,000 Class A1 Mortgage Backed Floating Rate Notes due August 2043,e1,656,000,000 Class A2 Mortgage Backed Floating Rate Notes due August 2043, e50,000,000Class B Mortgage Backed Floating Rate Notes due August 2043, e44,000,000 Class C MortgageBacked Floating Rate Notes due August 2043 and e56,000,000 Class D Mortgage Backed FloatingRate Notes due August 2043 will in each case, be constituted by the Trust Deed and share in thesame security, subject to the priority described below.

Interest: payable in arrear on the 10th day of each month in each year or if such day is not abusiness day (a ‘‘business day’’ being a day (other than a Saturday or Sunday) on which banksare open for business in London and Dublin and which is a TARGET Settlement Day (as definedin Condition 4(c) of ‘‘Terms and Conditions of the Notes’’ (the ‘‘Conditions’’)), the next followingbusiness day (each such day an ‘‘Interest Payment Date’’) the first Interest Payment Date being10 August 2006, at a rate equal to Note EURIBOR plus a margin of:

(i) 0.03 per cent. per annum in relation to the A1 Notes until the Interest Payment Datefalling in June 2012, and thereafter 0.06 per cent. per annum;

(ii) 0.12 per cent. per annum in relation to the A2 Notes until the Interest Payment Datefalling in June 2012, and thereafter 0.24 per cent. per annum;

(iii) 0.15 per cent. per annum in relation to the B Notes until the Interest Payment Datefalling in June 2012, and thereafter 0.30 per cent. per annum;

(iv) 0.23 per cent. per annum in relation to the C Notes until the Interest Payment Datefalling in June 2012, and thereafter 0.46 per cent. per annum; and

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(v) 0.45 per cent. per annum in relation to the D Notes until the Interest Payment Datefalling in June 2012 and thereafter, 0.90 per cent. per annum.

Expected Average Lives: the average lives of the Notes cannot be accurately predicted, as theactual rate of redemption of the Mortgages and a number of other relevant factors are unknown.Calculations of the possible average lives can be made based on certain assumptions, includingthe rate at which the Mortgages are repaid or prepaid and whether the Issuer exercises its optionto redeem the Notes on the Interest Payment Date falling in June 2012. Based on the assumptionsreferred to under ‘‘Average Lives of the Notes’’ below and a constant prepayment rate of 10 percent., the average life of the A1 Notes is likely to be approximately 0.98 years, the average life ofthe A2 Notes is likely to be approximately 5.25 years, the average life of the B Notes is likely tobe 4.52 years, the average life of the C Notes is likely to be 4.52 years and the average life of theD Notes is likely to be 4.52 years.

Withholding Tax: payments of interest and principal on the Notes will be subject to anywithholding taxes applicable to the Notes and the Mortgages and neither the Issuer nor the PayingAgents will be obliged to pay additional amounts in relation thereto.

Form and Denomination: each class of Notes (which will be in the denomination of e50,000each, subject to pro rata redemption of Notes of the same class) will initially be represented by asingle Temporary Global Note without coupons or talons. Each Temporary Global Note will beexchangeable, subject as provided under the Conditions, for a Permanent Global Note, withoutcoupons or talons. The Permanent Global Notes will not be exchangeable for definitive notes savein certain limited circumstances (for which see further ‘‘Terms and Conditions of the Notes’’ below).

Redemption and Purchase

(i) Final Redemption

Unless previously redeemed, the Notes will mature on the Interest Payment Date falling inAugust 2043.

(ii) Mandatory Redemption in Part

The Notes will be subject to mandatory redemption in part by the Issuer on each InterestPayment Date by calculating the ‘‘Available Principal Funds’’ (as defined under ‘‘Credit andLiquidity Structure’’ below) and applying them according to the Principal Priority of Payments as setout below.

(iii) Optional Redemption

(a) The Issuer may, at its option, redeem all (but not some only) of the Notes at theirPrincipal Amount Outstanding (as defined in Condition 5) in the event of certain taxchanges affecting the Notes, the Swap Agreements (as defined in ‘‘Credit and LiquidityStructure’’ below) or the Mortgages comprising the Mortgage Pool at any time;

(b) the Issuer may, at its option, redeem all (but not some only) of the Notes at theirPrincipal Amount Outstanding on the Interest Payment Date falling in June 2012 or onany Interest Payment Date falling thereafter; and

(c) the Issuer may, at its option, redeem all (but not some only) of the Notes on anyInterest Payment Date on which the aggregate Principal Amount Outstanding of theNotes is less than 10 per cent. of the aggregate Principal Amount Outstanding of theNotes as at the Issue Date.

(iv) Purchase

The Issuer shall not be permitted to purchase any Notes.

Security for the Notes

The Notes will be obligations of the Issuer only. Pursuant to a deed of charge andassignment to be entered into on the Issue Date between, among others, the Issuer, Irish Life &Permanent and the Trustee (the ‘‘Deed of Charge’’), the Notes will be secured in favour of theTrustee for the benefit of itself and on trust for other persons expressed to be secured partiesthereunder, inter alia, by:

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(i) a first fixed charge over the Issuer’s interests in the Mortgages and other collateralsecurity relating to the Mortgages (as described under ‘‘The Mortgages’’ below) (which,until notice is served on the Borrowers (as defined under ‘‘The Mortgages’’ below) and,in respect of Mortgages of property comprising registered land, until registration iseffected will take effect as an equitable assignment);

(ii) an assignment by way of security of the Issuer’s interests in certain block buildingspolicies, contingency policies and mortgage indemnity policies to the extent that theyrelate to the Mortgages and any other insurance policies relating to the Mortgages (the‘‘Insurance Contracts’’) and a first fixed charge over the Issuer’s interests in life policiesrelating to Mortgages;

(iii) an assignment by way of security of the benefit of the Mortgage ManagementAgreement, the mortgage sale agreement to be entered into between Irish Life &Permanent, the Issuer and the Trustee (the ‘‘Mortgage Sale Agreement’’), the payingagency agreement between, amongst others, the Issuer, the Trustee, Citibank, N.A. asagent bank and as principal paying agent (the ‘‘Agency Agreement’’), the BankAgreement (as defined under the Conditions), the Declaration of Trust, the SwapAgreements and the Subordinated Loan Agreement, in each case dated on or about theIssue Date (all as defined under ‘‘Credit and Liquidity Structure’’ below) (all suchdocuments together, the ‘‘Transaction Documents’’);

(iv) a first fixed charge over the Issuer’s interest in the Trust Accounts, the TransactionAccount and the Reserve Account (each as defined under ‘‘Credit and LiquidityStructure’’ below), any other bank account of the Issuer from time to time and over theAuthorised Investments (as defined under ‘‘Credit and Liquidity Structure’’ below); and

(v) a first floating charge (ranking after the security referred to in (i) to (iv) above) over thewhole of the undertaking, property, assets and rights of the Issuer (other than theExcluded Assets (as defined below)).

The Issuer’s share capital account and interest in the corporate service agreement (the‘‘Corporate Services Agreement’’) between the Issuer and Wilmington Trust (Ireland) Limited on orabout the Issue Date (the ‘‘Excluded Assets’’) will not form part of the security.

Pre-Enforcement Revenue Priority of Payments

On each Interest Payment Date prior to enforcement of the security created under the Deedof Charge, Available Revenue Funds (as defined under ‘‘Credit and Liquidity Structure’’ below) willbe applied in making the following payments or provisions in the following order of priority (the‘‘Revenue Priority of Payments’’):

(i) the remuneration payable to the Trustee and any costs, charges, liabilities and expenses(plus value added tax, if any), incurred by it under the provisions of the Trust Deed, theDeed of Charge and/or any of the Transaction Documents together with interest on suchamounts as provided in the Trust Deed, the Deed of Charge and/or any of theTransaction Documents;

(ii) amounts, including, amongst others, audit fees, an annual fee of e1,000 payable to theIssuer (the ‘‘Issuer Fee’’), rating agency fees, auditors fees, directors fees and companysecretarial expenses (plus value added tax, if any), which are payable by the Issuer inrespect of legal or compliance matters (where non-payment thereof may be detrimentalto the solvency of the Issuer or its ability to continue to service its obligations under theNotes) to persons who are not party to any of the Transaction Documents and incurredwith or without breach by the Issuer pursuant to the Trust Deed, the Deed of Chargeand/or any other Transaction Documents and not provided for payment elsewhere and toprovide for any such amounts expected to become due and payable by the Issuer afterthat Interest Payment Date and prior to the next Interest Payment Date and to providefor the Issuer’s liability or possible liability for corporation tax;

(iii) to pay pro rata and pari passu: (a) amounts due and/or which will become due andpayable (plus value added tax, if any) prior to the next Interest Payment Date to thePaying Agents and Agent Bank (each as defined in ‘‘Terms and Conditions’’ below)under the Agency Agreement; and (b) where the Mortgage Manager is not Irish Life &Permanent or an affiliate of Irish Life & Permanent, the management fee (inclusive ofvalue added tax, if any) payable together with costs and expenses (plus value added

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tax, if any) incurred by the Mortgage Manager under the Mortgage ManagementAgreement which are due and/or which will become due and payable prior to the nextInterest Payment Date;

(iv) to pay, where the Mortgage Manager is Irish Life & Permanent or an affiliate of Irish Life& Permanent, the aggregate monthly management fee (inclusive of value added tax, ifany) payable pursuant to the Mortgage Management Agreement and the Deed ofCharge, such fee being up to a maximum of 0.15 per cent. of the aggregate principalbalance of the Mortgages on the Determination Date (as defined in ‘‘Credit and LiquidityStructure’’ below) immediately preceding the relevant Interest Payment Date divided bytwelve, together with all costs and expenses (together with value added tax, if any)incurred by the Mortgage Manager during the immediately preceding Collection Period(as defined below), subject to and in accordance with the provisions of the MortgageManagement Agreement and the Deed of Charge;

(v) to pay amounts payable to the Swap Counterparty (as defined under ‘‘Credit andLiquidity Structure’’ below) under the Swap Agreements (other than any SwapTermination Amounts);

(vi) to pay pro rata and pari passu any interest due and payable on the Senior Notes;

(vii) in or towards satisfaction of sums to be credited to the Class A Principal DeficiencyLedger (as defined under ‘‘Credit and Liquidity Structure’’ below) until the debit balance,if any, on the Class A Principal Deficiency Ledger is reduced to zero;

(viii) to pay any interest due and payable on the B Notes, subject always to Condition 6(i);

(ix) in or towards satisfaction of sums to be credited to the Class B Principal DeficiencyLedger (as defined under ‘‘Credit and Liquidity Structure’’ below) until the debit balance,if any, on the Class B Principal Deficiency Ledger is reduced to zero;

(x) to pay any interest due and payable on the C Notes, subject always to Condition 6(i);

(xi) in or towards satisfaction of sums to be credited to the Class C Principal DeficiencyLedger (as defined under ‘‘Credit and Liquidity Structure’’ below) until the debit balance,if any, on the Class C Principal Deficiency Ledger is reduced to zero;

(xii) to pay any interest due and payable on the D Notes, subject always to Condition 6(i);

(xiii) in or towards satisfaction of sums to be credited to the Class D Principal DeficiencyLedger (as defined under ‘‘Credit and Liquidity Structure’’ below) until the debit balance,if any, on the Class D Principal Deficiency Ledger is reduced to zero;

(xiv) to the Reserve Ledger (as defined in ‘‘Credit and Liquidity Structure’’ below) (if required),until the credit balance of the Reserve Ledger reaches the Reserve Ledger RequiredAmount (as defined in ‘‘Credit and Liquidity Structure’’ below),

and in making the following payments or credits, provided that no amounts comprised in theReserve Ledger or Liquidity Reserve Ledger (as defined under ‘‘Credit and Liquidity Structure’’below) are to be applied on such Interest Payment Date except that amounts in the ReserveLedger may be applied to satisfy any First Period Shortfall Amount (as defined in ‘‘Credit andLiquidity Structure’’ below) on the first Interest Payment Date:

(xv) to pay any Swap Termination Amounts payable to the Swap Counterparty under theSwap Agreements; and

(xvi) amounts payable in respect of the Subordinated Loan (as defined below) other than inrespect of principal on the Subordinated Loan (and, if agreed between the Issuer andIrish Life & Permanent, amounts payable in respect of the principal).

‘‘Swap Termination Amounts’’ means any payment due to be made by the Issuer under aSwap Agreement on the termination of the relevant Swap Agreement upon the occurrence of anEvent of Default (as defined in the Swap Agreements) where the Swap Counterparty is theDefaulting Party (as defined in the Swap Agreements) or an Additional Termination Event (asdefined in the Swap Agreements) occurs as a result of a rating downgrade of the SwapCounterparty.

To the extent that the monies available on the relevant Interest Payment Date are sufficient,such amount shall be paid to the persons entitled thereto or so applied on such Interest Payment

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Date and after such payment or application it is not intended that any surplus will be accumulatedin the Issuer.

Pre-Enforcement Principal Priority of Payments

On each Interest Payment Date, prior to the enforcement of the security under the Deed ofCharge, Available Principal Funds (as defined under ‘‘Credit and Liquidity Structure’’ below) will beapplied, after payment of any Excluded Items, in making the following payments or provisions inthe following order of priority (the ‘‘Principal Priority of Payments’’):

(i) to the extent that the Issuer has insufficient Available Revenue Funds on aDetermination Date to pay in full items (i) to (xiii) (inclusive) of the Revenue Priority ofPayments, in or towards the payment of such items in the order in which they appear inthe Pre-Enforcement Revenue Priority of Payments provided that Available PrincipalFunds may not be applied in payment or reduction of items (viii) to (xiii) (inclusive andas applicable), of the Revenue Priority of Payments which relate to the B Notes, CNotes or D Notes (as the case may be) if the PDL Test in respect of such class ofNotes is satisfied.;

(ii) following a Liquidity Reserve Ledger Rating Event (as defined under ‘‘Credit andLiquidity Structure’’ below), in or towards satisfaction of sums to be credited to theLiquidity Reserve Ledger (as defined under ‘‘Credit and Liquidity Structure’’ below) untilthe balance of the Liquidity Reserve Ledger is equal to the Liquidity Reserve RequiredAmount (as defined under ‘‘Credit and Liquidity Structure’’ below);

(iii) amounts (other than amounts made available pursuant to paragraph (iv) of AvailablePrincipal Funds) to the New Loans Ledger (as defined under ‘‘Credit and LiquidityStructure’’ below) up to the New Loans Target Amount (as defined under ‘‘Credit andLiquidity Structure’’ below) up to the New Loans Acquisition Expiry Date (as definedunder ‘‘Credit and Liquidity’’ below);

(iv) (a) So long as the Pro Rata Test (as defined below) is satisfied, in redeeming theNotes in the same proportion between the Senior Notes and the Junior Notes asthe Principal Amount Outstanding of the Senior Notes bore to the Principal AmountOutstanding of the Junior Notes on the Determination Date immediately precedingsuch Interest Payment Date; such amounts to be apportioned between each classof the Senior Notes and Junior Notes as follows:

(i) the proportion allocated to the Senior Notes shall be applied in redeeming theA1 Notes until the A1 Notes are redeemed in full and thereafter shall beapplied in redeeming the A2 Notes until the A2 Notes are redeemed in full;and

(ii) the proportion allocated to the Junior Notes shall be applied in redeemingeach of the B Notes, the C Notes and the D Notes pro rata and pari passu,according to the respective proportions that the Principal Amount Outstandingof each Class, (determined as at the Determination Date immediatelypreceding such Interest Payment Date), bears to the total proportion, allocatedto the Junior Notes, until the same are redeemed in full.

(b) if the Pro Rata Test is not satisfied:

(i) first, to the A1 Notes until the A1 Notes are redeemed in full;

(ii) second, to the A2 Notes until the A2 Notes are redeemed in full;

(iii) third, to the B Notes until the B Notes are redeemed in full;

(iv) fourth, to the C Notes until the C Notes are redeemed in full; and

(v) fifth, to the D Notes until the D Notes are redeemed in full.

‘‘Collection Period’’ means, in respect of the first collection period, the period from the IssueDate to (but excluding) the Determination Date prior to the first Interest Payment Date, andthereafter, each successive period from (and including) a Determination Date to (but excluding) thenext following Determination Date.

‘‘PDL Test’’ means in respect of each applicable class of Notes when the ratio, expressed asa percentage, of the amount debited to the Class B Principal Deficiency Ledger, Class C PrincipalDeficiency Ledger and/or the Class D Principal Deficiency Ledger to the Principal Amount

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Outstanding of the applicable class of Notes to which such Principal Deficiency Ledger relates isgreater than 50 per cent. on the relevant Determination Date.

‘‘Pro Rata Test’’ means, as at the relevant Determination Date, the test carried out by theMortgage Manager in accordance with the Mortgage Management Agreement to determine whether(i) the total balance of Mortgages which are in arrears by more than 90 days represents less than4 per cent. of the outstanding balance of the Mortgages; (ii) there is any Principal Deficiencyremaining (after the allocation on the immediately succeeding Interest Payment Date of anyamounts to the Principal Deficiency Ledgers (as defined under ‘‘Credit and Liquidity Structure’’below) in accordance with the Revenue Priority of Payments); and (iii) immediately after thepreceding Interest Payment Date, the balance of the Reserve Ledger was at least equal to theReserve Ledger Required Amount (or if at such time the balance of the Reserve Ledger is notrequired to equal the Reserve Ledger Required Amount, there have been no deductions from theReserve Ledger (except on the first Interest Payment Date in respect of any deductions to satisfyany First Period Shortfall Amount)).

Excluded Items

The following items are included in those items (‘‘Excluded Items’’) which may be paid orprovided for prior to the allocation of sums under the Revenue Priority of Payments and PrincipalPriority of Payments:

(i) certain moneys which properly belong to third parties (including, but not limited tomonies owing to any party in respect of reimbursement for direct debit recall andoverpayments by Borrowers or to the Revenue Commissioners in Ireland or Borrowersunder the TRS Scheme for the deduction of tax relief at source);

(ii) on the first Interest Payment Date, amounts payable to Irish Life & Permanent under theMortgage Sale Agreement in respect of reconciliations of any amount underpaid inrespect of the purchase on the Issue Date to the purchase price for the relevantMortgages acquired;

(iii) amounts to be applied by the Issuer in the purchase of Further Advances during anInterest Period from monies allocated for such purpose on the immediately precedingDetermination Date to a ledger to record the purchase of Further Advances (the ‘‘FurtherAdvances Ledger’’) but subject to the conditions for the purchase of Further Advancescontained in the Mortgage Management Agreement (see ‘‘Further Advances’’ below);

(iv) Mortgage Prepayment Amounts which are to be payable to the Swap Counterpartypursuant to the FRM Swap Agreement (as defined under ‘‘Credit and Liquidity Structure’’below); and

(v) certain amounts payable by Borrowers to third parties, such as insurance providers.

Covenants

The Issuer will be subject to covenants including a negative pledge and an undertaking not toengage in any activity other than the ownership of the Mortgages and certain other assets, theexercise of related rights and powers and other activities referred to herein or reasonably incidentalthereto and to provide the Trustee with an annual certificate confirming amongst other things thatno Event of Default (as defined in Condition 9) or potential Event of Default has occurred.

The Mortgages

Mortgage Product Types: The Mortgage Pool (as defined below) will consist of Mortgages originatedby Irish Life & Permanent which are intended for borrowers (‘‘Borrowers’’) who are individuals who wishto use the Mortgage as a means to purchase or refinance a residential property situated in Ireland to beused solely as the Borrower’s own residence.

Identity of Borrower: The identity of the Borrowers will comprise any of the following:

(i) an individual who is self-employed and for whom an accountant has furnished acertificate in the form supplied by Irish Life & Permanent as evidence of the Borrower’sability to repay the Mortgage (a ‘‘Self-Employed Borrower’’);

(ii) any other individual (a ‘‘Standard Borrower’’).

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Types of Interest Rate Terms: The interest rate terms for each Mortgage will comprise any of thefollowing types:

(i) Mortgages which are subject to a variable rate of interest set by Irish Life & Permanentfrom time to time (‘‘Variable Rate Mortgages’’);

(ii) Mortgages which are subject to a fixed rate of interest set by reference to a pre-determined rate or series of rates for a fixed period or periods (‘‘Fixed RateMortgages’’); or

(iii) Mortgages which are ECB-linked mortgages where the applicable rate of interest iscalculated by reference to the European Central Bank base rate (the ‘‘ECB Rate’’)(‘‘Tracker Mortgages’’).

Mortgages which were but are no longer subject to a fixed rate of interest are treated as andare referred to herein as Variable Rate Mortgages.

Types of Repayment Terms: The type of repayment terms contained within each Mortgage Product willcomprise any of the following types (including possible combinations thereof):

(i) mortgages in relation to which monthly instalments, which can cover both interest andprincipal, are payable until the mortgage is fully repaid by its maturity (‘‘RepaymentMortgages’’); and

(ii) mortgages in relation to which the principal amount is not repayable before maturity andwhich require a policy of endowment life assurance (which is in certain cases a unit-linked policy) (an ‘‘Endowment Policy’’) to be charged by way of collateral security(‘‘Endowment Mortgages’’).

The Mortgage Pool: The ‘‘Mortgage Pool’’ from time to time will comprise:

(i) the Completion Mortgage Pool (as defined below);

(ii) any Substitute Mortgages (as defined under ‘‘The Mortgage Pool’’ below) acquired bythe Issuer;

(iii) any Further Advances (as defined below) acquired in accordance with the provisions ofthe Mortgage Sale Agreement and the Mortgage Management Agreement; and

(iv) any New Loans (as defined below) acquired in accordance with the provisions of theMortgage Sale Agreement and the Mortgage Management Agreement,

other than, in any such case, Mortgages which have been discharged or in respect of whichfunds representing principal outstanding have been otherwise received in full or which have beenre-transferred by the Issuer.

No searches, inquiries or independent investigation of title of the type which a prudentpurchaser or mortgagee would normally be expected to carry out have been or will be made bythe Issuer or the Trustee, each of whom is relying entirely upon the warranties set out in theMortgage Sale Agreement.

The Mortgage Pool will comprise only Mortgages originated by Irish Life & Permanent.

The ‘‘Completion Mortgage Pool’’ will comprise the Mortgages purchased by the Issuer fromIrish Life & Permanent on the Issue Date.

The Completion Mortgage Pool will be drawn (in accordance with the criteria summarisedbelow) only from, and will substantially comprise, the mortgages contained in a provisional portfolioof mortgages owned and selected by Irish Life & Permanent as at 13 April 2006 (the ‘‘Cut-OffDate’’) (the ‘‘Provisional Mortgage Pool’’). On the Cut-Off Date, the Provisional Mortgage Pool hadthe characteristics shown below:

Total number of Borrowers 27,840Total number of advances 27,872Aggregate balances of the Mortgages e4,357,866,699.53Average mortgage balance e156,352.85Largest Mortgage e999,850.28Weighted average loan-to-value ratio (LTV) 73.17%Weighted average indexed loan-to-value ratio (LTV) 63.21%Weighted average seasoning 16.59 monthsWeighted average remaining term 26.5 years

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Longest Maturity Date 6 April 2041Weighted Average Interest Rate 3.31%

Prior to the Issue Date, in forming the Completion Mortgage Pool, Irish Life & Permanent willremove from the Provisional Mortgage Pool all Mortgages which (a) are fully redeemed (b) do notcomply with the warranties to be set out in the Mortgage Sale Agreement or (c) as are necessaryto ensure that the aggregate balances of Mortgages comprised in the Completion Mortgage Poolare as close as possible to, but will not exceed e2,150,000,000.

Conversion of Mortgages: After a Mortgage has been acquired by the Issuer, the MortgageManager, on behalf of the Issuer, may agree to a request by a Borrower to convert his Mortgage(or, in the case of a default by a Borrower, the Mortgage Manager may on behalf of the Issuerelect to convert such Borrower’s Mortgage) into certain other types of mortgage below, as moreparticularly described in ‘‘The Mortgage Pool’’) subject to the fulfilment of certain conditions asmore particularly set out under ‘‘The Mortgage Pool’’ below.

Further Advances: Additional funds may be advanced to Borrowers (the ‘‘Further Advances’’) byIrish Life & Permanent utilising its own funds. Such advances will either be secured by a firstranking mortgage over a property or the advances will be secured over the same property, suchthat each advance will rank above all security other than the security in favour of Irish Life &Permanent. Such Further Advances may be acquired by the Issuer subject to the satisfaction ofcertain conditions as more particularly set out under ‘‘The Mortgage Pool’’ below.

New Loans: To the extent there are available funds in the New Loans Ledger (as defined in‘‘Credit and Liquidity Structure’’ below), the Mortgage Manager may apply such amounts towardsthe acquisition of new loans (‘‘New Loans’’) by the Issuer in accordance with the terms of theMortgage Management Agreement and the Mortgage Sale Agreement. Any New Loans acquiredwill be originated by Irish Life & Permanent or an affiliate of Irish Life & Permanent and will satisfythe conditions set out in the Mortgage Sale Agreement.

Key Features of Lending Criteria: The criteria (‘‘Lending Criteria’’) applicable to the initialadvance or any Further Advance under each Mortgage include, but are not limited to, the following:

– all loans must pass a credit search;

– all loans are credit scored;

– all loans must be secured by a first legal mortgage on a leasehold or freehold property.If the property is leasehold, the lease must have a minimum unexpired term of 70 yearsand be at a nominal/peppercorn rent;

– the customers must be at least 18 years old at the time of advance;

– the term of the mortgage is between 5 and 35 years from the date of advance;

– the loan to value ratio at the time of the initial advance must be no more than 92 percent. or in the case of loans to qualifying first time buyers, 100 per cent.;

– prior to December 2003, mortgage indemnity insurance was required for all loans with aloan to value ratio of between 75 per cent. and 92 per cent., save for certain loansissued up to April 2001 in excess of e190,460, where mortgage indemnity insurancewas only required if the ratio exceeded 85 per cent.;

– since December 2003, mortgage indemnity insurance is required for all loans with a loanto value ratio of between 80 per cent. and 92 per cent., irrespective of loan amount.Loans with a loan to value ratio in excess of 92 per cent. at the date of initial issue arenot the subject of mortgage indemnity insurance;

– all customers must provide evidence of income in accordance with Irish Life &Permanent lending policy;

– prior to November 2001 the principal amount advanced could not (subject to certainexceptions) exceed 3 times the assessed income of the primary customer plus onetimes the assessed income of any secondary customer;

– since November 2001, and as introduced on a phased basis, the principal amountadvanced (subject to certain exceptions) is assessed based on the customer’srepayment capacity, as determined using Irish Life & Permanent’s net income criteria

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(being proposed mortgage repayments plus other loan repayments or maintenance etc.as a percentage of monthly income net of tax). All applications assessed on this basisare subject to stress-testing;

– prior to making an initial advance, the relevant property was valued by an independentqualified valuer approved by Irish Life & Permanent.

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RISK FACTORS

The following is a summary of certain aspects of the issue of the Notes about whichprospective Noteholders should be aware. The summary is not intended to be exhaustive andprospective Noteholders should read the detailed information set out in the section below entitled‘‘Credit and Liquidity Structure’’ and elsewhere in this document and reach their own views prior tomaking any investment decision regarding the Notes.

The Issuer’s Ability to meet its Obligations Under the Notes

The ability of the Issuer to meet its obligations in full in respect of payments of interest andprincipal on the Notes, including following the occurrences of any event of default by the Issuer (an‘‘Event of Default’’ as set out in Condition 9(a)), will depend upon and is limited to the receipt by it(i) of funds, through the Mortgage Manager, from Borrowers in respect of their Mortgages and theirrelated collateral security, (ii) of interest on the Transaction Account or otherwise from certainAuthorised Investments and (iii) of funds from the Swap Counterparty under the Swap Agreements.In addition, the Issuer will have available to it the Reserve Ledger, and the Liquidity ReserveLedger for the purposes specified in ‘‘Credit Structure’’ below.

On enforcement of the security created under the Deed of Charge, the obligation of theIssuer to repay moneys due and owing to the Noteholders will depend upon whether theMortgages and their related collateral security can be realised to obtain an amount sufficient toeffect repayment thereof. It should be noted that there is currently no recognised secondary marketin Ireland for the sale of mortgage portfolios (see ‘‘Limited Secondary Market for Mortgages’’below).

Warranties

The Issuer, the Trustee, the Arranger and the Managers have not undertaken nor will theyundertake any investigations, searches or other actions in respect of the Mortgages, and theirrelated collateral security and, in the case of the Issuer and the Trustee, will rely instead on thewarranties given by Irish Life & Permanent in the Mortgage Sale Agreement (the ‘‘Warranties’’).The sole remedy (save as described below) of each of the Issuer and the Trustee in respect of abreach of Warranty (see ‘‘The Mortgage Pool’’) shall be the requirement that Irish Life &Permanent repurchases or procures the repurchase, or substitutes or procures the substitution of asimilar Mortgage in replacement for, any Mortgage which is the subject of any breach, providedthat this shall not limit any other remedies available to the Issuer and/or the Trustee if Irish Life &Permanent fails to repurchase or procure the repurchase, or substitutes or procures thesubstitution, of a Mortgage when obliged to do so. There can be no assurance that Irish Life &Permanent will have the financial resources to honour its obligations to repurchase any Mortgagesin respect of which such a breach of warranty arises.

Title of the Issuer

The sale of the Mortgages and their collateral security will take effect in equity only. Save inthe limited circumstances described below under ‘‘The Mortgage Pool’’ (such as, inter alia, wherean Enforcement Notice (as defined under ‘‘Title to the Mortgage Pool’’ below) has been given orwhere the Trustee considers the Charged Property (as defined under ‘‘Title to the Mortgage Pool’’below) to be in jeopardy), neither the Issuer nor the Trustee will obtain legal title to the Mortgagesand their related collateral security by effecting any registration of their interests in the Mortgagesand collateral security and by giving notice of assignment or assignation (as appropriate) to theBorrowers.

Prior to the Issuer or the Trustee obtaining legal title to the Mortgages and their relatedcollateral security (as described above), the rights of the Issuer and the Trustee may be or maybecome subject to equities (e.g. rights of set-off between the Borrowers or insurance companiesand Irish Life & Permanent) and to the interests of third parties who perfect a legal interest,namely, a bona fide purchaser from Irish Life & Permanent for value of any such Mortgage withoutnotice of any interest of the Issuer or the Trustee, who may obtain a good title to the Mortgagesand collateral security free of any such interests. Such equities and third party rights may diminishor negate the value of the Issuer’s or Trustee’s interest in the Mortgages and their relatedcollateral security and could acquire priority over the interests of the Issuer and the Trustee.

