Exhibit
10.19


 




 





 


GRAMERCY
REAL ESTATE CDO 2005-1, LTD.,

as Issuer


 


 


GRAMERCY
REAL ESTATE CDO 2005-1 LLC,

as Co-Issuer


 


 


GKK LIQUIDITY
LLC,

as Advancing Agent


 


 


AND


 


 


WELLS
FARGO BANK, NATIONAL ASSOCIATION,

as Trustee, Paying Agent, Calculation Agent, Transfer Agent,

Custodial Securities Intermediary, Backup Advancing Agent and Notes Registrar


 


 


INDENTURE


 


 


Dated
as of July 14, 2005


 





















 


TABLE
OF CONTENTS


 


	
  ARTICLE
  1

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Assumptions
  as to Pledged Obligations

  	
   

  
	
  Section 1.3

  	
  Interest
  Calculation Convention

  	
   

  
	
  Section 1.4

  	
  Rounding Convention

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
   

  	
   

  	
   

  
	
  THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Forms Generally

  	
   

  
	
  Section 2.2

  	
  Forms of
  Notes and Certificate of Authentication

  	
   

  
	
  Section 2.3

  	
  Authorized
  Amount; Stated Maturity; and Denominations

  	
   

  
	
  Section 2.4

  	
  Execution,
  Authentication, Delivery and Dating

  	
   

  
	
  Section 2.5

  	
  Registration,
  Registration of Transfer and Exchange

  	
   

  
	
  Section 2.6

  	
  Mutilated,
  Defaced, Destroyed, Lost or Stolen Note

  	
   

  
	
  Section 2.7

  	
  Payment of
  Principal and Interest and Other Amounts; Principal and Interest Rights
  Preserved

  	
   

  
	
  Section 2.8

  	
  Persons Deemed
  Owners

  	
   

  
	
  Section 2.9

  	
  Cancellation

  	
   

  
	
  Section
  2.10

  	
  Global
  Securities; Temporary Notes

  	
   

  
	
  Section
  2.11

  	
  U.S. Tax
  Treatment of Notes

  	
   

  
	
  Section 2.12

  	
  Authenticating
  Agents

  	
   

  
	
  Section
  2.13

  	
  Forced Sale
  on Failure to Comply with Restrictions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
   

  	
   

  	
   

  
	
  CONDITIONS
  PRECEDENT; PLEDGED OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  General
  Provisions

  	
   

  
	
  Section 3.2

  	
  Security for
  Notes

  	
   

  
	
  Section 3.3

  	
  Transfer of
  Pledged Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
   

  	
   

  	
   

  
	
  SATISFACTION AND
  DISCHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Satisfaction
  and Discharge of Indenture

  	
   

  



 


i





















 


	
  Section 4.2

  	
  Application
  of Trust Money

  	
   

  
	
  Section 4.3

  	
  Repayment
  of Monies Held by Paying Agent

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
   

  	
   

  	
   

  
	
  REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Events of Default

  	
   

  
	
  Section 5.2

  	
  Acceleration
  of Maturity; Rescission and Annulment

  	
   

  
	
  Section 5.3

  	
  Collection
  of Indebtedness and Suits for Enforcement by Trustee

  	
   

  
	
  Section 5.4

  	
  Remedies

  	
   

  
	
  Section 5.5

  	
  Preservation
  of Assets

  	
   

  
	
  Section 5.6

  	
  Trustee May
  Enforce Claims Without Possession of Notes

  	
   

  
	
  Section 5.7

  	
  Application
  of Money Collected

  	
   

  
	
  Section 5.8

  	
  Limitation on
  Suits

  	
   

  
	
  Section 5.9

  	
  Unconditional
  Rights of Noteholders to Receive Principal and Interest

  	
   

  
	
  Section
  5.10

  	
  Restoration
  of Rights and Remedies

  	
   

  
	
  Section
  5.11

  	
  Rights and
  Remedies Cumulative

  	
   

  
	
  Section
  5.12

  	
  Delay or
  Omission Not Waiver

  	
   

  
	
  Section
  5.13

  	
  Control by
  the Controlling Class

  	
   

  
	
  Section 5.14

  	
  Waiver of
  Past Defaults

  	
   

  
	
  Section 5.15

  	
  Undertaking
  for Costs

  	
   

  
	
  Section
  5.16

  	
  Waiver of
  Stay or Extension Laws

  	
   

  
	
  Section 5.17

  	
  Sale of Assets

  	
   

  
	
  Section 5.18

  	
  Action on the
  Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
   

  	
   

  	
   

  
	
  THE TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Certain
  Duties and Responsibilities

  	
   

  
	
  Section 6.2

  	
  Notice of Default

  	
   

  
	
  Section 6.3

  	
  Certain
  Rights of Trustee

  	
   

  
	
  Section 6.4

  	
  Not
  Responsible for Recitals or Issuance of Notes

  	
   

  
	
  Section 6.5

  	
  May Hold Notes

  	
   

  
	
  Section 6.6

  	
  Money Held in
  Trust

  	
   

  
	
  Section 6.7

  	
  Compensation
  and Reimbursement

  	
   

  
	
  Section 6.8

  	
  Corporate
  Trustee Required; Eligibility

  	
   

  
	
  Section 6.9

  	
  Resignation
  and Removal; Appointment of Successor

  	
   

  
	
  Section
  6.10

  	
  Acceptance
  of Appointment by Successor

  	
   

  
	
  Section
  6.11

  	
  Merger,
  Conversion, Consolidation or Succession to Business of Trustee

  	
   

  
	
  Section
  6.12

  	
  Co-Trustees
  and Separate Trustee

  	
   

  
	
  Section
  6.13

  	
  Certain
  Duties of Trustee Related to Delayed Payment of Proceeds

  	
   

  
	
  Section
  6.14

  	
  Representations
  and Warranties of the Trustee

  	
   

  
	
  Section 6.15

  	
  Requests for
  Consents

  	
   

  



 


ii





















 


	
  ARTICLE 7

  	
   

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  Payment of
  Principal and Interest

  	
   

  
	
  Section 7.2

  	
  Maintenance
  of Office or Agency

  	
   

  
	
  Section 7.3

  	
  Money for
  Note Payments to be Held in Trust

  	
   

  
	
  Section 7.4

  	
  Existence
  of the Issuer and Co-Issuer

  	
   

  
	
  Section 7.5

  	
  Protection of
  Assets

  	
   

  
	
  Section 7.6

  	
  Notice of
  Any Amendments

  	
   

  
	
  Section 7.7

  	
  Performance
  of Obligations

  	
   

  
	
  Section 7.8

  	
  Negative
  Covenants

  	
   

  
	
  Section 7.9

  	
  Statement
  as to Compliance

  	
   

  
	
  Section
  7.10

  	
  Issuer and
  Co-Issuer May Consolidate or Merge Only on Certain Terms

  	
   

  
	
  Section 7.11

  	
  Successor
  Substituted

  	
   

  
	
  Section 7.12

  	
  No Other Business

  	
   

  
	
  Section 7.13

  	
  Reporting

  	
   

  
	
  Section 7.14

  	
  Calculation
  Agent

  	
   

  
	
  Section 7.15

  	
  Certain Tax
  Matters

  	
   

  
	
  Section 7.16

  	
  Maintenance
  of Listing

  	
   

  
	
  Section 7.17

  	
  Purchase of
  Assets

  	
   

  
	
  Section 7.18

  	
  Effective
  Date Actions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  
	
   

  	
   

  	
   

  
	
  SUPPLEMENTAL
  INDENTURES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Supplemental
  Indentures Without Consent of Securityholders

  	
   

  
	
  Section 8.2

  	
  Supplemental
  Indentures with Consent of Securityholders

  	
   

  
	
  Section 8.3

  	
  Execution
  of Supplemental Indentures

  	
   

  
	
  Section 8.4

  	
  Effect of
  Supplemental Indentures

  	
   

  
	
  Section 8.5

  	
  Reference
  in Notes to Supplemental Indentures

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
   

  	
   

  	
   

  
	
  REDEMPTION
  OF SECURITIES; REDEMPTION PROCEDURES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1

  	
  Clean-up
  Call; Tax Redemption and Optional Redemption

  	
   

  
	
  Section 9.2

  	
  Auction Call
  Redemption

  	
   

  
	
  Section 9.3

  	
  Notice of
  Redemption

  	
   

  
	
  Section 9.4

  	
  Notice of
  Redemption or Maturity by the Issuer

  	
   

  
	
  Section 9.5

  	
  Notes
  Payable on Redemption Date

  	
   

  
	
  Section 9.6

  	
  Mandatory
  Redemption

  	
   

  
	
  Section 9.7

  	
  Special
  Amortization

  	
   

  



 


iii





















 


	
  ARTICLE 10

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCOUNTS,
  ACCOUNTINGS AND RELEASES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  10.1

  	
  Collection
  of Money; Custodial Account

  	
   

  
	
  Section 10.2

  	
  Collection
  Accounts

  	
   

  
	
  Section 10.3

  	
  Payment Account

  	
   

  
	
  Section
  10.4

  	
  Unused
  Proceeds Account

  	
   

  
	
  Section
  10.5

  	
  Delayed
  Funding Obligations Account

  	
   

  
	
  Section 10.6

  	
  Expense Account

  	
   

  
	
  Section 10.7

  	
  Interest
  Advances

  	
   

  
	
  Section 10.8

  	
  Reports by
  Parties

  	
   

  
	
  Section 10.9

  	
  Reports;
  Accountings

  	
   

  
	
  Section
  10.10

  	
  Release of
  Pledged Collateral Debt Securities; Release of Assets

  	
   

  
	
  Section
  10.11

  	
  Reports by
  Independent Accountants

  	
   

  
	
  Section
  10.12

  	
  Reports to
  Rating Agencies

  	
   

  
	
  Section
  10.13

  	
  United
  States Federal Income Tax Reporting

  	
   

  
	
  Section 10.14

  	
  Certain
  Procedures

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  
	
   

  	
   

  	
   

  
	
  APPLICATION OF MONIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  11.1

  	
  Disbursements
  of Monies from Payment Account

  	
   

  
	
  Section 11.2

  	
  Trust Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  
	
   

  	
   

  	
   

  
	
  SALE OF
  COLLATERAL DEBT SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  12.1

  	
  Sales of
  Collateral Debt Securities

  	
   

  
	
  Section
  12.2

  	
  Reinvestment
  Criteria and Trading Restrictions

  	
   

  
	
  Section
  12.3

  	
  Conditions
  Applicable to all Transactions Involving Sale or Grant

  	
   

  
	
  Section
  12.4

  	
  Sale of
  Collateral Debt Securities with respect to an Auction Call Redemption

  	
   

  
	
  Section
  12.5

  	
  Modifications
  to Collateral Quality Tests or Coverage Tests

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  
	
   

  	
   

  	
   

  
	
  NOTEHOLDERS’ RELATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.1

  	
  Subordination

  	
   

  
	
  Section 13.2

  	
  Standard of
  Conduct

  	
   

  



 


iv





















 


	
  ARTICLE 14

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  14.1

  	
  Form of
  Documents Delivered to the Trustee

  	
   

  
	
  Section
  14.2

  	
  Acts of
  Securityholders

  	
   

  
	
  Section
  14.3

  	
  Notices,
  etc., to the Trustee, the Issuer, the Co-Issuer, the Collateral Manager, the
  Initial Purchaser, each Hedge Counterparty and each Rating Agency

  	
   

  
	
  Section
  14.4

  	
  Notices to
  Noteholders; Waiver

  	
   

  
	
  Section
  14.5

  	
  Effect of
  Headings and Table of Contents

  	
   

  
	
  Section 14.6

  	
  Successors
  and Assigns

  	
   

  
	
  Section 14.7

  	
  Severability

  	
   

  
	
  Section 14.8

  	
  Benefits of
  Indenture

  	
   

  
	
  Section 14.9

  	
  Governing Law

  	
   

  
	
  Section
  14.10

  	
  Submission
  to Jurisdiction

  	
   

  
	
  Section 14.11

  	
  Counterparts

  	
   

  
	
  Section
  14.12

  	
  Liability
  of Co-Issuers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
   

  
	
   

  	
   

  	
   

  
	
  ASSIGNMENT
  OF COLLATERAL DEBT SECURITIES PURCHASE AGREEMENTS AND COLLATERAL MANAGEMENT
  AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  15.1

  	
  Assignment
  of Collateral Debt Securities Purchase Agreement and the Collateral
  Management Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
   

  
	
   

  	
   

  	
   

  
	
  HEDGE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  16.1

  	
  Issuer’s
  Obligations under Hedge Agreement

  	
   

  
	
  Section
  16.2

  	
  Collateral
  Debt Securities Purchase Agreements

  	
   

  
	
  Section 16.3

  	
  Cure Rights

  	
   

  
	
  Section
  16.4

  	
  Purchase
  Right; Majority Preferred Shares Holder

  	
   

  
	
  Section
  16.5

  	
  Representations
  and Warranties Related to Subsequent Collateral Debt Securities

  	
   

  
	
  Section
  16.6

  	
  Operating
  Advisor; Additional Debt

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
   

  
	
   

  	
   

  	
   

  
	
  ADVANCING AGENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section
  17.1

  	
  Liability
  of the Advancing Agent

  	
   

  
	
  Section
  17.2

  	
  Merger or
  Consolidation of the Advancing Agent

  	
   

  
	
  Section
  17.3

  	
  Limitation
  on Liability of the Advancing Agent and Others

  	
   

  



 


v





















 


	
  Section
  17.4

  	
  Representations
  and Warranties of the Advancing Agent

  	
   

  
	
  Section
  17.5

  	
  Resignation
  and Removal; Appointment of Successor

  	
   

  
	
  Section
  17.6

  	
  Acceptance
  of Appointment by Successor Advancing Agent

  	
   

  



 


vi





















 


	
  SCHEDULES

  	
   

  
	
   

  	
   

  
	
  Schedule A

  	
  Moody’s Loss Scenario Matrix

  
	
  Schedule B

  	
  S&P Recovery Matrix

  
	
  Schedule C

  	
  S&P Non-Eligible Notching Asset Types

  
	
  Schedule D

  	
  S&P Eligible Notching Asset Types

  
	
  Schedule E

  	
  Gramercy Real Estate CDO 2005-1 Collateral Debt
  Securities Listing

  
	
  Schedule F

  	
  LIBOR

  
	
  Schedule G

  	
  List of Authorized Officers of Collateral Manager

  
	
  Schedule H

  	
  Form of Representations and Warranties Re:
  Collateral Debt Securities Consisting of Mortgage Loans

  
	
  Schedule I

  	
  Form of Representations and Warranties Re:
  Collateral Debt Securities Consisting of B Notes

  
	
  Schedule J

  	
  Form of Representations and Warranties Re:
  Collateral Debt Securities Consisting of Participations

  
	
  Schedule K

  	
  Form of Representations and Warranties Re:
  Collateral Debt Securities Consisting of Mezzanine Loans

  
	
  Schedule L

  	
  Form of Representations and Warranties Re:
  Collateral Debt Securities Consisting of CRE CDO Securities, CMBS Securities and
  Rake Bonds

  
	
  Schedule M

  	
  Form of Representations and Warranties Re:
  Collateral Debt Securities Consisting of Preferred Equity Securities

  
	
  Schedule N

  	
  Fitch Recovery Matrix

  
	
  Schedule O

  	
  Primary Servicing Agreements

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Global Security

  
	
  Exhibit B

  	
  Form of Certificated Security

  
	
  Exhibit C

  	
  Form of Transfer Certificate for (1) Transfer at the
  Closing to a Regulation S Global Security or (2) Subsequent Transfer from a
  Rule 144A Global Security to a Regulation S Global Security

  
	
  Exhibit D

  	
  Form of Transfer Certificate for (1) Transfer at the
  Closing to a Rule 144A Global Security or (2) Subsequent Transfer from a
  Regulation S Global Security to a Rule 144A Global Security

  
	
  Exhibit E-1

  	
  Form of Transfer Certificate for a Transfer from a
  Certificated Rule 144A Security to a Certificated Regulation S Security

  
	
  Exhibit E-2

  	
  Form of Transfer Certificate for a Transfer from a
  Certificated Regulation S Security to a Certificated Rule 144A Security

  
	
  Exhibit F

  	
  Forms of Opinion of Cadwalader, Wickersham &
  Taft LLP

  
	
  Exhibit G

  	
  Form of Opinion of Maples and Calder

  
	
  Exhibit H

  	
  Form of Opinion of Counsel to the Hedge Counterparty

  



 


vii





















 


	
  Exhibit I

  	
  Forms of Opinion of Clifford Chance LLP

  
	
  Exhibit J

  	
  Form of Opinion of Kennedy, Covington, Lobdell &
  Hickman, LLP

  
	
  Exhibit K

  	
  Form of Trust Receipt

  
	
  Exhibit L

  	
  Form of Request for Release of Documents and Receipt

  
	
  Exhibit M

  	
  Form of Information Request from Beneficial Owners
  of Notes

  
	
  Exhibit N

  	
  Origination Agreement

  
	
  Exhibit O

  	
  Rating Agency Pool Contribution Analysis

  



 


viii





















 


INDENTURE, dated as of July 14, 2005, by and among GRAMERCY
REAL ESTATE CDO 2005-1, LTD., a Cayman Islands exempted company with limited
liability (the “Issuer”),
GRAMERCY REAL ESTATE CDO 2005-1 LLC, a limited liability company formed under
the laws of Delaware (the “Co-Issuer”),
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
trustee, paying agent, calculation agent, transfer agent, custodial securities
intermediary, backup advancing agent and notes registrar (herein, together with
its permitted successors and assigns in the trusts hereunder, the “Trustee”) and GKK LIQUIDITY
LLC ( “GKK Liquidity”),
a Delaware limited liability company, as advancing agent (herein, together with
its permitted successors and assigns in the trusts hereunder, the “Advancing Agent”).


 


PRELIMINARY
STATEMENT


 


Each of the Issuer and the Co-Issuer is duly
authorized to execute and deliver this Indenture to provide for the Notes
issuable as provided in this Indenture. 
All covenants and agreements made by the Issuer and Co-Issuer herein are
for the benefit and security of the Secured Parties.  The Issuer, the Co-Issuer, Wells Fargo Bank,
National Association, in its capacity other than as Trustee, and the Advancing
Agent are entering into this Indenture, and the Trustee is accepting the trusts
created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.


 


All things necessary to make this Indenture a valid
agreement of the Issuer and Co-Issuer in accordance with this Indenture’s terms
have been done.


 


GRANTING
CLAUSES


 


The Issuer hereby Grants to the Trustee, for the
benefit and security of the Secured Parties, all of its right, title and
interest in, to and under, in each case, whether now owned or existing, or
hereafter acquired or arising (other than Excepted Assets and amounts in the
Preferred Shares Distribution Account), (a) the Collateral Debt Securities
listed in the Schedule of Closing Date Collateral Debt Securities which the
Issuer purchases on the Closing Date and causes to be delivered to the Trustee
(directly or through an agent or bailee) herewith, all payments thereon or with
respect thereto and all Collateral Debt Securities which are delivered to the
Trustee (directly or through an agent or bailee) after the Closing Date
pursuant to the terms hereof (including the Collateral Debt Securities listed,
as of the Effective Date, on the Schedule of Closing Date Collateral Debt
Securities delivered by the Issuer pursuant to Section 7.17) and all
payments thereon or with respect thereto, (b) the rights of the Issuer under
each Hedge Agreement, (c) the Payment Account, the Interest Collection Account,
the Principal Collection Account, the Expense Account, the Unused Proceeds
Account, the Delayed Funding Obligations Account, the Custodial Account, each Hedge
Collateral Account, each Hedge Termination Account and all Eligible Investments
purchased with funds on deposit therein, the Custodial Account and all related
security entitlements and all income from the investment of funds in any of the
foregoing, (d) the rights of the Issuer under each Collateral Debt Securities
Purchase Agreement (including any Collateral Debt Securities Purchase Agreement
entered into after the Closing Date), the Collateral Management Agreement, the
Asset Servicing Agreement, the GMACCMC Servicing Agreement and any other
primary or special servicing agreement, (e)


 





















 


all Cash or Money delivered to the Trustee (or its
bailee) in respect of the Notes or the Assets, (f) all other investment
property, accounts, instruments and general intangibles in which the Issuer has
an interest, other than the Excepted Assets and (g) all proceeds with respect
to the foregoing clauses (a)-(f).  The
collateral described in the foregoing clauses (a)-(g) is referred to as the “Assets.”  For the avoidance of doubt, the Assets do not
include the Excepted Assets.  Such Grants
are made, however, in trust, to secure the Notes and each Hedge Agreement,
subject to the Priority of Payments, equally and ratably without prejudice,
priority or distinction between any Note and any other Note by reason of
difference in time of issuance or otherwise, except as expressly provided in
this Indenture, and to secure (i) the payment of all amounts due on and in
respect of the Notes and each Hedge Agreement in accordance with their terms,
(ii) the payment of all other sums payable under this Indenture and (iii)
compliance with the provisions of this Indenture, all as provided in this
Indenture.  For the avoidance of doubt,
the Assets shall not include the Excepted Assets, the Preferred Shares
Distribution Account and any amounts in the Preferred Shares Distribution
Account.  The foregoing Grant shall, for
the purpose of determining the property subject to the lien of this Indenture
(but not for the purpose of determining compliance with any of the Coverage
Tests or compliance by the Issuer with any of the other provisions hereof), be
deemed to include any securities and any investments granted by or on behalf of
the Issuer to the Trustee for the benefit of the Noteholders and each Hedge
Counterparty, whether or not such securities or such investments satisfy the
criteria set forth in the definitions of “Collateral Debt Security” or “Eligible
Investment,” as the case may be.


 


Except to the extent otherwise provided in this Indenture,
this Indenture shall constitute a security agreement under the laws of the
State of New York applicable to agreements made and to be performed therein,
for the benefit of the Noteholders and each Hedge Counterparty.  Upon the occurrence and during the
continuation of any Event of Default hereunder, and in addition to any other
rights available under this Indenture or any other Assets held for the benefit
and security of the Noteholders and each Hedge Counterparty or otherwise
available at law or in equity but subject to the terms hereof, the Trustee
shall have all rights and remedies of a secured party on default under the laws
of the State of New York and other applicable law to enforce the assignments
and security interests contained herein and, in addition, shall have the right,
subject to compliance with any mandatory requirements of applicable law and the
terms of this Indenture, to sell or apply any rights and other interests
assigned or pledged hereby in accordance with the terms hereof at public and
private sale.


 


The Trustee acknowledges such Grants, accepts the
trusts hereunder in accordance with the provisions hereof, and agrees to
perform the duties herein in accordance with, and subject to, the terms hereof,
in order that the interests of the Secured Parties may be adequately and
effectively protected in accordance with this Indenture.


 


ARTICLE 1


 


DEFINITIONS


 


Section 1.1             Definitions.


 


Except as otherwise specified herein or as the context
may otherwise require, the following terms have the respective meanings set
forth below for all purposes of this Indenture,


 


2





















 


and
the definitions of such terms are equally applicable both to the singular and
plural forms of such terms and to the masculine, feminine and neuter genders of
such terms.  The word “including” and its
variations shall mean “including without limitation.”  Whenever any reference is made to an amount
the determination of which is governed by Section 1.2, the provisions of
Section 1.2 shall be applicable to such determination or calculation,
whether or not reference is specifically made to Section 1.2, unless
some other method of calculation or determination is expressly specified in the
particular provision. All references in this Indenture to designated “Articles,”
“Sections,” “Subsections” and other subdivisions are to the designated
Articles, Sections, Subsections and other subdivisions of this Indenture as
originally executed.  The words “herein,”
“hereof,” “hereunder” and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section, Subsection or other
subdivision.


 


“10%
Limit”:  The meaning
specified in Section 12.1(b) hereof.


 


“A Note”:  A promissory note secured by a mortgaged property
that is not subordinate in right of payment to any separate promissory note
secured by the same mortgaged property.


 


“Above
Cap Security”:  Any
Collateral Debt Security, which initially bore interest based upon a floating
rate index subject to a cap (which, if exceeded, would cause such Collateral
Debt Security to bear interest at a fixed rate) and which currently bears
interest at a fixed rate as a result of such cap being exceeded, but only for
so long as such cap is exceeded.


 


“Account”:
Any of the Interest Collection Account, the Principal Collection Account, the
Unused Proceeds Account, the Delayed Funding Obligations Account, the Payment
Account, the Expense Account, the Custodial Account, each Hedge Termination
Account, the Preferred Shares Distribution Account and each Hedge Collateral
Account, and any subaccount thereof that the Trustee deems necessary or
appropriate.


 


“Accountants’
Report”:  A report of a
firm of Independent certified public accountants of recognized national
reputation appointed by the Issuer pursuant to Section 10.11(a), which
may be the firm of independent accountants that reviews or performs procedures
with respect to the financial reports prepared by the Issuer or the Collateral
Manager.


 


“Accounts
Receivable”:  The
meaning specified in Section 3.3(a)(vi) hereof.


 


“Acquired
Property”:  Any real
property located in metropolitan New York or Washington D.C. in which the
Issuer acquires a direct or indirect interest by foreclosure or other similar
conveyance, or by transfer in lieu thereof, as a result of the Issuer’s ownership
of a related Collateral Debt Security.


 


“Act”
or “Act of Securityholders”:  The meaning specified in Section 14.2
hereof.


 


“Advancing
Agent”:  GKK Liquidity,
unless a successor Person shall have become the Advancing Agent pursuant to the
applicable provisions of this Indenture, and thereafter “Advancing Agent” shall
mean such successor Person.


 


3





















 


“Advancing
Agent Fee”:  The fee
payable quarterly in arrears on each Payment Date to the Advancing Agent in
accordance with the Priority of Payments, equal to 0.07% per
annum on the Aggregate Outstanding
Amount of the Class A Notes and the Class B Notes on such Payment Date prior to
giving effect to distributions with respect to such Payment Date.


 


“Advisers
Act”: The Investment Advisers Act of 1940, as amended.


 


“Advisory
Committee”: The meaning specified in the Collateral
Management Agreement.


 


“Affiliate”
or “Affiliated”:  With respect to a Person, (i) any other Person
who, directly or indirectly, is in control of, or controlled by, or is under
common control with, such Person or (ii) any other Person who is a director,
Officer or employee (a) of such Person, (b) of any subsidiary or parent company
of such Person or (c) of any Person described in clause (i) above.  For the purposes of this definition, control
of a Person shall mean the power, direct or indirect, (i) to vote a more than
50% of the securities having ordinary voting power for the election of
directors of such Person, or (ii) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise; provided that (x) neither the Company Administrator nor any
other company, corporation or person to which the Company Administrator
provides direction and/or acts as share trustee shall be an Affiliate of the
Issuer or Co-Issuer and (y) neither the Collateral Manager, SLG Gramercy
Services LLC, Gramercy Investment nor any of their respective subsidiaries
shall be deemed to be Affiliates of the Issuer.


 


“Agent
Members”:  Members of,
or participants in, the Depository, Clearstream, Luxembourg or Euroclear.


 


“Aggregate
Amortized Cost”  With
respect to any Interest Only Security or Principal Only Security, as of any
date of determination (a) on the date of acquisition thereof by the Issuer, the
cost of purchase thereof and (b) on any date thereafter, the present value of
all remaining payments on such security discounted to such date of
determination as of each subsequent due date for such security at a discount
rate per annum equal to the internal rate of return on such security as
calculated in good faith by the Collateral Manager at the time of purchase
thereof by the Issuer.


 


“Aggregate
Collateral Balance”: 
The aggregate Principal Balance of (i) Collateral Debt Securities, (ii)
Eligible Investments purchased with Principal Proceeds and (iii) Eligible
Investments purchased with monies on deposit in the Unused Proceeds Account
that have not been designated as Interest Proceeds by the Collateral Manager pursuant
to Section 10.4(c).


 


“Aggregate
Outstanding Amount”: 
With respect to any Class or Classes of Notes, the aggregate principal
balance (excluding any Class C Capitalized Interest, Class D Capitalized
Interest, Class E Capitalized Interest, Class F Capitalized Interest, Class G
Capitalized Interest, Class H Capitalized Interest, Class J Capitalized
Interest and Class K Capitalized Interest, as the case may be) of such Class or
Classes Outstanding at the date of determination.


 


“Aggregate
Principal Balance”: When used with respect to any Pledged Collateral Debt Securities as of any date of
determination, the sum of the Principal Balances on such date of determination
of all such Pledged Collateral Debt Securities.


 


4





















 


“Applicable
Recovery Rate”:  The
lowest of the Moody’s Recovery Rate, the Fitch Applicable Recovery Rate and the
S&P Recovery Rate, as applicable.


 


“ARD
Loan”:  A Loan with an
anticipated repayment date, after which (if not repaid in full by such
anticipated repayment date) the loan provides for changes in payments and
accrual of interest.


 


“Article
15 Agreement”:  The
meaning specified in Section 15.1(a) hereof.


 


“Asset
Servicing Agreement”: 
The servicing agreement dated as of the Closing Date among the Issuer,
SLG Gramercy and the Collateral Manager.


 


“Assets”:  The meaning specified in the first paragraph
of the Granting Clause of this Indenture.


 


“Assumed
Portfolio”:  The
portfolio with characteristics developed in accordance with the Eligibility
Criteria and Collateral Quality Tests for purposes of determining the Class A-1
Break Even Loss Rate, the Class A-2 Break Even Loss Rate, the Class B
Break-Even Loss Rate, the Class C Break-Even Loss Rate, the Class D Break-Even
Loss Rate, the Class E Break-Even Loss Rate, the Class F Break-Even Loss Rate,
the Class G Break-Even Loss Rate, the Class H Break-Even Loss Rate, the Class J
Break-Even Loss Rate and the Class K Break-Even Loss Rate.


 


“Auction”:  Any auction conducted in connection with an
Auction Call Redemption.


 


“Auction
Bid Date”:  The meaning
specified in Section 12.4(b)(ii) hereof.


 


“Auction
Call Period”:  The
meaning specified in Section 9.2(a) hereof.


 


“Auction
Call Redemption”:  The
meaning specified in Section 9.2(a) hereof.


 


“Auction
Call Redemption Date”: 
The meaning specified in Section 9.2(a) hereof.


 


“Auction
Date”: The meaning specified in Section 12.4(a)(i) hereof.


 


“Auction
Procedures”:  The
required procedures with respect to an Auction set forth in Section 12.4(b)
hereof.


 


“Auction
Purchase Agreement”: 
The meaning specified in Section 12.4(a)(iii)
hereof.


 


“Auction
Purchase Closing Date”: The meaning specified in Section
12.4(b)(v) hereof.


 


5





















 


“Authenticating
Agent”:  With respect
to the Notes or a Class of the Notes, the Person designated by the Trustee to
authenticate such Notes on behalf of the Trustee pursuant to Section 2.12
hereof.


 


“Authorized
Officer”:  With respect
to the Issuer or Co-Issuer, any Officer (or attorney-in-fact appointed by the
Issuer or the Co-Issuer) who is authorized to act for the Issuer or Co-Issuer
in matters relating to, and binding upon, the Issuer or Co-Issuer.  With respect to the Collateral Manager, the
persons listed on Schedule G hereto. 
With respect to the Trustee or any other bank or trust
company acting as trustee of an express trust or as custodian, a Trust Officer.  Each party may receive and accept a
certification of the authority of any other party as conclusive evidence of the
authority of any person to act, and such certification may be considered as in
full force and effect until receipt by such other party of written notice to
the contrary.


 


“Average
Life”:  On any
Measurement Date with respect to any Collateral Debt Security (other than a
Defaulted Security), the quotient obtained by dividing (i) the summing of the
products of (a) the number of years (rounded to the nearest one tenth thereof)
from such Measurement Date to the respective dates of each successive expected
distribution of principal of such Collateral Debt Security and (b) the
respective amounts of such expected distributions of principal by (ii) the sum
of all successive expected distributions of principal on such Collateral Debt
Security, calculated by the Collateral Manager.


 


“Backup
Advancing Agent”: 
Wells Fargo Bank, National Association, a national banking association,
solely in its capacity as Backup Advancing Agent hereunder, or any successor Backup
Advancing Agent; provided that any such successor
Backup Advancing Agent must be a financial institution having a long-term debt
rating from each Rating Agency at least equal to “A-” or “A2,” as applicable,
or a short-term debt rating at least equal to “A-1,” “P-1” or “F-1,” as
applicable.


 


“Backup
Advancing Agent Fee”: 
The fee payable quarterly in arrears on each Payment Date to the Trustee,
in its capacity as Backup Advancing Agent, in accordance with the Priority of
Payments, equal to 0.00125% per annum on
the Aggregate Outstanding Amount of the Class A Notes and the Class B Notes on
such Payment Date prior to giving effect to distributions with respect to such
Payment Date.


 


“Bailee
Letter”:  The meaning
specified in Section 12.4(b)(v) hereof.


 


“Bank”:  Wells Fargo Bank, National Association, a
national banking association, in its individual capacity and not as Trustee
and, if any Person is appointed as a successor Trustee, such Person in its
individual capacity and not as Trustee.


 


“Bankruptcy
Code”:  The federal
Bankruptcy Code, Title 11 of the United States Code, as amended.


 


“Bearer
Securities”:  The
meaning specified in Section 3.3(a)(iv) hereof.


 


“Benefit
Plan”:  The meaning
specified in Section 2.5(g)(vi) hereof.


 


6





















 


“B Note”:  A promissory note secured by a mortgage on
commercial real estate property that is subordinate in right of payment to one
or more separate promissory notes secured by a direct or beneficial interest in
the same property.


 


“Board
of Directors”:  With
respect to the Issuer, the directors of the Issuer duly appointed and, with
respect to the Co-Issuer, the LLC Managers duly appointed by the sole member of
the Co-Issuer or otherwise.


 


“Board
Resolution”:  With
respect to the Issuer, a resolution of the Board of Directors of the Issuer
and, with respect to the Co-Issuer, a resolution or unanimous written consent of
the LLC Managers or the sole member of the Co-Issuer.


 


“Business
Day”:  Any day other
than (i) a Saturday or Sunday and (ii) a day on which commercial banks are authorized
or required by applicable law, regulation or executive order to close in New
York, New York or the location of the Corporate Trust Office; provided that if any action is required of the Irish Paying
Agent, then, for purposes of determining when such Irish Paying Agent action is
required, Dublin, Ireland will be considered in determining “Business Day.”


 


“Calculation
Agent”:  The meaning
specified in Section 7.14(a) hereof.


 


“Calculation
Amount”: With respect to any Collateral Debt Security, at any
time, the lesser of (a) the Market Value of such Collateral Debt Security and
(b) the Applicable Recovery Rate multiplied by the Principal Balance of such
Collateral Debt Security.


 


“Caribbean
Corporate Center Loan”: 
The Initial Collateral Debt Security known as the Caribbean Corporate
Center Loan.


 


“Cash”:  Such coin or currency of the United States of
America as at the time shall be legal tender for payment of all public and
private debts.


 


“Certificate
of Authentication”: 
The meaning specified in Section 2.1 hereof.


 


“Certificated Note”:  Any of the Notes, as applicable, executed,
authenticated and delivered in definitive non-global, fully registered form
without interest coupons, pursuant to this Indenture.


 


“Certificated
Security”:  A “certificated
security” as defined in Section 8-102(a)(4) of the
UCC.


 


“Class”:  The Class A-1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes or the
Class K Notes, as applicable.


 


“Class A Notes”: 
The Class A-1 Notes and the Class A-2 Notes, collectively.


 


“Class
A-1 Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s


 


7





















 


assumptions on recoveries and
timing and to the Priority of Payments, will result in sufficient funds
remaining for the timely payment of interest and the ultimate payment of
principal of the Class A-1 Notes.


 


“Class A-1
Defaulted Interest Amount”: 
As of each Payment Date, the accrued and unpaid amount due to holders of
the Class A-1 Notes on account of any shortfalls in the payment of the Class A-1
Interest Distribution Amount with respect to any preceding Payment Date or
Payment Dates, together with interest accrued thereon (to the extent lawful).


 


“Class A-1
Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class A-1 Notes on account of interest equal to the product of
(i) the Aggregate Outstanding Amount of the Class A-1 Notes with respect to the
related Interest Accrual Period, (ii) the actual number of days in such
Interest Accrual Period divided by 360 and (iii) the Class A-1 Rate.


 


“Class A-1
Loss Differential”:  At
any time, the rate calculated by subtracting the Class A-1 Scenario Loss Rate
from the Class A-1 Break-Even Loss Rate at such time.


 


“Class A-1 Notes”:  The Class A-1 Senior Secured Floating Rate
Term Notes due 2035, issued by the Issuer and the Co-Issuer pursuant to this
Indenture.


 


“Class A-1
Rate”:  With respect to
any Class A-1 Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 0.32% per annum.


 


“Class A-1
Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“AAA” of the Class A-1 Notes by S&P, determined by application of the
S&P CDO Monitor at such time.


 


“Class A-2
Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s assumptions
on recoveries and timing and to the Priority of Payments, will result in
sufficient funds remaining for the timely payment of interest and the ultimate
payment of principal of the Class A-2 Notes.


 


“Class A-2
Defaulted Interest Amount”: 
As of each Payment Date, the accrued and unpaid amount due to holders of
the Class A-2 Notes on account of any shortfalls in the payment of the Class A-2
Interest Distribution Amount with respect to any preceding Payment Date or
Payment Dates, together with interest accrued thereon (to the extent lawful).


 


“Class A-2
Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class A-2 Notes on account of interest equal to the product of
(i) the Aggregate Outstanding Amount of the Class A-2 Notes with respect to the
related Interest Accrual Period, (ii) the actual number of days in such
Interest Accrual Period divided by 360 and (iii) the Class A-2 Rate.


 


8





















 


“Class A-2
Loss Differential”:  At
any time, the rate calculated by subtracting the Class A-2 Scenario Loss Rate
from the Class A-2 Break-Even Loss Rate at such time.


 


“Class A-2
Notes”:  The Class A-2 Second
Priority Senior Secured Floating Rate Term Notes due 2035, issued by the Issuer
and the Co-Issuer pursuant to this Indenture.


 


“Class A-2
Rate”:  With respect to
any Class A-2 Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 0.39% per annum.


 


“Class A-2
Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“AAA” of the Class A-2 Notes by S&P, determined by application of the
S&P CDO Monitor at such time.


 


“Class
A-2 Subordinated Interests”: 
The meaning specified in Section 13.1(a) hereof.


 


“Class
A/B Coverage Tests”: The Class A/B Par Value Test and the
Class A/B Interest Coverage Test.


 


“Class
A/B Interest Coverage Ratio”: 
The meaning specified under the definition of “Interest Coverage Ratio.”


 


“Class
A/B Interest Coverage Test”: The test that is met as of any
Measurement Date on which any Class A Notes or Class B Notes remain Outstanding
if the Class A/B Interest Coverage Ratio as of such Measurement Date is equal
to or greater than 161.70%.


 


“Class
A/B Par Value Ratio”: 
As of any Measurement Date, the number (expressed as a percentage)
calculated by dividing (a) the Net Outstanding Portfolio Balance on such
Measurement Date by (b) the sum of the Aggregate Outstanding Amount of the
Class A Notes and the Class B Notes and the amount of
any unreimbursed Interest Advances.


 


“Class
A/B Par Value Test”: 
The test that will be met as of any Measurement Date on which any Class
A Notes or Class B Notes remain Outstanding if the Class A/B Par Value Ratio on
such Measurement Date is equal to or greater than 136.70%.


 


“Class
B Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s
assumptions on recoveries and timing and to the Priority of Payments, will
result in sufficient funds remaining for the timely payment of interest and the
ultimate payment of principal of the Class B Notes.


 


“Class
B Defaulted Interest Amount”: 
As of each Payment Date, the accrued and unpaid amount due to holders of
the Class B Notes on account of any shortfalls in the payment of the Class B
Interest Distribution Amount with respect to any preceding Payment Date or
Payment Dates, together with interest accrued thereon (to the extent lawful).


 


9





















 


“Class
B Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class B Notes on account of interest equal to the product of (i)
the Aggregate Outstanding Amount of the Class B Notes with respect to the
related Interest Accrual Period, (ii) the actual number of days in such
Interest Accrual Period divided by 360 and (iii) the Class B Rate.


 


“Class
B Loss Differential”: 
At any time, the rate calculated by subtracting the Class B Scenario
Loss Rate from the Class B Break-Even Loss Rate at such time.


 


“Class
B Notes”:  The Class B Third
Priority Floating Rate Term Notes due 2035, issued by the Issuer and the
Co-Issuer pursuant to this Indenture.


 


“Class
B Rate”:  With respect
to any Class B Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 0.45% per annum.


 


“Class
B Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“AA” of the Class B Notes by S&P, determined by application of the S&P
CDO Monitor at such time.


 


“Class
B Subordinate Interests”: 
The meaning specified in Section 13.1(b) hereof.


 


“Class
C Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s
assumptions on recoveries and timing and to the Priority of Payments, will
result in sufficient funds remaining for the ultimate payment of interest and
principal of the Class C Notes.


 


“Class
C Capitalized Interest”: 
The meaning specified in Section 2.7(d) hereof.


 


“Class
C Defaulted Interest Amount”: 
On or after any Payment Date on which no Class A Notes or Class B Notes
are Outstanding, any interest on the Class C Notes (other than Class C
Capitalized Interest) that is due and payable but is not punctually paid or
duly provided for on or prior to the due date therefor and which remains
unpaid, together with interest accrued thereon (to the extent lawful).


 


“Class
C Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class C Notes on account of interest equal to the product of (i)
the Aggregate Outstanding Amount (including any Class C Capitalized Interest)
of the Class C Notes with respect to the related Interest Accrual Period, (ii)
the actual number of days in such Interest Accrual Period divided by 360 and
(iii) the Class C Rate.


 


“Class
C Loss Differential”: 
At any time, the rate calculated by subtracting the Class C Scenario
Loss Rate from the Class C Break-Even Loss Rate at such time.


 


“Class
C Notes”:  The Class C Fourth
Priority Floating Rate Capitalized Interest Term Notes due 2035, issued by the
Issuer and the Co-Issuer pursuant to this Indenture.


 


10





















 


“Class
C Rate”:  With respect
to any Class C Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 0.70% per annum.


 


“Class
C Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“A+” of the Class C Notes by S&P, determined by application of the S&P
CDO Monitor at such time.


 


“Class
C Subordinate Interests”: 
The meaning specified in Section 13.1(c) hereof.


 


“Class C/D/E Coverage Tests”:
The Class C/D/E Par Value Test and the Class C/D/E Interest Coverage Test.


 


“Class C/D/E
Interest Coverage Ratio”: 
The meaning specified in the definition of “Interest Coverage Ratio.”


 


“Class C/D/E
Interest Coverage Test”: The test that is met as of any
Measurement Date on which any Class C Notes, Class D Notes or Class E Notes
remain Outstanding if the Class C/D/E Interest Coverage Ratio as of such
Measurement Date is equal to or greater than 150.70%.


 


“Class C/D/E
Par Value Ratio”: As of any Measurement Date, the number
(expressed as a percentage) calculated by dividing (a) the Net Outstanding
Portfolio Balance on such Measurement Date by (b) the sum of the Aggregate
Outstanding Amount (including any Class C Capitalized Interest, Class D
Capitalized Interest and Class E Capitalized Interest) of the Class A Notes,
the Class B Notes, the Class C Notes, the Class D and Class E Notes and the
amount of any unreimbursed Interest Advances.


 


“Class C/D/E
Par Value Test”: The test that is met as of any Measurement Date
on which any Class C Notes, Class D Notes or Class E Notes remain Outstanding
if the Class C/D/E Par Value Ratio on such Measurement Date is equal to or
greater than 125.70%.


 


“Class
D Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s
assumptions on recoveries and timing and to the Priority of Payments, will
result in sufficient funds remaining for the ultimate payment of interest and
principal of the Class D Notes.


 


“Class
D Capitalized Interest”: The meaning specified in Section
2.7(e) hereof.


 


“Class D
Defaulted Interest Amount”: 
On or after any Payment Date on which no Class A Notes, Class B Notes or
Class C Notes are Outstanding, any interest on the Class D Notes (other than
Class D Capitalized Interest) that is due and payable but is not punctually
paid or duly provided for on or prior to the due date therefor and which
remains unpaid, together with interest accrued thereon (to the extent lawful).


 


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“Class
D Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class D Notes on account of interest equal to the product of (i)
the Aggregate Outstanding Amount (including any Class D Capitalized Interest)
of the Class D Notes with respect to the related Interest Accrual Period, (ii)
the actual number of days in such Interest Accrual Period divided by 360 and
(iii) the Class D Rate.


 


“Class
D Loss Differential”: 
At any time, the rate calculated by subtracting the Class D Scenario
Loss Rate from the Class D Break-Even Loss Rate at such time.


 


“Class
D Notes”:  The Class D
Fifth Priority Floating Rate Capitalized Interest Term Notes due 2035, issued
by the Issuer and the Co-Issuer pursuant to this Indenture.


 


“Class
D Rate”:  With respect
to any Class D Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 0.80% per annum.


 


“Class
D Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“A” of the Class D Notes by S&P, determined by application of the S&P
CDO Monitor at such time.


 


“Class D Subordinate Interests”:  The meaning specified in Section 13.1(d)
hereof.


 


“Class
E Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s
assumptions on recoveries and timing and to the Priority of Payments, will
result in sufficient funds remaining for the ultimate payment of interest and
principal of the Class E Notes.


 


“Class
E Capitalized Interest”: 
The meaning specified in Section 2.7(f) hereof.


 


“Class
E Defaulted Interest Amount”: 
On or after any Payment Date on which no Class A Notes, Class B Notes,
Class C Notes or Class D Notes are Outstanding, any interest on the Class E
Notes (other than Class E Capitalized Interest) that is due and payable but is
not punctually paid or duly provided for on or prior to the due date therefor
and which remains unpaid, together with interest accrued thereon (to the extent
lawful).


 


“Class E
Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class E Notes on account of interest equal to the product of (i)
the Aggregate Outstanding Amount (including any Class E Capitalized Interest)
of the Class E Notes with respect to the related Interest Accrual Period, (ii)
the actual number of days in such Interest Accrual Period divided by 360 and
(iii) the Class E Rate.


 


“Class E
Loss Differential”:  At
any time, the rate calculated by subtracting the Class E Scenario Loss Rate
from the Class E Break-Even Loss Rate at such time.


 


“Class E
Notes”:  The Class E Sixth
Priority Floating Rate Capitalized Interest Term Notes due 2035, issued by the
Issuer and the Co-Issuer pursuant to this Indenture.


 


12





















 


“Class E
Rate”:  With respect to
any Class E Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 0.90% per annum.


 


“Class E
Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“A-” of the Class E Notes by S&P, determined by application of the S&P
CDO Monitor at such time.


 


“Class E Subordinate Interests”:  The meaning specified in Section 13.1(e)
hereof.


 


“Class
F Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s
assumptions on recoveries and timing and to the Priority of Payments, will
result in sufficient funds remaining for the ultimate payment of interest and
principal of the Class F Notes.


 


“Class
F Capitalized Interest”: The meaning specified in Section
2.7(g) hereof.


 


“Class
F Defaulted Interest Amount”: 
On or after any Payment Date on which no Class A Notes, Class B Notes,
Class C Notes, Class D Notes or Class E Notes are Outstanding, any interest on
the Class F Notes (other than Class F Capitalized Interest) that is due and
payable but is not punctually paid or duly provided for on or prior to the due
date therefor and which remains unpaid, together with interest accrued thereon
(to the extent lawful).


 


“Class
F Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class F Notes on account of interest equal to the product of (i)
the Aggregate Outstanding Amount (including any Class F Capitalized Interest)
of the Class F Notes with respect to the related Interest Accrual Period, (ii)
the actual number of days in such Interest Accrual Period divided by 360 and
(iii) the Class F Rate.


 


“Class
F Loss Differential”: 
At any time, the rate calculated by subtracting the Class F Scenario
Loss Rate from the Class F Break-Even Loss Rate at such time.


 


“Class
F Notes”:  The Class F
Seventh Priority Floating Rate Capitalized Interest Term Notes due 2035, issued
by the Issuer and the Co-Issuer pursuant to this Indenture.


 


“Class
F Rate”:  With respect
to any Class F Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 1.50% per annum.


 


“Class
F Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“BBB+” of the Class F Notes by S&P, determined by application of the
S&P CDO Monitor at such time.


 


“Class F Subordinate Interests”:  The meaning specified in Section 13.1(f)
hereof.


 


13





















 


“Class
F/G/H Coverage Tests”: The Class F/G/H Par Value Test and the
Class F/G/H Interest Coverage Test.


 


“Class
F/G/H Interest Coverage Ratio”:  The meaning specified in the definition of “Interest
Coverage Ratio”.


 


“Class
F/G/H Interest Coverage Test”: The test that is met as of any
Measurement Date on which any Class F Notes, Class G Notes or Class H Notes
remain Outstanding if the Class F/G/H
Interest Coverage Ratio as of such Measurement Date is equal to or greater than
132.85%.


 


“Class
F/G/H Par Value Ratio”: As of any Measurement Date, the
number (expressed as a percentage) calculated by dividing (a) the Net
Outstanding Portfolio Balance on such Measurement Date by (b) the sum of the
Aggregate Outstanding Amount (including any Class C Capitalized Interest, Class
D Capitalized Interest, Class E Capitalized Interest, Class F Capitalized
Interest, Class G Capitalized Interest and Class H Capitalized Interest) of the
Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes, the Class G Notes and the Class H Notes and
the amount of any unreimbursed Interest Advances.


 


“Class
F/G/H Par Value Test”: The test that is met as of any
Measurement Date on which any Class F Notes, Class G Notes or Class H Notes
remain Outstanding if the Class F/G/H Par
Value Ratio on such Measurement Date is equal to or greater than 117.85%.


 


“Class
G Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s
assumptions on recoveries and timing and to the Priority of Payments, will
result in sufficient funds remaining for the ultimate payment of interest and
principal of the Class G Notes.


 


“Class
G Capitalized Interest”: 
The meaning specified in Section 2.7(h) hereof.


 


“Class
G Defaulted Interest Amount”: 
On or after any Payment Date on which no Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes or Class F Notes are Outstanding,
any interest on the Class G Notes (other than Class G Capitalized Interest)
that is due and payable but is not punctually paid or duly provided for on or
prior to the due date therefor and which remains unpaid, together with interest
accrued thereon (to the extent lawful).


 


“Class
G Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class G Notes
on account of interest equal to the product of (i) the Aggregate Outstanding
Amount (including any Class G Capitalized Interest) of the Class G Notes with
respect to the related Interest Accrual Period, (ii) the actual number of days
in such Interest Accrual Period divided by 360 and (iii) the Class G Rate.


 


“Class
G Loss Differential”: 
At any time, the rate calculated by subtracting the Class G Scenario
Loss Rate from the Class G Break-Even Loss Rate at such time.


 


“Class
G Notes”:  The Class G Eighth
Priority Floating Rate Capitalized Interest Term Notes due 2035, issued by the
Issuer and the Co-Issuer pursuant to this Indenture.


 


14





















 


“Class
G Rate”:  With respect
to any Class G Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 1.65% per annum.


 


“Class
G Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“BBB” of the Class G Notes by S&P, determined by application of the S&P
CDO Monitor at such time.


 


“Class G Subordinate Interests”:  The meaning specified in Section 13.1(g),
hereof.


 


“Class
H Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s
assumptions on recoveries and timing and to the Priority of Payments, will
result in sufficient funds remaining for the ultimate payment of interest and
principal of the Class H Notes.


 


“Class
H Capitalized Interest”: 
The meaning specified in Section 2.7(i) hereof.


 


“Class
H Defaulted Interest Amount”: 
On or after any Payment Date on which no Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes or Class G Notes are
Outstanding, any interest on the Class H Notes (other than Class H Capitalized
Interest) that is due and payable but is not punctually paid or duly provided
for on or prior to the due date therefor and which remains unpaid, together
with interest accrued thereon (to the extent lawful).


 


“Class
H Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class H Notes
on account of interest equal to the product of (i) the Aggregate Outstanding
Amount (including any Class H Capitalized Interest) of the Class H Notes with
respect to the related Interest Accrual Period, (ii) the actual number of days
in such Interest Accrual Period divided by 360 and (iii) the Class H Rate.


 


“Class
H Loss Differential”: 
At any time, the rate calculated by subtracting the Class H Scenario
Loss Rate from the Class H Break-Even Loss Rate at such time.


 


“Class
H Notes”:  The Class H Ninth
Priority Floating Rate Capitalized Interest Term Notes due 2035, issued by the
Issuer and the Co-Issuer pursuant to this Indenture.


 


“Class
H Rate”:  With respect
to any Class H Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 2.00% per annum.


 


“Class
H Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“BBB-” of the Class H Notes by S&P, determined by application of the
S&P CDO Monitor at such time.


 


15





















 


“Class H Subordinate Interests”:  The meaning specified in Section 13.1(h)
hereof.


 


“Class
J Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s
assumptions on recoveries and timing and to the Priority of Payments, will
result in sufficient funds remaining for the ultimate payment of interest and
principal of the Class J Notes.


 


“Class
J Capitalized Interest”: 
The meaning specified in Section 2.7(j) hereof.


 


“Class
J Defaulted Interest Amount”: 
On or after any Payment Date on which no Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes, Class G Notes or
Class H Notes are Outstanding, any interest on the Class J Notes (other than
Class J Capitalized Interest) that is due and payable but is not punctually
paid or duly provided for on or prior to the due date therefor and which
remains unpaid, together with interest accrued thereon (to the extent lawful).


 


“Class
J Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class J Notes
on account of interest equal to the product of (i) the Aggregate Outstanding
Amount (including any Class J Capitalized Interest) of the Class J Notes with
respect to the related Interest Accrual Period, (ii) the actual number of days
in such Interest Accrual Period divided by 360 and (iii) the Class J Rate.


 


“Class
J Loss Differential”: 
At any time, the rate calculated by subtracting the Class J Scenario
Loss Rate from the Class J Break-Even Loss Rate at such time.


 


“Class
J Notes”:  The Class J Tenth
Priority Floating Rate Capitalized Interest Term Notes due 2035, issued by the
Issuer and the Co-Issuer pursuant to this Indenture.


 


“Class
J Rate”:  With respect
to any Class J Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 3.50% per annum.


 


“Class
J Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“BB” of the Class J Notes by S&P, determined by application of the S&P
CDO Monitor at such time.


 


“Class J Subordinate Interests”:  The meaning specified in Section 13.1(i)
hereof.


 


“Class
K Break-Even Loss Rate”: 
At any time, the maximum percentage of defaults that the Assumed
Portfolio should be able to sustain, which after giving effect to S&P’s assumptions
on recoveries and timing and to the Priority of Payments, will result in
sufficient funds remaining for the ultimate payment of interest and principal
of the Class K Notes.


 


“Class
K Capitalized Interest”: 
The meaning specified in Section 2.7(k) hereof.


 


16





















 


“Class
K Defaulted Interest Amount”: 
On or after any Payment Date on which no Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes, Class G Notes,
Class H Notes or Class J Notes are Outstanding, any interest on the Class K
Notes (other than Class K Capitalized Interest) that is due and payable but is
not punctually paid or duly provided for on or prior to the due date therefor
and which remains unpaid, together with interest accrued thereon (to the extent
lawful).


 


“Class
K Interest Distribution Amount”:  On each Payment Date, the amount due to
Holders of the Class K Notes on account of interest equal to the product of (i)
the Aggregate Outstanding Amount (including any Class K Capitalized Interest)
of the Class K Notes with respect to the related Interest Accrual Period, (ii)
the actual number of days in such Interest Accrual Period divided by 360 and
(iii) the Class K Rate.


 


“Class
K Loss Differential”: 
At any time, the rate calculated by subtracting the Class K Scenario
Loss Rate from the Class K Break-Even Loss Rate at such time.


 


“Class
K Notes”:  The Class K Eleventh
Priority Floating Rate Capitalized Interest Term Notes due 2035, issued by the
Issuer and the Co-Issuer pursuant to this Indenture.


 


“Class
K Rate”:  With respect
to any Class K Note, the per annum rate
at which interest accrues on such Note for any Interest Accrual Period, which
shall be equal to LIBOR for the related Interest Accrual Period plus 6.50% per annum.


 


“Class
K Scenario Loss Rate”: 
At any time, an estimate of the cumulative default rate for the Current
Portfolio or the Proposed Portfolio, as applicable, consistent with a rating of
“B” of the Class K Notes by S&P, determined by application of the S&P
CDO Monitor at such time.


 


“Class K Subordinate Interests”:  The meaning specified in Section 13.1(j)
hereof.


 


“Clean-up
Call”:  The meaning
specified in Section 9.1 hereof.


 


“Clearing
Agency”: An organization registered as a “clearing agency”
pursuant to Section 17A of the Exchange Act.


 


“Clearing Corporation”:  The meaning specified in Section 8-102(a)(5) of the UCC.


 


“Clearing
Corporation Security”: A security subject to book-entry
transfers and pledges deposited with the Clearing Agency.


 


“Clearstream”:
Clearstream Banking, société anonyme, a limited liability company organized
under the laws of the Grand Duchy of Luxembourg.


 


“Closing”:  The transfer of any Note to the initial
registered Holder of such Note.


 


“Closing
Date”:  July 14, 2005.


 


17





















 


“CMBS
Conduit Securities”: Collateral Debt Securities (A) issued by
a single-seller or multi-seller conduit under which the holders of such Collateral
Debt Securities have recourse to a specified pool of assets (but not other
assets held by the conduit that support payments on other series of securities)
and (B) that entitle the holders thereof to receive payments that depend
(except for rights or other assets designed to assure the servicing or timely
distribution of proceeds to holders of the Collateral Debt Securities) on the
cash flow from a pool of commercial mortgage loans generally having the
following characteristics: (i) the commercial mortgage loans have varying
contractual maturities; (ii) the commercial mortgage loans are secured by real
property purchased or improved with the proceeds thereof (or to refinance an
outstanding loan the proceeds of which were so used); (iii) the commercial
mortgage loans are obligations of a relatively limited number of obligors (with
the creditworthiness of individual obligors being less material than for CMBS
Large Loan Securities) and accordingly represent a relatively undiversified
pool of obligor credit risk; (iv) upon original issuance of such Collateral
Debt Securities no five commercial mortgage loans account for more than 20% of
the aggregate principal balance of the entire pool of commercial mortgage loans
supporting payments on such securities; and (v) repayment thereof can vary
substantially from the contractual payment schedule (if any), with early
prepayment of individual loans depending on numerous factors specific to the
particular obligors and upon whether, in the case of loans bearing interest at
a fixed rate, such loans or securities include an effective prepayment premium.


 


“CMBS
Large Loan Securities”: 
Collateral Debt Securities (other than CMBS Conduit Securities) that
entitle the holders thereof to receive payments that depend (except for rights
or other assets designed to assure the servicing or timely distribution of
proceeds to holders of the Collateral Debt Securities) on the cash flow from a
pool of commercial mortgage loans made to finance the acquisition, construction
and improvement of properties.  They
generally have the following characteristics: (i) the commercial mortgage loans
have varying contractual maturities; (ii) the commercial mortgage loans are
secured by real property purchased or improved with the proceeds thereof (or to
refinance one or more outstanding loans the proceeds of which were so used);
(iii) the commercial mortgage loans are obligations of a relatively limited
number of obligors and accordingly represent a relatively undiversified pool of
obligor credit risk; (iv) repayment thereof can vary substantially from the
contractual payment schedule (if any), with early prepayment of individual
loans depending on numerous factors specific to the particular obligors and
upon whether, in the case of loans bearing interest at a fixed rate, such loans
or securities include an effective prepayment premium; and (v) the valuation of
individual properties securing the commercial mortgage loans is the primary
factor in any decision to invest in those securities.


 


“CMBS
Security”: A CMBS Conduit Security or a CMBS Large Loan Security,
as the case may be, but excluding any Single Asset Mortgage Security, Single
Borrower Mortgage Security or Rake Bond.


 


“Co-Issuer”:  Gramercy Real Estate CDO 2005-1 LLC, a limited
liability company formed under the laws of Delaware, until a successor Person
shall have become the Co-Issuer pursuant to the applicable provisions of this
Indenture, and thereafter “Co-Issuer” shall mean such successor Person.


 


“Co-Issuers”:  The Issuer and the Co-Issuer.


 


18





















 


“Code”:  The United States Internal Revenue Code of
1986, as amended.


 


“Collateral
Debt Securities Purchase Agreement”: The collateral debt
securities purchase agreement entered into on or about the Closing Date and any
other collateral debt securities purchase agreement entered into after the
Closing Date if a purchase agreement is necessary to comply with this
Indenture, which agreement is assigned to the Trustee pursuant to this
Indenture.


 


“Collateral
Debt Security” and “Collateral Debt Securities”:  Any loan, security or other obligation (other
than Eligible Investments) owned by the Issuer (including those acquired after
the Closing Date) that complied with the Eligibility Criteria at the time the
Issuer entered into the commitment to acquire such loan, security or obligation.


 


“Collateral
Management Agreement”: 
The Collateral Management Agreement, dated as of the Closing Date, by
and between the Issuer and the Collateral Manager, as amended, supplemented or
otherwise modified from time to time in accordance with its terms.


 


“Collateral Management Fee”:  The Senior Collateral Management Fee and the
Subordinate Collateral Management Fee.


 


“Collateral
Manager”:  GKK Manager
LLC, each of GKK Manager LLC’s permitted successors and assigns or any
successor Person that shall have become the Collateral Manager pursuant to the
provisions of the Collateral Management Agreement and thereafter “Collateral
Manager” shall mean such successor Person.


 


“Collateral
Manager Servicing Standard”: 
With respect to the Collateral Manager, to manage the Collateral Debt
Securities that such Person is obligated to service and administer pursuant to
this Indenture and the Collateral Management Agreement (i) in accordance with
(A) the higher of the following standards of care:  (1) customary and usual standards of practice
of prudent institutional commercial mortgage lenders servicing their own
mortgage loans and (2) the same manner in which, and with the same care, skill,
prudence and diligence with which, the Collateral Manager manages securities
comparable to the Collateral Debt Securities for its own account; (B)
applicable law and (C) the terms of this Indenture, the Collateral Management
Agreement and the terms of each such Collateral Debt Security and the related
Underlying Instruments and (ii) without regard to (A) any relationship,
including as lender on any other debt, that the Collateral Manager or any
Affiliate of the Collateral Manager, may have with the underlying borrower, or
any Affiliate of the borrower, or any other party to this Indenture (or any
agreements relating to this Indenture); (B) the election by the Collateral
Manager whether or not to make Cure Advances from time to time; (C) the right
of the Collateral Manager or any Affiliate thereof, to receive compensation or
reimbursement of costs hereunder generally or with respect to any particular
transaction (including, without limitation, any transaction related to the
Collateral Management Agreement); (D) the ownership, servicing or management
for others of any security not subject to this Indenture by the Collateral
Manager or any Affiliate thereof or the obligation of any Affiliate of the
Collateral Manager to repurchase the Collateral Debt Security; and (E) the
ownership of any Notes by the Collateral Manager or any affiliate therof.


 


19





















 


“Collateral Quality Test Modification”:  The meaning specified in Section 12.5 hereof.


 


“Collateral
Quality Tests”:  The
tests that are satisfied if, as of any Measurement Date, in the aggregate, the
Collateral Debt Securities purchased or irrevocably committed to be purchased
(and not sold) comply with all of the requirements set forth below:


 


(i)            the Aggregate
Principal Balance of Collateral Debt Securities (other than CMBS Securities,
CRE CDO Securities and REIT Debt Securities) backed or otherwise invested in
properties located in any single U.S. state does not exceed the greater of (x) 20%
of the Aggregate Collateral Balance and (y) $200,000,000, except that (A) the
greater of (x) 60% of the Aggregate Collateral Balance and (y) $600,000,000 may
consist of Collateral Debt Securities (other than CMBS Securities, CRE CDO
Securities and REIT Debt Securities) backed or otherwise invested in properties
located in the State of New York, (B) the greater of (x) 35% of the Aggregate
Collateral Balance and (y) $350,000,000 may consist of Collateral Debt
Securities (other than CMBS Securities, CRE CDO Securities and REIT Debt
Securities) backed or otherwise invested in properties located in the State of
California, (C) the greater of (x) 30% of the Aggregate Collateral Balance and
(y) $300,000,000 may consist of Collateral Debt Securities (other than CMBS
Securities, CRE CDO Securities and REIT Debt Securities) backed or otherwise
invested in properties located in Washington D.C. and (D) the greater of (x) 25%
of the Aggregate Collateral Balance and (y) $250,000,000 may consist of
Collateral Debt Securities (other than CMBS Securities, CRE CDO Securities and
REIT Debt Securities) backed or otherwise invested in properties located in the
State of Florida;


 


(ii)           the Aggregate Principal Balance of CMBS Securities and REIT
Debt Securities does not exceed the greater of (A) 25% of the Aggregate
Collateral Balance and (B) $250,000,000;


 


(iii)          the Aggregate Principal Balance of CRE CDO Securities does
not exceed the greater of (A) 2% of the Aggregate Collateral Balance and (B) $20,000,000;


 


(iv)          the Aggregate
Principal Balance of all Collateral Debt Securities (that are not Mezzanine
Loans or B Notes) issued by any single issuer does not exceed the greater of
(A) $150,000,000 and (B) 15% of the Aggregate Collateral Balance (provided that, for the avoidance of doubt, with respect to
any Loan, the related borrower shall be deemed to be the issuer thereof);


 


(v)           the Aggregate
Principal Balance of all Mezzanine Loans issued by any single issuer does not
exceed the greater of (A) $100,000,000 and (B) 10% of the Aggregate Collateral
Balance (provided that, for avoidance of doubt,
with respect to any Mezzanine Loan, the issuer of such Mezzanine Loan shall be
deemed to be the borrower of such Mezzanine Loan);


 


20





















 


(vi)          the Aggregate
Principal Balance of all B Notes issued by any single issuer does not exceed
the greater of (A) $120,000,000 and (B) 12% of the Aggregate Collateral Balance
(provided that, for avoidance of doubt,
with respect to any B Note, the issuer of such B Note shall be deemed to be the
borrower of such B Note);


 


(vii)         the Aggregate Principal Balance of all Collateral Debt
Securities with respect to which the underlying property is located outside of
the U.S. does not exceed the greater of (A) $150,000,000 and (B) 15% of the
Aggregate Collateral Balance;


 


(viii)        no more than 20% of the Aggregate Collateral Balance consists
of CMBS Securities issued in any single calendar year;


 


(ix)           the Aggregate
Principal Balance of Collateral Debt Securities (other than CMBS Securities,
REIT Debt Securities and CRE CDO Securities) that are collateralized or backed
by interests on any single Property Type does not exceed the greater of (x) 20%
of the Aggregate Collateral Balance and (y) $200,000,000; provided
that (A) the greater of (x) 65% of the Aggregate Collateral Balance and (y) $650,000,000,
may consist of Collateral Debt Securities (other than CMBS Securities, REIT
Debt Securities and CRE CDO Securities) that are collateralized or backed by
interests on any Urban Office Property or Suburban Office Property; (B) the
greater of (x) 30% of the Aggregate Collateral Balance and (y) $300,000,000 may
consist of Collateral Debt Securities (other than CMBS Securities, REIT Debt
Securities and CRE CDO Securities) that are collateralized or backed by
interests on any Multi Family Properties; (C) the greater of (x) 30% of the
Aggregate Collateral Balance and (y) $300,000,000 may consist of Collateral
Debt Securities (other than CMBS Securities, REIT Debt Securities and CRE CDO
Securities) that are collateralized or backed by interests on Retail
Properties; (D) the greater of (x) 30% of the Aggregate Collateral Balance and
(y) $300,000,000, may consist of Collateral Debt Securities (other than CMBS
Securities, REIT Debt Securities and CRE CDO Securities) that are
collateralized or backed by interests on Hospitality Properties; (E) the
greater of (x) 25% of the Aggregate Collateral Balance and (y) $250,000,000 may
consist of Collateral Debt Securities (other than CMBS Securities, REIT Debt
Securities and CRE CDO Securities) that are collateralized or backed by
interests on Industrial Properties; (F) the greater of (x) 15% of the Aggregate
Collateral Balance and (y) $150,000,000 may consist of Collateral Debt
Securities (other than CMBS Securities, REIT Debt Securities and CRE CDO
Securities) that are collateralized or backed by interests on Healthcare
Properties (including skilled nursing facilities); and (G) the greater of (x) 10%
of the Aggregate Collateral Balance and (y) $100,000,000 may consist of
Collateral Debt Securities (other than CMBS Securities, REIT Debt Securities and
CRE CDO Securities) that are collateralized or backed by interests on skilled
nursing facilities; provided that
for the avoidance of doubt, any Collateral Debt Security categorized pursuant
to this clause (G) shall also be included when calculating the applicable
amount under the preceding clause (F);


 


21





















 


(x)            the Aggregate
Principal Balance of Floating Rate Securities that bear interest based upon a
floating rate index other than LIBOR and that are not subject to Liability
Hedges does not exceed the greater of (A) 5% of the Aggregate Collateral
Balance and (B) $50,000,000;


 


(xi)           the Aggregate Principal Balance of Fixed Rate Securities
that are not Covered Fixed Rate Securities does not exceed the greater of (A) 20%
of the Aggregate Collateral Balance and (B) $200,000,000;


 


(xii)          the number of underlying obligors shall be greater than or
equal to 20 (provided that, for the avoidance
of doubt, with respect to any Loan, the related borrower shall be deemed to be
the obligor thereon) ;


 


(xiii)         if
the Collateral Debt Security is a Principal Only Security or an Interest Only
Security, the Aggregate Amortized Cost (which accreted cost shall not exceed
par) of all such Principal Only Securities or Interest Only Securities does not
exceed the greater of (A) an amount equal to 5% of the Aggregate Collateral
Balance and (B) $50,000,000, respectively;


 


(xiv)        the Aggregate Principal Balance of Loans related to
undeveloped real estate intended to be developed into residential property does
not exceed the greater of (x) 25% of the Aggregate Collateral Balance or (y)
$250,000,000;


 


(xv)         the Moody’s Maximum Rating Factor Test is satisfied;


 


(xvi)        the Moody’s Weighted Average Initial Maturity Test is
satisfied;


 


(xvii)       the Moody’s Weighted Average Extended Maturity Test is
satisfied;


 


(xviii)      the Herfindahl Diversity Test is satisfied;


 


(xix)         the Minimum Weighted Average Coupon Test is satisfied;


 


(xx)          the Minimum Weighted Average Spread Test is satisfied;


 


(xxi)         the Weighted Average Life Test is satisfied;


 


(xxii)        S&P
CDO Monitor Test is satisfied;


 


(xxiii)       S&P
Recovery Test is satisfied; and


 


(xxiv)       the Fitch Loan Diversity Index Test is satisfied.


 


Notwithstanding the foregoing, during the Ramp-Up
Period the Collateral Quality Tests need not be met.  At all times the dollar amount limitation set
forth in any individual Collateral Quality Test will be disregarded for the
purposes of the Reinvestment Criteria, but will


 


22





















 


be taken into account for the
purposes of any reports to be prepared pursuant to Section 10.9 of this
Indenture.


 


“Collection
Accounts”:  The trust
accounts so designated and established pursuant to Section 10.2(a) hereof.


 


“Company
Administration Agreement”: 
The administration agreement, dated on or about the Closing Date, by and
among the Issuer and the Company Administrator, as modified and supplemented
and in effect from time to time.


 


“Company
Administrative Expenses”: 
All fees, expenses and other amounts due or accrued with respect to any
Payment Date and payable by the Issuer or the Co-Issuer to (i) the Trustee
pursuant to Section 6.7 hereof or any co-trustee appointed pursuant to this
Indenture (including amounts payable by the Issuer as indemnification pursuant
to this Indenture), (ii) the Company Administrator under the Company
Administration Agreement (including amounts payable by the Issuer as
indemnification pursuant to the Company Administration Agreement) and to
provide for the costs of liquidating the Issuer following redemption of the
Notes, (iii) the LLC Managers (including indemnification), (iv) the Independent
accountants, agents and counsel of the Issuer for reasonable fees and expenses
(including amounts payable in connection with the preparation of tax forms on
behalf of the Issuer and the Co-Issuer) and any registered office and
government filing fees, (v) the Rating Agencies for fees and expenses in
connection with any rating (including the annual fee payable with respect to
the monitoring of any rating) of the Notes, including fees and expenses due or
accrued in connection with any credit estimate or rating of the Collateral Debt
Securities, (vi) the Collateral Manager under this Indenture and the Collateral
Management Agreement, (vii) the Collateral Manager or other Persons as
indemnification pursuant to the Collateral Management Agreement, (viii) the
Advancing Agent or other Persons as indemnification pursuant to Section 17.3,
(ix) each member of the Advisory Committee (including amounts payable as
indemnification) under each agreement between such Advisory Committee member
and the Issuer (and the amounts payable by the Issuer to each member of the
Advisory Committee as indemnification pursuant to each such agreement); (x) the
Preferred Shares Paying Agent and the Shares Registrar under the Preferred
Shares Paying Agency Agreement, (xi) any other Person in respect of any
governmental fee, charge or tax in relation to the Issuer or the Co-Issuer (in
each case as certified by an Authorized Officer of the Issuer or the Co-Issuer
to the Trustee), and (xii) any other Person in respect of any other fees or
expenses (including indemnifications) permitted under this Indenture and the
documents delivered pursuant to or in connection with this Indenture and the
Notes and any amendment or other modification of any such documentation, in
each case unless expressly prohibited under this Indenture (including, without
limitation, the payment of all transaction fees and all legal and other fees
and expenses required in connection with the purchase of any Collateral Debt
Securities or any other transaction authorized by this Indenture and any
amounts due in respect of the listing of any Notes on the Irish Stock Exchange);
provided that Company Administrative
Expenses shall not include (a) amounts payable in respect of the Notes, (b)
amounts payable under any Hedge Agreement and (c) any Collateral Management Fee
payable pursuant to the Collateral Management Agreement.


 


“Company
Administrator”:  Maples
Finance Limited, as administrator pursuant to the Company Administration
Agreement, unless a successor Person shall have become


 


23





















 


administrator pursuant to the
Company Administration Agreement, and thereafter, Company Administrator shall
mean such successor Person.


 


“Controlling
Class”:  The Class A-1
Notes, so long as any Class A-1 Notes are Outstanding, then the Class A-2
Notes, so long as any Class A-2 Notes are Outstanding, then the Class B Notes,
so long as Class B Notes are Outstanding, then the Class C Notes, so long as
any Class C Notes are Outstanding, then the Class D Notes, so long as any Class
D Notes are Outstanding, then the Class E Notes, so long as any Class E Notes
are Outstanding, then the Class F Notes, so long as any Class F Notes are
Outstanding, then the Class G Notes, so long as any Class G Notes are Outstanding,
then the Class H Notes, so long as any Class H Notes are Outstanding, then the
Class J Notes, so long as any Class J Notes are Outstanding, then the Class K
Notes, so long as any Class K Notes are Outstanding, and after the Notes are no
longer Outstanding, the Preferred Shares.


 


“Corporate
Trust Office”:  The
principal corporate trust office of the Trustee, currently located at (i) for
Note transfer purposes, Wells Fargo Center, Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention:  Corporate Trust Services – Gramercy Real
Estate CDO 2005-1, Ltd. and (ii) for all other purposes, 9062 Old Annapolis
Road, Columbia, Maryland 21045, Attention:  CDO Trust Services – Gramercy Real Estate CDO
2005-1, Ltd., telephone number (410) 884-2000, or such other address as the
Trustee may designate from time to time by notice to the Noteholders, the
holders of the Preferred Shares, the Collateral Manager, the Rating Agencies,
the Issuer and each Hedge Counterparty or the principal corporate trust office
of any successor Trustee.


 


“Coverage Test Modification”:  The meaning specified in Section 12.5
hereof.


 


“Coverage
Tests”:  The Class A/B
Coverage Tests, the Class C/D/E Coverage Tests and the Class F/G/H Coverage
Tests.


 


“Covered
Fixed Rate Security”:  Any
Fixed Rate Security (including any Above Cap Security) (i) for which the Issuer
has entered into one or more interest rate swap agreements (either individually
or together with other Collateral Debt Securities), which (A) is a market rate
swap that does not require the related Hedge Counterparty to make any upfront payments,
(B) has a term which is at least as long as the expected maturity of such Fixed
Rate Security, (C) requires the related Hedge Counterparty to make floating
rate payments to the Issuer based on the related notional amount based on the
London interbank offered rate for U.S. Dollar deposits in Europe and (D) requires
the Issuer to make fixed rate payments to the related Hedge Counterparty or
(ii) that is subject to a Liability Hedge.


 


“CRE
CDO Security”: 
Collateralized debt obligation, collateralized bond obligation or
collateralized loan obligation (including, without limitation, any synthetic
collateralized debt obligation or synthetic collateralized loan obligation)
that entitles the holder thereof to receive payments that depend (except for
rights or other assets designed to assure the servicing or timely distribution
of proceeds to the holder of such CRE CDO Security) on the cash flow from (and
not the market value of) a portfolio of securities related to commercial
mortgage property.


 


24





















 


“Credit Risk/Defaulted Security Cash Purchase”:
The meaning specified in Section 12.1(b) hereof.


 


“Credit
Risk Security”: Any Collateral Debt Security that, in the
Collateral Manager’s reasonable business judgment, has a significant risk of
declining in credit quality or, with a lapse of time, becoming a Defaulted
Security.


 


“Cure
Advance”:  An advance
by the Collateral Manager, in connection with the exercise of a cure right by
the Issuer, as controlling holder or directing holder or other similar
function, with respect to a Collateral Debt Security.


 


“Current
Portfolio”:  The
portfolio of Collateral Debt Securities and Eligible Investments prior to
giving effect to a proposed reinvestment in a Substitute Collateral Debt
Security.


 


“Custodial Account”:   An account at the Custodial Securities
Intermediary in the name of the Trustee pursuant to Section 10.1(b)
hereof.


 


“Custodial
Securities Intermediary”: 
The meaning specified in Section 3.3(a) hereof.


 


“Dealers”:  Wachovia Capital Markets LLC, Goldman, Sachs
& Co., Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner
& Smith Incorporated.


 


“Default”:  Any Event of Default or any occurrence that
is, or with notice or the lapse of time or both would become, an Event of
Default.