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Also, for so long as neither the Issuer nor the Trustee has obtained legal title, it must joinIrish Life & Permanent as a party to any legal proceedings which it may wish to take against anyBorrower to enforce its rights under the relevant Mortgage and its related collateral security. In thisrespect, Irish Life & Permanent will, pursuant to the Mortgage Sale Agreement, undertake for thebenefit of the Issuer and the Trustee that it will lend its name to, and take such steps as mayreasonably be required by the Issuer or the Trustee in relation to, any legal proceedings in respectof the Mortgages and their related collateral security.

Collectability of Mortgages

The collectability of amounts due under the Mortgages is subject to credit, liquidity andinterest rate risks and will generally fluctuate in response to, among other things, market interestrates, general economic conditions, the financial standing of Borrowers and other similar factors.Other factors (which may not affect real estate values) may have an impact on the ability ofBorrowers to repay Mortgages. Loss of earnings, illness, divorce and other similar factors may leadto an increase in delinquencies and bankruptcy filings by Borrowers and could ultimately have anadverse impact on the ability of Borrowers to repay Mortgages.

In addition, the ability of the Borrower or, as the case may be, the Issuer or the Trustee todispose of a property at a price sufficient to repay the amounts outstanding under the relevantMortgage will depend upon a number of factors including the availability of buyers for the Property.

Risks of Losses Associated with Declining Property Values

The security for the Notes consists of, inter alia, the Issuer’s interest in the Mortgages. Thissecurity may be affected by, among other things, a decline in property values. No assurance canbe given that values of the Properties have remained or will remain at the level at which they wereon the dates of origination of the related Mortgages. If the residential property market in Irelandshould experience an overall decline in property values, such a decline could in certaincircumstances result in the value of the security created by the Mortgages being significantlyreduced. To that extent, Noteholders will bear the risk of loss resulting from default by Borrowersand will have to look primarily to the value of the Properties for recovery of the outstandingprincipal and unpaid interest of any delinquent Mortgages.

Geographic Concentration of Mortgaged Properties

Certain geographic regions will from time to time experience weaker regional economicconditions and housing markets than will other regions and, consequently, will experience higherrates of loss and delinquency on mortgage loans generally. There are concentrations of Propertieswithin certain regional areas which may present risk considerations in addition to those generallypresent for similar mortgage loan asset backed securities without such concentrations. See ‘‘TheMortgage Pool’’ below.

Lending Criteria

The Lending Criteria will have applied at the time of origination in respect of the Mortgagescomprising the Completion Mortgage Pool and will also apply in respect of any SubstituteMortgages, Further Advances or New Loans. The criteria consider, among other things, aBorrower’s credit history, employment history and status, repayment ability and debt service-to-income ratio, as well as the value of the relevant property. There can be no assurance that theLending Criteria will not be varied or that Mortgages originated under different criteria may notbecome part of the Mortgage Pool. See ‘‘The Mortgage Pool’’ below.

Solely Issuer Obligations and Enforcement Action

The Notes will be obligations solely of the Issuer and will not be guaranteed by, or be theresponsibility of, any other entity. In particular, the Notes will not be obligations of, and will not beguaranteed by Irish Life & Permanent, Citigroup, the Managers, the Trustee and the SwapCounterparty (as defined under ‘‘Credit and Liquidity Structure’’ below) or any other party. TheIssuer will rely solely on payments in respect of amounts due under the Mortgages, the ReserveLedger, the Liquidity Reserve Ledger, the Swap Agreements, and Authorised Investments to enableit to make payments in respect of the Notes.

Upon enforcement of the security for the Notes, the Trustee will have recourse only to theMortgages and any other assets (other than the Excluded Assets) of the Issuer then in existence,

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including the Reserve Ledger, the Liquidity Reserve Ledger and the Authorised Investments. Otherthan as provided in the Transaction Documents, the Issuer and the Trustee will have no recourseto Irish Life & Permanent or any other entity.

If, upon default by Borrowers and after the exercise by the Mortgage Manager of all availableremedies in respect of the Mortgages, the Issuer does not receive the full amount due from thoseBorrowers, then Noteholders may receive by way of principal repayment an amount less than theface value of their Notes and the Issuer may be unable to pay in full interest due on the Notes.

Limited Recourse and Non-Petition

The terms on which the Security for the Notes will be held will provide that, uponenforcement, payments will rank in the order of priority set out in Condition 2 (‘‘Priority ofPayments (Principal and Revenue) Post Enforcement’’) of the Notes. In the event that the Securityfor the Notes is enforced, no amounts will be paid to the holders of the Junior Notes until allamounts owing to the holders of the Senior Notes have been paid in full.

The obligations of the Issuer in respect of the Notes and its obligations to the Trustee andthe Noteholders are limited to the proceeds of enforcement of the Security. Upon enforcement ofthe Security and in the circumstances where amounts to be paid by the Issuer in accordance withthe provisions under Condition 2 (‘‘Priority of Payments (Principal and Revenue) PostEnforcement’’) of the Notes is greater than the amount realised from the Security, the Issuer willnot be obliged to pay any amounts representing such shortfall and any claims in respect of suchshortfall shall be extinguished.

Neither the Trustee nor the Noteholders shall be entitled to institute against the Issuer anybankruptcy, reorganisation, arrangement, examination, insolvency or liquidation proceedings orother proceedings under any applicable bankruptcy or similar law in connection with any obligationrelating to the Notes or the other Transaction Documents, save for lodging a claim in theliquidation of the Issuer which is initiated by any other party.

Yield and Prepayment Considerations

The yield to maturity of the Notes of each class will depend on, inter alia, the amount andtiming of payment of principal (including prepayments, sale proceeds arising on enforcement of aMortgage, and repurchases by Irish Life & Permanent due to, inter alia, breaches of the warrantiesunder the Mortgage Sale Agreement) on the Mortgages and the price paid by the holders of theNotes. Such yield may be adversely affected by a higher or lower than anticipated rate ofprepayments on the Mortgages.

Prepayments may arise in connection with refinancings, sales of properties by Borrowersvoluntarily or as a result of enforcement proceedings under the relevant Mortgages, as well as thereceipt of proceeds from buildings insurance and life insurance policies. In addition, repurchases ofMortgages required to be made under the Mortgage Sale Agreement will have the same effect asa prepayment of such Mortgages.

The rate of prepayment of Mortgages cannot be predicted and is influenced by a wide varietyof economic, social and other factors, including prevailing mortgage market interest rates, theavailability of alternative financing, local and regional economic conditions and homeowner mobility.Therefore, no assurance can be given as to the level of prepayments that the Mortgage Pool willexperience. See ‘‘Average Lives of the Notes’’.

Hedging of Fixed Rate Loans

The Mortgage Pool contains certain Mortgages in respect of which interest is payable at afixed rate of interest set by reference to a pre-determined rate or series of rates for a fixed periodor periods (the ‘‘Fixed Rate Loans’’) but the rate of interest payable in respect of the Notes isbased on a floating rate of interest. As such, the Issuer’s ability to pay interest on the Notes maybe affected if Note EURIBOR increases beyond a certain rate. In order to mitigate this risk, theIssuer will enter into the Swap Agreements as described under ‘‘Credit and Liquidity Structure –Swap Agreements below’’.

Termination Payments on the Swap Agreements

The Swap Agreements will provide that, upon the occurrence of certain events, the SwapAgreements may terminate. If a Swap Agreement terminates, the Issuer may be obliged to make a

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termination payment to the Swap Counterparty. The amount of the termination payment will bebased on the cost of entering into a replacement swap agreement. There can be no assurancethat the Issuer will have sufficient funds available to make any termination payment under a SwapAgreement. Nor can any assurance be given that the Issuer will be able to enter into areplacement swap agreement, or if one is entered into, as to the credit rating of the replacementswap counterparty, or that the then current ratings of the Notes would not be downgraded orwithdrawn as a result of entering into such replacement swap agreement.

Except where the Swap Counterparty has caused a Swap Agreement to terminate by its owndefault, any termination payment due by the Issuer following termination of such Swap Agreement(including any extra costs incurred (for example, from entering into ‘‘spot’’ currency or interest rateswaps)) will rank pari passu or senior with the relevant Senior Notes.

Therefore, if the Issuer is obliged to make a termination payment to the Swap Counterparty orto any successor swap counterparty or pay any other additional amount as a result of thetermination of a Swap Agreement this could reduce the Issuer’s ability to service payments on theNotes.

Withholding Tax under the Notes

In the event that withholding taxes are imposed in respect of payments to Noteholders ofamounts due pursuant to the Notes, neither the Issuer nor any Paying Agent nor any other personis obliged to gross up or otherwise compensate Noteholders for the lesser amounts theNoteholders will receive as a result of the imposition of withholding taxes. The imposition of suchwithholding taxes would entitle (but not oblige) the Issuer to redeem the Notes at their PrincipalAmount Outstanding plus accrued interest.

Limited Secondary Market for Mortgages

The ability of the Issuer to redeem all of the Notes in full, including following the occurrenceof an Event of Default in relation to the Notes while any of the Mortgages are still outstanding,may depend upon whether the Mortgages can be realised to obtain an amount sufficient to redeemthe Notes. There is not, at present, an active and liquid secondary market for loans of this type inIreland or the United Kingdom. The Issuer, and following the occurrence of an Event of Default,the Trustee, may not, therefore, be able to sell the Mortgages on appropriate terms should it berequired to do so.

Limited Secondary Market for the Notes

There is not, at present, an active and liquid secondary market for the Notes, and there canbe no assurance that a secondary market for the Notes will develop. Even if a secondary marketdoes develop, it may not continue for the life of the Notes or it may leave Noteholders withilliquidity of investment. Illiquidity means that a Noteholder may not be able to find a buyer to buyits Notes readily or at prices that will enable the Noteholder to realise a desired yield. Illiquidity canhave an adverse effect on the market value of the Notes.

Conflict between Classes of Noteholders

The Trust Deed and the Deed of Charge contain provisions requiring the Trustee to haveregard to the interests of the Noteholders as a whole as regards all powers, trusts, authorities,duties and discretions of the Trustee (except where expressly provided otherwise) but requiring theTrustee in any particular case to have regard only to the interests of:

(i) the A1 Noteholders if, in the Trustee’s opinion, there is or may be a conflict between theinterests of the A1 Noteholders and the interests of the A2 Noteholders, the BNoteholders, the C Noteholders and/or the D Noteholders (each as defined in the MasterDefinitions Schedule);

(ii) the A2 Noteholders, if in the Trustee’s opinion, there is or may be a conflict between theinterests of the A2 Noteholders and the interests of the B Noteholders, the CNoteholders and/or the D Noteholders;

(iii) the B Noteholders if all of the Senior Notes have been redeemed in full and if, in theTrustee’s opinion, there is or may be a conflict between the interests of the BNoteholders, the interests of the C Noteholders and/or the interests of the DNoteholders;

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(iv) the C Noteholders, if all of the Senior Notes and the B Notes have been redeemed infull and if, in the Trustee’s opinion, there is or may be a conflict between the interests ofthe C Noteholders and the interests of the D Noteholders; and

(v) the D Noteholders, if all of the Senior Notes, B Notes and C Notes have beenredeemed in full.

Preferred Creditors under Irish Law

Under Irish law, upon an insolvency of an Irish company such as the Issuer, when applyingthe proceeds of assets subject to fixed security which may have been realised in the course of aliquidation or receivership, the claims of a limited category of preferential creditors will take priorityover the claims of creditors holding the relevant fixed security. These preferred claims include theremuneration, costs and expenses properly incurred by any examiner of the company (which mayinclude any borrowings made by an examiner to fund the company’s requirements for the durationof his appointment) which have been approved by the Irish courts. See ‘‘Examinership’’ below.

The holder of a fixed security over the book debts of an Irish tax resident company (whichwould include the Issuer) may be required by the Irish Revenue Commissioners, by notice inwriting from the Irish Revenue Commissioners, to pay to them sums equivalent to those which theholder received in payment of debts due to it by the company. Where the holder of the securityhas given notice to the Irish Revenue Commissioners of the creation of the security within 21 daysof its creation, the holder’s liability is limited to the amount of certain outstanding Irish tax liabilitiesof the company (including liabilities in respect of value added tax) arising after the issuance of theIrish Revenue Commissioners’ notice to the holder of fixed security.

The Irish Revenue Commissioners may also attach any debt due to an Irish tax residentcompany by another person in order to discharge any liabilities of the company in respect ofoutstanding tax whether the liabilities are due on its own account or as an agent or trustee. Thescope of this right of the Irish Revenue Commissioners has not yet been considered by the Irishcourts and it may override the rights of holders of security (whether fixed or floating) over the debtin question.

In relation to the disposal of assets of any Irish tax resident company which are subject tosecurity, a person entitled to the benefit of the security may be liable for tax in relation to anycapital gains made by the company on a disposal of those assets on exercise of the security.

In relation to the disposal of assets of an Irish tax resident individual which are subject tosecurity, such as the disposal of a property on which the borrower has secured a Mortgage, aperson entitled to the benefit of the security may be liable for tax in relation to any capital gainsmade by the individual on a disposal of those assets on exercise of the security. Capital gains taxwill arise on the gain at a rate of 20 per cent. Tax is calculated by reference to the excess of thenet disposal proceeds over the allowable acquisition costs (including enhancement expenditure)and is calculated without reference to the amounts outstanding on a Mortgage. There is anexemption from Irish capital gains tax on gains arising on the disposal by an individual of hisprincipal private residence, which broadly covers gains arising on the disposal of the dwellinghouse which has been occupied by the individual as his only or main residence since he acquiredthe property.

Examinership

Examinership is a court procedure available under the Irish Companies (Amendment) Act1990, as amended (the ‘‘1990 Act’’) to facilitate the survival of Irish companies in financialdifficulties.

The Issuer, the directors of the Issuer, a contingent, prospective or actual creditor of theIssuer, or shareholders of the Issuer holding, at the date of presentation of the petition, not lessthan one-tenth of the voting share capital of the Issuer are each entitled to petition the court forthe appointment of an examiner. The examiner, once appointed, has the power to set asidecontracts and arrangements entered into by the company after this appointment and, in certaincircumstances, can avoid a negative pledge given by the company prior to this appointment.Furthermore, the examiner may sell assets, the subject of a fixed charge. However, if such poweris exercised the examiner must account to the holders of the fixed charge for the amount realisedand discharge the amount due to the holders of the fixed charge out of the proceeds of the sale.

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During the period of protection, the examiner will compile proposals for a compromise orscheme or arrangement to assist in the survival of the company or the whole or any part of itsundertaking as a going concern. A scheme of arrangement may be approved by the Irish HighCourt when at least one class of creditors has voted in favour of the proposals and the Irish HighCourt is satisfied that such proposals are fair and equitable in relation to any class of members orcreditors who have not accepted the proposals and whose interests would be impaired byimplementation of the scheme of arrangement.

In considering proposals by the examiner, it is likely that secured and unsecured creditorswould form separate classes of creditors. In the case of the Issuer, if the Trustee represented themajority in number and value of claims within the secured creditor class (which would be likelygiven the restrictions agreed to by the Issuer in the Conditions), the Trustee would be in a positionto reject any proposal not in favour of the Noteholders. The Trustee would also be entitled toargue at the Irish High Court hearing at which the proposed scheme of arrangement is consideredthat the proposals are unfair and inequitable in relation to the Noteholders, especially if suchproposals included a writing down to the value of amounts due by the Issuer to the Noteholders orresulted in Noteholders receiving less than they would have if the Issuer was wound up. Theprimary risks to the holders of Notes if an examiner were appointed to the Issuer are as follows:

(a) the potential for a scheme of arrangement being approved involving the writing down ofthe debt due by the Issuer to the Noteholders as secured by the Trust Deed;

(b) the potential for the examiner to seek to set aside any negative pledge in the Notesprohibiting the creation of security or the incurring of borrowings by the Issuer to enablethe examiner to borrow to fund the Issuer during the protection period; and

(c) in the event that a scheme of arrangement is not approved and the Issuer subsequentlygoes into liquidation, the examiner’s remuneration and expenses (including certainborrowings incurred by the examiner on behalf of the Issuer and approved by the IrishHigh Court) will take priority over the amounts secured by the charges held for thebenefit of Noteholders under the Deed of Charge.

Consumer Credit Act

The making of housing loans in Ireland is regulated by the Consumer Credit Act, 1995 (asamended) of Ireland (the ‘‘CCA’’), which imposes a range of obligations and restrictions onmortgage lenders and mortgage intermediaries.

A mortgage lender is an entity the business of which consists of or includes the making ofhousing loans. A housing loan is a loan that is secured by a mortgage on a house and which is,inter alia, made to a consumer for the purchase of the house to which the mortgage relates, orotherwise made to a person for the purchase or improvement of that person’s principal residence.It is not anticipated that the Issuer will be a mortgage lender for the purposes of the CCA.

A mortgage intermediary is a person (other than a mortgage lender or credit institution) who,in return for commission or some other form of consideration arranges, or offers to arrange, for amortgage lender to provide a consumer with a housing loan, or introduces a consumer to anintermediary who arranges, or offers to arrange, for a mortgage lender to provide the consumerwith such a loan. A mortgage intermediary requires an authorisation from IFSRA in order toconduct its business. In the event that an unauthorised mortgage intermediary operates in Ireland,it is subject to penalties and sanctions that are discussed below. It is not anticipated that theIssuer will be a mortgage intermediary for the purposes of the CCA.

Relevant obligations imposed by the CCA include rules regulating advertising for housingloans; a requirement to furnish the borrower with a valuation report concerning the property; arequirement that specified warnings regarding the potential loss of the person’s home be includedin all key documentation relating to a housing loan and that key, prescribed information bedisplayed on the front page of a housing loan; and obligations to provide prescribed documentsand information to a borrower. Restrictions include prohibitions on the imposition of a redemptionfee in the case of many types of housing loan; compelling a borrower to pay the lender’s legalcosts of investigating title; and the linking of certain products.

A breach of any of these obligations or restrictions is a criminal offence by the mortgagelender or intermediary. The financial penalties may range from a maximum fine of e3,000 for mostoffences, to a maximum fine of e100,000 for the unlawful linking of certain services. A person(including a company) that is convicted of an offence under the CCA will normally be ordered to

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pay the costs of the prosecution. In respect of a regulated financial service provider (but not anentity that is a mortgage lender only), IFSRA may, instead of a prosecution, impose a monetarypenalty for breach of any of these obligations and restrictions; that penalty may be appealed to theFinancial Services Appeals Tribunal. The maximum financial penalty is e5,000,000 in the case of abody corporate.

Moneylending

Subject to the above considerations in the case of mortgage lenders and mortgageintermediaries, the activity of lending money in Ireland is not regulated in a number ofcircumstances; these include a loan for the purchase, sale or hire of goods at an annualpercentage rate (‘‘APR’’) of less than 23 per cent. Where a loan carries interest calculated at anAPR of 23 per cent., or greater, the lender may be required by the CCA to be licensed by IFSRAas a moneylender and must, in its dealings with consumers and in its documents and records,comply with a range of obligations and restrictions. It is not anticipated that the Issuer will be amoneylender for the purposes of the CCA.

Unfair Terms in Consumer Contracts Regulations

The European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 and2000 (together, the ‘‘UTCC Regulations’’) apply in relation to the Mortgages. A Borrower maychallenge a term in an agreement on the basis that it is ‘‘unfair’’ within the meaning of the UTCCRegulations and therefore not binding on the Borrower. In addition, the Director of ConsumerAffairs or a consumer organisation (as defined in the UTCC Regulations) may seek an injunctionpreventing the use of specific terms that are unfair.

This will not generally affect ‘‘core terms’’ which set out the main subject matter of thecontract, such as the Borrower’s obligation to repay principal, but may affect terms deemed to beancillary terms, which may include terms the application of which are in the Mortgage Manager’sdiscretion (such as a term permitting the Mortgage Manager to vary the interest rate).

If a term of a Mortgage permitting the lender to vary the interest rate is found to be unfair,the Borrower will not be liable to pay the increased rate or, to the extent that the Borrower haspaid it, will be able, as against Irish Life & Permanent, or any assignee such as the Issuer, toclaim repayment of the extra interest amounts paid or to set-off the amount of the claim againstthe amount owing by the Borrower under the Mortgage. Any such non-recovery, claim or set-offmay adversely affect the realisable value of the Mortgages in the Mortgage Pool and accordinglythe ability of the Issuer to meet its obligations in respect of the Notes.

No assurance can be given that changes in the UTCC Regulations, if enacted, will not havean adverse effect on the Mortgages, Irish Life & Permanent, the Mortgage Manager or the Issuerand their respective businesses and operations. This may adversely affect the ability of the Issuerto dispose of the Mortgage Pool, or any part thereof, in a timely manner and/or the realisablevalue of the Mortgage Pool, or any part thereof, and accordingly affect the ability of the Issuer tomeet its obligations under the Notes when due.

European Directive on Unfair Commercial Practices

On 11 May 2005, the European Council and European Parliament signed a directive on unfaircommercial practices. This directive affects all consumer contracts and thus will have some impactin relation to the residential mortgage market.

Under this directive, a commercial practice is to be regarded as unfair if it is (a) contrary to therequirements of professional diligence; and (b) materially distorts or is likely to materially distort theeconomic behaviour of the average consumer whom the practice reaches or to whom it isaddressed or the average member of a group where a practice is directed at a particular group ofconsumers.

The intention is that this general definition will not affect obligations imposed by other Europeandirectives, but will provide a minimum standard for all dealings with persons who are acting outsidetheir business, trade or profession.

In addition to this general obligation, there are provisions aimed at aggressive and misleadingpractices and a list of practices which will in all cases be considered unfair. The directive is statedto be without prejudice to contract law and the rules of the validity, formation or effect of acontract.

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The directive is a maximum harmonisation measure which means that Member States will beprevented from retaining consumer protection measures which go beyond it within its scope.However, in relation to financial services, Member States are permitted to retain protections whichgo beyond these requirements. Therefore, in the context of financial services, this directive willpotentially place additional obligations on mortgage lenders in those areas in which there currentlyare no specific rules applying.

Member States are obliged to adopt national implementing measures by 12 June 2007 and applythese provisions by December 2007. Until the details of Irish implementing legislation arepublished, it is not certain what effect the adoption and implementation of the directive would haveon the Mortgage Pool, Irish Life & Permanent, the Mortgage Manager or the Issuer and theirrespective businesses and operations. No assurance can be given that the finalised directive willnot adversely affect the liability of the Issuer to make payments to Noteholders and Couponholders(if any).

TRS Scheme

Tax relief at source for mortgage interest was introduced in Ireland in the tax year 2002 (the‘‘TRS Scheme’’). The Irish Revenue Commissioners published regulations indicating how the TRSScheme will operate (the ‘‘Regulations’’) and Irish Life & Permanent has been operating the TRSScheme based on the Regulations since then.

Under the TRS Scheme, mortgage borrowers are permitted to pay interest net of the relevanttax relief to the relevant mortgage lender and the relevant mortgage lender, once it constitutes aqualifying lender, claims a refund of the tax relief directly from an account of the Irish RevenueCommissioners. On the Issue Date, Irish Life & Permanent will be the lender with respect to theMortgage Pool and Irish Life & Permanent will be a qualifying lender for the purposes of the TRSScheme.

The operation of the TRS Scheme does not have any negative impact on Irish Life &Permanent’s cash flows as Irish Life & Permanent makes claims for a payment of the tax reliefgranted from the Irish Revenue Commissioners funding account on a direct debiting monthly(estimated) basis.

If the Deed of Charge were enforced, resulting in a transfer of legal title to the Mortgage Poolto the Issuer or the Trustee, Irish Life & Permanent would no longer be the lender with respect tothe Mortgage Pool. However, the Regulations provide that provided Irish Life & Permanent acts asservicer in relation to the Mortgage Pool, it will be regarded as the qualifying lender for thepurpose of the TRS Scheme or it can nominate the securitisation vehicle (the Issuer), or its agent(the Trustee or another nominee) as a qualifying lender for the purpose of the TRS Scheme. IrishLife & Permanent will covenant in the Mortgage Management Agreement, that if it is replaced asservicer or if the Security under the Deed of Charge is enforced, it will irrevocably appoint suchperson as may be selected or approved by the Issuer and the Trustee as a qualified lender for thepurposes of the TRS Scheme. The Mortgage Management Agreement will include a power ofattorney enabling the Trustee to make this nomination on behalf of Irish Life & Permanent as itsattorney.

In addition, under the terms of the Mortgage Management Agreement, the parties, includingthe Trustee, have agreed that, if requested by the Issuer, they will do all things and make anychanges to any relevant documents to deal with, or alleviate the burden of, any TRS Scheme inIreland, provided that such changes are not materially prejudicial to the interests of the Noteholdersor Irish Life & Permanent. The Trustee will act in accordance with any such request if it is advisedby an investment bank of recognised standing that the matters contemplated by such request arenot materially prejudicial to the interest of Noteholders. If such advice cannot be obtained, theTrustee will act in accordance with any such request if approved by an Extraordinary Resolution(as described in Condition 11) of all classes of Noteholders.

Reliance on Third Parties

The Issuer is party to contracts with a number of entities who have agreed to performservices in relation to the Notes. In particular, but without limitation, the Mortgage Manager hasagreed to provide the Issuer with certain mortgage and cash administration services with respect tothe Mortgage Pool, the Swap Counterparty has agreed to enter into hedges with the Issuer againstcertain interest rate fluctuations, the Agent Bank has agreed to provide certain banking functions

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on behalf of the Issuer and the Paying Agents have agreed to provide paying agent services withrespect to the Notes. In the event that any of these or any of the other parties appointed by theIssuer under the terms of the Transaction Documents were to fail to perform their obligations underthe respective agreements to which they are a party, Noteholders may be adversely affected.

Change of Law

The structure of the issue of the Notes and the ratings which are to be assigned to them arebased on Irish and English law and administrative practices in effect as at the date of thisProspectus. No assurance can be given as to the impact of any possible change to Irish andEnglish law or administrative practices after the date of this Prospectus, nor can any assurance begiven as to whether any such change could adversely affect the ability of the Issuer to makepayments under the Notes.

Transparency Directive

Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004on the harmonisation of transparency requirements in relation to information about issuers whosesecurities are admitted to trading on a regulated market and amending Directive 2001/34/EC (the‘‘Transparency Directive’’) entered into force on 20 January 2005. It requires Member States totake measures necessary to comply with the Transparency Directive by 20 January 2007. If, as aresult of the Transparency Directive or any legislation implementing the Transparency Directive, theIssuer could be required to publish financial information either more regularly than it otherwisewould be required to or according to accounting principles which are materially different from theaccounting principles which it would otherwise use to prepare its published financial information,the Issuer may seek an alternative admission to listing, trading and/or quotation for the Notes on adifferent section of the Irish Stock Exchange or by such other listing authority, stock exchange and/or quotation system inside or outside the European Union as it may (with the approval of theManagers and the Trustee) decide.

EU Savings Directive

On 3 June, 2003 the Council of the European Union adopted a directive regarding thetaxation of interest income. Each EU Member State must implement the directive by enactinglegislation that requires paying agents (within the meaning of the directive) established within itsterritory to provide to the relevant competent authority details of interest payments made to anyindividual and certain intermediate entities resident in another EU Member State or a territory beinga dependent or associated territory of a Member State (a ‘‘Reportable Territory’’). The competentauthority of the EU Member State of the paying agent (within the meaning of the directive) is thenrequired to communicate this information to the competent authority of the Reportable Territory ofwhich the beneficial owner of the interest is a resident.

Austria, Belgium and Luxembourg may opt instead to withhold tax from interest paymentswithin the meaning of the directive.

Member States must apply the respective provisions with effect from 1 July, 2005. Ireland hasimplemented the directive into national law. Any Irish paying agent making an interest payment onbehalf of the Issuer to an individual, and certain residual entities defined in the Taxes ConsolidationAct, 1997 (as amended), resident in another Reportable Territory will have to provide details of thepayment to the Irish Revenue Commissioners who in turn will provide such information to thecompetent authorities of the Reportable Territory of residence of the individual or residual entityconcerned.

Changes to the Basel Capital Accord: Basel II Framework

On 26 June 2004, the central bank governors and heads of bank supervisory authorities inthe ‘‘Group of Ten countries’’ (the ‘‘Basel Committee’’) endorsed the publication of the new capitaladequacy capital framework, the ‘‘International Convergence of Capital Measurement and CapitalStandards: a Revised Framework’’ commonly known as the ‘‘Basel II Framework’’. An updatedversion of that publication was issued by the Basel Committee on 15 November, 2005. The BaselII Framework sets out the details for adopting more risk-sensitive minimum capital requirements bylaying out principles for banking organisations to assess the adequacy of their capital by improvingthe capital framework and for supervisors to review such assessments to ensure bankingorganisations have adequate capital to support their risks. The Basel Committee intends the Basel

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II Framework to be available for implementation in member jurisdictions as of year-end 2006. Themost advanced approaches to risk measurement will be available for implementation as of year-end 2007, in order to allow banking organisations and supervisors to benefit from an additionalyear of impact analysis or parallel capital calculations under the existing and new rules. The BaselII Framework could affect risk weighting of the Notes in respect of certain investors if thoseinvestors are regulated in a manner which will be affected by the Basel II Framework.Consequently, investors should consult their own advisers as to the effect on them of the futureimplementation of the Basel II Framework.

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CREDIT AND LIQUIDITY STRUCTURE

The Senior Notes are expected, on issue, to be rated Aaa by Moody’s and AAA by S&P. TheB Notes are expected, on issue, to be rated Aa3 by Moody’s and AA by S&P. The C Notes areexpected, on issue, to be rated A2 by Moody’s and A by S&P. The D Notes are expected, onissue, to be rated Baa2 by Moody’s and BBB by S&P. A security rating is not a recommendationto buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any timeby either one or both of the Rating Agencies. The structure of the credit arrangements may besummarised as follows:

Payments of Interest: While A1 Noteholders and A2 Noteholders receive payments ofinterest on a pari passu basis, B Noteholders will not be entitled to receive any payment of interestunless and until all amounts of interest then due to the holders of the Senior Notes have beenpaid in full. C Noteholders will not be entitled to receive any payment of interest unless and untilall amounts of interest then due to the holders of the Senior Notes and B Notes have been paid infull. D Noteholders will not be entitled to receive any payment of interest unless and until allamounts of interest then due to the holders of the Senior Notes, the B Notes and the C Noteshave been paid in full.