 


“Defaulted
Security”:  Any
Collateral Debt Security or any other security included in the Assets:


 


(i)            with
respect to a Preferred Equity Security (1) with respect to which there has
occurred and is continuing a payment default (after giving effect to any
applicable grace period but without giving effect to any waiver); provided, however, that
notwithstanding the foregoing, a Preferred Equity Security shall not be deemed
to be a Defaulted Security as a result of (A) the related issuer’s failure to
pay dividends or distributions on the initial due date therefor, if the
Collateral Manager or the Issuer consents to extend the due date when such
dividend or distribution is due and payable, and such dividend or distribution
is paid on or before such extended due date (provided
that such dividend or distribution is paid not more than 60 days (or if the due
date for such dividend or distribution was previously so extended, not more
than 30 days) after the initial date that it was due), or (B) the failure of
the issuer or affiliate of the issuer of the Preferred Equity Security to
redeem or purchase such Preferred Equity Security on the date when such
redemption or purchase is required pursuant to the terms of the agreement
setting forth the rights of the holder of that Preferred Equity Security (after
giving effect to all extensions of such redemption or purchase date that the
issuer or affiliate of the issuer of the Preferred Equity Security had the
right to elect and did elect under the terms of the agreement setting forth the
rights of the


 


25





















 


holder of that Preferred Equity Security), if the
Collateral Manager or the Issuer consents to extend such redemption or purchase
date; provided that such consent does not
extend the redemption or purchase date by more than two (2) years after the
redemption or purchase date required under such agreement (that is, the
original redemption or purchase date under such agreement as extended by all
extensions of such date that the issuer or affiliate of the issuer of the Preferred
Equity Security had the right to elect and did elect under the terms of such
agreement) and the amount required to be paid in connection with such
redemption or purchase is paid on or before such extended redemption or
purchase date, or (2) with respect to which there is known to the Issuer or the
Collateral Manager a default (other than any payment default) which default
entitles the holders thereof to accelerate the maturity of all or a portion of
the principal amount of such obligation; provided, however, in each case, if such default is cured or waived
then such asset shall no longer be a Defaulted Security or (3) with respect to
which there is known to the Collateral Manager that (A) any bankruptcy,
insolvency or receivership proceeding has been initiated in connection with the
issuer of such Collateral Debt Security, or (B) there has been proposed or
effected any distressed exchange or other debt restructuring where the issuer
of such Collateral Debt Security has offered the debt holders a new security or
package of securities that either (x) amounts to a diminished financial
obligation or (y) has the purpose of helping the issuer to avoid default, or (4)
that has been rated “CC”, “D” or “SD” or below by S&P or “CC” or below by
Fitch, (5) with respect to which there is known to the Collateral Manager that
the issuer thereof is in default (without giving effect to any applicable grace
period or waiver) as to payment of principal and/or interest on another
obligation (and such default has not been cured or waived) which is senior or pari passu in right of payment to such Collateral Debt
Security, except that a Collateral Debt Security will not constitute a “Defaulted
Security” under this clause (5) if each of the Rating Agencies has confirmed in
writing that such event shall not result in the reduction, qualification or
withdrawal of any rating of the Notes;


 


(ii)           with
respect to a Loan, if a foreclosure or default (whether or not declared) with
respect to the related commercial mortgage loan has occurred; provided, however, that
notwithstanding the foregoing, a Loan shall not be deemed to be a Defaulted
Security as a result of (1) the related borrower’s failure to pay interest on
such Loan or on the related commercial mortgage loan on the initial due date
therefor, if the related lender or holder of such Loan or the related
commercial mortgage loan consents to extend the due date when such interest is
due and payable, and such interest is paid on or before such extended due date (provided that such interest is paid not more than 60 days
(or if the due date for such interest was previously so extended, not more than
30 days) after the initial date that it was due), or (2) the related borrower’s
failure to pay principal on such Loan or the related commercial mortgage loan
on the original maturity date thereof (as defined below), if the related lender
or holder of such Loan or the related commercial mortgage loan consents to
extend such maturity date (so long as the Maturity Extension Requirements are
met) and such principal is paid on or before such extended maturity date, or (3)
the occurrence of any default (other


 


26





















 


than a payment default) with respect to such Loan or
the related commercial mortgage loan, unless and until the earlier of (A)
declaration of default and acceleration of the maturity of the Loan by the
lender or holder thereof and (B) the continuance of such default uncured for 60
days after such default became known to the Issuer or the Collateral Manager
or, subject to the satisfaction of the Rating Agency Condition, such longer
period as the Collateral Manager determines. 
As used herein, the term “original maturity date” means the maturity
date of a Loan or the related commercial mortgage loan as extended by all
extensions thereof which the related borrower had the right to elect and did
elect under the terms of the instruments and agreements relating to such Loan
or the related commercial mortgage loan, but before taking into account any additional
extensions thereof that are consented to by the lender or holder of such Loan
or the related commercial mortgage loan; and


 


(iii)          with
respect to a CMBS Security, CRE CDO Security or REIT Debt Security (1) as to
which there has occurred and is continuing a principal payment default (without
giving effect to any applicable grace period or waiver) or (2) as to which
there is known to the Issuer or the Collateral Manager a default (other than
any payment default) which default entitles the holders thereof to accelerate
the maturity of all or a portion of the principal amount of such obligation; provided, however, in
each case, if such default is cured or waived then such asset shall no longer
be a Defaulted Security or (3) as to which there is known to the Collateral
Manager that (A) any bankruptcy, insolvency or receivership proceeding has been
initiated in connection with the issuer of such CMBS Security, CRE CDO Security
or REIT Debt Security, or (B) there has been proposed or effected any
distressed exchange or other debt re-structuring where the issuer of such CMBS
Security, CRE CDO Security or REIT Debt Security has offered the debt holders a
new security or package of securities that either (x) amounts to a diminished
financial obligation or (y) has the purpose of helping the issuer to avoid
default, or (4) that has been rated “CC”, “D” or “SD” or below by S&P, “CC”
or below by Fitch, or “Ca” or “C” by Moody’s, or with respect to REIT Debt
Securities, the issuer of which has a credit rating of “D” or “SD” or as to
which S&P has withdrawn its rating or (5) as to which there is known to the
Collateral Manager that the issuer thereof is in default (without giving effect
to any applicable grace period or waiver) as to payment of principal and/or
interest on another obligation (and such default has not been cured or waived)
which is senior or pari passu in
right of payment to such CMBS Security, CRE CDO Security or REIT Debt Security,
except that a CMBS Security, CRE CDO Security or REIT Debt Security will not
constitute a “Defaulted Security” under this clause (5) if each of the Rating
Agencies has confirmed in writing that such event shall not result in the
reduction, qualification or withdrawal of any rating of the Notes; or (6) (A)
as to which there has been a failure to pay interest in whole or in part for
the lesser of (x) six months or (y) three payment periods (if such CMBS
Security, CRE CDO Security or REIT Debt Security is rated (or privately rated
for purposes of the issuance of the Securities) below “Baa3” by Moody’s or “BBB-”
by S&P or Fitch); provided, however, if the Rating Agency Condition for such CMBS
Security, CRE CDO Security or REIT Debt Security is satisfied with


 


27





















 


respect to S&P and Moody’s, the Collateral Manager
may choose not to treat such a CMBS Security, CRE CDO Security or REIT Debt
Security as a Defaulted Security or (B) as to which there has been a failure to
pay interest in whole or in part for the lesser of (x) one year or (y) six
consecutive payment periods (if such CMBS Security, CRE CDO Security or REIT
Debt Security is rated (or privately rated for purposes of the issuance of the
Securities) “BBB-” or higher by S&P or Fitch, or “Baa3” or higher by Moody’s)
even if by its terms it provides for the deferral and capitalization of
interest thereon.


 


provided that any Collateral Debt Security which has sustained a
write-down of principal balance in accordance with its terms will not
necessarily be considered a Defaulted Security solely due to such writedown.


 


For purposes of calculating the Par Value Ratios, an
appraisal reduction of a Collateral Debt Security will be assumed to result in
an implied reduction of principal balance for such Collateral Debt Security
only if such appraisal reduction is intended to reduce the interest payable on
such Collateral Debt Security and only in proportion to such interest
reduction.  For purposes of the Par Value
Ratios, any Collateral Debt Security that has sustained an implied reduction of
principal balance due to an appraisal reduction will not be considered a
Defaulted Security solely due to such implied reduction.  The Collateral Manager will notify the
Trustee of any appraisal reductions of Collateral Debt Securities if the
Collateral Manager has actual knowledge thereof.


 


For purposes of the definition of “Defaulted Security,”
the “Maturity Extension Requirements” will be satisfied with respect to any
extension if the maturity date is extended (i) in the case of Loans other than
ARD Loans, to a new maturity date that is (A) not more than two (2) years after
the original maturity date and (B) not less than ten years prior to the Stated
Maturity and (ii) in the case of ARD Loans, such that (A) the anticipated
repayment date will not be less than 15 years prior to the Stated Maturity and
(B) the new maturity date is not less than six (6) months prior to the Stated
Maturity; provided, however, that notwithstanding
the requirements in the foregoing clauses (i) and (ii), “Maturity Extension
Requirements” will be deemed satisfied with respect to any extensions as to
which the Rating Agency Condition has been satisfied.


 


For the avoidance of doubt, the parties hereto
understand and agree that any initial permissible 60 day extension period described
in paragraphs (i) and (ii) of this definition shall in no event be combined
with any subsequent permissible 30 day extension period described in paragraphs
(i) and (ii) of this definition.


 


“Delayed Draw Term Loan”: Any Loan that is
fully committed on the initial funding date of such Loan but is required to be
fully funded in one or more installments but which, once all such installments
have been made, has the characteristics of a term loan; provided
that no Loan with respect to which the additional funding obligation is held
separately outside the Issuer by an affiliate of the Seller or by an
unaffiliated third party shall be deemed to be a “Delayed Draw Term Loan”
hereunder; provided, further,
for purposes of the Coverage Tests and the Collateral Quality Tests, the
principal balance of a Delayed Draw Term Loan, as of any date of determination,
refers to the sum of (i) the outstanding principal balance of such


 


28





















 


Delayed Draw Term Loan and (ii) the amounts on deposit
in the Delayed Funding Obligations Account in respect of the unfunded portion of
such Delayed Draw Term Loan.


 


“Delayed
Funding Obligations Account”: 
The account established pursuant to Section 10.5(a) hereof.


 


“Deposit
Accounts”: The meaning specified in Section 3.3(e)(xii) hereof.


 


“Depository”
or “DTC”:  The Depository Trust
Company, its nominees, and their respective successors.


 


“Determination
Date”:  With respect to
the initial Payment Date, October 19, 2005, and thereafter quarterly on each January
19, April 19, July 19 and October 19 (or if such date is not a Business Day,
then the next succeeding Business Day).


 


“Disqualified
Transferee”:  The meaning
specified in Section 2.5(l) hereof.


 


“Distressed
Debt Security”:  Any
Collateral Debt Security (other than any CMBS Security, CRE CDO Security or
REIT Debt Security owned by the Issuer) relating to real property located in
metropolitan New York or Washington, D.C. on which (i) there is a payment
default, an acceleration, bankruptcy or foreclosure, (ii) a default is highly
likely because the loan-to-value is greater than 100% or (iii) the debt service
on such security exceeds the available cash flow from the underlying property
on a current and projected basis.


 


“Dollar,”
“U.S. $” or “$”:  A U.S. dollar or other equivalent unit in
Cash.


 


“Due
Date”:  Each date on
which a Scheduled Distribution is due on a Pledged Obligation.


 


“Due
Period”:  With respect
to any Payment Date, the period commencing on the day immediately succeeding
the second preceding Determination Date (or commencing on the Closing Date, in
the case of the Due Period relating to the first Payment Date) and ending on
and including the Determination Date immediately preceding such Payment Date.


 


“Effective Date”:  The date which is the earlier
of (i) the 120th day after the Closing Date and (ii) the date on
which the Issuer utilizes the $190,718,894 deposited into the Unused Proceeds
Account on the Closing Date to acquire additional Collateral Debt Securities.


 


“Eligibility
Criteria”:  The
criteria set forth below, which if satisfied with respect to any asset at the
time it is purchased, as evidenced by an Officer’s Certificate of the
Collateral Manager delivered to the Trustee as of the date of such acquisition,
will make such asset eligible for purchase by the Issuer as a Collateral Debt
Security:


 


(i)            it is a Loan or security related to (A) commercial real
estate or (B) undeveloped real estate intended to be developed into residential
property; provided that no Loan shall be secured by
an individual residential property;


 


29





















 


(ii)           it is
issued by an issuer incorporated or organized under the laws of the United
States or a commonwealth, territory or possession of the United States or under
the laws of the Bahamas, Bermuda, Canada, the Cayman Islands, the Channel
Islands, Mexico or the Netherlands Antilles;


 


(iii)          with
respect to each CMBS Security, substantially all the loans backing such
Collateral Debt Security are secured by collateral substantially all of which
is located in the United States or a commonwealth, territory or possession of
the United States and with respect to each REIT Debt Security, the issuer of
such Collateral Debt Security is incorporated or organized under the laws of
the United States or a commonwealth, territory or possession of the United
States;


 


(iv)          it provides for periodic payments of interest (or, in the
case of Preferred Equity Securities, dividends or other distributions) no less
frequently than semi-annually;


 


(v)           it has a Moody’s Rating, a Fitch Rating and an S&P
Rating and, unless otherwise agreed by S&P, such S&P Rating does not
include the subscript “t”;


 


(vi)          its
acquisition would not cause the Issuer, the Co-Issuer or the pool of Pledged
Obligations to be required to register as an investment company under the Investment
Company Act; and if the issuer of such Collateral Debt Security is excepted
from the definition of an “investment company” solely by reason of Section
3(c)(1) of the Investment Company Act, then either (A) such Collateral Debt
Security does not constitute a “voting security” for purposes of the Investment
Company Act or (B) the aggregate amount of such Collateral Debt Security held
by the Issuer is less than 10% of the entire issue of such Collateral Debt
Security;


 


(vii)         (A)
if it is a Loan (including a Mezzanine Loan but excluding an ARD Loan), no
commercial mortgage loan underlying, securing or constituting such Collateral
Debt Security has a maturity date (including any extension option) that is
later than ten (10) years prior to the Stated Maturity, (B) if it is a REIT
Debt Security, such REIT Debt Security (without regard to the maturities of any
collateral underlying such REIT Debt Security) does not have a stated final
maturity later than the Stated Maturity, (C) if it is a CMBS Security, such
CMBS Security (without regard to the maturities of any collateral underlying
such CMBS Security) does not have a rated final maturity later than the Stated
Maturity; provided that up to 5% of the aggregate
principal balance of all Collateral Debt Securities may consist of CMBS
Securities with a rated final maturity of not more than 5 years after the
Stated Maturity, (D) if it is an ARD Loan, (i) the anticipated repayment date
of such ARD Loan is not later than fifteen (15) years prior to the Stated
Maturity and (ii) the new maturity date is not less than six (6) months prior
to the Stated Maturity; provided that
up to 5% of the aggregate principal balance of all Collateral Debt Securities
may consist of ARD Loans with a stated maturity of not more than five (5) years
after the Stated Maturity, (E) if it is a CRE CDO


 


30





















 


Security, it does not have a stated maturity later
than the Stated Maturity; provided that
up to 2% of the aggregate principal balance of all Collateral Debt Securities
may consist of CRE CDO Securities with a stated maturity of not more than 5
years after the Stated Maturity, and (F) if it is a Preferred Equity Security,
the date (after giving effect to all permissible extensions thereof) by which
all distributions on such Preferred Equity Security attributable to the return
of capital by its governing documents are required to be made is not later than
six (6) months prior to the Stated Maturity (after giving effect to all
anticipated settlement concerns in connection with such return of capital);


 


(viii)        it is not prohibited under its Underlying Instruments from
being purchased by the Issuer and pledged to the Trustee;


 


(ix)           it is not, and does not provide for conversion or exchange
into, “margin stock” (as defined under Regulations T, U or X by the Board of
Governors of the Federal Reserve System) at any time over its life;


 


(x)            other
than any Loan with respect to which the Collateral Manager has a reasonable
indication from the related borrower that such borrower plans to prepay such
Loan, it is not the subject of (a) any Offer by the issuer of such security or
by any other person made to all of the holders of such security to purchase or
otherwise acquire such security (other than pursuant to any redemption in
accordance with the terms of the related Underlying Instruments) or to convert
or exchange such security into or for cash, securities or any other type of
consideration or (b) any solicitation by an issuer of such security or any
other person to amend, modify or waive any provision of such security or any
related Underlying Instruments, and has not been called for redemption;


 


(xi)           it is not
an Ineligible Equity Security, Step-Up Security, Step-Down Bond, Market Value
Collateralized Debt Obligation, any security the repayment of which is subject
to substantial non-credit related risk, as determined by the Collateral Manager
in its reasonable business judgment, or a synthetic security;


 


(xii)          except with respect to Preferred Equity Securities, it is
not a security that by the terms of its Underlying Instruments provides for
conversion or exchange (whether mandatory or at the option of the issuer or the
holder thereof) into equity capital at any time prior to its maturity;


 


(xiii)         it is not a financing by a debtor-in-possession in any
insolvency proceeding;


 


(xiv)        except with respect to Delayed Draw Term Loans, it will not
require the Issuer to make any future payments after the initial purchase
thereof;


 


(xv)         its acquisition will be in compliance with Section 206 of the
Advisers Act;


 


31





















 


(xvi)        except with respect to Partially Deferred Loans, it does not
have any outstanding deferred or capitalized interest;


 


(xvii)       it is not a security that, in the Collateral Manager’s
reasonable business judgment, has a significant risk of declining in credit
quality or, with lapse of time or notice, becoming a Defaulted Security;


 


(xviii)      it is not a Defaulted Security (as determined by the
Collateral Manager after reasonable inquiry);


 


(xix)         if
it is a Participation, (a) it is a real estate related Participation, (b) except
in the case of any Initial Collateral Debt Security, the Mayacama Loan or any
other Participation with respect to which the Rating Agency Condition is
satisfied, either (i) the Underlying Term Loan, A Note or B Note has been
included in a transaction that would be classified as a CMBS Conduit Security
or a CMBS Large Loan Security or (ii) the Underlying Term Loan is serviced
pursuant to a commercial mortgage servicing arrangement, which includes the
standard servicing provisions found in CMBS Securities transactions, (c) the
requirements regarding the representations and warranties with respect to the Underlying
Term Loan, the Underlying Mortgage Property (as applicable) and the
Participation set forth in Section 16.5 have been met, (d) the terms of
the Underlying Instruments are consistent with the terms of similar Underlying
Instruments in the CMBS industry and (e) except in the case of any Initial
Collateral Debt Security, if it is a Participation, the Participating
Institution is either a “special purpose vehicle” or qualifies as a “qualified
institutional lender” as typically defined in the Underlying Instruments
related to Participations; provided that a
securitization trust, a CDO issuer or a similar securitization vehicle shall be
deemed to be a “special purpose vehicle” hereunder;


 


(xx)          if it is a
B Note, it is (a) a real estate related B Note, (b) except in the case of any
Initial Collateral Debt Security or any other B Note with respect to which the
Rating Agency Condition is satisfied, either (i) the related A Note has been
included in a transaction that would be classified as a CMBS Conduit Security
or a CMBS Large Loan Security or (ii) the B Note is serviced pursuant to a
commercial mortgage servicing arrangement, which includes the standard
servicing provisions found in CMBS Securities transactions, (c) the
requirements regarding the representations and warranties with respect to the
Underlying Term Loan, the Underlying Mortgage Property (as applicable) and the
B Note set forth in Section 16.5 have been met and (d) the terms of the
Underlying Instruments are consistent with the terms of similar Underlying
Instruments in the CMBS industry;


 


(xxi)         if
it is a Mezzanine Loan (other than the LNR Loan), (a) except in the case of any
Initial Collateral Debt Security or any other Mezzanine Loan with respect to
which the Rating Agency Condition is satisfied, the Mezzanine Loan is serviced
pursuant to a commercial mortgage servicing arrangement, which includes the
standard servicing provisions found in CMBS Securities transactions,


 


32





















 


(b) the requirements regarding the representations and
warranties with respect to the Underlying Term Loan, the Underlying Mortgage
Property (as applicable) and the Mezzanine Loan set forth in Section 16.5
have been met and (c) the terms of the Underlying Instruments are consistent
with the terms of similar Underlying Instruments in the CMBS industry with
respect to Mezzanine Loans;


 


(xxii)        if
it is a Loan (that is not a Participation, a B Note or a Mezzanine Loan), (a) except
in the case of any Initial Collateral Debt Security or any other Loan with
respect to which the Rating Agency Condition is satisfied, it is a real estate
related Loan that is serviced pursuant to (A) the GMACCMC Servicing Agreement
or (B) a commercial mortgage servicing arrangement, which includes the standard
servicing provisions found in CMBS Securities transactions, and (b) the
requirements regarding the representations and warranties with respect to the
Loan and the Underlying Mortgage Property (as applicable) set forth in Section
16.5 have been met;


 


(xxiii)       it is U.S. Dollar denominated and may not, by its terms, be
converted into a security payable in any other currencies;


 


(xxiv)       it is one of the Specified Types;


 


(xxv)        if
it is a Loan or CMBS Security, the principal balance of the Loan or CMBS
Security has not been reduced by a realized loss, expected loss, appraisal
event, appraisal reduction or similar item since initial issuance, other than a
Loan as to which a workout or other restructuring has occurred but as to which
no such reduction has occurred since the completion of such workout or
restructuring;


 


(xxvi)       any requirements regarding opinions with respect to certain
purchases of Collateral Debt Securities as provided in this Indenture have been
met;


 


(xxvii)      if such Collateral Debt Security is an Interest Only
Security, the Rating Agency Condition has been satisfied with respect to the
acquisition of such Interest Only Security;


 


(xxviii)     if such Collateral Debt Security is a Principal Only
Security, the Rating Agency Condition has been satisfied with respect to the
acquisition of such Principal Only Security;


 


(xxix)       its acquisition would not cause Gramercy Investment to fail
to qualify as a “REIT” under the Code;


 


(xxx)        if
such Collateral Debt Security has attached “buy/sell” rights in favor of the
Issuer, such rights are freely assignable by the Issuer to any of its
affiliates; and


 


33





















 


(xxxi)       if such Collateral Debt Security is a CRE CDO Security or a
CMBS Security, at the time it was issued at least one class of the related
issuer’s securities was rated “AAA” (or the equivalent) by one or more
nationally recognized statistical rating organizations.


 


Notwithstanding the foregoing provisions of this
definition, with respect to any Collateral Debt Security acquired by the Issuer
on or prior to the Closing Date, if the Eligibility Criteria above pertains to
the subject matter of a representation and warranty under the related
Collateral Debt Securities Purchase Agreement as to which an exception has been
disclosed in the related exception schedule, such Collateral Debt Security
shall be deemed to satisfy such criterion notwithstanding such exception.


 


“Eligible
Investments”:  Any
Dollar-denominated investment that, at the time it is Granted
to the Trustee (directly or through a Securities Intermediary or bailee), is
Registered and is one or more of the following obligations or securities:


 


(i)            direct
obligations of, and obligations the timely payment of principal of and interest
on which is fully and expressly guaranteed by, the United States, or any agency
or instrumentality of the United States, the obligations of which are expressly
backed by the full faith and credit of the United States;


 


(ii)           demand and
time deposits in, certificates of deposit of, bankers’ acceptances issued by,
or federal funds sold by, any depository institution or trust company
incorporated under the laws of the United States or any state thereof or the
District of Columbia (including the Trustee or the commercial department of any
successor Trustee, as the case may be; provided that
such successor otherwise meets the criteria specified herein) and subject to
supervision and examination by federal and/or state banking authorities so long
as the commercial paper and/or the debt obligations of such depositary
institution or trust company (or, in the case of the principal depositary
institution in a holding company system, the commercial paper or debt
obligations of such holding company) at the time of such investment or
contractual commitment providing for such investment have a credit rating not
less than “A1” by Moody’s, “A+” by Fitch and “A+” by S&P, in the case of
long-term debt obligations, and “P-1” by Moody’s, “F1” by Fitch and “A-1” by
S&P for Eligible Investments which have a maturity of 30 days or less;


 


(iii)          unleveraged
repurchase or forward purchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or guaranteed by
an agency or instrumentality of the United States, in either case entered into
with a depository institution or trust company (acting as principal) described
in clause (ii) above (including Wells Fargo Bank, National Association or the
commercial department of any successor Trustee, as the case may be; provided that such person otherwise meets the criteria
specified herein) or entered into with a corporation (acting as principal)
whose long-term rating is not less than “Aa2” by Moody’s, “AA” by Fitch and “AAA”
by S&P (for so long as any Notes rated by S&P are Outstanding) or whose
short-term credit rating is not less than “P-1” by Moody’s, “F1” by Fitch and “A-1+”
by S&P for Eligible


 


34





















 


Investments which have a maturity of 30 days or less
(for so long as any Notes rated by S&P are Outstanding); provided that the issuer thereof must also have at the time
of such investment a long-term credit rating of not less than “Aa2” by Moody’s,
“A+” by Fitch and “AAA” by S&P (for so long as any Notes rated by S&P
are Outstanding);


 


(iv)          registered
securities bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof or the
District of Columbia that has a credit rating of not less than “Aa2” by Moody’s,
“AA” by Fitch and “AAA” by S&P (for so long as any Notes rated by S&P
are Outstanding) at the time of such investment or contractual commitment
providing for such investment;


 


(v)           commercial
paper or other similar short-term obligations (including that of the Trustee or
the commercial department of any successor Trustee, as the case may be, or any
affiliate thereof; provided that
such person otherwise meets the criteria specified herein) having at the time
of such investment a credit rating of “P-1” by Moody’s, “F1” by Fitch and “A-1+”
by S&P or “A-1” by S&P for Eligible Investments which have a maturity
of 30 days or less (for so long as any Notes rated by S&P are Outstanding);
provided that the issuer thereof must
also have at the time of such investment a senior long-term debt rating of not
less than “Aa3” by Moody’s, “AA” by Fitch and “AA” by S&P (for so long as
any Notes rated by S&P are Outstanding);


 


(vi)          a
reinvestment agreement issued by any bank (if treated as a deposit by such
bank), or a Registered guaranteed investment or reinvestment agreement issued
by an insurance company or other corporation or entity, in each case that has a
credit rating of not less than “P-1” by Moody’s, “F1” by Fitch and “A-1+” by
S&P or “A-1” by S&P for Eligible Investments which have a maturity of 30
days or less (for so long as any Notes rated by S&P are Outstanding); provided that the issuer thereof must also have at the time
of such investment a long-term credit rating of not less than “Aa2” by Moody’s,
“AA” by Fitch and “AAA” by S&P (for so long as any Notes rated by S&P
are Outstanding);


 


(vii)         money
market funds which have at all times the highest credit rating assigned by each
of the Rating Agencies (including funds for which the Trustee or an affiliate
provides services or received compensation); and


 


(viii)        any
other investment similar to those described in clauses (i) through (vii) above
that (1) each of Moody’s and S&P has confirmed may be included in the
portfolio of Pledged Obligations as an Eligible Investment without adversely
affecting its then-current ratings on the Notes and (2) has a long-term credit
rating of not less than “Aa2” by Moody’s, “AA” by Fitch and “AAA” by S&P
(for so long as any Notes rated by S&P are Outstanding) or a credit rating
of not less than “P-1” by Moody’s, “F1” by Fitch and “A-1+” by S&P or “A-1”
by S&P for Eligible Investments which have a maturity of 30 days or less
(for so long as any Notes rated by S&P are Outstanding);


 


35





















 


provided that mortgage-backed
securities and Interest Only Securities shall not constitute Eligible
Investments; and provided, further, that (a)
Eligible Investments acquired with funds in the Collection Accounts shall
include only such obligations or securities as mature no later than the
Business Day prior to the next Payment Date succeeding the acquisition of such
obligations or securities, (b) Eligible Investments shall not include
obligations bearing interest at inverse floating rates, (c) Eligible
Investments shall not include obligations the purchase of which would cause the
Issuer to be engaged in a trade or business within the United States, shall not
have payments subject to foreign or United States withholding tax, shall not be
purchased for a price in excess of par and shall not have an S&P rating
which contains a subscript “r”, “t”, “p”, “pi” or “q” and (d) Eligible
Investments shall not include Margin Stock.


 


For the avoidance of doubt, all credit ratings by
Fitch required under this definition shall be deemed to be Fitch Ratings for
all purposes under this Indenture.


 


“Entitlement Order”:  The meaning specified in Section 8-102(a)(8) of the UCC.


 


“ERISA”:  The United States Employee Retirement Income
Security Act of 1974, as amended.


 


“Euroclear”:  Euroclear Bank S.A./N.V.,
as operator of the Euroclear system.


 


“Event
of Default”:  The
meaning specified in Section 5.1 hereof.


 


“Excepted
Assets”:  (i) The U.S.
$250 of capital contributed by the holder of the ordinary shares of the Issuer
and any interest earned thereon and the bank account in which such monies are
held and the U.S. $250 transaction fee paid to the Issuer and (ii) the
Preferred Shares Distribution Account and all of the funds and other property
from time to time deposited in or credited to the Preferred Shares Distribution
Account.


 


“Exchange
Act”:  The Securities
Exchange Act of 1934, as amended.


 


“Exchange Security”: The meaning specified in Section
12.1(b) hereof.


 


“Expense
Account”:  The account
established pursuant to Section 10.6(a) hereof.


 


“Extended Maturity Date”:  With respect to any Collateral Debt Security,
the maturity date of such Collateral Debt Security, assuming the exercise of
all extension options that are exercisable at the option of the related
borrower under the terms of such Collateral Debt Security.


 


“Extended Weighted Average Maturity”:  As of any Measurement Date with respect to
the Collateral Debt Securities (other than Defaulted Securities), the number
obtained by (i) summing the products obtained by multiplying (a) the remaining
term to maturity (in years, rounded to the nearest one tenth thereof, and based
on the Extended Maturity Date) of each Collateral Debt Security (other than
Defaulted Securities) by (b) the outstanding Principal Balance at such time of
such Collateral Debt Security and (ii) dividing the sum by the Aggregate
Principal Balance at such time of all Collateral Debt Securities (other than
Defaulted Securities).


 


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“Financial
Asset”:  The meaning
specified in Section 8-102(a)(9) of the UCC.


 


“Financing
Statements”:  Financing
statements relating to the Assets naming the Issuer as debtor and the Trustee
on behalf of the Noteholders and each Hedge Counterparty as secured party.


 


“Fitch”:  Fitch Ratings and any successor or successors thereto.


 


“Fitch Applicable Recovery Rate”:  (i) With respect to any Collateral Debt
Security that is a CMBS Security, a CRE Security or a REIT Debt Security on any
Measurement Date, an amount equal to the percentage corresponding to the
domicile and seniority of such Collateral Debt Security, as set forth in Schedule
N (the Fitch Recovery Matrix); provided that
the applicable percentage shall be the percentage corresponding to the rating
of the most senior Outstanding Class of Notes then rated by Fitch and (ii) with
respect to any Collateral Debt Security that is a Loan, the Market Value
thereof.


 


“Fitch
Loan Diversity Index Score” means the amount determined by
the Collateral Manager on any Measurement Date, by the sum of the series of
products obtained for each Collateral Debt Security, by squaring the quotient
of (x) the Principal Balance on such Measurement Date of each such Collateral
Debt Security and (y) the Aggregate Principal Balance of all Collateral Debt
Securities on such Measurement Date, multiplied by 10,000.  In the event that cash has been received in
respect of Principal Proceeds since the immediately preceding Measurement Date
but has not been reinvested in additional Collateral Debt Securities as of the
current Measurement Date, the aggregate amount then held in cash shall be
divided into one or more “Cash Security Exposures.”  Each Cash Security Exposure will be sized in
an amount equal to the result obtained by averaging the Principal Balance of
all Collateral Debt Securities on such Measurement Date; provided that if the
cash position as of such Measurement Date is less than such average, or if
there is cash remaining in an amount less than such average, the Cash Security
Exposure, or the additional Cash Security Exposure, as applicable, represented
thereby will be sized in the actual amount of such cash position.  The Fitch Loan Diversity Index Score shall
then be calculated as the quotient of (x) the Principal Balance on such Measurement
Date of each such Collateral Debt Security and each Cash Security Exposure and (y)
the Aggregate Principal Balance of all Collateral Debt Securities and all Cash
Security Exposures on such Measurement Date, multiplied by 10,000.


 


“Fitch
Loan Diversity Index Test” means a test that will be
satisfied if on any Measurement Date the Fitch Loan Diversity Index Score for
the Collateral Debt Securities is less than 500.


 


“Fitch Rating”: With respect to any Collateral
Debt Security,


 


(a)           if such Collateral Debt Security is rated by Fitch, the
Fitch Rating shall be such rating;


 


(b)           if
such Collateral Debt Security is not rated by Fitch and a rating is published
by both S&P and Moody’s, the Fitch Rating shall be the lower of such
ratings; and if a rating is published by only one of S&P and Moody’s, the
Fitch Rating shall be that published rating by S&P or Moody’s, as the case
may be;


 


37





















 


(c)           if
such Collateral Debt Security is a Loan that is not rated by Fitch, but is
rated by Moody’s or S&P, then the Fitch Rating of such Loan will be deemed
to be “CCC”; provided that Loans (which in the
aggregate) represent not more than 5% of the Aggregate Collateral Balance may be
deemed to have a Fitch Rating pursuant to this paragraph (c); and


 


(d)           in all other circumstances, the Fitch Rating shall be the
private rating assigned by Fitch upon request of the Collateral Manager;


 


provided that (x) if such
Collateral Debt Security has been put on rating watch negative for possible
downgrade by any Rating Agency, then the rating used to determine the Fitch
Rating under either of clauses (a) or (b) above shall be one rating subcategory
below such rating by that Rating Agency, and (y) if such Collateral Debt
Security has been put on rating watch positive for possible upgrade by any
Rating Agency, then the rating used to determine the Fitch Rating under either
of clauses (a) or (b) above shall be one rating subcategory above such rating
by that Rating Agency, and (z) notwithstanding the rating definition described
above, Fitch reserves the right to issue a rating estimate for any Collateral
Debt Security at any time.


 


“Fixed
Rate Excess”:  As of
any Measurement Date, a fraction (expressed as a percentage) the numerator of
which is equal to the product of (i) the greater of zero and the excess, if
any, of the Weighted Average Coupon for such Measurement Date over 7.00% and
(ii) the Aggregate Principal Balance of all Collateral Debt Securities that are
Fixed Rate Securities (excluding all Defaulted Securities and Written Down
Securities) and the denominator of which is the Aggregate Principal Balance of
all Collateral Debt Securities that are Floating Rate Securities (excluding all
Defaulted Securities and Written Down Securities), multiplying the resulting
figure by 360 and then dividing by 365.


 


“Fixed Rate Security”:  Any Collateral Debt Security (including,
without limitation, an Above Cap Security) other than a Floating Rate Security.


 


“Floating
Rate Security”:  Any
Collateral Debt Security which bears interest based upon a floating rate index
(including a floating rate index subject to a cap but other than an Above Cap
Security); provided that any Covered Fixed Rate
Security will be deemed to be a Floating Rate Security for purposes of
calculating the Fixed Rate Excess, Spread Excess, Weighted Average Coupon and
Weighted Average Spread and for purposes of calculating the Spread Excess and
Weighted Average Spread, such Covered Fixed Rate Security shall be assumed to
have a spread (i) above LIBOR equal to the spread over the London interbank
offered rate for U.S. Dollar deposits in Europe for the related swap agreement
or (ii) equal to the sum of (a) the coupon on the underlying related Collateral
Debt Security plus (b) the floating amount receivable from the applicable Hedge
Counterparty under the related swap agreement minus (c) the fixed amount
payable by the Issuer under the applicable swap agreement minus (d) LIBOR.


 


“Form-Approved Liability Hedge”:  A Liability Hedge entered into with respect
to a Covered Fixed Rate Security (i) the documentation of which conforms (but
for the amount and timing of periodic payments, the notional amount, the
effective date, the termination date and other similarly necessary changes) to
a form for which satisfaction of the Rating Agency


 


38





















 


Condition was previously received in respect of the
Notes (as certified to the Trustee by the Collateral Manager), provided that any Rating Agency may withdraw its approval of
a form at any time and (ii) for which the Issuer has provided each Rating
Agency with written notice of the purchase of the related Collateral Debt
Security within five Business Days after such purchase.


 


“General Intangible”:  The meaning specified in Section 9-102(a)(42) of the UCC.


 


“GKK”: 
Gramercy Capital Corp., a Maryland real estate investment trust.


 


“Global
Securities”:  The Rule
144A Global Securities and the Regulation S Global Securities.


 


“GMACCMC”: 
The GMAC Commercial Mortgage Corporation.


 


“GMACCMC Servicing Agreement”:  The servicing agreement dated as of the
Closing Date, among the Issuer, SLG Gramercy, the Collateral Manager and
GMACCMC.


 


“Governing
Documents”:  With
respect to (i) the Issuer, the memorandum and articles of association of the
Issuer, as amended and restated and/or supplemented and in effect from time to
time and (ii) all other Persons, the articles of incorporation, certificate of
incorporation, by-laws, certificate of limited partnership, limited partnership
agreement, limited liability company agreement, certificate of formation,
articles of association and similar charter documents, as applicable to any
such Person.


 


“Government
Items”:  A security
(other than a security issued by the Government National Mortgage Association)
issued or guaranteed by the United States of America or an agency or
instrumentality thereof representing a full faith and credit obligation of the
United States of America and, with respect to each of the foregoing, that is
maintained in book-entry on the records of a Federal Reserve Bank.


 


“Gramercy Investment”:  Gramercy Investment Trust, a Maryland real
estate investment trust.


 


“Grant”:  To grant, bargain, sell, warrant, alienate,
remise, demise, release, convey, assign, transfer, mortgage, pledge, create and
grant a security interest in and right of set-off against, deposit, set over
and confirm.  A Grant of the Pledged
Obligations or of any other security or instrument shall include all rights,
powers and options (but none of the obligations) of the granting party
thereunder, including without limitation the immediate continuing right to
claim, collect, receive and take receipt for principal and interest payments in
respect of the Pledged Obligations (or any other security or instrument), and
all other Monies payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the granting party or otherwise,
and generally to do and receive anything that the granting party is or may be
entitled to do or receive thereunder or with respect thereto.


 


“Hedge
Agreement”:  One or
more interest rate cap agreements, interest rate floor agreements, Interest
Rate Swap Agreements or similar agreements (including Liability Hedges),
including any related ISDA Master Agreement and hedge confirmations, entered
into between


 


39





















 


the Issuer and one or more Hedge Counterparties from
time to time and any additional or replacement interest rate cap or swap
agreements or other agreements that address interest rate exposure, entered
into from time to time between the Issuer and each Hedge Counterparty in
accordance with the terms hereof, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.


 


“Hedge
Collateral Account”:  Each
trust account established pursuant to Section 16.1(e) hereof.


 


“Hedge
Counterparty”:  Any
institution or institutions with whom the Issuer enters into interest rate cap
agreements, interest rate floor agreements, Interest Rate Swap Agreements or
other similar agreements (including Liability Hedges) that address interest
rate exposure, or any permitted assignees or successors of such institutions
under any Hedge Agreements.


 


“Hedge
Counterparty Credit Support”: 
With respect to any Hedge Agreement, the agreement to provide
collateral, if necessary, substantially in the form of the ISDA Credit Support
Annex attached to such Hedge Agreement, which in each case will be
substantially similar to the ISDA Credit Support Annex attached to the
Form-Approved Liability Hedge.


 


“Hedge
Counterparty Credit Support Provider”:  The meaning specified in Section 16.1(a)
hereof.


 


“Hedge
Counterparty Required Rating”: (i) with respect to a Person
as an issuer or with respect to long-term senior unsecured debt of such Person,
(a) “A1” by Moody’s to the extent such Person has a long-term rating only (for
so long as any Notes are Outstanding and are rated by Moody’s); or (b) “A2” by
Moody’s to the extent such Person has both a long-term and short-term rating
and the short-term rating is “P-1” (for so long as any Notes are Outstanding
and are rated by Moody’s); and (ii) with respect to a Person as an issuer or
with respect to long-term senior unsecured debt of such Person, “BBB-”, by
Fitch (for so long as any Notes are Outstanding and are rated by Fitch); and
(iii) with respect to a Person as an issuer or with respect to long term senior
unsecured debt of such Person, “BBB-” by S&P (for so long as any Notes are
Outstanding and are rated by S&P), or a short term rating of such Person, of
“A-3” by S&P (for so long as any Notes are Outstanding and are rated by
S&P); provided that should a Rating Agency
effect an overall downward adjustment of its short-term or long-term ratings,
then the applicable Hedge Counterparty Required Rating shall be downwardly
adjusted accordingly; provided, further, that any adjustment to a rating shall be subject
to the prior written consent of the applicable Rating Agency.


 


“Hedge
Counterparty Collateral Threshold Rating”:  With respect to a person as an issuer or with
respect to the debt of such person, as the case may be, (i) (a) if any Class of
Notes are rated “A” or higher by Fitch, with respect to a Person as an issuer
or with respect to the long-term senior unsecured debt of such Person, “A” (and
the short-term debt of such Person is rated at least “F-1”) or “A+” (if such
Person does not have a short-term debt rating by Fitch), in each case by Fitch
(for so long as any Notes are Outstanding and are rated by Fitch), (b) if any
Class of Notes are rated “A-” or “BBB+” by Fitch, with respect to a Person as
an issuer or with respect to the long-term senior unsecured debt of such
Person, “BBB+” (and the short-term debt


 


40





















 


of such Person is rated at least “F-2”), in each case
by Fitch (for so long as any Notes are Outstanding and are rated by Fitch), or
(c) if any Class of Notes are rated “BBB” or lower by Fitch, with respect to a
Person as an issuer or with respect to the long-term senior unsecured debt of
such Person, a rating equal to the rating on the highest rated Notes, in each
case by Fitch (for so long as any Notes are Outstanding and are rated by Fitch)
and (ii) such rating as shall be satisfactory to S&P (for so long as any
Class of Notes is Outstanding and is rated by S&P) and Moody’s (for so long
as any Class of Notes is Outstanding and is rated by Moody’s) at the time of
entering into the applicable Hedge Agreement and as specifically set forth in
the related Hedge Agreement; provided that
should a Rating Agency effect an overall downward adjustment of its short-term
or long-term ratings, then the applicable Hedge Counterparty Collateral
Threshold Rating shall be downwardly adjusted accordingly; provided,
further, that any adjustment to a rating
shall be subject to the prior written consent of the applicable Rating Agency.


 


“Hedge Payment
Amount”:  With respect
to each Hedge Agreement, the amount of any payment then due and payable
thereunder by the Issuer to each Hedge Counterparty, including without
limitation any payments due and payable upon a termination of such Hedge
Agreement.


 


“Hedge
Termination Account”:  Each
trust account established pursuant to Section 16.1(g) hereof.


 


“Herfindahl
Diversity Test”:  A
test that will be satisfied if on any Measurement Date the Herfindahl Score for
the Collateral Debt Securities is greater than 26.5.  In the event that Cash has been received in
respect of Principal Proceeds of the Collateral Debt Securities since the
immediately preceding Measurement Date but has not been reinvested in
additional Collateral Debt Securities as of the current Measurement Date, the
Herfindahl Diversity Test also will be deemed satisfied on the current
Measurement Date notwithstanding a Herfindahl Score of 26.5 or less if (i) the
Herfindahl Test was satisfied or deemed satisfied on the immediately preceding
Measurement Date and (ii) the reason for the failure on the current Measurement
Date is the existence of such Cash. 
Similarly, if the Herfindahl Diversity Test was not satisfied or deemed
satisfied on the immediately preceding Measurement Date and the Herfindahl
Score has worsened as of the current Measurement Date, the Herfindahl Score as
of the immediately preceding Measurement Date will be deemed to have been
maintained on the current Measurement Date to the extent that the reason for
such worsened Herfindahl Score is the existence of such Cash.


 


“Herfindahl
Score”:  The amount
determined by the Collateral Manager on any Measurement Date, by dividing (i)
one by (ii) the sum of the series of products obtained for each Collateral Debt
Security, by squaring the quotient of (x) the Principal Balance on such
Measurement Date of each such Collateral Debt Security and (y) Aggregate
Principal Balance of all Collateral Debt Securities on such Measurement Date.


 


“Highest
Auction Price”:  The
meaning specified in Section 12.4(b)(iv)
hereof.


 


“Holder”
or “Securityholder”:  With respect to any Note, the Person in whose
name such Note is registered in the Notes Register.  With respect to any Preferred Share, the


 


41





















 


Person in whose name such Preferred Share is
registered in the register maintained by the Share Registrar.


 


“Indenture”:  This instrument as originally executed and,
if from time to time supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
as so supplemented or amended.


 


“Independent”:  As to any Person, any other Person
(including, in the case of an accountant, or lawyer, a firm of accountants or
lawyers and any member thereof or an investment bank and any member thereof)
who (i) does not have and is not committed to acquire any material direct or
any material indirect financial interest in such Person or in any Affiliate of
such Person, and (ii) is not connected with such Person as an Officer,
employee, promoter, underwriter, voting trustee, partner, director or Person
performing similar functions.  “Independent”
when used with respect to any accountant may include an accountant who audits
the books of such Person if in addition to satisfying the criteria set forth
above the accountant is independent with respect to such Person within the
meaning of Rule 101 of the Code of Ethics of the American Institute of
Certified Public Accountants.


 


Whenever any Independent Person’s opinion or
certificate is to be furnished to the Trustee such opinion or certificate shall
state that the signer has read this definition and that the signer is
Independent within the meaning hereof.


 


“Ineligible Equity Security”: Any equity
security or any other security which is not eligible for purchase by the Issuer
as a Collateral Debt Security; provided that
the term “Ineligible Equity Security” will not include any Preferred Equity
Security or any asset backed security structured as a certificate or other form
of beneficial interest.


 


“Initial Collateral Debt Security”:  Any of the Collateral Debt Securities
acquired by the Issuer on the Closing Date or with respect to which the Issuer
has, as of the Closing Date, entered into a binding commitment to purchase.


 


“Initial Deposit”:  Any Cash or Money deposited with the Trustee by
the Issuer on the Closing Date for inclusion as Assets and deposited by the
Trustee in the Unused Proceeds Account on the Closing Date, which shall be
equal to $190,718,914.


 


“Initial Maturity Date”:  With respect to any Collateral Debt Security,
the maturity date of such Collateral Debt Security without giving effect to any
extension options available under the terms of such Collateral Debt Security.


 


“Initial
Purchaser”:  Wachovia
Capital Markets, LLC.


 


“Initial Weighted Average Maturity”:  As of any Measurement Date with respect to
the Collateral Debt Securities (other than Defaulted Securities), the number
obtained by (i) summing the products obtained by multiplying (a) the remaining
term to maturity (in years, rounded to the nearest one tenth thereof, and based
on the Initial Maturity Date) of each Collateral Debt Security (other than
Defaulted Securities) by (b) the Outstanding Principal Balance of such
Collateral Debt Security and (ii) dividing the sum by the Aggregate Principal
Balance at such time of all Collateral Debt Securities (other than Defaulted
Securities).


 


42





















 


“Instrument”:  The meaning specified in Section 9-102(a)(47) of the UCC.


 


“Interest
Accrual Period”:  With
respect to the first Payment Date, the period from and including the Closing
Date to but excluding the initial Payment Date and with respect to each
successive Payment Date, the period from and including the immediately
preceding Payment Date to but excluding such Payment Date.


 


“Interest
Advance”:  The meaning
specified in Section 10.7(a) hereof.


 


“Interest
Collection Account”: 
The trust account established pursuant to Section 10.2(a) hereof.


 


“Interest
Coverage Ratio”: With respect to the Class A Notes and the
Class B Notes (the “Class A/B
Interest Coverage Ratio”), the Class C Notes, the Class D
Notes and the Class E Notes (the “Class C/D/E Interest Coverage Ratio”) or the
Class F Notes, the Class G Notes and the Class H Notes (the “Class F/G/H Interest Coverage Ratio”)
as of any Measurement Date, the ratio calculated by dividing:


 


(1)           (i) the
sum of (A) Cash standing to the credit of the Expense Account, plus (B) the
Scheduled Distributions of interest due (or, in the case of the Preferred
Equity Securities, the scheduled payments of dividends or other distributions
not attributable to the return of capital by their governing documents) due (in
each case regardless of whether the due date for any such interest (or dividend
or other distribution) payment has yet occurred) in the Due Period in which
such Measurement Date occurs on (x) the Collateral Debt Securities (excluding
accrued and unpaid interest on Defaulted Securities); provided
that no interest (or dividends or other distributions) will be included with
respect to any Collateral Debt Security (including, without limitation, the
deferred or capitalized interest component of a Partially Deferred Loan) to the
extent that such Collateral Debt Security does not provide for the scheduled
payment of interest (or dividends or other distributions) in Cash; and (y) the
Eligible Investments held in the Payment Account, the Collection Accounts, the Delayed
Funding Obligations Account and the Expense Account (whether purchased with
Interest Proceeds or Principal Proceeds), plus (C) any net amount (other than
any termination payments) scheduled to be received by the Issuer from any Hedge
Counterparty under any related Hedge Agreement on or before the following
Payment Date, plus (D) Interest Advances, if any, advanced by the Advancing
Agent or the Trustee, in its capacity as Backup Advancing Agent, with respect
to the related Payment Date, minus (ii) the sum of (A) any net amount (other
than any termination payments) scheduled to be paid by the Issuer to any Hedge
Counterparty under any related Hedge Agreement on or before the following
Payment Date, plus, without duplication, (B) any amounts scheduled to be paid pursuant
to Section 11.1(a)(i)(1) through (5); by


 


43





















 


(2)           (i) in the
case of the Class A/B Interest Coverage Ratio, the sum of the scheduled
interest on the Class A-1 Notes, the Class A-2 Notes and the Class B Notes
payable on the Payment Date immediately following such Measurement Date plus
any Class A-1 Defaulted Interest Amount, any Class A-2 Defaulted Interest
Amount and any Class B Defaulted Interest Amount payable on the Payment Date
immediately following such Measurement Date; (ii) in the case of the Class C/D/E
Interest Coverage Ratio, the amount determined by the foregoing clause (i) plus
the scheduled interest on the Class C Notes (including any Class C Defaulted Interest
Amount and interest on Class C Capitalized Interest, if any, but excluding any
Class C Capitalized Interest), the Class D Notes (including any Class D Defaulted
Interest Amount and interest on Class D Capitalized Interest, if any, but
excluding any Class D Capitalized Interest) and the Class E Notes (including
any Class E Defaulted Interest and interest on any Class E Capitalized
Interest, if any, but excluding any Class E Capitalized Interest) payable on
the Payment Date immediately following such Measurement Date; or (iii) in the
case of the Class F/G/H Interest Coverage Ratio, the amount determined by the
foregoing clause (ii) plus the scheduled interest on the Class F Notes
(including any Class F Defaulted Interest Amount and interest on Class F
Capitalized Interest, if any, but excluding any Class F Capitalized Interest), the
Class G Notes (including any Class G Defaulted Interest Amount and interest on
Class G Capitalized Interest, if any, but excluding any Class G Capitalized
Interest) and the Class H Notes (including any Class H Defaulted Interest and
interest on Class H Capitalized Interest, if any, but excluding any Class H
Capitalized Interest), in each case payable on the Payment Date immediately
following such Measurement Date.


 


“Interest
Distribution Amount”: 
Each of the Class A-1 Interest Distribution Amount, Class A-2 Interest
Distribution Amount, Class B Interest Distribution Amount, Class C Interest
Distribution Amount, Class D Interest Distribution Amount, Class E Interest
Distribution Amount, Class F Interest Distribution Amount, Class G Interest
Distribution Amount, Class H Interest Distribution Amount, Class J Interest
Distribution Amount and Class K Interest Distribution Amount.


 


“Interest
Only Security”:  Any
security that by its terms provides for periodic payments of interest on a
notional amount and does not provide for the repayment of a principal amount.


 


“Interest
Proceeds”:  With respect
to any Payment Date, (a) the sum (without duplication) of (i) all Cash payments
of interest (including any amount representing the accreted portion of a
discount from the face amount of an Eligible Investment) or dividends and other
distributions (but excluding distributions on Preferred Equity Securities
attributable to the return of capital by their governing documents) received
during the related Due Period on the Collateral Debt Securities other than Defaulted
Securities (net of the Servicing Fee) and Eligible Investments, including, in
the Collateral Manager’s commercially reasonable discretion (exercised as of
the trade date), the accrued interest received in connection with a sale of
such


 


44





















 


Collateral Debt Securities or Eligible Investments (to
the extent such accrued interest was not applied to the purchase of Substitute
Collateral Debt Securities), in each case, excluding any accrued interest
included in Principal Proceeds pursuant to clause (a)(iv), (v) or (vii) of the
definition of Principal Proceeds, (ii) all make whole premiums, yield
maintenance or any interest amount paid in excess of the stated interest amount
of a Collateral Debt Security received during the related Due Period, (iii) all
amendment and waiver fees, late payment fees, commitment fees, exit fees,
extension fees and other fees and commissions received during such Due Period
in connection with such Collateral Debt Securities and Eligible Investments
(other than, in each such case, fees and commissions received in connection
with the restructuring of a Defaulted Security or default of Collateral Debt
Securities and Eligible Investments), (iv) all payments pursuant to any Hedge
Agreement for the Payment Date immediately following such Due Period (excluding
any amounts payable upon a termination under any Hedge Agreement during such
Due Period), (v) funds in the Unused Proceeds Account designated as Interest
Proceeds by the Collateral Manager pursuant to Section 10.4(c), (vi) funds
in the Expense Account designated as Interest Proceeds by the Collateral
Manager pursuant to Section 10.6(a), (vii) funds remaining on deposit in
the Expense Account upon redemption of the Notes in whole, pursuant to Section
10.6(a), (viii) except for distributions on Preferred Equity Securities
attributable to the return of capital by their governing documents and other
than as specified in item (i) above, all proceeds received in respect of equity
features, if any, of the Collateral Debt Securities, (ix) with respect to any
Defaulted Security sold by the Issuer during the related Due Period, the
excess, if any, of the amount received by the Issuer in connection with such sale
over the par amount of such Defaulted Security, and (x) all payments of
principal on Eligible Investments purchased with proceeds of items (a)(i), (ii)
and (iii) of this definition; provided that
Interest Proceeds will in no event include any payment or proceeds specifically
defined as “Principal Proceeds” in the definition thereof; minus (b) (i) the
aggregate amount of any Nonrecoverable Advances that were previously reimbursed
to the Advancing Agent or the Trustee, in its capacity as Backup Advancing
Agent, and the aggregate amount of any Nonrecoverable Cure Advances reimbursed
to the Collateral Manager during the related Due Period from Interest Proceeds
and (ii) the aggregate amount of any Hedge Payment Amounts that were previously
paid to the applicable Hedge Counterparty from Interest Proceeds during the
related Due Period.


 


“Interest
Rate Swap Agreement” means an interest rate swap agreement,
including any related ISDA Master Agreement and hedge confirmations, for
purposes of managing the Issuer’s interest rate exposure related to the
variable rate of interest applicable to the Notes.


 


“Interest
Shortfall”:  The meaning
set forth in Section 10.7(a) hereof.


 


“Investment
Company Act”:  The
Investment Company Act of 1940, as amended.


 


“Irish Paying Agent”:  J&E Davy, or any successor Irish Paying
Agent under the Irish Paying Agent Agreement.


 


“Irish
Paying Agent Agreement”: 
The agreement between the Issuer and the Irish Paying Agent that will be
entered into in the event that the listing of the Notes on the Irish Stock
Exchange is obtained.


 


45





















 


“Issuer”:  Gramercy Real Estate CDO 2005-1, Ltd., an
exempted company incorporated with limited liability under the laws of the
Cayman Islands, until a successor Person shall have become the Issuer pursuant
to the applicable provisions of this Indenture, and thereafter “Issuer” shall
mean such successor Person.


 


“Issuer
Order” and “Issuer
Request”:  A written
order or request (which may be in the form of a standing order or request)
dated and signed in the name of the Issuer and the Co-Issuer by an Authorized
Officer of each of the Issuer and the Co-Issuer, or by an Authorized Officer of
the Collateral Manager.


 


“Liability Hedge”: Any agreement, in the form
of an interest rate exchange agreement, between the Issuer and a Hedge
Counterparty that is entered into by the Issuer in connection with the purchase
or holding of (i) a Fixed Rate Security or (ii) a Floating Rate Security that
bears interest upon a floating rate index other than LIBOR, and which, in each
case, entitles the Issuer to receive from the related Hedge Counterparty
payments based on LIBOR, plus or minus a spread, at prevailing market rates, as
determined by the Collateral Manager at the date of execution of such
agreement.  In addition to the foregoing,
each Liability Hedge will be subject to the following conditions:


 


(a)           the notional balance of each Liability Hedge shall in no
event exceed the scheduled principal amount of the Collateral Debt Security to
which it is related;


 


(b)           each
Liability Hedge (i) (other than Liability Hedges entered into in respect of an
ARD Loan) will amortize according to the same schedule as, and terminate on the
maturity date of, the Collateral Debt Security to which it is related and (ii)
any such amounts so payable shall be paid in accordance with the Priority of
Payments;


 


(c)           the payment dates of the Liability Hedge must match the
payment dates of either the Collateral Debt Security to which it is related or
the Payment Dates for the Notes;


 


(d)           if
the Collateral Debt Security related to a Liability Hedge (i) is a Defaulted
Security, or (ii) is sold by the Issuer, such Liability Hedge shall be
terminated; provided that if any unscheduled Hedge
Payment Amount is payable by the Issuer under the related Hedge Agreement
solely as a result of the early termination of such Liability Hedge and is not
offset by any amount payable by the relevant Hedge Counterparty, (A) such
Liability Hedge may only be terminated if the Rating Agency Condition with
respect to Moody’s and S&P shall have been satisfied in connection with
such termination and if Fitch shall have been given notice of such termination;
and (B) such Hedge Payment Amount shall be paid in accordance with the Priority
of Payments;


 


(e)           if
the Collateral Debt Security related to such Liability Hedge is not a Defaulted
Obligation and such Collateral Debt Security is called or prepaid, such
Liability Hedge shall be terminated; provided that
if any unscheduled Hedge Payment Amount is payable by the Issuer solely as a
result of the early termination of such Liability Hedge and is not offset by
any amount payable by the relevant Hedge Counterparty, (i) such Liability Hedge
may only be terminated if the Rating Agency


 


46





















 


Condition with respect to
Moody’s and S&P shall have been satisfied in connection with such
termination and if Fitch shall have been given notice of such termination, (ii)
any such Hedge Payment Amount shall first be paid from any call, redemption and
prepayment premiums received from such Collateral Debt Security, and (iii) any
remaining amount so payable shall be paid in accordance with the Priority of
Payments;


 


(f)            except
upon satisfaction of the Rating Agency Condition with respect to Moody’s and
S&P, each Liability Hedge entered into in respect of an ARD Loan will be
for a term that terminates at least three years after the anticipated repayment
date of such ARD Loan; and


 


(g)           each Liability Hedge will contain appropriate limited
recourse and non-petition provisions equivalent (mutatis
mutandis) to those contained in this Indenture.


 


“LIBOR”:  The meaning set forth in Schedule F
attached hereto.


 


“LIBOR
Determination Date”: 
The meaning set forth in Schedule F attached hereto.


 


“List”:  The meaning specified in Section 12.4(a)(ii) hereof.


 


“Listed
Bidders”:  The meaning
specified in Section 12.4(a)(ii) hereof.


 


“LLC Managers”: 
The managers of the Co-Issuer duly appointed by the sole member of the
Co-Issuer (or, if there is only one manager of the Co-Issuer so duly appointed,
such sole manager).


 


“LNR Corporate Loan”:  The Initial Collateral Debt Security known as
the LNR Corporate Loan.


 


“Loan”:
Any U.S. Dollar denominated interest in a senior secured or senior unsecured or
senior or junior subordinated term loan (including, without limitation, a
mortgage loan, an ARD Loan, a Delayed Draw Term Loan, or a B Note (or other
interest in a split loan structure)) or any Participation interest therein, or
any Mezzanine Loan, Single Asset Mortgage Security, Single Borrower Mortgage
Security or Rake Bond.


 


“London
Banking Day”:  The
meaning set forth in Schedule F attached hereto.


 


“Majority”:  With respect to:


 


(i)            any Class of Notes, the Holders of more than 50% of the
Aggregate Outstanding Amount of the Notes of such Class; and


 


(ii)           the Preferred Shares, the Preferred Shareholders
representing more than 50% of the aggregate Notional Amount of the outstanding Preferred
Shares, which are issued and have not been redeemed.


 


47





















 


“Majority Preferred Shares Holder”:  The holder of at least a majority of the
aggregate Notional Amount of the outstanding Preferred Shares.


 


“Mandatory
Redemption”:  The
meaning specified in Section 9.6 hereof.


 


“Margin
Stock”:  As defined
under Regulation U issued by the Board of Governors of the Federal Reserve
System.


 


“Market
Value”:  With respect
to any date of determination and any Collateral Debt Security or Eligible Investment,
an amount equal to (i) the median of the bona fide bids for such Collateral
Debt Security obtained by the Collateral Manager at such time from any three
nationally recognized dealers, which dealers are Independent from one another
and from the Collateral Manager, (ii) if the Collateral Manager is in good
faith unable to obtain bids from three such dealers, the lesser of the bona
fide bids for such Collateral Debt Security obtained by the Collateral Manager
at such time from any two nationally recognized dealers chosen by the
Collateral Manager, which dealers are Independent from each other and the
Collateral Manager, or (iii) if the Collateral Manager is in good faith unable
to obtain bids from two such dealers, the bona fide bid for such Collateral
Debt Security obtained by the Collateral Manager at such time from any
nationally recognized dealer chosen by the Collateral Manager, which dealer is
Independent from the Collateral Manager.


 


“Market
Value Collateralized Debt Obligation”:  Any collateralized debt obligation that is
valued on the basis of the market value of the underlying debt obligations
rather than the cash flow related to the underlying debt obligations.


 


“Maturity”:  With respect to any Note, the date on which
the unpaid principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration or
otherwise.


 


“Mayacama Loan” means a Participation relating
to the Whole Loan collateralized by a private membership golf course and resort
community located in Sonoma, California which the Issuer expects to acquire
during the Ramp-Up Period.


 


“Measurement
Date”:  Any of the
following: (i) the Closing Date, (ii) the date of acquisition or disposition of
any Collateral Debt Security, (iii) any date on which any Collateral Debt
Security becomes a Defaulted Security, (iv) each Determination Date, (v) the
last Business Day of each calendar month (other than any calendar month in
which a Determination Date occurs) and (vi) with reasonable notice to the
Issuer and the Trustee, any other Business Day that any Rating Agency or the Holders
of at least 66 2/3% of the Aggregate Outstanding Amount of any Class of Notes
requests be a “Measurement Date”;
provided that if any such date would
otherwise fall on a day that is not a Business Day, the relevant Measurement
Date will be the immediately preceding Business Day.


 


“Mezzanine
Loan”:  The LNR Loan and
any Loan secured by one or more direct or indirect ownership interests in a
company, partnership or other entity owning, operating or controlling, directly
or through subsidiaries or affiliates, one or more commercial properties,
including a participation interest therein.


 


48





















 


“Minimum Ramp-Up Amount”:  An amount equal to $1,000,000,000.


 


“Minimum
Weighted Average Coupon Test”:  A test that will be satisfied on any Measurement
Date if the Weighted Average Coupon for the Collateral Debt Securities is
greater than or equal to 7.00%.


 


“Minimum
Weighted Average Spread Test”:  A test that will be satisfied as of any
Measurement Date if the Weighted Average Spread as of such Measurement Date for
the Collateral Debt Securities is greater than or equal to 2.75%.


 


“Minnesota Collateral”:  The meaning specified in Section 3.3(v)
hereof.


 


“Money”:  The meaning specified in Section 1-201(24) of
the UCC.


 


“Monthly
Report”:  The meaning
specified in Section 10.9(c) hereof.


 


“Moody’s”:  Moody’s Investors Service, Inc., and its
successors in interest.


 


“Moody’s Maximum Rating Factor Test”:  A test that will be satisfied on any
Measurement Date if the Weighted Average Moody’s Rating Factor does not exceed
4200.


 


“Moody’s
Rating”:  Of any
Collateral Debt Security will be determined as follows:


 


(i)            (x) if
such Collateral Debt Security is publicly rated by Moody’s, the Moody’s Rating
will be such rating, or, (y) if such Collateral Debt Security is not publicly
rated by Moody’s, but the Issuer has requested that Moody’s assign a rating to
such Collateral Debt Security, the Moody’s Rating will be the rating so
assigned by Moody’s;


 


(ii)           with respect to a CMBS Security or REIT Debt Security, if
such CMBS Security or REIT Debt Security is not rated by Moody’s, then the
Moody’s Rating of such CMBS Security or REIT Debt Security may be determined
using any one of the methods below:


 


(A)          with
respect to any REIT Debt Security not publicly rated by Moody’s that is a REIT
Debt Securities—Diversified; REIT Debt Securities—Health Care; REIT Debt
Securities—Hotel; REIT Debt Securities—Industrial; REIT Debt
Securities—Multi-Family; REIT Debt Securities—Office; REIT Debt
Securities—Residential; REIT Debt Securities—Retail; or REIT Debt
Securities—Storage, if such REIT Debt Security is publicly rated by S&P,
then the Moody’s Rating thereof will be (1) one subcategory below the Moody’s
equivalent rating assigned by S&P if the rating assigned by S&P is “BBB”
or greater and (2) two rating subcategories below the Moody’s equivalent rating
assigned by S&P if the rating assigned by S&P is below “BBB”;


 


49





















 


(B)           with
respect to any CMBS Conduit Security not publicly rated by Moody’s, (x) if
Moody’s has rated a tranche or class of CMBS Conduit Security senior to the
relevant issue, then the Moody’s Rating thereof will be one and one-half rating
subcategories below the Moody’s equivalent of the lower of the rating assigned
by S&P and Fitch for purposes of determining the Moody’s Rating Factor and
one rating subcategory below the Moody’s equivalent of the lower rating
assigned by S&P and Fitch for all other purposes and (y) if Moody’s has not
rated any such tranche or class and S&P and Fitch have rated the subject
CMBS Conduit Security, then the Moody’s Rating thereof will be two rating
subcategories below the Moody’s equivalent of the lower of the rating assigned
by S&P and Fitch;


 


(C)           with
respect to any CMBS Large Loan Security not rated by Moody’s, the Issuer or the
Collateral Manager on behalf of the Issuer will request Moody’s to assign a
rating to such CMBS Large Loan Security on a case-by-case basis; and


 


(D)          with respect to any other type of CMBS Security or REIT Debt
Securities of a Specified Type not referred to in clauses (A) through (C) above,
pursuant to subclause (y) of clause (i) above;


 


(iii)          with
respect to corporate guarantees on REIT Debt Securities, if such corporate
guarantees are not publicly rated by Moody’s but another security or obligation
of the guarantor or obligor (an “other security”) is publicly rated by Moody’s,
and no rating has been assigned in accordance with clause (i) above, the Moody’s
Rating of such Collateral Debt Security will be determined as follows:


 


(A)          if the corporate guarantee is a senior secured obligation of
the guarantor or obligor and the other security is also a senior secured
obligation, the Moody’s Rating of such Collateral Debt Security will be the
rating of the other security;


 


(B)           if the corporate guarantee is a senior unsecured obligation
of the guarantor or obligor and the other security is a senior secured
obligation, the Moody’s Rating of such Collateral Debt Security will be one
rating subcategory below the rating of the other security;


 


(C)           if
the corporate guarantee is a subordinated obligation of the guarantor or
obligor and the other security is a senior secured obligation that is: (1)
rated “Ba3” or higher by Moody’s, the Moody’s Rating of such corporate
guarantee will be three rating subcategories below the rating of the other
security; or (2) rated “B1” or lower by Moody’s, the Moody’s Rating of such
corporate guarantee will be two rating subcategories below the rating of the
other security;


 


50





















 


(D)          if
the corporate guarantee is a senior secured obligation of the guarantor or
obligor and the other security is a senior unsecured obligation that is: (1)
rated “Baa3” or higher by Moody’s, the Moody’s Rating of such corporate
guarantee will be the rating of the other security; or (2) rated “Ba1” or lower
by Moody’s, the Moody’s Rating of such corporate guarantee will be one rating
subcategory above the rating of the other security;


 


(E)           if
the corporate guarantee is a senior unsecured obligation of the guarantor or
obligor and the other security is also a senior unsecured obligation, the Moody’s
Rating of such corporate guarantee will be the rating of the other security;


 


(F)           if
the corporate guarantee is a subordinated obligation of the guarantor or
obligor and the other security is a senior unsecured obligation that is: (1)
rated “B1” or higher by Moody’s, the Moody’s Rating of such corporate guarantee
will be two rating subcategories below the rating of the other security; or (2)
rated “B2” or lower by Moody’s, the Moody’s Rating of such corporate guarantee
will be one rating subcategory below the rating of the other security;


 


(G)           if
the corporate guarantee is a senior secured obligation of the guarantor or
obligor and the other security is a subordinated obligation that is: (1) rated “Baa3”
or higher by Moody’s, the Moody’s Rating of such corporate guarantee will be
one rating subcategory above the rating of the other security; (2) rated below “Baa3”
but not rated “B3” by Moody’s, the Moody’s Rating of such corporate guarantee
will be two rating subcategories above the rating of the other security; or (3)
rated “B3” by Moody’s, the Moody’s Rating of such corporate guarantee will be “B2;”


 


(H)          if
the corporate guarantee is a senior unsecured obligation of the guarantor or
obligor and the other security is a subordinated obligation that is: (1) rated “Baa3”
or higher by Moody’s, the Moody’s Rating of such corporate guarantee will be
one rating subcategory above the rating of the other security; or (2) rated “Ba1”
or lower by Moody’s, the Moody’s Rating of such corporate guarantee will also
be one rating subcategory above the rating of the other security; and


 


(I)            if
the REIT Debt Security is a subordinated obligation of the guarantor or obligor
and the other security is also a subordinated obligation, the Moody’s Rating of
such corporate guarantee will be the rating of the other security; or


 


(iv)          if such Collateral Debt Security is a Mezzanine Loan or a
CRE CDO Security, no notching is permitted and the Moody’s Rating will be the
rating so assigned by Moody’s;


 


51





















 


provided that (x) the rating of
either S&P or Fitch used to determine the Moody’s Rating pursuant to any of
clauses (ii) or (iii) above will be (a) a public rating that addresses the
obligation of the obligor (or guarantor, where applicable) to pay principal of
and interest on the relevant Collateral Debt Security in full and is monitored
on an ongoing basis by the relevant Rating Agency or (b) if no such public
rating is available, a rating determined pursuant to a method determined by
Moody’s on a case-by-case basis and (y) the Aggregate Principal Balance of
Collateral Debt Securities the Moody’s Rating of which is based on an S&P
rating or a Fitch rating may not exceed 20% of the Aggregate Principal Balance
of all Collateral Debt Securities; provided, further, that the Moody’s Rating of any Collateral Debt
Security will be reduced one subcategory to the extent it is on credit watch
with negative implications and increased one subcategory to the extent it is on
credit watch with positive implications.


 


“Moody’s
Rating Factor”: 
Relating to any Collateral Debt Security, the number set forth in the
table below opposite the Moody’s Rating of such Collateral Debt Security:


 


	
  Moody’s Rating

  	
   

  	
  Moody’s Rating

  Factor

  	
   

  	
  Moody’s Rating

  	
   

  	
  Moody’s Rating

  Factor

  	
   

  
	
  Aaa

  	
   

  	
  1

  	
   

  	
  Ba1

  	
   

  	
  940

  	
   

  
	
  Aa1

  	
   

  	
  10

  	
   

  	
  Ba2

  	
   

  	
  1,350

  	
   

  
	
  Aa2

  	
   

  	
  20

  	
   

  	
  Ba3

  	
   

  	
  1,766

  	
   

  
	
  Aa3

  	
   

  	
  40

  	
   

  	
  B1

  	
   

  	
  2,220

  	
   

  
	
  A1

  	
   

  	
  70

  	
   

  	
  B2

  	
   

  	
  2,720

  	
   

  
	
  A2

  	
   

  	
  120

  	
   

  	
  B3

  	
   

  	
  3,490

  	
   

  
	
  A3

  	
   

  	
  180

  	
   

  	
  Caa1

  	
   

  	
  4,770

  	
   

  
	
  Baa1

  	
   

  	
  260

  	
   

  	
  Caa2

  	
   

  	
  6,500

  	
   

  
	
  Baa2

  	
   

  	
  360

  	
   

  	
  Caa3

  	
   

  	
  8,070

  	
   

  
	
  Baa3

  	
   

  	
  610

  	
   

  	
  Ca or lower

  	
   

  	
  10,000

  	
   

  



 


“Moody’s
Recovery Rate”:  With
respect to any Collateral Debt Security on any Measurement Date, an amount
equal to (A) if the Specified Type of Collateral Debt Security is included in
the Moody’s Loss Scenario Matrix the percentage for such Collateral Debt
Security set forth in Schedule A (the Moody’s Loss Scenario Matrix)
hereto in (x) the table corresponding to the relevant Specified Type of
Collateral Debt Security, (y) the column in such table setting forth the Moody’s
Rating of such Collateral Debt Security on such Measurement Date and (z) the
row in such table opposite the percentage of the issue of which such Collateral
Debt Security is a part relative to the total capitalization of (including both
debt and equity securities issued by) the relevant issuer of or obligor on such
Collateral Debt Security determined on the date on which such Collateral Debt
Security was originally issued or (B) if the Specified Type of Collateral Debt
Security is not included in the table set forth in Schedule A (the Moody’s
Loss Scenario Matrix) hereto, the Recovery Rate set forth following such table
with respect to the applicable Specified Type.


 


“Moody’s
Special Amortization Pro Rata Condition”:  A condition that will be satisfied with
respect to any Payment Date if either (i) the Collateral Quality Tests (other
than the Weighted Average Coupon Test, the Weighted Average Spread Test and the
S&P CDO Monitor


 


52





















 


Test) are satisfied as of the related Determination
Date or (ii) the Rating Agency Condition has been satisfied with respect to
Moody’s.


 


“Moody’s Weighted Average Extended Maturity Test”:  A test that will be satisfied on any
Measurement Date if the Extended Weighted Average Maturity of the Collateral
Debt Securities as of such Measurement Date is five and one-half (5.5) years or
less.


 


“Moody’s Weighted Average Initial Maturity Test”:  A test that will be satisfied on any
Measurement Date if the Initial Weighted Average Maturity of the Collateral
Debt Securities as of such Measurement Date is four and one-half (4.5) years or
less.


 


“Net
Outstanding Portfolio Balance”:  On any Measurement Date, the sum (without
duplication) of:


 


(i)            the Aggregate Principal Balance on such Measurement Date of
the Collateral Debt Securities (other than Defaulted Securities);


 


(ii)           the
aggregate Principal Balance of all Principal Proceeds held as Cash and Eligible
Investments, all Cash and Eligible Investments held in the Unused Proceeds
Account that have not been designated as Interest Proceeds by the Collateral
Manager with respect to the Effective Date and all Cash and Eligible
Investments held in the Delayed Funding Obligations Account; and


 


(iii)          with respect to each Defaulted Security, the Calculation
Amount of such Defaulted Security.


 


“Non-Advancing Collateral Debt Security”: Any
Collateral Debt Security, other than a CMBS Security or a REIT Debt Security,
with respect to which no servicer or other party is required, under the terms
of the Underlying Instruments governing such Collateral Debt Security, to make
any liquidity advances to ensure the timely receipt of interest by and for the
benefit of the holder of such Collateral Debt Security.


 


“Non-Permitted
Holder”: The meaning specified in Section 2.13(b)
hereof.


 


“Nonrecoverable
Advance”: Any Interest Advance made or proposed to be made
pursuant to Section 10.7 hereof that the Advancing Agent or the Trustee,
as applicable, has determined in its sole discretion, exercised in good faith,
that the amount so advanced or proposed to be advanced plus interest expected
to accrue thereon, will not be ultimately recoverable from subsequent payments
or collections with respect to the Assets.


 


“Nonrecoverable
Cure Advance”:  Any
Cure Advance previously made or proposed to be made pursuant to Section 16.3
hereof with respect to any Collateral Debt Security that the Collateral Manager
has determined in its sole discretion, exercised in good faith, that the amount
so advanced or proposed to be advanced will not be ultimately recoverable from
collections from the specific Collateral Debt Security with respect to which
such Cure Advance was made or proposed to be made.


 


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“Note Interest Rate”:  With respect to the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes, the Class G Notes, the Class H Notes, the
Class J Notes and the Class K Notes, the Class A-1 Rate, the Class A-2 Rate,
the Class B Rate, the Class C Rate, the Class D Rate, the Class E Rate, the
Class F Rate, the Class G Rate, the Class H Rate, the Class J Rate and the
Class K Rate, respectively.


 


“Note
Liquidation Event”: 
The meaning specified in Section 12.1(f) hereof.


 


“Noteholder”:  The Person in whose name such Note is
registered in the Notes Register.


 


“Notes”:  The Class A-1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes and the
Class K Notes, collectively, authorized by, and authenticated and delivered
under, this Indenture or any supplemental indenture.


 


“Notes
Register” and “Notes Registrar”: 
The respective meanings specified in Section 2.5(a) hereof.


 


“Notes
Valuation Report”:  The
meaning specified in Section 10.9(e) hereof.


 


“Notional Amount”:  In respect of the Preferred Shares, the per
share notional amount of $1.00.  The
aggregate Notional Amount of the Preferred Shares on the Closing Date will be $105,000,000.


 


“Offer”:  With respect to any security, (i) any offer
by the issuer of such security or by any other person or entity made to all of
the holders of such security to purchase or otherwise acquire such security
(other than pursuant to any redemption in accordance with the terms of the
related Underlying Instruments) or to convert or exchange such security into or
for Cash, securities or any other type of consideration or (ii) any solicitation
by the issuer of such security or any other person or entity to amend, modify
or waive any provision of such security or any related Underlying Instrument.


 


“Officer”:  With respect to any corporation or limited
liability company, including the Issuer, the Co-Issuer and the Collateral
Manager, any Director, the Chairman of the Board of Directors, the President,
any Senior Vice President any Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, General Partner of such
entity; and with respect to the Trustee, any Trust Officer.


 


“Officer’s
Certificate”:  With
respect to the Issuer, the Co-Issuer and the Collateral Manager, any
certificate executed by an Officer thereof.


 


“Opinion
of Counsel”:  A written
opinion addressed to the Trustee and each Rating Agency in form and substance
reasonably satisfactory to the Trustee, each Rating Agency (and each Hedge
Counterparty, if applicable, pursuant to the provisions below) of an attorney
at law admitted to practice before the highest court of any state of the United
States or the District of Columbia (or the Cayman Islands, in the case of an
opinion relating to the laws of the Cayman


 


54





















 


Islands), which attorney may, except as otherwise
expressly provided in this Indenture, be counsel for the Issuer, and which
attorney shall be reasonably satisfactory to the Trustee.  Whenever an Opinion of Counsel is required
hereunder, such Opinion of Counsel may rely on opinions of other counsel who
are so admitted and so satisfactory which opinions of other counsel shall
accompany such Opinion of Counsel and shall either be addressed to the Trustee
and each Rating Agency or shall state that the Trustee and each Rating Agency
shall be entitled to rely thereon; provided, however,
that such Opinion of Counsel shall be addressed to each Hedge Counterparty (or
each Hedge Counterparty may rely on such Opinion of Counsel) to the extent that
such Opinion of Counsel relates to or affects the interests of each Hedge
Counterparty.


 


“Optional
Redemption”:  The
meaning specified in Section 9.1(c) hereof.


 


“Origination Agreement”:  That certain origination agreement, dated as
of August 2, 2004 between SLG and Gramercy Capital Corp, as modified by the
Origination Agreement Side Letter, dated as of July 14, 2005, among SLG,
Gramercy Capital Corp., GKK Manager LLC and the Issuer.  A copy of the Origination Agreement is hereto
as Exhibit N.


 


“Origination Agreement Security”:  Any Acquired Property or Distressed Debt Security.


 


“Origination Agreement Security Sale”:  The meaning specified in Section 12.1(c)
hereof.


 


“Outstanding”:  With respect to the Notes, as of any date of
determination, all of the Notes or any Class of Notes, as the case may be,
theretofore authenticated and delivered under this Indenture except:


 


(i)            Notes
theretofore canceled by the Notes Registrar or delivered to the Notes Registrar
for cancellation;


 


(ii)           Notes or
portions thereof for whose payment or redemption funds in the necessary amount
have been theretofore irrevocably deposited with the Trustee or the Paying
Agent in trust for the Holders of such Notes pursuant to Section 4.1(a)(ii); provided that
if such Notes or portions thereof are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;


 


(iii)          Notes
in exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, unless proof satisfactory to the Trustee
is presented that any such Notes are held by a holder in due course; and


 


(iv)          Notes
alleged to have been mutilated, destroyed, lost or stolen for which replacement
Notes have been issued as provided in Section 2.6 hereof;


 


provided that in determining
whether the Noteholders of the requisite Aggregate Outstanding Amount have
given any request, demand, authorization, direction, notice, consent or waiver


 


55





















 


hereunder, (x) Notes owned by the Issuer, the
Co-Issuer or any Affiliate thereof shall be disregarded and deemed not to be
Outstanding and (y) in relation to (1) any amendment or other modification of,
or assignment or termination of, any of the express rights or obligations of
the Collateral Manager under the Collateral Management Agreement or this
Indenture (including the exercise of any rights to remove the Collateral
Manager or terminate the Collateral Management Agreement or approve or object
to a replacement for the Collateral Manager except as specifically provided in
the Collateral Management Agreement with respect to the termination of the
Collateral Manager without cause and with respect to the replacement of the
Collateral Manager) and (2) the exercise by the Noteholders of their right, in
connection with certain Events of Default, to accelerate amounts due under the
Notes, Notes owned by the Collateral Manager or any of its Affiliates, or by
any accounts managed by them, shall be disregarded and deemed not to be
Outstanding.  In determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that the
Trustee knows to be so owned shall be so disregarded.  Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right so to act with respect to such
Notes and that the pledgee is not the Issuer, the Collateral Manager or any
other obligor upon the Notes or any Affiliate of the Issuer, the Collateral
Manager or such other obligor.


 


“Par Value Ratio”:  Each of the Class A/B Par Value Ratio, the
Class C/D/E Par Value Ratio and the Class F/G/H Par Value Ratio.


 


“Par Value Test”:  Each of the Class A/B Par Value Test, the
Class C/D/E Par Value Test and the Class F/G/H Par Value Test.


 


“Partially Deferred Loan”: A Loan which by its
terms provides for the payment of interest in two components, one of which is
payable currently on each due date under the Loan and the other of which is either
deferred or capitalized until maturity.


 


“Participating
Institution”:  An
entity that creates a Participation.


 


“Participation”:  An interest in all or part of a Loan acquired
by a participant from a Participating Institution, which participation may be
subordinate to other interests in such Loan and may be further participated
into sub-participations.


 


“Paying
Agent”:  Any Person
authorized by the Issuer and the Co-Issuer to pay the principal of or interest
on any Notes on behalf of the Issuer and the Co-Issuer as specified in Section
7.2 hereof.


 


“Payment
Account”:  The payment
account of the Trustee in respect of the Notes established pursuant to Section
10.3 hereof.


 


“Payment
Date”:  With respect to
each Class of Notes, October 25, 2005, and thereafter quarterly on each January
25, April 25, July 25 and October 25 (or if such day is not a Business Day, the
next succeeding Business Day) to and including the Stated Maturity related to
such Class unless redeemed or repaid prior thereto.


 


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


 


“Plan
Assets”:  The meaning
specified in Section 2.5(g)(vi) hereof.


 


“Pledged
Collateral Debt Security”: 
On any date of determination, any Collateral Debt Security that has been
Granted to the Trustee and not been released from the lien of this Indenture
pursuant to Section 10.10 hereof.


 


“Pledged
Obligations”:  On any
date of determination, any Pledged Collateral Debt Securities and the Eligible
Investments that have been Granted to the Trustee for the benefit of the
Noteholders and each Hedge Counterparty and which form part of the Assets.


 


“Preferred Equity Security”: A security,
providing for regular payments of dividends or other distributions,
representing an equity interest in an entity (including, without limitation, a
partnership or a limited liability company) that is a borrower under a mortgage
loan secured by commercial properties (or in an entity operating or
controlling, directly or through affiliates, such commercial properties), which
is generally senior with respect to the payments of dividends and other
distributions, redemption rights and rights upon liquidation to such entity’s
common equity.


 


“Preferred Shareholder”:  A registered owner of Preferred Shares.


 


“Preferred Shares”:  The preferred shares issued by the Issuer
concurrently with the issuance of the Notes.


 


“Preferred Shares Distribution Account”:  A segregated account established and
designated as such by the Preferred Shares Paying Agent pursuant to the
Preferred Shares Paying Agency Agreement.


 


“Preferred Shares Paying Agency Agreement”:  The Preferred Shares Paying Agency Agreement,
dated as of the Closing Date, between the Issuer and the Preferred Shares
Paying Agent relating to the Preferred Shares, as amended from time to time in
accordance with the terms thereof.


 


“Preferred Shares Paying Agent”:  The Bank, solely in its capacity as Preferred
Shares Paying Agent under the Preferred Shares Paying Agency Agreement and not
individually, unless a successor Person shall have become the Preferred Shares
Paying Agent pursuant to the applicable provisions of the Preferred Shares
Paying Agency Agreement, and thereafter Preferred Shares Paying Agent shall
mean such successor Person.


 


“Primary Servicer”:  Each servicer named in a servicing agreement
among the Issuer, the Collateral Manager and such primary servicer.  Each Primary Servicer is listed opposite the
related Collateral Debt Securities on Schedule O  hereto,
as such schedule may be amended from time to time.


 


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“Principal
Balance” or “par”:  With respect to any Collateral Debt Security
or Eligible Investment, as of any date of determination, the outstanding
principal amount of such Collateral Debt Security or Eligible Investment; provided that:


 


(i)            the
Principal Balance of a Collateral Debt Security received upon acceptance of an
Offer for another Collateral Debt Security, which Offer expressly states that
failure to accept such Offer may result in a default under the Underlying
Instruments, will be deemed to be the Calculation Amount of such other
Collateral Debt Security until such time as Interest Proceeds and Principal
Proceeds, as applicable, are received when due with respect to such other
Collateral Debt Security;


 


(ii)           the Principal Balance of any Eligible Investment that does
not pay Cash interest on a current basis will be the accreted value thereof;


 


(iii)          the
Principal Balance of any Collateral Debt Security that permits the
capitalization or deferral of any interest payable thereon in accordance with
the terms of its Underlying Instruments will be deemed to exclude any deferred
or capitalized interest;


 


(iv)          the Principal Balance of any Preferred Equity Security will
be equal to the component of the liquidation price thereof that is attributable
to the return of capital by its governing documents;


 


(v)           the
Principal Balance of any Written Down Security will exclude any portion of the
principal balance of such security that (x) has been written down as a result
of a “realized loss,” “collateral support deficit,” “additional trust fund
expense” or other event that under the terms of such security results in a
write-down of principal balance or (y) would be affected by an appraisal
reduction;


 


(vi)          the
Principal Balance of a Principal Only Security will be the Aggregate Amortized
Cost of such Principal Only Security; and


 


(vii)         the Principal Balance of an Interest Only Security will be
deemed to be zero.


 


“Principal
Collection Account”: 
The trust account established pursuant to Section 10.2(a) hereof.


 


“Principal
Only Security”:  Any
Collateral Debt Security (other than a Step-Up Security) that does not provide
for payment of interest or provides that all payments of interest will be
deferred until the final maturity thereof.


 


“Principal
Proceeds”:  With
respect to any Payment Date, (a) the sum (without duplication) of (i) all
principal payments (including prepayments and Unscheduled Principal Payments)
received during the related Due Period (excluding those previously reinvested
or designated by the Collateral Manager for reinvestment in Collateral Debt
Securities) on (A)


 


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Eligible Investments (other than Eligible Investments
purchased with Interest Proceeds, Eligible Investments in the Unused Proceeds
Account designated as Interest Proceeds in accordance with the definition
thereof by the Collateral Manager with respect to the Effective Date, Eligible
Investments in the Delayed Funding Obligations Account and Eligible Investments
in the Expense Account and any amount representing the accreted portion of a
discount from the face amount of an Eligible Investment) and (B) Collateral Debt
Securities as a result of (1) a maturity, scheduled amortization, mandatory
prepayment or mandatory sinking fund payment on a Collateral Debt Security, (2)
optional redemptions, prepayments, exchange offers or tender offers made at the
option of the issuer thereof, (3) recoveries on Defaulted Securities or (4) any
other principal payments with respect to Collateral Debt Securities (not
included in Sale Proceeds), (ii) distributions on Preferred Equity Securities
attributable to the return of capital by their governing documents, (iii) all
fees and commissions received during such Due Period in connection with
Eligible Investments and the restructuring or default of such Eligible
Investments, (iv) any interest received during such Due Period on such
Collateral Debt Securities or Eligible Investments to the extent such interest
constitutes proceeds from accrued interest purchased with Principal Proceeds
other than accrued interest purchased by the Issuer on or prior to the Effective
Date and interest included in clause (a)(i) of the definition of Interest
Proceeds, (v) Sale Proceeds received during such Due Period in respect of sales
(excluding those previously reinvested or currently being reinvested in
Collateral Debt Securities in accordance with the Transaction Documents and
excluding accrued interest included in Sale Proceeds (unless such accrued
interest was purchased with Principal Proceeds) that are designated by the
Collateral Manager as Interest Proceeds in accordance with clause (a)(i) of the
definition of Interest Proceeds), (vi) all Cash payments of interest or
dividends received during such Due Period on Defaulted Securities, (vii) any
interest received during such Due Period on a Written Down Security to the
extent such interest constitutes accrued interest on the excess of the principal
amount of such Written Down Security over the Principal Balance of such Written
Down Security, (viii) any proceeds resulting from (A) the termination (in whole
or in part) of any Hedge Agreement during such Due Period to the extent such
proceeds are received from the Hedge Counterparty to such Hedge Agreement and,
to the extent such proceeds exceed the cost of entering into a replacement
Hedge Agreement in accordance with the requirements set forth in Section
16.1(a) hereof, (B) payments received from a replacement Hedge Counterparty
to the extent such proceeds exceed the amount owed to a previous Hedge
Counterparty in connection with the termination of the related Hedge Agreement
and (C) all amounts transferred from each Hedge Termination Account pursuant to
Section 16.1(g) hereof, (ix) during the Reinvestment Period, the Special
Amortization Amount, if any, (x) on the first Payment Date following the Effective
Date, if a Rating Confirmation Failure has not occurred, funds in the Unused
Proceeds Account to the extent the Collateral Manager has not designated such
amounts as Interest Proceeds pursuant to Section 10.4(c) hereof, (xi) funds
transferred to the Principal Collection Account from the Delayed Funding
Obligations Account in respect of amounts previously held on deposit in respect
of unfunded commitments for Delayed Draw Term Loans that have been sold or
otherwise disposed before such commitments thereunder have been drawn or as to
which excess funds remain, (xii) all amounts received during such Due Period in
respect of Defaulted Securities (other than any amounts included in the
definition of “Interest Proceeds” pursuant to item (ix) of the definition
thereof) and (xiii) all other payments received in connection with the
Collateral Debt Securities and Eligible Investments that are not included in
Interest Proceeds; provided that
in no event will Principal Proceeds include any proceeds from the Excepted
Assets; minus (b)(i) the aggregate amount of


 


59





















 


any Nonrecoverable Advances that were previously
reimbursed to the Advancing Agent or the Trustee, in its capacity as Backup
Advancing Agent, and the aggregate amount of any Nonrecoverable Cure Advances
reimbursed to the Collateral Manager during the related Due Period from
Principal Proceeds and (ii) the aggregate amount of any Hedge Payment Amounts
that were previously paid to the applicable Hedge Counterparty from Principal
Proceeds during the related Due Period as a result of the early termination of
the related Liability Hedge from any call, redemption and prepayment premiums
in accordance with clause (e) of the definition of Liability Hedge.


 


“Priority
of Payments”:  The
meaning specified in Section 11.1(a) hereof.


 


“Proceeding”:  Any suit in equity, action at law or other
judicial or administrative proceeding.


 


“Property
Type”:  Each of the
following types of property:


 


(i)            “Diversified Properties”
means properties used by businesses for diverse purposes and other similar
property interests;


 


(ii)           “Healthcare Properties”
means hospitals, clinics, sports clubs, spas and other health care facilities
and other similar real property interests used in one or more similar
businesses (but excluding medical offices);


 


(iii)          “Hospitality Properties”
means hotels, motels, youth hostels, bed and breakfasts and other similar real
property interests used in one or more similar businesses;


 


(iv)          “Industrial Properties”
means factories, refinery plants, breweries and other similar real property
interests used in one or more similar businesses;


 


(v)           “Mixed Use Properties”
means real estate property used by businesses for diverse business purposes and
any similar property interests;


 


(vi)          “Mortgaged
Property” means mortgages and real estate property interests;


 


(vii)         “Multi-Family Properties”
means multi-family dwellings such as apartment blocks, condominiums and
cooperative owned buildings;


 


(viii)        “Retail Properties”
means retail stores, restaurants, bookstores, clothing stores and other similar
real property interests used in one or more similar businesses;


 


(ix)           “Self-Storage Properties”
means self-storage facilities and other similar real property interests used in
one or more similar businesses;


 


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(x)            “Suburban Office Properties”
means office buildings (including medical offices), conference facilities and
other similar real property interests used in the commercial real estate
business in suburban areas;


 


(xi)           “Urban Office Properties”
means office buildings (including medical offices), conference facilities and
other similar real property interests used in the commercial real estate
business in urban areas;


 


(xii)          “Warehouse Properties”
means warehouse facilities and other similar real property interests; and


 


(xiii)         “Other Properties”
means any property other than Diversified Properties, Hospitality Properties,
Industrial Properties, Multi-Family Properties, Urban Office Properties,
Suburban Office Properties, Retail Properties, Self-Storage Properties,
Healthcare Properties, Mixed Use Properties, Mortgaged Properties and Warehouse
Properties.


 


“Proposal”:  The meaning specified in Section 7.18(b)
hereof.


 


“Proposed Portfolio”:  The portfolio of Collateral Debt Securities
and Eligible Investments resulting from the disposition of a Collateral Debt
Security or a proposed reinvestment of Principal Proceeds in a Substitute
Collateral Debt Security, as the case may be.


 


“PTCE”:  The meaning specified in Section 2.5(g)(vi) hereof.


 


“Purchase
Agreement”:  The
purchase agreement relating to the Notes dated on or about the Closing Date by
and among the Issuer, the Co-Issuer and the Dealers.


 


“Purchase Option Purchase Price”:  The meaning specified in Section 16.4 hereof.


 


“Purchase Price”: The purchase price identified
for each Collateral Debt Security against its name in Schedule E.


 


“QIB”:  A “qualified institutional buyer” as defined
in Rule 144A.


 


“QRS
Corp.”:  Gramercy
Investment QRS Corp., a wholly owned subsidiary of Gramercy Investment.


 


“Qualified
Hedge Party”:  A party that:


 


(a)           (i)            at
the time it becomes a Hedge Counterparty, will have with respect to itself as
an issuer or with respect to its debt obligations by Moody’s, Fitch and S&P
of at least equal to the requirements set forth in the definition of “Hedge
Counterparty Collateral Threshold Rating”;


 


(ii)           legally
and effectively accepts the rights and obligations of a Hedge Counterparty in
respect of the Hedge Agreement pursuant to a written agreement reasonably
acceptable to the Issuer and the Trustee; and


 


61





















 


(iii)          is
a recognized dealer in over-the-counter derivatives organized under the laws of
the United States of America or a jurisdiction located in the United States of
America (or another jurisdiction reasonably acceptable to the Issuer and the
Trustee); or


 


(b)           (i)            has,
with respect to becoming a Hedge Counterparty, satisfied the Rating Agency
Condition with respect to Moody’s and S&P; and


 


(ii)           for so
long as any Class of Notes is Outstanding under this Indenture and is rated by
Fitch, (A) has posted collateral in an amount and manner that satisfies the
Rating Agency Condition with respect to Fitch or (B) has caused an entity that
satisfies the ratings criteria set forth in clause (a) of this definition to guarantee
its obligations under the applicable Hedge Agreement.


 


“Qualified
Purchaser”:  A “qualified
purchaser” within the meaning of Section 2(a)(51) of
the Investment Company Act.


 


“Rake Bond”:  A loan-specific commercial mortgage
pass-through certificate or similar security backed by only one of the mortgage
loans included in a pooled securitization transaction, typically representing a
non-pooled component of the related mortgage loan that is subordinate to the
pooled component with respect to the right to receive distributions of
collections on such mortgage loan.


 


“Ramp-Up Period”:  The period commencing on the Closing Date and
ending on the Effective Date.


 


“Rating
Agency”:  Each of Moody’s,
Fitch and S&P and any successor thereto, or, with respect to Pledged
Obligations generally, if at any time Moody’s, Fitch or S&P or any such
successor ceases to provide rating services with respect to the Notes or
certificates similar to the Notes, any other nationally recognized investment
rating agency selected by the Issuer and reasonably satisfactory to each Hedge
Counterparty and a Majority of the Notes voting as a single Class.


 


“Rating
Agency Condition”:  With
respect to any proposed action or matter, the receipt by the Trustee of
confirmation in writing from the applicable Rating Agencies that the then
current ratings on the Notes, as applicable, shall not be reduced, qualified or
withdrawn as a result of such action or matter; provided,
however, that for purposes of this
definition, “Rating Agencies” shall not be deemed to include Fitch unless the
proposed action or matter relates to any amendment or modification, or any
proposed amendment or modification, to any Transaction Document.


 


“Rating Confirmation Failure”:  The meaning specified in Section 7.18(b)
hereof.


 


“Record
Date”:  The date on
which the Holders of Notes entitled to receive a payment in respect of
principal or interest on the succeeding Payment Date is determined, such date
as to any Payment Date being the 15th day (whether or not a Business Day) prior
to the applicable Payment Date.


 


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“Redemption
Date”:  Any Payment
Date specified for a redemption of the Securities pursuant to Section 9.1
or 9.2 hereof.


 


“Redemption
Date Statement”:  The meaning
specified in Section 10.9(i) hereof.


 


“Redemption
Price”: The Redemption Price of each Class of Notes and the Preferred
Shares will be calculated as follows:


 


Class A-1 Notes.  The redemption price of the Class A-1 Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class A-1 Notes to be redeemed, together
with the Class A-1 Interest Distribution Amount (plus any Class A-1 Defaulted
Interest Amount) due on that day of redemption;


 


Class A-2 Notes.  The redemption price of the Class A-2 Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class A-2 Notes to be redeemed, together
with the Class A-2 Interest Distribution Amount (plus any Class A-2 Defaulted
Interest Amount) due on that day of redemption;


 


Class B Notes.  The redemption price of the Class B Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class B Notes to be redeemed, together with
the Class B Interest Distribution Amount (plus any Class B Defaulted Interest
Amount) due on that day of redemption;


 


Class C Notes.  The redemption price of the Class C Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class C Notes to be redeemed, together with
the Class C Interest Distribution Amount (plus any Class C Capitalized Interest
and any Class C Defaulted Interest Amount) due on that day of redemption;


 


Class D Notes.  The redemption price of the Class D Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class D Notes to be redeemed, together with
the Class D Interest Distribution Amount (plus any Class D Capitalized Interest
and any Class D Defaulted Interest Amount) due on that day of redemption;


 


Class E Notes.  The redemption price of the Class E Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class E Notes to be redeemed, together with
the Class E Interest Distribution Amount (plus any Class E Capitalized Interest
and any Class E Defaulted Interest Amount) due on that day of redemption;


 


Class F Notes.  The redemption price of the Class F Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class F Notes to be redeemed, together with
the Class F Interest Distribution Amount (plus any Class F Capitalized Interest
and any Class F Defaulted Interest Amount) due on that day of redemption;


 


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Class G Notes.  The redemption price of the Class G Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class G Notes to be redeemed, together with
the Class G Interest Distribution Amount (plus any Class G Capitalized Interest
and any Class G Defaulted Interest Amount) due on that day of redemption;


 


Class H Notes.  The redemption price of the Class H Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class H Notes to be redeemed, together with
the Class H Interest Distribution Amount (plus any Class H Capitalized Interest
and any Class H Defaulted Interest Amount) due on that day of redemption;


 


Class J Notes.  The redemption price of the Class J Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class J Notes to be redeemed, together with
the Class J Interest Distribution Amount (plus any Class J Capitalized Interest
and any Class J Defaulted Interest Amount) due on that day of redemption;


 


Class K Notes.  The redemption price of the Class K Notes
will be calculated on the related Determination Date and will be equal to the
Aggregate Outstanding Amount of the Class K Notes to be redeemed, together with
the Class K Interest Distribution Amount (plus any Class K Capitalized Interest
and any Class K Defaulted Interest Amount) due on that day of redemption;


 


Preferred Shares.  The redemption price for the Preferred Shares
will be calculated on the related Determination Date and will be equal to the
sum of all net proceeds and Cash, if any, remaining after redemption of the
Notes and payments of all amounts and expenses described under subclauses (1)
through (5), (31), (32), and (33) of Section 11.1(a)(i); provided that if there are no such net proceeds or Cash remaining,
the redemption price for the Preferred Shares shall be equal to $0.


 


“Reference
Banks”:  The meaning
set forth in Schedule F attached hereto.


 


“Registered”:  With respect to any debt obligation, a debt
obligation that is issued after July 18, 1984, and that is in registered form
for purposes of the Code.


 


“Registered Security”:  The meaning specified in Section 3.3(a)(iii) hereof.


 


“Regulation
S”:  Regulation S under
the Securities Act.


 


“Regulation
S Global Security”: 
The meaning specified in Section 2.2(b)(ii)
hereof.


 


“Reimbursement
Interest”:  Interest
accrued on the amount of any Interest Advance made by the Advancing Agent or
the Trustee, for so long as it is outstanding, at the Reimbursement Rate.


 


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“Reimbursement Rate”:  A rate per annum equal to the “prime rate” as
published in the “Money Rates” section of The Wall Street Journal, as such “prime
rate” may change from time to time.


 


“Reinvestment Criteria”:  The meaning specified in Section 12.2(a)
hereof.


 


“Reinvestment Income”:  Any interest or other earnings on the Initial
Deposit or funds in the Unused Proceeds Account that have not been designated
as Interest Proceeds by the Collateral Manager with respect to the Effective
Date.


 


“Reinvestment
Period”:  The period
beginning on the Closing Date and ending on and including the first to occur of
the following events or dates:  (i) the
end of the Due Period related to the Payment Date in July 2010; (ii) the end of
the Due Period related to the Payment Date immediately following the date on
which the Collateral Manager (with the written consent of Holders of the
Majority of the Preferred Shares) notifies the Trustee that, in light of the
composition of Collateral Debt Securities, general market conditions and other
factors, investments in additional Collateral Debt Securities within the
foreseeable future would be either impractical or not beneficial to the Issuer
and the holders of the Preferred Shares; (iii) the end of the Due Period
related to the date on which all of the Securities are redeemed as described
herein under Section 9.1 and (iv) the date on which the principal of and
accrued and unpaid interest on the Notes are declared immediately due and
payable pursuant to Section 5.2 hereof following the occurrence of an
Event of Default.


 


“REIT Debt Securities”: REIT Debt
Securities—Diversified, REIT Debt Securities—Health Care, REIT Debt
Securities—Hotel, REIT Debt Securities—Industrial, REIT Debt
Securities—Mortgage, REIT Debt Securities—Multi Family, REIT Debt
Securities—Office, REIT Debt Securities—Retail and REIT Debt
Securities—Storage.


 


“REIT Debt Securities—Diversified”:  Collateral Debt Securities issued by a real
estate investment trust (as defined in Section 856 of the Code or any successor
provision) whose assets consist (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the
Collateral Debt Securities) of mortgages on a portfolio of diverse real
property interests, provided that
(a) any Collateral Debt Security falling within this definition will be
excluded from the definition of each other Specified Type of Collateral Debt
Security and (b) any Collateral Debt Security falling within any other REIT
Debt Security description set forth herein will be excluded from this
definition.


 


“REIT Debt Securities—Health Care”:  Collateral Debt Securities issued by a real
estate investment trust (as defined in Section 856 of the Code or any successor
provision) whose assets consist (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the
Collateral Debt Securities) of mortgages on hospitals, clinics, sport clubs,
spas and other health care facilities and other similar real property interests
used in one or more similar businesses, provided that
any Collateral Debt Security falling within this definition will be excluded
from the definition of each other Specified Type of Collateral Debt Security.


 


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“REIT Debt Securities—Hotel”:  Collateral Debt Securities issued by a real
estate investment trust (as defined in Section 856 of the Code or any successor
provision) whose assets consist (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the
Collateral Debt Securities) of mortgages on hotels, motels, youth hostels, bed
and breakfasts and other similar real property interests used in one or more
similar businesses, provided that
any Collateral Debt Security falling within this definition will be excluded
from the definition of each other Specified Type of Collateral Debt Security.


 


“REIT Debt Securities—Industrial”:  Collateral Debt Securities issued by a real
estate investment trust (as defined in Section 856 of the Code or any successor
provision) whose assets consist (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the
Collateral Debt Securities) of mortgages on factories, refinery plants,
breweries and other similar real property interests used in one or more similar
businesses, provided that any Collateral Debt
Security falling within this definition will be excluded from the definition of
each other Specified Type of Collateral Debt Security.


 


“REIT Debt Securities—Mortgage”:  Collateral Debt Securities issued by a real
estate investment trust (as defined in Section 856 of the Code or any successor
provision) whose assets consist (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the
Collateral Debt Securities) of mortgages, commercial mortgage backed
securities, collateralized mortgage obligations and other similar mortgage related
securities (including Collateral Debt Securities issued by a hybrid form of
such trust that invests in both commercial real estate and commercial
mortgages), provided that any Collateral Debt
Security falling within this definition will be excluded from the definition of
each other Specified Type of Collateral Debt Security.


 


“REIT Debt Securities—Multi Family”:  Collateral Debt Securities issued by a real
estate investment trust (as defined in Section 856 of the Code or any successor
provision) whose assets consist (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the
Collateral Debt Securities) of residential mortgages on multi family dwellings
such as apartment blocks, condominiums and co operative owned buildings, provided that any Collateral Debt Security falling within
this definition will be excluded from the definition of each other Specified
Type of Collateral Debt Security.


 


“REIT Debt Securities—Office”:  Collateral Debt Securities issued by a real
estate investment trust (as defined in Section 856 of the Code or any successor
provision) whose assets consist (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the Collateral
Debt Securities) of mortgages on office buildings, conference facilities and
other similar real property interests used in the commercial real estate
business, provided that any Collateral Debt
Security falling within this definition will be excluded from the definition of
each other Specified Type of Collateral Debt Security.


 


“REIT Debt Securities—Retail”:  Collateral Debt Securities issued by a real
estate investment trust (as defined in Section 856 of the Code or any successor
provision) whose assets consist (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the
Collateral Debt Securities) of mortgages on retail stores, restaurants,
bookstores, clothing stores and other similar real property interests used in
one or more similar


 


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businesses, provided
that any Collateral Debt Security falling within this definition will be
excluded from the definition of each other Specified Type of Collateral Debt
Security.


 


“REIT Debt Securities—Storage”:  Collateral Debt Securities issued by a real
estate investment trust (as defined in Section 856 of the Code or any successor
provision) whose assets consist (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the
Collateral Debt Securities) of storage facilities and other similar real
property interests used in one or more similar businesses, provided
that any Collateral Debt Security falling within this definition will be
excluded from the definition of each other Specified Type of Collateral Debt
Security.


 


“Repurchase Price”: The meaning specified in Section
16.5(c) hereof.


 


“Rule
144A”:  Rule 144A under
the Securities Act.


 


“Rule
144A Global Security”: 
The meaning specified in Section 2.2(b)(i)
hereof.


 


“Rule
144A Information”:  The
meaning specified in Section 7.13 hereof.


 


“S&P”:  Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc., and its successors in interest.


 


“S&P
CDO Monitor”:  A
dynamic, analytical computer model provided prior to the initial Payment Date by
S&P to the Collateral Manager and the Trustee, with written instructions
and assumptions to be applied when running such computer model, for the purpose
of estimating the default risk of a pool of Collateral Debt Securities.


 


“S&P CDO Monitor Test”:  A test that will be satisfied on any
Measurement Date if, after giving effect to any purchase or sale of a
Collateral Debt Security (or both), as the case may be, (i) the Class A-1 Loss
Differential, the Class A-2 Loss Differential, the Class B Loss Differential,
the Class C Loss Differential, the Class D Loss Differential, the Class E Loss
Differential, the Class F Loss Differential, the Class G Loss Differential, the
Class H Loss Differential, the Class J Loss Differential or the Class K Loss
Differential, as the case may be, of the Proposed Portfolio is equal to or
greater than zero or (ii) the Class A-1 Loss Differential, the Class A-2 Loss
Differential, the Class B Loss Differential, the Class C Loss Differential, the
Class D Loss Differential, the Class E Loss Differential, the Class F Loss
Differential, the Class G Loss Differential, the Class H Loss Differential, the
Class J Loss Differential or the Class K Loss Differential, as the case may be,
of the Proposed Portfolio is greater than or equal to the Class A-1 Loss
Differential, the Class A-2 Loss Differential, the Class B Loss Differential,
the Class C Loss Differential, the Class D Loss Differential, the Class E Loss
Differential, the Class F Loss Differential, the Class G Loss Differential, the
Class H Loss Differential, the Class J Loss Differential or the Class K Loss
Differential, as the case may be, of the Current Portfolio.


 


“S&P
Rating”:  Of any
Collateral Debt Security will be determined as follows:


 


(i)            if
S&P has assigned a rating to such Collateral Debt Security either publicly
or privately (in the case of a private rating, with the appropriate consents
for the use of such private rating), the S&P Rating shall be the rating
assigned


 


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thereto by S&P (or, in the case of a REIT Debt
Security, the issuer credit rating assigned by S&P), provided that,
notwithstanding the foregoing, if any Collateral Debt Security shall, at the
time of its purchase by the Issuer, be listed for a possible upgrade or
downgrade on S&P’s then current credit rating watch list, then the S&P
Rating of such Collateral Debt Security shall be one subcategory above or
below, respectively, the rating then assigned to such item by S&P, as
applicable; provided that if such Collateral Debt
Security is removed from such list at any time, it shall be deemed to have its
actual rating by S&P;


 


(ii)           if such
Collateral Debt Security is not rated by S&P but the Issuer or the
Collateral Manager on behalf of the Issuer has requested that S&P assign a
rating to such Collateral Debt Security, the S&P Rating shall be the rating
so assigned by S&P; provided that
pending receipt from S&P of such rating, if such Collateral Debt Security
is of a type listed on Schedule C hereto or is not eligible for notching
in accordance with Schedule D hereto, such Collateral Debt Security
shall have an S&P Rating of “CCC-”, otherwise such S&P Rating shall be
the rating assigned according to Schedule D hereto until such time as
S&P shall have assigned a rating thereto; or


 


(iii)          if
any Collateral Debt Security is a Collateral Debt Security that has not been
assigned a rating by S&P and is not a Collateral Debt Security listed in Schedule
C hereto, as identified by the Collateral Manager, the S&P Rating shall
be the rating assigned according to Schedule D hereto; provided that if any Collateral Debt Security shall, at the
time of its purchase by the Issuer, be listed for a possible upgrade or
downgrade on either Moody’s or Fitch’s then current credit rating watch list,
then the S&P Rating of such Collateral Debt Security shall be one
subcategory above or below, respectively, the rating then assigned to such item
in accordance with Schedule D hereto; provided,
further, that the Aggregate Principal
Balance that may be given a rating based on this paragraph (c) may not exceed
20%, of the Aggregate Principal Balance of all Collateral Debt Securities.


 


“S&P
Recovery Rate”:  With
respect to any Collateral Debt Security on any Measurement Date, an amount
equal to the percentage for such Collateral Debt Security set forth in
Schedule B (the Standard & Poor’s Recovery Matrix) hereto (or, in the
case of a Defaulted Security under Clause A of Schedule B (the
Standard & Poor’s Recovery Matrix) hereto, corresponding to the S&P
Rating at the time of issuance of such Collateral Debt Security).


 


“S&P Recovery Test”:  A test that will be satisfied on any
Measurement Date if the S&P Weighted Average Recovery Rate (based upon the
Principal Balance of the Collateral Debt Securities) is greater than 39% for
each Class of Notes.


 


“S&P
Special Amortization Pro Rata Condition”: A condition that
will be satisfied with respect to any Payment Date if either (i) the aggregate
principal balance of the Collateral Debt Securities as of the related
Determination Date is greater than an amount equal to 50% of the aggregate
principal balance of the Collateral Debt Securities on the Effective Date and
the S&P CDO Monitor Test is satisfied as of such Determination Date or (ii)
the Rating Agency Condition has been satisfied with respect to S&P.


 


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“S&P Weighted Average Recovery Rate”:  With respect to the Collateral Debt
Securities, as of any Measurement Date, the number obtained by summing the
products obtained by multiplying the Principal Balance of each Collateral Debt
Security, other than a Defaulted Security, by its S&P Recovery Rate, and dividing
such sum by the Aggregate Principal Balance of all such Collateral Debt
Securities and rounding up to the first decimal place.


 


“Sale”:  The meaning specified in Section 5.17(a)
hereof.


 


“Sale
Proceeds”:  All
proceeds (including accrued interest) received with respect to Collateral Debt
Securities and Eligible Investments as a result of sales of such Collateral
Debt Securities and Eligible Investments, in accordance with this Indenture, net
of any reasonable out-of-pocket expenses of the Collateral Manager or the
Trustee in connection with any such sale.


 


“Schedule of Closing Date Collateral Debt
Securities”:  The Collateral Debt
Securities listed on Schedule E attached hereto, which Schedule shall
include the Principal Balance, interest rate (if the security bears interest at
a fixed rate) or the spread and the relevant floating reference rate (if the
security bears interest at a floating rate), the maturity date, the Moody’s
Rating, S&P Rating and Fitch Rating, if any, of each such Collateral Debt
Security.


 


“Scheduled
Distribution”:  With
respect to any Pledged Obligation, for each Due Date, the scheduled payment of
principal, interest or fee or any dividend or premium payment due on such Due
Date or any other distribution with respect to such Pledged Obligation,
determined in accordance with the assumptions specified in Section 1.2
hereof.


 


“Secured Parties”:  Collectively, the Trustee, the Noteholders,
each Hedge Counterparty (for so long as it is a party under its Hedge
Agreement) and the Collateral Manager, each as their interests appear in
applicable Transaction Documents.


 


“Securities”: 
Collectively, the Notes and the Preferred Shares.


 


“Securities Account”:  The meaning specified in Section 8-501(a) of
the UCC.


 


“Securities Accounts Control Agreement”:  The meaning specified in Section 3.3(a)
hereof.


 


“Securities
Act”:  The Securities
Act of 1933, as amended.


 


“Securities
Intermediary”:  The
meaning specified in Section 8-102(a)(14) of the UCC.


 


“Security
Entitlement”:  The
meaning specified in Section 8-102(a)(17) of the UCC.


 


“Seller”:  The meaning specified in the applicable
Collateral Debt Securities Purchase Agreement.


 


“Senior
Collateral Management Fee”: 
The fee payable quarterly in arrears on each Payment Date to the
Collateral Manager pursuant to this Indenture and the Collateral


 


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Management Agreement, equal to 0.15% per annum of the Net Outstanding Portfolio Balance for such
Payment Date, to the extent funds are available for such purpose in accordance
with the Priority of Payments.


 


“Senior
Notes”:  Collectively,
the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes, the Class G Notes and the Class H Notes.


 


“Senior
Tranche”:  (i) With
respect to a Participation or B Note, any senior interest in the same
Underlying Term Loan as a Participation or any senior debt secured by the same
Underlying Mortgage Property as a B Note or Participation and (ii) with respect
to a Mezzanine Loan, any commercial mortgage loan related to the same
Underlying Mortgage Property or Properties as the Mezzanine Loan.


 


“Servicing Agreement”:  The GMACCMC Servicing Agreement, the
Administrative Servicing Agreement and any other servicing agreement entered into
by the Issuer, the Collateral Manager and any other servicer.


 


“Servicing Fee”:  With respect to each Due Period, the sum of
(i) the aggregate amount of all servicing fees payable to the Primary Servicers
under the related primary servicing agreements during such Due Period, including
servicing fees payable to GMACCMC pursuant to the GMACCMC Servicing Agreement, (ii)
the SLG Gramercy Administrative Fee and (iii) the aggregate amount of all
special servicing fees in respect of serviced loans payable to (x) SLG Gramercy
under the Asset Servicing Agreement and (y) any other special servicer pursuant
to the related special servicing agreement between the Issuer and such special
servicer, in each case during such Due Period.


 


“Share Registrar”:  Maples Finance Limited, unless a successor
Person shall have become the Share Registrar pursuant to the applicable
provisions of the Preferred Shares Paying Agency Agreement, and thereafter “Share
Registrar” shall mean such successor Person.


 


“Similar
Law”:  The meaning
specified in Section 2.5(g)(vi) hereof.


 


“Single Asset Mortgage Security”:  A commercial mortgage pass-through
certificate or similar security backed primarily by a single mortgage loan on
one or more commercial properties included in a property-specific
securitization transaction.


 


“Single Borrower Mortgage Security”:  A commercial mortgage pass-through
certificate or similar security backed primarily by one or more mortgage loans
to the same borrower (or affiliated borrowers) on one or more commercial properties
included in a securitization.


 


“SLG”: 
SL Green Operating Partnership L.P.


 


“SLG Gramercy”: 
SLG Gramercy Services LLC, a Delaware limited liability company.


 


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“SLG Gramercy Administrative Fee”:  A fee which is equal to the 0.15% of the “book
value” of each Collateral Debt Security (other than any CMBS Security rated
investment grade at the time of issuance thereof, any CRE CDO Security or any REIT
Debt Security, in each case owned by the Issuer) payable to SLG Gramercy under
the Asset Servicing Agreement during such Due Period; provided,
however, that the SLG Gramercy
Administrative Fee will be reduced by the fees payable to the Primary Servicers
to the extent described on Schedule O hereto during such Due
Period.  During any period in which SLG
Gramercy is acting as special servicer under the Asset Servicing Agreement with
respect to a Collateral Debt Security which is subject to special servicing
thereunder, SLG Gramercy will not be entitled to the SLG Gramercy
Administrative Fee with respect to such Collateral Debt Security.


 


“Special
Amortization”:  The
meaning specified in Section 9.7 hereof.


 


“Special
Amortization Amount”: 
The meaning specified in Section 9.7 hereof.


 


“Specified
Person”:  The meaning
specified in Section 2.6(a) hereof.


 


“Specified Type”:  Each of a Loan, CMBS Security, CRE CDO
Security, REIT Debt Security and Preferred Equity Security.


 


“Spread
Excess”:  As of any
Measurement Date, a fraction (expressed as a percentage), the numerator of
which is equal to the product of (a) the greater of zero and the excess, if
any, of the Weighted Average Spread for such Measurement Date over 2.75% and
(b) the Aggregate Principal Balance of all Collateral Debt Securities that are
Floating Rate Securities (excluding all Defaulted Securities and Written Down
Securities) and the denominator of which is the Aggregate Principal Balance of
all Collateral Debt Securities that are Fixed Rate Securities (excluding all
Defaulted Securities and Written Down Securities), multiplying the resulting
figure by 365 and then dividing by 360.


 


“Starrett Lehigh Loan”:  The Initial Collateral Debt Security
identified as the Starrett Lehigh Loan.


 


“Stated Maturity”:  The Payment Date occurring in July, 2035.


 


“Step-Down
Bond”:  A security
which by the terms of the related Underlying Instruments provides for a
decrease, in the case of a Fixed Rate Security, in the per annum
interest rate on such security or, in the case of a Floating Rate Security, in
the spread over the applicable index or benchmark rate, solely as a function of
the passage of time; provided that the
term Step-Down Bond shall not include any such security providing for payment
of a constant rate of interest at all times after the date of acquisition by
the Issuer or any Loan.


 


“Step-Up
Security”:  A security
with a current interest rate of zero percent per annum
at the time of purchase but which increases to predetermined levels on specific
dates; provided that the term Step-Up Security
shall not include any Loan.


 


“Subordinate
Collateral Management Fee”: 
The fee payable quarterly in arrears on each Payment Date to the
Collateral Manager pursuant to this Indenture and the Collateral Management
Agreement, in an amount equal to 0.25% per annum of
the Net Outstanding


 


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Portfolio Balance, to the extent funds are available for such purpose in accordance with the
Priority of Payments.


 


“Subordinate
Interests”:  The Class A-2
Subordinate Interests, the Class B Subordinate Interests, the Class C
Subordinate Interests, the Class D Subordinate Interests, the Class E
Subordinate Interests, the Class F Subordinate Interests, the Class G
Subordinate Interests, the Class H Subordinate Interests, the Class J
Subordinate Interests and/or the Class K Subordinate Interests, as the context
may require.


 


“Subsequent
Collateral Debt Security”: 
Any Collateral Debt Security that is acquired after the Closing Date.


 


“Substitute
Collateral Debt Security”: 
A Collateral Debt Security that is acquired by the Issuer in
substitution for securities previously pledged to the Trustee in accordance
herewith.


 


“Successful
Auction”:  (i) An
Auction which is conducted in accordance with Section 9.2(b) or (ii) the
purchase of Collateral Debt Securities by the Collateral Manager or its
Affiliates for a price equal to the Total Redemption Price pursuant to Section
12.4(c).


 


“Tax
Event”: Means (i) any obligor is, or on the next scheduled
payment date under any Collateral Debt Security, will be, required to deduct or
withhold from any payment under any Collateral Debt Security to the Issuer for
or on account of any tax for whatever reason and such obligor is not required
to pay to the Issuer such additional amount as is necessary to ensure that the
net amount actually received by the Issuer (free and clear of taxes, whether
assessed against such obligor or the Issuer) will equal the full amount that
the Issuer would have received had no such deduction or withholding been
required, (ii) any jurisdiction imposes net income, profits, or similar tax on
the Issuer, (iii) the Issuer is required to deduct or withhold from any payment
under a Hedge Agreement for or on account of any tax and the Issuer is
obligated to make a gross up payment (or otherwise pay additional amounts) to
the Hedge Counterparty, (iv) a Hedge Counterparty is required to deduct or
withhold from any payment under a Hedge Agreement for or on account of any tax
for whatever reason and such Hedge Counterparty is not required to pay to the
Issuer such additional amount as is necessary to ensure that the net amount
actually received by the Issuer (free and clear of taxes, whether assessed
against such obligor or the Issuer) will equal the full amount that the Issuer
would have received had no such deduction or withholding been required or (v)
the Issuer fails to maintain its status as a qualified REIT subsidiary (within
the meaning of Section 856(i)(2) of the Code).


 


“Tax
Materiality Condition”: 
The condition that will be satisfied if either (i) as a result of the
occurrence of a Tax Event, a tax or taxes are imposed on the Issuer or withheld
from payments to the Issuer and with respect to which the Issuer receives less
than the full amount that the Issuer would have received had no such deduction
occurred, and such amount exceeds, in the aggregate, U.S. $1 million during any
12-month period or (ii) the Issuer fails to maintain its status as a qualified
REIT subsidiary (within the meaning of Section 856(i)(2) of the Code).


 


“Tax
Opinion”:  A written
opinion addressed to the Issuer, in form and substance reasonably satisfactory
to the Issuer, of Cadwalader, Wickersham & Taft LLP or another


 


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nationally recognized U.S. tax counsel, admitted to practice
(or a law firm with one or more partners admitted to practice) before the
highest court of any state of the United States or the District of Columbia and
experienced in such matters for which such Tax Opinion is sought.


 


“Tax
Redemption”:  The meaning
specified in Section 9.1(b) hereof.


 


“Total
Redemption Price”:  The
amount equal to funds sufficient to pay all amounts and expenses described
under clauses (1) through (5), (31), (32) and (33) of Section 11.1(a)(i) and to redeem all Notes at their applicable
Redemption Prices.


 


“Transaction
Documents”:  This
Indenture, the Collateral Management Agreement, the Collateral Debt Securities
Purchase Agreements, the Servicing Agreements, the Company Administration
Agreement, the Preferred Shares Paying Agency Agreement and each Hedge
Agreement.


 


“Transfer
Agent”:  The Person or
Persons, which may be the Issuer, authorized by the Issuer to exchange or
register the transfer of Notes.


 


“Treasury
Regulations”: 
Temporary or final regulations promulgated under the Code by the United
States Treasury Department.


 


“Trust
Officer”:  When used
with respect to the Trustee, any officer within the CDO Trust Services Group of
the Corporate Trust Office (or any successor group of the Trustee) including
any vice president, assistant vice president or officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate
trust matter is referred at the CDO Trust Services Group of the Corporate Trust
Office because of his knowledge of and familiarity with the particular subject.


 


“Trustee”:  Wells Fargo Bank, National Association, a
national banking association, solely in its capacity as trustee hereunder,
unless a successor Person shall have become the Trustee pursuant to the
applicable provisions of this Indenture, and thereafter “Trustee” shall mean
such successor Person.


 


“UCC”:  The applicable Uniform Commercial Code.


 


“UCC Account”: 
“Account,” as such term is
defined in Section 9-102(a)(2) of the UCC.


 


“Uncertificated
Security”:  The meaning
specified in Section 3.3(a)(ii) hereof.


 


“Underlying
Instruments”:  The
indenture, loan agreement, note, mortgage, intercreditor agreement, pooling and
servicing agreement, participation agreement or other agreement pursuant to
which a Collateral Debt Security or Eligible Investment has been issued or
created and each other agreement that governs the terms of or secures the
obligations represented by such Collateral Debt Security or Eligible Investment
or of which holders of such Collateral Debt Security or Eligible Investment are
the beneficiaries.


 


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“Underlying
Mortgage Property”: 
With respect to (i) a Loan (other than a Participation or Mezzanine
Loan), the commercial mortgage property or properties securing the Loan, (ii) a
Participation, the commercial mortgage property or properties securing the
Underlying Term Loan, or (iii) a Mezzanine Loan, the commercial mortgage
property or properties related to the Mezzanine Loan.


 


“Underlying
Term Loan”:  With
respect to (i) a Loan (other than Participation or Mezzanine Loan), such Loan
or (ii) a Participation, the underlying commercial mortgage loan.


 


“United
States”: The United States of America, including any state
and any territory or possession administered thereby.


 


“Unregistered
Securities”:  The
meaning specified in Section 5.17(c) hereof.


 


“Unscheduled
Principal Payments”: 
Any proceeds received by the Issuer from an unscheduled prepayment or
redemption (in whole but not in part) by the obligor of a Collateral Debt
Security prior to the stated maturity date of such Collateral Debt Security.


 


“Unused Proceeds Account”:  The trust account established pursuant to Section
10.4(a) hereof.


 


“U.S.
Person”: The meaning specified in Regulation S.


 


“Weighted
Average Coupon”:  As of
any Measurement Date, (a) the number obtained (rounded up to the next 0.001%)
by (i) summing the products obtained by multiplying (x) the current interest
rate on each Collateral Debt Security that is a Fixed Rate Security (excluding
all Defaulted Securities and Written Down Securities) by (y) the Principal
Balance of each such Collateral Debt Security and (ii) dividing such sum by the
Aggregate Principal Balance of all Collateral Debt Securities that are Fixed
Rate Securities (excluding all Defaulted Securities and Written Down
Securities) plus (b) if the amount obtained pursuant to clause (a) is less than
7.00%, the Spread Excess, if any, as of such Measurement Date.


 


“Weighted
Average Life”:  As of
any Measurement Date with respect to the Collateral Debt Securities (other than
Defaulted Securities), the number obtained by (a) summing the products obtained
by multiplying (i) the Average Life at such time of each Collateral Debt
Security (other than Defaulted Securities) by (ii) the outstanding Principal
Balance of such Collateral Debt Security and (b) dividing such sum by the
Aggregate Principal Balance at such time of all Collateral Debt Securities
(other than Defaulted Securities).


 


“Weighted
Average Life Test”: 
With respect to any Collateral Debt Securities, a test that will be
satisfied as of any Measurement Date if the Weighted Average Life of such
Collateral Debt Securities as of such Measurement Date is less than or equal to
4.5 years.


 


“Weighted
Average Moody’s Rating Factor”:  The amount determined by summing the products
obtained by multiplying the Principal Balance of each Collateral Debt Security
(excluding Defaulted Securities) by its Moody’s Rating Factor, dividing such
sum by the Aggregate Principal Balance of all such obligations and rounding the
result up to the nearest whole number.


 


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“Weighted
Average Spread”:  As of
any Measurement Date, (a) the number obtained (rounded up to the next 0.001%),
by (i) summing the products obtained by multiplying (x) the stated spread above
LIBOR at which interest accrues on each Collateral Debt Security that is a
Floating Rate Security (other than a Defaulted Security or Written Down
Security) as of such date by (y) the Principal Balance of such Collateral Debt
Security as of such date, and (ii) dividing such sum by the Aggregate Principal
Balance of all Collateral Debt Securities that are Floating Rate Securities
(excluding all Defaulted Securities and Written Down Securities) plus (b) if
the amount obtained pursuant to clause (a) is less than 2.75%, the Fixed Rate
Excess, if any, as of such Measurement Date. 
For purposes of this definition, a Fixed Rate Security that is subject
to a Liability Hedge will be deemed to be a Floating Rate Security and the
floating rate applicable thereto shall be the rate payable taking into account
the related Liability Hedge.


 


“Whole Loan”:  
A whole loan secured by a mortgage on commercial real estate property or
a senior interest therein.


 


“Written
Down Security”:  As of
any date of determination, any Collateral Debt Security as to which the
aggregate par amount of the entire issue of such Collateral Debt Security and
all other securities secured by the same pool of collateral and that rank
senior in priority of payment to such issue exceeds the aggregate par amount of
all collateral (giving effect to any appraisal reductions) securing such issue
(excluding defaulted collateral).


 


Section 1.2             Assumptions
as to Pledged Obligations.


 


(a)      In connection
with all calculations required to be made pursuant to this Indenture with
respect to Scheduled Distributions on any Pledged Obligation, or any payments
on any other assets included in the Assets, and with respect to the income that
can be earned on Scheduled Distributions on such Pledged Obligations and on any
other amounts that may be received for deposit in the applicable Collection
Account, the provisions set forth in this Section 1.2 shall be applied.


 


(b)      All
calculations with respect to Scheduled Distributions on the Pledged Obligations
securing the Notes shall be made on the basis of information as to the terms of
each such Pledged Obligation and upon report of payments, if any, received on
such Pledged Obligation that are furnished by or on behalf of the issuer of
such Pledged Obligation and, to the extent they are not manifestly in error,
such information or report may be conclusively relied upon in making such
calculations.


 


(c)      For each Due
Period, the Scheduled Distribution on any Pledged Obligation (other than a
Defaulted Security, which, except as otherwise provided herein, shall be
assumed to have a Scheduled Distribution of zero) shall be the sum of (i) the
total amount of payments and collections in respect of such Pledged Obligation
(including all Sales Proceeds received during the Due Period and not reinvested
in Substitute Collateral Debt Securities or retained in the Principal
Collection Account for subsequent reinvestment) that, if paid as scheduled,
will be available in the Collection Accounts at the end of such Due Period for
payment on the Notes and of expenses of the Issuer and the Co-Issuer pursuant
to the Priority of Payments and (ii) any such amounts received in prior Due Periods
that were not


 


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disbursed on a
previous Payment Date and do not constitute amounts which have been used as
reimbursement with respect to a prior Interest Advance pursuant to the terms of
this Indenture.


 


(d)      With respect to
any Collateral Debt Security as to which any interest or other payment thereon
is subject to withholding tax of any relevant jurisdiction, each Scheduled
Distribution thereon shall, for purposes of the Coverage Tests and the Collateral
Quality Tests, be deemed to be payable net of such withholding tax unless the
issuer thereof or obligor thereon is required to make additional payments to
fully compensate the Issuer for such withholding taxes (including in respect of
any such additional payments). On any date of determination, the amount of any
Scheduled Distribution due on any future date shall be assumed to be made net
of any such uncompensated withholding tax based upon withholding tax rates in
effect on such date of determination.


 


(e)      For purposes of
calculating any Interest Coverage Ratio, the expected interest income on
floating rate Collateral Debt Securities and Eligible Investments and under
each Hedge Agreement and the expected interest payable on the Notes shall be
calculated using (i) the interest rates applicable thereto on the applicable
Measurement Date and (ii) accrued original issue discount on Eligible
Investments shall be deemed to be Scheduled Distributions of interest due on
the date such original issue discount is scheduled to be paid.  Notwithstanding the foregoing, for the
purposes of calculating any Interest Coverage Ratio, there shall be excluded
all scheduled or deferred payments of interest on or principal of Collateral
Debt Securities and any payment, including any amount payable to the Issuer by
each Hedge Counterparty, which the Collateral Manager has determined in its
reasonable judgment shall not be made in Cash or received when due.


 


(f)       Each Scheduled
Distribution receivable with respect to a Pledged Obligation shall be assumed
to be received on the applicable Due Date, and each such Scheduled Distribution
shall be assumed to be immediately deposited in the applicable Collection
Account except to the extent the Collateral Manager has a reasonable expectation
that such Scheduled Distribution will not be received on the applicable Due
Date.  All such funds shall be assumed to
continue to earn interest until the date on which they are required to be
available in the applicable Collection Account for transfer to the Payment
Account for application, in accordance with the terms hereof, to payments of
principal of or interest on the Notes or other amounts payable pursuant to this
Indenture.


 


(g)      All
calculations required to be made and all reports which are to be prepared
pursuant to this Indenture with respect to the Pledged Obligations, shall be
made on the basis of the date on which the Issuer makes a commitment to
purchase or sell an asset (the “trade
date”), not the settlement date.


 


(h)      For purposes of
calculating the Par Value Ratio, an appraisal reduction of a Collateral Debt
Security will be assumed to result in an implied reduction of Principal Balance
for such Collateral Debt Security only if such appraisal reduction is intended
to reduce the interest payable on such Collateral Debt Security and only in
proportion to such interest reduction. 
For purposes of the Par Value Ratio, any Collateral Debt Security that
has sustained an implied reduction of Principal Balance due to an appraisal
reduction will not be considered a Defaulted Security solely due to such
implied reduction.  The Collateral
Manager


 


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will
notify the Trustee of any appraisal reductions of Collateral Debt Securities if
the Collateral Manager has actual knowledge thereof.


 


Section 1.3             Interest
Calculation Convention.


 


All calculations of interest hereunder that are made
with respect to the Notes shall be made on the basis of the actual number of
days during the related Interest Accrual Period divided by 360.


 


Section 1.4             Rounding
Convention.


 


Unless otherwise specified herein, test calculations
that evaluate to a percentage will be rounded to the nearest hundredth of a
percentage point and test calculations that evaluate to a number or decimal
will be rounded to 2 decimal places.


 


ARTICLE 2


 


THE NOTES


 


Section 2.1             Forms
Generally.


 


The Notes and the Trustee’s or Authenticating Agent’s
certificate of authentication thereon (the “Certificate of Authentication”) shall be in
substantially the forms required by this Article 2, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may be consistent herewith, determined by the Authorized Officers of the
Issuer and the Co-Issuer, executing such Notes as evidenced by their execution
of such Notes.  Any portion of the text
of any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note.


 


Section 2.2             Forms
of Notes and Certificate of Authentication.


 


(a)      Form.  The form of each Class of Notes, including
the Certificate of Authentication, shall be substantially as set forth in Exhibits
A and B hereto.


 


(b)      Global
Securities and Certificated Notes.


 


(i)            The
Senior Notes initially offered and sold in the United States to (or to U.S.
Persons who are) QIBs shall be represented by one or more permanent global
notes in definitive, fully registered form without interest coupons with the
applicable legend set forth in Exhibit A hereto added to the form of
such Notes (each, a “Rule 144A
Global Security”), which shall be registered in the name of
the nominee of the Depository and deposited with the Trustee, at its Corporate
Trust Office, as custodian for the Depository, duly executed by the Issuer and
the Co-Issuer and authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the Rule
144A Global Securities


 


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may
from time to time be increased or decreased by adjustments made on the records
of the Trustee or the Depository or its nominee, as the case may be, as
hereinafter provided.


 


(ii)           The Senior
Notes initially sold in offshore transactions in reliance on Regulation S shall
be represented by one or more permanent global notes in definitive, fully
registered form without interest coupons with the applicable legend set forth
in Exhibit B hereto added to the form of such Notes (each, a “Regulation S Global Security”),
which shall be deposited on behalf of the subscribers for such Notes
represented thereby with the Trustee as custodian for the Depository and
registered in the name of a nominee of the Depository for the respective
accounts of Euroclear and Clearstream, Luxembourg or their respective
depositories, duly executed by the Issuer and the Co-Issuer and authenticated
by the Trustee as hereinafter provided. 
The aggregate principal amount of the Regulation S Global Securities may
from time to time be increased or decreased by adjustments made on the records
of the Trustee or the Depository or its nominee, as the case may be, as
hereinafter provided.


 


(iii)          The
Class J Notes and the Class K Notes initially sold in the United States to QRS
Corp. pursuant to a transaction exempt from registration under Section 4(2) of
the Securities Act shall be represented by one or more Certificated Notes in
definitive, fully registered form without interest coupons with the applicable
legend set forth in Exhibit B, duly executed by the Issuer and
authenticated by the Trustee or Authenticating Agent as hereinafter
provided.  No Class J Note or Class K
Note shall be issued in the form of a Global Security.


 


(c)      Book-Entry
Provisions.  This Section 2.2(c)
shall apply only to Global Securities deposited with or on behalf of the
Depository.


 


Each of the Issuer and Co-Issuer shall execute and the
Trustee shall, in accordance with this Section 2.2(c), authenticate and
deliver initially one or more Global Securities that shall be (i) registered in
the name of the nominee of the Depository for such Global Security or Global
Securities and (ii) delivered by the Trustee to such Depository or pursuant to
such Depository’s instructions or held by the Trustee’s agent as custodian for
the Depository.


 


Agent Members shall have no rights under this
Indenture with respect to any Global Security held on their behalf by the
Trustee, as custodian for the Depository or under the Global Security, and the
Depository may be treated by the Issuer, the Co-Issuer, the Trustee, and any
agent of the Issuer, the Co-Issuer or the Trustee as the absolute owner of such
Global Security for all purposes whatsoever. 
Notwithstanding the foregoing, nothing herein shall prevent the Issuer,
the Co-Issuer, the Trustee, or any agent of the Issuer, the Co-Issuer or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Global Security.


 


(d)      Delivery of Certificated
Notes in Lieu of Global Securities. 
Except as provided in Section 2.10 hereof, owners of beneficial
interests in a Class of Global Securities shall not be entitled to receive
physical delivery of a Certificated Note.


 


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Section 2.3             Authorized
Amount; Stated Maturity; and Denominations.


 


(a)      The aggregate
principal amount of Notes that may be authenticated and delivered under this
Indenture is limited to $895,000,000, except for Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Notes pursuant to Sections 2.5, 2.6 or 8.5 hereof.


 


Such Notes shall be divided into eleven (11) Classes
having designations and original principal amounts as follows:


 


	
  Designation

  	
   

  	
  Original

  Principal

  Amount

  	
   

  
	
  Class A-1 Senior
  Secured Floating Rate

  	
   

  	
   

  	
   

  
	
  Term Notes due
  2035

  	
   

  	
  $

  	
  513,000,000

  	
   

  
	
  Class A-2 Second
  Priority Senior Secured Floating Rate

  	
   

  	
   

  	
   

  
	
  Term Notes due
  2035

  	
   

  	
  $

  	
  57,000,000

  	
   

  
	
  Class B Third
  Priority Floating Rate

  	
   

  	
   

  	
   

  
	
  Term Notes due
  2035

  	
   

  	
  $

  	
  102,500,000

  	
   

  
	
  Class C Fourth
  Priority Floating Rate Capitalized Interest

  	
   

  	
   

  	
   

  
	
  Term Notes due
  2035

  	
   

  	
  $

  	
  47,000,000

  	
   

  
	
  Class D Fifth
  Priority Floating Rate Capitalized Interest

  	
   

  	
   

  	
   

  
	
  Term Notes due
  2035

  	
   

  	
  $

  	
  12,500,000

  	
   

  
	
  Class E Sixth
  Priority Floating Rate Capitalized Interest

  	
   

  	
   

  	
   

  
	
  Term Notes due
  2035

  	
   

  	
  $

  	
  16,000,000

  	
   

  
	
  Class F Seventh
  Priority Floating Rate Capitalized Interest Term Notes due 2035

  	
   

  	
  $

  	
  16,000,000

  	
   

  
	
  Class G Eighth
  Priority Floating Rate Capitalized Interest Term Notes due 2035

  	
   

  	
  $

  	
  18,500,000

  	
   

  
	
  Class H Ninth
  Priority Floating Rate Capitalized Interest Term Notes due 2035

  	
   

  	
  $

  	
  28,000,000

  	
   

  
	
  Class J Tenth
  Priority Floating Rate Capitalized Interest Term Notes due 2035

  	
   

  	
  $

  	
  49,500,000

  	
   

  
	
  Class K Eleventh
  Priority Floating Rate Capitalized Interest Term Notes due 2035

  	
   

  	
  $

  	
  35,000,000

  	
   

  



 


(b)      The Notes shall
be issuable in minimum denominations of $500,000 and integral multiples of
$1,000 in excess thereof (plus any residual amount).


 


Section 2.4             Execution,
Authentication, Delivery and Dating.


 


The Notes shall be executed on behalf of the Issuer
and the Co-Issuer by an Authorized Officer of the Issuer and the Co-Issuer,
respectively.  The signature of such
Authorized Officers on the Notes may be manual or facsimile.


 


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Notes bearing the manual or facsimile signatures of
individuals who were at any time the Authorized Officers of the Issuer or the
Co-Issuer shall bind the Issuer or the Co-Issuer, as the case may be,
notwithstanding the fact that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of issuance of such Notes.


 


At any time and from time to time after the execution
and delivery of this Indenture, the Issuer and the Co-Issuer may deliver Notes
executed by the Issuer and the Co-Issuer to the Trustee or the Authenticating
Agent for authentication and the Trustee or the Authenticating Agent, upon
Issuer Order, shall authenticate and deliver such Notes as provided in this
Indenture and not otherwise.


 


Each Note authenticated and delivered by the Trustee
or the Authenticating Agent upon Issuer Order on the Closing Date shall be
dated as of the Closing Date.  All other
Notes that are authenticated after the Closing Date for any other purpose under
this Indenture shall be dated the date of their authentication.


 


Notes issued upon transfer, exchange or replacement of
other Notes shall be issued in authorized denominations reflecting the original
aggregate principal amount of the Notes so transferred, exchanged or replaced,
but shall represent only the current outstanding principal amount of the Notes
so transferred, exchanged or replaced. 
In the event that any Note is divided into more than one Note in
accordance with this Article 2, the original principal amount of such
Note shall be proportionately divided among the Notes delivered in exchange
therefor and shall be deemed to be the original aggregate principal amount of
such subsequently issued Notes.


 


No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Note a Certificate of Authentication, substantially in the form provided
for herein, executed by the Trustee or by the Authenticating Agent by the
manual signature of one of their Authorized Officers, and such certificate upon
any Note shall be conclusive evidence, and the only evidence, that such Note
has been duly authenticated and delivered hereunder.


 


Section 2.5             Registration, Registration of Transfer and
Exchange.


 


(a)      The Issuer and
the Co-Issuer shall cause to be kept a register (the “Notes Register”) in
which, subject to such reasonable regulations as it may prescribe, the Issuer
and the Co-Issuer shall provide for the registration of Notes and the
registration of transfers of Notes.  The
Trustee is hereby initially appointed “Notes Registrar” for the purpose of
registering Notes and transfers of such Notes with respect to any duplicate
copy of the Notes Register kept in the United States as herein provided.  Upon any resignation or removal of the Notes
Registrar, the Issuer and the Co-Issuer shall promptly appoint a successor or,
in the absence of such appointment, assume the duties of Notes Registrar.


 


If a Person other than the Trustee is appointed by the
Issuer and the Co-Issuer as Notes Registrar, the Issuer and the Co-Issuer shall
give the Trustee prompt written notice of the appointment of a successor Notes
Registrar and of the location, and any change in the location,


 


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of the Notes Registrar, and the Trustee shall have the
right to inspect the Notes Register at all reasonable times and to obtain
copies thereof and the Trustee shall have the right to rely upon a certificate
executed on behalf of the Notes Registrar by an Officer thereof as to the names
and addresses of the Holders of the Notes and the principal amounts and numbers
of such Notes.


 


Subject to this Section 2.5, upon surrender for
registration of transfer of any Notes at the office or agency of the Issuer to
be maintained as provided in Section 7.2, the Issuer and the Co-Issuer
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Notes of any
authorized denomination and of a like aggregate principal amount.


 


At the option of the Holder, Notes may be exchanged
for Notes of like terms, in any authorized denominations and of like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency.  Whenever any Note is surrendered
for exchange, the Issuer and the Co-Issuer shall execute, and the Trustee shall
authenticate and deliver, the Notes that the Noteholder making the exchange is
entitled to receive.


 


All Notes issued and authenticated upon any
registration of transfer or exchange of Notes shall be the valid obligations of
the Issuer and the Co-Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.


 


Every Note presented or surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Notes
Registrar duly executed by the Holder thereof or his attorney duly authorized
in writing.


 


No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.


 


None of the Notes Registrar, the Issuer or the
Co-Issuer shall be required (i) to issue, register the transfer of or exchange
any Note during a period beginning at the opening of business 15 days before
any selection of Notes to be redeemed and ending at the close of business on
the day of the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Note so selected for redemption.


 


(b)      No Note may be
sold or transferred (including, without limitation, by pledge or hypothecation)
unless such sale or transfer is exempt from the registration requirements of
the Securities Act and is exempt from the registration requirements under
applicable state securities laws.


 


(c)      No Senior Note
may be offered, sold, resold or delivered, within the United States or to, or
for the benefit of, U.S. Persons except in accordance with Section 2.5(e)
below and in accordance with Rule 144A to QIBs who are Qualified Purchasers
purchasing for their own account or for the accounts of one or more QIBs who
are Qualified Purchasers, for which the purchaser is acting as fiduciary or
agent.  The Senior Notes may be offered,
sold, resold or delivered, as the case may be, in offshore transactions to
non-U.S. Persons in


 


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reliance
on Regulation S.  None of the Issuer, the
Co-Issuer, the Trustee or any other Person may register the Notes under the
Securities Act or any state securities laws.


 


(d)      Upon final
payment due on the Stated Maturity of a Note, the Holder thereof shall present
and surrender such Note at the Corporate Trust Office of the Trustee or at the
office of the Paying Agent (outside the United States if then required by
applicable law in the case of a Note in definitive form issued in exchange for
a beneficial interest in a Regulation S Global Security pursuant to Section
2.10).


 


(e)      Transfers of
Global Securities.  Notwithstanding
any provision to the contrary herein, so long as a Global Security remains
outstanding and is held by or on behalf of the Depository, transfers of a
Global Security, in whole or in part, shall only be made in accordance with Section
2.2(c) and this Section 2.5(e).


 


(i)            Subject
to clauses (ii) through (iv) of this Section 2.5(e), transfers of a
Global Security shall be limited to transfers of such Global Security in whole,
but not in part, to nominees of the Depository or to a successor of the
Depository or such successor’s nominee.


 


(ii)           Regulation
S Global Security to Rule 144A Global Security.  If a holder of a beneficial interest in a
Regulation S Global Security wishes to transfer all or a part of its interest
in such Regulation S Global Security to a Person who wishes to take delivery
thereof in the form of a Rule 144A Global Security, such holder may, subject to
the terms hereof and the rules and procedures of Euroclear, Clearstream,
Luxembourg or the Depository, as the case may be, exchange or cause the
exchange of such interest for an equivalent beneficial interest in a Rule 144A
Global Security of the same Class.  Upon
receipt by the Trustee, as Notes Registrar, of (A) instructions from Euroclear,
Clearstream, Luxembourg or the Depository, as the case may be, directing the
Trustee, as Notes Registrar, to cause such Rule 144A Global Security to be
increased by an amount equal to such beneficial interest in such Regulation S
Global Security but not less than the minimum denomination applicable to the
related Class of Notes, and (B) a certificate substantially in the form of Exhibit
D hereto given by the prospective transferee of such beneficial interest
and stating, among other things, that such transferee acquiring such interest
in a Rule 144A Global Security is a QIB and a Qualified Purchaser, is obtaining
such beneficial interest in a transaction pursuant to Rule 144A and in
accordance with any applicable securities laws of any state of the United
States or any other applicable jurisdiction, then Euroclear, Clearstream,
Luxembourg or the Trustee, as Notes Registrar, as the case may be, shall approve
the instruction at the Depository to reduce such Regulation S Global Security
by the aggregate principal amount of the interest in such Regulation S Global
Security to be transferred and increase the Rule 144A Global Security specified
in such instructions by an Aggregate Outstanding Amount equal to such reduction
in such principal amount of the Regulation S Global Security.


 


(iii)          Rule
144A Global Security to Regulation S Global Security.  If a holder of a beneficial interest in a
Rule 144A Global Security wishes to transfer all or a part of its interest in
such Rule 144A Global Security to a Person who wishes to take delivery thereof
in the form of a Regulation S Global Security, such holder may, subject to the


 


82





















 


terms hereof and
the rules and procedures of Euroclear, Clearstream, Luxembourg or the
Depository, as the case may be, exchange or cause the exchange of such interest
for an equivalent beneficial interest in a Regulation S Global Security of the same
Class.  Upon receipt by the Trustee, as
Notes Registrar, of (A) instructions from Euroclear, Clearstream, Luxembourg or
the Depository, as the case may be, directing the Trustee, as Notes Registrar,
to cause such Regulation S Global Security to be increased by an amount equal
to the beneficial interest in such Rule 144A Global Security but not less than
the minimum denomination applicable to the related Class of Notes to be
exchanged, and (B) a certificate substantially in the form of Exhibit C
hereto given by the prospective transferee of such beneficial interest and
stating, among other things, that such transferee acquiring such interest in a
Regulation S Global Security is a not a U.S. Person and that such transfer is
being made pursuant to Rule 903 or 904 under Regulation S, then Euroclear,
Clearstream, Luxembourg or the Trustee, as Notes Registrar, as the case may be,
shall approve the instruction at the Depository to reduce such Rule 144A Global
Security by the aggregate principal amount of the interest in such Rule 144A
Global Security to be transferred and increase the Regulation S Global Security
specified in such instructions by an Aggregate Outstanding Amount equal to such
reduction in the principal amount of the Rule 144A Global Security.


 


(iv)          Other
Exchanges.  (A)  In the event that, pursuant to Section
2.10 hereof, a Global Security is exchanged for Certificated Notes, such
Notes may be exchanged for one another only in accordance with such procedures
as are substantially consistent with the provisions above (including
certification requirements intended to ensure that such transfers are to a QIB
who is also a Qualified Purchaser or are to a non-U.S. Person, or otherwise
comply with Rule 144A or Regulation S, as the case may be) and as may be from
time to time adopted by the Issuer, the Co-Issuer and the Trustee.


 


(B)     Subject to
satisfaction of the conditions set forth in subparagraph (D) of this Section
2.5(e)(iv), a Class J Note or Class K Note represented by a Certificated
Note may be transferred to a Qualified Institutional Buyer in the form of a Certificated
Note upon receipt by the Trustee, as Notes Registrar, of a certificate
substantially in the form of Exhibit E-2 hereto given by the prospective
transferee of such beneficial interest and stating, among other things, that
such transferee acquiring such interest in a Rule 144A Global Security is a QIB
and a Qualified Purchaser, is obtaining such beneficial interest in a
transaction pursuant to Rule 144A and in accordance with any applicable
securities laws of any state of the United States or any other applicable
jurisdiction.  In connection with any
such transfer, such prospective transferee shall be deemed to have made the
applicable representations contained in Section 2.5(g) hereof.


 


(C)     Subject to
satisfaction of the conditions set forth in subparagraph (D) of this Section
2.5(e)(iv), a Class J Note or Class K Note
represented by a Certificated Note may be transferred to a Person other than a
U.S. Person in the form of a Certificated Note upon receipt by the Trustee, as
Notes Registrar, of a certificate substantially in the


 


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form of Exhibit
E-1 hereto given by the prospective transferee of such beneficial interest
and stating, among other things, that such transferee acquiring such interest
in a Regulation S Global Security is a not a U.S. Person and that such transfer
is being made pursuant to Rule 903 or 904 under Regulation S.  In connection with any such transfer, such
prospective transferee shall be deemed to have made the applicable
representations contained in Section 2.5(g) hereof.


 


(D)     Notwithstanding
anything contained in this Indenture to the contrary, as long as any Class of
Senior Notes is Outstanding, no wholly-owned, direct or indirect, subsidiary of
GKK may sell or otherwise transfer or finance any Class J Note or Class K Note
to any other Person that is not a wholly-owned, direct or indirect, subsidiary
of GKK unless the Issuer and the Trustee shall have received an appropriate Tax
Opinion to the effect that the Class J Notes or Class K Notes, as applicable,
will be treated as debt for U.S. federal income tax purposes at the time of
such sale, transfer or financing.


 


(f)       Removal of
Legend.  If Notes are issued upon the
transfer, exchange or replacement of Notes bearing the applicable legends set
forth in Exhibits A and B hereto, and if a request is made to
remove such applicable legend on such Notes, the Notes so issued shall bear
such applicable legend, or such applicable legend shall not be removed, as the
case may be, unless there is delivered to the Issuer and the Co-Issuer such
satisfactory evidence, which may include an Opinion of Counsel of an attorney
at law licensed to practice law in the State of New York (and addressed to the
Issuer and the Trustee), as may be reasonably required by the Issuer and the
Co-Issuer, if applicable, to the effect that neither such applicable legend nor
the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144A or Regulation S, as
applicable, the Investment Company Act or ERISA.  So long as the Issuer or the Co-Issuer is
relying on an exemption under or promulgated pursuant to the Investment Company
Act, the Issuer or the Co-Issuer shall not remove that portion of the legend
required to maintain an exemption under or promulgated pursuant to the
Investment Company Act.  Upon provision
of such satisfactory evidence, as confirmed in writing by the Issuer and the
Co-Issuer, if applicable, to the Trustee, the Trustee, at the direction of the
Issuer and the Co-Issuer, if applicable, shall authenticate and deliver Notes
that do not bear such applicable legend.


 


(g)      Each beneficial
owner of Rule 144A Global Securities shall be deemed to represent and agree as
follows (terms used in this paragraph that are defined in Rule 144A are used
herein as defined therein):


 


(i)            In the
case of a Rule 144A Global Security, the owner is (A) a QIB and a Qualified
Purchaser, (B) is aware that the sale of the Notes to it (other than the
initial sale by the Issuer and the Co-Issuer, as applicable,) is being made in
reliance on the exemption from registration provided by Rule 144A, and (C) is
acquiring the Notes for its own account or for one or more accounts, each of
which is a QIB and a Qualified Purchaser, and as to each of which the owner
exercises sole investment discretion, (D) in a principal amount of not less
than $100,000, for each such account.


 


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(ii)           The owner
understands that the Notes are being offered only in a transaction not
involving any public offering in the United States within the meaning of the
Securities Act, the Notes have not been and shall not be registered under the
Securities Act, and, if in the future the owner decides to offer, resell,
pledge or otherwise transfer the Notes, such Notes may only be offered, resold,
pledged or otherwise transferred in accordance with this Indenture and the
applicable legend on such Notes set forth in Exhibits A and B, as
applicable.  The owner acknowledges that
no representation is made by the Issuer, the Co-Issuer, or the Initial
Purchaser, as the case may be, as to the availability of any exemption under
the Securities Act or any state securities laws for resale of the Notes.


 


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


 


(iv)          In
connection with the purchase of the Notes (A) none of the Issuer, the
Co-Issuer, the Initial Purchaser, the Collateral Manager or the Trustee is
acting as a fiduciary or financial or investment adviser for the owner; (B) the
owner is not relying (for purposes of making any investment decision or
otherwise) upon any advice, counsel or representations (whether written or
oral) of the Issuer, the Co-Issuer, the Initial Purchaser, the Collateral
Manager or the Trustee other than in a current offering memorandum for such
Notes and any representations expressly set forth in a written agreement with
such party; (C) none of the Issuer, the Co-Issuer, the Initial Purchaser, the
Collateral Manager or the Trustee has given to the owner (directly or
indirectly through any other person) any assurance, guarantee, or
representation whatsoever as to the expected or projected success,
profitability, return, performance, result, effect, consequence, or benefit
(including legal, regulatory, tax, financial, accounting, or otherwise) of its
purchase, (D) the owner has consulted with its own legal, regulatory, tax,
business, investment, financial, and accounting advisers to the extent it has
deemed necessary, and it has made its own investment decisions (including
decisions regarding the suitability of any transaction pursuant to this
Indenture) based upon its own judgment and upon any advice from such advisers
as it has deemed necessary and not upon any view expressed by the Issuer, the
Co-Issuer, the Initial Purchaser, the Collateral Manager or the Trustee; and
(E) the owner is purchasing the Notes with a full
understanding of all of the terms, conditions and risks thereof (economic and
otherwise), and is capable of assuming and willing to assume (financially and
otherwise) these risks.


 


(v)           The owner understands
that the Notes shall bear the applicable legend set forth in Exhibits A
and B as applicable.  The Rule
144A Global Securities may not at any time be held by
or on behalf of any U.S. Person that is not a QIB who is a Qualified
Purchaser.  The owner must inform a
prospective transferee of the transfer restrictions.


 


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(vi)          Unless a
prospective Holder of a Senior Note otherwise provides another representation
acceptable to the Trustee, the Collateral Manager, the Issuer and the
Co-Issuer, each Holder of a Senior Note, by its acquisition thereof, shall be
deemed to have represented to the Issuer, the Co-Issuer, the Collateral Manager
and the Trustee that either (A) no part of the funds being used to pay the
purchase price for such Senior Notes constitutes an asset of any “employee
benefit plan” (as defined in Section 3(3) of ERISA) or “plan” (as defined in
Section 4975(e)(1) of the Code) that is subject to ERISA or Section 4975 of the
Code or any other plan which is subject to any federal, state or local law (“Similar Law”) that
is substantially similar to Section 406 of ERISA or Section 4975 of the Code
(each a “Benefit Plan”
and funds of such a Benefit Plan, “Plan Assets”), or an entity whose underlying
assets include Plan Assets of any such Benefit Plan, or (B) if the funds being
used to pay the purchase price for such Senior Notes include Plan Assets of any
Benefit Plan, its purchase and holding are eligible for the exemptive relief
from the prohibited transaction rules granted by Prohibited Transaction Class
Exemption (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23,
or a similar exemption, or in the case of any Benefit Plan subject to Similar
Law, do not result in a non-exempt violation of Similar Law.


 


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


 


(viii)        The
owner is not a member of the public in the Cayman Islands, within the meaning
of Section 194 of the Cayman Islands Companies Law (2004 Revision), unless the Issuer
has been listed on the Cayman Islands Stock Exchange.


 


(ix)           The owner
understands that the Issuer, Co-Issuer, Trustee or Paying Agent shall require
certification acceptable to it (A) as a condition to the payment of principal
of and interest on any Notes without, or at a reduced rate of, U.S. withholding
or backup withholding tax, and (B) to enable the Issuer, Co-Issuer, Trustee and
Paying Agent to determine their duties and liabilities with respect to any
taxes or other charges that they may be required to pay, deduct or withhold
from payments in respect of such Notes or the Holder of such Notes under any
present or future law or regulation of the Cayman Islands or the United States
or any present or future law or regulation of any political subdivision thereof
or taxing authority therein or to comply with any reporting or other
requirements under any such law or regulation. 
Such certification may include U.S. federal income tax forms (such as
IRS Form W-8BEN (Certification of Foreign Status of Beneficial Owner), IRS Form
W-8IMY (Certification of Foreign Intermediary Status), IRS Form W-9 (Request
for Taxpayer Identification Number and Certification), or IRS Form W-8ECI
(Certification of Foreign Person’s Claim for Exemption from Withholding on
Income Effectively Connected with Conduct of a U.S. Trade or Business) or any
successors to such IRS forms).  In
addition, the Issuer, Co-Issuer, Trustee or Paying Agent may require
certification acceptable to it to enable the Issuer to qualify for a reduced
rate of withholding in any jurisdiction from or through which the Issuer
receives payments on its assets.  Each
owner agrees to provide any certification requested pursuant to this


 


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paragraph
and to update or replace such form or certification in accordance with its
terms or its subsequent amendments.


 


(x)            The owner
hereby agrees that, for purposes of U.S. federal, state and local income and
franchise tax and any other income taxes, (A) the Notes will be treated as
indebtedness, and (B) the Preferred Shares will be treated as equity; the owner
agrees to such treatment and agrees to take no action inconsistent with such
treatment, unless required by law.