Available Revenue Funds: Prior to any determination by the Mortgage Manager, on behalfof the Issuer, as to whether it will need to draw on the Reserve Account, or the Liquidity ReserveLedger (if any) (as to which see further below) for the purposes of making payments under theRevenue Priority of Payments on any Interest Payment Date, the Mortgage Manager will firstdetermine whether, on each day which is 5 business days preceeding an Interest Payment Date(each a ‘‘Determination Date’’), it will have sufficient funds (the ‘‘Available Revenue Funds’’) tomake all of the payments provided for under items (i) to (xiii) inclusive of the Revenue Priority ofPayments on the immediately succeeding Interest Payment Date. Prior to the Interest PaymentDate on which the Notes are to be redeemed in full, Available Revenue Funds will be calculatedby the Mortgage Manager, on behalf of the Issuer, on each Determination Date and will comprisethe aggregate of the following:

(a) amounts (other than amounts representing principal) and all other unpaid amountsaccrued and/or falling due prior to the Issue Date from time to time received by theIssuer in the Transaction Account during that Collection Period in respect of theMortgages;

(b) all other payments (other than amounts representing principal and all other unpaidamounts accrued and/or falling due prior to the Issue Date and the payments describedin (a) above) standing to the credit of the Transaction Account at the end of the relevantCollection Period;

(c) interest which is expected to be credited to the Issuer’s Accounts (as defined under‘‘Bank Accounts’’ below) (other than amounts described in (b) above) on or prior to theimmediately succeeding Interest Payment Date;

(d) amounts calculated to be receivable under the Swap Agreements on or prior to theimmediately succeeding Interest Payment Date;

(e) amounts (other than amounts representing principal) received or expected to be receivedfrom Authorised Investments prior to the immediately succeeding Interest Payment Date;

(f) amounts drawn from the Reserve Ledger required to cover any shortfall between theaggregate of (a) to (c) above and the aggregate of items (i) to (xiii) of the RevenuePriority of Payments to be made on the immediately succeeding Interest Payment Date;

(g) to the extent that there are no or insufficient funds available to be drawn under theReserve Ledger, any amounts drawn under the Liquidity Reserve Ledger to cover anyshortfall between the aggregate of (a) and (c) above and the aggregate of items (i) to(xiii) of the Revenue Priority of Payments Date; and

(h) to the extent there are no funds or insufficient funds available to be drawn under theReserve Ledger and the Liquidity Reserve Ledger any amounts of Available PrincipalFunds to be applied as revenue payments on the immediately succeeding InterestPayment Date as referred to in item (i) of the Principal Priority of Payments,

less any Excluded Items paid or payable on or prior to the immediately succeeding InterestPayment Date. On the Interest Payment Date on which the Notes are to be redeemed in full, the

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Available Revenue Funds will also include amounts standing to the credit of the Reserve Ledgerand the Liquidity Reserve Ledger (if any). As to the application of Available Revenue Funds, see‘‘Terms and Conditions’’ below.

Available Principal Funds: Prior to the enforcement of the security under the Deed ofCharge amounts standing to the credit of the Transaction Account and recorded in the PrincipalLedger (as defined below) in accordance with provisions of the Mortgage Management Agreement(being the ‘‘Available Principal Funds’’) will comprise on each Determination Date the aggregate of:

(i) all payments representing principal and all other unpaid amounts accrued and/or fallingdue prior to the Issue Date, from time to time received by the Issuer into theTransaction Account during the Collection Period in respect of Mortgages;

(ii) amounts (other than amounts described in (i) above, in respect of principal received orexpected to be received) on Authorised Investments made by or on behalf of the Issuerand referable to principal amounts invested as Authorised Investments, prior to theimmediately succeeding Interest Payment Date;

(iii) amounts (if any) to be applied in reducing the Principal Deficiency Ledgers on suchInterest Payment Date pursuant to items (vii), (ix), (xi) and (xiii) (as applicable) of thePre-Enforcement Revenue Priority of Payment); and

(iv) amounts (if any) available to be released from the New Loans Ledger from theimmediately succeeding Interest Payment Date which was not applied in acquiring NewLoans.

less (i) amounts (if any) used or to be used to fund and/or acquire Further Advances during therelevant Collection Period and prior to or on the immediately succeeding Interest Payment Dateand (ii) amounts (if any) which are to be credited to the Liquidity Reserve Ledger on theimmediately succeeding Interest Payment Date.

Principal Deficiency Ledgers: Four principal deficiency ledgers (being the ‘‘Class A PrincipalDeficiency Ledger’’, the ‘‘Class B Principal Deficiency Ledger’’, the ‘‘Class C Principal DeficiencyLedger’’ and the ‘‘Class D Principal Deficiency Ledger’’, together the ‘‘Principal DeficiencyLedgers’’) will be opened and maintained by or on behalf of the Issuer in order to (i) record anynet losses on the Mortgages, (ii) record amounts (if any) of Available Principal Funds applied inpayment of items (i) to (xiii) of the Revenue Priority of Payments and (iii) record amounts (if any)of Available Principal Funds allocated to the Liquidity Reserve Ledger up to the Liquidity ReserveRequired Amount (as defined below) (each a ‘‘Principal Deficiency’’). Any Principal Deficiency shallbe debited (i) first to the Class D Principal Deficiency Ledger so long as the debit balance of the DNotes is less than or equal to the Principal Amount Outstanding of the D Notes, (ii) then to theClass C Principal Deficiency Ledger so long as the debit balance of the C Notes is less than orequal to the Principal Amount Outstanding of the C Notes; (iii) then to the Class B PrincipalDeficiency Ledger so long as the debit balance of the B Notes is less than or equal to thePrincipal Amount Outstanding of the B Notes; and (iv) finally, to the Class A Principal DeficiencyLedger so long as the debit balance of the Senior Notes is less than or equal to the PrincipalAmount Outstanding of the Senior Notes. Debit items shall be recredited in the case of the ClassA Principal Deficiency Ledger at item (vii) of the Revenue Priority of Payments, in the case of theClass B Principal Deficiency Ledger at item (ix), in the case of the Class C Principal DeficiencyLedger at item (xi) of the Revenue Priority of Payments and in the case of the Class D PrincipalDeficiency Ledger at item (xiii) of the Revenue Priority of Payments.

Principal Ledger: A segregated ledger designated the principal ledger (the ‘‘PrincipalLedger’’) will be established within the Transaction Account by the Mortgage Manager.

New Loans Ledger: A segregated ledger designated the new loans ledger (the ‘‘New LoansLedger’’) will be established within the Transaction Account by the Mortgage Manager into whichamounts up to the New Loans Target Amount (as defined below) may be credited on each InterestPayment Date up to and including the Interest Payment Date falling in June 2012 (the ‘‘New LoansAcquisition Expiry Date’’). Amounts credited to the New Loans Ledger may be utilised by theIssuer, or the Mortgage Manager on behalf of the Issuer, in acquiring New Loans subject to certainconditions (see ‘‘The Mortgage Pool’’ below). On or after the New Loans Acquisition Expiry Date,no further credits will be made to the New Loans Ledger and accordingly no New Loans will beacquired by the Issuer after that date.

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New Loans Target Amount: The ‘‘New Loans Target Amount’’ for the Issuer will be anamount determined by the Mortgage Manager equal to:

(i) for an Interest Payment Date prior to the New Loans Acquisition Expiry Date:

(a) the Available Principal Funds on such Interest Payment Date, less

(b) the aggregate of (x) amounts paid or to be paid out of such Available PrincipalFunds in respect of Excluded Items, (y) the sum of the amount to be paid in respect ofitems (i) and (ii) of the Principal Priority of Payment on such Interest Payment Date and(z) an amount equal to the amount which, when applied in redeeming the Notes inaccordance with Condition 5(b), would ensure that the Principal Amount Outstanding ofeach class of Notes would not be greater than the Targeted Balance for each class ofNotes for such Interest Payment Date; or

(ii) for an Interest Payment Date on or after the New Loans Acquisition Expiry Date, zero.

For these purposes, ‘‘Targeted Balance’’ means, in respect of a class of Notes on any InterestPayment Date, the amount specified against such class of Notes on such Interest Payment Dateas set out in the amortisation table (the ‘‘Amortisation Table’’) on pages 52 to 53.

Trust Accounts: Payments in respect of amounts due under the Mortgages will be made toa designated segregated collection account(s) (the ‘‘Trust Accounts’’) in the name of Irish Life &Permanent at Irish Life & Permanent, 56-59 St. Stephen’s Green, Dublin. Such payments will, inthe majority of cases, be made by direct debit. Irish Life & Permanent will on the Issue Dateexecute a declaration of trust in favour of the Issuer (the ‘‘Declaration of Trust’’) declaring a trustover the amounts which relate to the Mortgages and which are from time to time standing to thecredit of the Trust Accounts.

Transaction Account: Payments in respect of amounts due under the Mortgages which arecredited to the Trust Accounts will be transferred to a designated segregated account in the nameof the Issuer at Irish Life & Permanent at 56-59 St. Stephen’s Green, Dublin 2 (the ‘‘TransactionAccount’’) (i) in respect of direct debit collections on the business day on which they are creditedto the Trust Accounts and (ii) in respect of all other monies, on the business day following thebusiness day on which they are credited to the Trust Accounts. The credit balance of eachTransaction Account from time to time may accrue interest in accordance with the terms of thebank at which the account is held at such time (for the purpose of this paragraph only, businessday shall mean a day (other than a Saturday or Sunday) on which banks are open for business inDublin). To the extent that there are funds in the Transaction Account, such funds shall be appliedin accordance with the Revenue Priority of Payments and the Principal Priority of Payments by theMortgage Manager on behalf of the Issuer.

Reserve Account: A segregated account designated the ‘‘Fastnet 2 Reserve Account’’ (the‘‘Reserve Account’’) will be established in the name of the Issuer at Irish Life & Permanent at56-59 St. Stephen’s Green, Dublin 2. Amounts shall be deposited in the Reserve Account andcredited to a ledger (the ‘‘Reserve Ledger’’), with e32,250,000 to be credited on the Issue Date,and thereafter, on each Interest Payment Date, pursuant to item (xiv) of the Revenue Priority ofPayments up to the Reserve Ledger Required Amount (as defined below).

Any monies remaining in the Transaction Account on an Interest Payment Date following theapplication of the Revenue Priority of Payments may also at the discretion of the MortgageManager be placed in the Reserve Ledger. The Issuer will be obliged to maintain the ReserveLedger at the Reserve Ledger Required Amount. The Reserve Ledger will be available to meetitems (i) to (xiii) of the Revenue Priority of Payments if insufficient funds are available under theRevenue Priority of Payments.

The ‘‘Reserve Ledger Required Amount’’ means:

(i) on the Issue Date, e32,250,000; and

(ii) following the Issue Date, e32,250,000.

Liquidity Reserve Ledger: A segregated ledger designated the liquidity reserve ledger (the‘‘Liquidity Reserve Ledger’’) will be established within the Transaction Account by the MortgageManager. On any Interest Payment Date following a Liquidity Reserve Ledger Rating Event (asdefined below), amounts paid pursuant to item (ii) of the Principal Priority of Payments shall becredited to the Liquidity Reserve Ledger. The Issuer will be obliged to maintain the LiquidityReserve Ledger at an amount equal to the sum of (a) 3 per cent. of the Principal Amount

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Outstanding of the Notes, less (b) the balance of the Reserve Ledger, on each Interest PaymentDate that the Liquidity Reserve Ledger Rating Event is subsisting (the ‘‘Liquidity Reserve RequiredAmount’’).

Liquidity Reserve Ledger Rating Event: means the long term, unsecured, unsubordinatedand unguaranteed debt obligations of Irish Life & Permanent are rated below A3 by Moody’s(unless Moody’s confirms that its then current ratings of the Issuer will not be adversely affectedas a consequence of such rating of Irish Life & Permanent). If a Liquidity Reserve Fund RatingEvent has occurred but is no longer continuing due to an improvement in Irish Life & Permanent’srating since the preceding Interest Payment Date, all amounts standing to the credit of the LiquidityReserve Ledger may be transferred to the Transaction Amount to be used in accordance with theRevenue Priority of Payments. Any amount standing to the credit of the Liquidity Reserve Ledgerin excess of the Liquidity Reserve Required Amount will be transferred to the Transaction Accountand may be distributed in accordance with the Revenue Priority of Payments.

First Period Shortfall: means any shortfalls of income arising from the fact that there willonly be one monthly payment due under the Mortgages in the first Interest Period although the firstInterest Period is longer than a month (the ‘‘First Period Shortfall Amount’’).

Prepayment Amounts: Amounts received by the Issuer as additional payments upon theprepayment of Mortgages (as opposed to any interest or principal payable up to the date ofredemption and any management fees and other costs associated with the redemption) (the‘‘Mortgage Prepayment Amounts’’) will be credited to a ledger in the Transaction Accountestablished for such purposes (the ‘‘Prepayments Ledger’’) and will be owned by the Issuerpursuant to the Mortgage Sale Agreement. The Issuer in turn shall pay these amounts to the SwapCounterparty in relation to the FRM Swap Agreement (each as defined under ‘‘Swap Agreements’’below).

Bank Accounts: The ‘‘Bank Accounts’’ represent the Trust Accounts, the TransactionAccount and the Reserve Account. The ‘‘Issuer’s Accounts’’ represent the Transaction Account andthe Reserve Account. If the rating of the short term, unsecured, unsubordinated and unguaranteeddebt obligations of the bank at which a Bank Account is held assigned by each Rating Agency fallsbelow P-1 from Moody’s and A-1 from S&P the Mortgage Manager may, inter alia, (i) transfer therelevant Bank Account to a bank whose short term, unsecured, unsubordinated and unguaranteeddebt obligations are so rated or (ii) procure a third party guarantee or a third party pledge, in eachcase in accordance with S&P guarantee criteria.

Authorised Investments: The Mortgage Manager will be entitled to invest cash from time totime standing to the credit of the Transaction Account or the Reserve Account in variousinvestments (‘‘Authorised Investments’’) (such as certificates of deposit, commercial paper andother short term securities or deposits) with a short term unsecured, unsubordinated andunguaranteed rating of at least P-1 from Moody’s and at least A-1 from S&P provided that suchinvestments mature on or prior to the Interest Payment Date on which the cash represented bysuch investments is required by the Issuer.

Overall investment limit: Within the rating requirements for the holding of Bank Accountsand Authorised Investments above, the Mortgage Manager must further procure that at any timethe aggregate of (a) the amount held by the Issuer in the Bank Accounts where these are heldwith an entity with a short term rating of A-1 from S&P and P-1 from Moody’s and (b) the amountinvested by the Issuer in Authorised Investments carrying a short term rating of A-1 from S&P andP-1 from Moody’s, may not exceed 20 per cent. of the Principal Amount Outstanding of the Noteson the immediately preceding Interest Payment Date.

Subordination: The Senior Notes and the Junior Notes will share the same securityalthough, upon enforcement, the Senior Notes will rank in priority to the Junior Notes in point ofsecurity. In respect of the Junior Notes, upon enforcement of the security, the B Notes will rank inpriority to the C Notes and the D Notes, and the C Notes will rank in priority to the D Notes.

Subordinated Loan: The Issuer will enter into a subordinated loan facility agreement (the‘‘Subordinated Loan Agreement’’) with Irish Life & Permanent (the ‘‘Subordinated Loan Provider’’)and the Trustee on or prior to the Issue Date whereby Irish Life & Permanent will provide theIssuer with a subordinated loan facility (the ‘‘Subordinated Loan’’) in two tranches. Tranche A willbe used in order to fund the fees, costs and expenses of the Issuer under and in connection withthe issue of the Notes in an amount of e2,850,000. Tranche B will be used to credit the ReserveLedger on the Issue Date in an amount of e32,250,000. The rate of interest applicable under the

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Subordinated Loan shall be such amount as may be agreed from time to time between theSubordinated Loan Provider and the Issuer and the amount of interest payable under theSubordinated Loan shall be treated as accruing on a day-to-day basis. Payments of interest underthe Subordinated Loan will be made by the Issuer only in accordance with (and to the extent onlythat funds are available under) the Revenue Priority of Payments. The principal amount advancedunder the Subordinated Loan is repayable on the redemption in full of the Notes. The Issuer andthe Subordinated Loan Provider may agree to repayment of the Subordinated Loan in whole or inpart at any earlier time, provided, however, that (i) such repayment shall be made through theRevenue Priority of Payments in the manner and at the priority at which interest on theSubordinated Loan is paid and (ii) such repayment is permitted under any applicable regulatoryguidelines.

Swap Agreements: The Issuer will enter into:

(a) an interest rate exchange agreement with Irish Life & Permanent (the ‘‘SwapCounterparty’’) to hedge its exposure against movements in interest rate for the FixedRate Mortgages (the ‘‘FRM Swap Agreement’’); and

(b) an interest rate exchange agreement with the Swap Counterparty to hedge its exposureagainst movements in interest rate for the Variable Rate Mortgages and the TrackerMortgages (the ‘‘VRM Swap Agreement’’ together with the FRM Swap Agreement the‘‘Swap Agreements’’).

Under the FRM Swap Agreement, the Swap Counterparty will pay to the Issuer an amountcalculated by reference to Note EURIBOR plus a margin on the FRM Calculation Amount and theIssuer will pay to the Swap Counterparty an amount calculated by reference to the weightedaverage interest rates applicable to such Fixed Rate Mortgages during the Determination Period(as defined in the Swap Agreements) on the FRM Calculation Amount. The ‘‘FRM CalculationAmount’’ means the average aggregate Balances of the Fixed Rate Mortgages during eachCollection Period multiplied by the ratio of actual payments of interest in respect of the Fixed RateMortgages over the scheduled interest payments in respect of the Fixed Rate Mortgages, in eachcase during that Determination Period (subject to adjustment in the case of the first InterestPeriod).

Under the VRM Swap Agreement, the Swap Counterparty will pay to the Issuer an amountcalculated by reference to Note EURIBOR plus a margin on the VRM Calculation Amount and theIssuer will pay to the Swap Counterparty an amount calculated by reference to the weightedaverage interest rates applicable to the Variable Rate Mortgages during the Determination Periodon the VRM Calculation Amount. The ‘‘VRM Calculation Amount’’ means the average aggregateBalances of the Variable Rate Mortgages and Tracker Mortgages (together the ‘‘Floating RateMortages’’) during each Collection Period multiplied by the ratio of actual payments of interest inrespect of the Floating Rate Mortgages over the scheduled interest payments in respect of theFloating Rate Mortgages, in each case during that Determination Period (subject to adjustment inthe case of the first Interest Period).

Each of the Swap Agreements may be terminated (i) if the Notes have been declaredimmediately due and payable prior to their final maturity date; (ii) if there is a failure by either partyto pay any amounts due, or to comply with or perform any obligation, under the Swap Agreements;and (iii) upon the occurrence of changes in law resulting in illegality.

In the event of any change in tax law (or the application or official interpretation thereof) inrespect of either the Issuer or the Swap Counterparty under a Swap Agreement that has the effectof obliging either the Issuer or the Swap Counterparty to make any withholding or deduction frompayment it makes under a Swap Agreement (or the occurrence of any other event having thesame effect), neither the Issuer nor the Swap Counterparty will have any obligation to pay anyadditional amounts in respect of any such withholding or deduction.

If, at any time, the rating of the Swap Counterparty’s long term, unsecured, unsubordinatedand unguaranteed debt obligations falls below A1 by Moody’s or the rating of the SwapCounterparty’s short term unsecured, unsubordinated and unguaranteed debt obligations falls belowP-1 by Moody’s or A-1 by S&P (collectively, the ‘‘minimum ratings’’), then the Swap Counterpartywill be required to take certain remedial measures as set out in each Swap Agreement but whichmay include:

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(a) obtaining a guarantee or other support of its obligations under the Swap Agreement froma third party domiciled in the same legal jurisdiction as either the Swap Counterparty orthe Issuer or domiciled in the United Kingdom, with the minimum ratings in anacceptable form and substance to the Rating Agencies;

(b) transferring all of its obligations under the Swap Agreement to a replacement third partydomiciled in the same legal jurisdiction as either the Swap Counterparty or the Issuer ordomiciled in the United Kingdom, with the minimum ratings (or with prior writtenconfirmation of the Rating Agencies that such action will not result in a reduction orwithdrawal of the rating of the Notes, to a party with a lessor rating);

(c) providing collateral in support of its obligations under the Swap Agreements in anacceptable form and substance to the Rating Agencies;

(d) implement such other actions so that the Rating Agencies confirm that the then currentrating of the Notes will not be downgraded as a result of the downgrade of the long orshort term debt ratings of the Swap Counterparty.

If, at any time, the rating of the Swap Counterparty falls below a further rating level specifiedin each Swap Agreement, the remedial measures available to the Swap Counterparty may be morelimited.

In the event that the Swap Counterparty posts collateral in respect of its obligations under aSwap Agreement, that collateral will be credited to a separate swap collateral account. Amountsstanding to the credit of such account will be applied solely in returning collateral directly to, or insatisfaction of, amounts owing by the Swap Counterparty in accordance with such SwapAgreement and any credit support annex entered into in connection with such Swap Agreement.

If, despite using reasonable endeavours, the Swap Counterparty is unable to comply with itsobligations set out above, the Issuer will have the right to terminate the Swap Agreements. Failureto implement any of these actions referred to above may result in the downgrading of the thenapplicable ratings assigned to the Notes.

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USE OF PROCEEDS

The gross proceeds of the issue of the Notes are expected to amount to e2,150,000,000 andwill be applied in the purchase of the Mortgages in the Completion Mortgage Pool on the IssueDate. The expenses of the issue of the Notes (estimated not to exceed approximately e2,850,000)will be met, on the Issue Date, by the Issuer from the drawing under Tranche A of theSubordinated Loan.

It is estimated the total expenses related to admitting the Notes to trading on the regulatedmarket of the ISE will be e5,000.

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THE ISSUER

Introduction

The Issuer was incorporated and registered in Ireland (under company registration number420155) as a public company limited by shares under the Irish Companies Acts, 1963 to 2005 on16 May 2006. The registered office of the Issuer is at 1st Floor, 7 Exchange Place, IFSC, Dublin 1,Ireland. The Issuer obtained a Certificate of Entitlement to do business on 20 June 2006. Theentire issued share capital of the Issuer (40,000 ordinary shares of e1 each) is held by the ShareTrustee and six nominees of the Share Trustee under the terms of a trust established under Irishlaw by a declaration of trust dated 9 June 2006 and made by the Share Trustee on discretionarytrust for a number of charitable purposes. The Issuer has been established as a special purposecompany for the purpose of acquiring the mortgages and issuing asset backed securities. TheIssuer has no subsidiaries.

The telephone number of the Issuer is +353 1 612 5555.

The principal objects of the Issuer are set out in Clause 3 of its Memorandum of Associationand amongst other things are to purchase, take transfers of, invest in and acquire by any meansloans or other obligations involving the extension of credit and any security therefor and to raise orborrow money and to grant security over its assets for such purposes.

Neither Irish Life & Permanent nor any associated body of Irish Life & Permanent ownsdirectly or indirectly any of the share capital of the Share Trustee or the Issuer.

The Issuer has not engaged, since its incorporation, and will not engage in any materialactivities other than those incidental to its incorporation under the Irish Companies Acts, 1963 to2005, authorisation and issue of the Notes, the matters referred to or contemplated in thisdocument and the authorisation, execution, delivery and performance of the other documentsreferred to in this document to which it is a party and matters which are incidental or ancillary tothe foregoing.

Directors

The Directors of the Issuer and their respective business addresses and principal activitiesare:

Name Address Principal Activities

Alan Geraghty c/o First Floor7 Exchange PlaceIFSCDublin 1

Accountant

Roger McGreal c/o First Floor7 Exchange PlaceIFSCDublin 1

Director

The Secretary of the Issuer is Wilmington Trust SP Services (Dublin) Limited.

Activities

On the Issue Date, the Issuer will acquire from Irish Life & Permanent a portfolio ofresidential mortgages originated by Irish Life & Permanent. All Mortgages acquired by the Issueron such date will be financed by the proceeds of the issue of the Notes. The activities of theIssuer will be restricted by the Conditions and the Deed of Charge and will be limited to the issueof the Notes, the ownership of the Mortgages and other assets referred to herein and of anySubstitute Mortgages, the exercise of related rights and powers, and other activities referred toherein or reasonably incidental thereto. These activities will include the collection of payments ofprincipal and interest from Borrowers in respect of Mortgages and the operation of arrearsprocedures.

Substantially all of the above activities will be carried on by the Mortgage Manager on anagency basis on behalf of the Issuer and Trustee under the Mortgage Management Agreement.Additionally, the Mortgage Manager will provide cash management and reporting services to theIssuer and the Trustee pursuant to the Mortgage Management Agreement. The Issuer (with the

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consent of the Trustee) or the Trustee may revoke the agency of the Mortgage Manager upon theoccurrence of certain events of default or insolvency or similar events in relation to the MortgageManager or, in certain circumstances, following an Event of Default in relation to the Notes.Following such an event as aforesaid, the Issuer may (with the consent of the Trustee) or theTrustee may, subject to certain conditions, appoint any substitute Mortgage Manager.

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THE ORIGINATOR’S GROUP

Irish Life & Permanent plc

Irish Life & Permanent plc and its affiliates (the ‘‘group’’) is a leading provider of personalfinancial services in the Irish market. The group formed in 1999 from the merger of Irish Life plc,the largest life and pensions group in Ireland and Irish Permanent plc, a leading provider of retailfinancial services in Ireland. The group is quoted on the Irish and London Stock Exchanges.

The group’s strategic focus is on Ireland and its successful economy, with an ambition to bethe number one provider of personal financial services.

Activities of Irish Life & Permanent

Irish Life is Ireland’s leading life and pensions company with a current market share of over25 per cent. The company provides a wide range of risk protection, pension, savings andinvestment products for both the individual and group markets in Ireland. Its products and servicesare distributed through a wide range of channels including bank branches, independentintermediaries and brokers, the Irish Life salesforce and directly to customers. Asset managementfor the life operations is provided by Irish Life Investment Managers.

permanent tsb is the retail banking operation of the group and is the leading provider ofresidential mortgage finance in Ireland with a market share of approximately 18.6 per cent. on anannualised basis as at 31 December 2005. It offers a full range of personal banking servicesthrough a multi-channel distribution network of branches, intermediaries, agencies, retail outlets andinternet.

In the UK the bank operates through its subsidiary Capital Home Loans (CHL), a centralisedresidential mortgage lender distributing through independent intermediaries. CHL lendspredominantly in the buy-to-let residential market.

In partnership with Allianz the group holds a minority interest in Allianz (Ireland), the thirdlargest general (non-life) insurer in the Irish market.

Recent Financials

Total profit after tax on continuing activities for the year ended 31 December 2005 was e503million (calculated on a European embedded value basis, not statutory) (2004: e419m) and thegroup had total assets of e61 billion (2004: e50bn). Pre-tax profit in the life assurance divisionwas e222 million (2004: e192m) with life and investment sales of e520 million (2004: e470m) onan annual premium equivalent basis.

In the banking business operating profit was e148 million (2004: e139m) and the bank’s newlending was e9.7 billion (2004: e7.9bn).

At 31 December 2005 the group’s Tier 1 total capital ratio was 12.6 per cent. (2004: 11.2 percent.) while the solvency margin in Irish Life assurance was covered 1.7 times by available assets(2004: 1.7 times).

Irish Life & Permanent is rated A+/A-1 (S&P) and A1/P-1 (Moody’s).

History and Development

Irish Life

Irish Life was established in 1939 from the amalgamation of a number of Irish and British lifeassurance companies under Irish government ownership. In 1947, the company was restructuredand the Irish Government acquired 90.25 per cent. of the shares. The company remained acommercial enterprise owned by the Government until its privatisation by way of flotation on theDublin and London Stock Exchanges in 1991.

permanent tsb

permanent tsb was formed by the merger of the banking business of Irish Life & Permanentand TSB Bank in 2002 following the acquisition in 2001 of TSB Bank by Irish Life & Permanentgroup.

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Irish Permanent was formerly a building society which de-mutualised and listed on the Dublinand London Stock Exchanges in 1994. TSB Bank was formed out of the amalgamation of anumber of trustee savings banks and offered a full range of retail banking services through itsbranch network.

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THE MORTGAGE MANAGER

Irish Life & Permanent will be appointed as the Mortgage Manager pursuant to the MortgageManagement Agreement and is responsible for the provision of certain mortgage managementservices and the management of the cash receipts and disbursements, and making certainallocations and investments of cash, of the Issuer. The Mortgage Manager is also responsible formaking certain calculations and preparing and distributing certain reports and notices toNoteholders. Provision is made in the Mortgage Management Agreement for the possible transferof the mortgage and cash management services to another member of Irish Life & Permanent’sgroup of companies provided that certain conditions are met, including the prior written confirmationof the Rating Agencies that the rating of the Notes will not be prejudiced by such transfer.

THE SUBORDINATED LOAN PROVIDER

Irish Life & Permanent has agreed to provide the Issuer with the Subordinated Loan inaccordance with the terms of the Subordinated Loan Agreement among Irish Life & Permanent, theIssuer and the Trustee.

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THE MORTGAGE POOL

Introduction

Each of the Mortgages in the Completion Mortgage Pool was advanced by Irish Life &Permanent. The Provisional Mortgage Pool was drawn up as at 13 April 2006 and was made up ofmortgages owned by Irish Life & Permanent. The Completion Mortgage Pool will be selected fromthe Provisional Mortgage Pool after excluding mortgages, inter alia, which are repaid between thatdate and the Issue Date or which do not comply with the warranties set out in the Mortgage SaleAgreement. The aggregate balances of Mortgages in the Completion Mortgage Pool will not exceede2,150,000,000.

Sale of Mortgages

Irish Life & Permanent will sell its beneficial interests in each Mortgage in the Mortgage Poolto the Issuer for (a) an initial consideration payable on the Issue Date equal to the Balance (asdefined below) on the Issue Date less an amount up to the expected collections by way of directdebit of monthly payments due for the calendar month immediately prior to the Issue Date (the‘‘Expected Collections’’) and (b) a further consideration of the Expected Collections payable on orbefore 7 July 2006 as set out below. The further consideration shall be deemed to be paid to IrishLife & Permanent on behalf of the Issuer to the extent of Expected Collections actually received byIrish Life & Permanent from the relevant Borrowers in respect of Expected Collections on or priorto 6 July, such amounts to be retained by Irish Life & Permanent on that basis. To the extent thatany Expected Collections have not been received by 6 July, the Issuer will pay such remainingamount to Irish Life & Permanent by 7 July 2006. If any of the calendar dates above do not fall ona business day, the applicable date shall be the next following business day.

The ‘‘Balance’’ on the Issue Date for each Mortgage means the aggregate of the amountssecured or intended to be secured under the Mortgage comprising (i) the original principal amountadvanced to the Borrower (including any fees and expenses added to the principal amount) plus(ii) any advance of further moneys to the Borrower thereof on the security of or securable on therelevant Mortgage and any amount added to the principal balance of Mortgage on the terms of therelevant mortgage deed after the date of completion of such Mortgage which remains outstandingas at the Issue Date (including fees and expenses, accrued interest and any amounts in arrears)and less (iii) any repayments or prepayments of such principal as at the Issue Date plus (iv) allinterest accrued but not yet due and arrears of interest which in each case has not been added tothe principal amount.

Following the sale of the Completion Mortgage Pool to the Issuer on the Issue Date, NewLoans, Further Advances and Substitute Mortgages may from time to time be included in theMortgage Pool. The New Loans, Further Advances and Substitute Mortgages may be originated oracquired by Irish Life & Permanent on behalf of the Issuer. Substantially the same warranties tothose given by Irish Life & Permanent in respect of the Mortgages which comprise the CompletionMortgage Pool will be given by Irish Life & Permanent in respect of each Mortgage sold to theIssuer after the Issue Date.

Lending Criteria

The following lending criteria (the ‘‘Lending Criteria’’) will have been applied in respect of theMortgages comprising the Provisional Mortgage Pool. In addition, the Lending Criteria (as may bevaried in the manner described in ‘‘Changes to Lending Criteria’’ below) will apply in respect of allSubstitute Mortgages, New Loans and Further Advances.

On origination of each Mortgage from time to time comprised in the Mortgage Pool, theLending Criteria would have been applied with certain minor variations reflecting the specific IrishLife & Permanent policy in force at the time the mortgage application was underwritten.

Security

(a) Each loan must be secured by a first legal mortgage on a leasehold or freehold propertyin Ireland (the ‘‘Property’’ or the ‘‘Properties’’).

(b) Only Property of acceptable construction intended for use wholly or partly as a principalplace of residence is acceptable.

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(c) New properties must have the benefit of (i) a Home Bond Guarantee Certificate which isa guarantee provided by the National House Building Guarantee Company Limited or (ii)a Premier Guarantee of Ireland Guarantee Certificate under the scheme operated byCoyle Hamilton Willis and underwritten by the Liberty Mutual Group.

(d) Both of the guarantees referred to at (i) and (ii) above, cover the property against majorstructural defects for ten years. Alternatively, the Borrower will have a certificate from anarchitect to confirm that they supervised the construction and that the property is built inaccordance with good building practice.

(e) The Borrower’s solicitor must furnish an undertaking to Irish Life & Permanent to enablethe Borrower to draw down the loan. The solicitor must undertake to:

(i) furnish Irish Life & Permanent with a good and marketable title;

(ii) register the mortgage in the appropriate registry, so as to ensure that Irish Life &Permanent obtains a first registered legal mortgage/charge on the property;

(iii) lodge the title deeds, including the mortgage with Irish Life & Permanent oncompletion of registration; and

(iv) furnish a certificate of title wherein the Borrower’s solicitor certifies that Irish Life &Permanent has ‘‘good marketable title’’ (as determined by the Law Society ofIreland) to the Property.

(f) Each Property offered as security must have been valued by a valuer which is amember of Irish Life & Permanent’s approved panel chosen from a panel of valuationfirms approved by Irish Life & Permanent.

(g) At the time of completion, the relevant property must be insured either under a BlockBuildings Policy (as defined under ‘‘The Mortgage Pool – Insurance Contracts’’ below) inthe name of Irish Life & Permanent, or Irish Life & Permanent must be jointly insuredwith the Borrower under, or its interest noted on, a buildings policy in relation to therelevant Property.

(h) The Borrower must have life assurance (other than in exceptional circumstances) as atthe time of drawdown of the loan that at least matches the value of the loan other thanas provided in Section 126 of the Consumer Credit Act 1995 (as amended).

(i) Irish Life & Permanent, at its discretion, accepts personal guarantees in support of theBorrower’s repayment of the Mortgage.

Loan Amount

There is currently no pre-set minimum or maximum loan amount for a mortgage. However asat the 13th April 2006, no Mortgage within the Provisional Mortgage Pool exceeds e1,000,000.Currently, the required minimum property values for a mortgage are e70,000 (rural areas) ande100,000 (Dublin City and County and other areas of significant population).

Loan to value

(a) The loan to value ratio (the ‘‘Initial LTV’’) is calculated by dividing the initial loan amountadvanced at completion of the Mortgage by the valuation of the Property or the contractprice of the Property, whichever is the lesser amount.

(b) The Initial LTV of each Mortgage at the date of the initial advance must be no morethan 92 per cent or 100 per cent. in the case of loans to qualifying first time buyers.Prior to December 2003, mortgage indemnity insurance was required for all loans withan Initial LTV of between 75 per cent. and 92 per cent., save for certain loans issued upto April 2001 in excess of e190,460, where the mortgage indemnity insurance was onlyrequired if the ratio exceeded 85 per cent. Since December 2003, mortgage indemnityinsurance is required for all loans with an Initial LTV of between 80 per cent. and 92 percent., irrespective of loan amount. Loans with an Initial LTV in excess of 92 per cent. onthe Issue Date are not the subject of mortgage indemnity insurance.

Term

Each Mortgage must have an initial term of between 5 and 35 years and (except for aRepayment Mortgage) have no scheduled principal repayment prior to its stated final maturitywhich, in the case of mortgages in the Mortgage Pool, will be no later than 6 April 2041.

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Borrowers

(a) Borrowers must have a minimum age of 18 and the age at final maturity should notnormally extend beyond 70.

(b) A maximum number of four Borrowers (subject to certain exceptions) are allowed to beparties to any one Mortgage and assessment of the loan is based on the income/statusof up to three of the Borrowers;

(c) The Borrower’s credit and employment history will have been assessed with the aid ofone or more of the following:

(i) search supplied by credit reference agency;

(ii) salary certificates from current and past employers;

(iii) accountant’s certificate or letters of serviceability (introduced in December 2005) inthe form supplied by Irish Life & Permanent;

(iv) loan statements from current lenders;

(v) references from current landlords; and

(vi) bank account statements.

Income

(a) Income is determined by reference to the application form and supportingdocumentation, where appropriate, and may consist of the following:

(i) basic salary;

(ii) income from a second employment if the income is evidenced as being permanentand viable and the Borrower has had the position for a minimum of 2 years;

(iii) regular overtime payments (restricted to 10 per cent. of basic salary with certainexceptions);

(iv) bonus payments (restricted to 10 per cent. of basic salary), with certainexemptions;

(v) commission payments (restricted to 30 per cent. of basic salary), with certainexemptions;

(vi) net profits/drawings plus any additional income confirmed by an accountant for self-employed Borrowers (Borrowers are considered self-employed if they hold greaterthan 25 per cent. of the issued share capital of a company);

(vii) pension, investment and rental income (excluding room rental); and

(viii) any other monies approved by an authorised officer of Irish Life & Permanent.

(b) Prior to November 2001, the principal amount advanced could not (subject to certainexceptions) exceeds 3 times the assessed income of the primary customer plus onetimes the assessed income of any secondary customer. Since November 2001, theprincipal amount advanced (subject to certain exceptions) is assessed based on thecustomer’s repayment capacity, as determined using Irish Life & Permanent’s net incomecriteria (i.e. proposed mortgage repayments plus other loan repayments/maintenance, asa percentage of monthly income net of tax). All applications assessed on this basis aresubject to stress-testing.

Solicitors

The firm of solicitors acting on behalf of the Borrowers, on the making of each Mortgage,must have at least one practicing solicitor.

Further Advances and New Loans

Each Further Advance and/or New Loan originated by Irish Life & Permanent and acquired bythe Issuer will have the benefit of the same representations as the Mortgages in the CompletionMortgage Pool and will have been originated by Irish Life & Permanent in accordance with theLending Criteria (as may be varied in the manner described below).

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Changes to Lending Criteria

Subject to obtaining any relevant consent, Irish Life & Permanent may vary the LendingCriteria from time to time in the manner of a reasonably prudent mortgage lender lending toborrowers in Ireland who include the recently self-employed, independent contractors, temporaryemployees and people who may have experienced previous credit problems being, in each case,people who generally do not satisfy the lending criteria of traditional sources of residentialmortgage capital (a ‘‘Prudent Mortgage Lender’’).

Characteristics of the Provisional Mortgage Pool

The Mortgages in the Provisional Mortgage Pool have the aggregate characteristics indicatedin Tables 1 to 15 below.

Interest on the Mortgages in the Provisional Mortgage Pool is normally, other than in certaincircumstances, normally related to mortgages in arrears, due on the 28th day (or the next businessday in Dublin) of each month and there is therefore a concentration of monthly payments under theMortgages as at those dates.

The following tables give information on the Provisional Mortgage Pool at 13 April 2006. Allfigures and statistics in the tables have been rounded up to the nearest two decimal places.

Table 1 Summary

Total number of borrowers 27,840Total number of advances 27,872Aggregate balances of the mortgages e4,357,866,699.53Average mortgage balance e156,352.85Largest Mortgage e999,850.28Weighted average Loan-To-Value Ratio (LTV) 73.17%Weighted average Indexed Loan-To-Value Ratio (LTV) 63.21%Weighted average Seasoning 16.59 monthsWeighted average Remaining Term 26.5 yearsLongest Maturity Date 6 April 2041Weighted Average Interest Rate 3.31%

Table 2 Current LTV (%)

4 5= Current Balance (e) % of Total No. of Loans % of Total

0 30% 234,563,169.23 5.38% 3,844 13.79%30% 40% 241,396,331.74 5.54% 2,481 8.90%40% 50% 322,222,416.02 7.39% 2,680 9.62%50% 60% 351,398,644.64 8.06% 2,519 9.04%60% 70% 421,190,063.03 9.67% 2,612 9.37%70% 80% 512,686,318.55 11.76% 2,885 10.35%80% 90% 997,299,104.93 22.89% 5,364 19.25%90% 95% 819,725,043.01 18.81% 3,623 13.00%95% 5100% 457,385,608.38 10.50% 1,864 6.69%

Total 4,357,866,699.53 100.00% 27,872 100.00%

Minimum LTV 1.07%Maximum LTV 100.00%Weighted Average – LTV 73.17%

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Table 3 Current Indexed LTV*

4 5= Current Balance (e) % of Total No. of Loans % of Total

0 30% 412,636,050.46 9.47% 6,000 21.53%30% 40% 364,279,647.20 8.36% 3,208 11.51%40% 50% 480,784,004.49 11.03% 3,517 12.62%50% 60% 614,599,203.03 14.10% 3,944 14.15%60% 70% 414,486,267.81 9.51% 2,109 7.57%70% 80% 747,916,253.68 17.16% 3,495 12.54%80% 90% 901,848,985.34 20.69% 3,888 13.95%90% 95% 300,661,186.85 6.90% 1,232 4.42%95% 5100% 120,655,100.67 2.77% 479 1.72%

Total 4,357,866,699.53 100.00% 27,872 100.00%

Minimum – LTV 0.67%Maximum – LTV 99.93%Weighted Average – LTV 63.21%

* Note: Based on Permanent TSB National House Price Index

Table 4 Mortgage Size

4 5= Current Balance (e) % of Total No. of Loans % of Total

0 20,000 4,237,671.26 0.10% 265 0.95%20,000 40,000 42,015,173.12 0.96% 1,333 4.78%40,000 60,000 102,424,474.40 2.35% 2,012 7.22%60,000 80,000 165,188,374.58 3.79% 2,334 8.37%80,000 100,000 223,275,868.80 5.12% 2,454 8.80%100,000 120,000 264,016,228.06 6.06% 2,381 8.54%120,000 140,000 333,505,418.76 7.65% 2,555 9.17%140,000 160,000 416,317,650.81 9.55% 2,772 9.95%160,000 180,000 424,422,981.82 9.74% 2,495 8.95%180,000 200,000 376,544,201.82 8.64% 1,976 7.09%200,000 250,000 749,742,159.52 17.20% 3,335 11.97%250,000 300,000 614,136,291.12 14.09% 2,249 8.07%300,000 350,000 314,077,294.62 7.21% 974 3.49%350,000 400,000 129,458,285.67 2.97% 348 1.25%400,000 450,000 63,867,320.75 1.47% 151 0.54%450,000 500,000 47,687,612.21 1.09% 101 0.36%500,000 750,000 66,257,239.15 1.52% 113 0.41%750,000 20,692,453.06 0.47% 24 0.09%

Total 4,357,866,699.53 100.00% 27,872 100.00%

Minimum e10,011.53Maximum e999,850.28Average e156,352.85

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Table 5 Seasoning (months)

4 5= Current Balance (e) % of Total No. of Loans % of Total

0 3 467,438,979.17 10.73% 2,425 8.70%3 6 946,984,162.24 21.73% 4,810 17.26%6 9 768,577,497.64 17.64% 4,114 14.76%9 12 764,613,142.34 17.55% 4,359 15.64%12 24 516,134,239.74 11.84% 3,063 10.99%24 36 8,042,821.81 0.18% 60 0.22%36 48 376,729,365.81 8.64% 3,334 11.96%48 60 404,304,518.39 9.28% 4,349 15.60%60 72 56,005,898.70 1.29% 517 1.85%72 49,036,073.69 1.13% 841 3.02%

Total 4,357,866,699.53 100.00% 27,872 100.00%

Minimum 0.07 monthsMaximum 95.31 monthsWeighted Average 16.59 months

Table 6 Remaining Term (years)

4 5= Current Balance (e) % of Total No. of Loans % of Total

0 5 4,325,653.01 0.10% 138 0.50%5 10 60,309,657.74 1.38% 1,106 3.97%10 15 213,694,990.86 4.90% 2,710 9.72%15 20 530,339,289.43 12.17% 4,747 17.03%20 25 991,766,766.52 22.76% 6,572 23.58%25 30 1,453,011,182.52 33.34% 7,586 27.22%30 1,104,419,159.45 25.34% 5,013 17.99%

Total 4,357,866,699.53 100.00% 27,872 100.00%

Minimum 2.13 yearsMaximum 35.01 yearsWeighted Average 26.52 years

Table 7 Repayment Type

Repayment Type Current Balance (e) % of Total No. of Loans % of Total

Principal and Interest 4,272,621,201.20 98.04% 27,354 98.14%Endowment 85,245,498.33 1.96% 518 1.86%

4,357,866,699.53 100.00% 27,872 100.00%

Table 8 Interest Rate Type

Type Current Balance (e) % of Total No. of Loans % of Total

Fixed 2,497,654,501.74 57.31% 15,108 54.20%Variable 1,860,212,197.79 42.69% 12,764 45.80%

4,357,866,699.53 100.00% 27,872 100.00%

40

Table 9 Products by Interest Rate Type

Current Balance (f) % of Total No. of Loans % of Total

Fixed 2,497,654,501.74 57.31% 15,108 54.20%Tracker 492,475,520.59 11.30% 1,752 6.29%Standard Variable Rate 1,367,736,677.20 31.39% 11,012 39.51%

4,357,866,699.53 100.00% 27,872 100.00%

Table 10 Fixed Rate Loan Maturity (months)

4 5= Current Balance (f) % of Total No. of Loans % of Total

0 3 513,792,739.11 20.57% 3,208 21.23%3 6 499,121,367.17 19.98% 2,984 19.75%6 9 437,179,512.18 17.50% 2,583 17.10%9 12 302,065,568.64 12.09% 1,854 12.27%12 24 566,853,606.21 22.70% 3,081 20.39%24 36 114,471,531.60 4.58% 790 5.23%36 48 6,143,773.74 0.25% 69 0.46%48 58,026,403.09 2.32% 539 3.57%

Total 2,497,654,501.74 100.00% 15,108 100.00%

Minimum 0.00 monthsMaximum 120.07 monthsWeighted Average 11.33 months

Table 11 Interest Rate Distribution(%)

4 5= Current Balance (f) % of Total No. of Loans % of Total

2.00 2.50 7,019,637.65 0.16% 35 0.13%2.50 2.75 1,224,557,065.89 28.10% 6,893 24.73%2.75 3.00 161,180,364.53 3.70% 1,097 3.94%3.00 3.25 836,712,341.81 19.20% 4,798 17.21%3.25 3.50 153,542,762.04 3.52% 863 3.10%3.50 3.75 858,211,185.69 19.69% 4,173 14.97%3.75 4.00 1,014,034,412.76 23.27% 8,991 32.26%4.00 102,608,929.16 2.35% 1,022 3.67%

Total 4,357,866,699.53 100.00% 27,872 100.00%

Minimum 2.02%Maximum 8.00%Weighted Average 3.31%

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Table 12 Original Term (years)

4 5= Current Balance (f) % of Total No. of Loans % of Total

0 10 9,269,570.38 0.21% 184 0.66%10 15 78,916,032.18 1.81% 1,240 4.45%15 20 217,755,290.99 5.00% 2,466 8.85%20 25 568,225,005.08 13.04% 5,068 18.18%25 30 986,260,844.00 22.63% 6,508 23.35%30 35 1,433,670,580.71 32.90% 7,540 27.05%35 1,063,769,376.19 24.41% 4,866 17.46%

Total 4,357,866,699.53 100.00% 27,872 100.00%

Minimum 5.00 yearsMaximum 35.61 yearsWeighted Average 27.90 years

Table 13 Arrears Multiple (months)

Current Balance (f) % of Total No. of Loans % of Total

None 4,311,838,552.42 98.94% 27,454 98.50%0-1 35,764,113.47 0.82% 319 1.14%1-2 10,264,033.64 0.24% 99 0.36%

4,357,866,699.53 100.00% 27,872 100.00%

Table 14 First Time Buyer

Current Balance (f) % of Total No. of Loans % of Total

Yes 2,228,199,931.08 51.13% 13,451 48.26%No 2,129,666,768.45 48.87% 14,421 51.74%

4,357,866,699.53 100.00% 27,872 100.00%

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Table 15 Geographical Concentration

County Current Balance (f) % of Total No. of Loans % of Total

Dublin 980,203,835 22.49% 5,071 18.19%Co Dublin 449,848,329 10.32% 2,179 7.82%Co Cork 375,765,908 8.62% 2,452 8.80%Co Meath 283,071,927 6.50% 1,650 5.92%Co Kildare 278,940,371 6.40% 1,587 5.69%Co Louth 234,507,738 5.38% 1,597 5.73%Co Wicklow 208,883,991 4.79% 1,078 3.87%Co Wexford 154,328,234 3.54% 1,249 4.48%Co Limerick 151,351,472 3.47% 1,123 4.03%Co Galway 128,321,258 2.94% 911 3.27%Co Waterford 110,739,304 2.54% 788 2.83%Co Tipperary 101,959,223 2.34% 868 3.11%Co Donegal 92,637,929 2.13% 893 3.20%Co Westmeath 92,449,012 2.12% 678 2.43%Co Kilkenny 80,004,512 1.84% 603 2.16%Co Clare 73,857,220 1.69% 569 2.04%Co Mayo 68,175,734 1.56% 645 2.31%Co Cavan 66,346,755 1.52% 520 1.87%Co Laois 65,030,453 1.49% 466 1.67%Co Offaly 65,012,075 1.49% 514 1.84%Co Carlow 57,508,972 1.32% 448 1.61%Co Monaghan 55,365,967 1.27% 435 1.56%Co Kerry 48,860,164 1.12% 424 1.52%Co Sligo 47,609,334 1.09% 395 1.42%Co Roscommon 39,607,097 0.91% 344 1.23%Co Leitrim 26,136,381 0.60% 214 0.77%Co Longford 21,343,506 0.49% 171 0.61%

4,357,866,699.53 100.00% 27,872 100.00%

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Title to the Mortgage Pool

The Completion Mortgage Pool will consist of Mortgages originated by Irish Life & Permanentand governed by Irish law.

Pursuant to the Mortgage Sale Agreement, Irish Life & Permanent will agree to sell itsbeneficial interest in the Mortgages and their collateral security to the Issuer. Irish Life &Permanent will undertake to transfer legal title when required under the terms of such Agreement,as mentioned below, and will provide certain further assurances to the Issuer and the Trustee.

The Issuer will grant a first fixed charge or, as applicable an assignment by way of security,in favour of the Trustee for its own benefit and on trust for those named as secured persons underthe Deed of Charge over its interest in the Mortgages and their collateral security.

The Mortgage Manager is required by the Mortgage Management Agreement to ensure thesafe custody of the title deeds relating to the Mortgages and to provide the Trustee with access tothem at all reasonable times.

Save as mentioned below, neither the Issuer nor the Trustee will be entitled to effect anyregistration to perfect the sale of the Mortgages to the Issuer or the granting of security over themby the Issuer in favour of the Trustee, nor will they be entitled to obtain possession of the titledeeds to the properties the subject of the Mortgages.

Notices of the sale to the Issuer and the security in favour of the Trustee will not, save asmentioned below, be given to the Borrowers. Notice of the interest of the Issuer and the Trusteewill be given in respect of the Block Buildings Policies, the Mortgage Indemnity Policies and theContingency Policies (each as defined in ‘‘Insurance Contracts’’ below) to the relevant insuranceprovider.

Under the Mortgage Sale Agreement and the Deed of Charge, the Issuer and the Trustee willeach be entitled to effect such registrations and give (or require Irish Life & Permanent to give atthe cost of Irish Life & Permanent in such manner as the Issuer or the Trustee may reasonablyrequire) such notices as it considers necessary to protect and perfect its interests in theMortgages, and to call for a legal assignment or transfer of the Mortgages and the collateralsecurity in favour of the Issuer and a legal sub-mortgage over such Mortgages and collateralsecurity in favour of the Trustee, inter alia, where (i) it is obliged to do so by law, by court order orby a mandatory requirement of any regulatory authority, (ii) an Enforcement Notice (as defined inthe Deed of Charge) has been given, (iii) the Trustee considers in its reasonable opinion that theCharged Property (as defined in the Deed of Charge) or any part thereof is in jeopardy (includingthe possible insolvency of Irish Life & Permanent (where legal title to any Mortgage is vested inIrish Life & Permanent or any other entity in which legal title to any Mortgage is vested)) and thatdoing any of the foregoing acts or things would materially reduce such jeopardy, (iv) any action istaken for the winding-up, dissolution, examination or reorganisation of Irish Life & Permanent orany other entity in which legal title to any Mortgage is vested, (v) Irish Life & Permanent hasceased to be Mortgage Manager pursuant to the Mortgage Management Agreement and the Issuerand Trustee agree that such action should be taken (where legal title to any Mortgage is vested inIrish Life & Permanent), or (vi) the rating of the long term unsecured and unsubordinated debt ofIrish Life & Permanent falls below BBB by S&P or Baa2 by Moody’s unless the Rating Agenciesconsider that such downgrade will not affect the then current rating of the Notes. Following suchlegal assignment or transfer and sub-mortgage, the Issuer (with the consent of the Trustee) andthe Trustee will each be entitled to take all necessary steps to protect and perfect legal title to itsinterests in the Mortgages and collateral security, including the carrying out of any necessaryregistrations and notifications. These rights are supported by irrevocable powers of attorney given,inter alia, by the Issuer and Irish Life & Permanent in favour of the Trustee and will be similarlysupported in respect of Substitute Mortgages and New Loans.

The effect of the non-perfection of the Issuer’s legal title to the Mortgages and the collateralsecurity pursuant to the Mortgage Sale Agreement and the assignment of the Issuer’s rights inrespect thereof in favour of the Trustee pursuant to the Deed of Charge, is that the rights of theIssuer and the Trustee may be, or may become, subject to equities as well as to the interests ofthird parties who perfect a legal interest prior to the Issuer or the Trustee acquiring and perfectinga legal interest (such as a third party acquiring a legal interest in the relevant Mortgage withoutnotice of the Issuer’s or the Trustee’s interest, or, in the case of Mortgages over registered land, athird party acquiring a legal interest by registration prior to the registration of the Issuer’s or theTrustee’s interests). Furthermore, the Issuer’s and the Trustee’s interests will be subject to such

44

equitable interests of third parties as may rank in priority to their interests in accordance with thenormal rules governing the priority of equitable interests in the case of both registered andunregistered land.

The risk of such equities and other interests leading to third party claims obtaining priority tothe interests of the Issuer or the Trustee in the Mortgages or the collateral security thereto is likelyto be limited to circumstances arising from a breach by Irish Life & Permanent or the Issuer of itscontractual or other obligations or fraud or mistake on the part of Irish Life & Permanent or theIssuer or their respective officers, employees or agents.

In addition, the rights of the Issuer and the Trustee may be or become subject to the directrights of the Borrowers against Irish Life & Permanent. Such rights may include the rights of set-offexisting prior to notification to the Borrowers of the sale of the Mortgages which arise in relation totransactions made between certain Borrowers and Irish Life & Permanent, deposits made bycertain Borrowers with Irish Life & Permanent and the rights of Borrowers to redeem theirMortgages by repaying the relevant loan directly to Irish Life & Permanent. These rights may resultin the Issuer receiving less sums than anticipated from the Mortgages. Irish Life & Permanent will,however, undertake in the Mortgage Sale Agreement to account to the Issuer in respect of anyamounts in its possession or under its control which are set-off against any sums to which theIssuer is entitled under the Mortgage Sale Agreement and to hold any moneys repaid to Irish Life& Permanent in respect of the relevant Mortgages to the order of the Issuer.

For so long as neither the Issuer nor the Trustee have obtained legal title to the Mortgages,Irish Life & Permanent will undertake in the Mortgage Sale Agreement for the benefit of the Issuerand the Trustee that it will lend its name to, and take such other steps as may reasonably berequired by the Issuer or the Trustee in relation to, any legal proceedings in respect of theMortgages and their related security. In carrying out such steps, Irish Life & Permanent will act ina manner consistent with the requirements of Irish Life & Permanent’s policy from time to time.

Multiple advances

Occasionally Mortgages originated by Irish Life & Permanent may comprise more than oneadvance and/or may be secured by first ranking security over more than one Property (‘‘MultipleAdvances’’). Where more than one advance is made to a Borrower either (i) each advance issecured by a first ranking Mortgage over a Property or (ii) the advances are secured over thesame Property such that each advance will rank above all security other than the security in favourof Irish Life & Permanent. The rights to all such security will be sold by Irish Life & Permanent tothe Issuer in respect of any Mortgage, Further Advances or New Loans comprising part of theMortgage Pool.

Warranties and Repurchase

The Mortgage Sale Agreement will contain certain representations and warranties given byIrish Life & Permanent to the Issuer and the Trustee in relation to, inter alia, the CompletionMortgage Pool, New Loans, Substitute Mortgages and Further Advances transferred or assigned tothe Issuer pursuant to the Mortgage Sale Agreement.

No searches, enquiries or independent investigation of title of the type which a prudentpurchaser or mortgagee would normally be expected to carry out have been or will be made bythe Issuer or the Trustee, each of whom is relying entirely on the representations and warrantiesset out in the Mortgage Sale Agreement.

If there is an unremedied breach of any of the representations and warranties set out in theMortgage Sale Agreement in respect of a Mortgage or its collateral security then Irish Life &Permanent will be obliged to repurchase the relevant Mortgage (in the case of Multiple Advances,being all advances in the Mortgage Pool made to the relevant Borrower) and its collateral securityfor a consideration in cash equal to all sums due or owing thereunder (including accrued interestand arrears) as at the date of repurchase (after deducting the amount of any interest not thenaccrued but paid in advance by the relevant mortgagor, which amount will be retained by theIssuer). Performance of such repurchase will be in full satisfaction of the liabilities of Irish Life &Permanent in respect of the relevant breach. Alternatively, as consideration for such repurchaseIrish Life & Permanent may elect to transfer another mortgage originated by Irish Life & Permanentor an affiliate (a ‘‘Substitute Mortgage’’) either whose Adjusted Balance (as defined below) togetherwith cash equals such cash consideration or with an Adjusted Balance equal to or greater than the

45

amount of such cash consideration provided, however, that the Substitute Mortgage complies withcertain conditions set out in the Mortgage Sale Agreement.

‘‘Adjusted Balance’’ means, in respect of any Substitute Mortgage, the original principal amountadvanced to the Borrower thereunder plus any further advance made thereon less any prepayment,repayment or payment of or in respect of any of principal prior to the date on which suchSubstitute Mortgage is transferred to the Issuer.

The representations and warranties of Irish Life & Permanent referred to above include, butare not limited to, statements to the following effect:

(i) each Mortgage constitutes a valid and subsisting first charge by way of legal mortgageover the residential leasehold or freehold property situated in Ireland (subject only tostamping at the Revenue commissioners and to any registration which may be pendingat the Land Registry or Registry of Deeds) (or, in the case of Multiple Advances overthe same property, the advances rank above all security other than the security in favourof Irish Life & Permanent);

(ii) each Mortgage constitutes a valid and binding obligation of the Borrower enforceable inaccordance with its terms and secures the repayment of all advances, interest, costsand expenses payable by the Borrower;

(iii) prior to making the initial advance to the Borrower, the relevant property was valued byan independent qualified valuer approved by Irish Life & Permanent;

(iv) each Mortgage complied with the Lending Criteria applicable at the time of application bythe Borrower for the grant of such advance in all material respects save for any waiversas would be granted by a Prudent Mortgage Lender;

(v) prior to the making of an advance to a Borrower, all investigations, searches and otheraction and enquiries which a Prudent Mortgage Lender would normally make whenadvancing money to an individual or, as applicable, body corporate on the security ofresidential property in Ireland were taken by Irish Life & Permanent or on its behalf inrespect of each Mortgage;

(vi) at the time of the origination of each Mortgage, each Property was insured either (i)under a Block Buildings Policy, or (ii) a building insurance policy in the joint names ofthe Borrower and Irish Life & Permanent or with the interest of Irish Life & Permanent(as mortgagee) endorsed or otherwise noted thereon, or (iii) (in the case of leaseholdproperty) under a landlord’s building insurance with, where possible, the interests of IrishLife & Permanent and the Borrower endorsed thereon, or (iv) under one of theContingency Policies (as defined below), in all cases against risks usually covered whenadvancing money on the security of residential property of the same nature to anamount not less than the full reinstatement value thereof as determined by Irish Life &Permanent’s valuer;

(vii) where under the relevant Lending Criteria, part of the advance was required to beinsured by a mortgage guarantee indemnity policy, such part was so insured under aMortgage Indemnity Policy and effected in accordance with the relevant Block BuildingPolicy;

(viii) the Mortgage Indemnity Policies and the Contingency Policies are in full force and effectand all premiums thereon have been paid;

(ix) in relation to each Mortgage the property is either registerable in the Registry of Deedsand the Borrower’s solicitor undertakes to furnish a good and marketable title in duecourse or, if the property is registerable in the Land Registry, it has been registered orthe Borrower’s solicitor undertakes to have it registered, in accordance with hisundertaking, given prior to the drawdown of the relevant advance and to furnish in eithercase a good and marketable title in due course;

(x) other than in respect of certain specified Mortgages comprised in the ProvisionalMortgage Pool (as to which see Table 13 above), no Arrears were applicable to anyMortgage other than in respect of a Substitute Mortgage, as at 13 April 2006. NoArrears are applicable in respect of a Substitute Mortgage, Further Advance or NewLoan on the Interest Payment Date immediately prior to the date the SubstituteMortgage, Further Advance or New Loan is purchased by the Issuer;

46

(xi) each Mortgage has been made on the terms of Irish Life & Permanent standardmortgage documentation, which has not been varied in any material respect;

(xii) each Mortgage comprises all loans made by Irish Life & Permanent to such Borrowerand all security in favour of Irish Life & Permanent;

(xiii) no Mortgage contains an obligation on the part of Irish Life & Permanent to make anyfurther advance;

(xiv) all Mortgages are denominated in euro; and

(xv) all Mortgages are over property located in Ireland.