 


(xi)           The owner,
if not a “United States person” (as defined in Section 7701(a)(30) of the
Code), either: (A) is not a bank (within the meaning of Section 881(c)(3)(A) of
the Code); (B) if such owner is a bank (within the meaning of Section
881(c)(3)(A) of the Code), after giving effect to its purchase of the Notes,
the owner (x) will not own a Majority of the Preferred Shares (by number) or
50% by value of the aggregate of the preferred and all classes of notes that
are treated as equity for US federal income tax purposes either directly or
indirectly, and will not otherwise be related to the Issuer (within the meaning
of section 267(b) of the Code) and (y) has not purchased the Notes in whole or
in part to avoid any U.S. federal tax liability (including, without limitation,
any U.S. withholding tax that would be imposed on the Notes with respect to the
Collateral Debt Securities if held directly by the owner); (C) has provided an
IRS Form W-8ECI representing that all payments received or to be received by it
from the Issuer are effectively connected with the conduct of a trade or
business in the United States; or (D) is eligible for benefits under an income
tax treaty with the United States that eliminates U.S. federal income taxation
of U.S. source interest not attributable to a permanent establishment in the
United States and the Issuer is treated as a fiscally transparent entity (as
defined in Treasury Regulations section 1.894-1(d)(3)(ii)) under the laws of
owner’s jurisdiction with respect to payments made on the Collateral Debt
Securities held by the owner.


 


(h)      Each beneficial
owner of Regulation S Global Securities shall be deemed to have made the
representations set forth in clauses (ii), (iii), (iv), (vi), (vii), (viii),
(ix), (x) and (xi) of Section 2.5(g) and shall be deemed to have further
represented and agreed as follows:


 


(i)            The owner
is aware that the sale of such Senior Notes to it is being made in reliance on
the exemption from registration provided by Regulation S and understands that
the Senior Notes offered in reliance on Regulation S will bear the appropriate
legend set forth in Exhibit A or B, as applicable, and be
represented by one or more Regulation S Global Securities.  The Senior Notes so represented may not at
any time be held by or on behalf of U.S. Persons.  Each of the owner and the related Holder is
not, and shall not be, a U.S. Person. 
Before any interest in a Regulation S Global Security may be offered,
resold, pledged or otherwise transferred to a person who takes delivery in the
form of a Rule 144A Global Security, the transferee shall be required to
provide the Trustee with a written certification substantially in the form of Exhibits
C and D as applicable hereto as to compliance with the transfer
restrictions.  The owner must inform a
prospective transferee of the transfer restrictions.


 


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(i)       Any purported
transfer of a Note not in accordance with this Section 2.5 shall be null
and void and shall not be given effect for any purpose hereunder.


 


(j)       Notwithstanding
anything contained in this Indenture to the contrary, neither the Trustee nor
the Notes Registrar (nor any other Transfer Agent) shall be responsible or
liable for compliance with applicable federal or state securities laws
(including, without limitation, the Securities Act or Rule 144A or Regulation S
promulgated thereunder), the Investment Company Act, ERISA or the Code (or any
applicable regulations thereunder); provided, however,
that if a specified transfer certificate or Opinion of Counsel is required by
the express terms of this Section 2.5 to be delivered to the Trustee or
Notes Registrar prior to registration of transfer of a Note, the Trustee and/or
Notes Registrar, as applicable, is required to request, as a condition for
registering the transfer of the Note, such certificate or Opinion of Counsel
and to examine the same to determine whether it conforms on its face to the
requirements hereof (and the Trustee or Notes Registrar, as the case may be,
shall promptly notify the party delivering the same if it determines that such
certificate or Opinion of Counsel does not so conform).


 


(k)      If the Trustee
determines or is notified by the Issuer, Co-Issuer or the Collateral Manager
that (i) a transfer or attempted or purported transfer of any interest in any
Note was consummated in compliance with the provisions of this Section 2.5
on the basis of a materially incorrect certification from the transferee or
purported transferee, (ii) a transferee failed to deliver to the Trustee any
certification required to be delivered hereunder or (iii) the holder of any
interest in a Note is in breach of any representation or agreement set forth in
any certification or any deemed representation or agreement of such holder, the
Trustee shall not register such attempted or purported transfer and if a
transfer has been registered, such transfer shall be absolutely null and void ab initio and shall vest no rights in the purported
transferee (such purported transferee, a “Disqualified Transferee”) and the last preceding
holder of such interest in such Note that was not a Disqualified Transferee
shall be restored to all rights as a Holder thereof retroactively to the date
of transfer of such Note by such Holder.


 


In addition, the Trustee may require that the interest
in the Note referred to in (i), (ii) or (iii) in the preceding paragraph be
transferred to any person designated by the Issuer or the Collateral Manager at
a price determined by the Issuer or the Collateral Manager, as applicable,
based upon its estimation of the prevailing price of such interest and each
Holder, by acceptance of an interest in a Note, authorizes the Trustee to take
such action.  In any case, the Trustee
shall not be held responsible for any losses that may be incurred as a result
of any required transfer under this Section 2.5(l).


 


(l)       Each Holder of
Notes approves and consents to (i) the initial purchase of the Collateral Debt
Securities by the Issuer from Affiliates of the Collateral Manager on or prior
to the Closing Date and (ii) any other transaction between the Issuer and the
Collateral Manager or its Affiliates that are permitted under the terms of this
Indenture or the Collateral Management Agreement.


 


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Section 2.6             Mutilated,
Defaced, Destroyed, Lost or Stolen Note.


 


If (a) any mutilated or defaced Note is surrendered to
a Transfer Agent, or if there shall be delivered to the Issuer, the Co-Issuer,
the Trustee and the relevant Transfer Agent (each a “Specified Person”) evidence to their reasonable
satisfaction of the destruction, loss or theft of any Note, and (b) there is
delivered to the Specified Person such security or indemnity as may be required
by each Specified Person to save each of them and any agent of any of them
harmless (an unsecured indemnity agreement delivered to the Trustee by an
institutional investor with a net worth of at least $200,000,000 being deemed
sufficient to satisfy such security or indemnity requirement), then, in the
absence of notice to the Specified Persons that such Note has been acquired by
a bona fide purchaser, the Issuer and the Co-Issuer shall execute and, upon
Issuer Request, the Trustee shall authenticate and deliver, in lieu of any such
mutilated, defaced, destroyed, lost or stolen Note, a new Note, of like tenor
(including the same date of issuance) and equal principal amount, registered in
the same manner, dated the date of its authentication, bearing interest from
the date to which interest has been paid on the mutilated, defaced, destroyed,
lost or stolen Note and bearing a number not contemporaneously outstanding.


 


If, after delivery of such new Note, a bona fide
purchaser of the predecessor Note presents for payment, transfer or exchange
such predecessor Note, any Specified Person shall be entitled to recover such
new Note from the Person to whom it was delivered or any Person taking
therefrom, and each Specified Person shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by such Specified Person in connection therewith.


 


In case any such mutilated, defaced, destroyed, lost
or stolen Note has become due and payable, the Issuer and the Co-Issuer, if
applicable, in their discretion may, instead of issuing a new Note, pay such
Note without requiring surrender thereof except that any mutilated or defaced
Note shall be surrendered.


 


Upon the issuance of any new Note under this Section
2.6, the Issuer and the Co-Issuer, if applicable, may require the payment
by the registered Holder thereof of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.


 


Every new Note issued pursuant to this Section 2.6
in lieu of any mutilated, defaced, destroyed, lost or stolen Note shall
constitute an original additional contractual obligation of the Issuer and the
Co-Issuer, if applicable, and such new Note shall be entitled, subject to the
second paragraph of this Section 2.6, to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.


 


The provisions of this Section 2.6 are exclusive
and shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, defaced, destroyed, lost or
stolen Notes.


 


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Section 2.7             Payment
of Principal and Interest and Other Amounts; Principal and Interest Rights
Preserved.


 


(a)      The Class A-1
Notes shall accrue interest during each Interest Accrual Period at the Class A-1
Rate.  Interest on each Class A-1 Note
shall be due and payable on each Payment Date immediately following the related
Interest Accrual Period in the proportion that the outstanding principal amount
of such Class A-1 Note bears to the Aggregate Outstanding Amount of all Class A-1
Notes; provided, however,
that the payment of interest on the Class A-1 Notes is subordinated to the
payment on each Payment Date of certain amounts in accordance with the Priority
of Payments.


 


(b)      The Class A-2
Notes shall accrue interest during each Interest Accrual Period at the Class
A-2 Rate.  Interest on each Class A-2
Note shall be due and payable on each Payment Date immediately following the
related Interest Accrual Period in the proportion that the outstanding
principal amount of such Class A-2 Note bears to the Aggregate Outstanding
Amount of all Class A-2 Notes; provided, however, that the payment of interest on the Class A-2 Notes
is subordinated to the payment on each Payment Date of the interest due and
payable on the Class A-1 Notes (including any Class A-1 Defaulted Interest
Amount) and certain other amounts in accordance with the Priority of Payments.


 


(c)      The Class B
Notes shall accrue interest during each Interest Accrual Period at the Class B
Rate.  Interest on each Class B Note
shall be due and payable on each Payment Date immediately following the related
Interest Accrual Period in the proportion that the outstanding principal amount
of such Class B Note bears to the Aggregate Outstanding Amount of all Class B
Notes; provided, however,
that payment of interest on the Class B Notes is subordinated to the payment on
each Payment Date of the interest due and payable on the Class A-1 Notes and
the Class A-2 Notes, (including any Class A-1 Defaulted Interest Amount and any
Class A-2 Defaulted Interest Amount) and certain other amounts in accordance
with the Priority of Payments.


 


(d)      The Class C
Notes shall accrue interest during each Interest Accrual Period at the Class C
Rate.  Interest on each Class C Note
shall be due and payable on each Payment Date immediately following the related
Interest Accrual Period in the proportion that the outstanding principal amount
of such Class C Note bears to the Aggregate Outstanding Amount of all Class C
Notes; provided, however, that payment of
interest on the Class C Notes is subordinated to the payment on each Payment
Date of the interest due and payable on the Class A-1 Notes, the Class A-2
Notes and the Class B Notes (including any Class A-1 Defaulted Interest Amount,
Class A-2 Defaulted Interest Amount and Class B Defaulted Interest Amount) and certain
other amounts in accordance with the Priority of Payments.


 


For so long as any Class B Notes are Outstanding, any
payment of interest due on the Class C Notes which is not available to be paid
(the “Class C Capitalized
Interest”) in accordance with the Priority of Payments on any
Payment Date shall not be considered “due and payable” for the purpose of Section
5.1(a) hereof (and the failure to pay such Class C Capitalized Interest
shall not be an Event of Default) until the Payment Date on which funds are
available to pay all or any portion of such Class C Capitalized Interest in
accordance with the Priority of Payments. 
On or after such Payment Date, only such portion of any payment of Class
C


 


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Capitalized Interest for which funds are available in
accordance with the Priority of Payments shall be considered “due and payable”
and the failure to pay such portion of Class C Capitalized Interest shall be an
Event of Default.  Class C Capitalized
Interest shall be added to the principal amount of the Class C Notes, shall
bear interest thereafter at the Class C Rate (to the extent lawful) and shall
be payable on the first Payment Date on which funds are permitted to be used
for such purpose in accordance with the Priority of Payments.  On or after the Payment Date on which the
Class B Notes are no longer Outstanding, to the extent interest is due
(excluding any previously deferred Class C Capitalized Interest) but not paid
on the Class C Notes, the failure to pay such interest shall constitute an
Event of Default hereunder.


 


(e)      The Class D
Notes shall accrue interest during each Interest Accrual Period at the Class D
Rate.  Interest on each Class D Note
shall be due and payable on each Payment Date immediately following the related
Interest Accrual Period in the proportion that the outstanding principal amount
of such Class D Note bears to the Aggregate Outstanding Amount of all Class D
Notes; provided, however,
that payment of interest on the Class D Notes is subordinated to the payment on
each Payment Date of the interest due and payable on the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes and the Class C Notes (including any Class
A-1 Defaulted Interest Amount, Class A-2 Defaulted Interest Amount, Class B
Defaulted Interest Amount, Class C Defaulted Interest Amount and Class C
Capitalized Interest) and certain other amounts in accordance with the Priority
of Payments.


 


For so long as any Class C Notes are Outstanding, any
payment of interest due on the Class D Notes which is not available to be paid
(“Class D Capitalized Interest”)
in accordance with the Priority of Payments on any Payment Date shall not be
considered “due and payable” for the purpose of Section 5.1(a) hereof
(and the failure to pay such Class D Capitalized Interest shall not be an Event
of Default) until the Payment Date on which funds are available to pay all or
any portion of such Class D Capitalized Interest in accordance with the
Priority of Payments.  On or after such
Payment Date, only such portion of any payment of Class D Capitalized Interest
for which funds are available in accordance with the Priority of Payments shall
be considered “due and payable” and the failure to pay such portion of Class D
Capitalized Interest shall be an Event of Default.  Class D Capitalized Interest shall be added
to the principal amount of the Class D Notes, shall bear interest thereafter at
the Class D Rate (to the extent lawful) and shall be payable on the first
Payment Date on which funds are permitted to be used for such purpose in
accordance with the Priority of Payments. 
On or after the Payment Date on which the Class C Notes are no longer
Outstanding, to the extent interest is due (excluding any previously deferred
Class D Capitalized Interest) but not paid on the Class D Notes, the failure to
pay such interest shall constitute an Event of Default hereunder.


 


(f)       The Class E
Notes shall accrue interest during each Interest Accrual Period at the Class E
Rate.  Interest on each Class E Note shall
be due and payable on each Payment Date immediately following the related
Interest Accrual Period in the proportion that the outstanding principal amount
of such Class E Note bears to the Aggregate Outstanding Amount of all Class E
Notes; provided, however, that payment of
interest on the Class E Notes is subordinated to the payment on each Payment
Date of the interest due and payable on the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes and the Class D Notes (including
any Class A-1 Defaulted Interest Amount, Class A-2 Defaulted Interest Amount,
Class B Defaulted Interest Amount, Class C Defaulted Interest Amount, Class C


 


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Capitalized
Interest, Class D Defaulted Interest Amount and Class D Capitalized Interest)
and certain other amounts in accordance with the Priority of Payments.


 


For so long as any Class D Notes are Outstanding, any
payment of interest due on the Class E Notes which is not available to be paid
(the “Class E Capitalized
Interest”) in accordance with the Priority of Payments on any
Payment Date shall not be considered “due and payable” for the purpose of Section
5.1(a) hereof (and the failure to pay such Class E Capitalized Interest
shall not be an Event of Default) until the Payment Date on which funds are
available to pay all or any portion of such Class E Capitalized Interest in
accordance with the Priority of Payments. 
On or after such Payment Date, only such portion of any payment of Class
E Capitalized Interest for which funds are available in accordance with the
Priority of Payments shall be considered “due and payable” and the failure to
pay such portion of Class E Capitalized Interest shall be an Event of
Default.  Class E Capitalized Interest
shall be added to the principal amount of the Class E Notes, shall bear
interest thereafter at the Class E Rate (to the extent lawful) and shall be
payable on the first Payment Date on which funds are permitted to be used for
such purpose in accordance with the Priority of Payments.  On or after the Payment Date on which the
Class D Notes are no longer Outstanding, to the extent interest is due
(excluding any previously deferred Class E Capitalized Interest) but not paid
on the Class E Notes, the failure to pay such interest shall constitute an
Event of Default hereunder.


 


(g)      The Class F
Notes shall accrue interest during each Interest Accrual Period at the Class F
Rate.  Interest on each Class F Note
shall be due and payable on each Payment Date immediately following the related
Interest Accrual Period in the proportion that the outstanding principal amount
of such Class F Note bears to the Aggregate Outstanding Amount of all Class F
Notes; provided, however,
that payment of interest on the Class F Notes is subordinated to the payment on
each Payment Date of the interest due and payable on the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes (including any Class A-1 Defaulted Interest Amount, Class A-2
Defaulted Interest Amount, Class B Defaulted Interest Amount, Class C Defaulted
Interest Amount, Class C Capitalized Interest, Class D Defaulted Interest
Amount, Class D Capitalized Interest, Class E Defaulted Interest Amount and
Class E Capitalized Interest) and certain other amounts in accordance with the
Priority of Payments.


 


For so long as any Class E Notes are Outstanding, any
payment of interest due on the Class F Notes which is not available to be paid
(“Class F Capitalized Interest”)
in accordance with the Priority of Payments on any Payment Date shall not be
considered “due and payable” for the purpose of Section 5.1(a) hereof
(and the failure to pay such Class F Capitalized Interest shall not be an Event
of Default) until the Payment Date on which funds are available to pay all or
any portion of such Class F Capitalized Interest in accordance with the
Priority of Payments.  On or after such
Payment Date, only such portion of any payment of Class F Capitalized Interest
for which funds are available in accordance with the Priority of Payments shall
be considered “due and payable” and the failure to pay such portion of Class F
Capitalized Interest shall be an Event of Default.  Class F Capitalized Interest shall be added
to the principal amount of the Class F Notes, shall bear interest thereafter at
the Class F Rate (to the extent lawful) and shall be payable on the first
Payment Date on which funds are permitted to be used for such purpose in
accordance with the Priority of Payments. 
On or after the Payment Date on which the Class E Notes are no longer
Outstanding, to the extent interest is due (excluding any previously deferred


 


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Class F Capitalized Interest) but not paid on the
Class F Notes, the failure to pay such interest shall constitute an Event of
Default hereunder.


 


(h)      The Class G
Notes shall accrue interest during each Interest Accrual Period at the Class G
Rate.  Interest on each Class G Note
shall be due and payable on each Payment Date immediately following the related
Interest Accrual Period in the proportion that the outstanding principal amount
of such Class G Note bears to the Aggregate Outstanding Amount of all Class G
Notes; provided, however,
that payment of interest on the Class G Notes is subordinated to the payment on
each Payment Date of the interest due and payable on the Class A-1 Notes, Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes and the Class F Notes (including any Class A-1 Defaulted Interest Amount,
Class A-2 Defaulted Interest Amount, Class B Defaulted Interest Amount, Class C
Defaulted Interest Amount, Class C Capitalized Interest, Class D Defaulted
Interest Amount, Class D Capitalized Interest, Class E Defaulted Interest Amount,
Class E Capitalized Interest, Class F Defaulted Interest Amount and Class F
Capitalized Interest) and certain other amounts in accordance with the Priority
of Payments.


 


For so long as any Class F Notes are Outstanding, any
payment of interest due on the Class G Notes which is not available to be paid
(the “Class G Capitalized
Interest”) in accordance with the Priority of Payments on any
Payment Date shall not be considered “due and payable” for the purpose of Section
5.1(a) hereof (and the failure to pay such Class G Capitalized Interest
shall not be an Event of Default) until the Payment Date on which funds are
available to pay all or any portion of such Class G Capitalized Interest in
accordance with the Priority of Payments. 
On or after such Payment Date, only such portion of any payment of Class
G Capitalized Interest for which funds are available in accordance with the
Priority of Payments shall be considered “due and payable” and the failure to
pay such portion of Class G Capitalized Interest shall be an Event of
Default.  Class G Capitalized Interest
shall be added to the principal amount of the Class G Notes, shall bear
interest thereafter at the Class G Rate (to the extent lawful) and shall be
payable on the first Payment Date on which funds are permitted to be used for
such purpose in accordance with the Priority of Payments.  On or after the Payment Date on which the
Class F Notes are no longer Outstanding, to the extent interest is due
(excluding any previously deferred Class G Capitalized Interest) but not paid
on the Class G Notes, the failure to pay such interest shall constitute an
Event of Default hereunder.


 


(i)       The Class H
Notes shall accrue interest during each Interest Accrual Period at the Class H
Rate.  Interest on each Class H Note
shall be due and payable on each Payment Date immediately following the related
Interest Accrual Period in the proportion that the outstanding principal amount
of such Class H Note bears to the Aggregate Outstanding Amount of all Class H
Notes; provided, however,
that payment of interest on the Class H Notes is subordinated to the payment on
each Payment Date of the interest due and payable on the Class A-1 Notes, Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes and the Class G Notes (including any Class A-1
Defaulted Interest Amount, Class A-2 Defaulted Interest Amount, Class B
Defaulted Interest Amount, Class C Defaulted Interest Amount, Class C
Capitalized Interest, Class D Defaulted Interest Amount, Class D Capitalized
Interest, Class E Defaulted Interest Amount, Class E Capitalized Interest,
Class F Defaulted Interest Amount, Class F Capitalized Interest, Class G


 


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Defaulted
Interest Amount and Class G Capitalized Interest) and certain other amounts in
accordance with the Priority of Payments.


 


For so long as any Class G Notes are Outstanding, any
payment of interest due on the Class H Notes which is not available to be paid
(“Class H Capitalized Interest”)
in accordance with the Priority of Payments on any Payment Date shall not be
considered “due and payable” for the purpose of Section 5.1(a) hereof
(and the failure to pay such Class H Capitalized Interest shall not be an Event
of Default) until the Payment Date on which funds are available to pay all or
any portion of such Class H Capitalized Interest in accordance with the
Priority of Payments.  On or after such
Payment Date, only such portion of any payment of Class H Capitalized Interest for
which funds are available in accordance with the Priority of Payments shall be
considered “due and payable” and the failure to pay such portion of Class H
Capitalized Interest shall be an Event of Default.  Class H Capitalized Interest shall be added to
the principal amount of the Class H Notes, shall bear interest thereafter at
the Class H Rate (to the extent lawful) and shall be payable on the first
Payment Date on which funds are permitted to be used for such purpose in
accordance with the Priority of Payments. 
On or after the Payment Date on which the Class G Notes are no longer
Outstanding, to the extent interest is due (excluding any previously deferred
Class H Capitalized Interest) but not paid on the Class H Notes, the failure to
pay such interest shall constitute an Event of Default hereunder.


 


(j)       The Class J
Notes shall accrue interest during each Interest Accrual Period at the Class J
Rate.  Interest on each Class J Note
shall be due and payable on each Payment Date immediately following the related
Interest Accrual Period in the proportion that the outstanding principal amount
of such Class J Note bears to the Aggregate Outstanding Amount of all Class J
Notes; provided, however,
that payment of interest on the Class J Notes is subordinated to the payment on
each Payment Date of the interest due and payable on the Class A-1 Notes, Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes (including
any Class A-1 Defaulted Interest, Class A-2 Defaulted Interest Amount, Class B
Defaulted Interest Amount, Class C Defaulted Interest Amount, Class C
Capitalized Interest, Class D Defaulted Interest Amount, Class D Capitalized
Interest, Class E Defaulted Interest Amount, Class E Capitalized Interest,
Class F Defaulted Interest Amount, Class F Capitalized Interest, Class G
Defaulted Interest Amount, Class G Capitalized Interest, Class H Defaulted
Interest Amount and Class H Capitalized Interest) and certain other amounts in
accordance with the Priority of Payments.


 


For so long as any Class H Notes are Outstanding, any
payment of interest due on the Class J Notes which is not available to be paid
(“Class J Capitalized Interest”) in accordance with the Priority of
Payments on any Payment Date shall not be considered “due and payable” for the
purpose of Section 5.1(a) hereof (and the failure to pay such Class J
Capitalized Interest shall not be an Event of Default) until the Payment Date
on which funds are available to pay all or any portion of such Class J
Capitalized Interest in accordance with the Priority of Payments.  On or after such Payment Date, only such
portion of any payment of Class J Capitalized Interest for which funds are
available in accordance with the Priority of Payments shall be considered “due
and payable” and the failure to pay such portion of Class J Capitalized
Interest shall be an Event of Default. 
Class J Capitalized Interest shall be added to the principal amount of
the Class J Notes, shall bear interest thereafter at the Class J Rate (to the
extent lawful) and shall be


 


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payable
on the first Payment Date on which funds are permitted to be used for such
purpose in accordance with the Priority of Payments.  On or after the Payment Date on which the
Class H Notes are no longer Outstanding, to the extent interest is due
(excluding any previously deferred Class J Capitalized Interest) but not paid
on the Class J Notes, the failure to pay such interest shall constitute an
Event of Default hereunder.


 


(k)      The Class K
Notes shall accrue interest during each Interest Accrual Period at the Class K
Rate.  Interest on each Class K Note
shall be due and payable on each Payment Date immediately following the related
Interest Accrual Period in the proportion that the outstanding principal amount
of such Class K Note bears to the Aggregate Outstanding Amount of all Class K
Notes; provided, however,
that payment of interest on the Class K Notes is subordinated to the payment on
each Payment Date of the interest due and payable on the Class A-1 Notes, Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes and the Class J
Notes (including any Class A-1 Defaulted Interest Amount, Class A-2 Defaulted
Interest Amount, Class B Defaulted Interest Amount, Class C Defaulted Interest
Amount, Class C Capitalized Interest, Class D Defaulted Interest Amount, Class
D Capitalized Interest, Class E Defaulted Interest Amount, Class E Capitalized
Interest, Class F Defaulted Interest Amount, Class F Capitalized Interest,
Class G Defaulted Interest Amount, Class G Capitalized Interest, Class H
Defaulted Interest Amount, Class H Capitalized Interest, Class J Defaulted
Interest Amount and Class J Capitalized Interest) and certain other amounts in
accordance with the Priority of Payments.


 


For so long as any Class J Notes are Outstanding, any
payment of interest due on the Class K Notes which is not available to be paid
(“Class K Capitalized Interest”)
in accordance with the Priority of Payments on any Payment Date shall not be
considered “due and payable” for the purpose of Section 5.1(a) hereof
(and the failure to pay such Class K Capitalized Interest shall not be an Event
of Default) until the Payment Date on which funds are available to pay all or
any portion of such Class K Capitalized Interest in accordance with the
Priority of Payments.  On or after such
Payment Date, only such portion of any payment of Class K Capitalized Interest
for which funds are available in accordance with the Priority of Payments shall
be considered “due and payable” and the failure to pay such portion of Class K
Capitalized Interest shall be an Event of Default.  Class K Capitalized Interest shall be added
to the principal amount of the Class K Notes, shall bear interest thereafter at
the Class K Rate (to the extent lawful) and shall be payable on the first
Payment Date on which funds are permitted to be used for such purpose in
accordance with the Priority of Payments. 
On or after the Payment Date on which the Class J Notes are no longer
Outstanding, to the extent interest is due (excluding any previously deferred
Class K Capitalized Interest) but not paid on the Class K Notes, the failure to
pay such interest shall constitute an Event of Default hereunder.


 


(l)       Upon any
Optional Redemption, Tax Redemption, Auction Call Redemption or Clean-up Call,
all net proceeds from such liquidation and all available Cash (other than the
Issuer’s right, title and interest in the Excepted Assets), after the payment
of the amounts referred to in clauses (1) through (33) of Section 11.1(a)(i)
and clauses (1) through (16) of Section 11.1(a)(ii) will be distributed
by Trustee to the Preferred Shares Paying Agent for distribution to the holders
of the Preferred Shares, whereupon the Preferred Shares will be cancelled and
deemed paid in full for all purposes.


 


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(m)     Interest shall
cease to accrue on each Class of Notes, or in the case of a partial repayment,
on such part, from the date of repayment or Stated Maturity unless payment of
principal is improperly withheld or unless a Default has occurred with respect
to such payments of principal.


 


(n)      The principal
of each Class of Notes matures at par and is due and payable on the Stated
Maturity, unless the unpaid principal of such Class of Notes becomes due and
payable at an earlier date by declaration of acceleration, call for redemption
or otherwise; provided, however,
that the payment of principal of the Class A-2 Notes (other than payment of
principal pursuant to Section 9.6 or Section 9.7) may only occur
after the principal of the Class A-1 Notes has been paid in full and is
subordinated to the payment on each Payment Date of the principal and interest
due and payable on the Class A-1 Notes and other amounts in accordance with the
Priority of Payments and any payment of principal of the Class A-2 Notes which
is not paid, in accordance with the Priority of Payments, on any Payment Date,
shall not be considered “due and payable” solely for purposes of Section
5.1(b) until the Payment Date on which such principal may be paid in
accordance with the Priority of Payments or all of the Class A-1 Notes have
been paid in full; provided, further, that the
payment of principal of the Class B Notes (other than payment of principal
pursuant to Section 9.6 or Section 9.7) may only occur after the
principal of the Class A-1 Notes and the Class A-2 Notes has been paid in full
and is subordinated to the payment on each Payment Date of the principal and
interest due and payable on the Class A-1 Notes and the Class A-2 Notes and
other amounts in accordance with the Priority of Payments and any payment of
principal of the Class B Notes which is not paid, in accordance with the
Priority of Payments, on any Payment Date, shall not be considered “due and
payable” solely for purposes of Section 5.1(b) until the Payment Date on
which such principal may be paid in accordance with the Priority of Payments or
all of the Class A-1 Notes and Class A-2 Notes have been paid in full; provided, further, that
the payment of principal of the Class C Notes (other than payment of the
amounts constituting Class C Capitalized Interest, notwithstanding that such
Class C Capitalized Interest may be deemed to constitute additions to
principal, and other than the payment of principal pursuant to Section 9.6
or Section 9.7) may only occur after the principal of the Class A-1
Notes, the Class A-2 Notes and the Class B Notes has been paid in full and is
subordinated to the payment on each Payment Date of the principal and interest
due and payable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes
and other amounts in accordance with the Priority of Payments and any payment
of principal of the Class C Notes which is not paid, in accordance with the
Priority of Payments, on any Payment Date, shall not be considered “due and
payable” solely for purposes of Section 5.1(b) until the Payment Date on
which such principal may be paid in accordance with the Priority of Payments or
all of the Class A-1 Notes, the Class A-2 Notes and the Class B Notes have been
paid in full; provided, further,
that the payment of principal of the Class D Notes (other than payment of the
amounts constituting Class D Capitalized Interest, notwithstanding that such
Class D Capitalized Interest may be deemed to constitute additions to
principal, and other than the payment of principal pursuant to Section 9.6
or Section 9.7) may only occur after the principal of the Class A-1
Notes, the Class A-2 Notes, the Class B Notes and the Class C Notes has been
paid in full and is subordinated to the payment on each Payment Date of the
principal and interest due and payable on the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes and other amounts in accordance
with the Priority of Payments and any payment of principal of the Class D Notes
which is not paid, in accordance with the Priority of Payments, on any


 


96





















 


Payment Date,
shall not be considered “due and payable” solely for purposes of Section
5.1(b) until the Payment Date on which such principal may be paid in
accordance with the Priority of Payments or all of the Class A Notes, the Class
B Notes and the Class C Notes have been paid in full; provided, further, that the payment of principal of the Class E Notes
(other than payment of the amounts constituting Class E Capitalized Interest,
notwithstanding that such Class E Capitalized Interest may be deemed to
constitute additions to principal, and other than the payment of principal
pursuant to Section 9.6 or Section 9.7) may only occur after the
principal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes and the Class D Notes has been paid in full and is subordinated
to the payment on each Payment Date of the principal and interest due and
payable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes and other amounts in accordance with the
Priority of Payments and any payment of principal of the Class E Notes which is
not paid, in accordance with the Priority of Payments, on any Payment Date, shall
not be considered “due and payable” solely for purposes of Section 5.1(b)
until the Payment Date on which such principal may be paid in accordance with
the Priority of Payments or all of the Class A-1 Notes, the Class A-2 Notes,
the Class B Notes, the Class C Notes and the Class D Notes have been paid in
full; provided, further,
that the payment of principal of the Class F Notes (other than payment of the
amounts constituting Class F Capitalized Interest, notwithstanding that such
Class F Capitalized Interest may be deemed to constitute additions to
principal, and other than the payment of principal pursuant to Section 9.6
or Section 9.7) may only occur after the principal of the Class A-1
Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D
Notes and the Class E Notes has been paid in full and is subordinated to the
payment on each Payment Date of the principal and interest due and payable on
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes,
the Class D Notes, the Class E Notes and other amounts in accordance with the
Priority of Payments and any payment of principal of the Class F Notes which is
not paid, in accordance with the Priority of Payments, on any Payment Date,
shall not be considered “due and payable” solely for purposes of Section
5.1(b) until the Payment Date on which such principal may be paid in
accordance with the Priority of Payments or all of the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes have been paid in full; provided, further, that the payment of principal of the Class G Notes
(other than payment of the amounts constituting Class G Capitalized Interest,
notwithstanding that such Class G Capitalized Interest may be deemed to
constitute additions to principal, and other than the payment of principal
pursuant to Section 9.6 or Section 9.7) may only occur after the
principal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes has
been paid in full and is subordinated to the payment on each Payment Date of
the principal and interest due and payable on the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes and other amounts in accordance with the Priority of
Payments and any payment of principal of the Class G Notes which is not paid,
in accordance with the Priority of Payments, on any Payment Date, shall not be
considered “due and payable” solely for purposes of Section 5.1(b) until
the Payment Date on which such principal may be paid in accordance with the
Priority of Payments or all of the Class A-1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes and the
Class F Notes have been paid in full; provided, further, that the payment of principal of the Class H Notes
(other than payment of the amounts constituting


 


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Class H Capitalized
Interest, notwithstanding that such Class H Capitalized Interest may be deemed
to constitute additions to principal, and other than the payment of principal
pursuant to Section 9.6 or Section 9.7) may only occur after the
principal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes and the
Class G Notes has been paid in full and is subordinated to the payment on each
Payment Date of the principal and interest due and payable on the Class A-1
Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes, the Class F Notes, the Class G Notes and other
amounts in accordance with the Priority of Payments and any payment of
principal of the Class H Notes which is not paid, in accordance with the
Priority of Payments, on any Payment Date, shall not be considered “due and
payable” solely for purposes of Section 5.1(b) until the Payment Date on
which such principal may be paid in accordance with the Priority of Payments or
all of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes and the Class G
Notes have been paid in full; provided, further, that the payment of principal of the Class J Notes
(other than payment of the amounts constituting Class J Capitalized Interest,
notwithstanding that such Class J Capitalized Interest may be deemed to
constitute additions to principal, and other than the payment of principal
pursuant to Section 9.6 or Section 9.7) may only occur after the
principal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes and the Class H Notes has been paid in full and is subordinated
to the payment on each Payment Date of the principal and interest due and
payable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes and other amounts in accordance with the
Priority of Payments and any payment of principal of the Class H Notes which is
not paid, in accordance with the Priority of Payments, on any Payment Date,
shall not be considered “due and payable” solely for purposes of Section
5.1(b) until the Payment Date on which such principal may be paid in
accordance with the Priority of Payments or all of the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes, the Class G Notes and the Class H Notes have
been paid in full; provided, further, that the payment of principal of the Class K Notes
(other than payment of the amounts constituting Class K Capitalized Interest,
notwithstanding that such Class K Capitalized Interest may be deemed to
constitute additions to principal, and other than the payment of principal
pursuant to Section 9.6 or Section 9.7) may only occur after the
principal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes and the Class J Notes has been paid in full
and is subordinated to the payment on each Payment Date of the principal and
interest due and payable on the Class A-1 Notes, the Class A-2 Notes, the Class
B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes and other
amounts in accordance with the Priority of Payments and any payment of
principal of the Class H Notes which is not paid, in accordance with the
Priority of Payments, on any Payment Date, shall not be considered “due and
payable” solely for purposes of Section 5.1(b) until the Payment Date on
which such principal may be paid in accordance with the Priority of Payments or
all of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes, the Class H Notes and the Class J Notes have been paid in full.


 


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(o)      As a condition
to the payment of principal of and interest on any Note without the imposition
of U.S. withholding tax, the Issuer shall require certification acceptable to
it to enable the Issuer, the Co-Issuer, the Trustee, the Preferred Shares
Paying Agent and the Paying Agent to determine their duties and liabilities
with respect to any taxes or other charges that they may be required to deduct
or withhold from payments in respect of such Security under any present or
future law or regulation of the United States or any present or future law or
regulation of any political subdivision thereof or taxing authority therein or
to comply with any reporting or other requirements under any such law or
regulation.


 


(p)      Payments in
respect of interest on and principal of the Notes shall be payable by wire
transfer in immediately available funds to a Dollar account maintained by the
Holder or its nominee; provided that
the Holder has provided wiring instructions to the Trustee on or before the
related Record Date or, if wire transfer cannot be effected, by a Dollar check
drawn on a bank in the United States, or by a Dollar check mailed to the Holder
at its address in the Notes Register. 
The Issuer expects that the Depository or its nominee, upon receipt of
any payment of principal or interest in respect of a Global Security held by
the Depository or its nominee, shall immediately credit the applicable Agent
Members’ accounts with payments in amounts proportionate to the respective
beneficial interests in such Global Security as shown on the records of the
Depository or its nominee.  The Issuer
also expects that payments by Agent Members to owners of beneficial interests
in such Global Security held through Agent Members will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in the names of nominees for such
customers.  Such payments will be the
responsibility of the Agent Members. 
Upon final payment due on the Maturity of a Note, the Holder thereof
shall present and surrender such Note at the Corporate Trust Office of the
Trustee or at the office of the Paying Agent (outside of the United States if
then required by applicable law in the case of a Certificated Note issued in
exchange for a beneficial interest in the Regulation S Global Security) on or
prior to such Maturity.  None of the
Issuer, the Co-Issuer, the Trustee or the Paying Agent will have any
responsibility or liability with respect to any records maintained by the
Holder of any Note with respect to the beneficial holders thereof or payments
made thereby on account of beneficial interests held therein.  In the case where any final payment of
principal and interest is to be made on any Note (other than on the Stated
Maturity thereof) the Issuer or, upon Issuer Request, the Trustee, in the name
and at the expense of the Issuer shall, not more than 30 nor fewer than five
Business Days prior to the date on which such payment is to be made, mail to
the Persons entitled thereto at their addresses appearing on the Notes
Register, a notice which shall state the date on which such payment will be
made and the amount of such payment per $500,000 initial principal amount of
Notes and shall specify the place where such Notes may be presented and
surrendered for such payment.


 


(q)      Subject to the
provisions of Sections 2.7(a) through (l) hereof, Holders of
Notes as of the Record Date in respect of a Payment Date shall be entitled to
the interest accrued and payable in accordance with the Priority of Payments
and principal payable in accordance with the Priority of Payments on such Payment
Date.  All such payments that are mailed
or wired and returned to the Paying Agent shall be held for payment as herein
provided at the office or agency of the Issuer and the Co-Issuer to be
maintained as provided in Section 7.2 (or returned to the Trustee).


 


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(r)       Interest on
any Note which is payable, and is punctually paid or duly provided for, on any
Payment Date shall be paid to the Person in whose name that Note (or one or
more predecessor Notes) is registered at the close of business on the Record
Date for such interest.


 


(s)      Payments of
principal to Holders of the Notes of each Class shall be made in the proportion
that the Aggregate Outstanding Amount of the Notes of such Class registered in
the name of each such Holder on such Record Date bears to the Aggregate
Outstanding Amount of all Notes of such Class on such Record Date.


 


(t)       Interest
accrued with respect to the Notes shall be calculated as described in the
applicable form of Note attached hereto.


 


(u)      All reductions
in the principal amount of a Note (or one or more predecessor Notes) effected
by payments of installments of principal made on any Payment Date, Redemption
Date or upon Maturity shall be binding upon all future Holders of such Note and
of any Note issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, whether or not such payment is noted on such Note.


 


(v)      Notwithstanding
anything contained in this Indenture to the contrary, the obligations of the
Issuer and the Co-Issuer under the Notes and this Indenture are non-recourse
obligations of the Issuer and the Co-Issuer payable solely from the Assets and
following realization of the Assets, any claims of the Noteholders or the
Trustee shall be extinguished.  No
recourse shall be had for the payment of any amount owing in respect of the
Notes against any Officer, director, employee, shareholder, limited partner or
incorporator of the Issuer, the Co-Issuer or any of their respective successors
or assigns for any amounts payable under the Notes or this Indenture.  It is understood that the foregoing
provisions of this paragraph shall not (i) prevent recourse to the Assets for
the sums due or to become due under any security, instrument or agreement which
is part of the Assets or (ii) constitute a waiver, release or discharge of any
indebtedness or obligation evidenced by the Notes or secured by this Indenture
(to the extent it relates to the obligation to make payments on the Notes)
until such Assets have been realized, whereupon any outstanding indebtedness or
obligation in respect of the Notes shall be extinguished.  It is further understood that the foregoing
provisions of this paragraph shall not limit the right of any Person to name
the Issuer or the Co-Issuer as a party defendant in any Proceeding or in the
exercise of any other remedy under the Notes or this Indenture, so long as no
judgment in the nature of a deficiency judgment or seeking personal liability
shall be asked for or (if obtained) enforced against any such Person or entity.


 


(w)     Subject to the
foregoing provisions of this Section 2.7, each Note delivered under this
Indenture and upon registration of transfer of or in exchange for or in lieu of
any other Note shall carry the rights of unpaid interest and principal that
were carried by such other Note.


 


(x)      Notwithstanding
any of the foregoing provisions with respect to payments of principal of and
interest on the Notes (but subject to Section 2.7(l)), if the Notes have
become or been declared due and payable following an Event of Default and such
acceleration of Maturity and its consequences have not been rescinded and
annulled and the provisions of


 


100





















 


Section 5.5
are not applicable, then payments of principal of and interest on such Notes
shall be made in accordance with Section 5.7 hereof.


 


(y)      Payments in
respect of the Preferred Shares as contemplated by Sections 11.1(a)(i)(34) and 11.1(a)(ii)(17) shall be made by the
Trustee to the Preferred Shares Paying Agent.


 


Section 2.8             Persons
Deemed Owners.


 


The Issuer, the Co-Issuer, the Trustee, and any agent
of the Issuer, the Co-Issuer or the Trustee may treat as the owner of a Note
the Person in whose name such Note is registered on the Notes Register on the
applicable Record Date for the purpose of receiving payments of principal of
and interest and other amounts on such Note and on any other date for all other
purposes whatsoever (whether or not such Note is overdue), and none of the
Issuer, the Co-Issuer or the Trustee nor any agent of the Issuer, the Co-Issuer
or the Trustee shall be affected by notice to the contrary; provided, however, that
the Depository, or its nominee, shall be deemed the owner of the Global
Securities, and owners of beneficial interests in Global Securities will not be
considered the owners of any Notes for the purpose of receiving notices.  With respect to the Preferred Shares, on any
Payment Date, the Trustee shall deliver to the Preferred Shares Paying Agent
the distributions thereon for distribution to the Preferred Shareholders.


 


Section 2.9             Cancellation.


 


All Notes surrendered for payment, registration of
transfer, exchange or redemption, or deemed lost or stolen, shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and shall be promptly canceled by the Trustee and may not be reissued or
resold.  No Notes shall be authenticated
in lieu of or in exchange for any Notes canceled as provided in this Section
2.9, except as expressly permitted by this Indenture.  All canceled Notes held by the Trustee shall
be destroyed or held by the Trustee in accordance with its standard retention
policy unless the Issuer and the Co-Issuer shall direct by an Issuer Order that
they be returned to them.


 


Section 2.10           Global
Securities; Temporary Notes.


 


(a)      In the event
that the Depository notifies the Issuer and the Co-Issuer that it is unwilling
or unable to continue as Depository for a Global Security or if at any time
such Depository ceases to be a “Clearing Agency” registered under the Exchange
Act and a successor depository is not appointed by the Issuer within 90 days of
such notice, the Global Securities deposited with the Depository pursuant to Section
2.2 hereof shall be transferred to the beneficial owners thereof subject to
the procedures and conditions set forth in this Section 2.10.


 


(b)      Any Global
Security that is transferable to the beneficial owners thereof pursuant to Section
2.10(a) above shall be surrendered by the Depository to the Trustee’s
Corporate Trust Office together with necessary instruction for the registration
and delivery of Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C Notes,
Class D Notes, Class E Notes, Class F Notes, Class G Notes and Class H Notes in
definitive registered form without interest coupons to the beneficial owners
(or such owner’s nominee) holding the ownership


 


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interests
in such Global Security.  Any such
transfer shall be made, without charge, and the Trustee shall authenticate and
deliver, upon such transfer of each portion of such Global Security, an equal
aggregate principal amount of Certificated Notes of the same Class and
authorized denominations.  Any Certificated
Notes delivered in exchange for an interest in a Global Security shall, except
as otherwise provided by Section 2.5(f), bear the applicable legend set
forth in Exhibit A or B, as applicable, and shall be subject to
the transfer restrictions referred to in such applicable legend.  The Holder of each such registered individual
Global Security may transfer such Global Security by surrendering it at the
Corporate Trust Office of the Trustee, or at the office of the Paying Agent or
Irish Paying Agent.


 


(c)      Subject to the
provisions of Section 2.10(b) above, the registered Holder of a Global
Security may grant proxies and otherwise authorize any Person, including Agent
Members and Persons that may hold interests through Agent Members, to take any
action which a Holder is entitled to take under this Indenture or the Notes.


 


(d)      In the event of
the occurrence of either of the events specified in Section 2.10(a)
above, the Issuer and the Co-Issuer shall promptly make available to the
Trustee a reasonable supply of Certificated Notes.


 


Pending the preparation of Certificated Notes pursuant
to this Section 2.10, the Issuer and the Co-Issuer may execute and, upon
Issuer Order, the Trustee shall authenticate and deliver, temporary Class A-1
Notes, Class A-2 Notes, Class B Notes, Class C Notes, Class D Notes, Class E
Notes, Class F Notes Class G Notes or Class H Notes that are printed,
lithographed, typewritten, mimeographed or otherwise reproduced, in any
authorized denomination, substantially of the tenor of the Certificated Notes
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the Officers executing such Certificated
Notes may determine, as conclusively evidenced by their execution of such Certificated
Notes.


 


If temporary Certificated Notes are issued, the Issuer
and the Co-Issuer shall cause permanent Certificated Notes to be prepared
without unreasonable delay.  The Certificated
Notes shall be printed, lithographed, typewritten or otherwise reproduced, or
provided by any combination thereof, or in any other manner permitted by the
rules and regulations of any applicable notes exchange, all as determined by
the Officers executing such Certificated Notes. 
After the preparation of Certificated Notes, the temporary Notes shall be
exchangeable for Certificated Notes upon surrender of the applicable temporary
Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C Notes, Class D Notes,
Class E Notes, Class F Notes, Class G Notes or Class H Notes at the office or
agency maintained by the Issuer and the Co-Issuer for such purpose, without
charge to the Holder.  Upon surrender for
cancellation of any one or more temporary Class A-1 Notes, Class A-2 Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes, Class F Notes,
Class G Notes or Class H Notes, the Issuer and the Co-Issuer shall execute, and
the Trustee shall authenticate and deliver, in exchange therefor the same
aggregate principal amount of Certificated Notes of authorized
denominations.  Until so exchanged, the
temporary Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C Notes, Class
D Notes, Class E Notes, Class F Notes, Class G Notes or Class H Notes shall in
all respects be entitled to the same benefits under this Indenture as Certificated
Notes.


 


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Section 2.11           U.S.
Tax Treatment of Notes.


 


(a)      Each of the
Issuer and the Co-Issuer intends that, for U.S. federal income tax purposes,
the Notes be treated as debt.  Each
prospective purchaser and any subsequent transferee of a Note or any interest
therein shall, by virtue of its purchase or other acquisition of such Note or
interest therein, be deemed to have agreed to treat such Note as debt for U.S.
federal income tax purposes.


 


(b)      In the case of
the Preferred Shares and any Class of Notes that is deemed equity for U.S.
federal income tax purposes by the Internal Revenue Service (the “IRS”), if the Holder
of such Security so requests, the Issuer agrees to timely provide each Holder
of such a Security with a PFIC Annual Information Statement, signed by the
Issuer or its authorized representative, on an annual basis that contains the
following information as required under Treasury Regulation section
1.1295-1(g)(i):


 


(i)            the first and last days of the taxable year of the Issuer to
which the PFIC Annual Information Statement applies;


 


(ii)           sufficient information to enable each Holder of such
Securities to calculate its pro rata share
of the Issuer’s ordinary earnings and net capital gain for that taxable year;


 


(iii)          the
amount of cash and the fair market value of other property distributed or
deemed distributed to such Holder of such Securities during the taxable year of
the Issuer to which the PFIC Annual Information Statement pertains; and


 


(iv)          a statement
that the Issuer shall permit the Holder of any such Securities to inspect and
copy the Issuer’s permanent books of account, records and such other documents
as may be maintained by the Issuer to establish that the Issuer’s ordinary
earnings and net capital gain are computed in accordance with U.S. federal
income tax principles and to verify these amounts and the Holder’s pro rata interest thereof.


 


Notwithstanding the foregoing, if the Holder of such
Security so requests and such Holder informs the Issuer or its authorized
representative of the par value of each Class of Securities held by such Holder
during such taxable year (including, if any Securities were acquired or sold
during such taxable year, the date such Securities were acquired or sold, and
par value of such Securities), the Issuer or its authorized representative will
inform such Holder of its pro rata share
of the Issuer’s ordinary earnings and net capital gain in a timely manner.


 


(c)      The Issuer and
the Co-Issuer shall account for the aforementioned Securities and prepare any
reports to Noteholders and tax authorities, including without limitation the
report specified in paragraph (b) above, consistent with the intentions
expressed in Sections 2.11(a) above.


 


(d)      Each Holder of
Notes shall timely furnish to the Issuer, the Co-Issuer or its agents any U.S.
federal income tax form or certification (such as IRS Form W-8BEN
(Certification of Foreign Status of Beneficial Owner) (with Part III marked), IRS
Form W-8IMY (Certification of Foreign Intermediary Status), IRS Form W-9
(Request for Taxpayer


 


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Identification
Number and Certification), or IRS Form W-8ECI (Certification of Foreign Person’s
Claim for Exemption from Withholding on Income Effectively Connected with
Conduct of a U.S. Trade or Business) or any successors to such IRS forms that
the Issuer, the Co-Issuer or its agents may reasonable request and shall update
or replace such forms or certification in accordance with its terms or its
subsequent amendments.


 


Section 2.12           Authenticating
Agents.


 


Upon the request of the Issuer and the Co-Issuer, the
Trustee shall, and if the Trustee so chooses the Trustee may pursuant to this
Indenture, appoint one or more Authenticating Agents with power to act on its
behalf and subject to its direction in the authentication of Notes in
connection with issuance, transfers and exchanges under Sections 2.4, 2.5,
2.6 and 8.5 hereof, as fully to all intents and purposes as
though each such Authenticating Agent had been expressly authorized by such
Sections to authenticate such Notes.  For
all purposes of this Indenture, the authentication of Notes by an
Authenticating Agent pursuant to this Section 2.12 shall be deemed to be
the authentication of Notes by the Trustee.


 


Any corporation or banking association into which any
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or banking association resulting from any
merger, consolidation or conversion to which any Authenticating Agent shall be
a party, or any corporation succeeding to the corporate trust business of any
Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, without the execution or filing of any further act on the part of the
parties hereto or such Authenticating Agent or such successor corporation.  Any Authenticating Agent may at any time
resign by giving written notice of resignation to the Trustee, the Issuer and
the Co-Issuer.  The Trustee may at any
time terminate the agency of any Authenticating Agent by giving written notice
of termination to such Authenticating Agent, the Issuer and the Co-Issuer.  Upon receiving such notice of resignation or
upon such a termination, the Trustee shall promptly appoint a successor Authenticating
Agent and shall give written notice of such appointment to the Issuer.


 


The Trustee agrees to pay to each Authenticating Agent
appointed by it from time to time reasonable compensation for its services, and
reimbursement for its reasonable expenses relating thereto and the Trustee
shall be entitled to be reimbursed for such payments, subject to Section 6.7
hereof.  The provisions of Sections
2.9, 6.4 and 6.5 hereof shall be applicable to any
Authenticating Agent.


 


Section 2.13           Forced
Sale on Failure to Comply with Restrictions.


 


(a)      Notwithstanding
anything to the contrary elsewhere in this Indenture, any transfer of a Note or
interest therein to a U.S. Person who is determined not to have been both a QIB
(except in the case of QRS. Corp.) and a Qualified Purchaser at the time of
acquisition of the Note or interest therein shall be null and void and any such
proposed transfer of which the Issuer, the Co-Issuer or the Trustee shall have
notice may be disregarded by the Issuer, the Co-Issuer and the Trustee for all
purposes.


 


(b)      If the Issuer
determines that any Holder of a Note has not satisfied the applicable
requirement described in Section 2.13(a) above (any such person a “Non-Permitted


 


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Holder”), then the Issuer
shall promptly after discovery that such Person is a Non-Permitted Holder by
the Issuer, the Co-Issuer or the Trustee (and notice by the Trustee or the
Co-Issuer to the Issuer, if either of them makes the discovery), send notice to
such Non-Permitted Holder demanding that such Non-Permitted Holder transfer its
interest to a Person that is not a Non-Permitted Holder within 30 days of the
date of such notice.  If such
Non-Permitted Holder fails to so transfer its Note or interest therein, the
Issuer shall have the right, without further notice to the Non-Permitted
Holder, to sell such Note or interest therein to a purchaser selected by the
Issuer that is not a Non-Permitted Holder on such terms as the Issuer may
choose.  The Issuer, or the Trustee
acting on behalf of the Issuer, may select the purchaser by soliciting one or
more bids from one or more brokers or other market professionals that regularly
deal in securities similar to the Note, and selling such Note to the highest
such bidder.  However, the Issuer or the
Trustee may select a purchaser by any other means determined by it in its sole
discretion.  The Holder of such Note, the
Non-Permitted Holder and each other Person in the chain of title from the
Holder to the Non-Permitted Holder, by its acceptance of an interest in the
Note, agrees to cooperate with the Issuer and the Trustee to effect
such transfers.  The proceeds of such
sale, net of any commissions, expenses and taxes due in connection with such
sale shall be remitted to the Non-Permitted Holder.  The terms and conditions of any sale under
this Section 2.13(b) shall be determined in the sole discretion of the
Issuer, and the Issuer shall not be liable to any Person having an interest in
the Note sold as a result of any such sale of exercise of such discretion.


 


ARTICLE 3


 


CONDITIONS
PRECEDENT; PLEDGED OBLIGATIONS


 


Section 3.1             General
Provisions.


 


The Notes to be issued on the Closing Date shall be
executed by the Issuer and the Co-Issuer upon compliance with Section 3.2
and shall be delivered to the Trustee for authentication and thereupon the same
shall be authenticated and delivered by the Trustee upon Issuer Request and
upon receipt by the Trustee of the items described below:


 


(a)      an Officer’s
Certificate of the Issuer (i) evidencing the authorization by Board Resolution
of the execution and delivery of this Indenture, the Collateral Management
Agreement, each Hedge Agreement and related documents, the execution,
authentication and delivery of the Notes and specifying the Stated Maturity of
each Class of Notes, the principal amount of each Class of Notes and the
applicable Note Interest Rate of each Class of Notes to be authenticated and
delivered, and (ii) certifying that (A) the attached copy of the Board
Resolution is a true and complete copy thereof, (B) such resolutions have not
been rescinded and are in full force and effect on and as of the Closing Date,
(C) the Directors authorized to execute and deliver such documents hold the
offices and have the signatures indicated thereon and (4) at least $105,000,000
of proceeds on account of the sale on the Closing Date of the Preferred Shares
shall have been received;


 


(b)      an Officer’s
Certificate of the Co-Issuer (i) evidencing the authorization by Board
Resolution of the execution and delivery of this Indenture and related
documents, the execution, authentication and delivery of the Notes and
specifying the Stated Maturity of


 


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each Class of
Notes, the principal amount of each Class of Notes and the applicable Note
Interest Rate of each Class of Notes to be authenticated and delivered, and (ii)
certifying that (A) the attached copy of the Board Resolution is a true and
complete copy thereof, (B) such resolutions have not been rescinded and are in
full force and effect on and as of the Closing Date and (C) the Officers
authorized to execute and deliver such documents hold the offices and have the
signatures indicated thereon;


 


(c)      (i) either (A)
certificates of the Issuer or other official document evidencing the due
authorization, approval or consent of any governmental body or bodies, at the
time having jurisdiction in the premises, together with an Opinion of Counsel
of the Issuer that no other authorization, approval or consent of any
governmental body is required for the valid issuance of such Notes, or (B) an
Opinion of Counsel of the Issuer reasonably satisfactory in form and substance
to the Trustee that no such authorization, approval or consent of any
governmental body is required for the valid issuance of such Notes except as
may have been given; and


 


(ii)      either (A)
certificates of the Co-Issuer or other official document evidencing the due
authorization, approval or consent of any governmental body or bodies, at the
time having jurisdiction in the premises, together with an Opinion of Counsel
of the Co-Issuer that no other authorization, approval or consent of any
governmental body is required for the valid issuance of such Notes, or (B) an
Opinion of Counsel of the Co-Issuer reasonably satisfactory in form and
substance to the Trustee that no such authorization, approval or consent of any
governmental body is required for the valid issuance of such Notes except as
may have been given;


 


(d)      opinions of
Cadwalader, Wickersham & Taft LLP, special U.S. counsel to the Issuer, the
Co-Issuer and the Collateral Manager (which opinions may be limited to the laws
of the State of New York and the federal law of the United States and may
assume, among other things, the correctness of the representations and
warranties made or deemed made by the owners of Notes pursuant to Sections
2.5(g) and (i)) dated the Closing Date, substantially in the form of
Exhibit F attached hereto;


 


(e)      an opinion of Maples and Calder, Cayman Islands counsel to
the Issuer (which opinion shall be limited to the laws of the Cayman Islands),
dated the Closing Date, substantially in the form of Exhibit G attached
hereto;


 


(f)       an opinion of counsel to each Hedge Counterparty, dated the
Closing Date, substantially in the form of Exhibit H attached hereto;


 


(g)      opinions of
Clifford Chance, (i) special tax counsel to Gramercy Investment regarding its
qualification and taxation as a REIT, substantially in the form of Exhibit K
attached hereto, (ii) special counsel to Gramercy Investment, as the Seller,
dated the Closing Date, substantially in the form of Exhibit I attached
hereto and (iii) special counsel to the Advancing Agent, dated the Closing
Date, substantially in the form of Exhibit I attached hereto;


 


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(h)      an Officer’s
Certificate, given on behalf of the Issuer and without personal liability,
stating that the Issuer is not in Default under this Indenture and that the
issuance of the Notes will not result in a breach of any of the terms,
conditions or provisions of, or constitute a Default under, the Governing
Documents of the Issuer, any indenture or other agreement or instrument to
which the Issuer is a party or by which it is bound, or any order of any court
or administrative agency entered in any Proceeding to which the Issuer is a
party or by which it may be bound or to which it may be subject; that all
conditions precedent provided in this Indenture relating to the authentication
and delivery of the Notes applied for and all conditions precedent provided in
the Preferred Shares Paying Agency Agreement relating to the issuance by the
Issuer of the Preferred Shares have been complied with;


 


(i)       an Officer’s
Certificate stating that the Co-Issuer is not in Default under this Indenture
and that the issuance of the Securities will not result in a breach of any of
the terms, conditions or provisions of, or constitute a Default under, the
Governing Documents of the Co-Issuer, any indenture or other agreement or
instrument to which the Co-Issuer is a party or by which it is bound, or any
order of any court or administrative agency entered in any Proceeding to which
the Co-Issuer is a party or by which it may be bound or to which it may be
subject; that all conditions precedent provided in this Indenture relating to
the authentication and delivery of the Notes applied for have been complied
with; and that all expenses due or accrued with respect to the offering or
relating to actions taken on or in connection with the Closing Date have been
paid;


 


(j)       an executed counterpart of the initial Collateral Debt
Securities Purchase Agreement and the Collateral Management Agreement;


 


(k)      an executed copy of each Hedge Agreement;


 


(l)       an executed counterpart of the Preferred Shares Paying
Agency Agreement;


 


(m)     an opinion of counsel to the Trustee, dated the Closing
Date, substantially in the form of Exhibit J attached hereto;


 


(n)      an Accountants’
Report confirming the following information as of the Closing Date:  (i) the information (other than the Principal
Balance and the Purchase Price) with respect to each Collateral Debt Security
set forth on the Schedule of Closing Date Collateral Debt Securities attached
hereto as Schedule E by reference to such sources as shall be specified
therein and (ii) specifying the procedures undertaken by the accountants to
review data and computations relating to the foregoing;


 


(o)      an Officer’s
Certificate from the Collateral Manager (i) confirming that each Collateral
Debt Security set forth on the Schedule E attached hereto meets the
Eligibility Criteria and that Schedule E correctly lists the Collateral
Debt Securities to be Granted to the Trustee on the Closing Date, and (ii)
stating the Aggregate Principal Amount of the Collateral Debt Securities;


 


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(p)      evidence of preparation for filing at the appropriate filing
office in the District of Columbia of a financing statement executed on behalf
of the Issuer relating to the perfection of the lien of this Indenture;


 


(q)      an Issuer Order
executed by the Issuer and the Co-Issuer directing the Trustee to (i)
authenticate the Notes specified therein, in the amounts set forth therein and
registered in the name(s) set forth therein and (ii) deliver the authenticated
Notes as directed by the Issuer and the Co-Issuer; and


 


(r)       such other documents as the Trustee may reasonably require.


 


Section 3.2             Security
for Notes.


 


Prior to the issuance of the Notes on the Closing
Date, the Issuer shall cause the following conditions to be satisfied:


 


(a)      Grant of
Security Interest; Delivery of Collateral Debt Securities.  The Grant pursuant to the Granting clauses of
this Indenture of all of the Issuer’s right, title and interest in and to the
Assets and the transfer of all Collateral Debt Securities acquired in
connection therewith purchased by the Issuer on the Closing Date (as set forth
in the Schedule of Closing Date Collateral Debt Securities) to the Trustee,
without recourse (except as expressly provided in each applicable Collateral
Debt Security Purchase Agreement), in the manner provided in Section 3.3(a)
and the crediting to the Custodial Account by the Custodial Securities
Intermediary of such Collateral Debt Securities shall have occurred;


 


(b)      Certificate
of the Issuer.  A certificate of an
Authorized Officer of the Issuer given on behalf of the Issuer and without
personal liability, dated as of the Closing Date, delivered to the Trustee, to
the effect that, in the case of each Collateral Debt Security pledged to the
Trustee for inclusion in the Assets on the Closing Date and immediately prior
to the delivery thereof on the Closing Date:


 


(i)            the
Issuer is the owner of such Collateral Debt Security free and clear of any
liens, claims or encumbrances of any nature whatsoever except for those which
are being released on the Closing Date;


 


(ii)           the Issuer
has acquired its ownership in such Collateral Debt Security in good faith
without notice of any adverse claim, except as described in paragraph (i)
above;


 


(iii)          the
Issuer has not assigned, pledged or otherwise encumbered any interest in such
Collateral Debt Security (or, if any such interest has been assigned, pledged
or otherwise encumbered, it has been released) other than interests Granted
pursuant to this Indenture;


 


(iv)          the Underlying Instrument with respect to such Collateral
Debt Security does not prohibit the Issuer from Granting a security interest in
and assigning and pledging such Collateral Debt Security to the Trustee;


 


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(v)           the information set forth with respect to such Collateral
Debt Security in the Schedule of Closing Date Collateral Debt Securities is
correct;


 


(vi)          the Collateral Debt Securities included in the Assets
satisfy the requirements of the definition of Eligibility Criteria and the
requirements of Section 3.2(a); and


 


(vii)         the
Grant pursuant to the Granting Clauses of this Indenture shall result in a
first priority security interest in favor of the Trustee for the benefit of the
Holders of the Notes and each Hedge Counterparty in all of the Issuer’s right,
title and interest in and to the Collateral Debt Securities pledged to the
Trustee for inclusion in the Assets on the Closing Date.


 


(c)      Rating
Letters.  The Trustee’s receipt of a
letter signed by each Rating Agency and confirming that (i) the Class A-1 Notes
have been rated “Aaa” by Moody’s and “AAA” by S&P and Fitch, (ii) the Class
A-2 Notes have been rated “Aaa” by Moody’s and “AAA” by S&P and Fitch,
(iii) the Class B Notes have been rated at least “Aa2” by Moody’s and “AA” by
S&P and Fitch, (iv) the Class C Notes have been rated at least “A1” by
Moody’s and “A+” by S&P and Fitch, (v) the Class D Notes have been rated at
least “A2” by Moody’s and “A” by S&P and Fitch, (vi) the Class E Notes have
been rated at least “A3” by Moody’s and “A-” by S&P and Fitch, (vii) the
Class F Notes have been rated at least “Baa1” by Moody’s and “BBB+” by S&P
and Fitch, (viii) the Class G Notes have been rated at least “Baa2” by Moody’s
and “BBB” by S&P and Fitch, (ix) the Class H Notes have been rated at least
“Baa3” by Moody’s and “BBB-” by S&P and Fitch, (x) the Class J Notes have
been rated at least “Ba2” by Moody’s and “BB” by S&P and Fitch and (xi) the
Class K Notes have been rated at least “B2” by Moody’s and “B” by S&P and
Fitch and that such ratings are in full force and effect on the Closing Date.


 


(d)      Accounts.  Evidence of the
establishment of the Payment Account, the Collection Account, the Interest
Collection Account, the Principal Collection Account, the Unused Proceeds
Account, the Delayed Funding Obligations Account, the Expense Account, each
Hedge Collateral Account, each Hedge Termination Account, the Preferred Shares
Distribution Account and the Custodial Account.


 


(e)      Deposit to
Expense Account.  On the Closing
Date, the Issuer shall deposit into the Expense Account from the gross proceeds
of the offering of the Securities, approximately $11,234,432.


 


(f)       Deposit to Delayed Funding Obligations Account.  On the Closing Date, the Issuer or the Seller
shall deposit into the Delayed Funding Obligations Account approximately $2,218,133,
which, in the aggregate is sufficient to fulfill the maximum funding
obligations under all Delayed Draw Term Loans included in the Initial
Collateral Debt Securities.


 


(g)      Deposit to
Unused Proceeds Account.  On the
Closing Date, the Issuer shall deposit the Initial Deposit with the Trustee in
an amount equal to approximately $190,718,894.


 


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(h)      Issuance of
Preferred Shares.  The Issuer shall
have delivered to the Trustee evidence that the Preferred Shares have been, or
contemporaneously with the issuance of the Notes will be, (1) issued by the
Issuer and (2) acquired in their entirety by QRS Corp.


 


Section 3.3             Transfer
of Pledged Obligations.


 


(a)      Wells Fargo
Bank, National Association is hereby appointed as Securities Intermediary (in
such capacity, the “Custodial Securities Intermediary”) to hold all
Pledged Obligations delivered to it in physical form at its office in Minneapolis,
Minnesota.  Any successor to such
Securities Intermediary shall be a U.S. state or national bank or trust company
that is not an Affiliate of the Issuer or the Co-Issuer and has capital and
surplus of at least $100,000,000. 
Subject to the limited right to relocate Pledged Obligations set forth
in Section 7.5(b), the Custodial Securities Intermediary, as a
Securities Intermediary, shall hold all Collateral Debt Securities in the
Custodial Account and Eligible Investments and other investments purchased in
accordance with this Indenture in the respective Accounts in which the funds
used to purchase such investments are held in accordance with Article 10,
and, in respect of each Account (other than the Payment Account), the Trustee
shall have entered into an agreement with the Securities Intermediary (the “Securities
Accounts Control Agreement”) providing, inter alia,
that the establishment and maintenance of such Account will be governed by a
law satisfactory to the Issuer, the Trustee and the Custodial Securities
Intermediary.  To the maximum extent
feasible, Pledged Obligations shall be transferred to the Trustee as Security
Entitlements in the manner set forth in clause (i) below.  In the event that the measures set forth in
clause (i) below cannot be taken as to any Pledged Obligations, such Pledged
Obligation may be transferred to the Trustee in the manner set forth in clauses
(ii) through (vii) below, as appropriate. 
The security interest of the Trustee in Pledged Obligations shall be perfected
and otherwise evidenced as follows:


 


(i)            in the
case of such Pledged Obligations consisting of Security Entitlements by (A) the
Issuer causing the Custodial Securities Intermediary, in accordance with the
Securities Accounts Control Agreement, to indicate by book entry that a
Financial Asset has been credited to the Custodial Account and (B) the Issuer
causing the Custodial Securities Intermediary to agree pursuant to the
Securities Accounts Control Agreement that it will comply with Entitlement Orders
originated by the Trustee with respect to each such Security Entitlement
without further consent by the Issuer;


 


(ii)           in the
case of Pledged Obligations that are “uncertificated securities” (as such term
is defined in the UCC) to the extent that any such uncertificated securities do
not constitute Financial Assets forming the basis of Security Entitlements by
the Trustee pursuant to clause (i) (the “Uncertificated Securities”), by
the Issuer (A)  causing the issuer(s) of
such Uncertificated Securities to register on their respective books the
Trustee as the registered owner thereof upon original issue or transfer thereof
or (B) causing another Person, other than a Securities Intermediary, either to
become the registered owner of such Uncertificated Securities on behalf of the
Trustee, or such Person having previously become the registered owner, to
acknowledge that it holds such Uncertificated Securities for the Trustee;


 


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(iii)          in
the case of Pledged Obligations consisting of Certificated Securities in
registered form to the extent that any such Certificated Securities do not
constitute Financial Assets forming the basis of Security Entitlements acquired
by the Trustee pursuant to clause (i) (the “Registered Securities”), by
the Issuer (A) causing (1) the Trustee to obtain possession of such Registered
Securities in the State of Minnesota or (2) another Person, other than a
Securities Intermediary, either to acquire possession of such Registered
Securities on behalf of the Trustee, or having previously acquired such
Registered Securities, in either case, in the State of Minnesota to acknowledge
that it holds such Registered Securities for the Trustee and (B) causing (1)
the endorsement of such Registered Securities to the Trustee by an effective
endorsement; or (2) the registration of such Registered Securities in the name
of the Trustee by the issuer thereof upon its original issue or registration of
transfer;


 


(iv)          in the case
of Pledged Obligations consisting of Certificated Securities in bearer form to
the extent that any such Certificated Securities do not constitute Financial
Assets forming the basis of Security Entitlements acquired by the Trustee
pursuant to clause (i) (the “Bearer Securities”), by the Issuer causing
(A) the Trustee to obtain possession of such Bearer Securities in the State of
Minnesota or (B) another Person, other than a Securities Intermediary, either
to acquire possession of such Bearer Securities on behalf of the Trustee or, having
previously acquired possession of such Bearer Securities, in either case, in
the State of Minnesota to acknowledge that it holds such Bearer Securities for
the Trustee;


 


(v)           in the
case of Pledged Obligations that consist of Money or Instruments (the “Minnesota Collateral”),
to the extent that any such Minnesota Collateral does not constitute a
Financial Asset forming the basis of a Security Entitlement acquired by the
Trustee pursuant to clause (i), by the Issuer causing (A) the Trustee to
acquire possession of such Minnesota Collateral in the State of Minnesota or
(B) another Person (other than the Issuer or a Person controlling, controlled
by, or under common control with, the Issuer) (1) to (x) take possession of
such Minnesota Collateral in the State of Minnesota and (y) authenticate a
record acknowledging that it holds such possession for the benefit of the
Trustee or (2) to (x) authenticate a record acknowledging that it will hold
possession of such Minnesota Collateral for the benefit of the Trustee and (y)
take possession of such Minnesota Collateral in the State of Minnesota;


 


(vi)          in the case
of Pledged Obligations that consist of UCC Accounts or General Intangibles (“Accounts
Receivable”), by the Issuer (A) notifying, or causing the notification of,
the account debtors (as such term is defined in Section 9-102(a) of the
UCC) for such Accounts Receivable of the security interest of the Trustee in
such Accounts Receivable and causing the Securities Intermediary to credit such
Accounts Receivable to the Custodial Account and to treat such Accounts
Receivable as Financial Assets within the meaning of Article 8 of the UCC and
(B) to the extent that doing so would be effective to perfect a security
interest in such Accounts Receivable under the UCC as in effect at the time of
transfer of such Accounts Receivable to the Trustee hereunder, filing or
causing the filing of a UCC financing statement that encompasses such Accounts
Receivable with the Recorder of Deeds of the District of Columbia and such other
offices as applicable; and


 


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(vii)         to
the maximum extent reasonably possible, in the case of any Loans, Preferred
Equity Securities or Participations that are not evidenced by Instruments,
Certificated Securities or Uncertificated Securities, by the Issuer (A) taking
all steps necessary (including obtaining any necessary consents to the transfer
of the Loan, Participation or Preferred Equity Security, as applicable) to make
the Custodial Securities Intermediary the registered owner thereof, (B) causing
the Custodial Securities Intermediary to credit such Loans, Participations or
Preferred Equity Securities, as applicable, to the Custodial Account and to
treat such Loans, Participations or Preferred Equity Securities, as applicable,
as Financial Assets within the meaning of Article 8 of the UCC and (C) to the
extent that doing so would be effective to perfect a security interest in such
Loans, Participations or Preferred Equity Securities, as applicable, under the
UCC as in effect at the time of transfer of such Loans, Participations or
Preferred Equity Securities to the Trustee hereunder, filing or causing the
filing of a UCC financing statement that encompasses such Loans, Participations
or Preferred Equity Securities, as applicable, with the Recorder of Deeds of
the District of Columbia and such other offices as applicable.


 


(b)      The Issuer
hereby authorizes the filing of UCC financing statements describing as the
collateral covered thereby “all of the debtor’s personal property and assets,”
or words to that effect, notwithstanding that such wording may be broader in
scope than the Assets described in this Indenture.


 


(c)      Without
limiting the foregoing, the Issuer and the Trustee on behalf of the Bank agree,
and the Bank shall cause the Custodial Securities Intermediary, to take such
different or additional action as the Trustee may reasonably request in order
to maintain the perfection and priority of the security interest of the Trustee
in the event of any change in applicable law or regulation, including Articles
8 and 9 of the UCC and Treasury Regulations governing transfers of interests in
Government Items (it being understood that the Trustee shall be entitled to
rely upon an Opinion of Counsel, including an Opinion of Counsel delivered in
accordance with Section 3.1(d), as to the need to file any financing
statements or continuation statements, the dates by which such filings are
required to be made and the jurisdictions in which such filings are required to
be made).


 


(d)      Without
limiting any of the foregoing,


 


(i)            in
connection with each Grant of a Collateral Debt Security hereunder, the Issuer
shall deliver (or cause to be delivered by the applicable Seller) to the
Custodial Securities Intermediary (A) the original of any note (or a copy of
such note together with a lost note affidavit), certificate or other instrument
constituting or evidencing such Collateral Debt Security and any other
Underlying Instrument related to such Collateral Debt Security the delivery of
which is necessary in order to perfect the security interest of the Trustee in
such Collateral Debt Security granted pursuant to this Indenture and (B) copies
of the other Underlying Instruments then in possession of the Issuer;


 


(ii)           from time to time upon the request of the Trustee or
Collateral Manager, the Issuer shall deliver (or cause to be delivered) to the
Custodial Securities Intermediary any Underlying Instrument in the possession
of the Issuer and not previously delivered


 


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hereunder
(including originals of Underlying Instruments not previously required to be
delivered as originals) and as to which the Trustee or Collateral Manager, as
applicable, shall have reasonably determined to be necessary or appropriate for
the administration of such Collateral Debt Security hereunder or under the
Collateral Management Agreement or for the protection of the security interest
of the Trustee under this Indenture;


 


(iii)          in
connection with any delivery of documents to the Custodial Securities
Intermediary pursuant to clauses (i) and (ii) above, the Trustee shall deliver
to the Collateral Manager, on behalf of the Issuer, a Trust Receipt in the form
of Exhibit K acknowledging the receipt of such documents by the
Custodial Securities Intermediary and that it is holding such documents subject
to the terms of this Indenture;


 


(iv)          from time to time upon request of the Collateral Manager,
the Custodial Securities Intermediary shall, upon delivery by the Collateral
Manager of a duly completed Request for Release in the form of Exhibit L
hereto, release to the Collateral Manager such of the Underlying Instruments
then in its custody as the Collateral Manager reasonably so requests.  By submission of any such Request for
Release, the Collateral Manager shall be deemed to have represented and
warranted that it has determined, in accordance with the Collateral Manager
Servicing Standard, that the requested release is
necessary for one or more of the purposes described in clause (ii) above.  The Collateral Manager shall return to the
Custodial Securities Intermediary each Underlying Instrument released from
custody pursuant to this clause (iv) within 20 Business Days of receipt thereof
(except such Underlying Instruments as are released in connection with a sale,
exchange or other disposition, in each case only as permitted under this
Indenture, of the related Collateral Debt Security that is consummated within
such 20-day period).  Notwithstanding the
foregoing provisions of this clause (iv), (A) any note, certificate or other
instrument evidencing a Pledged Collateral Debt Security shall be released only
for the purpose of (1) a sale, exchange or other disposition of such Pledged
Collateral Debt Security that is permitted in accordance with the terms of this
Indenture or (2) presentation, collection, renewal or registration of transfer
of such Collateral Debt Security and (B) the Custodial Securities Intermediary
may refuse to honor any Request for Release following the occurrence of an
Event of Default under this Indenture.


 


(e)      As of the
Closing Date (with respect to the Assets) and each date on which an Asset is
acquired (only with respect to the Asset so acquired) the Issuer represents and
warrants as follows:


 


(i)            this
Indenture creates a valid and continuing security interest (as defined in the
UCC) in the Assets in favor of the Trustee for the benefit of the Noteholders
and each Hedge Counterparty, which security interest is prior to all other
liens, and is enforceable as such against creditors of and purchasers from the
Issuer;


 


(ii)           the Issuer owns and has good and marketable title to such
Assets free and clear of any lien, claim or encumbrance of any Person;


 


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(iii)          in
the case of each Asset, the Issuer has acquired its ownership in such Asset in
good faith without notice of any adverse claim as defined in Section
8-102(a)(1) of the UCC as in effect on the date hereof;


 


(iv)          other than
the security interest granted to the Trustee for the benefit of the Noteholders
and each Hedge Counterparty pursuant to this Indenture, the Issuer has not,
pledged, assigned, sold, granted a security interest in, or otherwise conveyed
any of the Assets;


 


(v)           the Issuer
has not authorized the filing of and is not aware of any financing statements
against the Issuer that include a description of collateral covering the Assets
other than any financing statement relating to the security interest granted to
the Trustee for the benefit of the Noteholders and each Hedge Counterparty
hereunder or that has been terminated; the Issuer is not aware of any judgment
or Pension Benefit Guarantee Corporation lien and tax lien filings against the
Issuer;


 


(vi)          the Issuer has received all consents and approvals required
by the terms of each Asset and the Underlying Instruments to grant to the
Trustee its interest and rights in such Asset hereunder;


 


(vii)         the
Issuer has caused or will have caused, within 10 days, the filing of all
appropriate financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the security interest in
the Assets granted to the Trustee for the benefit of the Noteholders and each
Hedge Counterparty hereunder;


 


(viii)        each Asset is an Instrument, a General Intangible or a
Certificated Security or Uncertificated Security or has been and will have been
credited to a Securities Account;


 


(ix)           the Custodial Securities Intermediary has agreed to treat
all assets credited to the Securities Account as Financial Assets;


 


(x)            the
Issuer has delivered a fully executed Securities Accounts Control Agreement
pursuant to which the Custodial Securities Intermediary has agreed to comply
with all instructions originated by the Trustee relating to the Custodial
Account without further consent of the Issuer; 
the Custodial Account is not in the name of any person other than the
Issuer or the Trustee;  the Issuer has
not consented to the Securities Intermediary of the Custodial Account to comply
with Entitlement Orders of any person other than the Trustee;


 


(xi)           (A) all
original executed copies of each promissory note or other writings that
constitute or evidence any pledged obligation that constitutes Instruments have
been delivered to the Custodial Securities Intermediary for the benefit of the
Trustee, (B) the Issuer has received a written acknowledgement from the
Custodial Securities Intermediary that the Custodial Securities Intermediary is
acting solely as agent of the Trustee and (C) none of the promissory notes or
other writings that constitute or evidence such collateral has any marks or
notations indicating that they have been pledged, assigned or otherwise
conveyed by the Issuer to any Person other than the Trustee;


 


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(xii)          (A)
the Collection Accounts, the Unused Proceeds Account, the Delayed Funding
Obligations Account, each Hedge Termination Account, each Hedge Collateral
Account, the Expense Account and the Payment Account (collectively, the “Deposit
Accounts”) constitute “deposit accounts” within the meaning of the UCC, (B)
the Issuer has taken all steps necessary to cause the Trustee to become the
customer and account holder of the Deposit Accounts, (C) other than the security
interest granted to the Trustee pursuant to this Indenture, the Issuer has not
pledged, assigned, sold, granted a security interest in, or otherwise conveyed
any of the Deposit Accounts, and (D) the Deposit Accounts are not in the name
of any person other than the Issuer or the Trustee.  The Issuer has not consented to the bank
maintaining the Deposit Accounts to comply with the instructions of any person
other than the Trustee; and


 


(xiii)         The
Issuer has established procedures such that any Eligible Investments purchased
with funds withdrawn from the Deposit Accounts will be either (i) credited to a
Securities Account over which the Trustee will have a first priority perfected
security interest, (ii) purchased in the name of the Trustee, or (iii) held in
another manner sufficient to establish the Trustee’s first priority perfected
security interest over such Eligible Investments.