Management of the Mortgage Pool

The Mortgage Manager is required to manage the Mortgage Pool as the agent of the Issuerand the Trustee under and in accordance with the terms of the Mortgage Management Agreement.The duties of the Mortgage Manager include:

– setting the interest rates on the Variable Rate Mortgages and the Tracker Mortgagesfrom time to time;

– collecting payments on the Mortgages and discharging Mortgages and related securityupon redemption;

– monitoring and, where appropriate, pursuing arrears and enforcing the security;

– taking all reasonable steps to ensure safe custody of all title deeds and documents inrespect of the Mortgages and their related security which are in its possession;

– making claims under the Insurance Contracts;

– managing the Issuer’s interests in the life policies and other collateral security related tothe Mortgages;

– managing the operation of the Bank Accounts;

– making the required entries in the Principal Deficiency Ledgers;

– managing the Issuer’s obligations under the Swap Agreements;

– dealing with conversion of Mortgages and the acquisition of Further Advances and NewLoans (see ‘‘Further Advances and New Loans’’ and ‘‘Conversion of Mortgages’’ below);

– making arrangements for the payment by the Issuer of interest and principal in respectof the Notes subject to the terms thereof and to the availability of funds;

– managing the operation of the Subordinated Loan;

– making the required ledger entries including the Principal Ledger, the Liquidity ReserveLedger and the New Loans Ledger;

– maintaining and/or replenishing the Reserve Fund; and

– operating the Revenue Priority of Payments and Principal Priority of Payments andmaking arrangements for the payment by the Issuer of interest and principal in respectof the Notes, subject to the terms thereof and to the availability of funds.

The Mortgage Manager will be entitled to delegate its functions under the MortgageManagement Agreement subject to certain conditions. The Mortgage Manager remains liable to theIssuer for the performance of those functions notwithstanding such delegation.

The Mortgage Manager is entitled to charge a fee for its services under the MortgageManagement Agreement payable on each Interest Payment Date. Such fee is payable inaccordance with the Revenue Priority of Payments.

The appointment of Irish Life & Permanent as Mortgage Manager may be terminated by theIssuer (with the consent of the Trustee) or the Trustee on the happening of certain events ofdefault or insolvency on the part of Irish Life & Permanent or if the security for the Notescomprised in the Deed of Charge is enforced and the Trustee is of the opinion that thecontinuation of the appointment of Irish Life & Permanent as the Mortgage Manager is materiallyprejudicial to the interest of the Noteholders. Following any such termination, the Issuer may (withthe consent of the Trustee) or the Trustee may, subject to certain conditions, appoint a substituteservicer. The Mortgage Manager will provide reasonable cooperation in order to facilitate thehandover of its responsibilities. For a period of three months following such termination, the Issuer,

47

the Trustee (or its agents) and any substitute servicer will be entitled to such non-exclusivelicences and intellectual property that the Mortgage Manager is legally empowered to grant andaccess to the premises and equipment of the Mortgage Manager, as required to service theMortgages, subject to certain reasonable limitations.

The registered office of the Mortgage Manager is located at Irish Life Centre, Lower AbbeyStreet, Dublin 1.

The Trustee shall have no responsibility for the genuineness, validity, effectiveness orsuitability of any of the Mortgages, the advances relating thereto, the collateral security, includingbut not limited to, the Insurance Contracts and the life policies, any of the New Loans or FurtherAdvances made in respect of the Mortgages or any other documents or manuals entered into or inconnection therewith or any obligation or rights created or purported to be created thereby. TheTrustee shall not be responsible or liable for the investigation of any of the foregoing. The TrustDeed and the Deed of Charge include provisions which further limit the responsibility and liability ofthe Trustee in respect of the Mortgages, the advances relating thereto and the collateral security inrelation thereto.

Enforcement Procedures

Irish Life & Permanent has established procedures for managing loans which are in arrears,including early contact with Borrowers in order to find a solution to any financial difficulties theymay be experiencing. Such solutions may include offering the option to transfer to a longer termarrangement. The procedures permit discretion to be exercised by the appropriate officers of IrishLife & Permanent in many circumstances. These same procedures (and if different, any arrearsmanagement procedures which may be required by a relevant mortgage indemnity insurer), asfrom time to time varied in accordance with the policies of a Prudent Mortgage Lender, arerequired to be used by the Mortgage Manager in respect of arrears arising on the Mortgages andall material amendments to such procedures will be notified to the Trustee.

Further Advances and New Loans

Irish Life & Permanent may make Further Advances to Borrowers. Such Further Advances willbe secured on the relevant Property on which the original loan was secured. Irish Life &Permanent may also originate further mortgages (the ‘‘New Loans’’) which may be acquired by theIssuer where the Issuer has funds available for such purposes and the conditions set out beloware satisfied. The Issuer will acquire such Further Advances or New Loans from Irish Life &Permanent on the relevant sale date (the ‘‘Sale Date’’).

The sale of a Further Advance or a New Loan by Irish Life & Permanent to the Issuer will(where applicable) be subject, inter alia, to the following conditions:

(i) upon the sale of any Further Advance, the relevant Borrower is not, so far as theMortgage Manager is aware, in material breach of any of the conditions of the relevantBorrower’s existing Mortgage;

(ii) the applicable provisions of the Consumer Credit Act 1995 relating to the FurtherAdvance or New Loan have been complied with;

(iii) if the terms on which the Further Advance or New Loan is made include a term orterms to which the European Communities (Unfair Terms in Consumer Contracts)Regulations 1995 and 2000 (the ‘‘UTCC Regulations’’) apply (pursuant to Regulation 3thereof), such term or terms is or are not a term or terms of the kind described inRegulation 3 of the UTCC Regulations;

(iv) there is no deficiency recorded on the Principal Deficiency Ledgers and no drawing hasbeen made on the Reserve Ledger which has not been replenished;

(v) each Further Advance or New Loan is made on terms which are legal, valid, bindingand enforceable and the amount of such Further Advance or New Loan (together withall related fees, costs and expenses) will have the benefit of a Mortgage which ranksabove all security except, in the case of Further Advances, other than the Issuer’sexisting charge for the principal amount outstanding under the relevant Mortgageimmediately prior to the sale of such Further Advance;

48

(vi) the Mortgage Manager’s further advance or origination procedures and the relevant partof the Lending Criteria have been applied to the Further Advance or New Loan and tothe circumstances of the Borrower at the time the Further Advance or New Loan wasmade;

(vii) prior to sale of the Further Advance or New Loan, any second charge or other securitycreated in favour of a third party, has been either expressly postponed to the charge orother security securing such Further Advance or New Loan or redeemed out of theproceeds of the Further Advance or New Loan simultaneously with the making of theFurther Advance or New Loan;

(viii) no Enforcement Notice has been given by the Trustee which remains in effect on therelevant Sale Date;

(ix) the amount of any Further Advance and New Loans, when added to the sum of theaggregate Balances of any Further Advances previously made during the relevantInterest Period, does not exceed 15 per cent. of the aggregate Balances of theMortgages on the first day of that Interest Period, save that the figure of 15 per cent.referred to above may be increased from time to time upon S&P agreeing that suchincrease will not adversely affect the then current ratings by S&P of the Notes;

(x) the product of the weighted average foreclosure frequency (‘‘WAFF’’) and the weightedaverage loss severity (‘‘WALS’’) for the Mortgage Pool calculated on the immediatelypreceding Determination Date in the same way as for the Completion Mortgage Pool (oras agreed by the Mortgage Manager and S&P from time to time) would not exceed theproduct of the WAFF and WALS for the Completion Mortgage Pool calculated on theIssue Date, plus 0.25 per cent. provided that the figure of 0.25 per cent. may beincreased from time to time upon S&P agreeing that such increase will not adverselyaffect the then current ratings of the Notes;

(xi) in relation to a Further Advance and/or New Loans which will carry a fixed rate ofinterest, such Further Advance and/or New Loans will not cause the aggregate of theBalances of the Fixed Rate Mortgages in the Mortgage Pool to exceed the maximumFRM Calculation Amount under the FRM Swap Agreement from time to time;

(xii) the Rating Agencies not having advised in writing that sale of the Further Advances orthe New Loans will cause the rating of the Notes to be downgraded;

(xiii) the aggregate amount of a Further Advance or a New Loan may not exceede1,000,000;

(xiv) in the case of New Loans, no sale of New Loans may occur after the Interest PaymentDate falling in June 2012;

(xv) if the sale of New Loans would include the sale of new types of loan products to theIssuer, the Trustee has received written confirmation from each of the Rating Agenciesthat such new types of loan products may be sold to the Issuer and that such sale ofnew types of loan products would not have an adverse effect on the then current ratingsof the Notes;

(xvi) the final maturity date of a New Loan or Further Advance cannot be later than August2041;

(xvii) no New Loan or Further Advance may be acquired if there are arrears in excess of 90days in respect of 4 per cent. of the aggregate Balances of the Mortgages as at theimmediately preceding Interest Payment Date;

(xviii)the aggregate of (i) the yield of the Further Advances and/or (ii) the yield of New Loansis at least equal to or in excess of 0.50 per cent. above one month EURIBOR (asdetermined in accordance with Condition 4(c)) as at the previous Interest Payment Date,after taking into account the yield on the loans and the margin on the SwapAgreements, on the relevant Sale Date;

(xix) the sale of any New Loan and/or Further Advance does not result in the loan to valueratio of all loans in the Mortgage Pool on the relevant Sale Date exceeding the loan tovalue ratio of the loans in the Completion Mortgage Pool plus 0.50 per cent; and

49

(xx) no New Loans may be purchased if the cumulative aggregate principal amount of all NewLoans would exceed an amount equal to or in excess of 30 per cent. of the aggregateprincipal amount of the Completion Mortgage Pool without the approval of Moody’s.

Conversion of Mortgages

The Mortgage Manager on behalf of the Issuer may agree to a request by a Borrower toconvert his Mortgage (or, in the case of a default by a Borrower, may itself elect to convert suchBorrower’s Mortgage) (subject to satisfaction of the following conditions) into a Mortgage with adifferent type of interest rate term or repayment term (a ‘‘Converted Mortgage’’). A ConvertedMortgage may comprise (following the conversion):

(a) an Endowment Mortgage, a Repayment Mortgage, a mortgage in respect of which theprincipal amount is not payable before maturity and under the terms of which a pensionpolicy is required (a ‘‘Pension Mortgage’’) and a mortgage (other than an EndowmentMortgage or Pension Mortgage) under the terms of which the principal amount is notrepayable before maturity or a combination of one or more such types of Mortgage; and/or

(b) a Fixed Rate Mortgage;

(c) a Variable Rate Mortgage;

(d) a Tracker Mortgage; or

(e) any other type of Mortgage offered by Irish Life & Permanent other than a Mortgagewhich is subject to a rate of interest set by reference or a flexible repayment or currentaccount mortgage, unless the Rating Agencies have confirmed in writing that theinclusion of any such Mortgage will not adversely affect the rating of the Notes.

The relevant conditions for conversion are, to the extent applicable, those set out in (i) to(xix) above under ‘‘Further Advances and New Loans’’ except that references in (i) to (xix) aboveto Further Advances and/or New Loans should be read as Converted Mortgages.

If the Issuer is unable to agree to a conversion request pursuant to the above, Irish Life &Permanent may at its discretion repurchase the relevant Mortgage from the Issuer for aconsideration of either (i) in cash equal to all sums due or owing thereunder (including accruedinterest) at the date of such repurchase (after deducting any interest not then accrued but paid inadvance by the relevant mortgagor, which amount will be retained by the Issuer) or (ii) the transferof another Mortgage originated by Irish Life & Permanent with a balance equal or greater than theamount calculated in (i) above, or, if the balance of such Mortgage is less than the amountcalculated in (i) above, such shortfall to be met by a cash payment equal to such shortfall fromIrish Life & Permanent to the Issuer, provided in such cases the replacement mortgage complieswith the Lending Criteria.

Insurance Contracts

The Issuer and the Trustee will have the benefit of a block buildings insurance master policy(the ‘‘Block Buildings Policy’’), certain contingency policies of insurance effected by Irish Life &Permanent with various insurance companies (the ‘‘Contingency Policies’’) and the block mortgageindemnity policies providing an indemnity for certain amounts advanced under a Mortgageexceeding the percentage of the value or purchase price of the relevant Property prescribed by theLending Criteria in respect of such Mortgage (the ‘‘Mortgage Indemnity Policies’’) to the extent oftheir respective interests in the Mortgages in the Mortgage Pool. The Issuer and the Trustee willalso have the benefit of the charges over any life policies securing Mortgages comprised in theMortgage Pool and any other insurance policies relating to the Mortgages. Certain warranties willbe given by Irish Life & Permanent in relation to the various insurance policies as described under‘‘Warranties and Repurchase’’ above.

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AVERAGE LIVES OF THE NOTES

‘‘Average lives of the Notes’’ refers to the average amount of time that will elapse from thedate of issuance of a security to the date of distribution to the investor of amounts distributed innet reduction of principal of such security. The average life of the Notes will be influenced by,amongst other things, the actual rate of redemption of the Mortgage Loans.

‘‘CPR’’ is the assumed annual constant rate of prepayment and repayment.

Redemption rates can be modelled by using the CPR and by applying this to the scheduledrate of amortisation of a mortgage pool.

The average lives of the Notes that would result from modelling five CPR scenarios areshown in the table below. The CPR scenarios have been modelled using the followingassumptions:

(a) the Mortgages all prepay/repay at the CPR detailed in the relevant column heading inthe table below and all such payments are treated as prepayments or repayment in fullof individual Mortgages;

(b) there are no losses or arrears associated with any of the Mortgages;

(c) no Principal Deficiency arises;

(d) no Mortgages are repurchased by Irish Life & Permanent, except as described in (h)below;

(e) the Issuer exercises its option to redeem all of the Notes that remain outstanding on theInterest Payment Date falling in June 2012;

(f) payments on the Notes are made on the 10th day of each payment month regardless ofthe day on which the Interest Payment Date actually occurs; and

(g) there has been no Event of Default (as defined in the Conditions) in respect of theNotes; and

(h) Irish Life & Permanent will sell and the Issuer will acquire Further Advances and NewLoans to the extent that there are available funds in the Further Advances Ledger orNew Loans Ledger, as the case may be.

AVERAGE LIVES CPR SCENARIO TABLE

Net CPR (prepayment rate) 5 per cent. 10 per cent. 15 per cent. 20 per cent. 25 per cent.

A1 Notes 1.86 0.98 0.98 0.98 0.98A2 Notes 5.83 5.25 5.25 5.25 5.25B Notes 5.15 4.52 4.52 4.52 4.52C Notes 5.15 4.52 4.52 4.52 4.52D Notes 5.15 4.52 4.52 4.52 4.52

The above scenarios have been selected to show the response of the average lives of theNotes to changes in the CPR assumption only. Neither the Issuer, the Trustee, or any other entitymakes any representation that the actual repayment profile of the Notes will match the repaymentprofile of any of the five CPR scenarios.

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AMORTISATION TABLE

Expected Amortisation of Notes

This is based on a 10% CPR

Class A1

Schedule

Class A2

Schedule

Class B

Schedule

Class C

Schedule

Class D

Schedule

344,000,000 1,656,000,000 50,000,000 44,000,000 56,000,000

Aug-06 327,333,333 1,656,000,000 49,583,333 43,633,333 55,533,333

Sep-06 310,805,555 1,656,000,000 49,170,139 43,269,722 55,070,555

Oct-06 294,415,508 1,656,000,000 48,760,388 42,909,141 54,611,634

Nov-06 278,162,046 1,656,000,000 48,354,051 42,551,565 54,156,537

Dec-06 262,044,029 1,656,000,000 47,951,101 42,196,969 53,705,233

Jan-07 246,060,329 1,656,000,000 47,551,508 41,845,328 53,257,689

Feb-07 230,209,827 1,656,000,000 47,155,245 41,496,617 52,813,875

Mar-07 214,491,412 1,656,000,000 46,762,285 41,150,812 52,373,759

Apr-07 198,903,983 1,656,000,000 46,372,599 40,807,889 51,937,311

May-07 183,446,450 1,656,000,000 45,986,161 40,467,823 51,504,500

Jun-07 168,117,730 1,656,000,000 45,602,943 40,130,591 51,075,296

Jul-07 152,916,749 1,656,000,000 45,222,918 39,796,169 50,649,669

Aug-07 137,842,443 1,656,000,000 44,846,060 39,464,534 50,227,588

Sep-07 122,893,756 1,656,000,000 44,472,343 39,135,663 49,809,025

Oct-07 108,069,642 1,656,000,000 44,101,740 38,809,532 49,393,950

Nov-07 93,369,062 1,656,000,000 43,734,225 38,486,119 48,982,334

Dec-07 78,790,987 1,656,000,000 43,369,773 38,165,401 48,574,148

Jan-08 64,334,395 1,656,000,000 43,008,358 37,847,356 48,169,363

Feb-08 49,998,275 1,656,000,000 42,649,955 37,531,961 47,767,952

Mar-08 35,781,623 1,656,000,000 42,294,539 37,219,195 47,369,886

Apr-08 21,683,443 1,656,000,000 41,942,085 36,909,035 46,975,137

May-08 7,702,748 1,656,000,000 41,592,568 36,601,460 46,583,678

Jun-08 — 1,649,838,558 41,245,963 36,296,448 46,195,481

Jul-08 — 1,636,089,903 40,902,247 35,993,978 45,810,519

Aug-08 — 1,622,455,820 40,561,395 35,694,028 45,428,765

Sep-08 — 1,608,935,355 40,223,383 35,396,578 45,050,192

Oct-08 — 1,595,527,561 39,888,188 35,101,607 44,674,774

Nov-08 — 1,582,231,498 39,555,786 34,809,094 44,302,484

Dec-08 — 1,569,046,236 39,226,154 34,519,018 43,933,297

Jan-09 — 1,555,970,851 38,899,269 34,231,360 43,567,186

Feb-09 — 1,543,004,427 38,575,108 33,946,099 43,204,126

Mar-09 — 1,530,146,057 38,253,649 33,663,215 42,844,092

Apr-09 — 1,517,394,840 37,934,869 33,382,688 42,487,058

May-09 — 1,504,749,883 37,618,745 33,104,499 42,132,999

Jun-09 — 1,492,210,301 37,305,255 32,828,628 41,781,891

Jul-09 — 1,479,775,215 36,994,378 32,555,056 41,433,709

Aug-09 — 1,467,443,755 36,686,092 32,283,764 41,088,428

Sep-09 — 1,455,215,057 36,380,375 32,014,733 40,746,024

Oct-09 — 1,443,088,264 36,077,205 31,747,944 40,406,474

Nov-09 — 1,431,062,528 35,776,562 31,483,378 40,069,753

Dec-09 — 1,419,137,007 35,478,424 31,221,017 39,735,838

Jan-10 — 1,407,310,866 35,182,770 30,960,842 39,404,706

Feb-10 — 1,395,583,275 34,889,580 30,702,835 39,076,333

Mar-10 — 1,383,953,415 34,598,834 30,446,978 38,750,697

Apr-10 — 1,372,420,470 34,310,510 30,193,253 38,427,775

May-10 — 1,360,983,633 34,024,589 29,941,643 38,107,544

Jun-10 — 1,349,642,103 33,741,051 29,692,129 37,789,981

Jul-10 — 1,338,395,085 33,459,876 29,444,695 37,475,064

Aug-10 — 1,327,241,793 33,181,044 29,199,323 37,162,772

Sep-10 — 1,316,181,445 32,904,535 28,955,995 36,853,082

Oct-10 — 1,305,213,266 32,630,331 28,714,695 36,545,973

Nov-10 — 1,294,336,489 32,358,412 28,475,406 36,241,423

Dec-10 — 1,283,550,351 32,088,759 28,238,111 35,939,411

Jan-11 — 1,272,854,098 31,821,353 28,002,793 35,639,916

Feb-11 — 1,262,246,981 31,556,175 27,769,436 35,342,917

Mar-11 — 1,251,728,256 31,293,207 27,538,024 35,048,393

Apr-11 — 1,241,297,187 31,032,430 27,308,540 34,756,323

May-11 — 1,230,953,044 30,773,826 27,080,969 34,466,687

Jun-11 — 1,220,695,102 30,517,377 26,855,294 34,179,465

Jul-11 — 1,210,522,642 30,263,066 26,631,500 33,894,636

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Class A1

Schedule

Class A2

Schedule

Class B

Schedule

Class C

Schedule

Class D

Schedule

Aug-11 — 1,200,434,954 30,010,874 26,409,571 33,612,181

Sep-11 — 1,190,431,330 29,760,783 26,189,491 33,332,080

Oct-11 — 1,180,511,069 29,512,776 25,971,245 33,054,313

Nov-11 — 1,170,673,476 29,266,836 25,754,818 32,778,860

Dec-11 — 1,160,917,864 29,022,946 25,540,195 32,505,703

Jan-12 — 1,151,243,549 28,781,088 25,327,360 32,234,822

Feb-12 — 1,141,649,853 28,541,246 25,116,299 31,966,198

Mar-12 — 1,132,136,104 28,303,402 24,906,997 31,699,813

Apr-12 — 1,122,701,636 28,067,540 24,699,439 31,435,648

May-12 — 1,113,345,790 27,833,644 24,493,610 31,173,684

Jun-12 — 1,104,067,908 27,601,697 24,289,497 30,913,903

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TERMS AND CONDITIONS OF THE NOTES

The following are the terms and conditions (the ‘‘Conditions’’) of the Notes in the form (subject toamendment) in which they will appear in the Trust Deed.

General

e344,000,000 Class A1 Mortgage Backed Floating Rate Notes due August 2043 (the ‘‘A1Notes’’), e1,656,000,000 Class A2 Mortgage Backed Floating Rate Notes due August 2043 (the‘‘A2 Notes’’ and together with the A1 Notes, the ‘‘Senior Notes’’), e50,000,000 Class B MortgageBacked Floating Rate Notes due August 2043 (the ‘‘B Notes’’), the e44,000,000 Class C MortgageBacked Floating Rate Notes due August 2043 (the ‘‘C Notes’’) and the e56,000,000 Class DMortgage Backed Floating Rate Notes due August 2043 (the ‘‘D Notes’’, and together with the CNotes and the B Notes, the ‘‘Junior Notes’’ and together with the Senior Notes, the ‘‘Notes’’) ofFastnet Securities 2 plc (the ‘‘Issuer’’) are the subject of a trust deed (the ‘‘Trust Deed’’, whichexpression includes such trust deed as from time to time modified in accordance with theprovisions therein contained and any deed or other document expressed to be supplementalthereto as from time to time so modified including the Master Definitions Schedule (as definedbelow), made between the Issuer and Citicorp Trustee Company Limited (the ‘‘Trustee’’, whichexpression includes any assignee or successor trustee appointed under the terms of the TrustDeed) as trustee for, inter alia, the holders for the time being of the Notes (the ‘‘Noteholders’’) andto be entered into on 29 June 2006 or on such later date as may be agreed between the Issuerand the Trustee (the ‘‘Issue Date’’).

The security for the Notes is created pursuant to, and on the terms set out in, a deed ofcharge and assignment (the ‘‘Deed of Charge’’, which expression includes such deed of chargeand assignment as from time to time modified in accordance with the provisions therein containedand any deed or other document expressed to be supplemental thereto as from time to timemodified) to be dated the Issue Date and made between, inter alia, the Issuer, Irish Life &Permanent plc (‘‘Irish Life & Permanent’’) and the Trustee.

By a paying agency agreement (the ‘‘Agency Agreement’’, which expression includes suchAgency Agreement as from time to time modified in accordance with the provisions thereincontained and any deed or other document expressed to be supplemental thereto as from time totime so modified) to be dated the Issue Date and made between the Issuer, the Trustee, Citibank,N.A. as agent bank (the ‘‘Agent Bank’’ which expression includes any other agent bank appointedin respect of the Notes) and Citibank, N.A. as principal paying agent (the ‘‘Principal Paying Agent’’,and together with any further or other paying agents for the time being appointed in respect of theNotes, the ‘‘Paying Agents’’) provision is made for the payment of principal and interest in respectof the Notes. The statements in these Conditions include summaries of, and are subject to, thedetailed provisions of the Trust Deed, the Agency Agreement and the Deed of Charge.

On or before the Issue Date, inter alios, the Issuer, the Trustee and Irish Life & Permanentwill enter into a master definitions schedule (the ‘‘Master Definitions Schedule’’). To the extent nototherwise defined in these Conditions any defined term shall have the meaning set out in theMaster Definitions Schedule.

Copies of the Trust Deed, the Agency Agreement, the Deed of Charge and the otherTransaction Documents (as defined below) are available for inspection at the principal office for thetime being of the Issuer and at the specified offices of the Paying Agents. The Noteholders andthe Couponholders are entitled to the benefit of, are bound by, and are deemed to have notice of,all the provisions of the Trust Deed and the Deed of Charge and are deemed to have notice of allthe applicable provisions of the Agency Agreement.

The issue of the Notes was authorised by resolution of the Board of Directors of the Issuerpassed on 23 June 2006.

Global Notes

Temporary Global Notes and Permanent Global Notes

The Notes of each class are initially represented by (i) in the case of the A1 Notes,a temporary global note in the principal amount of e344,000,000 (the ‘‘Temporary GlobalA1 Note’’), (ii) in the case of the A2 Notes, a temporary global note in the principal amount ofe1,656,000,000 (the ‘‘Temporary Global A2 Note’’), (iii) in the case of the B Notes, a temporary

54

global note in the principal amount of e50,000,000 (the ‘‘Temporary Global B Note’’), (iv) in thecase of the C Notes, a temporary global note in the principal amount of e44,000,000 (the‘‘Temporary Global C Note’’) and (v) in the case of the D Notes, a temporary global note in theprincipal amount of e56,000,000 (the ‘‘Temporary Global D Note’’ and, together with the TemporaryGlobal A1 Note, the Temporary Global A2 Note, the Temporary Global B Note and the TemporaryGlobal C Note, the ‘‘Temporary Global Notes’’), in each case without Coupons attached. EachTemporary Global Note will be deposited on behalf of the subscribers for each class of Notes witha common depositary (the ‘‘Common Depositary’’) for Euroclear Bank S.A./N.V. as operator of theEuroclear System (‘‘Euroclear’’) and Clearstream Banking, societe anonyme (‘‘Clearstream,Luxembourg’’) on the Issue Date. Upon deposit of each such Temporary Global Note, Euroclear orClearstream, Luxembourg will credit each subscriber of Notes represented by such TemporaryGlobal Note with the principal amount of the relevant class of Notes for which it has subscribedand paid. Interests in each Temporary Global Note will be exchangeable 40 days after the later ofthe Issue Date and the commencement of the offering of the Notes (the ‘‘Exchange Date’’),provided certification of non-US beneficial ownership by the Noteholders has been received, forinterests in a permanent global note (each a ‘‘Permanent Global Note’’), without Coupons. Theexpression ‘‘Global Notes’’ means the Temporary Global Notes and the Permanent Global Notesand the expression ‘‘Global Note’’ means any of them. On the exchange of a Temporary GlobalNote for a Permanent Global Note, the relevant Permanent Global Note will remain deposited withthe Common Depositary.

Transfers

Title to the Global Notes will pass by delivery. Each Permanent Global Note will only beexchangeable for definitive Notes in the limited circumstances described below. Each of thepersons appearing from time to time in the records of Euroclear or Clearstream, Luxembourg asthe holder of a Note will be entitled to receive any payment so made in respect of that Note inaccordance with the respective rules and procedures of Euroclear or Clearstream, Luxembourg, asappropriate. For so long as any Notes are represented by a Global Note, such Notes will betransferable in accordance with the rules and procedures for the time being of Euroclear orClearstream, Luxembourg, as appropriate.

Payments

Principal and interest on a Global Note will be payable against presentation of that GlobalNote at the specified office of any Paying Agent provided certification of non-US beneficialownership by the relevant class of Noteholders has been received by Euroclear or Clearstream,Luxembourg. A record of each payment made on a Global Note, distinguishing between anypayment of principal and payment of interest, will be endorsed on that Global Note by the PayingAgents (or the Paying Agent shall procure that such endorsement be made) and such record shallbe prima facie evidence that the payment in question has been made.

Issue of Notes in Definitive Form

If (i) any of the Notes become due and repayable pursuant to Condition 9(a) or (ii) eitherEuroclear or Clearstream, Luxembourg 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 tocease business or, in fact, does so or (iii) as a result of any amendment to, or change in, the lawsor regulations of Ireland (or of any political sub-division thereof) or of any authority therein orthereof having power to tax or in the interpretation or administration of such laws or regulationswhich becomes effective on or after the Issue Date, the Issuer is, or the Paying Agents are or willbe, required to make any deduction or withholding from any payment in respect of the Notes whichwould not be required were the Notes in definitive form, then the Issuer will, at its sole cost andexpense, issue Notes of each class in definitive form in exchange for the whole outstandinginterest in the Permanent Global Notes within 30 days of the occurrence of the relevant event.