 


(f)       The Trustee
shall only invest in Eligible Investments which the applicable Custodial
Securities Intermediary agrees to credit to the applicable account.  To the extent any Eligible Investment shall
not be delivered to the Trustee by causing the Custodial Securities
Intermediary to create a Security Entitlement in the Securities Account in
favor of the Trustee, the Issuer shall deliver an Opinion of Counsel to the
Trustee to the effect that any other delivery will effect a first priority
security interest in favor of the Trustee in such Eligible Instrument.


 


ARTICLE 4


 


SATISFACTION AND DISCHARGE


 


Section 4.1             Satisfaction
and Discharge of Indenture.


 


This Indenture shall be discharged and shall cease to
be of further effect with respect to the Assets securing the Notes and the
Issuer’s obligations under each Hedge Agreement except as to (i) rights of
registration of transfer and exchange, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive
payments of principal thereof and interest thereon as provided herein, (iv) the
rights, obligations and immunities of the Trustee on their behalf hereunder,
(v) the rights of Noteholders as beneficiaries hereof with respect to the
property deposited with the Trustee on their behalf and payable to all or any
of them; and the Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when:


 


(a)      either:


 


 


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(i)            all Notes
theretofore authenticated and delivered (other than (A) Notes which have
been mutilated, defaced, destroyed, lost or stolen and which have been replaced
or paid as provided in Section 2.6 and (B) Notes for whose
payment Money has theretofore irrevocably been deposited in trust and
thereafter repaid to the Issuer or discharged from such trust, as provided in Section 7.3)
have been delivered to the Trustee for cancellation; or


 


(ii)           all Notes
not theretofore delivered to the Trustee for cancellation (A) have become
due and payable, or (B) will become due and payable at their Stated
Maturity within one year, or (C) are to be called for redemption pursuant
to Section 9.1 or Section 9.2 under an arrangement
satisfactory to the Trustee for the giving of notice of redemption by the
Issuer and the Co-Issuer pursuant to Section 9.4 and the Issuer or
the Co-Issuer, in the case of clauses (A), (B) or (C) of this subsection (ii),
has irrevocably deposited or caused to be deposited with the Trustee, in trust
for such purpose, Cash or non-callable direct obligations of the United States
of America; provided that the obligations are
entitled to the full faith and credit of the United States of America or are
debt obligations which are rated “Aaa” by Moody’s, “AAA” by Fitch and “AAA” by
S&P in an amount sufficient, as verified by a firm of certified public
accountants which are nationally recognized, to pay and discharge the entire
indebtedness (including, in the case of a redemption pursuant to Section 9.1
or Section 9.2, the Redemption Price) on such Notes not theretofore
delivered to the Trustee for cancellation, for principal and interest to the
date of such deposit (in the case of Notes which have become due and payable),
or to the Stated Maturity or the Redemption Date, as the case may be (and in
each case in respect of the Notes, subject to the Priority of Payments); provided, further, that
any such deposit of funds with the Trustee in satisfaction of this Indenture
shall be subject to the Rating Agency Condition; provided,
however, this subsection (ii) shall not apply if an
election to act in accordance with the provisions of Section 5.5(a) shall
have been made and not rescinded;


 


(b)      (i) the
Issuer has paid or caused to be paid or provided for (to the satisfaction of
the Person entitled thereto) all other sums payable hereunder and under the
Collateral Management Agreement, Preferred Shares Paying Agency Agreement and
the Company Administration Agreement, and (ii) all Hedge Agreements then
in effect have been terminated and Issuer has paid all amounts, including
payments due and payable in connection with such termination and has paid all
other outstanding amounts, including any outstanding payments due and payable
for any previously terminated Hedge Agreement.


 


(c)      Each of the
Issuer and the Co-Issuer has delivered to the Trustee an Officer’s Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have been
complied with.


 


Notwithstanding the satisfaction and discharge of this
Indenture, the rights and obligations of the Issuer, the Co-Issuer, the
Trustee, and, if applicable, the Noteholders, as the case may be, under Sections
2.7, 4.2, 5.4(d), 5.9, 5.18, 6.7 and 7.3 hereof shall survive.


 


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Section 4.2             Application
of Trust Money.


 


All Monies deposited with the Trustee pursuant to Section
4.1 shall be held in trust and applied by it in accordance with the
provisions of the Notes and this Indenture to the payment of the principal and
interest, either directly or through the Paying Agent, as the Trustee may
determine, to the Person entitled thereto of the principal and interest for
whose payment such Money has been deposited with the Trustee; but such Money
need not be segregated from other funds except to the extent required herein or
when commingling of funds is prohibited by law.


 


Section 4.3             Repayment
of Monies Held by Paying Agent.


 


In connection with the satisfaction and discharge of
this Indenture with respect to the Notes, all Monies then held by the Paying
Agent other than the Trustee under the provisions of this Indenture shall, upon
demand of the Issuer and the Co-Issuer, be paid to the Trustee to be held and
applied pursuant to Section 7.3 hereof and, in the case of Monies
payable on the Notes, in accordance with the Priority of Payments and thereupon
such Paying Agent shall be released from all further liability with respect to
such Monies.


 


ARTICLE 5


 


REMEDIES


 


Section 5.1             Events
of Default.


 


“Event of Default,” wherever used herein, means any
one of the following events (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):


 


(a)      a default in
the payment of any interest on any Note when the same becomes due and payable (provided that (a) if any Class A Notes or Class B Notes are
Outstanding, solely for the purposes of this Section 5.1(a), no interest
shall be “due and payable” on any Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes, Class H Notes, Class J Notes or Class K Notes,
(b) if any Class C Notes are Outstanding, solely for the purposes of this Section
5.1(a), no interest shall be “due and payable” on any Class D Notes, Class
E Notes, Class F Notes, Class G Notes, Class H Notes, Class J Notes or Class K
Notes, (c) if any Class D Notes are Outstanding, solely for the purposes of
this Section 5.1(a), no interest shall be “due and payable” on any Class
E Notes, Class F Notes, Class G Notes, Class H Notes, Class J Notes or Class K
Notes, (d) if any Class E Notes are Outstanding, solely for the purposes of
this Section 5.1(a), no interest shall be “due and payable” on any Class
F Notes, Class G Notes, Class H Notes, Class J Notes or Class K Notes, (e) if
any Class F Notes are Outstanding, solely for the purposes of this Section
5.1(a), no interest shall be “due and payable” on any Class G Notes, Class
H Notes, Class J Notes or Class K Notes, (f) if any Class G Notes are Outstanding,
solely for the purposes of this Section 5.1(a), no interest shall be “due
and payable” on any Class H Notes, Class J Notes or Class K Notes, (g) if any
Class H Notes are outstanding, solely for purposes of this Section 5.1(a),
no


 


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interest shall be “due
and payable” on any Class J Notes or Class K Notes, (h) if any Class J Notes
are Outstanding, solely for purposes for this Section 5.1(a), no
interest shall be “due and payable” on any Class K Notes and (g) if any Class K
Notes are Outstanding, solely for the purposes of this Section 5.1(a),
no dividends or other distributions shall be payable on the Preferred Shares,
in each case unless such amount is available pursuant to the Priority of
Payments), which default continues for a period of three Business Days or, in
the case of a default in payment due to an administrative error or omission by
the Trustee or Paying Agent, which default continues for five Business Days;


 


(b)      a default in
the payment of principal (or the related Redemption Price, if applicable) of
any Class A-1 Note when the same becomes due and payable, at its Stated
Maturity or any Redemption Date, or if there are no Class A-1 Notes Outstanding
a default in the payment of principal (or the related Redemption Price, if
applicable) of any Class A-2 Note when the same becomes due and payable, at its
Stated Maturity or any Redemption Date, or if there are no Class A-2 Notes
Outstanding, a default in the payment of principal (or the related Redemption
Price, if applicable) of any Class B Note when the same becomes due and payable
at its Stated Maturity or any Redemption Date, or if there are no Class B Notes
Outstanding, a default in the payment of principal (or the related Redemption
Price, if applicable) of any Class C Note (plus any Class C Capitalized
Interest) when the same becomes due and payable at its Stated Maturity or any
Redemption Date, or if there are no Class C Notes Outstanding, a default in the
payment of principal (or the related Redemption Price, if applicable) of any
Class D Note (plus any Class D Capitalized Interest) when the same becomes due
and payable at its Stated Maturity or any Redemption Date, or if there are no
Class D Notes Outstanding, a default in the payment of principal (or the
related Redemption Price, if applicable) of any Class E Note (including any
Class E Capitalized Interest) when the same becomes due and payable at its
Stated Maturity or any Redemption Date, or if there are no Class E Notes
Outstanding, a default in the payment of principal (or the related Redemption
Price, if applicable) of any Class F Note (including Class F Capitalized
Interest) when the same becomes due and payable at its Stated Maturity or any
Redemption Date, or if there are no Class F Notes Outstanding, a default in the
payment of principal (or the related Redemption Price, if applicable) of any
Class G Note (including any Class G Capitalized Interest) when the same becomes
due and payable at its Stated Maturity or any Redemption Date, or if there are
no Class G Notes Outstanding, a default in the payment of principal (or the
related Redemption Price, if applicable) of any Class H Note (including Class H
Capitalized Interest) when the same becomes due and payable at its Stated
Maturity or any Redemption Date, or if there are no Class H Notes Outstanding,
a default in the payment of principal (or the related Redemption Price, if
applicable) of any Class J Note (including Class J Capitalized Interest) when
the same becomes due and payable, or if there are no Class J Notes Outstanding,
a default in the payment of principal (or the related Redemption Prince, if
applicable) of any Class K Note (including Class K Capitalized Interest) when
the same becomes due and payable at its Stated Maturity or any Redemption Date
(or in the case of a default in payment due to any administrative error or
omission by the Trustee or the Paying Agent, such default continues for a
period of five Business Days);


 


(c)      the failure on
any Payment Date to disburse amounts available in the Payment Account in
accordance with the Priority of Payments set forth under Section 11.1(a)
(other than a default in payment described in clause (a) or (b) above), which
failure continues


 


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for
a period of three Business Days or, in the case of a failure to disburse such
amounts due to an administrative error or omission by the Trustee or Paying
Agent, which failure continues for five Business Days;


 


(d)      either the Issuer, the Co-Issuer or the pool of Assets
becomes an investment company required to be registered under the Investment
Company Act;


 


(e)      a default in
the performance, or breach, of any other covenant or other agreement (other
than the covenant to meet or improve the Collateral Quality Tests or the
Coverage Tests) of the Issuer or the Co-Issuer hereunder or any representation
or warranty of the Issuer or the Co-Issuer hereunder or in any certificate or
other writing delivered pursuant hereto or in connection herewith proves to be
incorrect in any material respect when made, and the continuation of such default
or breach for a period of 30 days (or, if such default, breach or failure has
an adverse effect on the validity, perfection or priority of the security
interest granted hereunder, 15 days) after either the Issuer, the Co-Issuer or
the Collateral Manager has actual knowledge thereof or after notice thereof to
the Issuer, the Co-Issuer and the Collateral Manager by the Trustee or to the
Issuer, the Co-Issuer, the Collateral Manager and the Trustee by Holders of at
least 25% of the Aggregate Outstanding Amount of the Controlling Class; provided that a default in the performance by the Issuer of
the obligations imposed on it by this Indenture in connection with the entry
into a replacement Hedge Agreement upon the early termination of a Hedge
Agreement shall not be an Event of Default if the Rating Agency Condition has
been satisfied;


 


(f)       the entry of a
decree or order by a court having competent jurisdiction adjudging the Issuer
or the Co-Issuer as bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Issuer or the Co-Issuer under the Bankruptcy Code or any other
applicable law, or appointing a receiver, liquidator, assignee, or sequestrator
(or other similar official) of the Issuer or the Co-Issuer or of any
substantial part of its property, respectively, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days;


 


(g)      the institution
by the Issuer or the Co-Issuer of proceedings to be adjudicated as bankrupt or
insolvent, or the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under the Bankruptcy Code or any other similar
applicable law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee or sequestrator
(or other similar official) of the Issuer or the Co-Issuer or of any
substantial part of its property, respectively, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due, or the taking of
any action by the Issuer in furtherance of any such action;


 


(h)      one or more
final judgments being rendered against the Issuer or the Co-Issuer which
exceed, in the aggregate, U.S. $1,000,000 (or such lesser amount as any Rating
Agency may specify) and which remain unstayed, undischarged and unsatisfied for
30 days after such judgment(s) becomes nonappealable, unless adequate funds
have been reserved or


 


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set
aside for the payment thereof, and unless (except as otherwise specified in
writing by each Rating Agency) the Rating Agency Condition shall have been
satisfied; or


 


(i)       the Issuer
loses its status as a qualified REIT subsidiary (within the meaning of Section
856(i)(2) of the Code), unless (A) within 90 days, the Issuer either (1)
delivers an opinion of tax counsel of nationally recognized standing in the
United States experienced in such matters to the effect that, notwithstanding
the Issuer’s loss of qualified REIT subsidiary status, the Issuer is not, and
has not been, an association (or publicly traded partnership) taxable as a
corporation, or is not, and has not been, otherwise subject to U.S. federal
income tax on a net basis and the Noteholders are not otherwise materially
adversely affected by the loss of qualified REIT subsidiary status or (2)
receives an amount from the Preferred Shareholders sufficient to discharge in
full the amounts then due and unpaid on the Notes and amounts and expenses
described in clauses (1) through (5), (31), (32) and (33) under Section
11.1(a)(i) in accordance with the Priority of Payments or (B) all Classes
of the Notes are subject to a Tax Redemption announced by the Issuer in
compliance with this Indenture, and such redemption has not been rescinded.


 


Upon becoming aware of the occurrence of an Event of
Default, the Issuer, shall promptly notify the Trustee, the Collateral Manager,
the Noteholders, the Preferred Shares Paying Agent, the Preferred Shareholders,
each Rating Agency, each Hedge Counterparty and, for so long as any Notes are
listed on the Irish Stock Exchange, the Irish Paying Agent in writing.  If the Collateral Manager has actual
knowledge of the occurrence of an Event of Default, the Collateral Manager
shall promptly notify, in writing, the Trustee. 
Upon such notification from the Collateral Manager, the Trustee shall
promptly notify the Noteholders, each Rating Agency and each Hedge Counterparty
of the occurrence of such Event of Default.


 


Section 5.2             Acceleration
of Maturity; Rescission and Annulment.


 


(a)      If an Event of
Default shall occur and be continuing (other than the Events of Default
specified in Section 5.1(f), 5.1(g) or 5.1(i)), the Trustee may
(and shall at the direction of a Majority, by outstanding principal amount, of each
Class of Notes voting as a separate Class (excluding in each case any Notes
held by the Collateral Manager, any of its Affiliates or any funds (other than
the Issuer) managed by the Collateral Manager or its Affiliates)) declare the
principal of and accrued and unpaid interest on all the Notes to be immediately
due and payable (and any such acceleration shall automatically terminate the
Reinvestment Period).  If an Event of
Default described in Section 5.1(f), Section 5.1(g) or Section 5.1(i)
above occurs, such an acceleration shall occur
automatically and without any further action. 
If the Notes are accelerated, payments shall be made in the order and
priority set forth in Section 11.1(a)(i) and Section 11.1(a)(ii)
hereof.


 


(b)      At any time
after such a declaration of acceleration of Maturity of the Notes has been made
and before a judgment or decree for payment of the Money due has been obtained
by the Trustee as hereinafter provided in this Article 5, a Majority of
each and every Class of Notes (voting as a separate Class), by written notice
to the Issuer and the Co-Issuer, the Trustee and each Hedge Counterparty, may
rescind and annul such declaration and its consequences if:


 


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(i)            the Issuer or the Co-Issuer has paid or deposited with the
Trustee a sum sufficient to pay:


 


(A)     all unpaid installments of interest on and principal of the
Notes that would be due and payable hereunder if the Event of Default giving
rise to such acceleration had not occurred;


 


(B)     to the extent
that payment of such interest is lawful, interest on the Class C Capitalized
Interest at the Class C Rate, interest on the Class D Capitalized Interest at
the Class D Rate, interest on the Class E Capitalized Interest at the Class E
Rate, interest on the Class F Capitalized Interest at the Class F Rate,
interest on the Class G Capitalized Interest at the Class G Rate, interest on
the Class H Capitalized Interest at the Class H Rate, interest on the Class J
Capitalized Interest at the Class J Rate and interest on the Class K Capitalized
Interest at the Class K Rate;


 


(C)     all unpaid taxes
of the Issuer and the Co-Issuer, Company Administrative Expenses and other sums
paid or advanced by or otherwise due and payable to the Trustee hereunder;


 


(D)     with respect to
each Hedge Agreement, any amount then due and payable thereunder; and


 


(E)      with respect to
the Collateral Management Agreement, any Senior Collateral Management Fee then
due and any Company Administrative Expense due and payable to the Collateral
Manager thereunder.


 


(ii)           if any
Hedge Agreement has been reduced or terminated, the Rating Agency Condition has
been satisfied with respect to such reduction or termination; and


 


(iii)          the
Trustee has determined that all Events of Default of which it has actual
knowledge, other than the non-payment of the interest and principal on the
Notes that have become due solely by such acceleration, have been cured and a
Majority of the Controlling Class, by written notice to the Trustee and each
Hedge Counterparty has agreed with such determination (which agreement shall
not be unreasonably withheld or delayed) or waived as provided in Section
5.14.


 


At any such time that the Trustee shall rescind and
annul such declaration and its consequences as permitted hereinabove, the
Trustee shall preserve the Assets in accordance with the provisions of Section
5.5 with respect to the Event of Default that gave rise to such
declaration; provided, however,
that if such preservation of the Assets is rescinded pursuant to Section 5.5,
the Notes may be accelerated pursuant to the first paragraph of this Section
5.2, notwithstanding any previous rescission and annulment of a declaration
of acceleration pursuant to this paragraph.


 


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No such rescission shall affect any subsequent Default
or impair any right consequent thereon. 
In addition, no such rescission shall affect any Hedge Agreement if it
has been terminated in accordance with its terms.


 


(c)      Subject to Sections
5.4 and 5.5, a Majority of the Controlling Class shall have the
right to direct the Trustee in the conduct of any proceedings for any remedy
available to the Trustee; provided that
(i) such direction will not conflict with any rule of law or this Indenture;
(ii) the Trustee may take any other action not inconsistent with such
direction; (iii) the Trustee has been provided with an indemnity or reasonable
security satisfactory to it (and the Trustee need not take any action that it
determines might involve it in liability unless it has received such indemnity
or security against such liability); and (iv) any direction to undertake a sale
of the Assets may be made only as described in Section 5.17.  The Trustee shall provide written notice of
the receipt of such direction to each Hedge Counterparty promptly after receipt
thereof.


 


(d)      As security for
the payment by the Issuer of the compensation and expenses of the Trustee and
any sums the Trustee may be entitled to receive as indemnification by the
Issuer, the Issuer hereby grants the Trustee a lien on the Assets, which lien
is senior to the lien of the Noteholders. The Trustee’s lien shall be subject
to the Priority of Payments and exercisable by the Trustee only if the Notes
have been declared due and payable following an Event of Default and such
acceleration has not been rescinded or annulled.


 


(e)      A Majority of
the Controlling Class, may, prior to the time a
judgment or decree for the payment of money due has been obtained by the
Trustee, waive any past Default on behalf of the holders of all the Notes and
its consequences in accordance with Section 5.14.


 


(f)       In determining
whether the holders of the requisite percentage of Notes have given any
direction, notice or consent hereunder, (i) Notes owned by the Issuer, the
Co-Issuer or any Affiliate thereof shall be disregarded and deemed not to be
outstanding and (ii) in relation to (x) any amendment or other modification of,
or assignment or termination of, any of the express rights or obligations of
the Collateral Manager under the Collateral Management Agreement or this
Indenture (including the exercise of any rights to remove the Collateral
Manager or terminate the Collateral Management Agreement or approve or object
to a replacement for the Collateral Manager except as specifically provided in
the Collateral Management Agreement with respect to the termination of the
Collateral Manager without cause and with respect to the replacement of the
Collateral Manager) and (y) the exercise by the Noteholders of their right, in
connection with certain Events of Default, to accelerate amounts due under the
Notes, Notes owned by the Collateral Manager or any of its Affiliates, or by
any accounts managed by them, shall be disregarded and deemed not to be outstanding.  The Collateral Manager and its Affiliates
shall be entitled to vote Notes held by them, and by accounts managed by them,
with respect to all other matters other than those described in clause (ii).


 


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Section 5.3             Collection
of Indebtedness and Suits for Enforcement by Trustee.


 


The Issuer covenants that if a Default shall occur in
respect of the payment of any interest on any Class A-1 Note, the payment of
principal on any Class A-1 Note (but only after interest with respect to the
Class A-1 Notes and any amounts payable pursuant to Section 11.1(a)
having a higher priority have been paid in full), the payment of interest on
any Class A-2 Note (but only after interest with respect to the Class A-1 Notes
and any amounts payable pursuant to Section 11.1(a) having a higher
priority have been paid in full), the payment of principal on any Class A-2
Note (but only after interest with respect to the Class A-2 Notes and any
amounts payable pursuant to Section 11.1(a) having a higher priority
have been paid in full), the payment of interest on any Class B Note (but only
after interest with respect to the Class A-1 Notes and the Class A-2 Notes and
any amounts payable pursuant to Section 11.1(a) having a higher priority
have been paid in full), the payment of principal on any Class B Note (but only
after interest and principal with respect to the Class A-1 Notes and the Class
A-2 Notes and interest with respect to the Class B Notes and any amounts
payable pursuant to Section 11.1(a) having a higher priority have been
paid in full), the payment of interest on any Class C Note (but only after
interest with respect to the Class A-1 Notes, the Class A-2 Notes and the Class
B Notes and any amounts payable pursuant to Section 11.1(a) having a
higher priority have been paid in full), the payment of principal on any Class
C Note (but only after interest and principal with respect to the Class A-1
Notes, the Class A-2 Notes and the Class B Notes and interest with respect to
the Class C Notes and any amounts payable pursuant to Section 11.1(a)
having a higher priority have been paid in full), the payment of interest on
any Class D Note (but only after interest with respect to the Class A-1 Notes,
the Class A-2 Notes, the Class B Notes and the Class C Notes and any amounts
payable pursuant to Section 11.1(a) having a higher priority have been
paid in full) or the payment of principal on any Class D Note (but only after
interest and principal with respect to the Class A-1 Notes, the Class A-2
Notes, the Class B Notes and the Class C Notes and interest with respect to the
Class D Notes and any amounts payable pursuant to Section 11.1(a) having
a higher priority have been paid in full), the payment of interest on any Class
E Note (but only after interest with respect to the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes and the Class D Notes and any
amounts payable pursuant to Section 11.1(a) having a higher priority
have been paid in full), the payment of principal on any Class E Note (but only
after interest and principal with respect to the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes and the Class D Notes and interest
with respect to the Class E Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
interest on any Class F Note (but only after interest with respect to the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes and the Class E Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
principal on any Class F Note (but only after interest and principal with
respect to the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes and the Class E Notes and interest with
respect to the Class F Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
interest on any Class G Note (but only after interest with respect to the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes and the Class F Notes and any amounts payable
pursuant to Section 11.1(a) having a higher priority have been paid in
full), the payment of principal on any Class G Note (but only after interest
and principal with respect to the Class A-1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the


 


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Class E Notes and the Class F Notes and interest with
respect to the Class G Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
interest on any Class H Note (but only after interest with respect to the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes, the Class F Notes and the Class G Notes and any
amounts payable pursuant to Section 11.1(a) having a higher priority
have been paid in full), the payment of principal on any Class H Note (but only
after interest and principal with respect to the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes and the Class G Notes and interest with respect to the
Class H Notes and any amounts payable pursuant to Section 11.1(a) having
a higher priority have been paid in full), the payment of interest on any Class
J Note (but only after interest with respect to the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes and any
amounts payable pursuant to Section 11.1(a) having a higher priority
have been paid in full), the payment of principal on any Class J Note (but only
after interest and principal with respect to the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes and interest
with respect to the Class J Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the payment of
interest on any Class K Note (but only after interest with respect to the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes and the Class J Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full) or the payment of
principal on any Class K Note (but only after interest and principal with
respect to the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes and the Class J Notes and interest with
respect to the Class K Notes and any amounts payable pursuant to Section
11.1(a) having a higher priority have been paid in full), the Issuer and
Co-Issuer shall, upon demand of the Trustee or any affected Noteholder, pay to
the Trustee, for the benefit of the Holder of such Note, the whole amount, if
any, then due and payable on such Note for principal and interest or other
payment with interest on the overdue principal and, to the extent that payments
of such interest shall be legally enforceable, upon overdue installments of
interest, at the applicable interest rate and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee and such Noteholder and their respective agents and counsel.


 


If the Issuer or the Co-Issuer fails to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as Trustee
of an express trust, may institute a Proceeding for the collection of the sums
so due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer and the Co-Issuer or any
other obligor upon the Notes and collect the Monies adjudged or decreed to be
payable in the manner provided by law out of the Assets.


 


If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the
rights of the Noteholders by such appropriate Proceedings as the Trustee shall
deem most effectual (if no direction by a Majority of the Controlling Class is
received by the Trustee), or the Trustee shall proceed to protect and enforce


 


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its rights and the rights of the Noteholders by such
Proceedings as the Trustee may be directed by Majority of the Controlling
Class, to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or legal
or equitable right vested in the Trustee by this Indenture or by law.


 


In case there shall be pending Proceedings relative to
the Issuer or the Co-Issuer under the Bankruptcy Code or any other applicable
bankruptcy, insolvency or other similar law, or in case a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the Issuer or the
Co-Issuer, or their respective property, or in case of any other comparable
Proceedings relative to the Issuer or the Co-Issuer, or the creditors or
property of the Issuer or the Co-Issuer, the Trustee, regardless of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and regardless of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 5.3, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:


 


(a)      to file and
prove a claim or claims for the whole amount of principal and interest owing
and unpaid in respect of the Notes and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee, except as a result of
negligence or bad faith) and of the Noteholders allowed in any Proceedings
relative to the Issuer, the Co-Issuer or other obligor upon the Notes or to the
creditors or property of the Issuer, the Co-Issuer or such other obligor;


 


(b)      unless
prohibited by applicable law and regulations, to vote on behalf of the Holders
of the Notes in any election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency proceedings or
Person performing similar functions in comparable Proceedings; and


 


(c)      to collect and
receive any Monies or other property payable to or deliverable on any such
claims, and to distribute all amounts received with respect to the claims of
the Noteholders and of the Trustee on their behalf; and any trustee, receiver
or liquidator, custodian or other similar official is hereby authorized by each
of the Noteholders to make payments to the Trustee, and, in the event that the
Trustee shall consent to the making of payments directly to the Noteholders, to
pay to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other reasonable expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of its own negligence or bad faith.


 


Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Noteholder, any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Noteholder in any
such


 


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Proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.


 


All rights of action and of asserting claims under
this Indenture, or under any of the Notes, may be enforced by the Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any action or Proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, shall be applied as set forth in Section
5.7.


 


In any Proceedings brought by the Trustee on behalf of
the Holders, the Trustee shall be held to represent all the Holders of the
Notes.


 


Notwithstanding anything in this Section 5.3 to
the contrary, the Trustee may not sell or liquidate the Assets or institute
Proceedings in furtherance thereof pursuant to this Section 5.3 unless
the conditions specified in Section 5.5(a) are met.


 


Section 5.4             Remedies.


 


(a)      If an Event of
Default shall have occurred and be continuing, and the Notes have been declared
due and payable and such declaration and its consequences have not been
rescinded and annulled, the Issuer and the Co-Issuer agree that the Trustee
may, after notice to the Noteholders and each Hedge Counterparty, and shall,
upon direction by a Majority of the Controlling Class, to the extent permitted
by applicable law, exercise one or more of the following rights, privileges and
remedies:


 


(i)            institute
Proceedings for the collection of all amounts then payable on the Notes or
otherwise payable under this Indenture, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Assets any Monies adjudged
due;


 


(ii)           sell all
or a portion of the Assets or rights of interest therein, at one or more public
or private sales called and conducted in any manner permitted by law and in
accordance with Section 5.17 hereof;


 


(iii)          institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Assets;


 


(iv)          exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Trustee and the Holders of the Notes hereunder; and


 


(v)           exercise any other rights and remedies that may be available
at law or in equity;


 


provided, however,
that the Trustee may not sell or liquidate the Assets or institute Proceedings
in furtherance thereof pursuant to this Section 5.4 unless either of the
conditions specified in Section 5.5(a) is met.


 


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The Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking firm of national reputation with
demonstrated capabilities in structuring and distributing notes or certificates
similar to the Notes as to the feasibility of any action proposed to be taken
in accordance with this Section 5.4 and as to the sufficiency of the
proceeds and other amounts receivable with respect to the Assets to make the
required payments of principal of and interest on the Notes and other amounts
payable hereunder, which opinion shall be conclusive evidence as to such
feasibility or sufficiency.


 


(b)      If an Event of
Default as described in Section 5.1(e) hereof shall have occurred and be
continuing, the Trustee may, and at the request of the Holders of not less than
25% of the Aggregate Outstanding Amount of the Controlling Class shall,
institute a Proceeding solely to compel performance of the covenant or
agreement or to cure the representation or warranty, the breach of which gave
rise to the Event of Default under such Section, and enforce any equitable
decree or order arising from such Proceeding.


 


(c)      Upon any Sale,
whether made under the power of sale hereby given or by virtue of judicial
proceedings, any Noteholder or Noteholders or Preferred Shareholder or
Preferred Shareholders or the Collateral Manager or any of its Affiliates may
bid for and purchase the Assets or any part thereof and, upon compliance with
the terms of Sale, may hold, retain, possess or dispose of such property in its
or their own absolute right without accountability; and any purchaser at any
such Sale may, in paying the purchase Money, turn in any of the Notes in lieu
of Cash equal to the amount which shall, upon distribution of the net proceeds
of such sale, be payable on the Notes so turned in by such Holder (taking into
account the Class of such Notes).  Such
Notes, in case the amounts so payable thereon shall be less than the amount due
thereon, shall be returned to the Holders thereof after proper notation has
been made thereon to show partial payment.


 


Upon any Sale, whether made under the power of sale
hereby given or by virtue of judicial proceedings, the receipt of the Trustee
or of the Officer making a sale under judicial proceedings shall be a
sufficient discharge to the purchaser or purchasers at any sale for its or
their purchase Money and such purchaser or purchasers shall not be obliged to
see to the application thereof.


 


Any such Sale, whether under any power of sale hereby
given or by virtue of judicial proceedings, shall bind the Issuer, the
Co-Issuer, the Trustee, the Noteholders and the Preferred Shareholders, shall
operate to divest all right, title and interest whatsoever, either at law or in
equity, of each of them in and to the property sold, and shall be a perpetual
bar, both at law and in equity, against each of them and their successors and
assigns, and against any and all Persons claiming through or under them.


 


(d)      Notwithstanding
any other provision of this Indenture, the Trustee may not, prior to the date
which is one year and one day, or, if longer, the applicable preference period
then in effect after the payment in full of all Notes, institute against, or
join any other Person in instituting against, the Issuer or the Co-Issuer any
bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation
proceedings, or other proceedings under federal or State bankruptcy or similar
laws.  Nothing in this Section 5.4
shall preclude, or be deemed to stop, the Trustee (i) from taking any action
prior to the expiration of the


 


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aforementioned one
year and one day (or, if longer, the applicable preference period then in
effect) period in (A) any case or proceeding voluntarily filed or commenced by
the Issuer or the Co-Issuer or (B) any involuntary insolvency proceeding filed
or commenced by a Person other than the Trustee, or (ii) from commencing
against the Issuer or the Co-Issuer or any of their respective properties any
legal action which is not a bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceeding.


 


Section 5.5             Preservation
of Assets.


 


(a)      Notwithstanding
anything to the contrary herein, if an Event of Default shall have occurred and
be continuing when any of the Notes are Outstanding, the Trustee shall retain
the Assets securing the Notes, collect and cause the collection of the proceeds
thereof and make and apply all payments and deposits and maintain all accounts
in respect of the Assets and the Notes in accordance with the Priority of
Payments and the provisions of Articles 10, 12 and 13
unless either:


 


(i)            the
Trustee, pursuant to Section 5.5(c), determines that the anticipated
proceeds of a sale or liquidation of the Assets (after deducting the reasonable
expenses of such sale or liquidation) would be sufficient to discharge in full
the amounts then due and unpaid on the Notes, Company Administrative Expenses
due and payable pursuant to clauses (3) and (31) of Section 11.1(a)(i)
and clauses (1) and (13) of Section 11.1(a)(ii), the Senior Collateral
Management Fees due and payable pursuant to clause (4) of Section 11.1(a)(i),
the Subordinate Collateral Management Fees due and payable pursuant to clause (32)
of Section 11.1(a)(i), any amounts due and unpaid to each Hedge
Counterparty, including without limitation, any payments (however described)
due and payable by the Issuer under each Hedge Agreement upon a termination of
such Hedge Agreement (including any interest that may accrue thereon) and
amounts due and payable to the Advancing Agent and the Trustee, in its capacity
as Backup Advancing Agent, in respect of unreimbursed Interest Advances and
Reimbursement Interest, and a Majority of the Controlling Class agrees with
such determination; or


 


(ii)           the
Holders of a Majority of the Aggregate Outstanding Amount of each Class of
Notes (each voting as a separate Class) (and each Hedge Counterparty, unless
each shall be paid in full the amounts due and unpaid, including, without
limitation, any payments (however described) due and payable by the Issuer
under each Hedge Agreement upon a termination of such Hedge Agreement
(including any interest that may accrue thereon)), direct, subject to the provisions
of this Indenture, the sale and liquidation of the Assets.


 


The Trustee shall give written notice of the retention
of the Assets to the Issuer, the Co-Issuer, the Collateral Manager, each Hedge
Counterparty and the Rating Agencies.  So
long as such Event of Default is continuing, any such retention pursuant to
this Section 5.5(a) may be rescinded at any time when the conditions
specified in clause (i) or (ii) above exist.


 


(b)      Nothing
contained in Section 5.5(a) shall be construed to require the Trustee to
sell the Assets securing the Notes if the conditions set forth in Section
5.5(a) are not


 


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satisfied.  Nothing contained in Section 5.5(a)
shall be construed to require the Trustee to preserve the Assets securing the
Notes if prohibited by applicable law.


 


(c)      In determining
whether the condition specified in Section 5.5(a)(i) exists, the
Collateral Manager shall obtain bid prices with respect to each Pledged
Collateral Debt Security from two dealers (Independent of the Collateral
Manager and any of its Affiliates) at the time making a market in such Pledged
Collateral Debt Securities (or, if there is only one market maker, then the
Collateral Manager shall obtain a bid price from that market maker or, if no
market maker, from a pricing service). 
The Collateral Manager shall compute the anticipated proceeds of sale or
liquidation on the basis of the lowest of such bid prices for each such Pledged
Collateral Debt Security.  For the
purposes of determining issues relating to the Market Value of the Pledged
Collateral Debt Security and the execution of a sale or other liquidation
thereof, the Trustee may, but need not, retain at the expense of the Issuer and
rely on an opinion of an Independent investment banking firm of national
reputation in connection with a determination (notwithstanding that such
opinion will not be the basis for such determination) as to whether the
condition specified in Section 5.5(a)(i) exists.


 


The Trustee shall promptly deliver to the Noteholders
and each Hedge Counterparty a report stating the results of any determination
required to be made pursuant to Section 5.5(a)(i).  The Trustee shall make the determinations
required by Section 5.5(a)(i) within 30 days
after an Event of Default if requested by a Majority of the Controlling Class.


 


Section 5.6             Trustee
May Enforce Claims Without Possession of Notes.


 


All rights of action and claims under this Indenture
or under any of the Notes may be prosecuted and enforced by the Trustee without
the possession of any of the Notes or the production thereof in any trial or
other Proceeding relating thereto, and any such action or Proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust.  Any recovery of judgment in respect of the
Notes shall be applied as set forth in Section 5.7 hereof.


 


In any Proceedings brought by the Trustee (and any
Proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party), in respect of the Notes, the Trustee shall
be held to represent all the Holders of the Notes.


 


Section 5.7             Application
of Money Collected.


 


Any Money collected by the Trustee with respect to the
Notes pursuant to this Article 5 and any Money that may then be held or
thereafter received by the Trustee with respect to the Notes hereunder shall be
applied subject to Section 13.1 hereof and in accordance with the
Priority of Payments set forth in Section 11.1 hereof, at the date or
dates fixed by the Trustee.


 


Section 5.8             Limitation
on Suits.


 


No Holder of any Notes shall have any right to
institute any Proceedings, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:


 


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(a)      such Holder has previously given to the Trustee written
notice of an Event of Default;


 


(b)      except as
otherwise provided in Section 5.9 hereof, the Holders of at least 25% of
the then Aggregate Outstanding Amount of the Controlling Class shall have made
written request to the Trustee to institute Proceedings in respect of such
Event of Default in its own name as Trustee hereunder and such Holder or
Holders have offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request;


 


(c)      the Trustee for
30 days after its receipt of such notice, request and offer of indemnity has
failed to institute any such Proceeding; and


 


(d)      no direction
inconsistent with such written request has been given to the Trustee during
such 30 day period by a Majority of the Controlling Class; it being understood
and intended that no one or more Holders of Notes shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Holders of
Notes of the same Class or to obtain or to seek to obtain priority or
preference over any other Holders of the Notes of the same Class or to enforce
any right under this Indenture, except in the manner herein provided and for
the equal and ratable benefit of all the Holders of Notes of the same Class
subject to and in accordance with Section 13.1 hereof and the Priority
of Payments.


 


In the event the Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of the
Controlling Class, each representing less than a Majority of the Controlling
Class, the Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.


 


Section 5.9             Unconditional
Rights of Noteholders to Receive Principal and Interest.


 


Notwithstanding any other provision in this Indenture
(except for Section 2.7(n) and 2.7(v)), the Holder of any Class
of Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on such Class of Note as such
principal, interest and other amounts become due and payable in accordance with
the Priority of Payments and Section 13.1, and, subject to the
provisions of Section 5.4(d) and Section 5.8 to institute
Proceedings for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder; provided, however, that the right of such Holder to institute
proceedings for the enforcement of any such payment shall not be subject to the
25% threshold requirement set forth in Section 5.8(b).


 


Section 5.10           Restoration
of Rights and Remedies.


 


If the Trustee or any Noteholder has instituted any
Proceeding to enforce any right or remedy under this Indenture and such
Proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee, or to such Noteholder, then and in every
such case the Issuer, the Co-Issuer, the Trustee, and the Noteholder shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions


 


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hereunder,
and thereafter all rights and remedies of the Trustee, and the Noteholders
shall continue as though no such Proceeding had been instituted.


 


Section 5.11           Rights
and Remedies Cumulative.


 


No right or remedy herein conferred upon or reserved
to the Trustee, or to the Noteholders, is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.


 


Section 5.12           Delay
or Omission Not Waiver.


 


No delay or omission of the Trustee, or of any
Noteholder to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein or a waiver of a subsequent Event of
Default.  Every right and remedy given by
this Article 5 or by law to the Trustee, or to
the Noteholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee, or by the Noteholders, as the case may be.


 


Section 5.13           Control
by the Controlling Class.


 


Notwithstanding any other provision of this Indenture,
if an Event of Default shall have occurred and be continuing when any of the
Notes are Outstanding, a Majority of the Controlling Class shall have the right
to cause the institution of and direct the time, method and place of conducting
any Proceeding for any remedy available to the Trustee for exercising any
trust, right, remedy or power conferred on the Trustee in respect of the Notes;
provided that:


 


(a)      such direction shall not conflict with any rule of law or
with this Indenture;


 


(b)      the Trustee may
take any other action deemed proper by the Trustee that is not inconsistent
with such direction; provided, however, that, subject to Section 6.1, the Trustee
need not take any action that it determines might involve it in liability
(unless the Trustee has received satisfactory indemnity against such liability
as set forth below);


 


(c)      the Trustee shall have been provided with indemnity
satisfactory to it; and


 


(d)      any direction to the Trustee to undertake a Sale of the
Assets shall be by the Holders of Notes secured thereby representing a Majority
of the Aggregate Outstanding Amount of each Class of Notes.


 


Section 5.14           Waiver
of Past Defaults.


 


Prior to the time a judgment or decree for payment of
the Money due has been obtained by the Trustee, as provided in this Article
5, a Majority of each and every Class of


 


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Notes voting as a separate Class may on behalf of the
Holders of all the Notes waive any past Default in respect of the Notes and its
consequences, except a Default:


 


(a)      in
the payment of principal of any Note;


 


(b)      in
the payment of interest in respect of the Controlling Class;


 


(c)      in
respect of a covenant or provision hereof that under Section 8.2 cannot
be modified or amended without the waiver or consent of the Holder of each
Outstanding Note adversely affected thereby; or


 


(d)      in respect of any covenant or provision hereof for the
individual protection or benefit of the Trustee (without the Trustee’s express
written consent thereto).


 


In the case of any such waiver, the Issuer, the
Co-Issuer, the Trustee, and the Holders of the Notes shall be restored to their
former positions and rights hereunder, respectively, but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereto.  The Trustee shall promptly give
written notice of any such waiver to the Collateral Manager, each Noteholder
and each Hedge Counterparty.


 


Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture, but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereto.


 


Section 5.15           Undertaking
for Costs.


 


All parties to this Indenture agree, and each Holder
of any Note by its acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 5.15 shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Noteholder, or
group of Noteholders, holding in the aggregate more than 10% of the Aggregate
Outstanding Amount of the Controlling Class, or to any suit instituted by any
Noteholder for the enforcement of the payment of the principal of or interest
on any Note or any other amount payable hereunder on or after the Stated
Maturity (or, in the case of redemption, on or after the applicable Redemption
Date).


 


Section 5.16           Waiver
of Stay or Extension Laws.


 


Each of the Issuer and the Co-Issuer covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants, the performance of or any remedies under
this Indenture; and each of the Issuer and the Co-Issuer (to the extent that it
may lawfully do so)


 


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hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.


 


Section 5.17           Sale
of Assets.


 


(a)      The power to
effect any sale (a “Sale”)
of any portion of the Assets pursuant to Sections 5.4 and 5.5 hereof
shall not be exhausted by any one or more Sales as to any portion of such
Assets remaining unsold, but shall continue unimpaired until all amounts
secured by the Assets shall have been paid or if there are insufficient
proceeds to pay such amount until the entire Assets shall have been sold.  The Trustee may upon notice to the
Securityholders and each Hedge Counterparty, and shall, upon direction of a
Majority of the Controlling Class, from time to time postpone any Sale by
public announcement made at the time and place of such Sale; provided, however, that
if the Sale is rescheduled for a date more than three Business Days after the
date of the determination by the Trustee pursuant to Section 5.5 hereof,
such Sale shall not occur unless and until the Trustee has again made the
determination required by Section 5.5 hereof.  The Trustee hereby expressly waives its
rights to any amount fixed by law as compensation for any Sale; provided that the Trustee shall be authorized to deduct the
reasonable costs, charges and expenses incurred by it in connection with such
Sale from the proceeds thereof notwithstanding the provisions of Section 6.7
hereof.


 


(b)      The Trustee may
bid for and acquire any portion of the Assets in connection with a public Sale
thereof, and may pay all or part of the purchase price by crediting against
amounts owing on the Notes or other amounts secured by the Assets, all or part
of the net proceeds of such Sale after deducting the reasonable costs, charges
and expenses incurred by the Trustee in connection with such Sale
notwithstanding the provisions of Section 6.7 hereof.  The Notes need not be produced in order to
complete any such Sale, or in order for the net proceeds of such Sale to be
credited against amounts owing on the Notes. 
The Trustee may hold, lease, operate, manage or otherwise deal with any
property so acquired in any manner permitted by law in accordance with this
Indenture.


 


(c)      If any portion
of the Assets consists of securities issued without registration under the
Securities Act (“Unregistered
Securities”), the Trustee may seek an Opinion of Counsel, or,
if no such Opinion of Counsel can be obtained and with the consent of a
Majority of the Controlling Class, seek a no action position from the
Securities and Exchange Commission or any other relevant federal or State
regulatory authorities, regarding the legality of a public or private Sale of
such Unregistered Securities.  In no
event shall the Trustee be required to register Unregistered Securities under
the Securities Act.


 


(d)      The Trustee
shall execute and deliver an appropriate instrument of conveyance transferring
its interest in any portion of the Assets in connection with a Sale
thereof.  In addition, the Trustee is
hereby irrevocably appointed the agent and attorney in fact of the Issuer to
transfer and convey its interest in any portion of the Assets in connection
with a Sale thereof, and to take all action necessary to effect
such Sale.  No purchaser or transferee at
such a Sale shall be bound to ascertain the Trustee’s authority, to inquire
into the satisfaction of any conditions precedent or see to the application of
any Monies.


 


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(e)      In the event of
any Sale of the Assets pursuant to Section 5.4 or Section 5.5, payments
shall be made in the order and priority set forth in Section 11.1(a)(i)
and Section 11.1(a)(ii) in the same manner as if the Notes had been
accelerated.


 


Section 5.18           Action
on the Notes.


 


The Trustee’s right to seek and recover judgment on
the Notes or under this Indenture shall not be affected by the seeking or
obtaining of or application for any other relief under or with respect to this
Indenture.  Neither the lien of this
Indenture nor any rights or remedies of the Trustee, or the Noteholders shall
be impaired by the recovery of any judgment by the Trustee against the Issuer
or the Co-Issuer or by the levy of any execution under such judgment upon any
portion of the Assets or upon any of the assets of the Issuer or the Co-Issuer.


 


ARTICLE 6


 


THE TRUSTEE


 


Section 6.1             Certain
Duties and Responsibilities.


 


(a)      Except during
the continuance of an Event of Default:


 


(i)            the
Trustee undertakes to perform such duties and only such duties as are set forth
in this Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and


 


(ii)           in the
absence of manifest error, or bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; provided, however, that
in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they substantially
conform to the requirements of this Indenture and shall promptly, but in any
event within three Business Days in the case of an Officer’s Certificate
furnished by the Collateral Manager, notify the party delivering the same if
such certificate or opinion does not conform. 
If a corrected form shall not have been delivered to the Trustee within
15 days after such notice from the Trustee, the Trustee shall so notify the
Noteholders.


 


(b)      In case an
Event of Default known to the Trustee has occurred and is continuing, the
Trustee shall, prior to the receipt of directions, if any, from a Majority of
the Controlling Class (or other Noteholders to the extent provided in Article
5 hereof), exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.


 


(c)      If, in
performing its duties under this Agreement, the Trustee is required to decide
between alternative courses of action, the Trustee may request written
instructions from


 


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the
Collateral Manager as to courses of action desired by it.  If the Trustee does not receive such
instructions within two Business Days after it has requested them, it may, but
shall be under no duty to, take or refrain from taking such action.  The Trustee shall act in accordance with
instructions received after such two-Business Day period except to the extent
it has already taken, or committed itself to take, action inconsistent with
such instructions.  The Trustee shall be
entitled to rely on the advice of legal counsel and Independent accountants in
performing its duties hereunder and be deemed to have acted in good faith if it
acts in accordance with such advice.


 


(d)      No provision of
this Indenture shall be construed to relieve the Trustee from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:


 


(i)            this subsection shall not be construed to limit the effect
of subsection (a) of this Section 6.1;


 


(ii)           the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it shall be proven that the
Trustee was negligent in ascertaining the pertinent facts;


 


(iii)          the
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Issuer in
accordance with this Indenture and/or the Controlling Class relating to the
time, method and place of conducting any Proceeding for any remedy available to
the Trustee in respect of any Note or exercising any trust or power conferred
upon the Trustee under this Indenture;


 


(iv)          no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers
contemplated hereunder, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it (if the amount of such funds or risk or liability
does not exceed the amount payable to the Trustee pursuant to Section
11.1(a)(i)(3) and Section 11.1(a)(ii)(1) net of the amounts
specified in Section 6.7(a)(i), the Trustee shall be deemed to be
reasonably assured of such repayment) unless such risk or liability relates to
its ordinary services under this Indenture, except where this Indenture
provides otherwise; and


 


(v)           the
Trustee shall not be liable to the Noteholders for any action taken or omitted
by it at the direction of the Issuer, the Co-Issuer, the Collateral Manager,
the Controlling Class and/or a Noteholder under circumstances in which such
direction is required or permitted by the terms of this Indenture.


 


(e)      For all
purposes under this Indenture, the Trustee shall not be deemed to have notice
or knowledge of any Event of Default described in Section 5.1(d), 5.1(f),
5.1(g), 5.1(h) or 5.1(i) or any Default described in Section
5.1(e) unless a Trust Officer assigned to and working in the Corporate
Trust Office has actual knowledge thereof or unless written notice of any event
which is in fact such an Event of Default or Default is received by the


 


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Trustee at the
Corporate Trust Office, and such notice references, as
applicable, the Notes generally, the Issuer, the Assets or this Indenture.  For purposes of determining the Trustee’s
responsibility and liability hereunder, whenever reference is made in this
Indenture to such an Event of Default or a Default, such reference shall be
construed to refer only to such an Event of Default or Default of which the
Trustee is deemed to have notice as described in this Section 6.1.


 


(f)       Whether or not
therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of Section 6.1(a), 6.1(b), 6.1(c),
6.1(d) and 6.1(e).


 


(g)      The Trustee
shall, upon reasonable prior written notice to the Trustee, permit the Issuer,
the Co-Issuer, the Collateral Manager or the Rating Agencies, during the
Trustee’s normal business hours, to examine all books of account, records,
reports and other papers of the Trustee relating to the Notes, to make copies and
extracts therefrom (the reasonable out-of-pocket expenses incurred in making
any such copies or extracts to be reimbursed to the Trustee by such Person) and
to discuss the Trustee’s actions, as such actions relate to the Trustee’s
duties with respect to the Notes, with the Trustee’s officers and employees
responsible for carrying out the Trustee’s duties with respect to the Notes.


 


Section 6.2             Notice
of Default.


 


Promptly (and in no event later than three Business
Days) after the occurrence of any Default known to the Trustee or after any
declaration of acceleration has been made or delivered to the Trustee pursuant
to Section 5.2, the Trustee shall transmit by mail to the Collateral
Manager, the Irish Paying Agent (for so long as any Notes are listed on the
Irish Stock Exchange), each Hedge Counterparty and each Rating Agency (for so
long as any Class of Notes is Outstanding and rated by such Rating Agency), to
all Holders of Notes as their names and addresses appear on the Notes Register,
notice of all Defaults hereunder known to the Trustee, unless such Default
shall have been cured or waived.


 


Section 6.3             Certain
Rights of Trustee.


 


Except as otherwise provided in Section 6.1:


 


(a)      the Trustee may
rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, note or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties;


 


(b)      any request or direction of the Issuer or the Co-Issuer
mentioned herein shall be sufficiently evidenced by an Issuer Request or Issuer
Order, as the case may be;


 


(c)      whenever in the
administration of this Indenture the Trustee shall (i) deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an Officer’s
Certificate or (ii) be required to determine the value of any Assets or funds
hereunder or the cash flows projected to be


 


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received
therefrom, the Trustee may, in the absence of bad faith on its part, rely on
reports of nationally recognized accountants, investment bankers or other
persons qualified to provide the information required to make such
determination, including nationally recognized dealers in securities of the
type being valued and securities quotation services;


 


(d)      as a condition
to the taking or omitting of any action by it hereunder, the Trustee may
consult with counsel and the advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken or omitted by it hereunder in good faith and in reliance thereon;


 


(e)      the Trustee
shall be under no obligation to exercise or to honor any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Noteholders pursuant to this Indenture, unless such Noteholders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might reasonably be incurred by it in compliance
with such request or direction;


 


(f)       the Trustee
shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, note or other paper documents, but the
Trustee, in its discretion, may and, upon the written direction of a Majority
of the Controlling Class or of a Rating Agency, shall make such further inquiry
or investigation into such facts or matters as it may see fit or as it shall be
directed and shall have received indemnification reasonably acceptable to the
Trustee, and, the Trustee shall be entitled, on reasonable prior notice to the
Issuer, the Co-Issuer and the Collateral Manager, to examine the books and
records relating to the Notes and the Assets, as applicable, at the premises of
the Issuer, the Co-Issuer and the Collateral Manager, personally or by agent or
attorney during the Issuer’s, the Co-Issuer’s or the Collateral Manager’s
normal business hours upon not less than three Business Days’ prior written
notice; provided that the Trustee shall, and
shall cause its agents to, hold in confidence all such information, except (i)
to the extent disclosure may be required by law by any regulatory authority and
(ii) except to the extent that the Trustee, in its sole judgment, may determine
that such disclosure is consistent with its obligations hereunder;


 


(g)      the Trustee may
execute any of the trusts or powers hereunder or perform any duties hereunder
(except with respect to its duty to make any Interest Advance under the
circumstances specified in Section 10.7) either directly or by or
through agents or attorneys; provided that
the Trustee shall not be responsible for any willful misconduct or negligence
on the part of any agent appointed and supervised, or attorney appointed, with
due care by it hereunder;


 


(h)      the Trustee shall not be liable for any action it takes or
omits to take in good faith that it reasonably and prudently believes to be
authorized or within its rights or powers hereunder;


 


(i)       the Trustee shall not be responsible for the accuracy of the
books or records of, or for any acts or omissions of, the Depository, any
Transfer Agent (other than the Trustee itself acting in that capacity),
Clearstream, Luxembourg, Euroclear, any Calculation


 


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Agent (other than
the Trustee itself acting in that capacity) or any Paying Agent (other than the
Trustee itself acting in that capacity); and


 


(j)       the Trustee
shall not be liable for the actions or omissions of the Collateral Manager; and
without limiting the foregoing, the Trustee shall not (except to the extent, if
at all, otherwise expressly stated in this Indenture) be under any obligation
to monitor, evaluate or verify compliance by the Collateral Manager with the
terms hereof or the Collateral Management Agreement, or to verify or
independently determine the accuracy of information received by it from the
Collateral Manager (or from any selling institution, agent bank, trustee or
similar source) with respect to the Collateral Debt Securities.


 


Section 6.4             Not
Responsible for Recitals or Issuance of Notes.


 


The recitals contained herein and in the Notes, other
than the Certificate of Authentication thereon, shall be taken as the
statements of the Issuer and the Co-Issuer, and the Trustee assumes no
responsibility for their correctness. 
The Trustee makes no representation as to the validity or sufficiency of
this Indenture (except as may be made with respect to the validity of the
Trustee’s obligations hereunder), the Assets or the Notes.  The Trustee shall not be accountable for the
use or application by the Issuer or the Co-Issuer of the Notes or the proceeds
thereof or any Money paid to the Issuer or the Co-Issuer pursuant to the
provisions hereof.


 


Section 6.5             May
Hold Notes.


 


The Trustee, the Paying Agent, the Notes Registrar or
any other agent of the Issuer or the Co-Issuer, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Issuer and the Co-Issuer with the same rights it would have if it were not
Trustee, Paying Agent, Notes Registrar or such other agent.


 


Section 6.6             Money
Held in Trust.


 


Money held by the Trustee hereunder shall be held in
trust to the extent required herein.  The
Trustee shall be under no liability for interest on any Money received by it
hereunder except as otherwise agreed upon with the Issuer and except to the
extent of income or other gain on investments which are deposits in or
certificates of deposit of the Trustee in its commercial capacity and income or
other gain actually received by the Trustee on Eligible Investments.


 


Section 6.7             Compensation
and Reimbursement.


 


(a)      The Issuer
agrees:


 


(i)            to pay
the Trustee on each Payment Date in accordance with the Priority of Payments reasonable
compensation for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);


 


(ii)           except as otherwise expressly provided herein, to reimburse
the Trustee (subject to any written agreement between the Issuer and the
Trustee) in a timely manner


 


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upon its request
for all reasonable expenses, disbursements and advances (except as otherwise
provided herein with respect to Interest Advances) incurred or made by the
Trustee in accordance with any provision of this Indenture (including
securities transaction charges to the extent not waived due to the Trustee’s
receipt of payments from a financial institution with respect to certain
Eligible Investments, as specified by the Collateral Manager and the reasonable
compensation and expenses and disbursements of its agents and legal counsel and
of any accounting firm or investment banking firm employed by the Trustee
pursuant to Section 5.4, 5.5, 10.9 or 10.11 hereof,
except any such expense, disbursement or advance as may be attributable to its
negligence, willful misconduct or bad faith);


 


(iii)          to
indemnify the Trustee and its Officers, directors, employees and agents for,
and to hold them harmless against, any loss, liability or expense incurred
without negligence, willful misconduct or bad faith on their part, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of their powers
or duties hereunder; and


 


(iv)          to pay the Trustee reasonable additional compensation together
with its expenses (including reasonable counsel fees) for any collection action
taken pursuant to Section 6.13 hereof.


 


(b)      The Issuer may
remit payment for such fees and expenses to the Trustee or, in the absence
thereof, the Trustee may from time to time deduct payment of its fees and
expenses hereunder from Monies on deposit in the Payment Account in accordance
with the Priority of Payments.


 


(c)      The Trustee in
its capacity as Trustee, Paying Agent, Calculation Agent, Transfer Agent,
Custodial Securities Intermediary, Backup Advancing Agent and Notes Registrar,
hereby agrees not to cause the filing of a petition in bankruptcy against the
Issuer or the Co-Issuer until at least one year and one day or, if longer, the
applicable preference period then in effect after the payment in full of all
Notes issued under this Indenture.  This
provision shall survive termination of this Agreement.


 


(d)      The Trustee
agrees that the payment of all amounts to which it is entitled pursuant to sub-sections
6.7(a)(i), (a)(ii), (a)(iii) and (a)(iv) shall be
subject to the Priority of Payments, shall be payable only to the extent funds
are available in accordance with such Priority of Payments, shall be payable
solely from the Assets and following realization of the Assets, any such claims
of the Trustee against the Issuer shall be extinguished.  The Trustee will have a lien upon the Assets
to secure the payment of such payments to it in accordance with the Priority of
Payments; provided that the Trustee shall not
institute any proceeding for enforcement of such lien except in connection with
an action taken pursuant to Section 5.3 hereof for enforcement of the
lien of this Indenture for the benefit of the Noteholders.


 


Fees shall be accrued on the actual number of days in
the related Interest Accrual Period.  The
Trustee shall receive amounts pursuant to this Section 6.7 and Sections
11.1(a)(i) and (ii) only to the extent that
such payment is made in accordance with the Priority of Payments


 


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and
the failure to pay such amounts to the Trustee will not, by itself, constitute
an Event of Default.  Subject to Section
6.9, the Trustee shall continue to serve as Trustee under this Indenture
notwithstanding the fact that the Trustee shall not have received amounts due to
it hereunder.  No direction by a Majority
of the Controlling Class shall affect the right of the Trustee to collect
amounts owed to it under this Indenture.


 


If on any Payment Date when any amount shall be
payable to the Trustee pursuant to this Indenture is not paid because there are
insufficient funds available for the payment thereof, all or any portion of
such amount not so paid shall be deferred and payable on any later Payment Date
on which a fee shall be payable and sufficient funds are available therefor in
accordance with the Priority of Payments.


 


Section 6.8             Corporate
Trustee Required; Eligibility.


 


There shall at all times be a Trustee hereunder which
shall be a corporation organized and doing business under the laws of the
United States of America or of any State thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $200,000,000, subject to supervision or examination by federal or State authority,
having a rating of at least “A2” by Moody’s, a rating of at least “BBB” by
Fitch and a long-term senior unsecured debt rating of at least “A+” and a
short-term debt rating of at least “A-1” by S&P and having an office within
the United States.  If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 6.8, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.  If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.8, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article 6.


 


Section 6.9             Resignation and Removal; Appointment of Successor.


 


(a)      No resignation
or removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article 6 shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.10.


 


(b)      The Trustee may
resign at any time by giving written notice thereof to the Issuer, the
Co-Issuer, the Collateral Manager, each Hedge Counterparty, the Noteholders and
each Rating Agency.  Upon receiving such
notice of resignation, the Issuer and the Co-Issuer shall promptly appoint a
successor trustee or trustees by written instrument, in duplicate, executed by
an Authorized Officer of the Issuer and an Authorized Officer of the Co-Issuer,
one copy of which shall be delivered to the Trustee so resigning and one copy
to the successor Trustee or Trustees, together with a copy to each Noteholder,
each Hedge Counterparty and the Collateral Manager; provided that
such successor Trustee shall be appointed only upon the written consent of a
Majority of the Notes (or if there are no Notes Outstanding, a Majority of the
Preferred Shares) or, at any time when an Event of Default shall have occurred
and be continuing or when a successor Trustee has been appointed pursuant to Section
6.10, by Act of a Majority of the Controlling Class.  If no successor Trustee shall have been
appointed and an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee


 


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within
30 days after the giving of such notice of resignation, the resigning Trustee,
the Controlling Class of Notes or any Holder of a Note, on behalf of himself
and all others similarly situated, may petition any court of competent
jurisdiction for the appointment of a successor Trustee.


 


(c)      The Trustee is
subject to removal by act of a Majority of the Holders of the Notes (or if
there are no Notes Outstanding, a Majority of the Preferred Shares) or, at any
time when an Event of Default shall have occurred and be continuing or when a
successor Trustee has been appointed pursuant to Section 6.10, by Act of
a Majority of the Controlling Class, upon written notice delivered to the Trustee
and to the Issuer and the Co-Issuer.


 


(d)      If at any time:


 


(i)            the Trustee shall cease to be eligible under Section 6.8
and shall fail to resign after written request therefor by the Issuer, the
Co-Issuer, or by any Holder; or


 


(ii)           the
Trustee shall become incapable of acting or there shall be instituted any
proceeding pursuant to which it could be adjudged as bankrupt or insolvent or a
receiver or liquidator of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;


 


then, in any such case (subject to Section 6.9(a)),
(a) the Issuer or the Co-Issuer, by Issuer Order, subject to the written
consent of each Hedge Counterparty, may remove the Trustee or (b) subject to Section
5.15, a Majority of the Controlling Class or any Holder may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.


 


(e)      If the Trustee
shall resign, be removed or become incapable of acting, or if a vacancy shall
occur in the office of the Trustee for any reason, the Issuer and the
Co-Issuer, by Issuer Order, subject to the written consent of each Hedge
Counterparty and the Collateral Manager, shall promptly appoint a successor
Trustee.  If the Issuer and the Co-Issuer
shall fail to appoint a successor Trustee within 60 days after such
resignation, removal or incapability or the occurrence of such vacancy, a
successor Trustee may be appointed by Act of a Majority of the Controlling
Class delivered to the Issuer, the Co-Issuer, the Collateral Manager and the
retiring Trustee.  The successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee and supersede any successor Trustee proposed by the
Issuer and the Co-Issuer.  If no
successor Trustee shall have been so appointed by the Issuer and the Co-Issuer
or a Majority of the Controlling Class and shall have accepted appointment in
the manner hereinafter provided, subject to Section 5.15, each Hedge
Counterparty, the Controlling Class or any Holder may, on behalf of itself or
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.


 


(f)       The Issuer and
the Co-Issuer shall give prompt notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first class mail, postage prepaid, to each Rating
Agency, each


 


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Hedge
Counterparty, the Preferred Shares Paying Agent and to the Holders of the Notes
as their names and addresses appear in the Notes Register.  Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.  If the Issuer or the Co-Issuer fail to mail such notice within ten days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be given at the expense of the Issuer or the Co-Issuer, as the case
may be.


 


Section 6.10           Acceptance
of Appointment by Successor.


 


Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer, the Co-Issuer, each Hedge Counterparty,
the Collateral Manager and the retiring Trustee an instrument accepting such
appointment.  Upon delivery of the
required instruments, the resignation or removal of the retiring Trustee shall
become effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts, duties and
obligations of the retiring Trustee; but, on request of the Issuer and the Co-Issuer
or a Majority of the Controlling Class or the Collateral Manager or the
successor Trustee, such retiring Trustee shall, upon payment of its charges
then unpaid, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
Money held by such retiring Trustee hereunder, subject nevertheless to its
lien, if any, provided for in Section 6.7(d).  Upon request of any such successor Trustee,
the Issuer and the Co-Issuer shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts.


 


No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor shall be qualified and
eligible under this Article 6 and (a) such successor shall have long
term debt rated within the four highest rating categories by each Rating
Agency, and (b) each Rating Agency has confirmed in writing that the employment
of such successor would not adversely affect the rating on the Notes.


 


Section 6.11           Merger,
Conversion, Consolidation or Succession to Business of Trustee.


 


Any corporation or banking association into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation or banking association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article
6, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.  In
case any of the Notes have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Notes
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.


 


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Section 6.12           Co-Trustees
and Separate Trustee.


 


At any time or times, including for the purpose of
meeting the legal requirements of any jurisdiction in which any part of the
Assets may at the time be located, the Issuer, the Co-Issuer and the Trustee
shall have power to appoint, one or more Persons to act as co-trustee jointly
with the Trustee of all or any part of the Assets, with the power to file such
proofs of claim and take such other actions pursuant to Section 5.6
herein and to make such claims and enforce such rights of action on behalf of
the Holders of the Notes as such Holders themselves may have the right to do,
subject to the other provisions of this Section 6.12.


 


Each of the Issuer and the Co-Issuer shall join with
the Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to appoint a co-trustee.  If the Issuer and the Co-Issuer do not both
join in such appointment within 15 days after the receipt by them of a request
to do so, the Trustee shall have power to make such appointment.


 


Should any written instrument from the Issuer or the
Co-Issuer be required by any co-trustee, so appointed, more fully confirming to
such co-trustee such property, title, right or power, any and all such
instruments shall, on request, be executed, acknowledged and delivered by the
Issuer or the Co-Issuer, as the case may be. 
The Issuer agrees to pay (but only from and to the extent of the Assets)
to the extent funds are available therefor under subclauses (3) and (31) of Section
11.1(a)(i), for any reasonable fees and expenses
in connection with such appointment.


 


Every co-trustee, shall, to the extent permitted by law, but to such extent only, be appointed
subject to the following terms:


 


(a)      the Notes shall
be authenticated and delivered and all rights, powers, duties and obligations
hereunder in respect of the custody of securities, Cash and other personal
property held by, or required to be deposited or pledged with, the Trustee
hereunder, shall be exercised solely by the Trustee;


 


(b)      the rights,
powers, duties and obligations hereby conferred or imposed upon the Trustee in
respect of any property covered by the appointment of a co-trustee shall be
conferred or imposed upon and exercised or performed by the Trustee or by the
Trustee and such co-trustee jointly in the case of the appointment of a
co-trustee as shall be provided in the instrument appointing such co-trustee,
except to the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or unqualified
to perform such act, in which event such rights, powers, duties and obligations
shall be exercised and performed by a co-trustee;


 


(c)      the Trustee at
any time, by an instrument in writing executed by it, with the concurrence of
the Issuer and the Co-Issuer evidenced by an Issuer Order, may accept the
resignation of or remove any co-trustee appointed under this Section 6.12,
and in case an Event of Default has occurred and is continuing, the Trustee
shall have the power to accept the resignation of, or remove, any such
co-trustee without the concurrence of the Issuer or the Co-


 


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Issuer. A successor to any co-trustee so
resigned or removed may be appointed in the manner provided in this Section
6.12;


 


(d)      no co-trustee hereunder shall be personally liable by reason
of any act or omission of the Trustee hereunder;


 


(e)      the Trustee shall not be liable by reason of any act or
omission of a co-trustee; and


 


(f)       any Act of Securityholders delivered to the Trustee shall be
deemed to have been delivered to each co-trustee.


 


Section 6.13           Certain
Duties of Trustee Related to Delayed Payment of Proceeds.


 


In the event that in any month the Trustee shall not
have received a Scheduled Distribution, (a) the Trustee shall promptly notify
the Issuer and the Collateral Manager in writing and (b) unless within three
Business Days (or the end of the applicable grace period for such payment, if
longer) after such notice such payment shall have been received by the Trustee,
or the Issuer, in its absolute discretion (but only to the extent permitted by Section
10.2(a)), shall have made provision for such payment satisfactory to the
Trustee in accordance with Section 10.2(a), the Trustee shall request
the obligor of such Pledged Obligation, the trustee under the related
Underlying Instrument or paying agent designated by either of them, as the case
may be, to make such payment as soon as practicable after such request but in
no event later than three Business Days after the date of such request.  In the event that such payment is not made
within such time period, the Trustee, subject to the provisions of clause (iv) of Section 6.1(d), shall take such action as the
Collateral Manager reasonably shall direct in writing.  Any such action shall be without prejudice to
any right to claim a Default or Event of Default under this Indenture.  In the event that the Issuer or the
Collateral Manager requests a release of a Pledged Obligation in connection
with any such action under the Collateral Management Agreement, such release
shall be subject to Section 10.10 and Article 12 of this
Indenture, as the case may be. 
Notwithstanding any other provision hereof, the Trustee shall deliver to
the Issuer or its designee any payment with respect to any Pledged Obligation
received after the Due Date thereof to the extent the Issuer previously made
provisions for such payment satisfactory to the Trustee in accordance with this
Section 6.13 and such payment shall not be deemed part of the Assets.


 


Section 6.14           Representations
and Warranties of the Trustee.


 


The Trustee represents and warrants that:


 


(a)      the Trustee is
a national banking association with trust powers, duly and validly existing
under the laws of the United States of America, with corporate power and
authority to execute, deliver and perform its obligations under this Indenture,
and is duly eligible and qualified to act as trustee under this Indenture;


 


(b)      this Indenture
has been duly authorized, executed and delivered by the Trustee and constitutes
the valid and binding obligation of the Trustee, enforceable against it in
accordance with its terms except (i) as limited by bankruptcy, fraudulent
conveyance, fraudulent transfer, insolvency, reorganization, liquidation,
receivership, moratorium or other


 


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similar laws now
or hereafter in effect relating to creditors’ rights generally and by general
equitable principles, regardless of whether considered in a proceeding in
equity or at law, and (ii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;


 


(c)      neither the
execution or delivery by the Trustee of this Indenture nor the performance by
the Trustee of its obligations under this Indenture requires the consent or
approval of, the giving of notice to or the registration or filing with, any
governmental authority or agency under any existing law of the United States of
America governing the banking or trust powers of the Trustee;


 


(d)      neither the
execution, delivery and performance of this Indenture, nor the consummation of
the transactions contemplated by this Indenture, (i) is prohibited by, or
requires the Trustee to obtain any consent, authorization, approval or
registration under, any law, statute, rule, regulation, or any judgment, order,
writ, injunction or decree that is binding upon the Trustee or any of its
properties or assets, (ii) will violate the provisions of the Governing
Documents of the Trustee or (iii) will violate any provision of, result in any
default or acceleration of any obligations under, result in the creation or
imposition of any lien pursuant to, or require any consent under, any material
agreement to which the Trustee is a party or by which it or any of its property
is bound, the violation of which would have a material adverse effect on the
Trustee or its property; and


 


(e)      there are no
proceedings pending or, to the best knowledge of the Trustee, threatened
against the Trustee before any Federal, state or other governmental agency,
authority, administrator or regulatory body, arbitrator, court or other
tribunal, foreign or domestic, which could have a material adverse effect on
the Pledged Obligations or the performance by the Trustee of its obligations
under this Indenture.


 


Section 6.15           Requests
for Consents.


 


In the event that the Trustee receives written notice
of any proposed amendment, consent or waiver under the Underlying Instruments
of any Collateral Debt Security (before or after any default) or in the event
any action is required to be taken in respect to an Underlying Instrument, the
Trustee shall promptly contact the Issuer and the Collateral Manager.  The Collateral Manager may, on behalf of the
Issuer, instruct the Trustee pursuant to an Issuer Order to, and the Trustee
shall, with respect to which a Collateral Debt Security as to which a consent
or waiver under the Underlying Instruments of such Collateral Debt Security
(before or after any default) has been proposed or with respect to action
required to be taken in respect of an Underlying Instrument, give consent,
grant a waiver, vote or exercise any or all other rights or remedies with respect
to any such Collateral Debt Security in accordance with such Issuer Order.  In the absence of any instruction from the
Collateral Manager, the Trustee shall not engage in any vote or take any action
with respect to such a Collateral Debt Security.


 


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ARTICLE 7


 


COVENANTS


 


Section 7.1             Payment
of Principal and Interest.


 


The Issuer and the Co-Issuer shall duly and punctually
pay the principal of and interest on each Class of Notes in accordance with the
terms of such Notes and this Indenture. Amounts properly withheld under the
Code or other applicable law by any Person from a payment to any Noteholder of
interest and/or principal shall be considered as having been paid by the Issuer
and the Co-Issuer, and, with respect to the Preferred Shares, by the Issuer, to
such Preferred Shareholder for all purposes of this Indenture.


 


The Trustee shall, unless prevented from doing so for
reasons beyond its reasonable control, give notice to each Securityholder of
any such withholding requirement no later than ten days prior to the related
Payment Date from which amounts are required (as directed by the Issuer or the
Collateral Manager on behalf of the Issuer) to be withheld, provided that despite the failure of the Trustee to give
such notice amounts withheld pursuant to applicable tax laws shall be
considered as having been paid by the Issuer and the Co-Issuer, as provided
above.


 


Section 7.2             Maintenance
of Office or Agency.


 


The Issuer and the Co-Issuer hereby appoint the
Trustee as a Paying Agent for the payment of principal of and interest on the
Notes and where Notes may be surrendered for registration of transfer or
exchange and the Issuer and the Co-Issuer hereby appoint the Trustee, as their
agent where notices and demands to or upon the Co-Issuer in respect of the
Notes or this Indenture, or the Issuer in respect of the Notes or this
Indenture, may be served.


 


The Issuer and the Co-Issuer hereby appoint the Irish
Paying Agent as a Paying Agent for the payment of principal of and interest on
the Notes and to act as their agent where notices and demands to or upon the
Issuer or the Co-Issuer in respect of the Notes or this Indenture may be served
and where Notes may be surrendered for registration of transfer or exchange.


 


The Issuer or the Co-Issuer may at any time and from
time to time vary or terminate the appointment of any such agent or appoint any
additional agents for any or all of such purposes; provided, however, that the Issuer and the Co-Issuer, if applicable,
will maintain in the Borough of Manhattan, The City of New York, an office or
agency where notices and demands to or upon the Issuer and the Co-Issuer in
respect of the Notes and this Indenture may be served, and, subject to any laws
or regulations applicable thereto, an office or agency outside of the United
States where Notes may be presented and surrendered for payment; provided, further, that
no paying agent shall be appointed in a jurisdiction which subjects payments on
the Notes to withholding tax. The Issuer or the Co-Issuer, as the case may be,
shall give prompt written notice to the Trustee, each Rating Agency and the
Noteholders of the appointment or termination of any such agent and of the
location and any change in the location of any such office or agency.


 


If at any time the Issuer and the Co-Issuer, if
applicable, shall fail to maintain any such required office or agency in the
Borough of Manhattan, The City of New York, or outside the United States, or
shall fail to furnish the Trustee with the address thereof, presentations and


 


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surrenders may be made (subject to the limitations
described in the preceding paragraph) at and notices and demands may be served
on the Issuer and the Co-Issuer, and Notes may be presented and surrendered for
payment to the appropriate Paying Agent at its main office and the Issuer and
the Co-Issuer hereby appoint the same as their agent to receive such respective
presentations, surrenders, notices and demands.


 


Section 7.3             Money
for Note Payments to be Held in Trust.


 


All payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Payment
Account shall be made on behalf of the Issuer and the Co-Issuer by the Trustee
or a Paying Agent (in each case, from and to the extent of available funds in
the Payment Account and subject to the Priority of Payments) with respect to
payments on the Notes.


 


When the Paying Agent is not also the Notes Registrar,
the Issuer and the Co-Issuer shall furnish, or cause the Notes Registrar to
furnish, no later than the fifth calendar day after each Record Date a list, if
necessary, in such form as such Paying Agent may reasonably request, of the
names and addresses of the Holders of Notes and of the certificate numbers of
individual Notes held by each such Holder.


 


Whenever the Paying Agent is not also the Trustee, the
Issuer, the Co-Issuer, and such Paying Agent shall, on or before the Business
Day next preceding each Payment Date or Redemption Date, as the case may be,
direct the Trustee to deposit on such Payment Date with such Paying Agent, if
necessary, an aggregate sum sufficient to pay the amounts then becoming due pursuant
to the terms of this Indenture (to the extent funds are then available for such
purpose in the Payment Account, and subject to the Priority of Payments), such
sum to be held for the benefit of the Persons entitled thereto and (unless such
Paying Agent is the Trustee) the Issuer and the Co-Issuer shall promptly notify
the Trustee of its action or failure so to act. Any Monies deposited with a
Paying Agent (other than the Trustee) in excess of an amount sufficient to pay
the amounts then becoming due on the Notes with respect to which such deposit
was made shall be paid over by such Paying Agent to the Trustee for application
in accordance with Article 11. 
Any such Paying Agent shall be deemed to agree by assuming such role not
to cause the filing of a petition in bankruptcy against the Issuer or the
Co-Issuer for the non-payment to the Paying Agent of any amounts payable
thereto until at least one year and one day or, if longer, the applicable
preference period then in effect after the payment in full of all Notes issued
under this Indenture.


 


The initial Paying Agent shall be as set forth in Section
7.2. Any additional or successor Paying Agents shall be appointed by Issuer
Order of the Issuer and Issuer Order of the Co-Issuer with written notice
thereof to the Trustee; provided, however, that so long as any Class of the Notes are rated
by a Rating Agency and with respect to any additional or successor Paying Agent
for the Notes, either (i) such Paying Agent has a long-term debt rating of “Aa3”
or higher by Moody’s, “AA-”or higher by Fitch and “AA-” or higher by S&P or
a short-term debt rating of “P-1” by Moody’s, “F1+” by Fitch and “A1+” by
S&P or (ii) each Rating Agency confirms that employing such Paying Agent
shall not adversely affect the then-current ratings of the Notes.  In the event that such successor Paying Agent
ceases to have a long-term debt rating of “Aa3” or higher by Moody’s, “AA-”or
higher by Fitch or “AA-” or higher by S&P or a short-term debt


 


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rating of at least “P-1” by Moody’s, “F1+” by Fitch
and “A-1+” by S&P, the Issuer and the Co-Issuer shall promptly remove such
Paying Agent and appoint a successor Paying Agent. The Issuer and the Co-Issuer
shall not appoint any Paying Agent that is not, at the time of such
appointment, a depository institution or trust company subject to supervision
and examination by federal and/or state and/or national banking authorities.
The Issuer and the Co-Issuer shall cause the Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee (and if the Trustee acts as Paying
Agent, it hereby so agrees), subject to the provisions of this Section 7.3,
that such Paying Agent will:


 


(a)      allocate all
sums received for payment to the Holders of Notes for which it acts as Paying
Agent on each Payment Date and Redemption Date among such Holders in the
proportion specified in the applicable report or Redemption Date Statement, as
the case may be, in each case to the extent permitted by applicable law;


 


(b)      hold all sums
held by it for the payment of amounts due with respect to the Notes for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;


 


(c)      if such Paying
Agent is not the Trustee, immediately resign as a Paying Agent and forthwith
pay to the Trustee all sums held by it for the payment of Notes if at any time
it ceases to meet the standards set forth above required to be met by a Paying
Agent at the time of its appointment;


 


(d)      if such Paying
Agent is not the Trustee, immediately give the Trustee notice of any Default by
the Issuer or the Co-Issuer (or any other obligor upon the Notes) in the making
of any payment required to be made; and


 


(e)      if such Paying
Agent is not the Trustee at any time during the continuance of any such
Default, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held by such Paying Agent.