The Notes are not being issued in definitive form but the Conditions contemplate that theymay subsequently be issued in definitive form in limited circumstances. References to Couponsand Couponholders should be construed accordingly.

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1 Form, Denomination and Title

(a) The Notes, will be issued in a minimum denomination of e50,000 each without interestcoupons (‘‘Coupons’’). However, for so long as the Notes are represented by a GlobalNote and Euroclear and Clearstream, Luxembourg so permit, the Notes shall be tradablein minimum nominal amounts of e50,000 and integral multiples of e1,000 thereafter.However, if definitive Notes are required to be issued they will only be printed andissued in denominations of e50,000 each with interest coupons attached and a gridendorsed thereon for the recording of all payments of interest in accordance with theprovisions of Condition 4. Accordingly, if definitive Notes are required to be issued, aNoteholder holding Notes having a nominal amount which cannot be represented by adefinitive Note in the denomination of e50,000 will not be able to receive a definitiveNote in respect of such Notes and will not be able to receive interest or principal inrespect of such Note unless and until such time as his holding becomes an integralmultiple of e50,000. Subject as below, title to the Notes and Coupons shall pass bydelivery.

(b) Subject to (d) below, the holder of any Note and the holder of any Coupon may (to thefullest extent permitted by applicable laws) be deemed and treated at all times, by allpersons and for all purposes (including the making of any payments), as the absoluteowner of such Note or Coupon, as the case may be, regardless of any notice ofownership, theft or loss, of any trust or other interest therein or of any writing thereon.

(c) The holder of each Coupon (whether or not the Coupon is attached to the relevantNote) in his capacity as such shall be subject to all the provisions contained in therelevant Note.

(d) As long as the relevant Notes are held in Euroclear or Clearstream, Luxembourg,interest in a Global Note will be shown on, and transfers thereof will only be effectedthrough, the records maintained by Euroclear or Clearstream, Luxembourg as the casemay be, and their respective participants, and in accordance with the rules andprocedures of Euroclear and Clearstream, Luxembourg from time to time. For so long asany of the Notes are represented by a Global Note held on behalf of Euroclear orClearstream Luxembourg (as the case may be) each person (other than another clearingsystem) who is for the time being shown in the records of Euroclear or Clearstream,Luxembourg (as the case may be) as the holder of a particular principal amount of suchNotes (each an account holder) (in which regard any certificate or other documentissued by Euroclear or Clearstream, Luxembourg (as the case may be) as to theprincipal amount of such Notes standing to the account of any person shall beconclusive and binding for all purposes save in the case of manifest error) shall betreated by the Issuer, the Trustee and the Agents as the holder of such principal amountof such Notes (and reference to ‘‘holding of Notes’’ shall be construed accordingly) forall purposes other than with respect to the payments of principal or interest on theprincipal amount of such Notes, the right to which shall be vested, as against the Issuerand the Trustee, solely in the bearer of the relevant Global Note. Each account holdermust look solely to Euroclear or Clearstream, Luxembourg, as the case may be, for itsshare of each payment made to the bearer of the relevant Global Note.

2 Status, Security and Priority

Status

(a) The Notes and, if relevant, the Coupons constitute direct, secured and unconditionalobligations of the Issuer and the Notes within each class rank (subject to the provisionsof Condition 4) pari passu without preference or priority amongst themselves.

(b) The Senior Notes and the Junior Notes, each of which have been issued by the Issueron the Issue Date, are subject to the Trust Deed and are secured by the same security.The Senior Notes rank in point of payment of interest and security pari passu, withoutpreference or priority amongst themselves, and rank in priority to the Junior Notes inpoint of payment of interest and security. The A1 Notes rank in priority to the A2 Notesin point of payment of principal. The B Notes rank in priority in point of payment ofinterest and security to the C Notes and the D Notes and the C Notes rank in point ofpayment of interest and security to the D Notes. Subject to satisfaction of the Pro RataTest (as defined in Condition 5(b)), the Junior Notes rank pari passu in point of payment

56

of principal. If the Pro Rata Test is not satisfied, the B Notes rank in priority in point ofpayment of principal to the C Notes and the D Notes and the C Notes rank in priority inpoint of payment of principal to the D Notes.

(c) The Trust Deed and the Deed of Charge contain provisions requiring the Trustee tohave regard to the interests of the Noteholders and the other Secured Creditors (asdefined in the Master Definitions Schedule) as regards all powers, trusts, authorities,duties and discretions of the Trustee (except where expressly provided otherwise), butrequiring the Trustee in any such case to have regard only to (i) (so long as there areany A1 Notes outstanding) the interests of the holders of the A1 Notes if, in theTrustee’s opinion, there is conflict between the interests of (A) the holders of the A1Notes and (B) the holders of the A2 Notes and/or B Notes and/or C Notes and/or DNotes and/or any other Secured Creditors or (ii) (if there are no A1 Notes outstanding)the interest of the holders of the A2 Notes if, in the Trustee’s opinion, there is a conflictof interest between (A) the holders of the A2 Notes and (B) the holders of the B Notesand/or C Notes and/or D Notes and/or any other Secured Creditors or (iii) (if there areno Senior Notes outstanding) the interests of the holders of the B Notes if, in theTrustee’s opinion, there is a conflict of interest between (A) the holders of the B Notesand (B) C Notes and/or the D Notes and/or any other Secured Creditors or (iv) (if thereare no Senior Notes or B Notes outstanding) the interests of the holders of the C Notesif, in the Trustee’s opinion, there is a conflict of interest between the interests of (A) theholders of the C Notes and (B) the holders of the D Notes and/or any other SecuredCreditors and (v) (if there are no Senior Notes, B Notes or C Notes outstanding) theinterest of the holders of the D Notes if, in the Trustee’s opinion, there is a conflictbetween the interests of (A) the holders of D Notes and (B) any other SecuredCreditors.

Security

As security for the payment of all moneys payable in respect of the Notes and otherwiseunder the Trust Deed (including the remuneration, expenses and any other claims of the Trusteeand any Receiver (as defined in the Master Definitions Schedule) appointed under the Deed ofCharge) and in respect of certain amounts payable to Irish Life & Permanent or its successoracting as Mortgage Manager in respect of amounts payable to it under the Mortgage ManagementAgreement referred to below, and to certain other Beneficiaries (as defined in the MasterDefinitions Schedule) from time to time, the Issuer will enter into the Deed of Charge creating thefollowing security (the ‘‘Security’’) in favour of the Trustee for itself and on trust for the otherpersons expressed to be secured parties thereunder:

(i) a first fixed charge over the Issuer’s interests in the Mortgages and the other collateralsecurity relating to the Mortgages comprised in the Mortgage Pool (which, until notice isserved on the Borrowers and, in respect of Mortgages of property comprising registeredland, until registration is effected will take effect in equity);

(ii) an assignment by way of security of the Issuer’s interests in certain block buildingspolicies, contingency policies and mortgage indemnity policies to the extent that theyrelate to the Mortgages and any other insurance policies relating to the Mortgages (the‘‘Insurance Contracts’’) and a first fixed charge over the Issuer’s interests in any lifepolicies relating to the Mortgages;

(iii) an assignment by way of security of the benefit of the Mortgage ManagementAgreement to be entered into between Irish Life & Permanent (in such capacity, the‘‘Mortgage Manager’’), the Issuer and the Trustee (the ‘‘Mortgage ManagementAgreement’’), the mortgage sale agreement to be entered into between Irish Life &Permanent, the Issuer and the Trustee (the ‘‘Mortgage Sale Agreement’’), the swapagreements to be entered into between Irish Life & Permanent (the ‘‘SwapCounterparty’’) and the Issuer (the ‘‘Swap Agreements’’), the declaration of trust to beentered into and made by Irish Life & Permanent in favour of the Issuer and the Trusteein relation to the Trust Accounts (each as defined in the Master Definitions Schedule)(the ‘‘Declaration of Trust’’), the loan agreement to be entered into and made betweenthe Issuer and Irish Life & Permanent (the ‘‘Subordinated Loan Agreement’’) in respectof the Subordinated Loan (the ‘‘Subordinated Loan’’), the Master Definitions Schedule,the bank agreement to be entered into between the Issuer, the Trustee and Irish Life &

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Permanent (the ‘‘Bank Agreement’’), the Agency Agreement and such other documentsas are expressed to be subject to the charges under the Deed of Charge (all suchdocuments together the ‘‘Transaction Documents’’);

(iv) a first fixed charge over the Issuer’s interest in the Trust Accounts, the TransactionAccount, the Reserve Account (each as defined in the Master Definitions Schedule), anyother bank account of the Issuer from time to time and over the Authorised Investments(as defined in the Master Definitions Schedule); and

(v) a first floating charge (ranking after the security referred to in (i) to (iv) above) over thewhole of the undertaking, property, assets and rights of the Issuer other than theExcluded Assets (as defined in the Master Definitions Schedule).

Pre-Enforcement Revenue Priority of Payments

On each Interest Payment Date prior to enforcement, Available Revenue Funds (as defined inthe Master Definitions Schedule) will be applied, in making the following payments or provisions inthe following order of priority (the ‘‘Revenue Priority of Payments’’):

(i) the remuneration payable to the Trustee and any costs, charges, liabilities and expenses(plus value added tax, if any), incurred by it under the provisions of the Trust Deed, theDeed of Charge and/or any of the Transaction Documents together with interest on suchamounts as provided in the Trust Deed, the Deed of Charge and/or any of theTransaction Documents;

(ii) amounts, including, amongst others, audit fees, the annual fee of e1,000 payable to theIssuer (the ‘‘Issuer Fee’’), rating agency fees, auditors fees, directors fees and companysecretarial expenses (plus value added tax, if any), which are payable by the Issuer inrespect of legal or compliance matters (where non-payment thereof may be detrimentalto the solvency of the Issuer or its ability to continue to service its obligations under theNotes) to persons who are not party to any of the Transaction Documents and incurredwith or without breach by the Issuer pursuant to the Trust Deed, the Deed of Chargeand/or any other Transaction Documents and not provided for payment elsewhere and toprovide for any such amounts expected to become due and payable by the Issuer afterthat Interest Payment Date and prior to the next Interest Payment Date and to providefor the Issuer’s liability or possible liability for corporation tax;

(iii) to pay pro rata and pari passu: (a) amounts due and/or which will become due andpayable (plus value added tax, if any) prior to the next Interest Payment Date to thePaying Agents and Agent Bank under the Agency Agreement; and (b) where theMortgage Manager is not Irish Life & Permanent or an affiliate of Irish Life & Permanent,the management fee (inclusive of value added tax, if any) payable together with costsand expenses incurred by the Mortgage Manager under the Mortgage ManagementAgreement which are due and/or which will become due and payable prior to the nextInterest Payment Date;

(iv) to pay, where the Mortgage Manager is Irish Life & Permanent or an affiliate of Irish Life& Permanent, the aggregate monthly management fee (plus value added tax, if any)payable pursuant to the Mortgage Management Agreement and the Deed of Charge,such fee being up to a maximum of 0.15 per cent. of the aggregate principal balance ofthe Mortgages on the Determination Date (as defined in the Master DefinitionsSchedule) immediately preceding the relevant Interest Payment Date divided by twelve,together with all costs and expenses (together with value added tax, if any) incurred bythe Mortgage Manager during the immediately preceding Collection Period (as defined inthe Master Definitions Schedule) subject to and in accordance with the provisions of theMortgage Management Agreement and the Deed of Charge;

(v) to pay, amounts payable to the Swap Counterparty under the Swap Agreements (otherthan any Swap Termination Amounts (as defined below));

(vi) to pay pro rata and pari passu any interest due and payable on the Senior Notes;

(vii) in or towards satisfaction of sums to be credited to the Class A Principal DeficiencyLedger (as defined in the Master Definitions Schedule) until the debit balance, if any, onthe Class A Principal Deficiency Ledger is reduced to zero;

(viii) to pay any interest due and payable on the B Notes, subject always to Condition 6(i);

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(ix) in or towards satisfaction of sums to be credited to the Class B Principal DeficiencyLedger (as defined in the Master Definitions Schedule) until the debit balance, if any, onthe Class B Principal Deficiency Ledger is reduced to zero;

(x) to pay any interest due and payable on the C Notes, subject always to Condition 6(i);

(xi) in or towards satisfaction of sums to be credited to the Class C Principal DeficiencyLedger (as defined in the Master Definitions Schedule) until the debit balance, if any, onthe Class C Principal Deficiency Ledger is reduced to zero;

(xii) to pay any interest due and payable on the D Notes, subject always to Condition 6(i);

(xiii) in or towards satisfaction of sums to be credited to the Class D Principal DeficiencyLedger (as defined in the Master Definitions Schedule) until the debit balance, if any, onthe Class D Principal Deficiency Ledger is reduced to zero;

(xiv) to the Reserve Ledger (as defined in the Master Definitions Schedule) (if required), untilthe credit balance of the Reserve Ledger has reached the Reserve Ledger RequiredAmount (as defined in the Master Definitions Schedule);

and in making the following payments or credits, provided that no amounts comprised in theReserve Ledger or Liquidity Reserve Ledger (as defined in the Master Definitions Schedule)are to be applied on such Interest Payment Date except that amounts in the Reserve Ledgermay be applied to satisfy any First Period Shortfall Amount (as defined in the MasterDefinitions Schedule) on the first Interest Payment Date:

(xv) to pay any Swap Termination Amounts payable to the Swap Counterparty under theSwap Agreements; and

(xvi) amounts payable in respect of the Subordinated Loan (as defined in the MasterDefinitions Schedule) other than in respect of principal on the Subordinated Loan (and, ifagreed between the Issuer and Irish Life & Permanent, amounts payable in respect ofthe principal).

For the purposes of the foregoing:

‘‘Collection Period’’ means, in respect of the first collection period, the period from the IssueDate to (but excluding) the Determination Date prior to the first Interest Payment Date, andthereafter, each successive period from (and including) a Determination Date to (but excluding) thenext following Determination Date.

‘‘Swap Termination Amounts’’ means any payment due to be made by the Issuer under aSwap Agreement upon termination of the relevant Swap Agreement upon the occurrence of anEvent of Default (as defined in Condition 9(a)) where the Swap Counterparty is the DefaultingParty (as defined in the Swap Agreements or an Additional Termination Event (as defined in theSwap Agreements) occurs as a result of the rating downgrade of the Swap Counterparty.

Excluded Items

The following items are included in those items (‘‘Excluded Items’’) which may be paid orprovided for prior to the allocation of sums under the Revenue Priority of Payments and PrincipalPriority of Payments (as defined in Condition 5(b)):

(i) certain moneys which properly belong to third parties (including, but not limited tomonies owing to any party in respect of reimbursement for direct debit recall andoverpayments by Borrowers or to the Revenue Commissioners in Ireland or Borrowersunder the TRS Scheme (as defined in the Master Definitions Schedule) for the deductionof tax relief at source);

(ii) on the first Interest Payment Date, amounts payable to Irish Life & Permanent under theMortgage Sale Agreement in respect of reconciliations of any amount underpaid inrespect of the purchase on the Issue Date to the purchase price for the relevantMortgages acquired;

(iii) amounts to be applied by the Issuer in the purchase of Further Advances during anInterest Period from monies allocated for such purpose on the immediately precedingDetermination Date to a ledger to record the purchase of Further Advances (the ‘‘FurtherAdvances Ledger’’) but subject to the conditions to the purchase of Further Advancescontained in the Mortgage Management Agreement;

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(iv) Mortgage Prepayment Amounts which are to be payable to the Swap Counterpartypursuant to the FRM Swap Agreement (each as defined in the Master DefinitionsSchedule); and

(v) certain amounts payable by Borrowers to third parties, such as insurance providers.

Priority of Payments (Principal and Revenue) Post-Enforcement

On enforcement of the Security, the Trustee is required, subject to being indemnified and/orsecured to its satisfaction, to apply moneys available for distribution in or towards the satisfactionof the following amounts in the following order of priority (provided that no payment or provisionshall be made until all payments or provisions ranking above shall have been paid or provided forin full):

(i) first, to pay pari passu and pro rata, in or towards satisfaction of the remunerationthen payable to (a) any Receiver (as defined in the Master Definitions Schedule)appointed by the Trustee and any costs, charges, liabilities (including indemnitypayments) and expenses (including any value added tax) then incurred by suchReceiver and (b) the Trustee and any costs, charges, losses, liabilities (includingindemnity payments) and expenses (including any value added tax) incurred by theTrustee under the provisions of the Trust Deed, the Deed of Charge, theConditions and/or any of the Transaction Documents together with interest on suchamounts as provided in the Trust Deed, the Deed of Charge, the Conditions and/orany of the Transaction Documents;

(ii) secondly, to pay pari passu and pro rata, amounts, including audit fees, directorsfees and company secretarial expenses (plus value added tax, if any), which arepayable by the Issuer (a) to persons who are not party to any of the TransactionDocuments and incurred with or without breach by the Issuer pursuant to the TrustDeed, the Deed of Charge and/or any other Transaction Documents or (b) inrespect of the Issuer’s liability or possible liability for corporation tax and/oradvance corporation tax;

(iii) thirdly, to pay pari passu and pro rata: (a) amounts due to the Paying Agents andAgent Bank under the Agency Agreement; (b) the management fee (inclusive ofvalue added tax, if any) payable together with costs and expenses incurred by theMortgage Manager under the Mortgage Management Agreement where theMortgage Manager is not Irish Life & Permanent or an affiliate of Irish Life &Permanent;

(iv) fourthly, to pay, where the Mortgage Manager is Irish Life & Permanent or anaffiliate of Irish Life & Permanent, the aggregate monthly management fee(inclusive of value added tax, if any) payable pursuant to the MortgageManagement Agreement and the Deed of Charge, such fee being up to amaximum of 0.15 per cent. of the aggregate principal balance of the Mortgages onthe Determination Date immediately preceding the relevant Interest Payment Datedivided by twelve, together with all costs and expenses (together with value addedtax, if any) incurred by the Mortgage Manager during the immediately precedingCollection Period, subject to and in accordance with the provisions of the MortgageManagement Agreement and the Deed of Charge;

(v) fifthly, to pay amounts payable to the Swap Counterparty under the SwapAgreements (other than Swap Termination Amounts);

(vi) sixthly, in or towards satisfaction (pari passu and pro rata according to the amountsthen payable) of all arrears of interest remaining unpaid in respect of Senior Notes,all principal due in respect of Senior Notes and all other amounts payable under orin respect of Senior Notes;

(vii) seventhly, in or towards satisfaction of all arrears of interest remaining unpaid inrespect of B Notes, all principal due in respect of the B Notes and all otheramounts payable under or in respect of the B Notes;

(viii) eighthly, in or towards satisfaction of all arrears of interest remaining unpaid inrespect of C Notes, all principal due in respect of the C Notes and all otheramounts payable under or in respect of the C Notes;

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(ix) ninthly, in or towards satisfaction of all arrears of interest remaining unpaid inrespect of D Notes, all principal due in respect of the D Notes and all otheramounts payable under or in respect of the D Notes;

(x) tenthly, to pay any Swap Termination Amount payable to the Swap Counterpartyunder the Swap Agreements;

(xi) eleventhly, in or towards satisfaction of any amounts payable to Irish Life &Permanent pursuant to the Subordinated Loan Agreement; and

(xii) twelfthly, at the Issuer’s discretion, in dividends to the shareholders of the Issuer.

In such distribution, the manner of making payments to the Noteholders shall remain asspecified prior to the Notes being declared due and payable. The Noteholders have limitedrecourse to the Issuer in respect of the payments prescribed above in accordance with Condition10.

The Security will become enforceable upon the occurrence of an Event of Default (as definedin Condition 9(a)), provided that, if the Security has become enforceable otherwise than by reasonof a default in payment of any amount due on the Notes or Coupons, the Trustee will not beentitled to dispose of the assets comprised in the Security or any part thereof unless either asufficient amount would be realised to allow discharge in full of all amounts owing to theNoteholders and the Couponholders and other Secured Creditors or the Trustee is of the opinion,which shall be binding on the Noteholders, the Couponholders and the other Secured Creditors,reached after considering at any time and from time to time the advice of an investment bank orother financial adviser selected by the Trustee, that the cash flow prospectively receivable by theIssuer will not (or that there is a significant risk that it will not) be sufficient, having regard to anyother relevant actual, contingent or prospective liabilities of the Issuer, to discharge in full in duecourse all amounts owing to the Noteholders, the Couponholders and the other Secured Creditors.

3 Covenants

Save with the prior written consent of the Trustee (having obtained confirmation from theRating Agents that the then current rating of the Notes will not be downgraded as a result) or asprovided in or envisaged by any of the Trust Deed, the Deed of Charge, or any of the otherTransaction Documents, the Issuer shall not, so long as any Note remains outstanding:

(a) Negative Pledge

create or permit to subsist any mortgage, pledge, lien (unless arising by operation of law) orcharge upon the whole or any part of its assets, present or future (including any uncalledcapital) or its undertaking;

(b) Restrictions on Activities

(i) engage in any activity which is not incidental to any of the activities which theTransaction Documents provide or envisage that the Issuer will engage in;

(ii) have or form any subsidiaries (as defined in the Irish Companies Act, 1963 (asamended)), or subsidiary undertakings (as defined in the Irish European (CompaniesGroup Accounts) Regulations, 1992) of any nature or employees or premises;

(iii) act as a director of a company; and

(iv) engage in any activities in the United States (directly or through agents) or derive anyincome through sources within the United States as determined under US federalincome tax principles.

(c) Disposal of Assets

transfer, sell, lend, part with or otherwise dispose of, or deal with, or grant any option overany present or future right to acquire any of its assets or undertakings or any interest, estate,right, title or benefit therein other than as envisaged by the Transaction Documents;

(d) Dividends or Distributions

pay any dividend or make any other distribution to its shareholders or issue any furthershares other than pursuant to the Revenue Priority of Payments, the Principal Priority ofPayments and/or the Deed of Charge;

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(e) Borrowings

create, incur or suffer to exist any indebtedness in respect of borrowed money whatsoever orgive any guarantee or indemnity in respect of any obligation of any person;

(f) Merger

consolidate or merge with any other person or convey or transfer its properties or assetssubstantially as an entirety to any other person;

(g) Centre of Main Interest

take any action that would result in its ‘‘centre of main interest’’ (as that term is described inArticle 3(1) of Council Regulation (EC) No. 1346/2000 on Insolvency Proceedings) movingfrom Ireland;

(h) Bank Accounts

have an interest in any bank account (other than the account where the Issuer maintains itsshare capital (the ‘‘Issuer Account’’)), other than as envisaged by the Transaction Documentsunless such account or interest therein is charged to the Trustee on terms acceptable to it;and

(i) Other

permit the validity or effectiveness of any of the Documents, the Mortgages, the RelatedSecurity or the Insurance Contracts relating to the Mortgages owned by the Issuer or thepriority of the security interests created thereby to be amended, terminated or discharged, orconsent to any variation of, or exercise of any powers of consent or waiver pursuant to theterms of the Trust Deed, these Conditions or any of the Documents, or permit any party toany of the Documents or Insurance Contracts or any other person whose obligations formpart of the Security to be released from such obligations, or dispose of any Mortgage,Related Security or Insurance Contract save as envisaged in the Documents.

In giving any consent to the foregoing, the Trustee may require the Issuer to make suchmodifications or additions to the provisions of any of the Documents or may impose suchother conditions or requirements as the Trustee may deem expedient (in its absolutediscretion) in the interests of the Noteholders.

4 Interest

(a) Period of Accrual

Each Note of each class bears interest from (and including) the Issue Date. Each Note shallcease to bear interest from its due date for redemption unless, upon due presentation, payment ofthe relevant amount of principal is improperly withheld or refused. In such event, interest willcontinue to accrue thereon in accordance with this Condition 4 (after as well as before anyjudgment) up to (but excluding) the date on which all sums due in respect of such Note up to thatday are received by or on behalf of the relevant Noteholder, or (if earlier) the seventh day afternotice is duly given by the Principal Paying Agent to the holder thereof (in accordance withCondition 14) that it has received all sums due in respect of such Note (except to the extent thatthere is any subsequent default in payment).

In the case of any payment of principal made to the Trustee or the Principal Paying Agentafter the due date of a Note or on or after accelerated maturity following an Event of Default inrespect of a Note, interest will continue to accrue thereon in accordance with this Condition (aswell after as before any judgment) up to and including the date (being not later than 30 days afterthe date on which such principal, together with an amount equal to the interest which has accruedand is to accrue up to and including that date, has been received by the Trustee or the PrincipalPaying Agent) which the Trustee determines to be the date on and after which payment is to bemade to the holder thereof as stated in a notice given by the Trustee to the relevant class(es) ofNoteholders in accordance with Condition 14.

Whenever it is necessary to compute an amount of interest in respect of any Note for anyperiod (including any Interest Period (as defined below)), such interest shall be calculated on thebasis of actual days elapsed and a 360 day year.

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(b) Interest Payment Dates and Interest Periods

Interest on the Notes is payable monthly in arrear on the 10th day of each calendar month ineach year (or if such day is not a business day, the next following business day) (each such dayan ‘‘Interest Payment Date’’) with the first Interest Payment Date being 10 August 2006 (or, if suchday is not a business day, the next succeeding business day), subject to Condition 6(i). The periodfrom (and including) an Interest Payment Date (or the Issue Date in respect of the first InterestPayment Date) to (but excluding) the next following (or first) Interest Payment Date is called an‘‘Interest Period’’ in these Conditions and ‘‘business day’’ shall in these Conditions mean a day(other than a Saturday or Sunday) on which banks are open for business in the City of Londonand in Dublin and which is a TARGET Settlement Day (as defined in (c) below).

(c) Rate of Interest

The rate of interest payable from time to time in respect of each class of Notes (each a‘‘Rate of Interest’’) and the relevant Interest Amount (as defined in paragraph (d) below) will bedetermined on the basis of the provisions set out below:

(i) on the second TARGET Settlement Day prior to the Issue Date (in the case of the firstInterest Payment Date) and thereafter on the second TARGET Settlement Day prior tocommencement of the relevant Interest Period (each an ‘‘Interest Determination Date’’)the Agent Bank will determine the offered quotation to leading banks in the Euro-zoneinterbank market for one month deposits in euro (or, in the case of the first InterestPeriod, such rate shall be obtained by linear interpolation of the rate for one month andtwo month deposits in euro) by reference to the display quoted on Telerate Screen No.248 (or (aa) such other page as may replace Telerate Screen No. 248 on that servicefor the purpose of displaying such information or (bb) if that service ceases to displaysuch information, such page as displays such information on such service (or, if morethan one, that one previously approved in writing by the Trustee) as may replaceTelerate Screen No. 248 as at or about 11:00 a.m. (Brussels time) on that date (the‘‘Screen Rate’’). If the Screen Rate is unavailable, the Agent Bank will request theprincipal London office of each of the Reference Banks (as defined in paragraph (h)below) to provide the Agent Bank with its offered quotation as at or about 11:00 a.m.(Brussels time) on that date to leading banks in the Euro-zone interbank market for onemonth deposits in euro. The Rate of Interest for such Interest Period shall, subject asprovided below, be the Relevant Margin (as defined below) above the Screen Rate or,as the case may be, above the arithmetic mean (rounded if necessary to the nearest0.0001 per cent., 0.00005 per cent. being rounded upwards) of the quotations of threeout of five quoting Reference Banks (excluding, if all five are not the same, theReference Bank with the highest and the Reference Bank with the lowest suchquotations but, if more than one of either or both, only one of the Reference Banks withthe highest and/or, as the case may be, only one of the Reference Banks with thelowest such quotations);

(ii) if, on the relevant Interest Determination Date, the Screen Rate is unavailable and onlyfour of the Reference Banks provide such quotations, the Rate of Interest for therelevant Interest Period shall be determined (in accordance with (i) above) on the basisof two out of the four quoting Reference Banks (excluding two on the basis set out in (i)above);

(iii) if, on the relevant Interest Determination Date, the Screen Rate is unavailable and onlytwo or three of the Reference Banks provide such quotations, the Rate of Interest forthe relevant Interest Period shall be determined (in accordance with (i) above) on thebasis of the quotations of all the quoting Reference Banks (without any exclusion asreferred to in (i) above);

(iv) if, on the relevant Interest Determination Date, the Screen Rate is unavailable and onlyone or none of the Reference Banks provides such a quotation, then the Rate ofInterest for the relevant Interest Period shall be the Reserve Interest Rate. The‘‘Reserve Interest Rate’’ shall be the rate per annum which the Agent Bank determinesto be either, (aa) the Relevant Margin above the arithmetic mean (rounded if necessaryto the nearest 0.0001 per cent., 0.00005 per cent. being rounded upwards) of the eurolending rates which leading banks in the Euro-zone (selected by the Agent Bank in itsabsolute discretion) are quoting, as at or about 11:00 a.m. (Brussels time) on the

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relevant Interest Determination Date, for the relevant Interest Period to the ReferenceBanks or those of them (being at least two in number) to which such quotations are inthe sole opinion of the Agent Bank being so made or (bb) if the Agent Bank certifiesthat it cannot determine such arithmetic mean, the Relevant Margin above the lowest ofthe euro lending rates which leading banks in London (selected by the Agent Bank in itsabsolute discretion) are quoting on the relevant Interest Determination Date, to theleading banks in the Euro-zone for the relevant Interest Period provided that if the AgentBank certifies as aforesaid and further certifies that none of the banks selected asprovided in (b) above is quoting to leading banks as aforesaid, then the Reserve InterestRate shall be the Rate of Interest in effect for the Interest Period in which the relevantInterest Determination Date falls.

For the purpose of these Conditions:

‘‘Euro-zone’’ means the region comprised of the member states of the European Union thathave adopted the single currency in accordance with the Treaty establishing the EuropeanCommunity, as amended by the Treaty on European Union;

‘‘Relevant Margin’’ shall be:

(a) for the A1 Notes 0.03 per cent. per annum for each Interest Period ending on or beforethe Interest Payment Date falling in June 2012 and thereafter, 0.06 per cent. per annumfor each Interest Period thereafter;

(b) for the A2 Notes 0.12 per cent. per annum for each Interest Period ending on or beforethe Interest Payment Date falling in June 2012 and 0.24 per cent. per annum for eachInterest Period thereafter;

(c) for the B Notes 0.15 per cent. per annum for each Interest Period ending on or beforethe Interest Payment Date falling in June 2012 and 0.30 per cent. per annum for eachInterest Period thereafter;

(d) for the C Notes 0.23 per cent. per annum for each Interest Period ending on or beforethe Interest Payment Date falling in June 2012 and 0.46 per cent. per annum for eachInterest Period thereafter; and

(e) for the D Notes 0.45 per cent. per annum for each Interest Period ending on or beforethe Interest Payment Date falling in June 2012 and 0.90 per cent. per annum for eachInterest Period thereafter.