 


The Issuer or the Co-Issuer may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or by Issuer Order direct the Paying Agent to pay, to
the Trustee all sums held by the Issuer or the Co-Issuer or held by the Paying
Agent for payment of the Notes, such sums to be held by the Trustee in trust
for the same Noteholders as those upon which such sums were held by the Issuer,
the Co-Issuer or the Paying Agent; and, upon such payment by the Paying Agent
to the Trustee, the Paying Agent shall be released from all further liability
with respect to such Money.


 


Except as otherwise required by applicable law, any
Money deposited with the Trustee in trust or deposited with the Paying Agent
for the payment of the principal of or interest on any Note and remaining
unclaimed for two years after such principal or interest has become due and
payable shall be paid to the Issuer; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment of such amounts and all liability of the Trustee or the Paying Agent with
respect to such Money (but only to the extent of the amounts so paid to the
Issuer or the Co-Issuer, as applicable) shall thereupon cease; provided,


 


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however, that the Irish Paying
Agent, before being required to make any such payment, shall at the expense of
the Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in Dublin, Ireland, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than thirty (30) days from the
date of such publication, any unclaimed balance of such money then remaining
shall be repaid to the Issuer. The Trustee or the Paying Agent, before being
required to make any such release of payment, may, but shall not be required
to, adopt and employ, at the expense of the Issuer or the Co-Issuer, as the
case may be, any reasonable means of notification of such release of payment,
including, but not limited to, mailing notice of such release to Holders whose
Notes have been called but have not been surrendered for redemption or whose
right to or interest in Monies due and payable but not claimed is determinable
from the records of the Paying Agent, at the last address of record of each
such Holder.


 


Section 7.4             Existence
of the Issuer and Co-Issuer.


 


(a)      So long as any
Note is outstanding, the Issuer shall maintain in full force and effect its
existence and rights as an exempted company incorporated with limited liability
under the laws of the Cayman Islands and shall obtain and preserve its
qualification to do business as a foreign limited liability company in each
jurisdiction in which such qualifications are or shall be necessary to protect
the validity and enforceability of this Indenture, the Notes or any of the
Assets; provided that the Issuer shall be
entitled to change its jurisdiction of registration from the Cayman Islands to
any other jurisdiction reasonably selected by the Issuer so long as (i) such
change is not disadvantageous in any material respect to the Holders of the
Notes or the Preferred Shares, (ii) written notice of such change shall have
been given by the Trustee to the Holders of the Notes or Preferred Shares, the
Preferred Shares Paying Agent and each Rating Agency fifteen Business Days
prior to such change and (iii) on or prior to the 15th Business Day following
such notice the Trustee shall not have received written notice from a Majority
of the Controlling Class or a Majority of the Preferred Shares objecting to
such change.  So long as any Note is
outstanding, the Issuer will maintain at all times at least one director who is
Independent of the Collateral Manager and its Affiliates.


 


(b)      So long as any
Note is outstanding, the Co-Issuer shall maintain in full force and effect its
existence and rights as a limited liability company organized under the laws of
Delaware and shall obtain and preserve its qualification to do business as a
foreign limited liability company in each jurisdiction in which such
qualifications are or shall be necessary to protect the validity and
enforceability of this Indenture or the Notes; provided, however, that the Co-Issuer shall be entitled to change its
jurisdiction of formation from Delaware to any other jurisdiction reasonably
selected by the Co-Issuer so long as (i) such change is not disadvantageous in
any material respect to the Holders of the Notes, (ii) written notice of such
change shall have been given by the Trustee to the Holders of the Notes and
each Rating Agency fifteen Business Days prior to such change and (iii) on or
prior to the 15th Business Day following such notice the Trustee shall not have
received written notice from a Majority of the Controlling Class objecting to
such change.  So long as any Note is
outstanding, the Co-Issuer shall maintain at all times at least one manager who
is Independent of the Collateral Manager and its Affiliates.


 


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(c)      So long as any
Note is outstanding, the Issuer shall ensure that all corporate or other
formalities regarding its existence are followed (including correcting any
known misunderstanding regarding its separate existence).  So long as any Note is outstanding, the
Issuer shall not take any action or conduct its affairs in a manner that is
likely to result in its separate existence being ignored or its assets and
liabilities being substantively consolidated with any other Person in a
bankruptcy, reorganization or other insolvency proceeding.  So long as any Note is outstanding, the
Issuer shall maintain and implement administrative and operating procedures
reasonably necessary in the performance of the Issuer’s obligations hereunder,
and the Issuer shall at all times keep and maintain, or cause to be kept and
maintained, separate books, records, accounts and other information customarily
maintained for the performance of the Issuer’s obligations hereunder. Without
limiting the foregoing, so long as any Note is outstanding, (i) the Issuer
shall (A) pay its own liabilities only out of its own funds and (B) use
separate stationery, invoices and checks, (ii) the Issuer shall not have any
subsidiaries, and (iii) the Issuer shall not have any employees, (B) engage in
any transaction with any shareholder that is not permitted under the terms of
the Collateral Management Agreement, (C) pay dividends other than in accordance
with the terms of this Indenture or (D) conduct business under an assumed name
(i.e. no DBAs); provided that the foregoing shall
not prohibit the Issuer from entering into the transactions contemplated by the
Administration Agreement with the Company Administrator and the Preferred
Shares Paying Agency Agreement with the Shares Registrar.


 


(d)      So long as any
Note is outstanding, the Co-Issuer shall ensure that all limited liability
company or other formalities regarding its existence) are followed, as well as
correcting any known misunderstanding regarding its separate existence.  The Co-Issuer shall not take any action or
conduct its affairs in a manner, that is likely to result in its separate
existence being ignored or its assets and liabilities being substantively
consolidated with any other Person in a bankruptcy, reorganization or other
insolvency proceeding.  The Co-Issuer
shall maintain and implement administrative and operating procedures reasonably
necessary in the performance of the Co-Issuer’s obligations hereunder, and the
Co-Issuer shall at all times keep and maintain, or cause to be kept and
maintained, books, records, accounts and other information customarily
maintained for the performance of the Co- Issuer’s obligations hereunder.  Without limiting the foregoing, (i) the
Co-Issuer shall not have any subsidiaries, and (ii) the Co-Issuer shall not (A)
have any employees (other than its managers), (B) join in any transaction with
any member that is not permitted under the terms of the Collateral Management
Agreement or (C) pay dividends other than in accordance with the terms of this
Indenture.


 


Section 7.5             Protection
of Assets.


 


(a)      The Trustee, on
behalf of the Issuer, pursuant to any Opinion of Counsel received pursuant to Section
7.5(d) shall execute and deliver all such Financing Statements,
continuation statements, instruments of further assurance and other
instruments, and shall take such other action as may be necessary or advisable
or desirable to secure the rights and remedies of the Holders and each Hedge
Counterparty hereunder and to:


 


(i)            Grant
more effectively all or any portion of the Assets;


 


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(ii)           maintain
or preserve the lien (and the priority thereof) of this Indenture or to carry
out more effectively the purposes hereof;


 


(iii)          perfect,
publish notice of or protect the validity of any Grant made or to be made by
this Indenture (including, without limitation, any and all actions necessary or
desirable as a result of changes in law or regulations);


 


(iv)          enforce any
of the Pledged Obligations or other instruments or property included in the
Assets;


 


(v)           preserve
and defend title to the Assets and the rights of the Trustee, the Holders of
the Notes and each Hedge Counterparty in the Assets against the claims of all
persons and parties; and


 


(vi)          pursuant to
Sections 11.1(a)(i)(1) and 11.1(a)(ii)(1), pay or cause to be
paid any and all taxes levied or assessed upon all or any part of the Assets.


 


The Issuer hereby designates the Trustee, its agent
and attorney-in-fact to execute any Financing Statement, continuation statement
or other instrument required pursuant to this Section 7.5.  The Trustee agrees that it will from time to
time execute and cause to be filed Financing Statements and continuation
statements (it being understood that the Trustee shall be entitled to rely upon
an Opinion of Counsel described in Section 7.5(d), at the expense of the
Issuer, as to the need to file such Financing Statements and continuation
statements, the dates by which such filings are required to be made and the
jurisdictions in which such filings are required to be made).


 


(b)      The Trustee
shall not (i) except in accordance with Section 10.10(a), (b) or (c)
and except for payments, deliveries and distributions otherwise expressly
permitted under this Indenture, remove any portion of the Assets that consists
of Cash or is evidenced by an instrument, certificate or other writing (A) from
the jurisdiction in which it was held at the date as described in the Opinion
of Counsel delivered at the Closing Date pursuant to Section 3.1(d) or
(B) from the possession of the Person who held it on such date or (ii) cause or
permit the Custodial Account or the Custodial Securities Intermediary to be
located in a different jurisdiction from the jurisdiction in which such
securities accounts and Custodial Securities Intermediary were located on the
Closing Date, unless the Trustee shall have first received an Opinion of
Counsel to the effect that the lien and security interest created by this
Indenture with respect to such property will continue to be maintained after
giving effect to such action or actions.


 


(c)      The Issuer
shall pay or cause to be paid taxes, if any, levied on account of the
beneficial ownership by the Issuer of any Pledged Obligations that secure the
Notes.


 


(d)      For so long as
the Notes are Outstanding, (i) on July 31, 2010 and (ii) every 60 months after
such date, the Issuer (or the Collateral Manager on behalf of the Issuer) shall
deliver to the Trustee for the benefit of the Trustee, the Collateral Manager,
each Hedge Counterparty and each Rating Agency, at the expense of the Issuer,
an Opinion of Counsel stating what is required, in the opinion of such counsel,
as of the date of such opinion, to maintain the lien and security interest
created by this Indenture with respect to the Assets, and


 


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confirming the
matters set forth in the Opinion of Counsel, furnished pursuant to Section
3.1(d), with regard to the perfection and priority of such security
interest (and such Opinion may likewise be subject to qualifications and
assumptions similar to those set forth in the Opinion delivered pursuant to Section
3.1(d)); provided that the Issuer shall be
required to deliver an Opinion of Counsel with respect to the foregoing matters
within 60 days after any change in the jurisdiction of organization of the
Trustee; and provided, further, that a
Majority of the Controlling Class shall be entitled to direct the Issuer to
deliver an additional Opinion of Counsel with respect to the foregoing matters,
at the expense of such Holders, twice within any such 60 month period.


 


Section 7.6             Notice
of Any Amendments.


 


Each of the Issuer and the Co-Issuer shall give notice
to the Rating Agencies of, and satisfy the Rating Agency Condition with respect
to, any amendments to its Governing Documents.


 


Section 7.7             Performance
of Obligations.


 


(a)      Each of the
Issuer and the Co-Issuer shall not take any action, and will use its best
effort not to permit any action to be taken by others, that would release any
Person from any of such Person’s covenants or obligations under any instrument
included in the Assets, except in the case of enforcement action taken with
respect to any Defaulted Security in accordance with the provisions hereof and
as otherwise required hereby.


 


(b)      The Issuer or
the Co-Issuer may, with the prior written consent of the Majority of the Notes
(or if there are no Notes Outstanding, a Majority of the Preferred Shares),
contract with other Persons, including the Collateral Manager or the Trustee,
for the performance of actions and obligations to be performed by the Issuer or
the Co-Issuer, as the case may be, hereunder by such Persons and the
performance of the actions and other obligations with respect to the Assets of
the nature set forth in the Collateral Management Agreement by the Collateral
Manager. Notwithstanding any such arrangement, the Issuer or the Co-Issuer, as
the case may be, shall remain primarily liable with respect thereto. In the
event of such contract, the performance of such actions and obligations by such
Persons shall be deemed to be performance of such actions and obligations by
the Issuer or the Co-Issuer; and the Issuer or the Co-Issuer shall punctually
perform, and use its best efforts to cause the Collateral Manager or such other
Person to perform, all of their obligations and agreements contained in the
Collateral Management Agreement or such other agreement.


 


Section 7.8             Negative
Covenants.


 


(a)      The Issuer and
the Co-Issuer shall not:


 


(i)            sell,
assign, participate, transfer, exchange or otherwise dispose of, or pledge,
mortgage, hypothecate or otherwise encumber (or permit such to occur or suffer
such to exist), any part of the Assets, except as otherwise expressly permitted
by this Indenture or the Collateral Management Agreement;


 


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(ii)           claim any
credit on, make any deduction from, or dispute the enforceability of, the
payment of the principal or interest payable in respect of the Notes (other
than amounts required to be paid, deducted or withheld in accordance with any
applicable law or regulation of any governmental authority) or assert any claim
against any present or future Noteholder by reason of the payment of any taxes
levied or assessed upon any part of the Assets;


 


(iii)          (A)
incur or assume or guarantee any indebtedness, other than the Notes and this
Indenture and the transactions contemplated hereby; (B) issue any additional
class of securities, other than the Notes, the Preferred Shares, the ordinary
shares of the Issuer and the limited liability company membership interests of
the Co-Issuer; or (C) issue any additional shares of stock, other than the
ordinary shares of the Issuer and the Preferred Shares;


 


(iv)          (A) permit
the validity or effectiveness of this Indenture or any Grant hereunder to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to this Indenture or the Notes,
except as may be expressly permitted hereby, (B) permit any lien, charge,
adverse claim, security interest, mortgage or other encumbrance (other than the
lien of this Indenture) to be created on or extend to or otherwise arise upon
or burden the Assets or any part thereof, any interest therein or the proceeds
thereof, except as may be expressly permitted hereby or (C) take any action
that would permit the lien of this Indenture not to constitute a valid first
priority security interest in the Assets, except as may be expressly permitted
hereby;


 


(v)           amend the
Collateral Management Agreement, except pursuant to the terms thereof;


 


(vi)          amend any
Servicing Agreement, except pursuant to the terms thereof;


 


(vii)         amend
the Preferred Shares Paying Agency Agreement, except pursuant to the terms
thereof;


 


(viii)        dissolve
or liquidate in whole or in part, except as permitted hereunder;


 


(ix)           make or
incur any capital expenditures, except as reasonably required to perform its
functions in accordance with the terms of this Indenture;


 


(x)            become
liable in any way, whether directly or by assignment or as a guarantor or other
surety, for the obligations of the lessee under any lease, hire any employees
or pay any dividends to its shareholders, except with respect to the Preferred
Shares in accordance with the Priority of Payments;


 


(xi)           maintain
any bank accounts other than the Accounts and the bank account in the Cayman
Islands in which (inter alia) the proceeds of the
Issuer’s issued share capital and the transaction fees paid to the Issuer for
agreeing to issue the Securities will be kept;


 


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(xii)          conduct
business under an assumed name, or change its name without first delivering at
least 30 days’ prior written notice to the Trustee, the Noteholders and the
Rating Agencies and an Opinion of Counsel to the effect that such name change
will not adversely affect the security interest hereunder of the Trustee;


 


(xiii)         engage
in any activity that would cause the Issuer to be subject to U.S. Federal,
state or local income or franchises tax; or


 


(xiv)        except
for any agreements (other than a Hedge Agreement) involving the purchase and
sale of Collateral Debt Securities having customary purchase or sale terms and
documented with customary loan trading documentation, enter into any agreements
unless such agreements contain “non-petition” and “limited recourse”
provisions.


 


(b)      Neither the
Issuer nor the Trustee shall sell, transfer, exchange or otherwise dispose of
Assets, or enter into or engage in any business with respect to any part of the
Assets, except as expressly permitted or required by this Indenture or the
Collateral Management Agreement.


 


(c)      The Co-Issuer
shall not invest any of its assets in “securities” (as such term is defined in
the Investment Company Act) and shall keep all of the Co-Issuer’s assets in
Cash.


 


(d)      For so long as
any of the Notes are Outstanding, the Co-Issuer shall not issue any limited
liability company membership interests of the Co-Issuer to any Person other
than Gramercy Investment or a wholly-owned subsidiary of Gramercy Investment.


 


(e)      The Issuer
shall not enter into any material new agreements (other than any Hedge
Agreement, Hedge Counterparty Credit Support, Collateral Debt Security,
Collateral Debt Security Purchase Agreement or other agreement (including,
without limitation, in connection with the sale of Assets by the Issuer)
contemplated by this Indenture) without the prior written consent of Holders of
a Majority of the Notes (or if there are no Notes Outstanding, a Majority of
the Preferred Shares) and shall provide notice of all new agreements (other
than any Hedge Agreement, Collateral Debt Security or other agreement
specifically contemplated by this Indenture) the Holders of the Notes.  The foregoing notwithstanding, the Issuer may
agree to any new agreements; provided that
(i) the Issuer, or the Collateral Manager on behalf of the Issuer, determines
that such new agreements would not, upon or after becoming effective, adversely
affect the rights or interests of any Class or Classes of Noteholders and (ii)
subject to satisfaction of the Rating Agency Condition.


 


(f)       As long as any
Senior Note is outstanding, QRS Corp. may not transfer the Preferred Shares to
any other Person.


 


(g)      For so long as
any Senior Note is Outstanding, QRS Corp. may not sell, transfer or finance any
Class J Note or Class K Note except in accordance with the transfer
restrictions set forth in Section 2.5(e)(iv).


 


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Section 7.9             Statement
as to Compliance.


 


(a)      On or before
January 31, in each calendar year, commencing in 2006 or immediately if there
has been a Default in the fulfillment of an obligation under this Indenture,
the Issuer shall deliver to the Trustee (which will deliver a copy to each
Hedge Counterparty and each Rating Agency) an Officer’s Certificate given on
behalf of the Issuer and without personal liability stating, as to each signer
thereof, that, since the date of the last certificate or, in the case of the
first certificate, the Closing Date, to the best of the knowledge, information
and belief of such Officer, the Issuer has fulfilled all of its obligations
under this Indenture or, if there has been a Default in the fulfillment of any
such obligation, specifying each such Default known to them and the nature and
status thereof.


 


Section 7.10           Issuer
and Co-Issuer May Consolidate or Merge Only on Certain Terms.


 


(a)      The Issuer
shall not consolidate or merge with or into any other Person or transfer or
convey all or substantially all of its assets to any Person, unless permitted
by the Governing Documents and Cayman Islands law and unless:


 


(i)            the
Issuer shall be the surviving entity, or the Person (if other than the Issuer)
formed by such consolidation or into which the Issuer is merged or to which all
or substantially all of the assets of the Issuer are transferred shall be an
entity organized and existing under the laws of the Cayman Islands or such
other jurisdiction approved by a Majority of each and every Class of the Notes
(each voting as a separate Class) and a Majority of the Preferred Shares; provided that no such approval shall be required in
connection with any such transaction undertaken solely to effect a change in
the jurisdiction of registration pursuant to Section 7.4 hereof; and provided, further, that
the surviving entity shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee and each Noteholder, the due and
punctual payment of the principal of and interest on all Notes and other
amounts payable hereunder and under each Hedge Agreement and the Collateral
Management Agreement and the performance and observance of every covenant of
this Indenture and under each Hedge Agreement and the Collateral Management
Agreement on the part of the Issuer to be performed or observed, all as
provided herein;


 


(ii)           each
Rating Agency shall have been notified in writing of each proposed
consolidation or merger of the Issuer and the Trustee shall have received
written confirmation from each Rating Agency that the ratings issued with
respect to each Class of Notes shall not be reduced or withdrawn as a result of
the consummation of such transaction;


 


(iii)          if
the Issuer is not the surviving entity, the Person formed by such consolidation
or into which the Issuer is merged or to which all or substantially all of the
assets of the Issuer are transferred shall have agreed with the Trustee (A) to
observe the same legal requirements for the recognition of such formed or
surviving entity as a legal entity separate and apart from any of its
Affiliates as are applicable to the Issuer with respect to its Affiliates and
(B) not to consolidate or merge with or into any other Person


 


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or transfer or convey
all or substantially all of the Assets or all or substantially all of its
assets to any other Person except in accordance with the provisions of this Section
7.10, unless in connection with a sale of the Assets pursuant to Article
5, Article 9 or Article 12;


 


(iv)          if the
Issuer is not the surviving entity, the Person formed by such consolidation or
into which the Issuer is merged or to which all or substantially all of the
assets of the Issuer are transferred shall have delivered to the Trustee, each Hedge
Counterparty, the Collateral Manager and each Rating Agency an Officer’s
Certificate and an Opinion of Counsel each stating that such Person is duly
organized, validly existing and in good standing in the jurisdiction in which
such Person is organized; that such Person has sufficient power and authority
to assume the obligations set forth in subsection (i) above and to execute and
deliver an indenture supplemental hereto for the purpose of assuming such
obligations; that such Person has duly authorized the execution, delivery and
performance of an indenture supplemental hereto for the purpose of assuming
such obligations and that such supplemental indenture is a valid, legal and
binding obligation of such Person, enforceable in accordance with its terms,
subject only to bankruptcy, reorganization, insolvency, moratorium and other
laws affecting the enforcement of creditors’ rights generally and to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law); that, immediately following the event
which causes such Person to become the successor to the Issuer, (A) such Person
has good and marketable title, free and clear of any lien, security interest or
charge, other than the lien and security interest of this Indenture, to the
Assets securing, in the case of a consolidation or merger of the Issuer, all of
the Notes or, in the case of any transfer or conveyance of the Assets securing
any of the Notes, such Notes, (B) the Trustee continues to have a valid
perfected first priority security interest in the Assets securing, in the case
of a consolidation or merger of the Issuer, all of the Notes, or, in the case
of any transfer or conveyance of the Assets securing any of the Notes, such
Notes and (C) such other matters as the Trustee, each Hedge Counterparty, the
Collateral Manager or any Noteholder may reasonably require;


 


(v)           immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing;


 


(vi)          the Issuer
shall have delivered to the Trustee, the Preferred Shares Paying Agent, each Hedge
Counterparty, the Collateral Manager and each Noteholder, an Officer’s
Certificate and an Opinion of Counsel each stating that such consolidation,
merger, transfer or conveyance and such supplemental indenture comply with this
Article 7 and that all conditions precedent in this Article 7
provided for relating to such transaction have been complied with and that no
adverse tax consequences will result therefrom to the Holders of the Notes, the
Preferred Shareholders and any Hedge Counterparty; and


 


(vii)         after
giving effect to such transaction, the Issuer shall not be required to register
as an investment company under the Investment Company Act.


 


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(b)      The Co-Issuer
shall not consolidate or merge with or into any other Person or transfer or
convey all or substantially all of its assets to any Person, unless no Notes
remain Outstanding or:


 


(i)            the
Co-Issuer shall be the surviving entity, or the Person (if other than the
Co-Issuer) formed by such consolidation or into which the Co-Issuer is merged
or to which all or substantially all of the assets of the Co-Issuer are
transferred shall be a company organized and existing under the laws of
Delaware or such other jurisdiction approved by a Majority of the Controlling
Class; provided that no such approval shall be
required in connection with any such transaction undertaken solely to effect a
change in the jurisdiction of formation pursuant to Section 7.4; and provided, further, that
the surviving entity shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee and each Noteholder, the due and
punctual payment of the principal of and interest on all Notes and the
performance and observance of every covenant of this Indenture on the part of
the Co-Issuer to be performed or observed, all as provided herein;


 


(ii)           each
Rating Agency shall have been notified in writing of each proposed
consolidation or merger of the Co-Issuer and the Trustee shall have received
written confirmation from each Rating Agency that the ratings issued with
respect to each Class of Notes shall not be reduced or withdrawn as a result of
the consummation of such transaction;


 


(iii)          if
the Co-Issuer is not the surviving entity, the Person formed by such
consolidation or into which the Co-Issuer is merged or to which all or
substantially all of the assets of the Co-Issuer are transferred shall have
agreed with the Trustee (A) to observe the same legal requirements for the
recognition of such formed or surviving entity as a legal entity separate and
apart from any of its Affiliates as are applicable to the Co-Issuer with
respect to its Affiliates and (B) not to consolidate or merge with or into any
other Person or transfer or convey all or substantially all of its assets to
any other Person except in accordance with the provisions of this Section
7.10;


 


(iv)          if the
Co-Issuer is not the surviving entity, the Person formed by such consolidation
or into which the Co-Issuer is merged or to which all or substantially all of
the assets of the Co-Issuer are transferred shall have delivered to the Trustee
and each Rating Agency an Officer’s Certificate and an Opinion of Counsel each
stating that such Person is duly organized, validly existing and in good
standing in the jurisdiction in which such Person is organized; that such
Person has sufficient power and authority to assume the obligations set forth
in subsection (i) above and to execute and deliver an indenture supplemental
hereto for the purpose of assuming such obligations; that such Person has duly
authorized the execution, delivery and performance of an indenture supplemental
hereto for the purpose of assuming such obligations and that such supplemental
indenture is a valid, legal and binding obligation of such Person, enforceable
in accordance with its terms, subject only to bankruptcy, reorganization,
insolvency, moratorium and other laws affecting the enforcement of creditors’
rights generally and to general principles of equity (regardless of whether
such enforceability is


 


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considered in a
proceeding in equity or at law); such other matters as the Trustee or any Noteholder
may reasonably require;


 


(v)           immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing;


 


(vi)          the
Co-Issuer shall have delivered to the Trustee, the Preferred Shares Paying
Agent and each Noteholder an Officer’s Certificate and an Opinion of Counsel
each stating that such consolidation, merger, transfer or conveyance and such
supplemental indenture comply with this Article 7 and that all
conditions precedent in this Article 7 provided for relating to such
transaction have been complied with and that no adverse tax consequences will
result therefrom to the Holders of the Notes or the Preferred Shareholders; and


 


(vii)         after
giving effect to such transaction, the Co-Issuer shall not be required to
register as an investment company under the Investment Company Act.


 


Section 7.11           Successor
Substituted.


 


Upon any consolidation or merger, or transfer or
conveyance of all or substantially all of the assets of the Issuer or the
Co-Issuer, in accordance with Section 7.10 hereof, the Person formed by
or surviving such consolidation or merger (if other than the Issuer or the
Co-Issuer), or the Person to which such consolidation, merger, transfer or
conveyance is made, shall succeed to, and be substituted for, and may exercise
every right and power of, the Issuer or the Co-Issuer, as the case may be,
under this Indenture with the same effect as if such Person had been named as
the Issuer or the Co-Issuer, as the case may be, herein.  In the event of any such consolidation,
merger, transfer or conveyance, the Person named as the “Issuer” or the “Co-Issuer”
in the first paragraph of this Indenture or any successor which shall
theretofore have become such in the manner prescribed in this Article 7
may be dissolved, wound-up and liquidated at any time thereafter, and such
Person thereafter shall be released from its liabilities as obligor and maker
on all the Notes or Notes, as applicable, and from its obligations under this
Indenture.


 


Section 7.12           No
Other Business.


 


The Issuer shall not engage in any business or
activity other than issuing and selling the Notes pursuant to this Indenture
and any supplements thereto, issuing and selling the Preferred Shares in
accordance with its Governing Documents, entering into any Hedge Agreement, the
Collateral Management Agreement, and acquiring, owning, holding and pledging
the Assets in connection with the Notes and such other activities which are
necessary, suitable or convenient to accomplish the foregoing or are incidental
thereto or connected therewith.  The
Co-Issuer shall not engage in any business or activity other than issuing and
selling the Notes pursuant to this Indenture and any supplements thereto and
such other activities which are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith.


 


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Section 7.13           Reporting.


 


At any time when the Issuer and/or the Co-Issuer is
not subject to Section 13 or 15(d) of the Exchange Act and is not exempt from
reporting pursuant to Rule 12g3-2(b) under the Exchange Act, upon the request
of a Holder or beneficial owner of a Note, the Issuer and/or the Co-Issuer
shall promptly furnish or cause to be furnished “Rule 144A Information” (as
defined below) to such holder or beneficial owner, to a prospective purchaser
of such Note designated by such holder or beneficial owner or to the Trustee
for delivery to such holder or beneficial owner or a prospective purchaser
designated by such holder or beneficial owner, as the case may be, in order to
permit compliance by such holder or beneficial owner with Rule 144A under the
Securities Act in connection with the resale of such Note by such holder or
beneficial owner.  “Rule 144A Information”
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).  The Trustee shall reasonably cooperate with
the Issuer and/or the Co-Issuer in mailing or otherwise distributing (at the
Issuer’s expense) to such Noteholders or prospective purchasers, at and
pursuant to the Issuer’s and/or the Co-Issuer’s written direction the foregoing
materials prepared by or on behalf of the Issuer and/or the Co-Issuer; provided, however, that the
Trustee shall be entitled to prepare and affix thereto or enclose therewith
reasonable disclaimers to the effect that such Rule 144A Information was not
assembled by the Trustee, that the Trustee has not reviewed or verified the
accuracy thereof, and that it makes no representation as to such accuracy or as
to the sufficiency of such information under the requirements of Rule 144A or
for any other purpose.


 


Section 7.14           Calculation
Agent.


 


(a)      The Issuer and
the Co-Issuer hereby agree that for so long as any Notes remain Outstanding
there shall at all times be an agent appointed to calculate LIBOR in respect of
each Interest Accrual Period in accordance with the terms of Schedule F
hereto (the “Calculation Agent”).  The Issuer and the Co-Issuer have initially
appointed the Trustee as Calculation Agent for purposes of determining LIBOR
for each Interest Accrual Period.  The
Calculation Agent may be removed by the Issuer and the Co-Issuer at any time.  The Calculation Agent may resign at any time
by giving written notice thereof to the Issuer, the Co-Issuer, the Collateral
Manager, each Hedge Counterparty, the Noteholders and each Rating Agency.  If the Calculation Agent is unable or
unwilling to act as such or is removed by the Issuer and the Co-Issuer in respect
of any Interest Accrual Period, the Issuer and the Co-Issuer shall, with the
prior written consent of each Hedge Counterparty, promptly appoint as a
replacement Calculation Agent a leading bank which is engaged in transactions
in Eurodollar deposits in the international Eurodollar market and which does
not control or is not controlled by or under common control with the Issuer or
the Co-Issuer.  The Calculation Agent may
not resign its duties without a successor having been duly appointed, and shall
promptly inform the Hedge Counterparty of any such appointment.  If no successor Calculation Agent shall have
been appointed within 30 days after giving of a notice of resignation, the
resigning Calculation Agent, each Hedge Counterparty, a Majority of the Notes
or any Holder of a Note, on behalf of himself and all others similarly
situated, may petition a court of competent jurisdiction for the appointment of
a successor Calculation Agent.


 


(b)      The Calculation
Agent shall be required to agree that, as soon as practicable after 11:00 a.m.
(London time) on each LIBOR Determination Date (as defined in


 


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Schedule F hereto), but in no event
later than 11:00 a.m. (New York time) on the London Banking Day immediately
following each LIBOR Determination Date, the Calculation Agent shall calculate
(x) LIBOR for the next Interest Accrual Period and (y) the amount of interest
for such Interest Accrual Period payable in respect of each U.S. $1,000
principal amount of each Class of Notes (rounded to the nearest cent, with half
a cent being rounded upward) on the related Payment Date, and will communicate
such rates and amounts to the Issuer, the Co-Issuer, the Trustee, the
Collateral Manager, the Paying Agent, each Hedge Counterparty and, if any
Floating Rate Note is in the form of a Regulation S Global Security, to
Euroclear and Clearstream, Luxembourg. 
The Calculation Agent shall also specify to the Issuer and the Co-Issuer
the quotations upon which LIBOR is based, and in any event the Calculation
Agent shall notify the Issuer and the Co-Issuer before 5:00 p.m. (New York
time) on each LIBOR Determination Date if it has not determined and is not in
the process of determining LIBOR and the Interest Distribution Amounts for each
Class of Notes, together with the reasons therefor.  The determination of the Class A-1 Rate,
Class A-2 Rate, Class B Rate, Class C Rate, Class D Rate, Class E Rate, Class F
Rate, Class G Rate, Class H Rate, Class J Rate and Class K Rate and the related
Class A-1 Interest Distribution Amount, Class A-2 Interest Distribution Amount,
Class B Interest Distribution Amount, Class C Interest Distribution Amount,
Class D Interest Distribution Amount, Class E Interest Distribution Amount,
Class F Interest Distribution Amount, Class G Interest Distribution Amount,
Class H Interest Distribution Amount, Class J Interest Distribution Amount and
Class K Interest Distribution Amount, respectively, by the Calculation Agent
shall, absent manifest error, be final and binding on all parties.


 


Section 7.15           Certain
Tax Matters.


 


The Issuer will provide, upon request of any Holder of
any Class of Notes deemed equity for U.S. federal income tax purposes, any
information with regard to any filing requirements that such Holder may have as
a result of the Issuer being classified as a “passive foreign investment
company” or a “controlled foreign corporation” (as applicable) for U.S. federal
income tax purposes.


 


Section 7.16           Maintenance
of Listing.


 


(a)      For so long as
any of the Senior Notes remain Outstanding, the Issuer and Co-Issuer shall use
all reasonable efforts to arrange and maintain the listing of the Senior Notes
on the Irish Stock Exchange.


 


(b)      If the Senior Notes
are listed on the Irish Stock Exchange, the Issuer shall:


 


(i)            in each
calendar year commencing in 2005, request from the Irish Stock Exchange a
waiver of the Irish Stock Exchange’s requirement to publish annual reports and
accounts;


 


(ii)           submit to
the Irish Stock Exchange draft copies of any proposed amendments to the
Governing Documents which would affect the rights of the Holders of the Senior Notes
listed on the Irish Stock Exchange;


 


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(iii)          pay
the annual fee for listing the Senior Notes on the Irish Stock Exchange, if
any; and


 


(iv)          inform the
Irish Stock Exchange if the rating assigned to any of the Senior Notes is
reduced or withdrawn.


 


(c)      All notices,
documents, reports and other announcements delivered to such Company
Announcements Office shall be in the English language.


 


(d)      Notwithstanding
the foregoing, if the Collateral Manager on behalf of the Co-Issuers determines
that the maintenance of the listing of any Class of Senior Notes on the Irish
Stock Exchange (or any alternative listing on another securities exchange) is
unduly onerous or burdensome, the Co-Issuers will have the right to cause such
Class of Senior Notes to be delisted from the Irish Stock Exchange (or such
other securities exchange).  Without
limiting the Collateral Manager’s discretion with respect to any determination
that maintaining or obtaining a listing is unduly onerous or burdensome, the
Collateral Manager may take into account various factors, including any
requirement, resulting from a listing, that either Co-Issuer prepare financial
statements of any particular kind or provide additional disclosure of any
particular kind, in each case including any such requirement arising out of
disclosure or transparency directives of the European Union or any other law or
governmental rule.  Notwithstanding the
foregoing, the consent of a Majority of the Controlling Class shall be required
unless the reason for delisting relates to a legal/compliance, regulatory,
accounting or tax issue


 


Section 7.17           Purchase
of Assets.


 


The Issuer (or the Collateral Manager on behalf of the
Issuer) shall use reasonable commercial efforts to invest Principal Proceeds
and any remaining Initial Deposit and any Reinvestment Income during the
Ramp-Up Period in Collateral Debt Securities in accordance with the provisions
hereof.  Subject to the provisions of
this Section 7.17, Principal Proceeds and all or any portion of any
remaining Initial Deposit and any Reinvestment Income thereon may be applied
prior to the Effective Date to purchase Collateral Debt Securities (which shall
be, and hereby are, Granted to the Trustee pursuant to the Granting Clause of
this Agreement) for inclusion in the Assets upon receipt by the Trustee of an
Issuer Order executed by the Issuer (or the Collateral Manager on behalf of the
Issuer) with respect thereto directing the Trustee to pay out the amount
specified therein against delivery of the Collateral Debt Security specified
therein and a certificate of an Authorized Officer of the Issuer (or the
Collateral Manager), dated as of the trade date, and delivered to the Trustee
on or prior to the date of such purchase and Grant, to the effect that the
criteria set forth below in this Section 7.17 will be satisfied (such
criteria to be applied as of the trade date) after giving effect to such
purchase and Grant of the Collateral Debt Securities:


 


(a)           the
Eligibility Criteria are met with respect to the Collateral Debt Securities
purchased;


 


(b)           the
Reinvestment Criteria are satisfied after giving effect to such investment; and


 


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(c)           the
procedures relating to the perfection of the Trustee’s security interest in the
Collateral Debt Securities described in this Agreement have been satisfied.


 


Section 7.18           Effective
Date Actions.


 


(a)           The Issuer
(or the Collateral Manager on behalf of the Issuer) shall cause to be delivered
to the Trustee and each Rating Agency on the Effective Date an amended Schedule
of Closing Date Collateral Debt Securities listing all Collateral Debt
Securities Granted to the Trustee pursuant to Section 7.17 on or before
the Effective Date, which schedule shall supersede any prior Schedule of
Closing Date Collateral Debt Securities delivered to the Trustee.


 


(b)           Within ten
(10) Business Days after the Effective Date, the Issuer (or the Collateral
Manager on behalf of the Issuer) shall request each Rating Agency rating a
Class of Notes to confirm within twenty (20) Business Days after the Effective
Date, and to so notify in writing the Trustee and any Hedge Counterparty, that
it has not reduced or withdrawn the ratings assigned by it on the Closing Date
to such Class of Notes.  If any rating
assigned as of the Closing Date to any Class of Notes has not been so
confirmed, or is reduced or withdrawn, within twenty (20) Business Days after
the Effective Date by any such Rating Agency, the Collateral Manager may, on
behalf of the Issuer, within 10 Business Days provide to such Rating Agency a
proposal (a “Proposal”)
with respect to the Collateral Debt Securities. 
If such Rating Agency does not accept the Proposal or the Collateral
Manager, on behalf of the Issuer, elects not to submit a Proposal, a “Rating
Confirmation Failure” shall have occurred. 
If such Rating Agency accepts the Proposal, a Rating Confirmation Failure
shall not be deemed to have occurred unless and until the Collateral Manager
fails to meet the conditions set forth in the Proposal in accordance with the
time requirements set forth in such Proposal. 
Within 10 Business Days after the conditions set forth in the Proposal
have been satisfied, the Issuer must request a Rating Confirmation. Failure to
receive such Rating Confirmation shall result in a Rating Confirmation
Failure.  If a Rating Confirmation
Failure occurs on the first Payment Date thereafter, (i) as provided in Section
10.4, amounts on deposit in the Unused Proceeds Account, (ii) as provided
in Section 11.1(a)(i), all Interest Proceeds remaining after payment of
amounts referred to in clauses (1) through (29) of Section 11.1(a)(i)
and (iii) as provided in Section 11.1(a)(ii), all Principal Proceeds
remaining after payment of the amounts referred to in clauses (1) through (10)
of Section 11.1(a)(ii), in each case will be used to pay principal of
each such Class of Notes, sequentially in accordance with the Priority of
Payments, until each such rating is confirmed or reinstated or such Class of
Notes has been paid in full.


 


(c)           The
Collateral Manager on behalf of the Issuer shall cause to be delivered to the
Trustee, each Hedge Counterparty and each Rating Agency, within six Business
Days after the Effective Date, an Accountants’ Report, dated as of the
Effective Date, confirming that the Collateral Quality Tests and the Coverage
Tests have been satisfied and that the Collateral Debt Securities have an aggregate
par amount equal to at least the Minimum Ramp-Up Amount and certifying the
procedures applied and such accountants’ associated findings with respect to
the Eligibility Criteria and specifying the procedures undertaken by them to
review data and computations relating to such information. The Collateral
Manager may on any date, prior to the 120th day following the Closing Date or
the purchase of Collateral Debt Securities having an aggregate par amount equal
to the Minimum Ramp-Up Amount, upon written notice to the Trustee, the Issuer
and the Co-Issuer and each Rating Agency (with a copy to each Hedge


 


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Counterparty), declare that the Effective Date shall
occur on the date specified in such notice; provided that
each of the Collateral Quality Tests and the Coverage Tests will be satisfied
as of such Effective Date and the Rating Agency Condition has been
satisfied.  The Issuer (or the Collateral
Manager on behalf of the Issuer) shall cause to be delivered to S&P on the
Effective Date a Microsoft Excel file that provides all of the inputs required
to determine whether the S&P CDO Monitor Test has been satisfied.


 


ARTICLE 8


 


SUPPLEMENTAL INDENTURES


 


Section 8.1             Supplemental
Indentures Without Consent of Securityholders.


 


Without the consent of the Holders of any Notes or any
Preferred Shareholders, the Issuer, the Co-Issuer, when authorized by Board
Resolutions, and the Trustee, with the written consent of each Hedge
Counterparty delivered to the Issuer, the Co-Issuer and the Trustee, and, at
any time and from time to time subject to the requirement provided below in
this Section 8.1, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:


 


(a)      to evidence the
succession of another Person to the Issuer or the Co-Issuer and the assumption
by any such successor Person of the covenants of the Issuer or the Co-Issuer
herein and in the Notes;


 


(b)      to add to the
covenants of the Issuer, the Co-Issuer or the Trustee for the benefit of the
Holders of the Notes, Preferred Shareholders, each Hedge Counterparty or to
surrender any right or power herein conferred upon the Issuer or the Co-Issuer;


 


(c)      to convey,
transfer, assign, mortgage or pledge any property to or with the Trustee, or
add to the conditions, limitations or restrictions on the authorized amount,
terms and purposes of the issue, authentication and delivery of the Notes;


 


(d)      to evidence and
provide for the acceptance of appointment hereunder by a successor Trustee and
to add to or change any of the provisions of this Indenture as shall be
necessary to facilitate the administration of the trusts hereunder by more than
one Trustee, pursuant to the requirements of Sections 6.9, 6.10 and 6.12
hereof;


 


(e)      to correct or
amplify the description of any property at any time subject to the lien of this
Indenture, or to better assure, convey and confirm unto the Trustee any
property subject or required to be subjected to the lien of this Indenture
(including, without limitation, any and all actions necessary or desirable as a
result of changes in law or regulations) or to subject to the lien of this
Indenture any additional property;


 


(f)       to modify the
restrictions on and procedures for resales and other transfers of Notes to
reflect any changes in applicable law or regulation (or the interpretation
thereof) or to enable the Issuer and the Co-Issuer to rely upon any exemption
from registration under the


 


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Securities Act or
the Investment Company Act or to remove restrictions on resale and transfer to
the extent not required thereunder;


 


(g)      to accommodate
the issuance, if any, of Notes in global or book-entry form through the
facilities of the Depository Trust Company or otherwise;


 


(h)      to enable the
Issuer and the Trustee to rely upon any exemption from registration under the
Exchange Act or the Investment Company Act or to remove certain existing
restrictions to the extent not required under such exemption;


 


(i)       otherwise to
correct any inconsistency or cure any ambiguity or mistake;


 


(j)       to take any
action commercially reasonably necessary or advisable to prevent the Issuer
from failing to qualify as a qualified REIT subsidiary (within the meaning of
Section 856(i)(2) of the Code) or to prevent the Issuer from being subject to
U.S. federal, state or local income or franchise tax on a net income tax basis
or to prevent the Issuer, the Holders of the Securities or the Trustee from
being subject to withholding or other taxes, fees or assessments; and


 


(k)      to conform this
Indenture to the provisions described in the Offering Memorandum dated July 8,
2005 (or any supplement thereto).


 


The Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee’s own rights, duties, liabilities or immunities under
this Indenture or otherwise, except to the extent required by law.


 


If any Class of Notes is Outstanding and rated by a
Rating Agency, the Trustee shall not enter into any such supplemental indenture
if, as a result of such supplemental indenture, such Rating Agency would cause
the rating of any such Notes to be reduced or withdrawn.  At the cost of the Issuer, for so long as any
Class of Notes shall remain Outstanding and is rated by a Rating Agency, the
Trustee shall provide to such Rating Agency a copy of any proposed supplemental
indenture at least 15 days prior to the execution thereof by the Trustee, and,
for so long as such Notes are Outstanding and so rated, request written
confirmation that such Rating Agency will not, as a result of such supplemental
indenture, cause the rating of any such Class of Notes to be reduced or
withdrawn, and, as soon as practicable after the execution by the Trustee, the
Issuer and the Co-Issuer of any such supplemental indenture, provide to such
Rating Agency a copy of the executed supplemental indenture.


 


The Trustee shall not enter into any such supplemental
indenture if, as a result of such supplemental indenture, the interests of any
Holder of Securities would be materially and adversely affected thereby or such
action will cause the Holders of the Notes to experience any material change to
the timing, character or source of the income from the Notes, unless the
Majority of each and every Class of Notes or the Preferred Shares so affected have
approved such Supplemental Indenture. 
The Trustee shall be entitled to rely upon an Opinion of Counsel
provided by and at the expense of the party requesting such supplemental
indenture in determining whether or not the Holders of Securities would be adversely
affected by such change


 


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(after giving notice of such change to the Holders of
Securities).  Such determination shall be
conclusive and binding on all present and future Holders of Securities.  The Trustee shall not be liable for any such
determination made in good faith and in reliance upon an Opinion of Counsel
delivered to the Trustee as described in Section 8.3 hereof.


 


Furthermore, the Trustee shall not enter into any such
supplemental indenture unless the Trustee has received an Opinion of Counsel
from Cadwalader, Wickersham & Taft LLP or other nationally recognized U.S.
tax counsel experienced in such matters that the proposed supplemental
indenture will not cause the Issuer to fail to be treated as a qualified REIT
subsidiary (within the meaning of Section 856(i)(2) of the Code) or otherwise
be subject to U.S. federal income tax on a net income tax basis.


 


Section 8.2             Supplemental
Indentures with Consent of Securityholders.


 


Except as set forth below, with the written consent of
(a) the holders of not less than a Majority in Aggregate Outstanding Amount (excluding
any Notes owned by the Collateral Manager or any of its Affiliates, or by any
accounts managed by them) of the Notes of each class materially and adversely affected
thereby and all of the Holders of Preferred Shares if materially and adversely
affected thereby by Act of said Securityholders delivered to the Trustee and
the Co-Issuers, and (b) the consent of each Hedge Counterparty that is materially
and adversely affected thereby, the Trustee and the Co-Issuers may enter into
one or more indentures supplemental hereto to add any provisions to, or change
in any manner or eliminate any of the provisions of, this Indenture or modify
in any manner the rights of the Holders of the Notes of such Class or the Preferred
Shares, as the case may be, under this Indenture.  Unless notified by Holders of a Majority (excluding
any Notes owned by the Collateral Manager or any of its Affiliates, or by any
accounts managed by them) of the Notes of any Class that such Class of Notes
will be materially and adversely affected, the Trustee may, based on the
satisfaction of the Rating Agency Condition, determine whether or not such
Class of Notes would be materially and adversely affected by such change (after
giving 15 Business Days’ notice of such change to the Holders of such Class of
Notes, the holders of the Preferred Shares and each Hedge Counterparty).  The Trustee may, in reliance on the consent
of the Holders of the Preferred Shares or on a written Opinion of Counsel
provided by and at the expense of the party requesting such supplemental
indenture to determine whether or not the Holders of the Preferred Shares would
be adversely affected by such change (after giving notice of such change to the
Holders of the Preferred Shares).  Such
determinations shall be conclusive and binding on all present and future
Noteholders and Holders of the Preferred Shares.  The consent of the Holders of the Preferred Shares
shall be binding on all present and future Holders of the Preferred Shares.


 


Without the consent of (x) each Hedge Counterparty (if
any) (to the extent set forth in the related Hedge Agreement) and (y) in the
case of clauses (a) through (h) and (j) below, all of the holders of each Outstanding
Class of Notes adversely affected, or, in the case of clause (i) below, all of
the Holders of the Controlling Class and in each such case subject to
satisfaction of the Rating Agency Condition, no supplemental indenture may:


 


(a)      change the
Stated Maturity of the principal of or the due date of any installment of
interest on any Note, reduce the principal amount thereof or the Note Interest
Rate thereon or the Redemption Price with respect to any Note, change the date
of any


 


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scheduled
distribution on the Preferred Shares, or the Redemption Price with respect
thereto, or change the earliest date on which any Note may be redeemed at the
option of the Issuer, change the provisions of this Indenture that apply the
proceeds of any Assets to the payment of principal of or interest on Notes or
of distributions to the Preferred Shares Paying Agent for the payment of
distributions in respect of the Preferred Shares or change any place where, or
the coin or currency in which, any Note or the principal thereof or interest
thereon is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the applicable Redemption Date);


 


(b)      reduce the
percentage of the Aggregate Outstanding Amount of Holders of Notes of each
Class or the Notional Amount of Preferred Shares of Preferred Shareholders
whose consent is required for the authorization of any such supplemental
indenture or for any waiver of compliance with certain provisions of this
Indenture or certain Defaults hereunder or their consequences provided for in
this Indenture;


 


(c)      impair or
adversely affect the Assets except as otherwise permitted in this Indenture;


 


(d)      permit the
creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any part of the Assets or terminate such lien on any
property at any time subject hereto or deprive the Holder of any Note, or the
Holder of any Preferred Share as an indirect beneficiary, of the security
afforded to such Holder by the lien of this Indenture;


 


(e)      reduce the
percentage of the Aggregate Outstanding Amount of Holders of Notes of each
Class whose consent is required to request the Trustee to preserve the Assets
or rescind the Trustee’s election to preserve the Assets pursuant to Section
5.5 or to sell or liquidate the Assets pursuant to Section 5.4 or 5.5
hereof;


 


(f)       modify any of the
provisions of this Section 8.2, except to increase any percentage of
outstanding Notes whose holders’ consent is required for any such action or to
provide that other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each outstanding Note affected thereby;


 


(g)      modify the
definition of the term “Outstanding” or the provisions of Section 11.1 or
Section 13.1 hereof;


 


(h)      modify or amend
any of the non-petition and limited-recourse provisions set forth herein or in
any of the related Transaction Documents;


 


(i)       modify the
definition of the term “Collateral Manager Servicing Standard,” or


 


(j)       modify any of
the provisions of this Indenture in such a manner as to affect the calculation
of the amount of any payment of interest or principal on any Note on any
Payment Date or of distributions to the Preferred Shares Paying Agent for the
payment of distributions in respect of the Preferred Shares on any Payment Date
(or any other date) or to


 


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affect the rights
of the Holders of Securities to the benefit of any provisions for the
redemption of such Securities contained herein;


 


provided, however,
that no supplemental indenture may reduce the permitted minimum denominations
of the Notes or modify any provisions regarding limited recourse or
non-petition covenants with respect to the Issuer and the Co-Issuer.


 


If any Class of Notes are Outstanding and rated by a
Rating Agency, the Trustee shall not enter into any such supplemental indenture
if, as a result of such supplemental indenture, such Rating Agency would cause
the rating of any such Notes to be immediately reduced or withdrawn.  At the cost of the Issuer, for so long as any
Class of Notes shall remain Outstanding and is rated by a Rating Agency, the
Trustee shall provide to such Rating Agency a copy of any proposed supplemental
indenture at least 15 days prior to the execution thereof by the Trustee, and,
for so long as such Notes are Outstanding and so rated, request written
confirmation that such Rating Agency will not, as a result of such supplemental
indenture, cause the rating of any such Class of Notes to be reduced or
withdrawn.


 


The Trustee shall be entitled to rely upon an Opinion
of Counsel provided by and at the expense of the party requesting such
supplemental indenture in determining whether or not the Holders of Securities
would be adversely affected by such change (after giving notice of such change
to the Holders of Securities).  Such
determination shall be conclusive and binding on all present and future Holders
of Securities.  The Trustee shall not be
liable for any such determination made in good faith and in reliance upon an
Opinion of Counsel delivered to the Trustee as described in Section 8.3
hereof.


 


It shall not be necessary for any Act of
Securityholders under this Section 8.2 to approve the particular form of
any proposed supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.


 


Promptly after the execution by the Issuer, the
Co-Issuer and the Trustee of any supplemental indenture pursuant to this Section
8.2, the Trustee, at the expense of the Issuer, shall mail to the
Securityholders, each Hedge Counterparty, the Preferred Shares Paying Agent,
the Collateral Manager, and, so long as the Notes are Outstanding and so rated,
each Rating Agency a copy thereof based on an outstanding rating.  Any failure of the Trustee to publish or mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.


 


Section 8.3             Execution
of Supplemental Indentures.


 


In executing or accepting the additional trusts
created by any supplemental indenture permitted by this Article 8 or the
modifications thereby of the trusts created by this Indenture, the Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that all conditions precedent
thereto have been satisfied. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee’s own
rights, duties or immunities under this Indenture or otherwise.  The Collateral Manager will be bound to
follow any amendment or supplement to this Indenture of


 


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which it has received written notice at least ten
Business Days prior to the execution and delivery of such amendment or
supplement; provided, however,
that with respect to any amendment or supplement to this Indenture which may,
in the judgment of the Collateral Manager adversely affect the Collateral
Manager, the Collateral Manager shall not be bound (and the Issuer agrees that
it will not permit any such amendment to become effective) unless the
Collateral Manager gives written consent to the Trustee and the Issuer to such
amendment.  The Issuer and the Trustee
shall give written notice to the Collateral Manager of any amendment made to
this Indenture pursuant to its terms.  In
addition, the Collateral Manager’s written consent shall be required prior to
any amendment to this Indenture by which it is adversely affected.


 


Section 8.4             Effect
of Supplemental Indentures.


 


Upon the execution of any supplemental indenture under
this Article 8, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture
for all purposes; and every Holder of Notes and Preferred Shares theretofore
and thereafter authenticated and delivered hereunder shall be bound thereby.


 


Section 8.5             Reference
in Notes to Supplemental Indentures.


 


Notes authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article 8 may, and if
required by the Trustee shall, bear a notice in form approved by the Trustee as
to any matter provided for in such supplemental indenture.  If the Issuer and the Co-Issuer shall so
determine, new Notes, so modified as to conform in the opinion of the Trustee
and the Issuer and the Co-Issuer to any such supplemental indenture, may be
prepared and executed by the Issuer and the Co-Issuer and authenticated and
delivered by the Trustee in exchange for Outstanding Notes.


 


ARTICLE 9


 


REDEMPTION
OF SECURITIES; REDEMPTION PROCEDURES


 


Section 9.1             Clean-up
Call; Tax Redemption and Optional Redemption.


 


(a)      The Notes may
be redeemed at the option of and at the direction of the Collateral Manager, in
whole but not in part, on any Payment Date (the “Clean-up Call Date”), on or after the Payment
Date on which the Aggregate Outstanding Amount of the Notes has been reduced to
15% of the Aggregate Outstanding Amount of the Notes on the Closing Date, at a
price equal to the applicable Redemption Price (such redemption, a “Clean-up Call”); provided that any payments due and payable upon a
termination of each Hedge Agreement will be made on the Clean-up Call Date in
accordance with the terms thereof and this Indenture; and provided, further, that the funds available to be used for such
Clean-up Call will be sufficient to pay the Total Redemption Price.


 


(b)      The Notes and
the Preferred Shares shall be redeemable, in whole but not in part, by Act of a
Majority of the Preferred Shares delivered to the Trustee, on the Payment Date
(the “Tax Redemption Date”)
following the occurrence of a Tax Event and satisfaction of the Tax Materiality
Condition at a price equal to the applicable Redemption Price (such


 


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redemption, a “Tax Redemption”); provided that any payments due and payable upon a
termination of each Hedge Agreement will be made in accordance with the terms
thereof and this Indenture; and provided, further, the funds available to be used for such Tax Redemption
will be sufficient to pay the Total Redemption Price.  Upon the occurrence of a Tax Event, the
Issuer and the Co-Issuer, at the direction of the Collateral Manager shall
provide written notice thereof to the Trustee, the Irish Paying Agent (for so
long as any Notes are listed on the Irish Stock Exchange), each Hedge
Counterparty and each Rating Agency.


 


(c)      The Notes and
the Preferred Shares shall be redeemable, in whole but not in part, at a price
equal to the applicable Redemption Price, on any Payment Date on or after the
Payment Date occurring in July 2008 at the direction of the Issuer (such
redemption, an “Optional
Redemption”) (i) by Act of a Majority of the Preferred Shares
delivered to the Trustee, or (ii) at the direction of the Collateral Manager
unless a Majority of the Preferred Shares object; provided, however, that any payments due and payable upon a
termination of each Hedge Agreement will be made in accordance with the terms
thereof and this Indenture; and provided, further, that the funds available to be used for such
Optional Redemption will be sufficient to pay the Total Redemption Price.


 


(d)      The election by
the Collateral Manager to redeem the Notes pursuant to a Clean-up Call shall be
evidenced by an Officer’s Certificate from the Collateral Manager directing the
Trustee to make the payment to the Paying Agent of the applicable Redemption
Price of all of the Notes to be redeemed from funds in the Payment Account in
accordance with the Priority of Payments. 
In connection with a Tax Redemption, the occurrence of a Tax Event and
satisfaction of the Tax Materiality Condition shall be evidenced by an Issuer
Order from the Issuer or from the Collateral Manager on behalf of the Issuer
certifying that such conditions for a Tax Redemption have occurred.  The election by the Collateral Manager to
redeem the Notes pursuant to an Optional Redemption shall be evidenced by an
Officer’s Certificate from the Collateral Manager on behalf of the Issuer
certifying that the conditions for an Optional Redemption have occurred.


 


(e)      A redemption
pursuant to Sections 9.1(a), 9.1(b) or 9.1(c) shall not occur
unless (1) (i) at least six (6) Business Days before the scheduled Redemption
Date, the Collateral Manager shall have certified to the Trustee that the
Collateral Manager on behalf of the Issuer has entered into a binding agreement
or agreements, with (A) one or more financial institutions whose long-term
unsecured debt obligations (other than such obligations whose rating is based
on the credit of a person other than such institution) have a credit rating
from each Rating Agency of at least equal to the highest rating of any Notes
then Outstanding or whose short-term unsecured debt obligations have a credit
rating of “P-1” by Moody’s as long as the term of such agreement is ninety (90)
day or less and “A-1” by S&P or (B) one or more Affiliates of the
Collateral Manager, to sell all or part of the Pledged Obligations, not later
than the Business Day immediately preceding the scheduled Redemption Date or
(ii) the Trustee shall have received written confirmation that the method of
redemption satisfies the Rating Agency Condition and (2) the related Sale
Proceeds (in immediately available funds), together with all other available
funds (including proceeds from the sale of the Assets, Eligible Investments
maturing on or prior to the scheduled Redemption Date, all amounts in the
Collection Accounts and available Cash), shall be an aggregate amount
sufficient to pay all


 


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amounts, payments,
fees and expenses in accordance with the Priority of Payments due and owing on
such Redemption Date.


 


Section 9.2             Auction
Call Redemption.


 


(a)      During the
period from and including the Payment Date occurring in July 2015 and to but
not including the first Payment Date on which the Clean-up Call may be
exercised (the “Auction Call
Period”), the Notes and the Preferred Shares will be redeemed,
in whole but not in part, if a Successful Auction is completed (such
redemption, an “Auction Call
Redemption”), at their applicable Redemption Prices; provided that any payments due and payable upon a
termination of each Hedge Agreement will be made on the Auction Call Redemption
Date in accordance with the terms thereof and this Indenture; and provided, further, that the
funds available to be used for such Auction Call Redemption will be sufficient
to pay the Total Redemption Price.  An
Auction Call Redemption may only occur on a Payment Date occurring in January
or July during the Auction Call Period (such Payment Date, the “Auction Call Redemption Date”).


 


(b)      The Trustee
shall sell and transfer the Collateral Debt Securities to the highest bidder
for all of the Collateral Debt Securities (or to each highest bidder for one or
more (but not all) of the Collateral Debt Securities), at the Auction, as long
as:


 


(i)            the
Auction has been conducted in accordance with the Auction Procedures, as
evidenced by a certification of the Collateral Manager;


 


(ii)           at least
one bidder delivers to the Collateral Manager a bid (which bid may be based
upon a fixed spread above or below a generally recognized price index) for (x)
the purchase of all of the Collateral Debt Securities or (y) the purchase of
each Collateral Debt Security (which bid may be for one or more (but not all)
of the Collateral Debt Securities);


 


(iii)          based
on the Collateral Manager’s certification to the Trustee of the amount of the
cash purchase price of each bid, the Trustee, in consultation with the
Collateral Manager, determines that the Highest Auction Price would result in a
cash purchase price for the Collateral Debt Securities which, together with the
balance of all Eligible Investments and Cash in the Collection Accounts, the
Payment Account and the Expense Account, will be at least equal to the Total
Redemption Price; and


 


(iv)          each bidder
who offered the Highest Auction Price for all of the Collateral Debt Securities
or for one or more of the Collateral Debt Securities enters into a written
agreement with the Issuer (which the Issuer shall execute if the conditions set
forth in clauses (i) through (iii) above are satisfied) obligating the highest
bidder for all of the Collateral Debt Securities (or the highest bidder for one
or more (but not all) of the Collateral Debt Securities) to purchase all
(either individually or together with other bidders, as applicable) of the
Collateral Debt Securities with the closing of such purchase (and full payment
in Cash to the Trustee) to occur on or before the tenth Business Day prior to
the scheduled Redemption Date.


 


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(c)      If any of the
foregoing conditions is not met with respect to any Auction, or if the highest
bidder or the Collateral Manager, as the case may be, fails to pay the purchase
price on or before the sixth Business Day following the relevant Auction Date,
(i) the Auction Call Redemption shall not occur on the Payment Date following
the relevant Auction Date, (ii) the Trustee shall give notice of the withdrawal
pursuant to Section 9.3, (iii) subject to subclause (iv) below, the
Trustee shall decline to consummate such sale and shall not solicit any further
bids or otherwise negotiate any further sale of Collateral Debt Securities in
relation to such Auction and (iv) unless the Notes and the Preferred Shares are
redeemed in full prior to the next succeeding Auction Date, or the Collateral
Manager notifies the Trustee that market conditions are such that such Auction
is not likely to be successful, the Trustee shall conduct another Auction on
the next succeeding Auction Date.


 


Section 9.3             Notice
of Redemption.


 


(a)      In connection
with an Optional Redemption, a Clean-up Call or a Tax Redemption pursuant to Section
9.1 or an Auction Call Redemption pursuant to Section 9.2, the
Trustee on behalf of the Issuer and the Co-Issuer shall (i) set the applicable
Record Date and (ii) at least 45 days prior to the proposed Redemption Date,
notify the Collateral Manager, each Hedge Counterparty, the Rating Agencies and
each Preferred Shareholder at such Preferred Shareholder’s address in the
register maintained by the Share Registrar, of such proposed Redemption Date,
the applicable Record Date, the principal amount of Notes to be redeemed on
such Redemption Date and the Redemption Price of such Notes in accordance with Section
9.1 or Section 9.2.  The
Redemption Price shall be determined no earlier than 60 days prior to the
proposed Redemption Date.


 


(b)      Any such notice
of an Auction Call Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption may be withdrawn by the Issuer and the Co-Issuer at the direction of
the Collateral Manager up to the fourth Business Day prior to the scheduled
Redemption Date by written notice to the Trustee, the Irish Paying Agent (for
so long as any Notes are listed on the Irish Stock Exchange), each Hedge
Counterparty, to each Holder of Notes to be redeemed, and the Collateral
Manager only if (i) in the case of an Optional Redemption, a Clean-up Call or a
Tax Redemption the Collateral Manager is unable to deliver the sale agreement
or agreements or certifications referred to in Section 9.1(e), as the
case may be or (ii) in the case of an Auction Call Redemption, the Auction is
unable to be consummated pursuant to the Auction Procedures.


 


Section 9.4             Notice
of Redemption or Maturity by the Issuer.


 


Notice of redemption pursuant to Section 9.1, Section
9.2 or the Maturity of any Notes shall be given by first class mail,
postage prepaid, mailed not less than ten (10) Business Days (or four (4)
Business Days where the notice of an Auction Call Redemption, an Optional
Redemption, a Clean-up Call or a Tax Redemption is withdrawn pursuant to Section
9.3(b)) prior to the applicable Redemption Date or Maturity, to each Holder
of Notes to be redeemed, at its address in the Notes Register.  In addition, so long as any Notes are listed
on the Irish Stock Exchange, notice of redemption or Maturity shall be
published in the Irish Stock Exchange’s Daily Official List or as otherwise
required by the rules of the Irish Stock Exchange not less than ten (10)
Business Days prior to the applicable Redemption Date or Maturity.


 


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All notices of redemption shall state:


 


(a)      the applicable
Redemption Date;


 


(b)      the applicable
Redemption Price;


 


(c)      that all the
Notes are being paid in full, and that interest on the Notes shall cease to
accrue on the Redemption Date specified in the notice; and


 


(d)      the place or
places where such Notes to be redeemed in whole are to be surrendered for payment
of the Redemption Price which shall be the office or agency of the Paying Agent
as provided in Section 7.2.


 


Notice of redemption shall be given by the Issuer and
Co-Issuer, or at their request, by the Trustee in their names and at the
expense of the Issuer.  Failure to give
notice of redemption, or any defect therein, to any Holder of any Note shall
not impair or affect the validity of the redemption of any other Notes.


 


Section 9.5             Notes
Payable on Redemption Date.


 


Notice of redemption having been given as aforesaid,
the Notes to be redeemed shall, on the Redemption Date, become due and payable
at the Redemption Price therein specified, and from and after the Redemption
Date (unless the Issuer shall Default in the payment of the Redemption Price
and accrued interest) the Notes shall cease to bear interest on the Redemption
Date.  Upon final payment on a Note to be
redeemed, the Holder shall present and surrender such Note at the place
specified in the notice of redemption on or prior to such Redemption Date; provided, however, that
if there is delivered to the Issuer, the Co-Issuer and the Trustee such
security or indemnity as may be required by them to save each of them harmless
(an unsecured indemnity agreement delivered to the Issuer, the Co-Issuer and
the Trustee by an institutional investor with a net worth of at least
$200,000,000 being deemed to satisfy such security or indemnity requirement)
and an undertaking thereafter to surrender such Note, then, in the absence of
notice to the Issuer, the Co-Issuer and the Trustee that the applicable Note
has been acquired by a bona fide purchaser, such final payment shall be made
without presentation or surrender. 
Payments of interest on Notes of a Class so to be redeemed whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Notes, or one or more predecessor Notes, registered as such at the
close of business on the relevant Record Date according to the terms and
provisions of Section 2.7(m).


 


If any Note called for redemption shall not be paid
upon surrender thereof for redemption, the principal thereof shall, until paid,
bear interest from the Redemption Date at the applicable Note Interest Rate for
each successive Interest Accrual Period the Note remains Outstanding.


 


Section 9.6             Mandatory
Redemption.


 


On any Payment Date on which any of the Coverage Tests
applicable to any Class of Notes is not met on the most recent Measurement
Date, the Notes shall be redeemed (a “Mandatory Redemption”), first from Interest Proceeds
and then from Principal Proceeds in each


 


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case in accordance with the Priority of Payments in an
amount necessary, and only to the extent necessary, to cause each of the
Coverage Tests to be satisfied.  Further,
each Hedge Agreement will be terminated in part in accordance with the terms
thereof and any payments due and payable on the Hedge Agreement in connection
with the termination of the Hedge Agreement will be made on such Payment Date
in accordance with the terms thereof and this Indenture, including satisfaction
of the Rating Agency Condition.  Such
Principal Proceeds and Interest Proceeds shall be applied to each of the
outstanding Classes of Notes in accordance with its relative seniority in
accordance with the Priority of Payments. 
On or promptly after such Mandatory Redemption, the Issuer and the
Co-Issuer shall certify or cause to be certified to each of the Rating Agencies
and the Trustee whether the Coverage Tests have been met.


 


Section 9.7             Special
Amortization.


 


The Notes may be amortized in part by the Issuer (at
the election and direction of the Collateral Manager) if, at any time during
the Reinvestment Period, the Collateral Manager has been unable, for a period
of at least 30 consecutive days, to identify Substitute Collateral Debt
Securities that it determines would be appropriate and would meet the
Eligibility Criteria in sufficient amounts to permit the reinvestment of all or
a portion of the Principal Proceeds then on deposit in the Principal Collection
Account and the amounts on deposit in the Unused Proceeds Account in Substitute
Collateral Debt Securities.  The
Collateral Manager shall notify the Trustee, the Issuer, the Co-Issuer and each
Hedge Counterparty of such election (a “Special Amortization”) and the amount to be
amortized (such amount, the “Special
Amortization Amount”). 
On the first Payment Date following the date on which such notice is
given, the Special Amortization Amount will be applied to amortize the Notes in
accordance with the Priority of Payments (i) on a pro rata
basis (based on the Aggregate Outstanding Amount of each Class) among all
Classes of Notes if each of the S&P Special Amortization Pro Rata Condition
and the Moody’s Special Amortization Pro Rata Condition is satisfied with
respect to the related Payment Date and each of the Coverage Tests was
satisfied as of the related Determination Date; or (ii) sequentially among all
Classes of Notes, if either the S&P Special Amortization Pro Rata Condition
or the Moody’s Special Amortization Pro Rata Condition is not satisfied with
respect to the related Payment Date or any of the Coverage Tests were not
satisfied as of the related Determination Date; provided,
however, that all amounts representing
recoveries in respect of Defaulted Securities will be distributed sequentially
in any event, in accordance with Section 11.1(a)(ii)(12).


 


ARTICLE 10


 


ACCOUNTS,
ACCOUNTINGS AND RELEASES


 


Section 10.1           Collection
of Money; Custodial Account.


 


(a)      Except as
otherwise expressly provided herein, the Trustee may demand payment or delivery
of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all Money and other
property payable to or receivable by the Trustee pursuant to this Indenture,
including all payments due on the Pledged Obligations in accordance with the
terms and conditions of such Pledged Obligations.  The Trustee shall segregate and hold all such
Money and property received by it in trust for


 


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the Holders of the
Notes and each Hedge Counterparty, and shall apply it as provided in this
Indenture.


 


(b)      The Trustee
shall credit all Collateral Debt Securities and Eligible Securities to an account
designated as the “Custodial Account.”


 


Section 10.2           Collection
Accounts.


 


(a)      The Trustee
shall, prior to the Closing Date, establish a segregated trust account which
shall be designated as the “Collection Account” and will consist of two
subaccounts, the “Interest Collection Account” and the “Principal Collection
Account” (collectively, the “Collection
Accounts”), which shall be held in trust in the name of the
Trustee for the benefit of the Noteholders and each Hedge Counterparty, into
which Collection Accounts, as applicable, the Trustee shall from time to time
deposit (i) all amounts, if any, received by the Issuer pursuant to the Hedge
Agreements (other than amounts received by the Issuer by reason of an event of
default or termination event (each as defined in the related Hedge Agreement)
or other comparable event that are required, pursuant to Section 16.1(g)
to be used for the purchase by the Issuer of a replacement Hedge Agreement) and
amounts held in each Hedge Collateral Account pursuant to Section 16.1(e),
(ii) all Sale Proceeds (unless simultaneously reinvested in Substitute
Collateral Debt Securities, subject to the Reinvestment Criteria and (iii) all
Interest Proceeds and all Principal Proceeds. 
In addition, the Issuer may, but under no circumstances shall be
required to, deposit from time to time such Monies in the Collection Accounts
as it deems, in its sole discretion, to be advisable.  All Monies deposited from time to time in the
Collection Accounts pursuant to this Indenture shall be held by the Trustee as
part of the Assets and shall be applied to the purposes herein provided.  The Collection Accounts shall remain at all
times with the Corporate Trust Office or a financial institution having a long-term
debt rating at least equal to “BBB+” or “A2,” as applicable, or a short-term
debt rating at least equal to “A-1,” “P-1” or “F1,” as applicable.


 


(b)      All
distributions of principal or interest received in respect of the Assets, and
any Sale Proceeds from the sale or disposition of a Collateral Debt Security or
other Assets received by the Trustee in Dollars shall be immediately deposited
into the Interest Collection Account or the Principal Collection Account, as
Interest Proceeds or Principal Proceeds, respectively (unless, in the case of
proceeds received from the sale or disposition of any Assets, such proceeds are
simultaneously reinvested pursuant to Section 10.2(d) in Substitute
Collateral Debt Securities, subject to the Reinvestment Criteria, or in
Eligible Investments).  Subject to Sections
10.2(d), 10.2(e) and 11.2, all such property, together with any
securities in which funds included in such property are or will be invested or
reinvested during the term of this Indenture, and any income or other gain
realized from such investments, shall be held by the Trustee in the Collection
Accounts as part of the Assets subject to disbursement and withdrawal as
provided in this Section 10.2. 
Subject to Section 10.2(e) by Issuer Order (which may be in the
form of standing instructions), the Issuer or the Collateral Manager, on behalf
of the Issuer, shall at all times direct the Trustee to, and, upon receipt of
such Issuer Order, the Trustee shall, invest all funds received into the
Collection Accounts during a Due Period, and amounts received in prior Due
Periods and retained in the Collection Accounts, as so directed in Eligible
Investments having stated maturities no later than the Business Day immediately
preceding the next Payment Date.  The
Trustee, within one


 


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Business Day after
receipt of any Scheduled Distribution or other proceeds in respect of the
Assets which is not Cash, shall so notify the Issuer and the Collateral Manager
and the Issuer, or the Collateral Manager on behalf of the Issuer, shall,
within five Business Days of receipt of such notice from the Trustee, sell such
Scheduled Distribution or other non-Cash proceeds for Cash in an arm’s length
transaction to a Person which is not an Affiliate of the Issuer or the
Collateral Manager and deposit the proceeds thereof in the applicable
Collection Account for investment pursuant to this Section 10.2; provided, however, that the Issuer, or the Collateral
Manager on behalf of the Issuer, need not sell such Scheduled Distributions or
other non-Cash proceeds if it delivers an Officer’s Certificate to the Trustee
certifying that such Scheduled Distributions or other proceeds constitute
Collateral Debt Securities or Eligible Investments.


 


(c)      If prior to the
occurrence of an Event of Default, the Issuer, or the Collateral Manager on
behalf of the Issuer, shall not have given any investment directions pursuant
to Section 10.2(b), the Trustee shall seek instructions from the Issuer,
or the Collateral Manager on behalf of the Issuer, within three Business Days
after transfer of such funds to the applicable Collection Account.  If the Trustee does not thereupon receive
written instructions from the Issuer, or the Collateral Manager on behalf of
the Issuer, within five Business Days after transfer of such funds to the
applicable Collection Account, it shall invest and reinvest the funds held in
the applicable Collection Account in one or more Eligible Investments described
in clause (ii) of the definition of Eligible Investments maturing no later than
the Business Day immediately preceding the next Payment Date.  If after the occurrence of an Event of
Default, the Issuer, or the Collateral Manager on behalf of the Issuer, shall
not have given investment directions to the Trustee pursuant to Section
10.2(b) for three consecutive days, the Trustee shall invest and reinvest
such Monies as fully as practicable in Eligible Investments described in clause
(ii) of the definition of Eligible Investments maturing not later than the
earlier of (i) 30 days after the date of such investment or (ii) the Business
Day immediately preceding the next Payment Date.  All interest and other income from such
investments shall be deposited in the applicable Collection Account, any gain
realized from such investments shall be credited to the applicable Collection
Account, and any loss resulting from such investments shall be charged to the
applicable Collection Account.  The
Trustee shall not in any way be held liable (except as a result of negligence,
willful misconduct or bad faith) by reason of any insufficiency of such
applicable Collection Account resulting from any loss relating to any such
investment, except with respect to investments in obligations of the Trustee or
any Affiliate thereof.


 


(d)      During the
Reinvestment Period (and thereafter to the extent necessary to acquire
Collateral Debt Securities pursuant to contracts entered into during the
Reinvestment Period), the Collateral Manager on behalf of the Issuer may by
Issuer Order direct the Trustee to, and upon receipt of such Issuer Order the
Trustee shall, reinvest Principal Proceeds in Collateral Debt Securities
selected by the Collateral Manager as permitted under and in accordance with
the requirements of Article 12 and such Issuer Order.


 


(e)      Subject to Section
10.2(f), the Trustee shall transfer to the Payment Account for application
pursuant to Section 11.1(a) and in accordance with the calculations and
the instructions contained in the Notes Valuation Report prepared by the
Trustee on behalf of the Issuer pursuant to Section 10.9(e), on or prior
to the Business Day prior to each Payment Date, any amounts then held in the
Collection Accounts other than (i) Interest


 


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Proceeds or
Principal Proceeds received after the end of the Due Period with respect to
such Payment Date and (ii) amounts that the Issuer is entitled to reinvest in
accordance with Section 12.2 and which the Issuer so elects to reinvest
in accordance with the terms of this Indenture.


 


(f)       Notwithstanding the foregoing, the Trustee
shall transfer to the Payment Account from amounts on deposit in the Interest
Collection Account or, solely in the case of clause (iii) below, the Principal
Collection Account, as applicable, such amounts, if any, that are due
and payable to (i) SLG Gramercy in respect of the SLG Gramercy Administrative Fee
in accordance with, and at the times set forth in, the Asset Servicing
Agreement, (ii) SLG Gramercy in respect of any special servicing fees due to
SLG Gramercy in accordance with, and at the times set forth in, the Asset
Servicing Agreement (to the extent such amounts have not otherwise been paid)
and (iii) any Hedge Counterparty, in satisfaction of any Hedge Payment Amount
(other than any amount due and payable by the Issuer under the related Hedge
Agreement following an Event of Default or Termination Event (other than
Illegality or Tax event) (each as defined in the related Hedge Agreement) with
respect to which such Hedge Counterpart is the Defaulting Party or the sole
Affected Party (as defined in the related Hedge Agreement)), if any, then due and
payable to such Hedge Counterparty in accordance with the terms of the related
Hedge Agreement.  Any required payments to Hedge Counterparties pursuant to clause (iii)
of the preceding sentence shall be made, first, from amounts on deposit in the
Interest Collection Account and, second, to the extent amounts on deposit in
the Interest Collection Account are insufficient, from amounts on deposit in
the Principal Collection Account.  The
Trustee shall make each such transfer on or prior to the Business Day prior to
the related payment date.


 


Section 10.3           Payment
Account.


 


(a)      The Trustee
shall, prior to the Closing Date, establish a single, segregated trust account
which shall be designated as the “Payment Account,” which shall be held in
trust for the benefit of the Noteholders and each Hedge Counterparty and over
which the Trustee shall have exclusive control and the sole right of
withdrawal.  Any and all funds at any time
on deposit in, or otherwise to the credit of, the Payment Account shall be held
in trust by the Trustee for the benefit of the Noteholders.  Except as provided in Sections 11.1
and 11.2, the only permitted withdrawal from or application of funds on
deposit in, or otherwise to the credit of, the Payment Account shall be (i) to
pay the interest on and the principal of the Notes and make other payments in
respect of the Notes in accordance with their terms and the provisions of this
Indenture, (ii) to pay the Preferred Share Paying Agent for deposit into the
Preferred Share Distribution Account for distributions to the Preferred
Shareholders in accordance with the terms and the provisions of the Preferred
Shares Paying Agency Agreement, (iii) upon Issuer Order, to pay other amounts
specified therein, and (iv) otherwise to pay amounts payable pursuant to and in
accordance with the terms of this Indenture, each in accordance with the
Priority of Payments.  The Trustee agrees
to give the Issuer and the Co-Issuer immediate notice if it becomes aware that
the Payment Account or any funds on deposit therein, or otherwise to the credit
of the Payment Account, shall become subject to any writ, order, judgment,
warrant of attachment, execution or similar process.  Neither the Issuer nor the Co-Issuer shall
have any legal, equitable or beneficial interest in the Payment Account other
than in accordance with the Priority of Payments.  The Payment Account shall remain at all times
with the Corporate Trust Office or a financial institution having a long-term
debt


 


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rating by each
Rating Agency at least equal to “BBB+” or “A2,” as applicable, or a short-term
debt rating by each Rating Agency at least equal to “A-1,”  “P-1” or “F1,” as applicable.  Amounts in the Payment Account shall not be
invested.