‘‘TARGET Settlement Day’’ means in relation to a payment or rate fixing in or other matterrelating to euro, a day on which the Trans-European Automated Real-Time Gross SettlementExpress Transfer system (‘‘TARGET’’) is operating.

(d) Determination of Rates of Interest and Calculation of Interest Amounts

The Agent Bank shall, on each Interest Determination Date, determine and notify the Issuer,the Mortgage Manager, the Trustee and the Paying Agents of (i) the Rate of Interest applicable tothe Interest Period beginning on and including such Interest Determination Date in respect of theNotes of each class and (ii) the euro amount (the ‘‘Interest Amount’’) payable in respect of suchInterest Period in respect of the Principal Amount Outstanding (as defined in Condition 5(c)) ofeach Note of each class.

(e) Publication of Rate of Interest, Interest Amount and other Notices

As soon as practicable after receiving notification thereof, the Issuer will cause the Rate ofInterest and the Interest Amount applicable to each class of Notes for each Interest Period and theInterest Payment Date falling at the end of such Interest Period to be notified to the Trustee, thePaying Agents and each stock exchange (if any) on which the Notes are then listed and will causenotice thereof to be given to the relevant class of Noteholders in accordance with Condition 14.The Interest Amount and Interest Payment Date so notified may subsequently be amended (orappropriate alternative arrangements made by way of adjustment) without notice in the event ofany extension or shortening of the Interest Period.

(f) Determination or Calculation by Trustee

If the Agent Bank does not at any time for any reason determine the Rate of Interest and/orcalculate the Interest Amount for any class of Notes in accordance with the foregoing paragraphs,the Trustee shall (i) determine the Rate of Interest at such rate as, in its absolute discretion

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(having such regard as it shall think fit to the procedure described above), it shall deem fair andreasonable in all the circumstances and/or (as the case may be) (ii) calculate the Interest Amountfor each class of Notes in the manner specified in paragraph (c) above, and any suchdetermination and/or calculation shall be deemed to have been made by the Agent Bank.

(g) Notifications to be Final

All notifications, opinions, determinations, certificates, calculations, quotations and decisionsgiven, expressed, made or obtained for the purposes of this Condition, whether by the ReferenceBanks (or any of them) or the Agent Bank or the Trustee shall (in the absence of wilful default,bad faith or manifest error) be binding on the Issuer, the Mortgage Manager, the Reference Banks,the Agent Bank, the Trustee and all Noteholders and Couponholders and (in which absence asaforesaid) no liability to the Mortgage Manager, the Noteholders or Couponholders shall attach tothe Issuer, the Reference Banks, the Agent Bank or the Trustee in connection with the exercise ornon-exercise by them or any of them of their powers, duties and discretions hereunder.

(h) Reference Banks and Agent Bank

The Issuer shall ensure that, so long as any of the Notes remains outstanding, there shall atall times be four Reference Banks and an Agent Bank. The initial Reference Banks shall be theprincipal London office of each of Citibank, N.A., JPMorgan Chase Bank, N.A., Barclays Bank PLCand ABN AMRO Bank N.V. The initial Agent Bank shall be Citibank N.A. In the event of theprincipal London office of any such bank being unable or unwilling to continue to act as aReference Bank or in the event of Citibank N.A. being unwilling to act as the Agent Bank, theIssuer shall appoint such other bank as may be previously approved in writing by the Trustee toact as such in its place. The Agent Bank may not resign until a successor approved by theTrustee has been appointed.

5 Redemption, Cancellation

(a) Final Redemption

Unless previously redeemed or cancelled as provided in this Condition, the Issuer shallredeem the Notes at their Principal Amount Outstanding (as defined below) including all accruedbut unpaid interest on the Interest Payment Date falling in August 2043.

The Issuer may not redeem Notes in whole or in part prior to that date except as provided inparagraphs (b), (d) or (e) of this Condition but without prejudice to Condition 9.

(b) Mandatory Redemption in Part

On each Interest Payment Date, prior to the enforcement of the Security under the Deed ofCharge, Available Principal Funds (as defined in the Master Definitions Schedule) will be applied,after payment of any Excluded Items, in making the following payments or provisions in thefollowing order of priority (the ’’Principal Priority of Payments’’):

(i) to the extent that the Issuer has insufficient Available Revenue Funds on aDetermination Date to pay items (i) to (xiii) (inclusive) of the Revenue Priority ofPayments, in or towards the payment of such items in the order in which they appear inthe Revenue Priority of Payments;

(ii) following a Liquidity Reserve Ledger Rating Event (as defined in the Master DefinitionsSchedule), in or towards satisfaction of sums to be credited to the Liquidity ReserveLedger (as defined in the Master Definitions Schedule) until the balance of the LiquidityReserve Ledger is equal to the Liquidity Reserve Required Amount (as defined in theMaster Definitions Schedule);

(iii) amounts (if any) to the New Loans Ledger (as defined in the Master DefinitionsSchedule) up to the New Loans Target Amount (as defined in the Master DefinitionsSchedule) up to the New Loans Acquisition Expiry Date (as defined in the MasterDefinitions Schedule); and

(a) so long as the Pro Rata Test (as defined below) is satisfied, in redeeming theNotes in the same proportion between the Senior Notes and the Junior Notes asthe Principal Amount Outstanding of the Senior Notes bore to the Principal AmountOutstanding of the Junior Notes on the Determination Date immediately precedingsuch Interest Payment Date; such amounts to be apportioned between each classof the Senior Notes and Junior Notes as follows:

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(i) the proportion allocated to the Senior Notes shall be applied in redeeming theA1 Notes until the A1 Notes are redeemed in full and thereafter shall beapplied in redeeming the A2 Notes until the A2 Notes are redeemed in full;and

(ii) the proportion allocated to the Junior Notes shall be applied in redeemingeach of the B Notes, the C Notes and the D Notes pro rata and pari passuaccording to the proportion of each class’s Principal Amount Outstanding,determined as at the Determination Date immediately preceeding such InterestPayment Date, to the total proportion, allocated to the Junior Notes until thesame redeemed in full.

(b) if the Pro Rata Test is not satisfied:

(i) first, to the A1 Notes until the A1 Notes are redeemed in full;

(ii) second, to the A2 Notes until the A2 Notes are redeemed in full;

(iii) third, to the B Notes until the B Notes are redeemed in full;

(iv) fourth, to the C Notes until the C Notes are redeemed in full; and

(v) fifth, to the D Notes until the D Notes are redeemed in full.

‘‘Collection Period’’ means, in respect of the first collection period, the period from the IssueDate to (but excluding) the Determination Date prior to the first Interest Payment Date, andthereafter, each successive period from (and including) a Determination Date to (but excluding) thenext following Determination Date; and

‘‘Pro Rata Test’’ means, as at the relevant Determination Date, the test carried out by theMortgage Manager in accordance with the Mortgage Management Agreement to determine if (i) thetotal balance of Mortgages which are in arrears by more than 90 days represents less than 4 percent. of the outstanding balance of the Mortgages; (ii) there is no Principal Deficiency remaining(after the allocation on the immediately succeeding Interest Payment Date of any amounts to thePrincipal Deficiency Ledgers in accordance with the Revenue Priority of Payments); and (iii)immediately after the preceding Interest Payment Date, the balance of the Reserve Ledger was atleast equal to the Reserve Ledger Required Amount (or if at such time the balance of the ReserveLedger is not required to equal the Reserve Ledger Required Amount, there have been nodeductions from the Reserve Ledger, (except on the first Interest Payment Date in respect of anydeductions to satisfy any First Period Shortfall Amount)).

(c) Note Principal Payments, Principal Amount Outstanding and Pool Factor

The principal amount expected to be redeemable in respect of each Note of each class (the‘‘Note Principal Payment’’) on any Interest Payment Date under Condition 5(b) above shall be theActual Redemption Amount for all the Notes of such class on such date divided by the number ofNotes of that class outstanding on the relevant Interest Payment Date (rounded down to thenearest cent); provided always that no such Note Principal Payment may exceed the PrincipalAmount Outstanding (as defined below) of the relevant Note.

The Mortgage Manager on behalf of the Issuer shall give notice no later than the close ofbusiness on the business day next following each Determination Date of the Note PrincipalPayment to the Noteholders in accordance with Condition 14.

On (or as soon as practicable after) each Determination Date, the Issuer shall determine (orcause the Mortgage Manager to determine) (i) the amount of any Note Principal Payment due inrespect of each Note of each class on the Interest Payment Date next following suchDetermination Date, (ii) the principal amount outstanding of each Note of each class on the InterestPayment Date next following such Determination Date (after deducting any Note Principal Paymentdue to be made on that Interest Payment Date) (the ‘‘Principal Amount Outstanding’’) and (iii) thefraction expressed as a decimal to the sixth point (the ‘‘Pool Factor’’), of which the numerator isthe Principal Amount Outstanding of a Note (as referred to in (ii) above) and the denominator is50,000. Each determination by or on behalf of the Issuer of any Note Principal Payment, thePrincipal Amount Outstanding of a Note and the Pool Factor shall in each case (in the absence ofwilful default, bad faith or manifest error) be final and binding on all persons. The Principal AmountOutstanding of a Note on any date shall be e50,000 less the aggregate amount of all NotePrincipal Payments in respect of such Note that have become due and payable since the IssueDate and on or prior to such date (whether or not paid).

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With respect to each class of Notes, the Issuer will cause each determination of a NotePrincipal Payment, Principal Amount Outstanding and Pool Factor to be notified forthwith to theTrustee, the Paying Agents, the Agent Bank and (for so long as the Notes are listed on one ormore stock exchanges), the relevant stock exchanges, and will immediately cause notice of eachdetermination of a Note Principal Payment, Principal Amount Outstanding and Pool Factor to begiven in accordance with Condition 14 by not later than two business days prior to the relevantInterest Payment Date. If no Note Principal Payment is due to be made on the Notes of any classon any Interest Payment Date a notice to this effect will be given by or on behalf of the Issuer tothe Noteholders in accordance with Condition 14.

If the Issuer does not at any time for any reason determine (or cause the Mortgage Managerto determine) with respect to each class of Notes a Note Principal Payment, the Principal AmountOutstanding or the Pool Factor in accordance with the preceding provisions of this paragraph, suchNote Principal Payment, Principal Amount Outstanding and Pool Factor may be determined by theTrustee in accordance with this paragraph and each such determination or calculation shall bedeemed to have been made by the Issuer. Any such determination shall (in the absence of wilfuldefault, bad faith or manifest error) be binding on the Issuer, the Mortgage Manager, theNoteholders and the Couponholders and (in which absence as aforesaid) no liability to theMortgage Manager, the Noteholders or Couponholders shall attach to the Trustee in connectionwith the exercise or non-exercise by it of its powers, duties and discretions hereunder.

(d) Optional Redemption

On any Interest Payment Date falling on or after the Interest Payment Date in June 2012 andupon giving not more than 90 nor less than 30 days’ notice to the Trustee and the Noteholders,the Issuer may redeem all (but not some only of) the Notes at their Principal Amount Outstandingprovided that, prior to giving any such notice, the Issuer shall have provided to the Trustee acertificate signed by two directors of the Issuer to the effect that it will have the funds, not subjectto any interest of any other person, required to redeem the Notes as aforesaid.

On any Interest Payment Date on which the aggregate Principal Amount Outstanding of theNotes is less than ten per cent. of the initial aggregate Principal Amount Outstanding of the Notes,and upon giving not more than 90 and not less than 30 days notice to the Trustee and theNoteholders, the Issuer may redeem all the Notes (but not some only) at their Principal AmountOutstanding provided that prior to giving any such notice, the Issuer shall have provided theTrustee with a certificate signed by two directors of the Issuer to the effect that it will have thefunds, not subject to any interest of any other person, required to redeem the relevant Notes asaforesaid.

(e) Optional Redemption for Tax Reasons

If the Issuer at any time satisfies the Trustee immediately prior to the giving of the noticereferred to below that either (i) on the next Interest Payment Date the Issuer would be required todeduct or withhold from any payment of principal or interest on the Notes any amount for or onaccount of any present or future taxes, duties, assessments or governmental charges of whatevernature imposed, levied, collected, withheld or assessed by Ireland or any political sub-divisionthereof or any authority thereof or therein or (ii) the total amount payable in respect of interest inrelation to any of the Mortgages during an Interest Period ceases to be receivable (whether byreason of any Borrower being obliged to deduct or withhold any amount in respect of tax therefromor otherwise, and whether or not actually received) by the Issuer during such Interest Period or (iii)on the next Interest Payment Date the Issuer or the Swap Counterparty would, by virtue of achange in the law (or the application or interpretation thereof) be required to deduct or withholdfrom any payment under either of the Swap Agreements or not be entitled to relief for Irish taxpurposes for any material amount which it is obliged to pay under the Documents, then the Issuermay, having given not more than 90 nor less than 30 days’ notice to the Trustee and theNoteholders in accordance with Condition 14, redeem all (but not some only) of the Notes on anyInterest Payment Date at their Principal Amount Outstanding provided that, prior to giving any suchnotice, the Issuer shall have provided to the Trustee: (a) a certificate signed by two directors of theIssuer to the effect that it will have the funds, not subject to the interest of any other person,required to redeem the Notes as aforesaid and (b) a legal opinion (in form and substancesatisfactory to the Trustee) from a firm of lawyers in Ireland (approved in writing by the Trustee)opining on the relevant event. Any certificate and legal opinion given by or on behalf of the Issuer

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may be relied on by the Trustee and shall be conclusive and binding on the Noteholders andCouponholders.

(f) Notice of Redemption

Any such notice as is referred to in paragraph (b) or (c) above shall be irrevocable and, uponthe expiration of such notice, the Issuer shall be bound to redeem the Notes at their PrincipalAmount Outstanding.

(g) Purchase

The Issuer shall not be entitled to purchase any Notes.

(h) Cancellation

All Notes redeemed pursuant to paragraph (b) or (c) above will be cancelled uponredemption, together with any unmatured Coupons appertaining thereto and attached thereto orsurrendered therewith, and may not be resold or re-issued.

6 Payments

(a) Payments of principal in respect of the Notes will be made against presentation of theNotes at the specified office of any Paying Agent. Payments of interest in respect of theNotes will (subject as provided in paragraphs (c) and (d) below) be made only againstpresentation and surrender of the Coupons at the specified office of any Paying Agent.Payments will be made in euro at the specified office of any Paying Agent by eurocheque drawn on, or, at the option of the holder, by transfer to a euro account (or anyother account to which euro may be credited or transferred) maintained by the payeewith a bank in Europe.

(b) Payments of principal and interest in respect of the Notes are subject in all cases to anyfiscal or other laws and regulations applicable thereto.

(c) Upon the date which any Note becomes due and payable in full, unmatured Couponsappertaining thereto (whether or not attached to such Note) shall become void and nopayment or, as the case may be, exchange shall be made in respect thereof. If the duedate for redemption of any Note is not an Interest Payment Date, accrued interest willbe paid only against presentation and surrender of such Note. As used herein,unmatured Coupons include any talon insofar as it relates entirely to unmaturedCoupons.

(d) If payment of principal is improperly withheld or refused on or in respect of any Note orpart thereof, the interest which continues to accrue in respect of such Note inaccordance with Condition 4(a) will be paid against presentation of such Note at thespecified office of any Paying Agent.

(e) The Issuer reserves the right, subject to the prior written approval of the Trustee, at anytime to vary or terminate the appointment of the Principal Paying Agent and to appointadditional or other Paying Agents. The Issuer will at all times maintain a paying agentwith a specified office in Dublin. The Issuer will cause at least 30 days’ notice of anychange in or addition to the Paying Agents or their specified offices to be given inaccordance with Condition 14.

(f) On or after the Interest Payment Date for the final Coupon forming part of any Couponsheet, the talon forming part of such Coupon sheet may be surrendered at any specifiedoffice of the Paying Agent in exchange for a further Coupon sheet (including a furthertalon but excluding any Coupons which shall have become void).

(g) If any Coupon or Note is presented for payment on a day which is not a business day,no further payments of additional amounts by way of interest, principal or otherwise shallbe due in respect of such Coupon or, as the case may be, such Note.

(h) If a Paying Agent makes a partial payment in respect of any Note or Coupon presentedto it for payment, such Paying Agent will endorse on the grid endorsed on such Note (inrespect of payments of principal) and on the Coupon (in respect of payments of interest)a statement indicating the amount and date of such payment.

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(i) In the event that the aggregate funds, if any (computed in accordance with theprovisions of the Mortgage Management Agreement), available to the Issuer on anyInterest Payment Date for application in or towards the payment of interest which is, butfor this Condition, due or overdue on any of the then most junior class of Junior Noteson such Interest Payment Date, are not sufficient to satisfy in full the aggregate amountof interest which is, but for this Condition, otherwise due or overdue on such class ofJunior Notes on such Interest Payment Date, then notwithstanding any other provision ofthese Conditions, there shall be payable on such Interest Payment Date, by way ofinterest on each Junior Note of such class a pro rata share of such aggregate fundscalculated by reference to the ratio borne by the then Principal Amount Outstanding ofsuch Junior Note to the then Principal Amount Outstanding of all Junior Notes of suchclass and the amount of the shortfall will not be regarded as due until the earliestInterest Payment Date thereafter in respect of which funds are available to the Issuer topay such amounts to the extent of such available funds.

(j) In any such event, the Issuer shall create a provision in its accounts for the shortfallequal to the amount by which the aggregate amount of interest paid on any JuniorNotes on any Interest Payment Date in accordance with this Condition falls short of theaggregate amount of interest which would be otherwise payable on such Junior Noteson that date pursuant to Condition 4. Such shortfall relating to interest shall accrueinterest during each Interest Period during which it remains outstanding at the Rate ofInterest for the relevant class of Junior Notes for such Interest Period and a pro ratashare of such shortfall calculated by reference to the ratio borne by the then PrincipalAmount Outstanding of each relevant Junior Note to the then Principal AmountOutstanding of all Junior Notes of each class and accrued interest thereof shall beaggregated within the amount of, and treated for the purpose of this Condition as if itwere, interest due on each relevant Junior Note on the next succeeding InterestPayment Date.

To the extent such a shortfall arises, such unpaid amount (including interest accruing onsuch shortfall) shall be payable in priority to the payment of interest otherwise due onsuch class of Junior Notes on the next following Interest Payment Date.

7 Prescription

Claims for principal in respect of the Global Notes shall become void unless presented forpayment within a period of 10 years from the relevant date in respect thereof. Claims for interest inrespect of Global Notes and Coupons (if relevant) shall become void unless presented for paymentwithin a period of 5 years from the relevant date in respect thereof. After the date on which a Noteor a Coupon becomes void in its entirety, no claim may be made in respect thereof.

In this Condition, the ‘‘relevant date’’, in respect of a Note or Coupon, is the date on which apayment in respect thereof first becomes due or (if the full amount of the moneys payable inrespect of all the Notes and/or Coupons due on or before that date has not been duly received bythe Paying Agents or the Trustee on or prior to such date) the date on which the full amount ofsuch moneys having been so received, notice to that effect is duly given to the Noteholders inaccordance with Condition 14.

8 Taxation

All payments in respect of the Notes and Coupons will be made without withholding ordeduction for, or on account of, any present or future taxes, duties or charges of whatsoevernature unless the Issuer or the relevant Paying Agent (as applicable) is required by applicable lawto make any payment in respect of the Notes, the Swap Agreements and the Mortgages subject toany withholding or deduction for, or on account of, any present or future taxes, duties or chargesof whatsoever nature. In that event, the Issuer or the relevant Paying Agent (as the case may be)shall make such payment after such withholding or deduction has been made and shall account tothe relevant authorities for the amount so required to be withheld or deducted. NEITHER THEPAYING AGENTS NOR THE ISSUER WILL BE OBLIGED TO MAKE ANY ADDITIONALPAYMENTS TO HOLDERS OF NOTES OR COUPONS IN RESPECT OF SUCH WITHHOLDINGOR DEDUCTION.

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9 Events of Default

(a) The Trustee at its absolute discretion may, and if so requested in writing by the holdersof not less than 25 per cent. in aggregate of the Principal Amount Outstanding of the A1Notes or, if no A1 Notes are outstanding, the A2 Notes or, if no Senior Notes areoutstanding, the B Notes or, if no B Notes are outstanding, the C Notes or, if no CNotes are outstanding, the D Notes, if directed by or pursuant to an ExtraordinaryResolution (as defined in the Master Definitions Schedule) of the A1 Noteholders or, ifno A1 Notes are outstanding, the A2 Noteholders or, if no A2 Notes are outstanding, theB Noteholders or, if no B Notes are outstanding, the C Noteholders or, if no C Notesare outstanding, the D Noteholders (subject, in each case, to being indemnified and/orsecured to its satisfaction) shall, give notice to the Issuer declaring the Notes to be dueand repayable at any time after the happening of any of the following events (each an‘‘Event of Default’’):

(i) default being made for a period of ten business days in the payment of theprincipal of or any interest on any Note when and as the same ought to be paid inaccordance with these Conditions; or

(ii) the Issuer failing duly to perform or observe any other obligation binding upon itunder the Notes, the Trust Deed, the Deed of Charge or any of the otherTransaction Documents to which it is a party and, in any such case (except wherethe Trustee certifies that, in its opinion, such failure is incapable of remedy whenno notice will be required) such failure is continuing for a period of 30 daysfollowing the service by the Trustee on the Issuer, of notice requiring the same tobe remedied; or

(iii) the Issuer, otherwise than for the purposes of such amalgamation or reconstructionas is referred to in sub-paragraph (iv) below, ceasing or, through an official actionof the Board of Directors of the Issuer, threatening to cease to carry on businessor being unable to pay its debts within the meaning of Section 214 of theCompanies Act, 1963 of Ireland (as amended); or

(iv) an order being made or an effective resolution being passed for the winding-up ofthe Issuer except a winding-up for the purposes of or pursuant to an amalgamationor reconstruction the terms of which have previously been approved by the Trusteein writing or by an Extraordinary Resolution of the holders of the A1 Notes or if noA1 Notes are outstanding, the A2 Notes or, if no A2 Notes are outstanding, the BNotes or, if no B Notes are outstanding, the C Notes or, if no C Notes areoutstanding, the D Notes; or

(v) proceedings being otherwise initiated against the Issuer under any applicableliquidation, insolvency, composition, reorganisation or other similar laws including,but not limited to, presentation of a petition for an examiner and such proceedingsnot, in the opinion of the Trustee, being disputed in good faith with a reasonableprospect of success, or an examiner, receiver, liquidator or other similar officialbeing appointed in relation to the Issuer or in relation to the whole or anysubstantial part of the undertaking or assets of the Issuer, or an encumbrancertaking possession of the whole or any substantial part of the undertaking or assetsof the Issuer, or a distress or execution or other process being levied or enforcedupon or sued out against the whole or any substantial part of the undertaking orassets of the Issuer and such possession or process (as the case may be) notbeing discharged or not otherwise ceasing to apply within 30 days, or the Issuerinitiating or consenting to judicial proceedings relating to itself under applicableliquidation, insolvency, composition, reorganisation or other similar laws or making aconveyance or assignment for the benefit of its creditors generally;

provided that, in the case of each of the events described in sub-paragraph (ii) of thisparagraph (a), the Trustee shall have certified to the Issuer that such event is, in itsopinion, materially prejudicial to the interests of the Senior Noteholders, or if no SeniorNotes remain outstanding, the B Noteholders, or, if no B Notes remain outstanding, theC Noteholders or, if no C Notes remain outstanding, the D Noteholders.

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(b) Upon any declaration being made by the Trustee in accordance with paragraph (a)above that the Notes are due and repayable, the Notes shall immediately become dueand repayable at their Principal Amount Outstanding together with accrued interest asprovided in the Trust Deed and the Security shall become enforceable in accordancewith the Trust Deed and the Deed of Charge.

10 Enforcement of Notes

At any time after the Notes have become due and repayable and without prejudice to itsrights of enforcement in relation to the Security, the Trustee may, at its discretion and withoutfurther notice, take such proceedings against the Issuer as it may think fit to enforce payment ofthe Notes together with accrued interest, but it shall not be bound to take any such proceedingsunless:

(a) it shall have been so directed by an Extraordinary Resolution of the holders of therelevant class of Notes provided:

(i) no Extraordinary Resolution of the A2 Noteholders, B Noteholders or CNoteholders, or D Noteholders or any request of the A2 Noteholders, BNoteholders, C Noteholders or D Noteholders shall be effective unless there is anExtraordinary Resolution of the A1 Noteholders or a direction of the A1 Noteholdersto the same effect or none of the A1 Notes remain outstanding; and

(ii) if no A1 Notes remain outstanding, no Extraordinary Resolution of the BNoteholders, C Noteholders or D Noteholders or any request of the B Noteholders,C Noteholders or D Noteholders shall be effective unless there is an ExtraordinaryResolution of the A2 Noteholders or a direction of the A2 Noteholders to the sameeffect or none of the A2 Notes remain outstanding; and

(iii) if no Senior Notes remain outstanding, no Extraordinary Resolution of the CNoteholders or D Noteholders or any request of the C Noteholders or DNoteholders shall be effective unless there is an Extraordinary Resolution of the BNoteholders or a direction of the B Noteholders to the same effect or none of theB Notes remain outstanding; and

(iv) if no Senior Notes and no B Notes remain outstanding, no Extraordinary Resolutionof the D Noteholders or any request of the D Noteholders shall be effective unlessthere is an Extraordinary Resolution of the C Noteholders or a direction of the CNoteholders to the same effect or none of the C Notes remain outstanding; and

(b) in each case, it shall have been indemnified and/or secured to its satisfaction.

No Noteholder or Couponholder shall be entitled to proceed directly against the Issuer unlessthe Trustee, having become bound so to do, fails to do so within a reasonable period and suchfailure shall be continuing. The Trustee cannot, while any of the Senior Notes are outstanding, berequired to enforce the Security at the request of the holders of Junior Notes or any other SecuredCreditor under the Deed of Charge.

The obligations of the Issuer in respect of the Notes and its obligations to the Trustee andthe Noteholders are limited to the proceeds of enforcement of the Security. Upon enforcement ofthe Security and in the circumstances where amounts to be paid by the Issuer in accordance withthe provisions under ‘‘Priority of Payment (Principal and Revenue) Post Enforcement’’ above isgreater than the amount realised from the Security, the Issuer will not be obliged to pay anyamounts representing such shortfall and any claims in respect of such shortfall shall beextinguished. Neither the Trustee nor the Noteholders shall be entitled to institute against theIssuer any bankruptcy, reorganisation, arrangement, examination, insolvency or liquidationproceedings or other proceedings under any applicable bankruptcy or similar law in connection withany obligation relating to the Notes, the Coupons or the other Transaction Documents, save forlodging a claim in the liquidation of the Issuer which is initiated by any other party.

11 Meetings of Noteholders, Modification, Waiver and Substitution of Principal Debtor

(a) The Trust Deed contains provisions for convening meetings of A1 Noteholders, A2Noteholders, B Noteholders, C Noteholders and D Noteholders to consider any matteraffecting their interests, including the sanctioning by Extraordinary Resolution of suchNoteholders of a modification of these Conditions as they relate to the Notes of the

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relevant class or the provisions of any of the Transaction Documents or any otherdocuments the rights and benefits in respect of which are comprised in the Security(‘‘Other Relevant Documents’’).

The quorum at any meeting of Noteholders of any class of Notes for passing anExtraordinary Resolution shall be one or more persons holding or representing inaggregate not less than 50 per cent. in Principal Amount Outstanding of the Notes ofthe relevant class then outstanding or, at any adjourned meeting, one or more personsbeing or representing Noteholders as they relate to the Notes of such relevant classwhatever the Principal Amount Outstanding of the relevant Notes so held or representedexcept that, at any meeting the business of which includes the sanctioning of amodification which would (inter alia) have the effect of altering (i) the date of maturity ofthe relevant Notes; (ii) the day for payment of interest or principal thereon; (iii) theamount of principal or the rate of interest payable in respect of the relevant Notes; (iv)the currency of payment of the Notes or related Coupons; or (v) the quorum or majorityrequired in relation to this exception (a ‘‘Basic Terms Modification’’), the necessaryquorum for passing an Extraordinary Resolution shall be one or more persons holding orrepresenting in aggregate not less than 75 per cent., or, at any adjourned such meeting,25 per cent., of the Principal Amount Outstanding of the Notes of the relevant class thenoutstanding. An Extraordinary Resolution passed at any meeting of Noteholders of anyclass shall be binding on all Noteholders of such class whether or not they are presentat the meeting, and on all Couponholders. The majority required for passing anExtraordinary Resolution shall be 75 per cent. of the votes cast on that resolution.

The Trust Deed contains provisions limiting the powers of the holders of the JuniorNotes, inter alia, to request or direct the Trustee to take any action or to pass aneffective Extraordinary Resolution, according to the effect thereof on the interests of theholders of Senior Notes. Except in the circumstances set out in (b) below, the TrustDeed imposes no such limitations on the powers of the holders of Senior Notes, theexercise of which will be binding on the holders of Junior Notes, irrespective of theeffect on their interests.

Except in the circumstances set out in (b) below, the Trust Deed imposes no limitationson the powers of the holders of Senior Notes and the holders of Junior Notes, inter alia,to request or direct the Trustee to take any action or to pass an effective ExtraordinaryResolution.

(b) No Extraordinary Resolution to sanction a Basic Terms Modification shall take effectunless it shall have been sanctioned by an Extraordinary Resolution of each class of theholders of Notes.

(c) The Trustee may agree, without the consent of the Noteholders of any class, (i) to anymodification (except a Basic Terms Modification) of, or to the waiver or authorisation ofany breach or proposed breach of, these Conditions or any of the TransactionDocuments or any Other Relevant Documents, which is not, in the opinion of theTrustee, materially prejudicial to the interests of the Transaction Noteholders of suchclass or (ii) to any modification of these Conditions or any of the Documents or anyOther Relevant Documents, which, in the Trustee’s opinion, is to correct a manifest erroror an error which is, in the opinion of the Trustee, proven or is of a formal, minor ortechnical nature. The Trustee may also, in the absence of a direction from the relevantclass of Noteholders pursuant to Condition 9(a), without the consent of the Noteholdersof each class of Notes, determine that any Event of Default shall not, or shall not,subject to specified conditions, be treated as such. Any such modification, waiver,authorisation or determination shall be binding on the Noteholders and theCouponholders of each such class of Notes and, unless the Trustee agrees otherwise,any such modification shall be notified to the Noteholders in accordance with Condition14 as soon as practicable thereafter.

(d) The Trustee may agree, subject to the consent of the Issuer and to such amendment ofthese Conditions and of any of the Transaction Documents and to such other conditionsas the Trustee may require and subject to the relevant provisions of the Trust Deed, butwithout the consent of the Noteholders of each class of Notes, to the substitution ofanother body corporate in place of the Issuer as principal debtor under the Trust Deed

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and the Notes, subject to the Notes being unconditionally and irrevocably guaranteed bythe Issuer (unless all or substantially all of the assets of the Issuer are transferred tosuch body corporate) and to such body corporate being a single purpose vehicle andundertaking itself to be bound by provisions corresponding to those set out in Condition3. In the case of a substitution pursuant to this paragraph (d), the Trustee may in itsabsolute discretion agree, without the consent of the Noteholders of each class of Notes,to a change of the law governing the Notes and/or any of the Transaction Documentsprovided that such change would not, in the opinion of the Trustee, be materiallyprejudicial to the interests of the Noteholders of each class of Notes.

(e) Where the Trustee is required in connection with the exercise of its powers, trusts,authorities, duties and discretions to have regard to the interests of the Noteholders of aparticular class of Notes, it shall have regard to the interests of such Noteholders as oneclass and, in particular but without prejudice to the generality of the foregoing, theTrustee shall not have regard to, or be in any way liable for, the consequences of suchexercise for individual Noteholders resulting from their being for any purpose domiciledor resident in, or otherwise connected with, or subject to the jurisdiction of, any particularterritory. In connection with any such exercise, the Trustee shall not be entitled torequire, and no Noteholder shall be entitled to claim, from the Issuer or any otherperson any indemnification or payment in respect of any tax consequences of any suchexercise upon individual Noteholders.

(f) The Trustee shall be entitled to assume, for the purposes of exercising any power, trust,authority, duty or discretion under or in relation to these Conditions, any of theTransaction Documents or any of the Other Relevant Documents, that such exercise willnot be materially prejudicial to the interests of the Noteholders if Moody’s InvestorsService Limited (‘‘Moody’s’’) and Standard & Poor’s Ratings Services, a division of theMcGraw-Hill Companies Inc. (‘‘S&P’’), have confirmed that the then current rating of theNotes would not be adversely affected by such exercise.

12 Indemnification and Exoneration of the Trustee

The Trust Deed contains provisions governing the responsibility (and relief from responsibility)of the Trustee and providing for its indemnification in certain circumstances, including provisionsrelieving it from taking enforcement proceedings or enforcing the Security unless indemnified and/orsecured to its satisfaction. The Trustee and its related companies are entitled to enter intobusiness transactions with the Issuer, Irish Life & Permanent, the Mortgage Manager and/or therelated companies of any of them without accounting for any profit resulting therefrom. The Trusteewill not be responsible for any loss, expense or liability which may be suffered as a result of anyassets comprised in the Security, or any deeds or documents of title thereto, being uninsured orinadequately insured or being held by or to the order of the Mortgage Manager or any agent orrelated company of the Mortgage Manager or by clearing organisations of their operators or byintermediaries such as banks, brokers or other similar persons on behalf of the Trustee.

The Trust Deed provides that the Trustee shall be under no obligation to monitor or supervisecompliance by the Issuer or Irish Life & Permanent and/or the related companies of any of themwith their respective obligations or to make any searches, enquiries or independent investigationsof title in relation to any of the properties secured by the Mortgages.

13 Replacement of Definitive Notes and Coupons

If any Note or Coupon is mutilated, defaced, lost, stolen or destroyed, it may be replaced atthe specified office of any Paying Agent. Replacement of any mutilated, defaced, lost, stolen ordestroyed Note or Coupon will only be made on payment of such costs as may be incurred inconnection therewith and on such terms as to evidence and indemnity as the Issuer mayreasonably require. Mutilated or defaced Notes or Coupons must be surrendered before new oneswill be issued.

14 Notice to Noteholders

Any notice to the Noteholders shall be validly given if published in a leading daily newspaperprinted in the English language and with general circulation in Dublin (which for the time being isexpected to be the Irish Times or any successor thereof) or, if this is not practicable in the opinionof the Trustee, in another appropriate newspaper or newspapers having a general circulation in

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Europe; provided that if, at any time, the Issuer procures that the information concerned in suchnotice shall appear on a page of the Reuters screen, or any other medium for electronic display ofdata as may be previously approved in writing by the Trustee (in each case a ‘‘Relevant Screen’’),publication in a newspaper shall not be required with respect to such information. Any such noticeshall be deemed to have been given on the date of such publication or, if published more thanonce or on different dates, on the first date on which publication shall have been made in thenewspaper or newspapers in which (or on the Relevant Screen on which) publication is required.

The Trustee shall be at liberty to sanction some other method of giving notice to theNoteholders or any category of them if, in its opinion, such other method is reasonable havingregard to market practice then prevailing and to the requirements of the stock exchange on whichthe Notes are then listed and provided that notice of such other method is given to theNoteholders in such manner as the Trustee shall require. The Couponholders will be deemed forall purposes to have notice of the contents of any notice given to the Noteholders in accordancewith this Condition 14.

Whilst the Notes are listed on the Official list of the Irish Stock Exchange and admitted totrading on the regulated market of the Irish Stock Exchange, copies of all notices given inaccordance with this Condition 14 shall be sent to the Company Announcements Office of the IrishStock Exchange.

15 Governing Law

(a) The Mortgage Sale Agreement, the Deed of Charge, the Mortgage ManagementAgreement, the Declaration of Trust, the Subordinated Loan Agreement, the BankAgreement and the Swap Agreements (the ‘‘Irish Documents’’) shall be construed inaccordance with the laws of Ireland.

(b) The Notes, the Trust Deed and the Agency Agreement (the ‘‘English Documents’’) aregoverned by, and shall be construed in accordance with, English law.

(c) The courts of England have jurisdiction to settle any disputes which may arise out of orin connection with the English Documents and accordingly, any legal action orproceedings arising out of or in connection with the Notes (‘‘Proceedings’’) may bebrought in such courts. The Issuer has in the Trust Deed irrevocably submitted to thejurisdiction of such courts and waived any objection to Proceedings in such courtswhether on the ground of venue or on the ground that the Proceedings have beenbrought in an inconvenient forum.

(d) The Issuer has agreed that the process by which any Proceedings in England are begunmay be served on it by being delivered to Wilmington Trust SP Services (London)Limited at Tower 42, (Level 11), International Financial Centre, 25 Old Broad Street,London EC2N 1HQ, England (or to such other person and at such other address atwhich process may from time to time be served on the Issuer in accordance with PartXX of the Companies Act 1985 (as modified or re-enacted from time to time). If theappointment of the person mentioned in this Condition ceases to be effective, the Issuerhas agreed that it will forthwith appoint a further person in England to accept service ofprocess on its behalf in England and notify the name and address of such person to theTrustee and to the Noteholders in accordance with Condition 14. Nothing containedherein shall affect the right to serve process in any other manner permitted by law.

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TAXATION

IRELAND TAXATION

The following is a summary based on the laws and practices currently in force in Irelandregarding the tax position of investors beneficially owning their Notes and should be treated withappropriate caution. Particular rules may apply to certain classes of taxpayers holding Notes. Thesummary does not constitute tax or legal advice and the comments below are of a general natureonly. Prospective investors in the Notes should consult their professional advisers on the taximplications of the purchase, holding, redemption or sale of the Notes and the receipt of interestthereon under the laws of their country of residence, citizenship or domicile.

Withholding Tax

In general, tax at the standard rate of income tax (currently 20 per cent), is required to bewithheld from payments of Irish source interest. However, an exemption from withholding oninterest payments exists under Section 64 of the Taxes Consolidation Act, 1997 (the 1997 Act) forcertain interest bearing securities (quoted Eurobonds) issued by a body corporate (such as theIssuer) which are quoted on a recognised stock exchange (which would include the Irish StockExchange).

Any interest paid on such quoted Eurobonds can be paid free of withholding tax provided:

(a) the person by or through whom the payment is made is not in Ireland; or

(b) the payment is made by or through a person in Ireland, and either:

(i) the quoted Eurobond is held in a clearing system recognised by the Irish RevenueCommissioners (Euroclear and Clearstream, Luxembourg are so recognised), or

(ii) the person who is the beneficial owner of the quoted Eurobond and who isbeneficially entitled to the interest is not resident in Ireland and has made adeclaration to a relevant person (such as an Irish paying agent) in the prescribedform.

So long as the Notes are quoted on a recognised stock exchange and are held in Euroclearand/or Clearstream, Luxembourg, interest on the Notes can be paid by the Issuer and any payingagent acting on behalf of the Issuer without any withholding or deduction for or on account of Irishincome tax.

If, for any reason, the quoted Eurobond exemption referred to above does not or ceases toapply, the Issuer can still pay interest on the Notes free of withholding tax provided it is a‘‘qualifying company’’ (within the meaning of Section 110 of the 1997 Act) and provided the interestis paid to a person resident in a ‘‘relevant territory’’ (i.e. a member state of the European Union(other than Ireland) or in a country with which Ireland has a double taxation agreement). For thispurpose, residence is determined by reference to the law of the country in which the recipientclaims to be resident. This exemption from withholding tax will not apply, however, if the interest ispaid to a company in connection with a trade or business carried on by it through a branch oragency located in Ireland.

In certain circumstances, Irish tax will be required to be withheld at the standard rate frominterest on any quoted Eurobond, where such interest is collected by a bank in Ireland on behalf ofany Noteholder who is Irish resident.

Taxation of Noteholders

Notwithstanding that a Noteholder may receive interest on the Notes free of withholding tax,the Noteholder may still be liable to pay Irish income tax. Interest paid on the Notes may have anIrish source and therefore be within the charge to Irish income tax and levies. Ireland operates aself assessment system in respect of income tax and any person, including a person who isneither resident nor ordinarily resident in Ireland, with Irish source income comes within its scope.

However, interest on the Notes will be exempt from Irish income tax if the recipient of theinterest is resident in a relevant territory provided either (i) the Notes are quoted Eurobonds andare exempt from withholding tax as set out above (ii) in the event of the Notes not being orceasing to be quoted Eurobonds exempt from withholding tax, if the Issuer is a qualifying companywithin the meaning of Section 110 of the 1997 Act, or (iii) if the Issuer has ceased to be aqualifying company, the recipient of the interest is a company.

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Notwithstanding these exemptions from income tax, a corporate recipient that carries on atrade in Ireland through a branch or agency in respect of which the Notes are held or attributed,may have a liability to Irish corporation tax on the interest.

Interest on the Notes which does not fall within the above exemptions may be within thecharge to Irish income tax.

Capital Gains Tax

A holder of Notes who is neither resident nor ordinarily resident in Ireland and does not carryon a trade in Ireland through a branch or agency in respect of which the Notes were used or held,will not be liable to Irish tax on capital gains arising on the disposal of the Notes which are quotedon a stock exchange.

Capital Acquisitions Tax

A gift or inheritance comprising of Notes will be within the charge to capital acquisitions tax ifeither (i) the disponer or the donee/successor in relation to the gift or inheritance is resident orordinarily resident in Ireland (or, in certain circumstances, if the disponer is domiciled in Irelandirrespective of his residence or that of the donee/successor) or (ii) if the Notes are regarded asproperty situate in Ireland. Bearer notes are generally regarded as situated where they arephysically located at any particular time, but the Notes may be regarded as situated in Irelandregardless of their physical location as they secure a debt due by an Irish resident debtor and theymay be secured over Irish property. Accordingly, if such Notes are comprised in a gift orinheritance, the gift or inheritance may be within the charge to tax regardless of the residencestatus of the disponer or the donee/successor.

Stamp Duty

No stamp duty or similar tax is imposed in Ireland on the issue (on the basis of an exemptionprovided for in Section 85(2)(c) to the Stamp Duties Consolidation Act, 1999 provided the moneyraised on the issue of the Notes is used in the course of the Issuer’s business), transfer orredemption of the Notes whether they are represented by Global Notes or Definitive Notes.

EU Savings Directive

The Council of the European Union has adopted a directive regarding the taxation of interestincome known as the ‘‘European Union Directive on the Taxation of Savings Income (Directive2003/48/EC)’’.

Ireland has implemented the directive into national law. Any Irish paying agent making aninterest payment on behalf of the Issuer to an individual, and certain residual entities defined in the1997 Act, resident in another EU Member State and certain associated and dependent territories ofa Member State will have to provide details of the payment to the Irish Revenue Commissionerswho in turn will provide such information to the competent authorities of the state or territory ofresidence of the individual or residual entity concerned.

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SUBSCRIPTION AND SALE

Pursuant to a subscription agreement (the ‘‘Subscription Agreement’’) dated 28 June 2006and made between the Issuer, Irish Life & Permanent and Citigroup Global Markets Limited,Societe Generale, London Branch, Deutsche Bank AG, London Branch and Davy Stockbrokers (the‘‘Managers’’), the Managers have agreed to subscribe for the Notes at a price equal to the issueprice of 100 per cent. of their principal amount. The Managers will be paid a combinedmanagement, underwriting and selling commission based on the aggregate principal amount of theNotes. The Managers are entitled to be released and discharged from their obligations under theSubscription Agreement in certain circumstances prior to payment to the Issuer. The Issuer hasagreed to indemnify the Managers against certain liabilities in connection with the subscription ofthe Notes as more particularly described in the Subscription Agreement.

Selling Restrictions

1 United Kingdom

Each Manager has represented to and agreed with the Issuer that:

(a) it has only communicated or caused to be communicated and will only communicate orcause to be communicated any invitation or inducement to engage in investment activity(within the meaning of section 21 of the FSMA) received by it in connection with theissue or sale of any Notes in circumstances in which section 21(1) of the FSMA doesnot apply to the Issuer; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respectto anything done by it in relation to the Notes in, from or otherwise involving the UnitedKingdom; and

2 Ireland

Each Manager has represented to and agreed with the Issuer that:

(a) to the extent applicable, it will not underwrite the issue of, or placement of, the Notes inor through Ireland otherwise and in conformity with EU Directive 2003/6/EC and the IrishMarket Abuse (Directive 2003/6/EC) Regulations 2005;

(b) it has not and will not do anything in Ireland in connection with the Notes which wouldconstitute a breach of the Irish Investment Intermediaries Acts, 1995 (as amended); and

(c) it has not and will not do anything in Ireland in connection with the underwriting of, themarketing or the placement of the Notes otherwise than in conformity with EU Directive2003/171/EC, the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 or the IrishCompanies Act, 1963 to 2005.

3 United States of America

(a) The Notes have not been and will not be registered under the Securities Act and maynot be offered, sold, pledged or otherwise transferred, directly or indirectly, within theUnited States or to, or for the account or benefit of, a U.S. Person (as defined inRegulation S) unless the Notes are registered under the Securities Act or an exemptionfrom the registration requirements of the Securities Act is available. The Issuer has notregistered and will not register under the Investment Company Act.

The Notes will be offered and sold outside the United States to non-U.S. Persons inoffshore transactions in compliance with Rule 903 or 904 of Regulation S.

(b) In connection with sales outside the United States, each Manager has agreed under theSubscription Agreement that it will not offer, sell or deliver the Notes to, or for theaccount or benefit of U.S. persons (i) as part of such Manager’s distribution at any timeor (ii) otherwise prior to the date that is 40 days after the later of the commencement ofthe offering and the Issue Date (the ‘‘Distribution Compliance Period’’) and, accordingly,that neither it, its affiliates nor any person acting on their behalf has engaged or willengage in any directed selling efforts (within the meaning of Regulation S) with respectto the Notes and it and its affiliates and any person acting on its or their behalf hascomplied with and will comply with the offering restriction requirements of Regulation Sunder the Securities Act to the extent applicable.

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(c) Each Manager under the Subscription Agreement has also agreed that, at or prior toconfirmation of sales of any Notes, it will have sent to each distributor, dealer or otherperson receiving a selling concession, fee or other remuneration to which it sells anyNotes during the Distribution Compliance Period a confirmation or other notice settingforth the restrictions on offers and sales of such Notes within the United States or to, orfor the account or benefit of, U.S. persons.

4 General

No action has been taken by the Issuer or the Managers which would or is intended to permita public offer of Notes in any country or jurisdiction where action for that purpose is required, savefor having obtained the approval of the Prospectus by the Irish Stock Exchange and for havingprocured the delivery of a copy of the Prospectus for registration to the Registrar of Companies inIreland. Accordingly, each Manager has undertaken that it will not, directly or indirectly, offer or sellany Notes in any country or jurisdiction where further action for that purpose is required andneither this Prospectus nor any other circular, prospectus, form of application, advertisement orother material may be distributed in or from or published in any country or jurisdiction, exceptunder circumstances which will result in compliance with applicable laws and regulations.

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GENERAL INFORMATION

1 The issue of the Notes has been authorised by resolution of the Board of Directors of theIssuer passed on 23 June 2006.

2 Transactions will normally be effected for settlement in euro and for delivery on the thirdworking day after the day of the transaction. It is expected that listing of the Notes on theIrish Stock Exchange will be granted prior to 29 June 2006, subject only to issue of theTemporary Global Notes. Prior to official listing, however, dealings in the Notes will bepermitted by the Irish Stock Exchange in accordance with its rules. The issue will becancelled if the Temporary Global Notes are not issued.

3 The Notes have been accepted for clearance through Euroclear and Clearstream,Luxembourg. The CUSIP for the A1 Notes is 32725C9C6 and the ISIN number isXS0256128686. The CUSIP for the A2 Notes is 32725C9D4 and the ISIN number isXS0256130401. The CUSIP for the B Notes is 32725C9F9 and the ISIN number isXS0256132795. The CUSIP for C Notes is 32725C9E2 and the ISIN is XS0256133686. TheCUSIP for the D Notes is 32725C9G7 and the ISIN is XS0256134494.

4 The Issuer does not intend to provide any post issuance transactional information on eitherthe Notes or the property charged pursuant to the Deed of Charge.

5 The financial year end of the Issuer is 31 December. The Issuer has not commencedoperations and no statutory accounts of the Issuer have been required to be produced. Noaudited accounts of the Issuer have been prepared since its date of incorporation.

6 The Issuer is not involved in any governmental, legal or arbitration proceedings which mayhave or have had since its date of incorporation a significant effect on its financial positionnor is the Issuer aware that any such proceedings are pending or threatened.

7 Since 6 May 2006, being the date of incorporation of the Issuer, there has been no materialadverse change in the financial position or prospects of the Issuer and no significant changein the trading or financial position of the Issuer.

8 Copies of the following documents, in physical or electronic form, may be inspected duringusual business hours at the Registered office of the Issuer until the final maturity orredemption of the Notes:

(i) the Memorandum and Articles of Association of the Issuer;

(ii) the Subscription Agreement;

(iii) drafts (subject to modification) of the following documents:

(a) the Agency Agreement;

(b) the Trust Deed;

(c) the Deed of Charge;

(d) the Mortgage Sale Agreement;

(e) the Mortgage Management Agreement;

(f) the Declaration of Trust;

(g) the Bank Agreement;

(h) the Subordinated Loan Agreement;

(i) the Swap Agreements;

(j) the Master Definitions Schedule; and

(k) a copy of this Prospectus together with any supplement to this Prospectus.

9 The auditors of the Issuer are KPMG, members of the Institute of Chartered Accountants inIreland.

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INDEX

e ......................................................................................................................................... 21990 Act.............................................................................................................................. 17Actual Redemption Amount ................................................................................................ 66Additional Termination Event .............................................................................................. 7Adjusted Balance ................................................................................................................ 46Agency Agreement ............................................................................................................. 6, 54Agent Bank ......................................................................................................................... 54Amortisation Table .............................................................................................................. 25APR .................................................................................................................................... 19A1 Notes ............................................................................................................................. 1, 54A1 Noteholders ................................................................................................................... 16A2 Notes ............................................................................................................................. 1, 54A2 Noteholders ................................................................................................................... 16Authorised Investments....................................................................................................... 26Available Principal Funds.................................................................................................... 24Available Revenue Funds ................................................................................................... 23Average Lives of the Notes ................................................................................................ 51B Notes ............................................................................................................................... 1, 54B Noteholders ..................................................................................................................... 16Balance ............................................................................................................................... 35Bank Accounts .................................................................................................................... 26Bank Agreement ................................................................................................................. 58Basel Committee................................................................................................................. 21Basel II Framework ............................................................................................................. 21Basic Terms Modification.................................................................................................... 72Beneficiaries ....................................................................................................................... 57Block Buildings Policy ......................................................................................................... 50Borrowers............................................................................................................................ 9Business Day ...................................................................................................................... 4C Notes............................................................................................................................... 1, 54C Noteholders ..................................................................................................................... 16CCA .................................................................................................................................... 18Charged Property................................................................................................................ 44Citigroup.............................................................................................................................. 1Class A Principal Deficiency Ledger ................................................................................... 24Class B Principal Deficiency Ledger ................................................................................... 24Class C Principal Deficiency Ledger................................................................................... 24Class D Principal Deficiency Ledger................................................................................... 24Clearstream, Luxembourg................................................................................................... 1, 55Collection Period ................................................................................................................. 8, 59, 66Common Depositary ........................................................................................................... 55Completion Mortgage Pool ................................................................................................. 10Conditions ........................................................................................................................... 4, 54Contingency Policies........................................................................................................... 50Converted Mortgage ........................................................................................................... 50Corporate Services Agreement........................................................................................... 6Couponholders .................................................................................................................... 55Coupons.............................................................................................................................. 56CPR .................................................................................................................................... 51Cut-Off Date........................................................................................................................ 10D Notes............................................................................................................................... 1, 54D Noteholders ..................................................................................................................... 16Declaration of Trust ............................................................................................................ 25, 57Deed of Charge .................................................................................................................. 5, 54Defaulting Party .................................................................................................................. 7Determination Date ............................................................................................................. 23Determination Period .......................................................................................................... 27

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Distribution Compliance Period ........................................................................................... 77ECB Rate ............................................................................................................................ 10Endowment Mortgages ....................................................................................................... 10Endowment Policy .............................................................................................................. 10Enforcement Notice ............................................................................................................ 44English Documents ............................................................................................................. 74EURIBOR............................................................................................................................ 1Euro .................................................................................................................................... 2Euroclear............................................................................................................................. 1, 55Euro-zone ........................................................................................................................... 64Event of Default .................................................................................................................. 13, 70Exchange Date ................................................................................................................... 55Excluded Assets ................................................................................................................. 6Excluded Items ................................................................................................................... 9, 59Expected Collections........................................................................................................... 35First Period Shortfall ........................................................................................................... 26First Period Shortfall Amount .............................................................................................. 26Extraordinary Resolution ..................................................................................................... 70Fixed Rate Loans................................................................................................................ 15Floating Rate Mortgages..................................................................................................... 27FRM Calculation Amount .................................................................................................... 27FRM Swap Agreement........................................................................................................ 27Further Advances................................................................................................................ 11, 59Further Advances Ledger ................................................................................................... 9Global Note ......................................................................................................................... 55Global Notes ....................................................................................................................... 1, 55Group .................................................................................................................................. 32IFSRA ................................................................................................................................. 1Initial LTV ............................................................................................................................ 36Insurance Contracts ............................................................................................................ 6, 57Interest Amount................................................................................................................... 64Interest Determination Date ................................................................................................ 63Interest Payment Date ........................................................................................................ 4, 63Interest Period..................................................................................................................... 63Irish Documents .................................................................................................................. 74Irish Life & Permanent ........................................................................................................ 1, 54ISE ...................................................................................................................................... 1Issue Date........................................................................................................................... 1, 54Issuer .................................................................................................................................. 1Issuer Fee ........................................................................................................................... 6, 58Issuer Account .................................................................................................................... 62Issuer’s Accounts................................................................................................................ 26Junior Notes........................................................................................................................ 1, 54Lending Criteria................................................................................................................... 11, 35Liquidity Reserve Ledger .................................................................................................... 25Liquidity Reserve Ledger Rating Event............................................................................... 26Liquidity Reserve Required Amount.................................................................................... 25Managers ............................................................................................................................ 77Master Definitions Schedule ............................................................................................... 54Minimum Ratings ................................................................................................................ 27Moody’s............................................................................................................................... 1, 73Mortgage Indemnity Policies ............................................................................................... 50Mortgage Management Agreement .................................................................................... 4, 57Mortgage Manager.............................................................................................................. 4, 57Mortgage Pool..................................................................................................................... 10Mortgage Prepayment Amounts ......................................................................................... 26Mortgage Sale Agreement .................................................................................................. 6, 57Mortgages ........................................................................................................................... 4Multiple Advances ............................................................................................................... 45

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New Loans .......................................................................................................................... 11, 48New Loans Acquisition Expiry Date .................................................................................... 24New Loans Ledger.............................................................................................................. 24New Loans Target Amount ................................................................................................. 24Note EURIBOR ................................................................................................................... 1Note Principal Payment ...................................................................................................... 66Noteholders......................................................................................................................... 1, 54Notes .................................................................................................................................. 1, 54Other Relevant Documents................................................................................................. 72Paying Agents..................................................................................................................... 54PDL Test............................................................................................................................. 8Pension Mortgage ............................................................................................................... 50Permanent Global Note ...................................................................................................... 1, 55Pool Factor ......................................................................................................................... 66Prepayment Amounts ......................................................................................................... 26Prepayments Ledger........................................................................................................... 26Principal Amount Outstanding............................................................................................. 66Principal Deficiency Ledgers............................................................................................... 24Principal Deficiency............................................................................................................. 24Principal Ledger .................................................................................................................. 24Principal Paying Agent........................................................................................................ 54Principal Priority of Payments ............................................................................................. 8, 65Pro-Rata Test ..................................................................................................................... 9, 66Proceedings ........................................................................................................................ 74Properties............................................................................................................................ 35Property .............................................................................................................................. 35Prospectus Directive (2003/71/EC) ..................................................................................... 1Provisional Mortgage Pool .................................................................................................. 10Prudent Mortgage Lender ................................................................................................... 38Rate of Interest ................................................................................................................... 63Rating Agencies.................................................................................................................. 1Receiver.............................................................................................................................. 57Reference Banks ................................................................................................................ 65Regulations ......................................................................................................................... 20Relevant Date ..................................................................................................................... 69Relevant Margin .................................................................................................................. 64Relevant Screen ................................................................................................................. 74Repayment Mortgages........................................................................................................ 10Reportable Territory ............................................................................................................ 21Reserve Account................................................................................................................. 25Reserve Interest Rate ......................................................................................................... 63Reserve Ledger .................................................................................................................. 25Reserve Ledger Required Amount ..................................................................................... 25Revenue Priority of Payments ............................................................................................ 6, 58S&P..................................................................................................................................... 1, 73Sale Date ............................................................................................................................ 48Screen Rate ........................................................................................................................ 63Secured Creditors ............................................................................................................... 57Securities Act ...................................................................................................................... 2Security ............................................................................................................................... 57Self-Employed Borrower ..................................................................................................... 9Senior Notes ....................................................................................................................... 1, 54Share Trustee ..................................................................................................................... 4Stabilising Manager............................................................................................................. 2Standard Borrower .............................................................................................................. 9Subordinated Loan.............................................................................................................. 26, 57Subordinated Loan Agreement ........................................................................................... 26, 57Subordinated Loan Provider ............................................................................................... 26Subscription Agreement...................................................................................................... 77

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Subsidiaries ........................................................................................................................ 61Subsidiary Undertaking ....................................................................................................... 61Substitute Mortgage ............................................................................................................ 45Swap Agreements............................................................................................................... 27, 57Swap Counterparty ............................................................................................................. 27, 57Swap Termination Amounts ................................................................................................ 7, 59TARGET ............................................................................................................................. 64TARGET Settlement Date................................................................................................... 64Targeted Balance................................................................................................................ 25Temporary Global A1 Note ................................................................................................. 54Temporary Global A2 Note ................................................................................................. 54Temporary Global B Note ................................................................................................... 55Temporary Global C Note ................................................................................................... 55Temporary Global D Note ................................................................................................... 55Temporary Global Note....................................................................................................... 1Temporary Global Notes..................................................................................................... 55Tracker Mortgages.............................................................................................................. 10Transaction Account ........................................................................................................... 25Transaction Documents ...................................................................................................... 6, 58Transparency Directive ....................................................................................................... 21Trust Accounts .................................................................................................................... 25Trust Deed .......................................................................................................................... 4, 54Trustee................................................................................................................................ 1, 54TRS Scheme ...................................................................................................................... 20U.S. Person ........................................................................................................................ 77UTCC Regulations .............................................................................................................. 19, 48Variable Rate Mortgages .................................................................................................... 10VRM Calculation Amount .................................................................................................... 27VRM Swap Agreement ....................................................................................................... 27WAFF.................................................................................................................................. 49WALS.................................................................................................................................. 49Warranties........................................................................................................................... 13

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REGISTERED AND HEAD OFFICE OF THE ISSUER

Fastnet Securities 2 plcFirst Floor

7 Exchange PlaceIFSC

Dublin 1Ireland

MORTGAGE MANAGER TRUSTEE

Irish Life & Permanent plcIrish Life Centre

Lower Abbey StreetDublin 1Ireland

Citicorp Trustee Company LimitedCitigroup CentreCanada SquareCanary Wharf

London E14 5LBUnited Kingdom

LEGAL ADVISERS

To Irish Life & Permanent and theIssuer as to Irish law

To the Trustee as toEnglish law

To the Managers as toEnglish law

A&L GoodbodyNorth Wall QuayIFSC, Dublin 1

Ireland

Denton Wilde SapteOne Fleet Place

London EC4M 7WSUnited Kingdom

Weil, Gotshal & MangesOne South Place

London EC2M 2WGUnited Kingdom

PRINCIPAL PAYING AGENT & AGENT BANK IRISH PAYING AGENT

Citibank, N.A.21st Floor, Citigroup Centre

Canada SquareCanary Wharf

London E14 5LBUnited Kingdom

Citibank International plc1 North Wall Quay

IFSC, Dublin 1Ireland

LISTING AGENT

Davy StockbrokersDavy House

49 Dawson StreetDublin 2Ireland

imprima de bussy — C94137