 


Section 10.4           Unused
Proceeds Account.


 


(a)      The Trustee
shall prior to the Closing Date establish a single, segregated trust account
which shall be designated as the “Unused Proceeds Account” which shall be held
in trust in the name of the Trustee for the benefit of the Noteholders, into
which the amount specified in Section 3.2(g) shall be deposited.  All Monies deposited from time to time in the
Unused Proceeds Account pursuant to this Indenture shall be held by the Trustee
as part of the Assets and shall be applied to the purposes herein provided.


 


(b)      The Trustee
agrees to give the Issuer immediate notice if it becomes aware that the Unused
Proceeds Account or any funds on deposit therein, or otherwise to the credit of
the Unused Proceeds Account, shall become subject to any writ, order, judgment,
warrant of attachment, execution or similar process.  The Unused Proceeds Account shall remain at
all times with the Corporate Trust Office of a financial institution having a
long-term debt rating by each Rating Agency at least equal to “BBB+” or “A2,”
as applicable, or a short-term debt rating at least equal to “A-1,” “P-1” or “F1,”
as applicable.


 


(c)      During the
Reinvestment Period, amounts on deposit in the Unused Proceeds Account may or
shall be designated by the Collateral Manager as Special Amortization Amounts
to be included as Principal Proceeds pursuant to Section 9.7.  If the Aggregate Principal Balance of the
Collateral Debt Securities exceeds the Minimum Ramp-Up Amount on the Effective
Date, amounts remaining on deposit in the Unused Proceeds Account at the end of
the Ramp-Up Period not to exceed an amount equal to 15% of the Initial Deposit
may, at the option of the Collateral Manager, be designated as Interest
Proceeds.  Any such election will be made
on a one-time basis and must be made by written notice to the Trustee not later
than the twentieth (20th) Business Day after the Effective Date, which notice
shall set forth any such amounts in the Unused Proceeds Account so designated
(and any interest or earnings thereon). 
Upon receipt of such notice, the Trustee shall transfer such amount to
the Interest Collection Account (for subsequent transfer to the Payment
Account), which will be treated as Interest Proceeds and applied in accordance
with the Priority of Payments.  Any
amounts remaining in the Unused Proceeds Account on the twentieth (20th)
Business Day after the Effective Date, to the extent not designated as Interest
Proceeds and provided that a Ratings Confirmation Failure has not occurred,
shall be transferred by the Trustee to the Principal Collection Account (for
subsequent transfer to the Payment Account) and treated as Principal Proceeds
and applied in accordance with the Priority of Payments.


 


(d)      If a Rating
Confirmation Failure occurs, upon receipt of notice from the Collateral Manager
pursuant to Section 7.18, the Trustee shall transfer amounts in the
Unused Proceeds Account to the Payment Account for application on the
immediately following Payment Date to pay principal of the Notes, first, to the
payment of principal of the Class A-1 Notes, second, the payment of principal
of the Class A-2 Notes, third, the payment of principal of the Class B Notes, fourth,
the payment of principal of the Class C Notes, fifth, the payment of principal
of the Class D Notes, sixth, the payment of principal of the Class E Notes,


 


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seventh, the
payment of principal of the Class F Notes, eighth, the payment of principal of
the Class G Notes, ninth, the payment of principal of the Class H Notes, tenth,
the payment of principal of the Class J Notes and eleventh, the payment of
principal of the Class K Notes, in each case until the ratings assigned on the
Closing Date to each Class of Notes have been reinstated or such Class has been
paid in full.  Any excess amount shall be
treated as Principal Proceeds and applied in accordance with the Priority of
Payments.  If no Ratings Confirmation
Failure occurs, to the extent the Collateral Manager has not identified such
amounts as Interest Proceeds pursuant to Section 10.4(c), the Trustee
shall transfer the amounts on deposit in the Unused Proceeds Account to the
Principal Collection Account, and such amounts will be treated as Principal
Proceeds and applied in accordance with the Priority of Payments.


 


(e)      During the
Ramp-Up Period, the Issuer (or the Collateral Manager on behalf of the Issuer) may
by Issuer Order direct the Trustee to, and upon receipt of such Issuer Order
the Trustee shall, apply amounts on deposit in the Unused Proceeds Account to
acquire Collateral Debt Securities selected by the Collateral Manager as
permitted under and in accordance with the requirements of Section 7.17
and such Issuer Order.


 


(f)       To the extent
not applied pursuant to Section 7.17, the Collateral Manager on behalf
of the Issuer may direct the Trustee to, and upon such direction the Trustee
shall, invest all funds in the Unused Proceeds Account in Eligible Investments
designated by the Collateral Manager. 
All interest and other income from such investments shall be deposited
in the Unused Proceeds Account, any gain realized from such investments shall
be credited to the Unused Proceeds Account, and any loss resulting from such
investments shall be charged to the Unused Proceeds Account.  The Trustee shall not in any way be held
liable (except as a result of negligence, willful misconduct or bad faith) by
reason of any insufficiency of the Unused Proceeds Account resulting from any
loss relating to any such investment, except with respect to investments in
obligations of the Trustee or any Affiliate thereof.  If the Trustee does not receive investment
instructions from an Authorized Officer of the Collateral Manager, the Trustee
may invest funds received in the Unused Proceeds Account in Eligible
Investments of the type described in clause (ii) of the definition thereto.


 


Section 10.5           Delayed
Funding Obligations Account.


 


(a)      The Trustee
shall prior to the Closing Date establish a single, segregated trust account
which shall be designated as the “Delayed Funding Obligations Account” which
shall be held in trust in the name of the Trustee for the benefit of the Noteholders
and each Hedge Counterparty, into which Delayed Draw Funding Obligations
Account the Trustee shall deposit funds for any additional funding commitments
of the Issuer under any Delayed Draw Term Loans included in the Collateral Debt
Securities.  All amounts in the Delayed
Funding Obligations Account shall be deposited in overnight funds in Eligible
Investments and released to fulfill such commitments.  If a Delayed Draw Term Loan is sold or
otherwise disposed before the full commitment thereunder has been drawn, or if
excess funds remain following the termination of the funding obligation giving
rise to the deposit of such funds in the Delayed Funding Obligations Account,
such Eligible Investments on deposit in the Delayed Funding Obligations Account
for the purpose of fulfilling such commitment shall be transferred to the
Principal Collection Account as Principal Proceeds.  The Delayed Funding Obligations Account shall
remain at all times with the Corporate Trust Office or a financial


 


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institution having
a long-term debt rating from each Rating Agency at least equal to “BBB+” or “A2,”
as applicable, or a short-term debt rating at least equal to “A-1,” “P-1” or “F-1,”
as applicable.


 


(b)      Funds in the
Delayed Funding Obligations Account shall be available solely to fulfill any
additional funding commitments of the Issuer under any Delayed Draw Term Loans
included in the Collateral Debt Securities, and only funds in the Delayed
Funding Obligations Account shall be used for such purpose.  Upon the purchase of any Collateral Debt
Security that is a Delayed Draw Term Loan, the Collateral Manager shall direct
the Trustee to deposit Principal Proceeds into the Delayed Funding Obligation
Account in an amount equal to the Issuer’s maximum future funding obligation
under the terms of such Delayed Draw Term Loan, and the Principal Proceeds so
deposited shall be considered part of the purchase price of such Delayed Draw
Term Loan for purposes of Article 12.  The Collateral Manager shall not permit all
amounts then on deposit in the Delayed Funding Obligation Account to be less
than the aggregate amount of all future funding obligations outstanding under
the terms of all Delayed Draw Term Loans that constitute Collateral Debt
Securities.


 


(c)      The Collateral
Manager shall direct the Trustee to withdraw funds from the Delayed Funding
Obligation Account to fund amounts drawn under any Delayed Draw Term Loan.  Pursuant to an Issuer Order, all or a portion
of the funds, as specified in such Issuer Order, on deposit in the Delayed
Funding Obligation Account at any time in excess of the aggregate principal
amount of commitments which may be drawn upon under the Delayed Draw Term Loan
shall be transferred by the Trustee to the Collection Account as Principal
Proceeds.


 


Section 10.6           Expense
Account.


 


(a)      The Trustee
shall prior to the Closing Date establish a single, segregated trust account
which shall be designated as the “Expense Account” which shall be held in trust
in the name of the Trustee for the benefit of the Noteholders and each Hedge
Counterparty.  The only permitted
withdrawal from or application of funds on deposit in, or otherwise standing to
the credit of, the Expense Account shall be to pay (on any day other than a
Payment Date) accrued and unpaid Company Administrative Expenses of the Issuer
and the Co-Issuer (other than accrued and unpaid expenses and indemnities
payable to the Collateral Manager under the Collateral Management Agreement).  On the Closing Date, the Trustee shall
deposit into the Expense Account an amount equal to approximately U.S. $11,234,432
from the net proceeds received by the Issuer on such date from the initial
issuance of the Notes.  Funds in the
Expense Account shall be replenished on each Payment Date, if necessary, in
accordance with the Priority of Payments. 
On or after the Effective Date, any amount remaining in the Expense
Account may, at the election of the Collateral Manager be designated as
Interest Proceeds.  On the date on which
substantially all of the Issuer’s assets have been sold or otherwise disposed
of, the Issuer by Issuer Order executed by an Authorized Officer of the
Collateral Manager shall direct the Trustee to, and, upon receipt of such
Issuer Order, the Trustee shall, transfer all amounts on deposit in the Expense
Account to the Interest Collection Account for application pursuant to Section
11.1(a)(i) as Interest Proceeds.  Amounts credited to the Expense Account may
be applied on or prior to the Determination


 


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Date preceding the
first Payment Date to pay amounts due in connection with the offering of the
Notes.


 


(b)      The Trustee
agrees to give the Issuer immediate notice if it becomes aware that the Expense
Account or any funds on deposit therein, or otherwise to the credit of the
Expense Account, shall become subject to any writ, order, judgment, warrant of
attachment, execution or similar process. 
The Issuer shall not have any legal, equitable or beneficial interest in
the Expense Account.  The Expense Account
shall remain at all times with the Corporate Trust Office of a financial
institution having a long-term debt rating by each Rating Agency at least equal
to “BBB+” or “Baa1,” as applicable.


 


(c)      The Collateral
Manager on behalf of the Issuer may direct the Trustee to, and upon such
direction the Trustee shall, invest all funds in the Expense Account in
Eligible Investments designated by the Collateral Manager.  All interest and other income from such investments
shall be deposited in the Expense Account, any gain realized from such
investments shall be credited to the Expense Account, and any loss resulting
from such investments shall be charged to the Expense Account.  The Trustee shall not in any way be held
liable (except as a result of negligence, willful misconduct or bad faith) by
reason of any insufficiency of such Expense Account resulting from any loss
relating to any such investment, except with respect to investments in
obligations of the Trustee or any Affiliate thereof.  If the Trustee does not receive investment
instructions from an Authorized Officer of the Collateral Manager, the Trustee
may invest funds received in the Expense Account in Eligible Investments of the
type described in clause (ii) of the definition thereto.


 


Section 10.7           Interest
Advances.


 


(a)      With respect to
each Determination Date for which the sum of Interest Proceeds and, if
applicable, Principal Proceeds, collected during the related Due Period that
are available to pay interest on the Class A-1 Notes, the Class A-2 Notes and
the Class B Notes in accordance with the Priority of Payments, are insufficient
to remit the interest due and payable with respect to the Class A-1 Notes, the
Class A-2 Notes and the Class B Notes on the following Payment Date (the amount
of such insufficiency, an “Interest
Shortfall”), the Trustee shall provide the Advancing Agent
with written notice of such Interest Shortfall no later than the close of
business on the Business Day following such Determination Date.  The Trustee shall provide the Advancing Agent
with notice, prior to any funding of an Interest Advance by the Advancing
Agent, of any additional interest remittances received by the Trustee after
delivery of such initial notice that reduce such Interest Shortfall.  No later than 5:00 p.m. (New York time) on
the Business Day immediately preceding the related Payment Date (but in any
event no earlier than one Business Day following the Advancing Agent’s receipt
of notice of such Interest Shortfall), the Advancing Agent shall advance the
difference between such amounts (each such advance, an “Interest Advance”)
by deposit of an amount equal to such Interest Advance in the Payment Account,
subject to a determination of recoverability by the Advancing Agent as
described in Section 10.7(b), and subject to a maximum limit in respect
of any Payment Date equal to the lesser of (i) the aggregate of such Interest Shortfalls
that would otherwise occur on the Class A-1 Notes, the Class A-2 Notes and
Class B Notes and (ii) the aggregate of the interest payments not received in
respect of Non-Advancing Collateral Debt Securities.  Notwithstanding the foregoing, in no
circumstance will


 


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the Advancing
Agent be required to make an Interest Advance in respect of a Non-Advancing
Collateral Debt Security (x) to the extent that the aggregate outstanding
amount of all unreimbursed Interest Advances would exceed the aggregate
outstanding principal amount of the Class A Notes and the Class B Notes or (y)
if the Class A/B Par Value Ratio on the relevant Measurement Date is less than
100%. Any Interest Advance made by the Advancing Agent with respect to a
Payment Date that is in excess of the actual Interest Shortfall for such
Payment Date shall be refunded to the Advancing Agent by the Trustee on the
same Business Day that such Interest Advance was made (or, if such Interest
Advance is made prior to final determination by the Trustee of such Interest
Shortfall, on the Business Day of such final determination).  The Advancing Agent shall provide the Trustee
written notice of a determination by the Advancing Agent that a proposed
Interest Advance would constitute a Nonrecoverable Advance no later than the
close of business on the Business Day immediately preceding the related Payment
Date (or, in the event that the Advancing Agent did not receive notice of the
related Interest Shortfall on the related Determination Date, no later than the
close of business on the Business Day immediately following the Advancing Agent’s
receipt of notice of such Interest Shortfall). 
If the Advancing Agent shall fail to make any required Interest Advance
at or prior to the time at which distributions are to be made pursuant to Section
11.1(a), the Trustee, in its capacity as Backup Advancing Agent, shall be
required to make such Interest Advance, subject to a determination of
recoverability by the Trustee as described in Section 10.7(b).  The Trustee shall be entitled to conclusively
rely on any affirmative determination by the Advancing Agent that an Interest
Advance would constitute a Nonrecoverable Advance.  Based upon available information at the time,
the Trustee, the Collateral Manager or the Advancing Agent will provide fifteen
(15) days prior notice to each Rating Agency if recovery of a Nonrecoverable
Advance would result in an Interest Shortfall on the next succeeding Payment
Date.  No later than the close of
business on the Determination Date related to a Payment Date on which the recovery
of a Nonrecoverable Advance would result in an Interest Shortfall, the
Collateral Manager will provide each Rating Agency notice of such recovery.


 


(b)      Notwithstanding
anything herein to the contrary, neither the Advancing Agent nor the Trustee,
in its capacity as Backup Advancing Agent, as applicable, shall be required to
make any Interest Advance unless such Person determines, in its sole
discretion, exercised in good faith that such Interest Advance, or such
proposed Interest Advance, plus interest expected to accrue thereon at the
Reimbursement Rate, will be recoverable from subsequent payments or collections
with respect to all Assets and has determined in its reasonable judgment that
the recovery would not result in an Interest Shortfall.  In determining whether any proposed Interest
Advance will be, or whether any Interest Advance previously made is, a
Nonrecoverable Advance, the Advancing Agent or the Trustee, in its capacity as Backup
Advancing Agent, as applicable, will take into account:


 


(i)            amounts that may be realized on each Underlying Mortgage
Property in its “as is” or then current condition and occupancy;


 


(ii)           that the related Senior Tranches of any Collateral Debt
Security may be required to be fully paid and any advances (and interest thereon)
made in respect of such Senior Tranches may be required to be fully reimbursed,
prior to any amounts recovered


 


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in
respect of the Underlying Mortgage Properties are allocated or otherwise made available
to the Collateral Debt Securities;


 


(iii)          the
possibility and effects of future adverse change with respect to the Underlying
Mortgage Properties, the potential length of time before such Interest Advance
may be reimbursed and the resulting degree of uncertainty with respect to such
reimbursement; and


 


(iv)          the fact that Interest Advances are intended to provide
liquidity only and not credit support to the Class A-1 Noteholders, the Class
A-2 Noteholders and the Class B Noteholders.


 


For purposes of any such determination of whether an
Interest Advance constitutes or would constitute a Nonrecoverable Advance, an
Interest Advance will be deemed to be nonrecoverable if the Advancing Agent or
the Trustee, in its capacity as Backup Advancing Agent, as applicable,
determines that future Interest Proceeds and Principal Proceeds may be
ultimately insufficient to fully reimburse such Interest Advance, plus interest
thereon at the Reimbursement Rate within a reasonable period of time.  Absent bad faith, the determination by the
Advancing Agent or the Trustee, in its capacity as Backup Advancing Agent, as
applicable, as to the nonrecoverability of any Interest Advance shall be
conclusive and binding on the Holders of the Notes.


 


(c)      The Advancing
Agent and the Trustee, in its capacity as Backup Advancing Agent, will each be
entitled to recover any previously unreimbursed Interest Advance made by it
(including any Nonrecoverable Advance), together with interest thereon, first,
from Interest Proceeds and second (to the extent that there are insufficient Interest
Proceeds for such reimbursement), from Principal Proceeds to the extent that
such reimbursement would not trigger an additional Interest Shortfall; provided that if at any time an Interest Advance is determined
to be a Nonrecoverable Advance, the Advancing Agent or the Trustee, in its
capacity as Backup Advancing Agent, shall be entitled to recover all
outstanding Interest Advances from the Collection Accounts on any Business Day
during any Interest Accrual Period prior to the related Determination Date (or
on a Payment Date prior to any payment of interest on or principal of the Notes
in accordance with the Priority of Payments). 
The Advancing Agent shall be permitted (but not obligated) to defer or
otherwise structure the timing of recoveries of Nonrecoverable Advances in such
manner as the Advancing Agent determines is in the best interest of the
Noteholders as a collective whole, which may include being reimbursed for
Nonrecoverable Advances in installments.


 


(d)      The Advancing
Agent and the Trustee, in its capacity as Backup Advancing Agent, will each be
entitled with respect to any Interest Advance made by it (including
Nonrecoverable Advances) to interest accrued on the amount of such Interest
Advance for so long as it is outstanding at the Reimbursement Rate.


 


(e)      The Advancing
Agent’s and the Trustee’s obligations to make Interest Advances in respect of
the Collateral Debt Securities will continue through the Stated Maturity,
unless the Class A Notes and the Class B Notes are previously redeemed or
repaid in full.


 


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(f)       In no event
will the Advancing Agent or the Trustee, in its capacity as Backup Advancing Agent, be required to advance any payments in respect of
principal or with respect to any Class of Notes other than the Class A-1 Notes,
the Class A-2 Notes and the Class B Notes.


 


(g)      In
consideration of the performance of its obligations hereunder, the Advancing
Agent shall be entitled to receive, at the times set forth herein and subject
to the Priority of Payments, to the extent funds are available therefor, the
Advancing Agent Fee. In consideration of the Trustee’s back-up advancing
obligations hereunder, the Trustee shall be entitled to receive, at the times
set forth herein and subject to the Priority of Payments, to the extent funds
are available therefore, the Back-Up Advancing Agent Fee.


 


(h)      The
determination by the Advancing Agent or the Trustee, in its capacity as Backup
Advancing Agent, as applicable, (i) that it has made a Nonrecoverable Advance
or (ii) that any proposed Interest Advance, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officer’s Certificate
delivered promptly to the Trustee (or, if applicable, retained thereby), the
Issuer, S&P, Fitch and Moody’s, setting forth the basis for such
determination; provided that failure to give
such notice, or any defect therein, shall not impair or affect the validity of,
or the Advancing Agent or the Trustee’s entitlement to reimbursement with
respect to, any Interest Advance.


 


(i)       If a Scheduled
Distribution on any Collateral Debt Security is not paid to the Trustee on the
Due Date therefor, the Trustee shall provide the Advancing Agent with notice of
such default on the Business Day immediately following such default.  In addition, upon request, the Trustee shall
provide the Advancing Agent (either electronically or in hard-copy format),
with copies of all reports received from any trustee, trust administrator, master
servicer or similar administrative entity with respect to the Collateral Debt
Securities and the Trustee shall promptly make available to the Advancing Agent
any other information reasonably available to the Trustee by reason of its
acting as Trustee hereunder to permit the Advancing Agent to make a
determination of recoverability with respect to any Interest Advance and to
otherwise perform its advancing functions under this Indenture.


 


(j)       Notwithstanding
anything in this Indenture to the contrary, the Advancing Agent shall be
permitted (but not obligated) to defer or otherwise structure the timing of the
recoveries in such a manner as the Advancing Agent determines is in the best
interest of the Noteholders as a collective whole, which may include being
reimbursed for Nonrecoverable Advances in installments.


 


Section 10.8           Reports
by Parties.


 


The Trustee shall supply, in a timely fashion, to the
Issuer, the Co-Issuer, the Preferred Shares Paying Agent and the Collateral
Manager any information regularly maintained by the Trustee that the Issuer,
the Co-Issuer, the Preferred Shares Paying Agent or the Collateral Manager may
from time to time request with respect to the Pledged Obligations or the
Accounts and provide any other information reasonably available to the Trustee
by reason of its acting as Trustee hereunder and required to be provided by Section
10.9 or to permit the Collateral Manager to perform its obligations under
the Collateral Management Agreement.  The
Trustee


 


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shall forward to the Collateral Manager and each Hedge
Counterparty copies of notices and other writings received by it from the
issuer of any Collateral Debt Security or from any Clearing Agency with respect
to any Collateral Debt Security advising the holders of such security of any
rights that the holders might have with respect thereto (including, without
limitation, notices of calls and redemptions of securities) as well as all
periodic financial reports received from such issuer and Clearing Agencies with
respect to such issuer.  Each of the
Issuer and Collateral Manager shall promptly forward to the Trustee any
information in their possession or reasonably available to them concerning any
of the Pledged Obligations that the Trustee reasonably may request or that
reasonably may be necessary to enable the Trustee to prepare any report or
perform any duty or function on its part to be performed under the terms of
this Indenture.


 


Section 10.9           Reports;
Accountings.


 


(a)      The Trustee
shall monitor the Assets on an ongoing basis and provide access to the
information maintained by the Trustee to, and upon reasonable request of the
Collateral Manager, shall assist the Collateral Manager in performing its
duties under the Collateral Management Agreement, each in accordance with this
Indenture.


 


(b)      The Trustee
shall perform the following functions during the term of this Agreement:


 


(i)            Create
and maintain a database with respect to the Collateral Debt Securities (the “Database”);


 


(ii)           Permit
access to the information contained in the Database by the Collateral Manager
and the Issuer;


 


(iii)          On
a monthly basis monitor and update the Database for ratings changes;


 


(iv)          Update
the Database for Collateral Debt Securities or Eligible Investments acquired or
sold or otherwise disposed of;


 


(v)           Prepare
and arrange for the delivery to each Rating Agency, the Collateral Manager,
each Hedge Counterparty, the Initial Purchaser, and upon request therefor, any
Holder of a Note shown on the Note Registrar, any Preferred Shareholder shown
on the register maintained by the Share Registrar, and, for so long as any
Notes are listed on the Irish Stock Exchange, the Irish Paying Agent of the
Monthly Reports;


 


(vi)          prepare and
arrange for the delivery to the Collateral Manager, each Hedge Counterparty,
and upon request therefor, any Holder of a Note shown on the Notes Register,
any Preferred Shareholder shown on the register maintained by the Share
Registrar, the firm of Independent certified public accountants appointed
pursuant to Section 10.11(a) hereof, each Rating Agency, the Depository
(with instructions to forward it to each of its participants who are holders of
any Notes) and, for so long as any Notes are listed on the Irish Stock
Exchange, the Irish Paying Agent, of the Notes Valuation Report;


 


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(vii)         Assist
in preparation and arrange for the delivery to the Collateral Manager and each
Hedge Counterparty of the Redemption Date Statement;


 


(viii)        Arrange
for the delivery to each Rating Agency of all information or reports required
under this Indenture, including, but not limited to, providing S&P, Moody’s
and Fitch with (A) written notice of (1) any breaches under any of the
Transaction Documents and (2) the termination or change of any parties to the
Transaction Documents, in each case, for which the Trustee has received prior
written notice pursuant to the terms of the Transaction Document and (B) each
Monthly Report in Excel spreadsheet format; and


 


(ix)           Assist the
Independent certified public accountants in the preparation of those reports
required under Section 10.11 hereof by providing access to the
information contained in the Database.


 


(c)      The Trustee, on
behalf of the Issuer, shall compile and provide or make available on its
website initially located at www.cdolink.com to each Rating Agency, the
Collateral Manager, each Hedge Counterparty, the Initial Purchaser, for so long
as any Notes are listed on the Irish Stock Exchange, and upon request therefor,
any Holder of a Note shown on the Notes Register, any beneficial owner of a
Note who provides to the Trustee a certification in the form of Exhibit M
hereto, any Preferred Shareholder shown on the register maintained by the Share
Registrar, not later than the fifth Business Day after the first day of each
month commencing in September 2005 (or solely in the case of the first Monthly
Report, the fifteenth Business Day), determined as of the last Business Day of
the preceding month, a monthly report (the “Monthly Report”). 
The Monthly Report shall contain the following information and
instructions with respect to the Pledged Obligations included in the Assets
based in part on information provided by the Collateral Manager:


 


(i)            (1) the
Aggregate Principal Balance of all Collateral Debt Securities, together with a
calculation, in reasonable detail, of the sum of (A) the Aggregate Principal
Balance of all Collateral Debt Securities (other than Defaulted Securities and
Written Down Securities) plus (B) the Principal Balance of each Pledged
Obligation which is Written Down Security and (C) the Principal Balance of each
Pledged Obligation which is a Defaulted Security;


 


(ii)           the balance of all Eligible Investments and Cash in each of
the Interest Collection Account, the Principal Collection Account, the Delayed
Funding Obligations Account and the Expense Account;


 


(iii)          the nature, source and amount of any proceeds in the
Collection Accounts, including Interest Proceeds, Principal Proceeds,
Unscheduled Principal Payments and Sale Proceeds, received since the date of
determination of the last Monthly Report;


 


(iv)          with respect to each Collateral Debt Security and each
Eligible Investment that is part of the Assets, its Principal Balance, annual
interest rate, average life, issuer, Moody’s Rating, S&P Rating and Fitch
Rating;


 


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(v)           the
identity of each Collateral Debt Security that was sold or disposed of pursuant
to Section 12.1 (indicating whether such Collateral Debt Security is a
Defaulted Security, Credit Risk Security or otherwise (in each case, as
reported in writing to the Issuer by the Collateral Manager) and whether such
Collateral Debt Security was sold pursuant to Section 12.1(a)(i) or (ii)) or Granted to the Trustee since the
date of determination of the most recent Monthly Report;


 


(vi)          the identity of each Collateral Debt Security which became a
Defaulted Security, Credit Risk Security or a Written Down Security since the
date of determination of the last Monthly Report;


 


(vii)         the identity of each Collateral Debt Security that has been
upgraded or downgraded by one or more Rating Agencies;


 


(viii)        the Aggregate Principal Balance of all Fixed Rate
Securities;


 


(ix)           the Aggregate Principal Balance of all Floating Rate
Securities;


 


(x)            based on information provided by the Collateral Manager, the
Aggregate Principal Balance of all Floating Rate Securities that constitute
Covered Fixed Rate Securities;


 


(xi)           the Aggregate Principal Balance of all Collateral Debt
Securities that are guaranteed as to ultimate or timely payment of principal or
interest;


 


(xii)          with
respect to each Specified Type of Collateral Debt Security, the Aggregate
Principal Balance of all Collateral Debt Securities consisting of such Specified
Type of Collateral Debt Securities;


 


(xiii)         based
on information provided by the Collateral Manager, the identity of, and the
Aggregate Principal Balance of all Collateral Debt Securities whose Moody’s
Rating is determined as provided in each clause of the definition of “Moody’s
Rating” and the identity of, and the Aggregate Principal Balance of all
Collateral Debt Securities whose S&P Rating is determined as provided in
each of the clauses of the definition of “S&P Rating,” identifying in
reasonable detail the basis for such calculation with respect to Collateral
Debt Securities with an S&P Rating assigned pursuant to Annex 1, 2 or 3 of Schedule
D, based on information provided by the Collateral Manager;


 


(xiv)        with
respect to each Collateral Debt Security, the Aggregate Principal Balance of
all Collateral Debt Securities that are part of the same issuance;


 


(xv)         the Aggregate Principal Balance of all Collateral Debt
Securities that are securities that provide for periodic payments of interest
less frequently than quarterly;


 


(xvi)        based
upon the information supplied by the Collateral Manager, the Aggregate
Principal Balance of all Collateral Debt Securities issued by any single issuer
(provided that for avoidance of doubt,
with respect to any Loan, the issuer of such Loan shall be deemed to be the
borrower of such Loan);


 


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(xvii)       based upon the information supplied by the Collateral
Manager, the Aggregate Collateral Balance of the Collateral Debt Securities
consisting of CMBS Securities issued in any single calendar year;


 


(xviii)      the
Aggregate Principal Balance of all Collateral Debt Securities (other than CMBS
Securities, CRE CDO Securities and REIT Debt Securities) backed by each single
Property Type based on information provided by the Collateral Manager;


 


(xix)         the
Aggregate Principal Balance of all Collateral Debt Securities (other than CMBS
Securities, CRE CDO Securities and REIT Debt Securities) that are backed or
otherwise invested in properties located in any single U.S. state (for each
such state) based on information provided by the Collateral Manager;


 


(xx)          the Class
A/B Par Value Ratio, the Class A/B Interest Coverage Ratio, the Class C/D/E Par
Value Ratio, the Class C/D/E Interest Coverage Ratio, the Class F/G/H Par Value
Ratio and the Class F/G/H Interest Coverage Ratio, and a statement as to
whether the Interest Coverage Test and the Par Value Test are satisfied;


 


(xxi)         the Moody’s Rating Factor and a statement as to whether the
Moody’s Maximum Rating Factor Test is satisfied;


 


(xxii)          the Herfindahl Score, the
amount of Cash that has been received in respect of Principal Proceeds of the
Collateral Debt Securities since the immediately preceding Measurement Date but
has not been reinvested in additional Collateral Debt Securities (and what the
Herfindahl score would have been had such Cash in respect of such Principal
Proceeds not existed), a statement as to whether the Herfindahl Test was
satisfied or deemed satisfied on the immediately preceding Measurement Date and
a statement as to whether the Herfindahl Diversity Test is satisfied;


 


(xxiii)       the Weighted Average Coupon and a statement as to whether
the Minimum Weighted Average Coupon Test is satisfied;


 


(xxiv)          the Weighted Average Spread and a statement as to whether
the Minimum Weighted Average Spread Test is satisfied;


 


(xxv)          the
Extended Weighted Average Maturity and a statement as to whether the Moody’s
Weighted Average Extended Maturity Test is satisfied;


 


(xxvi)           the Initial Weighted Average Maturity and a statement as to
whether the Moody’s Weighted Average Initial Maturity Test is satisfied;


 


(xxvii)          based upon information supplied by the Collateral Manager,
the Average Life of each Collateral Debt Security, the Weighted Average Life
and a statement as to whether the Weighted Average Life Test is satisfied;


 


(xxviii)     the Class A-1 Loss Differential, the Class A-2 Loss
Differential, the Class B Loss Differential, the Class C Loss
Differential, the Class D Loss Differential, the Class E Loss
Differential, the Class F Loss Differential, the Class G Loss Differential,


 


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the
Class H Loss Differential, the Class J Loss Differential and the Class K Loss
Differential of the Current Portfolio and a statement as to whether the S&P
CDO Monitor Test is satisfied;


 


(xxix)       the S&P Weighted Average Recovery Rate and a statement
as to whether the S&P Recovery Test is satisfied;


 


(xxx)        a calculation in reasonable detail necessary to determine
compliance with each of the other Collateral Quality Tests;


 


(xxxi)         the
Principal Balance of each Collateral Debt Security that is on credit watch with
negative implications;


 


(xxxii)        the
Principal Balance of each Collateral Debt Security that is on credit watch with
positive implications;


 


(xxxiii)       the
amount of the current portion and the unpaid portion, if any, of the Senior
Collateral Management Fee and the Subordinated Collateral Management Fee with
respect to the related Payment Date;


 


(xxxiv)       based
upon information supplied by the Collateral Manager, the current ratings of any
Hedge Counterparty and the credit support provider of any Hedge Counterparty;


 


(xxxv)        the aggregate
notional amount as of the end of such month and each following month for all
outstanding Transactions under all Hedge Agreements which the Issuer has
entered into; and


 


(xxxvi)       such
other information as the Collateral Manager, the Trustee or any Hedge
Counterparty may reasonably request.


 


(d)      The Trustee, on
behalf of the Issuer, shall perform the following functions and report to the
Issuer, the Co-Issuer and the Collateral Manager on each Measurement Date:


 


(i)            Calculate
the Class A/B Par Value Ratio and the Class A/B Interest Coverage Ratio and
indicate whether the Class A/B Par Value Test and the Class A/B Interest
Coverage Test are met;


 


(ii)           Calculate
the Class C/D/E Par Value Ratio and the Class C/D/E Interest Coverage Ratio and
indicate whether the Class C/D/E Par Value Test and the Class C/D/E Interest Coverage
Test are met; and


 


(iii)          Calculate
the Class F/G/H Par Value Ratio and the Class F/G/H Interest Coverage Ratio and
indicate whether the Class F/G/H Par Value Test and the Class F/G/H Interest
Coverage Test are met.


 


(e)      The Trustee, on
behalf of the Issuer, shall perform the following functions and prepare a
report thereof relating to the most recently ended Due Period determined as of


 


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each Determination
Date not later than the Business Day preceding the Payment Date (the “Notes Valuation Report”),
which shall contain the following information, based in part on information
provided by the Collateral Manager:


 


(i)            Calculate
the percentage (based on the outstanding Aggregate Principal Balances of the
Pledged Collateral Debt Securities) of the Pledged Collateral Debt Securities
which have a maturity date occurring on or prior to each Payment Date;


 


(ii)           Identify
the Principal Proceeds and Interest Proceeds;


 


(iii)          Determine
the Net Outstanding Portfolio Balance as of the close of business on the last
Business Day of each Due Period after giving effect to the Principal Proceeds
as of the last Business Day of such Due Period, principal collections received
from Collateral Debt Securities in the related Due Period, the reinvestment of
such proceeds in Eligible Investments during such Due Period and the Collateral
Debt Securities that were released during such Due Period;


 


(iv)          Determine
the Aggregate Outstanding Amount of the Notes of each Class at the beginning of
the Due Period and such Aggregate Outstanding Amount as a percentage of the
original Aggregate Outstanding Amount of the Notes of such Class, the amount of
principal payments to be made on the Notes of each Class on the next Payment
Date, the amount of any Class C Capitalized Interest on the Class C Notes, the
amount of any Class D Capitalized Interest on the Class D Notes, the amount of
any Class E Capitalized Interest on the Class E Notes, the amount of any Class
F Capitalized Interest on the Class F Notes, the amount of any Class G
Capitalized Interest on the Class G Notes, the amount of any Class H
Capitalized Interest on the Class H Notes, the amount of any Class J
Capitalized Interest on the Class J Notes, the amount of any Class K Capitalized
Interest on the Class K Notes, the Aggregate Outstanding Amount of the Notes of
each Class after giving effect to the payment of principal (and with respect to
the Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes, the Class J Notes and the Class K Notes, Class
C Capitalized Interest, Class D Capitalized Interest, Class E Capitalized
Interest, Class F Capitalized Interest, Class G Capitalized Interest, Class H
Capitalized Interest, Class J Capitalized Interest or Class K Capitalized
Interest as applicable), on the related Payment Date and such Aggregate
Outstanding Amount as a percentage of the original Aggregate Outstanding Amount
of the Notes of such Class;


 


(v)           Calculate
the Class A-1 Interest Distribution Amount, the Class A-2 Interest Distribution
Amount, the Class B Interest Distribution Amount, the Class C Interest
Distribution Amount, the Class D Interest Distribution Amount, the Class E
Interest Distribution Amount, the Class F Interest Distribution Amount, the
Class G Interest Distribution Amount, the Class H Interest Distribution Amount,
the Class J Interest Distribution and the Class K Interest Distribution Amount,
for the related Payment Date and the aggregate amount paid for all prior Payment
Dates in respect of such amounts;


 


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(vi)          With
the assistance of the Collateral Manager, determine the Company Administrative
Expenses on an itemized basis, the Senior Collateral Management Fee and the
Subordinate Collateral Management Fee payable by the Issuer on the related
Payment Date;


 


(vii)         With
the assistance of the Collateral Manager as set forth in Section 10.9(f),
determine (A) the balance on deposit in the Interest Collection Account and the
Principal Collection Account at the end of the related Due Period, (B) the
amounts payable from the Collection Accounts to the Payment Account in order to
make payments pursuant to Section 11.1(a)(i) and Section 11.1(a)(ii)
on the related Payment Date (the amounts payable pursuant to each such clause
to be set forth and identified separately) and (C) the balance of Principal
Proceeds and the balance of Interest Proceeds remaining in the Collection
Accounts immediately after all payments and deposits to be made on the related
Payment Date;


 


(viii)        Calculate
the amount to be paid to each Hedge Counterparty and the amount to be paid by
each Hedge Counterparty in each case, specifying (a) the amount to be paid
under each Hedge Agreement (other than any payments due and payable upon a
termination of the related Hedge Agreement) and (b) the amount owing as a
result of a termination with respect to each Hedge Agreement;


 


(ix)           Calculate
the amount to be paid to the Advancing Agent or the Trustee, as applicable, as reimbursement
of Interest Advances and Reimbursement Interest and calculate the amount of the
Nonrecoverable Advances to be paid to the Advancing Agent or the Trustee, as
applicable;


 


(x)            Calculate
the amount on deposit in the Expense Account, the Unused Proceeds Account, the
Delayed Funding Obligations Account, each Hedge Collateral Account and each
Hedge Termination Account;


 


(xi)           the nature, source and amount of any proceeds in the
Collection Accounts, including Interest Proceeds, Principal Proceeds, Unscheduled
Principal Payments and Sale Proceeds, received since the date of determination
of the last Monthly Report;


 


(xii)          with respect to each Collateral Debt Security and each
Eligible Investment that is part of the Assets, its Principal Balance, annual interest
rate, average life, issuer, Moody’s Rating, S&P Rating and Fitch Rating;


 


(xiii)         the
identity of each Collateral Debt Security that was sold or disposed of pursuant
to Section 12.1 (indicating whether such Collateral Debt Security is a
Defaulted Security, Credit Risk Security or otherwise (in each case, as
reported in writing to the Issuer by the Collateral Manager) and whether such
Collateral Debt Security was sold pursuant to Section 12.1(a)(i) or (ii)) or Granted to the Trustee since the
date of determination of the most recent Monthly Report; and


 


(xiv)        the
identity of each Collateral Debt Security which became a Defaulted Security,
Credit Risk Security or a Written Down Security since the date of determination
of the last Monthly Report.


 


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(f)       Upon receipt
of each Monthly Report, each Notes Valuation Report and each Redemption Date
Statement, the Collateral Manager shall compare the information contained in
its records with respect to the Pledged Obligations and shall, within five
Business Days after receipt of each such Monthly Report, such Notes Valuation
Report or such Redemption Date Statement, notify the Issuer and the Trustee
whether such information contained in the Monthly Report, the Notes Valuation
Report or the Redemption Date Statement, as the case may be, conforms to the
information maintained by the Collateral Manager with respect to the Pledged
Obligations, or detail any discrepancies. 
If any discrepancy exists, the Trustee, the Issuer and the Collateral
Manager shall attempt to resolve the discrepancy and shall provide notice to a
designated representative of the Controlling Class.  If such discrepancy cannot be promptly
resolved, the Trustee shall cause the firm of Independent certified public
accountants appointed by the Issuer pursuant to Section 10.11 hereof to
review such Monthly Report, Notes Valuation Report or Redemption Date
Statement, as the case may be, and the Collateral Manager’s records and the
Trustee’s records to determine the cause of such discrepancy.  If such review reveals an error in the
Monthly Report, Notes Valuation Report or Redemption Date Statement, as the
case may be, or the Trustee’s or the Collateral Manager’s records, the Monthly
Report, Notes Valuation Report or Redemption Date Statement, as the case may
be, or the Trustee’s or the Collateral Manager’s records, shall be revised
accordingly and, as so revised, shall be utilized in making all calculations
pursuant to this Indenture.  Each Rating
Agency (in each case only so long as any Class of Notes is rated), the Initial
Purchaser and the Collateral Manager shall be notified in writing of any such
revisions by the Trustee on behalf of the Issuer.


 


(g)      The Trustee
shall prepare the Notes Valuation Report and shall deliver or make available on
its website initially located at www.cdolink.com such Notes Valuation Report to
the Collateral Manager, each Hedge Counterparty, and upon request therefor, any
Holder of a Note shown on the Notes Register, any beneficial owner of a Note
who provides to the Trustee a certification in the form of Exhibit M
hereto, any Holder of a Preferred Share shown on the register maintained by the
Share Registrar, the firm of Independent certified public accountants appointed
pursuant to Section 10.11(a) hereof, each Rating Agency, the Depository
(with instructions to forward it to each of its participants who are holders of
any Notes) and, for so long as any Senior Notes are listed on the Irish Stock
Exchange, the Irish Paying Agent not later than the related Payment Date.  The Notes Valuation Report shall have
attached to it (with the exception of the first Notes Valuation Report) the
most recent Monthly Report.  All
information made available on the Trustee’s website will be restricted and the
Trustee will only provide access to such reports to those parties entitled
thereto pursuant to this Indenture.  In
connection with providing access to its website, the Trustee may require
registration and the acceptance of a disclaimer.  Questions regarding the Trustee’s website can
be directed to the Trustee’s customer service desk at (301) 815-6600.


 


The Notes Valuation Report shall also contain the
following statements:


 


“Instruction
to Participant:  Please send

this to the beneficial owners of the Senior Notes”


 


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Reminder to Owners of each Class
of Senior Notes:


 


Each owner or beneficial owner of Senior Notes must be
either a U.S. Person who is a qualified institutional buyer as defined in Rule
144A under the Securities Act of 1933 and a Qualified Purchaser as defined by
the Investment Company Act of 1940 or not a U.S. Person, and if a U.S. Person,
can represent as follows:


 


(i)            it is not a broker-dealer which owns and invests on a
discretionary basis less than $25 million in securities of unaffiliated
issuers;


 


(ii)           it is not a participant-directed employee plan such as a
401(k) plan;


 


(iii)          it is acting for its own account or for the account of
another who is a qualified institutional buyer and a qualified purchaser that
is not included in (i) or (ii) above;


 


(iv)          it is not formed for the purpose of investing in the Notes;


 


(v)           it, and each account for which it holds the Notes, shall
hold at least the minimum denomination therefor; and


 


(vi)          it will provide notice of these transfer restrictions to any
transferee from it.


 


(h)      Each Notes
Valuation Report (after approval by the Collateral Manager after giving effect
to any revisions thereto in accordance with Section 10.9(f)) shall
constitute instructions from the Collateral Manager, on behalf of the Issuer,
to the Trustee to transfer funds from the Collection Accounts to the Payment
Account pursuant to Section 10.2(e) and to withdraw on the related
Payment Date from the Payment Account and pay or transfer the amounts set forth
in the Notes Valuation Report, as applicable, in the manner specified, and in
accordance with the priorities established, in Section 11.1 hereof.


 


(i)       Not more than
five Business Days after receiving an Issuer Request requesting information
regarding a redemption of the Notes of a Class as of a proposed Redemption Date
set forth in such Issuer Request, the Trustee shall compute the
following information and provide such information in a statement (the “Redemption Date Statement”)
delivered to the Collateral Manager (which shall review such statement in the
manner provided for in Section 10.9(f)), the Preferred Shares Paying
Agent and each Hedge Counterparty:


 


(i)            the Aggregate Outstanding Amount of the Notes of the Class
or Classes to be redeemed as of such Redemption Date;


 


(ii)           the amount of accrued interest due on such Notes as of the
last day of the Interest Accrual Period immediately preceding such Redemption
Date;


 


(iii)          the Redemption Price;


 


(iv)          the sum of all amounts due and unpaid under Section
11.1(a) (other than amounts payable on the Notes being redeemed or to the
Noteholders thereof);


 


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(v)           the amount due and payable to each Hedge Counterparty
pursuant to the applicable Hedge Agreement; and


 


(vi)          the amount in the Accounts available for application to the
redemption of such Notes.


 


(j)       In the event
of a sale by the Issuer of any Collateral Debt Security that is subject to a
Liability Hedge, the Issuer (at the direction Collateral Manager) shall provide
written notice to each Hedge Counterparty under such Liability Hedge at least 5
Business Days prior to such sale.


 


Section 10.10         Release
of Pledged Collateral Debt Securities; Release of Assets.


 


(a)      If no Event of
Default has occurred and is continuing and subject to Article 12 hereof,
the Issuer may, by Issuer Order delivered to the Trustee at least two Business
Days prior to the settlement date for any sale of a Pledged Collateral Debt
Security certifying that (i) it has sold such Pledged Collateral Debt Security
pursuant to and in compliance with Article 12 or (ii) in the case of a
redemption pursuant to Section 9.1 or Section 9.2 the proceeds
from any such sale of Pledged Collateral Debt Securities are sufficient to
redeem the Notes pursuant to Section 9.1 or Section 9.2, direct
the Trustee to release such Pledged Collateral Debt Security and, upon receipt
of such Issuer Order, the Trustee shall deliver any such Pledged Collateral
Debt Security, if in physical form, duly endorsed to the broker or purchaser
designated in such Issuer Order or, if such Pledged Collateral Debt Security is
represented by a Security Entitlement, cause an appropriate transfer thereof to
be made, in each case against receipt of the sales price therefor as set forth
in such Issuer Order; provided, however, that the Trustee may deliver any such Pledged
Collateral Debt Security in physical form for examination (prior to receipt of
the sales proceeds) in accordance with street delivery custom.  The Trustee shall (i) deliver any agreements
and other documents in its possession relating to such Pledged Collateral Debt
Security and (ii) if applicable, duly assign each such agreement and other
document, in each case, to the broker or purchaser designated in such Issuer
Order.


 


(b)      The Issuer may,
by Issuer Order, delivered to the Trustee at least three Business Days prior to
the date set for redemption or payment in full of a Pledged Collateral Debt
Security, certifying that such Pledged Collateral Debt Security is being
redeemed or paid in full, direct the Trustee, or at the Trustee’s instructions,
the Custodial Securities Intermediary, to deliver such Pledged Collateral Debt
Security, if in physical form, duly endorsed, or, if such Pledged Collateral
Debt Security is a Clearing Corporation Security, to cause it to be presented,
to the appropriate paying agent therefor on or before the date set for
redemption or payment, in each case against receipt of the applicable
redemption price or payment in full thereof.


 


(c)      If no Event of
Default has occurred and is continuing and subject to Article 12, the
Issuer may, by Issuer Order delivered to the Trustee at least two Business Days
prior to the date set for an exchange, tender or sale, certifying that a Collateral
Debt Security is subject to an Offer and setting forth in reasonable detail the
procedure for response to such Offer, direct the Trustee or at the Trustee’s
instructions, the Custodial Securities Intermediary,


 


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to
deliver such security, if in physical form, duly endorsed, or, if such security
is a Clearing Corporation Security, to cause it to be delivered, in accordance
with such Issuer Order, in each case against receipt of payment therefor.


 


(d)      The Trustee
shall deposit any proceeds received by it from the disposition of a Pledged
Collateral Debt Security in the Principal Collection Account unless
simultaneously applied to the purchase of Substitute Collateral Debt
Securities, subject to the Reinvestment Criteria, or Eligible Investments under
and in accordance with the requirements of Article 12 and this Article
10.  Neither the Trustee nor the
Custodial Securities Intermediary shall be responsible for any loss resulting
from delivery or transfer of any security prior to receipt of payment in
accordance herewith.


 


(e)      The Trustee
shall, upon receipt of an Issuer Order at such time as there are
no Notes Outstanding and all obligations of the Issuer hereunder have been
satisfied, release the Assets from the lien of this Indenture.


 


Section 10.11         Reports
by Independent Accountants.


 


(a)      On or about the
Closing Date, the Issuer shall appoint a firm of Independent certified public
accountants of recognized national reputation for purposes of preparing and
delivering the reports or certificates of such accountants required by this
Indenture.  The Collateral Manager, on
behalf of the Issuer, shall have the right to remove such firm or any successor
firm.  Upon any resignation by or removal
of such firm, the Collateral Manager, on behalf of the Issuer, shall promptly
appoint, by Issuer Order delivered to the Trustee, each Hedge Counterparty and
each Rating Agency, a successor thereto that shall also be a firm of
Independent certified public accountants of recognized national reputation and
shall provide notice to a designated representative of the Controlling Class.  If the Collateral Manager, on behalf of the
Issuer, shall fail to appoint a successor to a firm of Independent certified
public accountants which has resigned or been removed, within 30 days after
such resignation or removal, the Issuer shall promptly notify the Trustee of
such failure in writing.  If the
Collateral Manager, on behalf of the Issuer, shall not have appointed a
successor within 10 days thereafter, the Trustee shall promptly appoint a
successor firm of Independent certified public accountants of recognized
national reputation.  The fees of such
Independent certified public accountants and its successor shall be payable by
the Issuer or by the Trustee as provided in the Priority of Payments.


 


(b)      Within 60 days
after December 31 of each year (commencing with December 31, 2006), the Issuer
shall cause to be delivered to the Trustee, the Collateral Manager and each
Rating Agency an Accountants’ Report specifying the procedures applied and the
associated findings with respect to the Monthly Reports, the Notes Valuation
Reports and any Redemption Date Statements prepared in the year ending on such
date.  At least 60 days prior to the Payment
Date in April 2006 (and, if at any time a successor firm of Independent
certified public accountants is appointed, to the Payment Date following the
date of such appointment), the Issuer shall deliver to the Trustee an
Accountant’s Report specifying in advance the procedures that such firm will
apply in making the aforementioned findings throughout the term of its service
as accountants to the Issuer.  The
Trustee shall promptly forward a copy of such Accountant’s Report to the
Collateral Manager and each Holder of


 


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Notes
of the Controlling Class, at the address shown on the Note Register.  The Issuer shall not approve the institution
of such procedures if a Majority of the Aggregate Outstanding Amount of Notes
of the Controlling Class, by written notice to the Issuer and the Trustee
within 30 days after the date of the related notice to the Trustee, object
thereto.


 


(c)      If any Hedge
Counterparty is required to post collateral pursuant to the related Hedge
Agreement during any Due Period, then on or prior to the Payment Date following
such Due Period and on or prior to each anniversary of such Payment Date the
Issuer shall cause a firm of Independent certified public accountants to review
and verify that the value of collateral posted is in accordance with the
applicable provisions of the related Hedge Agreement.


 


Section 10.12         Reports
to Rating Agencies.


 


(a)      In addition to
the information and reports specifically required to be provided to each Rating
Agency pursuant to the terms of this Indenture, the Trustee shall provide each
Rating Agency and each Hedge Counterparty with all information or reports
delivered by the Trustee hereunder, and such additional information as each
Rating Agency may from time to time reasonably request and the Trustee
determines in its sole discretion may be obtained and provided without
unreasonable burden or expense.  The
Issuer shall promptly notify the Trustee and the Preferred Shares Paying Agent
if a Rating Agency’s rating of any Class of Notes has been, or it is known by
the Issuer that such rating will be, reduced, or qualified or withdrawn.


 


(b)      The Issuer, or
the Collateral Manager on behalf of the Issuer, shall provide the Rating
Agencies with all information and reports delivered to the Trustee hereunder,
and shall provide to Fitch on a quarterly basis, (i) the Operating Statement
Analysis Report for each applicable Collateral Debt Obligation, and (ii) the
file, shown in Exhibit O attached hereto, in excel format.


 


(c)      All additional
reports to be sent to the Rating Agencies pursuant to clause (a) above shall be
reviewed prior to such transmission by the Collateral Manager.


 


Section 10.13         United
States Federal Income Tax Reporting.


 


(a)      If the Class K
Notes (or any other Notes) are deemed equity for U.S. federal income tax
purposes, the Collateral Manager shall provide to the Trustee, for further
delivery to the Holders of the Class K Notes (or any other Notes deemed equity
for U.S. federal income tax purposes), information as the Collateral Manager
may possess necessary for a Holder of Class K Notes (or any other Notes deemed
equity for U.S. federal income tax purposes) to make an election to treat the
Issuer as a Qualified Electing Fund under Section 1295 of the Code, and for
such Holder to file returns consistent with such election.


 


The Issuer shall provide the Trustee with such
information as is required for the Trustee to perform its obligations under
this Section 10.13.


 


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Section 10.14         Certain
Procedures.


 


(a)      For so long as
the Notes may be transferred only in accordance with Rule 144A or another
exemption from registration under the Securities Act, the Issuer (or the
Collateral Manager on behalf of the Issuer) will ensure that any Bloomberg
screen containing information about the Rule 144A Global Notes includes the
following (or similar) language:


 


(i)            the “Note Box” on the bottom of the “Security Display” page
describing the Rule 144A Global Notes will state: “Iss’d Under 144A/3c7”;


 


(ii)           the “Security Display” page will have the flashing red
indicator “See Other Available Information”; and


 


(iii)          the
indicator will link to the “Additional Security Information” page, which will
state that the Notes “are being offered in reliance on the exemption from
registration under Rule 144A of the Securities Act to persons who are both (i)
qualified institutional buyers (as defined in Rule 144A under the Securities
Act) and (ii) qualified purchasers (as defined under Section 3(c)(7) under the Investment Company Act of 1940).


 


(b)      For so long as
the Rule 144A Global Notes are registered in the name of DTC or its nominee,
the Issuer (or the Collateral Manager on behalf of the Issuer) will instruct
DTC to take these or similar steps with respect to the Rule 144A Global Notes:


 


(i)            the DTC 20-character security descriptor and 48-character
additional descriptor will indicate with marker “3c7” that sales are limited to
(i) QIBs and (ii) Qualified Purchasers;


 


(ii)           where the DTC deliver order ticket sent to purchasers by DTC
after settlement is physical, it will have the 20-character security descriptor
printed on it.  Where the DTC deliver
order ticket is electronic, it will have a “3c7” indicator and a related user
manual for participants, which will contain a description of the relevant
restriction; and


 


(iii)          DTC
will send an “Important Notice” outlining the 3(c)(7)
restrictions applicable to the Rule 144A Global Notes to all DTC participants
in connection with the initial offering of Notes by the issuers.


 


ARTICLE 11


 


APPLICATION OF MONIES


 


Section 11.1           Disbursements
of Monies from Payment Account.


 


(a)      Notwithstanding
any other provision in this Indenture, but subject to the other subsections of
this Section 11.1 and Section 13.1 hereof, on each Payment Date,
or Redemption Date the Trustee shall disburse amounts transferred to the
Payment Account from


 


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the
Interest Collection Account and the Principal Collection Account pursuant to Section
10.2 hereof in accordance with the following priorities (the “Priority of Payments”):


 


(i)            Interest
Proceeds. On each Payment Date or Redemption Date, (except as otherwise
provided in Section 11.1(c)) Interest Proceeds with respect to the
related Due Period shall be distributed in the following order of priority:


 


(1)           to the
payment of taxes and filing fees (including any registered office and
government fees) owed by the Issuer, if any;


 


(2)           (a) first,
to the extent not previously reimbursed, to the Advancing Agent or the Trustee,
in its capacity as Backup Advancing Agent, the aggregate amount of any
Nonrecoverable Advances due and payable to such party, (b) second, to the
extent not previously reimbursed, to the Collateral Manager, the aggregate amount
of any Nonrecoverable Cure Advance due and payable to the Collateral Manager,
(c) third, to the Advancing Agent, the Advancing Agent Fee and any previously
due but unpaid Advancing Agent Fee (provided that
the Advancing Agent has not failed to make any Interest Advance required to be
made in respect of such Payment Date pursuant to the terms of the Indenture),
(d) fourth, to the Advancing Agent and the Trustee, in its capacity as Backup
Advancing Agent, (i) to the extent due and payable to such party, Reimbursement
Interest and (ii) reimbursement of any outstanding Interest Advances not (in
the case of this clause (ii)) to exceed the amount that would result in an
Interest Shortfall with respect to such Payment Date and (e) fifth, to the
extent due and payable to the Collateral Manager, reimbursement of any
outstanding Cure Advance (but only to the extent of the applicable proceeds in
respect of the Collateral Debt Security and not to exceed the amount that would
result in an Interest Shortfall with respect to such Payment Date);


 


(3)           (a) first,
to the payment to the Trustee, in its capacity as Backup Advancing Agent, the
Backup Advancing Agent Fee (or if the Advancing Agent has failed to make any
Interest Advance required to be made by the Advancing Agent in respect of such
Distribution Date pursuant to the terms of this Indenture, the Advancing Agent
Fee otherwise payable to the Advancing Agent on such Distribution Date) and any
previously due but unpaid Backup Advancing Agent Fee, (b) second, to the payment
to the Trustee of the accrued and unpaid fees in respect of its services equal
to the greater of (i) 0.0072% per annum of the Aggregate Collateral Balance and
(ii) U.S. $25,000 per annum, (c) third, to the payment of other accrued and
unpaid Company Administrative Expenses of the Trustee, the Paying Agent, the
Preferred Shares Paying Agent and the Calculation Agent and (d) fourth, to the
payment of any other accrued and unpaid Company Administrative Expenses, the
aggregate of all such amounts in clauses (c) and (d) above (including such
amounts paid since the previous Payment Date from the Expense Account) not to
exceed 0.05% per annum of the Aggregate Collateral Balance;


 


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(4)           to the
payment of the Senior Collateral Management Fee and any previously due but
unpaid Senior Collateral Management Fees;


 


(5)           pro rata
on the basis of amounts payable under each Hedge Agreement (if any), to the
payment of any amounts (including, without limitation, any Hedge Payment
Amounts) scheduled to be paid to each Hedge Counterparty, if any, pursuant to
any Hedge Agreement, along with any payments (however described) due and
payable by the Issuer under any Hedge Agreement in connection with a
termination (in whole or in part) of any Hedge Agreement (including any
interest that may accrue thereon), other than by reason of an Event of Default
(as defined in the related Hedge Agreement) or Termination Event (other than
Illegality or Tax Event) (each as defined in the related Hedge Agreement) in
each case, with respect to which the Hedge Counterparty is the Defaulting Party
or the sole Affected Party (as defined in the related Hedge Agreement);


 


(6)           to the payment of the Class A-1 Interest Distribution
Amount, plus, any Class A-1 Defaulted Interest Amount;


 


(7)           to the payment of the Class A-2 Interest Distribution
Amount, plus, any Class A-2 Defaulted Interest Amount;


 


(8)           to the
payment of the Class B Interest Distribution Amount, plus, any Class B
Defaulted Interest Amount;


 


(9)           as long as
any of the Class A Notes or the Class B Notes are
outstanding, to the payment of the following amounts:


 


(a)           in the
event that the Class A-1 Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon the Stated Maturity of the Class A-1 Notes, to the payment in full of
principal of the Class A-1 Notes;


 


(b)           in the
event that the Class A-2 Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class A-2 Notes, to the payment in full of
principal of, first, the Class A-1 Notes and second, the Class A-2 Notes;


 


(c)           in the
event that the Class B Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call Redemption,
an Optional Redemption, a Clean-up Call or a Tax Redemption or (z) upon Stated
Maturity of the Class B Notes, to the payment in full of principal of, first,
the Class A-1 Notes, second, the Class A-2 Notes and third, the Class B Notes;
or


 


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(d)           in the
event of a Mandatory Redemption of the Class A Notes and the Class B Notes,
first, to the payment of principal of the Class A-1 Notes, second, to the
payment of principal of the Class A-2 Notes and third, to the payment of
principal of the Class B Notes, to the extent necessary to cause each of the
Class A/B Coverage Tests to be satisfied (after giving effect to the payment of
all amounts previously paid on such Payment Date pursuant to this Section 11.1(a)(i)
and this Section 11.1(a)(ii);


 


(10)         to the
payment of the Class C Interest Distribution Amount, plus, any Class C
Defaulted Interest Amount;


 


(11)         to the
payment of the Class C Capitalized Interest (if any);


 


(12)         to the
payment of the Class D Interest Distribution Amount, plus, any Class D
Defaulted Interest Amount;


 


(13)         to the
payment of the Class D Capitalized Interest (if any);


 


(14)         to the
payment of the Class E Interest Distribution Amount, plus, any Class E
Defaulted Interest Amount;


 


(15)         to the
payment of the Class E Capitalized Interest (if any);


 


(16)         as long as
any of the Class C Notes, the Class D Notes or the Class E Notes are Outstanding,
to the payment of the following amounts:


 


(a)           in the
event that the Class C Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class C Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B
Notes and fourth, the Class C Notes;


 


(b)           in the
event that the Class D Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class D Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes and fifth, the Class D Notes;


 


(c)           in the
event that the Class E Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class E Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes and sixth, the Class
E Notes; or


 


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(d)           in the
event of a Mandatory Redemption of the Class C Notes, the Class D Notes and the
Class E Notes, first, to the payment of principal of the Class A-1 Notes,
second, to the payment of principal of the Class A-2 Notes, third, to the
payment of principal of the Class B Notes, fourth, to the payment of principal
of the Class C Notes, fifth, to the payment of principal of the Class D Notes
and sixth, to the payment of principal of the Class E Notes, to the extent
necessary to cause each of the Class C/D/E Coverage Tests to be satisfied
(after giving effect to the payment of all amounts previously paid on such
Payment Date pursuant to this Section 11.1(a)(i));


 


(17)         to the
payment of the Class F Interest Distribution Amount, plus, any Class F
Defaulted Interest Amount;


 


(18)         to the
payment of the Class F Capitalized Interest (if any);


 


(19)         to the
payment of the Class G Interest Distribution Amount, plus, any Class G
Defaulted Interest Amount;


 


(20)         to the
payment of the Class G Capitalized Interest (if any);


 


(21)         to the
payment of the Class H Interest Distribution Amount, plus, any Class H
Defaulted Interest Amount;


 


(22)         to the
payment of the Class H Capitalized Interest (if any);


 


(23)         as long as
any of the Class F Notes, Class G Notes or Class H Notes are Outstanding, to
the payment of the following amounts:


 


(a)           in the
event that the Class F Notes become due and payable (x) as a result of an acceleration
following an Event of Default, (y) pursuant to an Auction Call Redemption, an
Optional Redemption, a Clean-up Call or a Tax Redemption or (z) upon Stated
Maturity of the Class F Notes, to the payment in full of principal of first,
the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B Notes,
fourth, the Class C Notes, fifth, the Class D Notes, sixth, the Class E Notes
and seventh, the Class F Notes;


 


(b)           in the
event that the Class G Notes become due and payable (x) as a result of an acceleration
following an Event of Default, (y) pursuant to an Auction Call Redemption, an
Optional Redemption, a Clean-up Call or a Tax Redemption or (z) upon Stated
Maturity of the Class G Notes, to the payment in full of principal of first,
the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B Notes,
fourth, the Class C Notes, fifth, the Class D Notes, sixth, the Class E Notes,
seventh, the Class F Notes and eighth, the Class G Notes;


 


(c)           in the
event that the Class H Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class H Notes, to the payment in


 


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full of principal of first, the Class A-1 Notes,
second, the Class A-2 Notes, third, the Class B Notes, fourth, the Class C
Notes, fifth, the Class D Notes, sixth, the Class E Notes, seventh, the Class F
Notes, eighth, the Class G Notes and ninth, the Class H Notes; or


 


(d)           in the
event of a Mandatory Redemption of the Class F Notes, the Class G Notes and the
Class H Notes, first, to the payment of principal of the Class A-1 Notes,
second, to the payment of principal of the Class A-2 Notes, third, to the
payment of principal of the Class B Notes, fourth, to the payment of principal
of the Class C Notes, fifth, to the payment of principal of the Class D Notes,
sixth, to the payment of principal of the Class E Notes, seventh, to the
payment of principal of the Class F Notes, eighth, to the payment of principal
of the Class G Notes and ninth, to the payment of principal of the Class H
Notes, to the extent necessary to cause the Class F/G/H Coverage Tests to be
satisfied (after giving effect to the payment of all amounts previously paid on
such Payment Date pursuant to this Section 11.1(a)(i));


 


(24)         to the
payment of the Class J Interest Distribution Amount, plus, any Class J
Defaulted Interest Amount;


 


(25)         to the payment
of the Class J Capitalized Interest (if any);


 


(26)         as long as
any of the Class J Notes are Outstanding, in the event that the Class J Notes
become due and payable (x) as a result of an acceleration following an Event of
Default, (y) pursuant to an Auction Call Redemption, an Optional Redemption, a Clean-up
Call or a Tax Redemption or (z) upon Stated Maturity of the Class J Notes, to
the payment in full of principal of first, the Class A-1 Notes, second, the
Class A-2 Notes, third, the Class B Notes, fourth, the Class C Notes, fifth,
the Class D Notes, sixth, the Class E Notes, seventh, the Class F Notes,
eighth, the Class G Notes, ninth, the Class H Notes and tenth, the Class J
Notes;


 


(27)         to the
payment of the Class K Interest Distribution Amount, plus, any Class K
Defaulted Interest Amount;


 


(28)         to the
payment of the Class K Capitalized Interest (if any);


 


(29)         as long as
any of the Class K Notes are Outstanding, in the event that the Class K Notes
become due and payable (x) as a result of an acceleration following an Event of
Default, (y) pursuant to an Auction Call Redemption, an Optional Redemption, a Clean-up
Call or a Tax Redemption or (z) upon Stated Maturity of the Class K Notes, to
the payment in full of principal of first, the Class A-1 Notes, second, the
Class A-2 Notes, third, the Class B Notes, fourth, the Class C Notes, fifth,
the Class D Notes, sixth, the Class E Notes, seventh, the Class F Notes,
eighth, the Class G Notes, ninth, the Class H Notes, tenth, the Class J Notes
and eleventh, the Class K Notes;


 


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(30)         on the first
Payment Date following the occurrence of a Rating Confirmation Failure, to the
extent that application of any unused proceeds remaining on deposit on the
Unused Proceeds Account is insufficient to cause the ratings assigned to each
Class of Notes to be reinstated or any affected Class to be paid in full, to
the payment of principal of each Class of Notes, (i) first, to the Class A-1
Notes, (ii) second, to the Class A-2 Notes, (iii) third, to the Class B Notes,
(iv) fourth, to the Class C Notes, (v) fifth, to the Class D Notes, (vi) sixth,
to the Class E Notes, (vii) seventh, to the Class F Notes, (viii) eighth, to
the Class G Notes, (ix) ninth, to the Class H Notes, (x) tenth, to the Class J
Notes and (xi) eleventh, to the Class K Notes, in each case until the ratings
assigned on the Closing Date to each Class of Notes have been reinstated or
such Class has been paid in full;


 


(31)         to the payment of any Company Administrative Expenses not
paid pursuant to paragraph (3) above in the order specified therein;


 


(32)         to the
payment of the Subordinate Collateral Management Fee and any accrued and unpaid
Subordinate Collateral Management Fee;


 


(33)         pro rata on
the basis of amounts payable under each Hedge Agreement (if any), to the
payment of any amounts (including, without limitation, any Hedge Payment
Amounts) (including any interest accrued thereon), if any, payable by the
Issuer to the Hedge Counterparty under the related Hedge Agreement following an
Event of Default or Termination Event (other than Illegality or Tax Event)
(each as defined in the related Hedge Agreement) with respect to which the
Hedge Counterparty is the Defaulting Party or the sole Affected Party (as defined
in the related Hedge Agreement); and


 


(34)         any remaining Interest Proceeds to the Preferred Shares
Paying Agent for deposit into the Preferred Shares Distribution Account for
distribution subject to Section 11.1(g) to the holders of the Preferred
Shares as payments of the Preferred Shares Distribution Amount.


 


(ii)           Principal
Proceeds. On each Payment Date or Redemption Date, Principal Proceeds with
respect to the related Due Period shall be distributed in the following order
of priority:


 


(1)           to the payment
of the amounts referred to in paragraphs (1) through (8) of Section 11.1(a)(i)
in the same order of priority specified therein, but only to the extent not
paid in full thereunder;


 


(2)           to the extent that the amounts paid pursuant to paragraph
(9) of Section 11.1(a)(i) are insufficient to pay such amounts in full
thereunder and any Class A Notes or Class B Notes are outstanding, to the
payment of the following amounts:


 


(a)           in
the event that the Class A-1 Notes are outstanding and become due and payable
(x) as a result of an acceleration following an Event of


 


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Default, (y) pursuant to an Auction Call Redemption,
an Optional Redemption, a Clean-up Call or a Tax Redemption or (z) upon the
Stated Maturity of the Class A-1 Notes, to the payment in full of principal of
the Class A-1 Notes;


 


(b)           in the
event that the Class A-2 Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class A-2 Notes, to the payment in full of
principal of, first, the Class A-1 Notes and second, the Class A-2 Notes;


 


(c)           in the
event that the Class B Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class B Notes, to the payment in full of principal
of, first, the Class A-1 Notes, second, the Class A-2 Notes and third, the
Class B Notes; or


 


(d)           in the
event of a Mandatory Redemption of the Class A Notes and the Class B Notes,
first, to the payment of principal of the Class A-1 Notes, second, to the
payment of principal of the Class A-2 Notes and third, to the payment of
principal of the Class B Notes, to the extent necessary to cause each of the
Class A/B Coverage Tests to be satisfied (after giving effect to the payment of
all amounts previously paid on such Payment Date pursuant to Section
11.1(a)(i) and Section 11.1(a)(ii));


 


(3)           (a)           if
the Class A Notes and the Class B Notes are no longer Outstanding, to the
payment of first, the amounts referred to in paragraph (10) of Section
11.1(a)(i) and second, the amounts referred to in paragraph (11) of Section
11.1(a)(i), but only to the extent not paid in full thereunder;


 


(b)           if the
Class A Notes, the Class B Notes and the Class C Notes are no longer Outstanding,
to the payment of first, the amounts referred to in paragraph (12) of Section
11.1(a)(i) and second, the amounts referred to in paragraph (13) of Section
11.1(a)(i), but only to the extent not paid in full thereunder;


 


(c)           if the
Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes are
no longer outstanding, to the payment of first, the amounts referred to in
paragraph (14) of Section 11.1(a)(i) and
second, the amounts referred to in paragraph (15) of Section 11.1(a)(i),
but only to the extent not paid in full thereunder;


 


(4)           to the
extent that the amounts paid pursuant to paragraph (16) of Section
11.1(a)(i) are insufficient to pay such amounts in full thereunder and any
Class C Notes, Class D Notes or Class E Notes are outstanding, to the payment
of the following amounts:


 


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(a)           in the
event that the Class C Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class C Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B
Notes and fourth, the Class C Notes;


 


(b)           in the
event that the Class D Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class C Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes and fifth, the Class D Notes;


 


(c)           in the
event that the Class E Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class E Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes and sixth, the Class
E Notes; or


 


(d)           in the
event of a Mandatory Redemption of the Class C Notes, the Class D Notes and the
Class E Notes, first, to the payment of principal of the Class A-1 Notes,
second, to the payment of principal of the Class A-2 Notes, third, to the
payment of principal of the Class B Notes, fourth, to the payment of principal
of the Class C Notes, fifth, to the payment of principal of the Class D Notes
and sixth, to the payment of principal of the Class E Notes, to the extent
necessary to cause the Class C/D/E Coverage Tests to be satisfied (after giving
effect to the payment of all amounts previously paid on such Payment Date
pursuant to Section 11.1(a)(i) and Section 11.1(a)(ii));


 


(5)           (a)           if
the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes are no longer Outstanding, to the payment of first, the
amounts referred to in paragraph (17) of Section 11.1(a)(i)
and second, the amounts referred to in paragraph (18) of Section 11.1(a)(i),
but only to the extent not paid in full thereunder;


 


(b)           if the
Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes and the Class F Notes are no longer Outstanding, to the payment
of first, the amounts referred to in paragraph (19) of Section 11.1(a)(i) and second, the amounts referred to in paragraph
(20) of Section 11.1(a)(i), but only to the extent not paid in full
thereunder;


 


(c)           if the Class A Notes, the Class B Notes, the Class C Notes,
the Class D Notes, the Class E Notes, the Class F Notes and the Class G Notes
are no longer Outstanding, to the payment of first, the amounts referred to in


 


204





















 


paragraph (21) of Section 11.1(a)(i) and
second, the amounts referred to in paragraph (22) of Section 11.1(a)(i),
but only to the extent not paid in full thereunder;


 


(6)           to the
extent that the amounts paid pursuant to paragraph (23) of Section
11.1(a)(i) are insufficient to pay such amounts in full thereunder and any
Class F Notes, Class G Notes or Class H Notes are Outstanding, to the payment
of the following amounts:


 


(a)           in the event
that the Class F Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class F Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes, sixth, the Class E
Notes and seventh, the Class F Notes;


 


(b)           in the
event that the Class G Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class G Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes, sixth, the Class E
Notes, seventh, the Class F Notes and eighth, the Class G Notes;


 


(c)           in the
event that the Class H Notes become due and payable (x) as a result of an
acceleration following an Event of Default, (y) pursuant to an Auction Call
Redemption, an Optional Redemption, a Clean-up Call or a Tax Redemption or (z)
upon Stated Maturity of the Class H Notes, to the payment in full of principal
of first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class B
Notes, fourth, the Class C Notes, fifth, the Class D Notes, sixth, the Class E
Notes, seventh, the Class F Notes, eighth, the Class G Notes and ninth, the
Class H Notes; or


 


(d)           in the
event of a Mandatory Redemption of the Class F Notes, the Class G Notes and the
Class H Notes, first, to the payment of principal of the Class A-1 Notes,
second, to the payment of principal of the Class A-2 Notes, third, to the
payment of principal of the Class B Notes, fourth, to the payment of principal
of the Class C Notes, fifth, to the payment of principal of the Class D Notes,
sixth, to the payment of principal of the Class E Notes, seventh, to the
payment of principal of the Class F Notes, eighth, to the payment of principal
of the Class G Notes and ninth, to the payment of principal of the Class H
Notes, to the extent necessary to cause the Class F/G/H Coverage Tests to be
satisfied (after giving effect to the payment of all amounts previously paid on
such Payment Date pursuant to Section 11.1(a)(i) and Section
11.1(a)(ii);


 


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(7)           if the
Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes, the Class G Notes and Class H Notes are no
longer Outstanding, to the payment of first, the amounts referred to in
paragraph (24) of Section 11.1(a)(i), and second, the amounts referred
to in paragraph (25) of Section 11.1(a)(i), but only to the extent not
paid in full thereunder;


 


(8)           to the
extent that the amounts paid pursuant to paragraph (26) of Section
11.1(a)(i) are insufficient to pay such amounts in full thereunder and any
Class J Notes are outstanding, in the event that the Class J Notes become due
and payable (x) as a result of an acceleration following an Event of Default,
(y) pursuant to an Auction Call Redemption, an Optional Redemption, a Clean-up
Call or a Tax Redemption or (z) upon Stated Maturity of the Class J Notes, to
the payment in full of principal of first, the Class A-1 Notes, second, the
Class A-2 Notes, third, the Class B Notes, fourth, the Class C Notes, fifth,
the Class D Notes, sixth, the Class E Notes, seventh, the Class F Notes,
eighth, the Class G Notes, ninth, the Class H Notes and tenth, the Class J
Notes;


 


(9)           if the
Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes, the Class G Notes, the Class H Notes and the
Class J Notes are no longer Outstanding, to the payment of first, the amounts
referred to in paragraph (27) of Section 11.1(a)(ii), and second, the
amounts referred to in paragraph (28) of Section 11.1(a)(i), but only to
the extent not paid in full thereunder;


 


(10)         to the
extent that the amounts paid pursuant to paragraph (29) of Section
11.1(a)(i) are insufficient to pay such amounts in full thereunder and any
Class K Notes are Outstanding, in the event that the Class K Notes become due
and payable (x) as a result of an acceleration following an Event of Default,
(y) pursuant to an Auction Call Redemption, an Optional Redemption, a Clean-up
Call or a Tax Redemption or (z) upon Stated Maturity of the Class K Notes, to
the payment in full of principal of first, the Class A-1 Notes, second, the
Class A-2 Notes, third, the Class B Notes, fourth, the Class C Notes, fifth,
the Class D Notes, sixth, the Class E Notes, seventh, the Class F Notes,
eighth, the Class G Notes, ninth, the Class H Notes, tenth, the Class J Notes
and eleventh, the Class K Notes;


 


(11)         to the
extent that the amounts paid pursuant to paragraph (30) of Section
11.1(a)(i) are insufficient to pay such amounts in full thereunder and any
Notes are outstanding, on the first Payment Date following the occurrence of a
Rating Confirmation Failure, to the payment of principal of each Class of
Notes, (i) first, to the Class A-1 Notes, (ii) second, to the Class A-2 Notes,
(iii) third, to the Class B Notes, (iv) fourth, to the Class C Notes, (v)
fifth, the Class D Notes, (vi) sixth, the Class E Notes, (vii) seventh, the
Class F Notes, (viii) eighth, the Class G Notes, (ix) ninth, the Class H Notes,
(x) tenth, the Class J Notes and (x) eleventh, the Class K Notes, in each case
until the ratings assigned on the Closing


 


206





















 


Date to each Class
of Notes have been reinstated or such Class has been paid in full;


 


(12)         prior to the
last day of the Reinvestment Period, to the investment in Eligible Investments
and reinvestment in Substitute Collateral Debt Securities subject to the
Reinvestment Criteria or, if determined by the Collateral Manager, to pay any
Special Amortization Amount, to amortize the Class A-1 Notes, the Class A-2 Notes,
the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes and the
Class K Notes as follows: (x) if each of the S&P Special Amortization Pro
Rata Condition and the Moody’s Special Amortization Pro Rata Condition is
satisfied with respect to such Payment Date and each Coverage Test was
satisfied as of the related Determination Date, on a pro rata basis (based on
the Aggregate Outstanding Amount of each Class) among all Classes of Notes, or
(y) if either the S&P Special Amortization Pro Rata Condition or the Moody’s
Special Amortization Pro Rata Condition is not satisfied with respect to such
Payment Date or any of the Coverage Tests were not satisfied as of the related
Determination Date, sequentially among all Classes of Notes; provided, however, that
amounts representing recoveries in respect of Defaulted Securities will be
distributed sequentially in any event;


 


(13)         after the
Reinvestment Period (x) on each Payment Date that is not also a Redemption Date
or the Stated Maturity of the Notes and (y) in the absence of an acceleration
following an Event of Default, to the payment of principal of (i) first, the
Class A-1 Notes, until the Class A-1 Notes have been paid in full, (ii) second,
the Class A-2 Notes, until the Class A-2 Notes have been paid in full, (iii)
third, the Class B Notes, until the Class B Notes have been paid in full, (iv)
fourth, the Class C Notes, until the Class C Notes have been paid in full, (v)
fifth, the Class D Notes, until the Class D Notes have been paid in full, (vi)
sixth, the Class E Notes, until the Class E Notes have been paid in full, (vii)
seventh, the Class F Notes, until the Class F Notes have been paid in full,
(viii) eighth, the Class G Notes, until the Class G Notes have been paid in
full, (ix) ninth, the Class H Notes, until the Class H Notes have been paid in
full, (x) tenth, the Class J Notes, until the Class J Notes have been paid in
full and (xi) eleventh, the Class K Notes, until the Class K Notes have been
paid in full;


 


(14)         to the payment of amounts referred to in paragraph (31) of Section
11.1(a)(i) to the extent not paid thereunder;


 


(15)         to the payment of amounts referred to in paragraph (32) of Section
11.1(a)(i) to the extent not paid thereunder;


 


(16)         to the payment of amounts referred to in paragraph (33) of Section
11.1(a)(i) to the extent not paid thereunder; and


 


(17)         any remaining Principal Proceeds to the Preferred Shares
Paying Agent for deposit into the Preferred Shares Distribution Account for
distribution


 


207





















 


subject
to Section 11.1(g) to the holders of the Preferred Shares as payments of
the Preferred Shares Distribution Amount.


 


(b)      On or before
the Business Day prior to each Payment Date, the Issuer shall, pursuant to Section
10.2(e), remit or cause to be remitted to the Trustee for deposit in the
Payment Account an amount of Cash sufficient to pay the amounts described in Section
11.1(a) required to be paid on such Payment Date.


 


(c)      If on any
Payment Date the amount available in the Payment Account from amounts received
in the related Due Period is insufficient to make the full amount of the
disbursements required by the statements furnished by the Trustee pursuant to Section
10.9(e) hereof, the Trustee shall make the disbursements called for in the
order and according to the priority set forth under Section 11.1(a)
above, subject to Section 13.1 hereof, to the extent funds are available
therefor.


 


(d)      Except as
otherwise expressly provided in this Section 11.1, if on any Payment
Date the amount available in the Payment Account from amounts received in the
related Due Period are insufficient to make the full amount of the
disbursements required by any lettered subclause of Section 11.1(a)(i)
or Section 11.1(a)(ii), the Trustee shall make the disbursements called
for by such subclause ratably in accordance with the respective amounts of such
disbursements then due and payable to the extent funds are available therefor,
unless such subclause provides otherwise.


 


(e)      In connection
with the application of funds to pay Company Administrative Expenses of the
Issuer, in accordance with clauses (3) and (4) of clause (i) of Section
11.1(a) and sub-clause (1) of clause (ii) of Section 11.1(a), the
Trustee shall remit such funds, to the extent available, to the Issuer (or as
the Issuer may otherwise direct), as directed by the Issuer to the Trustee or
otherwise set forth in the written instructions delivered to the Trustee by the
Issuer (net of amounts payable to the Trustee) no later than the Business Day
prior to the applicable Payment Date. 
All such payments shall be made pursuant to the Priority of Payments.


 


(f)       In connection
with the payment to each Hedge Counterparty pursuant to each Hedge Agreement of
any amount scheduled to be paid from time to time between Payment Dates from
amounts received with respect to the Collateral Debt Securities, such amounts
shall be distributed to each Hedge Counterparty pursuant to the related Hedge
Agreement.


 


(g)      In connection
with any required payment by the Issuer to SLG Gramercy pursuant to the Asset
Servicing Agreement of any amount scheduled to be paid from time to time
between Payment Dates from amounts received with respect to the Collateral Debt
Securities, such amounts shall be distributed to SLG Gramercy pursuant to the
Asset Servicing Agreement.


 


Section 11.2           Trust
Accounts.


 


All Monies held by, or deposited with the Trustee in
the Collection Accounts, the Payment Account, the Expense Account, the Unused
Proceeds Account or the Delayed Funding


 


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Obligations Account pursuant to the provisions of this
Indenture, and not invested in Eligible Investments as herein provided, shall
be deposited in one or more trust accounts, maintained at the Corporate Trust
Office or at a financial institution whose long-term rating is at least equal
to, “A2” by Moody’s and “BBB+” by S&P to be held in trust for the benefit
of the Noteholders.  To the extent Monies
deposited in such trust account exceed amounts insured by the Bank Insurance
Fund or Savings Association Insurance Fund administered by the Federal Deposit
Insurance Corporation, or any agencies succeeding to the insurance functions
thereof, and are not fully collateralized by direct obligations of the United
States of America, such excess shall be invested in Eligible Investments as
directed by Issuer Order.


 


ARTICLE 12


 


SALE OF
COLLATERAL DEBT SECURITIES


 


Section 12.1           Sales
of Collateral Debt Securities.


 


(a)   Except as
otherwise expressly permitted or required by this Indenture, the Issuer shall
not sell or otherwise dispose of any Collateral Debt Security, provided that subject to satisfaction of any applicable
conditions in Section 10.10, so long as (A) no Event of Default has
occurred and is continuing and (B) on or prior to the trade date for such sale
the Collateral Manager has certified to the Trustee that each of the conditions
applicable to such sale set forth below has been satisfied, the Collateral
Manager on behalf of the Issuer acting pursuant to the Collateral Management
Agreement may direct the Trustee in writing to sell, and the Trustee shall sell
in the manner directed by the Collateral Manager in writing (which writing
shall specify whether such security is a Defaulted Security or Credit Risk
Security, if applicable, or whether such security is otherwise permitted to be
sold pursuant to this Section 12.1(a)):


 


(i)            any
Defaulted Security at any time;


 


(ii)           a Credit
Risk Security, (A) during the Reinvestment Period, if the Collateral Manager
has certified to the Trustee that it shall use commercially reasonable efforts
to purchase one or more Substitute Collateral Debt Securities having an
Aggregate Principal Balance no less than the Sale Proceeds (excluding accrued
interest) from such sale, and after giving effect to such sale and to the
purchase of Substitute Collateral Debt Securities with the Sale Proceeds
thereof, in the reasonable business judgment of the Collateral Manager (which
shall not be called into question solely as a result of subsequent events), the
Reinvestment Criteria shall be met and (B) after the Reinvestment Period, at
any time;


 


(iii)          if
a Collateral Debt Security that is a Defaulted Security is not sold by the
Issuer (at the direction of the Collateral Manager) within three (3) years of
such Collateral Debt Security becoming a Defaulted Security, the Collateral
Manager, on behalf of the Issuer, shall use its commercially reasonable efforts
to sell such Collateral Debt Security as soon as commercially practicable
thereafter; and


 


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(iv)          without
limiting the foregoing, (x) any Collateral Debt Security that is a CMBS
Security, a CRE CDO Security or a REIT Debt Security and in each case is not a
Defaulted Security or a Credit Risk Security, (y) any Participation relating to
a Whole Loan that is not a Defaulted Security or a Credit Risk Security and (z)
the Caribbean Corporate Center Loan if such Loan is not a Defaulted Security or
a Credit Risk Security, may be sold during the Reinvestment Period if (A) the
Aggregate Principal Balance of Collateral Debt Securities sold pursuant to this
paragraph for a given calendar year does not exceed 15% of the Aggregate
Collateral Balance at the beginning of that year, (B) the Collateral Manager
believes in good faith that proceeds from the sale of such Collateral Debt
Security can be reinvested, within five (5) Business Days after the trade date
on which such Collateral Debt Security is sold in one or more Substitute
Collateral Debt Securities having an Aggregate Principal Balance of not less than
100% of the Principal Balance of the Collateral Debt Security being sold, (C)
after giving effect to such sale and to the purchase of Substitute Collateral
Debt Securities with the Sale Proceeds thereof, the Reinvestment Criteria will
be met and (D) such Collateral Manager has not been removed, or voted to be
removed, for “cause” as described in Section 12 of the Collateral Management
Agreement.  For the purpose of effecting the
sale of any Participation described in clause (y) above, the Collateral Manager
may, on behalf of the Issuer, effect the sale of a Whole Loan to an Affiliate
of the Collateral Manager that is either a “special purpose vehicle” or “qualified
institutional lender” as typically defined in the Underlying Instruments
related to Participations, which Affiliate shall, within one (1) Business Day
(i) create two or more Participations in such Whole Loan and (ii) sell
back to the Issuer at least one of such Participations; provided
that a securitization trust, a CDO issuer or a similar securitization vehicle
shall be deemed to be a “special purpose vehicle” for purposes hereof.  For purposes of measuring compliance with the
requirements set forth in clauses (A), (B) and (C) above, the Issuer shall
be deemed to have sold a Participation with a Principal Balance equal to the
Principal Balance of the Whole Loan that was sold to an Affiliate less the
Principal Balance of the related Participation(s) purchased by the Issuer from
such Affiliate.


 


(b)  Notwithstanding the
foregoing, the Collateral Manager (at its option and at any time) shall be
permitted to effect a sale of a Credit Risk Security or a Defaulted Security
hereunder by purchasing (or causing its Affiliate to purchase) such Defaulted
Security or Credit Risk Security from the Issuer for a cash purchase price that
shall be equal to the sum of (i) the Aggregate Principal Balance thereof plus
(ii) all accrued and unpaid interest (or, in the case of a Preferred Equity
Security, all accrued and unpaid dividends or other distributions not attributable
to the return of capital by its governing documents) thereon.  Notwithstanding anything to the contrary set
forth herein, no Advisory Committee consent shall be required in connection
with such cash purchase (the “Credit Risk/Defaulted Security Cash Purchase”).


 


In addition and notwithstanding anything to the
contrary set forth herein (and provided that
no Event of Default has occurred and is continuing), the Collateral Manager (at
its option but only upon disclosure to, and with the prior consent of, the
Advisory Committee) shall be permitted to effect a sale of a Defaulted Security
or a Credit Risk Security hereunder by directing the Issuer to exchange such
Defaulted Security or Credit Risk Security for (i) a Substitute Collateral Debt
Security (that is not a Defaulted Security or a Credit Risk Security)


 


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owned by an Affiliate of the Collateral Manager (such
Substitute Collateral Debt Security, the “Exchange Security”) or (ii) a
combination of an Exchange Security and cash, provided
that:


 


(i)            (A) the
sum of (1) the Principal Balance of such Exchange Security plus (2) all accrued
and unpaid interest (or, in the case of a Preferred Equity Security, all
accrued and unpaid dividends or other distributions not attributable to the
return of capital by its governing documents) thereon plus (3) the cash amount
(if any) to be paid to the Issuer in respect of such exchange by such Affiliate
of the Collateral Manager, shall be equal to or greater than (B) the sum of (1)
the Principal Balance of such Defaulted Security or Credit Risk Security sought
to be substituted plus (2) all accrued and unpaid interest (or, in the case of
a Preferred Equity Security, all accrued and unpaid dividends or other
distributions not attributable to the return of capital by its governing
documents) thereon;


 


(ii)           the
Eligibility Criteria and the Reinvestment Criteria shall be satisfied
immediately after such exchange; and


 


(iii)          the
Aggregate Principal Balance of the Defaulted Securities and Credit Risk
Securities so exchanged shall not exceed 10% of the Aggregate Collateral
Balance as of the Closing (such limitation, the “10% Limit”).


 


(c)      Notwithstanding
anything contained herein to the contrary, the Collateral Manager, on behalf of
the Issuer, shall (at any time) be permitted to effect a sale of (i) any
Origination Agreement Security hereunder by selling (or causing the Trustee to
sell) such Origination Agreement Security to SLG (an “Origination Agreement
Security Sale”) for a purchase price and upon such terms as determined in
accordance with the Origination Agreement and (ii) the Starrett Lehigh Loan, to
the extent such Loan is called pursuant to its terms on August 13, 2005.  Notwithstanding anything to the contrary set
forth herein, no Advisory Committee consent shall be required in connection
with any such sales.


 


(d)      After the
Issuer has notified the Trustee of an Optional Redemption, a Clean-Up Call or a
Tax Redemption in accordance with Section 9.1 or an Auction Call Redemption
in accordance with Section 9.2, the Collateral Manager on behalf of the
Issuer acting pursuant to the Collateral Management Agreement may at any time
direct the Trustee in writing to sell, and the Trustee shall sell in the manner
directed by the Collateral Manager in writing, any Collateral Debt Security
without regard to the foregoing limitations in Section 12.1(a), provided that:


 


(i)            the Sale
Proceeds therefrom must be used to pay certain expenses and redeem all of the
Notes in whole but not in part pursuant to Sections 9.1 and Section
9.2, and upon any such sale the Trustee shall release such Collateral Debt
Security pursuant to Section 10.10;


 


(ii)           the Issuer
may not direct the Trustee to sell (and the Trustee shall not be required to
release) a Collateral Debt Security pursuant to this Section 12.1(d)
unless:


 


(1)           the
Collateral Manager certifies to the Trustee that (x) in the Collateral Manager’s
judgment based on calculations included in the certification


 


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(which shall
include the sales prices of each of the Collateral Debt Securities), the Sale
Proceeds from the sale of one or more of the Collateral Debt Securities and all
Cash and proceeds from Eligible Investments will be at least equal to the Total
Redemption Price, and (y) an Independent bond pricing service (which shall be
one or more broker-dealers selected by the Collateral Manager which are rated
at least “P-1” by Moody’s and at least “A-1+” by Standard & Poor’s and
which make a market in the applicable Collateral Debt Securities) has confirmed
(which confirmation may be in the form of a firm bid) the sales prices
contained in the certification in clause (x) above (and attaching a copy of
such confirmation); and


 


(2)           the
Independent accountants appointed by the Issuer pursuant to Section 10.11
shall confirm in writing the calculations made in clause (1)(x) above.


 


(iii)          in
connection with an Optional Redemption, an Auction Call Redemption, a Clean-up
Call or a Tax Redemption, all the Collateral Debt Securities to be sold
pursuant to this Section 12.1(d) must be sold in accordance with the
requirements set forth in Section 9.1(e) and Section 9.2, as
applicable.


 


(e)      In the event
that any Collateral Debt Security becomes the subject of a conversion,
exchange, redemption or offer, whether voluntary or involuntary, the Issuer (or
the Collateral Manager acting on behalf of the Issuer) shall take no action to
acquire the asset or instrument into which such Collateral Debt Security is
convertible or exchangeable unless such asset or instrument would qualify as a
Substitute Collateral Debt Security.  In
the event of an involuntary exchange or conversion of a Collateral Debt
Security, if the resulting asset or instrument would not qualify as a Substitute
Collateral Debt Security, the Issuer (or the Collateral Manager acting on
behalf of the Issuer) shall use its best efforts to sell such Collateral Debt
Security prior to conversion or exchange and, in any event, shall refuse to
accept, and shall not acquire or hold, the asset or instrument offered in
exchange.


 


(f)       In the event
that any Notes remain Outstanding as of the Payment Date occurring six months
prior to the Stated Maturity of the Notes, the Collateral Manager will be
required to determine whether proceeds expected to be received on the Assets prior
to the Stated Maturity of the Notes will be sufficient to pay in full the
principal amount of (and accrued interest on) the Notes on the Stated
Maturity.  If the Collateral Manager
determines, in its sole discretion, that such proceeds will not be sufficient
to pay the outstanding principal amount of and accrued interest on the Notes (a
“Note Liquidation Event”)
on the Stated Maturity of the Notes, the Issuer will, at the direction of the
Collateral Manager, be obligated to liquidate the portion of Collateral Debt
Securities sufficient to pay the remaining principal amount of and interest on
the Notes on or before the Stated Maturity. 
The Collateral Debt Securities to be liquidated by the Issuer will be
selected by the Collateral Manager.


 


Section 12.2           Reinvestment
Criteria and Trading Restrictions.


 


(a)      Except as
provided in Section 12.3(c), during the Reinvestment Period, Unscheduled
Principal Payments, Sale Proceeds and other Principal Proceeds will be
reinvested in Substitute Collateral Debt Securities (which shall be, and hereby
are, Granted to


 


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the Trustee
pursuant to the Granting Clause of this Agreement) only if after giving effect
to such reinvestment, the following criteria (the “Reinvestment Criteria”) are satisfied, as
evidenced by an Officer’s Certificate of the Issuer or the Collateral Manager
delivered to the Trustee, as of the date of the commitment to purchase such
Substitute Collateral Debt Securities:


 


(i)            the
Collateral Quality Tests are satisfied, or, if any Collateral Quality Test was
not satisfied immediately prior to such reinvestment, the extent of compliance
with such Collateral Quality Test will be maintained or improved following such
reinvestment, except as otherwise specified in the Reinvestment Criteria below;


 


(ii)           the
Coverage Tests are satisfied (or, if not satisfied, are maintained or
improved);


 


(iii)          if
immediately prior to such investment the S&P CDO Monitor Test or the
S&P Recovery Test was not satisfied, such test result is maintained or
improved after giving effect to such reinvestment; provided,
however, that notwithstanding the
foregoing, Sale Proceeds of Collateral Debt Securities may be reinvested as
long as the Collateral Manager provides written notice of each such sale and
reinvestment to S&P within three (3) Business Days after such reinvestment;
and


 


(iv)          no Event of
Default has occurred and is continuing.


 


(b)      Notwithstanding
the foregoing provisions, (i) Cash on deposit in the Collection Accounts may be
invested in Eligible Investments, pending investment in Substitute Collateral
Debt Securities and (ii) if an Event of Default shall have occurred and be
continuing, no Substitute Collateral Debt Security may be acquired unless it
was the subject of a commitment entered into by the Issuer prior to the
occurrence of such Event of Default.


 


Section 12.3           Conditions
Applicable to all Transactions Involving Sale or Grant.


 


(a)      Any transaction
effected after the Closing Date under this Article 12 or Section
10.10 shall be conducted in accordance with the requirements of the
Collateral Management Agreement, provided that,
(1) the Collateral Manager shall not direct the Trustee to acquire any
Substitute Collateral Debt Security for inclusion in the Assets from the
Collateral Manager or any of its Affiliates as principal or to sell any
Collateral Debt Security from the Assets to the Collateral Manager or any of
its Affiliates as principal unless the transaction is effected in accordance
with the Collateral Management Agreement and (2) the Collateral Manager shall
not direct the Trustee to acquire any Substitute Collateral Debt Security for
inclusion in the Assets from any account or portfolio for which the Collateral
Manager serves as investment adviser or direct the Trustee to sell any
Collateral Debt Security to any account or portfolio for which the Collateral
Manager serves as investment adviser unless such transactions comply with the
requirements of any applicable laws.  The
Trustee shall have no responsibility to oversee compliance with this clause by
the other parties.


 


(b)      Upon any Grant
pursuant to this Article 12, all of the Issuer’s right, title and
interest to the Pledged Obligation or Securities shall be Granted to the
Trustee pursuant to this Indenture, such Pledged Obligation or Securities shall
be registered in the name of the


 


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Trustee, and, if
applicable, the Trustee shall receive such Pledged Collateral Debt Security or
Securities.  The Trustee shall also
receive, not later than the date of delivery of any Collateral Debt Security
delivered after the Closing Date, an Officer’s Certificate of the Collateral
Manager certifying that, as of the date of such Grant, such Grant complies with
the applicable conditions of and is permitted by this Article 12 (and
setting forth, to the extent appropriate, calculations in reasonable detail
necessary to determine such compliance).


 


(c)      Notwithstanding
anything contained in this Article 12 to the contrary, the Issuer shall,
subject to this Section 12.3(c), have the right to effect any
transaction which has been consented to (i) by the Holders of Notes evidencing
100% of the Aggregate Outstanding Amount of each and every Class of Notes (or
if there are no Notes Outstanding, 100% of the Preferred Shares) and (ii) each
Hedge Counterparty, and of which each Rating Agency has been notified.


 


Section 12.4           Sale
of Collateral Debt Securities with respect to an Auction Call Redemption.


 


(a)      Pre-Auction
Process.


 


(i)            Each
Auction will occur on the Business Day that is at least 13 Business Days prior
to the proposed Auction Call Redemption Date (such date, the “Auction Date”).


 


(ii)           The
Collateral Manager will initiate the Auction Procedures at least 24 Business
Days before the proposed Auction Call Redemption Date by: (a) preparing a list
of Collateral Debt Securities (including CUSIP Number, if any, par amount and
issuer name for each Collateral Debt Security); (b) deriving a list of not less
than three qualified bidders (the “Listed Bidders”) and requesting from each Listed
Bidder bids by the applicable Auction Date; and (c) notifying the Trustee of
the list of Listed Bidders (the “List”).


 


(iii)          The
Collateral Manager will deliver a general solicitation package to the Listed
Bidders consisting of: (a) a form of a purchase agreement (“Auction Purchase Agreement”)
provided to the Trustee by the Collateral Manager (which shall provide that (I)
upon satisfaction of all conditions precedent therein, the purchaser is
irrevocably obligated to purchase, and the Issuer is irrevocably obligated to
sell, the Collateral Debt Securities on the date and on the terms stated
therein, (II) each bidder may tender a separate bid for one or more Collateral
Debt Securities in an Auction, (III) if the Collateral Debt Securities are to
be sold to different bidders, that the consummation of the purchase of all
Collateral Debt Securities must occur simultaneously and that the closing of
each purchase is conditional on the closing of the other purchases, (IV) if for
any reason whatsoever the Trustee has not received, by a specified Business Day
(which shall be more than ten Business Days before the proposed Auction Call
Redemption Date), payment in full in immediately available funds of the
purchase price for all Collateral Debt Securities, the obligations of the
parties shall terminate and the Issuer shall have no obligation or liability
whatsoever and (V) any prospective purchasers will be subject to the “limited
recourse” and “non-petition” provisions set forth in this


 


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Indenture), (b)
the minimum aggregate Cash purchase price (which shall be determined by the
Collateral Manager as the Total Redemption Price less the balance of all
Eligible Investments and Cash in the Collection Accounts, the Payment Account,
the Delayed Funding Obligations Account, each Hedge Termination Account and the
Expense Account; (c) the list of Collateral Debt Securities; (d) a formal bid
sheet (which will permit a bidder to bid for all of the Collateral Debt
Securities or separately for any one or more (but not all) Collateral Debt
Securities and will include a representation from the bidder that it is
eligible to purchase all of the Collateral Debt Securities or any one or more
(but not all) Collateral Debt Securities) to be provided to the Trustee by the
Collateral Manager; (e) a detailed timetable; and (f) copies of all transfer
documents provided to the Trustee by the Collateral Manager (including transfer
certificates and subscription agreements which a bidder must execute pursuant
to the underlying instruments and a list of the requirements which the bidder
must satisfy under the underlying instruments (i.e., QIB status, Qualified
Purchaser status, etc.)).


 


(iv)          The
Collateral Manager will send solicitation packages to all Listed Bidders on the
List at least 20 Business Days before the proposed Auction Call Redemption
Date. The Listed Bidders will be required to submit any due diligence questions
(or comments on the draft purchase agreement) in writing to the Collateral
Manager by a date specified in the solicitation package. The Collateral Manager
will be required to answer all reasonable and relevant questions by the date
specified in the solicitation package and the Collateral Manager will
distribute the questions and answers and the revised final Auction Purchase
Agreement to all Listed Bidders (with a copy to the Issuer and the Trustee).


 


(b)      Auction
Process.


 


(i)            Wells
Fargo Bank, National Association or its Affiliates may, but shall not be
required to, bid at the Auction.  The
Collateral Manager and its Affiliates may bid in the Auction if the Collateral
Manager deems such bidding to be appropriate but is not required to do so.


 


(ii)           On the
Second Business Day prior to the Auction Date (the “Auction Bid Date”), all bids will be due by
facsimile at the offices of the Trustee by 11:00 a.m. New York City time, with
the winning bidder or bidders to be notified by 2:00 p.m. New York City
time.  All bids from Listed Bidders on
the List will be due on the bid sheet contained in the solicitation package.
Each bid shall be for the purchase and delivery to one purchaser (i) of all
(but not less than all) of the Collateral Debt Securities or (ii) of one or
more (but not all) of the Collateral Debt Securities.


 


(iii)          Unless
the Trustee receives (A) at least one bid from a Listed Bidder to purchase all
of the Collateral Debt Securities or (B) receives bids from one or more Listed
Bidders (to purchase one or more (but not all) Collateral Debt Securities) for
all Collateral Debt Securities in the aggregate, the Trustee will decline to
consummate the sale.


 


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(iv)          Subject to
clause (iii) above, with the advice of the Collateral Manager, the Trustee
shall select the bid or bids which result in the Highest Auction Price from one
or more Listed Bidders (in excess of the specified minimum purchase price). “Highest
Auction Price” means the higher of (i) the highest price bid by any Listed
Bidder for all of the Collateral Debt Securities or (ii) the sum of the highest
prices bid by one or more Listed Bidders (for one or more (but not all)
Collateral Debt Securities) for all Collateral Debt Securities in the
aggregate. In each case, the price bid by a Listed Bidder will be the dollar
amount which the Collateral Manager certifies to the Trustee based on the
Collateral Manager’s review of the bids, which certification shall be binding
and conclusive.


 


(v)           Upon
notification to the winning bidder or bidders, the winning bidder (or, if the
Highest Auction Price requires the sale of the Collateral Debt Securities to
more than one bidder, each winning bidder) will be required to deliver to the
Trustee a signed counterpart of the Auction Purchase Agreement no later than
4:00 p.m. New York City time on the Auction Date. The winning bidder (or, if
the Highest Auction Price requires the sale of the Collateral Debt Securities
to more than one bidder, each winning bidder) will make payment in full of the
purchase price on the Business Day (the “Auction Purchase Closing Date”) specified in the
general solicitation package (which will be no later than ten Business Days
prior to the proposed Auction Call Redemption Date). If a winning bidder so
requests, the Trustee and the Issuer will enter into a bailee letter in the
form agreed upon by the Trustee and the Collateral Manager to this Indenture (a
“Bailee Letter”)
with each winning bidder and its designated bank (which bank will be subject to
approval by the Issuer or the Collateral Manager on behalf of the Issuer), provided that such bank enters into an account control
agreement with the Trustee and the Issuer and has a long term debt rating of at
least “BBB+” by Standard & Poor’s and (if rated by Fitch) at least “BBB+”
by Fitch and (if rated by Moody’s) at least “A2” by Moody’s. If the above
requirements are satisfied, the Trustee will deliver the Collateral Debt
Securities (to be sold to such bidder) pursuant thereto to the bailee bank at
least one Business Day prior to the closing on the sale of the Collateral Debt
Securities and accept payment of the purchase price pursuant thereto. If
payment in full of the purchase price is not made by the Auction Purchase
Closing Date for any reason whatsoever (or, if the Collateral Debt Securities
are to be sold to more than one bidder, if any bidder fails to make payment in
full of the purchase price by the Auction Purchase Closing Date for any reason
whatsoever), the Issuer will decline to consummate the sale of all Collateral
Debt Securities, the Trustee and the Issuer will direct the bailee bank to
return the Collateral Debt Securities to the Trustee, and (if notice of
redemption has been given by the Trustee) the Trustee will give notice (in
accordance with the terms of this Indenture) that the Auction Call Redemption
will not occur.


 


(vi)          Notwithstanding
the foregoing, but subject to the satisfaction of the conditions set forth in Section
9.2(b), the Collateral Manager or any of its Affiliates, although it may
not have been the highest bidder, will have the option to purchase any one or
more Collateral Debt Securities for a purchase price equal to the highest bid
therefor.


 


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(c)      Notwithstanding
anything to the contrary set forth in this Section 12.4, but subject to
the satisfaction of the conditions set forth in Section 9.2(b) and the
consummation of the Auction Call Redemption, at the election of the Collateral
Manager, in lieu of initiating or conducting any Auction, the Collateral
Manager or any of its Affiliates will have the option to purchase all of the
Collateral Debt Securities that would otherwise be subject to such Auction for
a price equal to the Total Redemption Price. 
Such purchase of Collateral Debt Securities by the Collateral Manager or
its Affiliates pursuant to this Section 12.4(c) will be deemed to be a
Successful Auction pursuant to this Indenture.


 


Section 12.5           Modifications
to Collateral Quality Tests or Coverage Tests.


 


In the event any of the Rating Agencies modifies the
definitions or calculations relating to (i) the method of calculating any of
its respective Collateral Quality Tests (a “Collateral Quality Test
Modification”) or (ii) any of the Coverage Tests (a “Coverage Test Modification”),
in either case in order to correspond with published changes in the guidelines,
methodology or standards established by such Rating Agency, the Issuer may, but
is under no obligation solely as a result of this Section 12.5 to, incorporate
corresponding changes into the Indenture by an amendment hereto without the
consent of the Holders of the Notes (but with written notice to the
Noteholders) or the Preferred Shares if (x)(1) in the case of a Collateral
Quality Test Modification, the Rating Agency Condition is satisfied with
respect to the Rating Agency that made such modification or (2) in the case of
a Coverage Test Modification, the Rating Agency Condition is satisfied with
respect to each Rating Agency then rating the Notes and (y) written notice of
such modification is delivered by the Collateral Manager to the Trustee and to
the Holders of the Notes and Preferred Shares (which notice may be included in
the next regularly scheduled report to Noteholders).  Any such Collateral Quality Test Modification
or Coverage Test Modification, as the case may be, shall be effected without
execution of a supplemental indenture; provided, however, that such amendment shall be (i) evidenced by a
written instrument executed and delivered by each of the Co-Issuers and the
Collateral Manager and delivered to the Trustee, (ii) accompanied by delivery
by the Issuer to the Trustee of (A) an Officer’s Certificate of the Issuer
certifying that such amendment has been made pursuant to and in compliance with
this Section 12.5 and (B) if requested by the Trustee, an Opinion of
Counsel stating that such amendment is authorized or permitted by this Section
12.5 and that all applicable conditions precedent under this Section 12.5
have been satisfied, on which such Officer’s Certificate or such Officer’s
Certificate and Opinion of Counsel, as the case may be, the Trustee shall be
entitled to rely.  Notwithstanding the
foregoing, any such amendment reasonably determined by the Trustee to be unduly
burdensome to the Trustee, shall not take effect without the Trustee’s express
written consent.


 


ARTICLE 13


 


NOTEHOLDERS’ RELATIONS


 


Section 13.1           Subordination.


 


(a)      Anything in
this Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes, the


 


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Class J Notes and
the Class K Notes agree for the benefit of the Holders of the Class A-1 Notes
and each Hedge Counterparty that the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes, the Class J Notes and the Class K Notes, and
the Issuer’s rights in and to the Assets (the “Class A-2 Subordinate
Interests”) shall be subordinate and junior to the Class A-1 Notes to the
extent and in the manner set forth in this Indenture including as set forth in Section
11.1(a) and hereinafter provided.  If
any Event of Default has not been cured or waived and acceleration occurs in
accordance with Article 5, including as a result of an Event of Default
specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes shall
be paid in full before any further payment or distribution is made on account
of the Class A-2 Subordinate Interests. 
The Holders of the Class A-2 Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes, the Class H Notes, the Class J Notes and the Class K Notes agree, for
the benefit of the Holders of the Class A-1 Notes and each Hedge Counterparty,
not to cause the filing of a petition in bankruptcy against the Issuer for
failure to pay to them amounts due under the Class A-2 Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes and the Class K
Notes hereunder until the payment in full of the Class A-1 Notes and not before
one year and one day, or, if longer, the applicable preference period then in
effect, has elapsed since such payment.


 


(b)      Anything in
this Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes, the Class J
Notes and the Class K Notes agree for the benefit of the Holders of the Class
A-1 Notes and the Class A-2 Notes and each Hedge Counterparty that the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes and the Class K
Notes and the Issuer’s rights in and to the Assets (the “Class B Subordinate Interests”)
shall be subordinate and junior to the Class A-1 Notes and the Class A-2 Notes
to the extent and in the manner set forth in this Indenture including as set
forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured or
waived and acceleration occurs in accordance with Article 5, including
as a result of an Event of Default specified in Section 5.1(f) or 5.1(g),
the Class A-1 Notes and the Class A-2 Notes shall be paid in full before any
further payment or distribution is made on account of the Class B Subordinate
Interests.  The Holders of the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes and the Class K
Notes agree, for the benefit of the Holders of the Class A-1 Notes and the
Class A-2 Notes and each Hedge Counterparty, not to cause the filing of a
petition in bankruptcy against the Issuer for failure to pay to them amounts
due under the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes, the Class J
Notes and the Class K Notes hereunder until the payment in full of the Class
A-1 Notes and the Class A-2 Notes and not before one year and one day, or, if
longer, the applicable preference period then in effect, has elapsed since such
payment.


 


(c)      Anything in
this Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes and the Class K
Notes agree for the benefit of the Holders of the Class A-1 Notes, the Class
A-2 Notes, the Class B


 


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Notes and each
Hedge Counterparty that the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes, the Class J
Notes and the Class K Notes and the Issuer’s rights in and to the Assets (the “Class C Subordinate Interests”)
shall be subordinate and junior to the Class A-1 Notes, the Class A-2 Notes and
the Class B Notes to the extent and in the manner set forth in this Indenture
including as set forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured or
waived and acceleration occurs in accordance with Article 5, including
as a result of an Event of Default specified in Section 5.1(f) or 5.1(g),
the Class A-1 Notes, the Class A-2 Notes and the Class B Notes shall be paid in
full before any further payment or distribution is made on account of the Class
C Subordinate Interests.  The Holders of
the Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes, the Class J Notes and the Class K Notes
agree, for the benefit of the Holders of the Class A-1 Notes, the Class A-2
Notes and the Class B Notes and each Hedge Counterparty, not to cause the
filing of a petition in bankruptcy against the Issuer for failure to pay to
them amounts due under the Class C Notes, the Class D Notes, the Class E Notes,
the Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes and
the Class K Notes hereunder until the payment in full of the Class A-1 Notes,
the Class A-2 Notes and the Class B Notes and not before one year and one day,
or, if longer, the applicable preference period then in effect, has elapsed
since such payment.


 


(d)      Anything in
this Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes, the Class H Notes, the Class J Notes and the Class K Notes agree for the
benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class B
Notes, the Class C Notes and each Hedge Counterparty that the Class D Notes,
the Class E Notes, the Class F Notes, the Class G Notes, the Class H Notes, the
Class J Notes and the Class K Notes and the Issuer’s rights in and to the
Assets (the “Class D Subordinate
Interests”) shall be subordinate and junior to the Class A-1
Notes, the Class A-2 Notes, the Class B Notes and the Class C Notes to the
extent and in the manner set forth in this Indenture including as set forth in Section
11.1(a) and hereinafter provided.  If
any Event of Default has not been cured or waived and acceleration occurs in
accordance with Article 5, including as a result of an Event of Default
specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes and the Class C Notes shall be paid in full
before any further payment or distribution is made on account of the Class D
Subordinate Interests.  The Holders of
the Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the
Class H Notes, the Class J Notes and the Class K Notes agree, for the benefit
of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes,
and the Class C Notes and each Hedge Counterparty, not to cause the filing of a
petition in bankruptcy against the Issuer for failure to pay to them amounts
due under the Class D Notes, the Class E Notes, the Class F Notes, the Class G
Notes, the Class H Notes, the Class J Notes and the Class K Notes hereunder
until the payment in full of the Class A-1 Notes, the Class A-2 Notes, the
Class B Notes and the Class C Notes and not before one year and one day, or, if
longer, the applicable preference period then in effect, has elapsed since such
payment.


 


(e)      Anything in
this Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes, the Class J Notes and the Class K Notes agree for the benefit of the
Holders of


 


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the Class A-1
Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes and the Class
D Notes and each Hedge Counterparty that the Class E Notes, the Class F Notes,
the Class G Notes, the Class H Notes, the Class J Notes, the Class K Notes and
the Issuer’s rights in and to the Assets (the “Class E Subordinate Interests”)
shall be subordinate and junior to the Class A-1 Notes, the Class A-2 Notes,
the Class C Notes and the Class D Notes to the extent and in the manner set
forth in this Indenture including as set forth in Section 11.1(a) and
hereinafter provided.  If any Event of
Default has not been cured or waived and acceleration occurs in accordance with
Article 5, including as a result of an Event of Default specified in Section
5.1(f) or 5.1(g), the Class A-1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, and the Class D Notes shall be paid in full
before any further payment or distribution is made on account of the Class E
Subordinate Interests.  The Holders of
the Class E Notes, the Class F Notes, the Class G Notes, the Class H Notes, the
Class J Notes and the Class K Notes agree, for the benefit of the Holders of
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes
and the Class D Notes and each Hedge Counterparty, not to cause the filing of a
petition in bankruptcy against the Issuer for failure to pay to them amounts
due under the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes, the Class J Notes and the Class K Notes hereunder until the payment in
full of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class
C Notes and the Class D Notes and not before one year and one day, or, if
longer, the applicable preference period in effect, has elapsed since such payment.


 


(f)       Anything in
this Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class F Notes, the Class G Notes, the Class H Notes, the Class J
Notes and the Class K Notes agree for the benefit of the Holders of the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes and each Hedge Counterparty that the Class F Notes,
the Class G Notes, the Class H Notes, the Class J Notes and the Class K Notes
and the Issuer’s rights in and to the Assets (the “Class F Subordinate
Interests”) shall be subordinate and junior to the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes to the extent and in the manner set forth in this Indenture
including as set forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured or
waived and acceleration occurs in accordance with Article 5, including
as a result of an Event of Default specified in Section 5.1(f) or 5.1(g),
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes,
the Class D Notes and the Class E Notes shall be paid in full before any
further payment or distribution is made on account of the Class F Subordinate
Interests.  The Holders of the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes and the Class K
Notes agree, for the benefit of the Holders of the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes and each Hedge Counterparty, not to cause the filing of a petition in
bankruptcy against the Issuer for failure to pay to them amounts due under the
Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes and the
Class K Notes hereunder until the payment in full of the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes and not before one year and one day, or, if longer, the
applicable preference period then in effect, has elapsed since such payment.


 


(g)      Anything in
this Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class G Notes, the Class H Notes, the Class J Notes and the


 


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Class K Notes
agree for the benefit of the Holders of the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes and each Hedge Counterparty that the Class G Notes,
the Class H Notes, the Class J Notes and the Class K Notes and the Issuer’s
rights in and to the Assets (the “Class G Subordinate Interests”) shall
be subordinate and junior to the Class A-1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes and the
Class F Notes to the extent and in the manner set forth in this Indenture
including as set forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured or
waived and acceleration occurs in accordance with Article 5, including
as a result of an Event of Default specified in Section 5.1(f) or 5.1(g),
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes,
the Class D Notes, the Class E Notes and the Class F Notes shall be paid in
full before any further payment or distribution is made on account of the Class
G Subordinate Interests.  The Holders of
the Class G Notes, the Class H Notes, the Class J Notes and the Class K Notes
agree, for the benefit of the Holders of the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes and the Class F Notes and each Hedge Counterparty, not to cause the
filing of a petition in bankruptcy against the Issuer for failure to pay to
them amounts due under the Class G Notes, the Class H Notes, the Class J Notes
and the Class K Notes hereunder until the payment in full of the Class A-1
Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes,
the Class E Notes and the Class F Notes and not before one year and one day,
or, if longer, the applicable preference period then in effect, has elapsed
since such payment.


 


(h)      Anything in
this Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class H Notes, the Class J Notes and the Class K Notes agree for
the benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class
F Notes, the Class G Notes and each Hedge Counterparty that the Class H Notes,
the Class J Notes and the Class K Notes and the Issuer’s rights in and to the
Assets (the “Class H Subordinate Interests”) shall be subordinate and
junior to the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes and the
Class G Notes to the extent and in the manner set forth in this Indenture
including as set forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured or
waived and acceleration occurs in accordance with Article 5, including
as a result of an Event of Default specified in Section 5.1(f) or 5.1(g),
the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes,
the Class D Notes, the Class E Notes, the Class F Notes and the Class G Notes
shall be paid in full before any further payment or distribution is made on
account of the Class H Subordinate Interests. 
The Holders of the Class H Notes, the Class J Notes and the Class K
Notes agree, for the benefit of the Holders of the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes and the Class G Notes and each Hedge Counterparty, not
to cause the filing of a petition in bankruptcy against the Issuer for failure
to pay to them amounts due under the Class H Notes, the Class J Notes and the
Class K Notes hereunder until the payment in full of the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes and the Class G Notes and not before one year
and one day, or if longer, the applicable preference period then in effect, has
elapsed since such payment.


 


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(i)       Anything in
this Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class J Notes and the Class K Notes agree for the benefit of the
Holders of the Class A -1 Notes, the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes, the Class H Notes and each Hedge Counterparty that the Class J
Notes and the Class K Notes and the Issuer’s rights in and to the Assets (the “Class J Subordinate Interests”)
shall be subordinate and junior to the Class A-1 Notes, the Class A-2 Notes,
the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes and the Class H Notes to the extent and in the
manner set forth in this Indenture including as set forth in Section 11.1(a)
and hereinafter provided.  If any Event
of Default has not been cured or waived and acceleration occurs in accordance
with Article 5, including as a result of an Event of Default specified
in Section 5.1(f) or 5.1(g), the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes and the Class H Notes shall be paid
in full before any further payment or distribution is made on account of the
Class J Subordinate Interests.  The
Holders of the Class J Notes and the Class K Notes agree, for the benefit of
the Holders of the Class A-1 Notes and the Class A-2 Notes, the Class B Notes,
the Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, the
Class G Notes and the Class H Notes and each Hedge Counterparty, not to cause
the filing of a petition in bankruptcy against the Issuer for failure to pay to
them amounts due under the Class J Notes and the Class K Notes hereunder until
the payment in full of the Class A-1 Notes and the Class A-2 Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes and the Class H Notes and not before one year and one
day, or if longer, the applicable preference period then in effect, has elapsed
since such payment.


 


(j)       Anything in
this Indenture or the Notes to the contrary notwithstanding, the Issuer and the
Holders of the Class K Notes agree for the benefit of the Holders of the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes and the Class J Notes and each Hedge Counterparty that the Class K Notes
and the Issuer’s rights in and to the Assets (the “Class K Subordinate Interests”) shall be
subordinate and junior to the Class A-1 Notes, the Class A-2 Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes and the Class J Notes to the extent
and in the manner set forth in this Indenture including as set forth in Section
11.1(a) and hereinafter provided.  If
any Event of Default has not been cured or waived and acceleration occurs in
accordance with Article 5, including as a result of an Event of Default
specified in Section 5.1(f) or 5.1(g), the Class A-1 Notes, the
Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the
Class E Notes, the Class F Notes, the Class G Notes, the Class H Notes and the
Class J Notes shall be paid in full before any further payment or distribution
is made on account of the Class J Subordinate Interests.  The Holders of the Class K Notes agree, for
the benefit of the Holders of the Class A -1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes, the Class H Notes and the Class J Notes and
each Hedge Counterparty, not to cause the filing of a petition in bankruptcy
against the Issuer for failure to pay to them amounts due under the Class K
Notes hereunder until the payment in full of the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes and the


 


222





















 


Class J Notes and
not before one year and one day, or if longer, the applicable preference period
then in effect, has elapsed since such payment.


 


(k)      In the event
that notwithstanding the provisions of this Indenture, any holder of any
Subordinate Interests shall have received any payment or distribution in
respect of such Subordinate Interests contrary to the provisions of this
Indenture, then, unless and until the Class A-1 Notes, the Class A-2 Notes, the
Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the
Class F Notes, the Class G Notes, the Class H Notes, the Class J Notes and the
Class K Notes, as the case may be, shall have been paid in full in accordance
with this Indenture, such payment or distribution shall be received and held in
trust for the benefit of, and shall forthwith be paid over and delivered to,
the Trustee, which shall pay and deliver the same to the Holders of the Class
A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class
D Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes, the Class J Notes and the Class K Notes, as the case may be, in
accordance with this Indenture.


 


(l)       Each Holder of
Subordinate Interests agrees with all Holders of the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes, the Class J
Notes and the Class K Notes, as the case may be, that such Holder of
Subordinate Interests shall not demand, accept, or receive any payment or
distribution in respect of such Subordinate Interests in violation of the
provisions of this Indenture including this Section 13.1; provided, however, that after the Class A-1 Notes, the Class
A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E
Notes, the Class F Notes, the Class G Notes, the Class H Notes, the Class J
Notes and the Class K Notes, as the case may be, have been paid in full, the
Holders of Subordinate Interests shall be fully subrogated to the rights of the
Holders of the Class A Notes, the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes, the Class E Notes, the Class F Notes, the Class G
Notes, the Class H Notes, the Class J Notes and the Class K Notes, as the case
may be.  Nothing in this Section 13.1
shall affect the obligation of the Issuer to pay Holders of Subordinate
Interests.


 


Section 13.2           Standard
of Conduct.


 


In exercising any of its or their voting rights,
rights to direct and consent or any other rights as a Securityholder under this
Indenture, subject to the terms and conditions of this Indenture, including,
without limitation, Section 5.9, a Securityholder or Securityholders
shall not have any obligation or duty to any Person or to consider or take into
account the interests of any Person and shall not be liable to any Person for
any action taken by it or them or at its or their direction or any failure by
it or them to act or to direct that an action be taken, without regard to
whether such action or inaction benefits or adversely affects any
Securityholder, the Issuer, or any other Person, except for any liability to
which such Securityholder may be subject to the extent the same results from
such Securityholder’s taking or directing an action, or failing to take or
direct an action, in bad faith or in violation of the express terms of this
Indenture.


 


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ARTICLE 14


 


MISCELLANEOUS


 


Section 14.1           Form
of Documents Delivered to the Trustee.


 


In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.


 


Any certificate or opinion of an Authorized Officer of
the Issuer or the Co-Issuer may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such Authorized Officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous.  Any such certificate of an Authorized Officer
of the Issuer or the Co-Issuer or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, the Issuer, the Co-Issuer, the Collateral Manager or any
other Person, stating that the information with respect to such factual matters
is in the possession of the Issuer, the Co-Issuer, the Collateral Manager or
such other Person, unless such Authorized Officer of the Issuer or the
Co-Issuer or such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous.  Any Opinion of Counsel may also be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an Authorized Officer of the Issuer or the Co-Issuer,
stating that the information with respect to such matters is in the possession
of the Issuer or the Co-Issuer, unless such counsel knows that the certificate
or opinion or representations with respect to such matters are erroneous.


 


Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.


 


Whenever in this Indenture it is provided that the
absence of the occurrence and continuation of a Default or Event of Default is
a condition precedent to the taking of any action by the Trustee at the request
or direction of the Issuer or the Co-Issuer, then notwithstanding that the
satisfaction of such condition is a condition precedent to the Issuer’s or the
Co-Issuer’s rights to make such request or direction, the Trustee shall be
protected in acting in accordance with such request or direction if it does not
have knowledge of the occurrence and continuation of such Default or Event of
Default as provided in Section 6.1(e).


 


Section 14.2           Acts
of Securityholders.


 


(a)      Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Securityholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee, and, where it is hereby expressly required, to the Issuer and/or the
Co-Issuer.  Such instrument or
instruments (and the action or actions


 


224





















 


embodied therein
and evidenced thereby) are herein sometimes referred to as the “Act” of the
Securityholders signing such instrument or instruments.  Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Trustee, the Issuer and the
Co-Issuer, if made in the manner provided in this Section 14.2.


 


(b)      The fact and
date of the execution by any Person of any such instrument or writing may be
proved in any manner which the Trustee deems sufficient.


 


(c)      The principal
amount and registered numbers of Notes held by any Person, and the date of his
holding the same, shall be proved by the Notes Register.  The Notional Amount and registered numbers of
the Preferred Shares held by any Person, and the date of his holding the same,
shall be proved by the register maintained with respect to the Preferred
Shares.


 


(d)      Any request,
demand, authorization, direction, notice, consent, waiver or other action by
the Securityholder shall bind such Securityholder (and any transferee thereof)
of such Security and of every Security issued upon the registration thereof or
in exchange therefor or in lieu thereof, in respect of anything done, omitted
or suffered to be done by the Trustee, the Preferred Shares Paying Agent, the Shares
Registrar, the Issuer or the Co-Issuer in reliance thereon, whether or not
notation of such action is made upon such Security.


 


Section 14.3           Notices,
etc., to the Trustee, the Issuer, the Co-Issuer, the Collateral Manager, the
Initial Purchaser, each Hedge Counterparty and each Rating Agency.


 


Any request, demand, authorization, direction, notice,
consent, waiver or Act of Securityholders or other documents provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with:


 


(a)      the Trustee by
any Securityholder or by the Issuer or the Co-Issuer shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to and
mailed, by certified mail, return receipt requested, hand delivered, sent by
overnight courier service guaranteeing next day delivery or by telecopy in
legible form, to the Trustee addressed to it at P.O. Box 98, Columbia, Maryland
21046, Attention:  CDO Trust Services
Group – Gramercy Real Estate CDO 2005-1, facsimile number:  (410) 715-3748, with a copy to its Corporate
Trust Office, or at any other address previously furnished in writing to the
Issuer, the Co-Issuer or Securityholders by the Trustee;


 


(b)      the Issuer by
the Trustee or by any Securityholder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first class postage prepaid, hand delivered, sent by overnight courier
service or by telecopy in legible form, to the Issuer addressed to it c/o
Gramercy Real Estate CDO 2005-1, Ltd. at Maples Finance Limited, P.O. Box
1093GT, Queensgate House, South Church Street, George Town, Grand Cayman,
Cayman Islands, facsimile number:  345-945-7100,
Attention:  The Directors, or at any
other address previously furnished in writing to the Trustee by the Issuer,
with a copy to the Collateral Manager at its address set forth below;


 


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(c)      the Co-Issuer
by the Trustee or by any Securityholder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first class postage prepaid, hand delivered, sent by overnight courier
service or by telecopy in legible form, to the Co-Issuer addressed to it in c/o
National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover,
Delaware 19904, facsimile number:  (609) 716-0820,
or at any other address previously furnished in writing to the Trustee by the
Co-Issuer, with a copy to the Collateral Manager at its address set forth
below;


 


(d)      the Preferred
Shares Paying Agent shall be sufficient for every purpose hereunder if made,
given, furnished or filed in writing to and mailed, by certified mail, return
receipt requested, hand delivered, sent by overnight courier service
guaranteeing next day delivery or by telecopy in legible form, to the Preferred
Shares Paying Agent addressed to it at P.O. Box 98, Columbia, Maryland 21046,
Attention:  CDO Trust Services Group –
Gramercy Real Estate CDO 2005-1, facsimile number:  (410) 715-3748, or at any other address
previously furnished in writing by the Trustee;


 


(e)      the Collateral
Manager by the Issuer, the Co-Issuer or the Trustee shall be sufficient for
every purpose hereunder if in writing and mailed, first class postage prepaid,
hand delivered, sent by overnight courier service or by telecopy in legible
form, to the Collateral Manager addressed to it at GKK Manager LLC, 420
Lexington Avenue, 19th Floor, New York, New York 10170, Attention:  Marc Holliday and Andrew Levine, facsimile
number:  (212) 216-1785, or at any other
address previously furnished in writing to the Issuer, the Co-Issuer or the
Trustee;


 


(f)       each Rating Agency, as applicable, by the
Issuer, the Co-Issuer, the Collateral Manager or the Trustee shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, hand
delivered, sent by overnight courier service or by telecopy in legible form, to
each Rating Agency addressed to it at Standard & Poor’s Ratings Services, a
division of The McGraw-Hill Companies, Inc., 55 Water Street, 41st Floor, New
York, New York 10041-0003, facsimile no. (212) 438-2664, Attention:  Structured Finance Ratings, Asset-Backed Securities
CBO/CLO Surveillance (and by electronic mail at
cdosurveillance@standardandpoors.com; provided that
all reports required to be submitted to S&P pursuant to this Indenture only
shall be provided in electronic form to such e-mail address); Moody’s Investor
Services, Inc., 99 Church Street, New York, New York 10007, facsimile no.:
(212) 553-4170, Attention:  CBO/CLO
Monitoring (or by electronic mail at cdomonitoring@moodys.com) and Fitch
Ratings, One State Street Plaza, New York, New York 10004, facsimile no.: (212)
558-2415, Attention:  Credit Products
Surveillance–Additional Reporting (or by electronic mail at
cdo.surveillance@fitchratings.com) or such other address that a Rating Agency
shall designate in the future;


 


(g)      each Hedge
Counterparty by the Issuer, the Co-Issuer, the Collateral Manager or the
Trustee shall be sufficient for every purpose hereunder if in writing and
mailed, first class postage prepaid, hand delivered, sent by overnight courier
service or by telecopy in legible form, to each Hedge Counterparty addressed to
it at the address specified in the related Hedge Agreement or at any other
address previously furnished in writing to the


 


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Issuer, the
Co-Issuer, the Collateral Manager and the Trustee by each Hedge Counterparty;
and


 


(h)      the Initial
Purchaser by the Issuer, the Co-Issuer, the Trustee or the Collateral Manager
shall be sufficient for every purpose hereunder if in writing and mailed, first
class postage prepaid, hand delivered, sent by overnight courier service or by
telecopy in legible form to the Initial Purchaser c/o Wachovia Capital Markets,
LLC, 12 East 49th Street, 45th Floor, New York, NY  10017, Attention:  Mitali Shah, facsimile no.:  (212) 451-2565.


 


Section 14.4           Notices
to Noteholders; Waiver.


 


Except as otherwise expressly provided herein, where
this Indenture provides for notice to Holders of Notes of any event,


 


(a)      such notice
shall be sufficiently given to Holders of Notes if in writing and mailed, first
class postage prepaid, to each Holder of a Note affected by such event, at the
address of such Holder as it appears in the Notes Register, not earlier than
the earliest date and not later than the latest date, prescribed for the giving
of such notice;


 


(b)      such notice
shall be in the English language;


 


(c)      such notice
shall also be provided to the Irish Paying Agent (for so long as any Notes are
listed on the Irish Stock Exchange); and


 


(d)      all reports or
notices to Preferred Shareholders shall be sufficiently given if provided in
writing and mailed, first class postage prepaid, to the Preferred Shares Paying
Agent.


 


Notwithstanding clause (a) above, a Holder of Notes
may give the Trustee written notice that it is requesting that notices to it be
given by facsimile transmissions and stating the facsimile number for such
transmission.  Thereafter, the Trustee
shall give notices to such Holder by facsimile transmission; provided that if such notice also requests that notices be
given by mail, then such notice shall also be given by mail in accordance with
clause (a) above.


 


The Trustee shall deliver to the Holders of the Notes
any information or notice requested to be so delivered by at least 25% of the
Holders of any Class of Notes.


 


Neither the failure to mail any notice, nor any defect
in any notice so mailed, to any particular Holder of a Note shall affect the
sufficiency of such notice with respect to other Holders of Notes.  In case by reason of the suspension of
regular mail service or by reason of any other cause, it shall be impracticable
to give such notice by mail, then such notification to Holders of Notes shall
be made with the approval of the Trustee and shall constitute sufficient
notification to such Holders of Notes for every purpose hereunder.


 


Where this Indenture provides for notice in any
manner, such notice may be waived in writing by any Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice.  Waivers of
notice by Noteholders shall


 


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be filed with the Trustee but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.


 


In the event that, by reason of the suspension of the
regular mail service as a result of a strike, work stoppage or similar
activity, it shall be impractical to mail notice of any event to Noteholders
when such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be satisfactory to
the Trustee shall be deemed to be a sufficient giving of such notice.


 


For so long as any Notes are listed on the Irish Stock
Exchange and the rules of such exchange so require, all notices to Noteholders
of such Notes will be published in the Daily Official List of the Irish Stock
Exchange.


 


Section 14.5           Effect
of Headings and Table of Contents.


 


The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the construction
hereof.


 


Section 14.6           Successors
and Assigns.


 


All covenants and agreements in this Indenture by the
Issuer and the Co-Issuer shall bind their respective successors and assigns,
whether so expressed or not.


 


Section 14.7           Severability.


 


In case any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.


 


Section 14.8           Benefits
of Indenture.


 


Nothing in this Indenture or in the Securities,
expressed or implied, shall give to any Person, other than (i) the parties
hereto and their successors hereunder and (ii) the Collateral Manager, each
Hedge Counterparty, the Preferred Shareholders, the Preferred Shares Paying
Agent, the Shares Registrar and the Noteholders (each of whom, in the case of
this subclause (ii), shall be an express third party beneficiary hereunder),
any benefit or any legal or equitable right, remedy or claim under this Indenture.


 


Section 14.9           Governing
Law.


 


THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.


 


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Section 14.10         Submission
to Jurisdiction.


 


Each of the Issuer and the Co-Issuer hereby
irrevocably submits to the non-exclusive jurisdiction of any New York State or
federal court sitting in the Borough of Manhattan in The City of New York in
any action or proceeding arising out of or relating to the Notes or this
Indenture, and each of the Issuer and the Co-Issuer hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such New York State or federal court.  Each of the Issuer and the Co-Issuer hereby
irrevocably waives, to the fullest extent that they may legally do so, the
defense of an inconvenient forum to the maintenance of such action or proceeding.  Each of the Issuer and the Co-Issuer
irrevocably consents to the service of any and all process in any action or
proceeding by the mailing or delivery of copies of such process to it at the
office of the Issuer’s and the Co-Issuer’s agent set forth in Section 7.2.  Each of the Issuer and the Co-Issuer agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.


 


Section 14.11         Counterparts.


 


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


 


Section 14.12         Liability
of Co-Issuers.


 


Notwithstanding any other terms of this Indenture, the
Notes or any other agreement entered into between, inter alios,
the Issuer and the Co-Issuer or otherwise, neither the Issuer nor the Co-Issuer
shall have any liability whatsoever to the Co-Issuer or the Issuer,
respectively, under this Indenture, the Notes, any such agreement or otherwise
and, without prejudice to the generality of the foregoing, neither the Issuer
nor the Co-Issuer shall be entitled to take any steps to enforce, or bring any action
or proceeding, in respect of this Indenture, the Notes, any such agreement or
otherwise against the other Co-Issuer or the Issuer, respectively.  In particular, neither the Issuer nor the
Co-Issuer shall be entitled to petition or take any other steps for the winding
up or bankruptcy of the Co-Issuer or the Issuer, respectively or shall have any
claim in respect of any assets of the Co-Issuer or the Issuer, respectively.


 


ARTICLE 15


 


ASSIGNMENT
OF COLLATERAL DEBT SECURITIES PURCHASE AGREEMENTS AND COLLATERAL MANAGEMENT
AGREEMENT


 


Section 15.1           Assignment
of Collateral Debt Securities Purchase Agreement and the Collateral Management
Agreements.


 


(a)      The Issuer, in
furtherance of the covenants of this Indenture and as security for the Notes
and amounts payable to the Noteholders hereunder and the performance and
observance of the provisions hereof, hereby collaterally assigns, transfers,
conveys and sets over to the Trustee, for the benefit of the Noteholders and
each Hedge Counterparty, all of


 


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the Issuer’s
estate, right, title and interest in, to and under each Collateral Debt
Securities Purchase Agreement (now or hereafter entered into) and the
Collateral Management Agreement (each, an “Article 15 Agreement”), including, without
limitation, (i) the right to give all notices, consents and releases
thereunder, (ii) the right to give all notices of termination and to take any
legal action upon the breach of an obligation of a Seller or the Collateral
Manager thereunder, including the commencement, conduct and consummation of
proceedings at law or in equity, (iii) the right to receive all notices,
accountings, consents, releases and statements thereunder and (iv) the right to
do any and all other things whatsoever that the Issuer is or may be entitled to
do thereunder; provided, however,
the Trustee hereby grants the Issuer a license to exercise all of the Issuer’s
rights pursuant to the Article 15 Agreements without notice to or the consent
of the Trustee (except as otherwise expressly required by this Indenture,
including, without limitation, as set forth in subsection (f) of this Section
15.1) which license shall be and is hereby deemed to be automatically
revoked upon the occurrence of an Event of Default hereunder until such time,
if any, as such Event of Default is cured or waived.


 


(b)      The assignment
made hereby is executed as collateral security, and the execution and delivery
hereby shall not in any way impair or diminish the obligations of the Issuer
under the provisions of each of the Article 15 Agreements, nor shall any of the
obligations contained in each of the Article 15 Agreements be imposed on the
Trustee.


 


(c)      Upon the
retirement of the Notes, the payment by the Issuer of all amounts payable under
each Hedge Agreement and the release of the Assets from the lien of this
Indenture, this assignment and all rights herein assigned to the Trustee for
the benefit of the Noteholders and each Hedge Counterparty shall cease and
terminate and all the estate, right, title and interest of the Trustee in, to
and under each of the Article 15 Agreements shall revert to the Issuer and no
further instrument or act shall be necessary to evidence such termination and
reversion.


 


(d)      The Issuer
represents that it has not executed any assignment of any of the Article 15
Agreements other than this collateral assignment.


 


(e)      The Issuer
agrees that this assignment is irrevocable, and that it shall not take any
action which is inconsistent with this assignment or make any other assignment
inconsistent herewith.  The Issuer shall,
from time to time upon the request of the Trustee, execute all instruments of
further assurance and all such supplemental instruments with respect to this assignment
as the Trustee may specify.


 


(f)       The Issuer
hereby agrees, and hereby undertakes to obtain the agreement and consent of the
Seller and the Collateral Manager, as applicable, in the Collateral Debt
Securities Purchase Agreements and the Collateral Management Agreement, as
applicable, to the following:


 


(i)            each of
the Seller and the Collateral Manager consents to the provisions of this
collateral assignment and agrees to perform any provisions of this Indenture
made expressly applicable to each of the Seller and the Collateral Manager pursuant
to the applicable Article 15 Agreement;


 


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(ii)           each of
the Seller and the Collateral Manager, as applicable, acknowledges that the
Issuer is collaterally assigning all of its right, title and interest in, to
and under the Collateral Debt Securities Purchase Agreements and the Collateral
Management Agreement, as applicable, to the Trustee for the benefit of the
Noteholders, each Hedge Counterparty and each of the Seller and the Collateral
Manager, as applicable, agrees that all of the representations, covenants and
agreements made by each of the Seller and the Collateral Manager, as
applicable, in the applicable Article 15 Agreement are also for the benefit of,
and enforceable by, the Trustee, the Noteholders and each Hedge Counterparty;


 


(iii)          each
of the Seller and the Collateral Manager, as applicable, shall deliver to the
Trustee duplicate original copies of all notices, statements, communications
and instruments delivered or required to be delivered to the Issuer pursuant to
the applicable Article 15 Agreement;


 


(iv)          none of the
Issuer, the Seller or the Collateral Manager shall enter into any agreement
amending, modifying or terminating the applicable Article 15 Agreement, (other
than in respect of an amendment or modification to cure any inconsistency,
ambiguity or manifest error) or selecting or consenting to a successor
collateral manager, without notifying each Rating Agency and without the prior
written consent and written confirmation of each Rating Agency that such
amendment, modification or termination will not cause its then-current ratings
of the Notes to be reduced;


 


(v)           except as
otherwise set forth herein and therein (including, without limitation, pursuant
to Sections 12 and 13 of the Collateral Management Agreement),
the Collateral Manager shall continue to serve as Collateral Manager under the
Collateral Management Agreement, notwithstanding that the Collateral Manager
shall not have received amounts due it under the Collateral Management
Agreement because sufficient funds were not then available hereunder to pay
such amounts pursuant to the Priority of Payments.  The Collateral Manager agrees not to cause
the filing of a petition in bankruptcy against the Issuer for the nonpayment of
the fees or other amounts payable to the Collateral Manager under the
Collateral Management Agreement until the payment in full of all Notes issued
under this Indenture and the expiration of a period equal to the applicable
preference period under the Bankruptcy Code plus ten days following such
payment; and


 


(vi)          the
Collateral Manager irrevocably submits to the non-exclusive jurisdiction of any
New York State or federal court sitting in the Borough of Manhattan in The City
of New York in any action or proceeding arising out of or relating to the Notes
or this Indenture, and the Collateral Manager irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such New York State or federal court. 
The Collateral Manager irrevocably waives, to the fullest extent it may
legally do so, the defense of an inconvenient forum to the maintenance of such
action or proceeding.  The Collateral
Manager irrevocably consents to the service of any and all process in any
action or Proceeding by the mailing by certified mail, return receipt
requested, or delivery requiring signature and proof of delivery of copies of
such initial process to it at GKK Manager LLC, 420 Lexington Avenue, 19th
Floor, New York, New


 


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York 10170, Attention:
 Andrew Levine.  The Collateral Manager agrees that a final
and non-appealable judgment by a court of competent jurisdiction in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.


 


ARTICLE 16


 


HEDGE AGREEMENT


 


Section 16.1           Issuer’s
Obligations under Hedge Agreement.


 


(a)      On the Closing
Date and thereafter, and on and after any date on which the Issuer enters into
an additional or replacement Hedge Agreement (including any related Hedge
Counterparty Credit Support), the Issuer as directed by the Collateral Manager
shall (i) require that each Hedge Counterparty thereto, or any third party
(including an Affiliate of such Hedge Counterparty) that (A) has absolutely and
unconditionally guaranteed the obligations of the Hedge Counterparty under the
related Hedge Agreement (with such form of guaranty as shall be satisfactory to
each Rating Agency then rating any Notes hereunder), (B) has entered into
credit intermediation arrangements in respect of the obligations of the Hedge
Counterparty under the related Hedge Agreement satisfactory to each Rating
Agency then rating any Notes hereunder, (C) is the issuing bank on one or more
letters of credit supporting the obligations of the Hedge Counterparty under
the related Hedge Agreement and that shall be reasonably acceptable to each
Rating Agency then rating any Notes hereunder or (D) has provided any other
additional credit support and such inclusion of additional credit support shall
have satisfied the Rating Agency Condition (any such third party, including an
Affiliate of such Hedge Counterparty, a “Hedge Counterparty Credit Support Provider”)) has
obtained, and will maintain (at the Hedge Counterparty’s or the Hedge
Counterparty’s Credit Support Provider’s expense), with respect to itself as an
issuer or with respect to its indebtedness, credit ratings at least equal to
the Hedge Counterparty Collateral Threshold Ratings, if any, by each Rating
Agency then rating any Notes hereunder, (ii) except with respect to a
Form-Approved Liability Hedge, obtain a written confirmation from each Rating
Agency then rating any Notes hereunder that any additional or replacement Hedge
Agreement and the related Hedge Counterparty would not cause such Rating Agency’s
then-current rating on any Class of Notes to be adversely qualified, reduced,
suspended or withdrawn and (iii) assign and grant a security interest in such
Hedge Agreement to the Trustee pursuant to this Indenture.  Each Hedge Agreement will provide that no
amendment, modification or waiver in respect of such Hedge Agreement, including
any additional or replacement Hedge Agreement will be effective unless (A)
evidenced by a writing executed by each party thereto, (B) the Trustee has
acknowledged its consent thereto in writing and (C) each Rating Agency
confirms that such amendment, modification or waiver will not cause the
reduction or withdrawal of its then-current rating on any Class of Notes.


 


(b)      The Trustee
shall, on behalf of the Issuer, pay amounts due to each Hedge Counterparty
under the related Hedge Agreements in accordance with Section 10.2(f), the
Priority of Payments and Section 16.1(g) hereof.


 


(c)      The notional
amount of certain Hedge Agreements providing for floating rate payments to the
Issuer will be calculated as a percentage of the principal amount of the


 


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Notes originally
anticipated to be Outstanding on each Payment Date based on certain
assumptions.  In accordance with the
terms of each Hedge Agreement, such notional amount will be reduced by the
Issuer (or the Collateral Manager on behalf of the Issuer) or each Hedge
Counterparty on each Payment Date to the extent that (i) the outstanding
principal amount of the Notes is less than the scheduled aggregate notional
amount of the related Hedge Agreements for such Payment Date and/or (ii) the
Net Outstanding Portfolio Balance is less than the scheduled aggregate notional
amount of the related Hedge Agreements for such Payment Date and/or (iii) in
the case of a Liability Hedge or other single asset-specific Hedge Agreement,
the outstanding Principal Balance of the related underlying Collateral Debt
Security is less than a percentage (as set forth in the related Hedge
Agreement) of the Scheduled material amount of the related Hedge Agreement; provided that if any Notes are then Outstanding, the Trustee
shall first have received written evidence that the Rating Agency Condition
with respect to Moody’s and S&P has been satisfied with respect to such
reduction other than as scheduled and Fitch shall have been notified of such
reduction other than as scheduled. 
Additionally, subject to satisfaction of the Rating Agency Condition
with respect to Moody’s and S&P and the notification of Fitch in respect
thereof, a termination in part of a Hedge Agreement and a corresponding
reduction in the notional amount of the Hedge Agreement may occur, in the event
of a Mandatory Redemption or Special Amortization of the Notes.  The Issuer’s remaining obligations in
accordance with the Priority of Payments will not be affected by any such
reduction.  Notwithstanding any right of
the Issuer to terminate each Hedge Agreement or related Hedge Counterparty
Credit Support upon the occurrence of a Termination Event or an Event of
Default (each as defined in each Hedge Agreement) or otherwise pursuant to a
Hedge Agreement, the Issuer shall not (x) terminate any Hedge Agreement or
Hedge Counterparty Credit Support or (y) cause the non-replacement of any
terminated Hedge Agreement, unless in each case the Issuer notifies Fitch
thereof and obtains a written confirmation from Moody’s and S&P that such
termination or non-replacement, as applicable, would not cause such Rating
Agency’s then-current rating on any Class of Notes, as applicable, to be
adversely qualified, reduced, suspended or withdrawn.


 


(d)      Each Hedge
Agreement shall provide for termination, and shall be capable of being
terminated (i) by or on behalf of the Issuer upon the failure of the related
Hedge Counterparty to post collateral under a Hedge Counterparty Credit Support
within the time period specified in the related Hedge Agreement or provide
other alternate credit enhancement in accordance with the related Hedge
Agreement, and upon the failure of the related Hedge Counterparty to transfer
(at the Hedge Counterparty’s sole cost and expense) all of its rights and
obligations under the related Hedge Agreement to a Qualified Hedge Party or
subject to satisfaction of the Rating Agency Condition, to a Counterparty that
maintains the Hedge Counterparty Required Ratings within the time period
specified in the related Hedge Agreement, after the failure of the related
Hedge Counterparty (or any Hedge Counterparty Credit Support Provider) to have
the Hedge Counterparty Collateral Threshold Ratings; (ii) by or on behalf of
the Issuer upon the failure of the related Hedge Counterparty to transfer (at
the related Hedge Counterparty’s sole cost and expense) all of its rights and
obligations under the related Hedge Agreement to a Qualified Hedge Party within
the time period specified in the related Hedge Agreement after the failure of
the related Hedge Counterparty (or any Hedge Counterparty Credit Support
Provider) to have the Hedge Counterparty Required Ratings (provided, however, that the related Hedge Counterparty shall continue
to post collateral and use its best efforts to find a replacement pursuant to
the related Hedge Agreement until the


 


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earlier to occur
of termination of the related Hedge Agreement by or on behalf of the Issuer or
consummation of a Permitted Transfer (as defined in and in accordance with the
terms of the related Hedge Agreement)) unless the Issuer has received written
confirmation from each Rating Agency that such failure would not cause such
Rating Agency’s then-current rating on any Class of Notes to be adversely
qualified, reduced, suspended or withdrawn, (iii) by the related Hedge
Counterparty, upon the failure of the Issuer to make, when due, any scheduled
periodic payments under the related Hedge Agreement, (iv) in whole or in part
as provided in the related Hedge Agreement, upon the final sale of the Assets,
an Auction Call Redemption, an Optional Redemption, a Clean-up Call or a Tax
Redemption, (v) in part as provided in the related Hedge Agreement, subject to
satisfaction of the Rating Agency Condition with respect to Moody’s and
S&P, upon a Mandatory Redemption or a Special Amortization, (vi) by the
related Hedge Counterparty upon any declaration by the Trustee that the Notes
have become due and payable or (vii) as otherwise expressly provided for in the
related Hedge Agreement.  Each Hedge
Agreement will further require a Hedge Counterparty, under the conditions
described in clause (ii) of the preceding sentence, to provide Hedge
Counterparty Credit Support, although the provision of Hedge Counterparty
Credit Support will not satisfy or discharge each Hedge Counterparty’s
obligation to transfer all of its rights and obligations under the related
Hedge Agreement to a Qualified Hedge Party. 
The Issuer shall satisfy the Rating Agency Condition with respect to
Moody’s and S&P with respect to any such termination of any provision of
Hedge Counterparty Credit Support and of any transfer of all of the rights and
obligations of any Hedge Counterparty under any Hedge Agreement.


 


(e)      The Trustee
shall, prior to the Closing Date, establish a single, segregated trust account
with respect to each Hedge Counterparty in the name of the Trustee, each
designated as the “Hedge Collateral Account,” which shall be held in trust for
the benefit of the Noteholders and the applicable Hedge Counterparty, over
which the Trustee shall have exclusive control and the sole right of
withdrawal, and in which no Person other than the Trustee and the Noteholders
and the applicable Hedge Counterparty shall have any legal or beneficial
interest.  The Trustee shall deposit all
collateral received from the related Hedge Counterparty under the related Hedge
Agreement in the related Hedge Collateral Account.  Any and all funds at any time on deposit in,
or otherwise to the credit of, each Hedge Collateral Account shall be held in
trust by the Trustee for the benefit of the Noteholders.  The only permitted withdrawal from or
application of funds on deposit in, or otherwise to the credit of, each Hedge
Collateral Account shall be (i) for application to obligations of the
applicable Hedge Counterparty to the Issuer under the related Hedge Agreement
in accordance with the terms of such Hedge Agreement or (ii) to return
collateral to the applicable Hedge Counterparty when and as required by the
related Hedge Agreement, which the Trustee shall return to the applicable Hedge
Counterparty in accordance with the related Hedge Agreement.  Each Hedge Collateral Account shall remain at
all times with the Corporate Trust Office or a financial institution having a
long-term debt rating at least equal to “A-” or “A2,” as applicable, or a
short-term debt rating at least equal to “A-1,” “P-1” or “F1,” as applicable.


 


(f)       Upon the
default by a Hedge Counterparty in the payment when due of its obligations to
the Issuer under the related Hedge Agreement (following the expiration of any
applicable grace period), the Trustee or the Collateral Manager shall forthwith
provide facsimile notice thereof to the Issuer, each of the Rating Agencies
and, if applicable, any Hedge Counterparty Credit Support Provider.  When the Trustee becomes aware of such


 


234





















 


default, the
Trustee shall make a demand on the applicable Hedge Counterparty, or any Hedge
Counterparty Credit Support Provider, if applicable, demanding payment
forthwith.  The Trustee shall give notice
to the Noteholders and further notice to the Collateral Manager upon the
continuing failure by such Hedge Counterparty or any Hedge Counterparty Credit
Support Provider to perform its obligations during the two Business Days
following a demand made by the Trustee on such Hedge Counterparty or any such
Hedge Counterparty Credit Support Provider.


 


(g)      Upon the
termination or partial termination of each Hedge Agreement, the Issuer at the
direction of the Collateral Manager and the Trustee shall take such
commercially reasonable actions (following the expiration of any applicable
grace period and after the expiration of the applicable time period set forth
in the related Hedge Agreement) to enforce the rights of the Issuer and the
Trustee thereunder as may be permitted by the terms of the related Hedge
Agreement and consistent with the terms hereof, and shall apply the proceeds of
any such actions (including, without limitation, the proceeds of the
liquidation of any collateral pledged by or on behalf of each Hedge
Counterparty) to enter into an additional or replacement Hedge Agreements
within 30 days of the expiration of any such grace period and such applicable
time period as set forth in the related Hedge Agreement on substantially identical
terms or on such other terms as required by the related Hedge Counterparty to
any such additional or replacement Hedge Agreement as each Rating Agency may
confirm in writing would not cause such Rating Agency’s then-current rating of
any Class of Notes, as applicable, to be, adversely qualified, reduced,
suspended or withdrawn.  The Trustee
shall, promptly after the Closing Date, in respect of each Hedge Counterparty,
establish a single segregated trust account in the name of the Trustee, each
designated the “Hedge Termination Account,” which shall be held in trust for
the benefit of the Noteholders and each Hedge Counterparty and over which the
Trustee will have exclusive control and the sole right of withdrawal, and in
each of which no person other than the Trustee, the Noteholders and the Hedge
Counterparty will have any legal or beneficial interest.  Each Hedge Collateral Account shall remain at
all times with the Corporate Trust Office or a financial institution having a
long-term debt rating at least equal to “A-” or “A2,” as applicable, or a
short-term debt rating at least equal to “A-1,” “P-1” or “F1,” as
applicable.  Notwithstanding anything
contained in this Indenture to the contrary, any payments (other than payments
relating to past-due scheduled payments on a Hedge Agreement) received by the
Issuer or Trustee in connection with either (x) the termination (in whole or in
part) of a related Hedge Agreement or (y) the execution of an additional or
replacement Hedge Agreements shall be immediately transferred to the Trustee
for deposit into the related Hedge Termination Account.  Any costs attributable to entering into an
additional or replacement Hedge Agreements (other than in connection with a
Permitted Transfer as provided for and defined in the related Hedge Agreement)
with respect to the related Hedge Counterparty shall be paid from the related
Hedge Termination Account, and any such amounts which are payable but exceed
the balance in the related Hedge Termination Account shall be borne solely by
the Issuer and shall constitute expenses payable under clause (5) of Section
11.1(a)(i) hereof.  Additionally, any
amounts that are due and payable to a Hedge Counterparty upon a termination of
a Hedge Agreement shall be paid from any amounts on deposit in the related
Hedge Termination Account, and, to the extent the amounts on deposit in such
Hedge Termination Account are insufficient to pay all such amounts, then such
amounts will be payable in accordance with Sections 11.1(a)(i) and (ii)
hereof.  Any amounts remaining on deposit
in a Hedge Termination Account related to a


 


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Hedge Agreement
following payment to the Hedge Counterparty shall be transferred to the
Principal Collection Account and shall constitute Principal Proceeds.  If determining the amount payable under the
terminated Hedge Agreement, the Issuer or the Collateral Manager on behalf of
the Issuer shall seek quotations in accordance with the terms of the related
Hedge Agreement from reference market-makers who satisfy the definition of
Qualified Hedge Party herein.  Each Hedge
Agreement may provide that the applicable Hedge Counterparty is responsible for
determining the amounts payable in certain circumstances.  In addition, the Issuer or the Collateral
Manager on behalf of the Issuer shall use commercially reasonable efforts to
cause the termination of the related Hedge Agreement to become effective
simultaneously with the effectiveness of a replacement thereto, described as
aforesaid.


 


(h)      Notwithstanding anything to the contrary
set forth herein, for so long as any Class of Notes is Outstanding under this
Indenture and is rated by Fitch, if any Hedge Counterparty fails to maintain
the Hedge Counterparty Collateral Threshold Rating with respect to Fitch, then
such Hedge Counterparty shall, within 30 days, at such Hedge Counterparty’s
election,


 


(i)            obtain a guaranty of its obligations
under each related Hedge Agreements from a Person that satisfies the Hedge
Counterparty Collateral Threshold Rating with respect to Fitch;


 


(ii)           assign its obligations under the
related Hedge Agreement to a Person that satisfies the Hedge Counterparty
Collateral Threshold Rating with respect to Fitch; or


 


(iii)          post collateral in respect of its
obligations under the related Hedge Agreement.


 


In addition, for so long as any Class of Notes is
Outstanding under this Indenture and are rated by Fitch, if any Hedge
Counterparty fails to maintain a rating by Fitch of at least “BBB-”, then such
Hedge Counterparty shall within 30 days, at such Hedge Counterparty’s expense,
either (i) transfer and assign its obligations under each related Hedge
Agreement to a substitute Hedge Counterparty that has the same rating level of
such Hedge Counterparty before the downgrade or (ii) provide alternative credit
support satisfactory to Fitch.


 


(i)            Notwithstanding
anything to the contrary set forth herein, for so long as any Class of Notes is
Outstanding under this Indenture and is rated by (i) S&P if any Hedge
Counterparty falls below (A) a rating by S&P of at least “A+” (if such
Hedge Counterparty does not have a short-term debt rating from S&P) or (B)
a short-term debt rating by S&P of at least “A-1”, then such Hedge
Counterparty shall, within 30 days, post collateral in respect of its obligations
under the related Hedge Agreement.


 


Section 16.2           Collateral
Debt Securities Purchase Agreements.


 


Following the Closing Date, unless a Collateral Debt
Securities Purchase Agreement is necessary to comply with the provisions of
this Indenture, the Issuer may acquire Collateral Debt Securities in accordance
with customary settlement procedures in the relevant markets. In any event, the
Issuer shall obtain from any seller of a Loan, all Underlying Instruments with
respect to each Collateral Debt Security and all Underlying


 


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Instruments related to any related Senior Tranche that
govern, directly or indirectly, the rights and obligations of the owner of the
Collateral Debt Security with respect to the Underlying Term Loan, the
Underlying Mortgage Property and the Collateral Debt Security and any
certificate evidencing the Collateral Debt Security.


 


Section 16.3           Cure
Rights.


 


(a)      If the Issuer,
as holder of a Loan, has the right pursuant to the related Underlying
Instruments to cure an event of default on the Underlying Term Loan, the
Collateral Manager may, in accordance with the Collateral Manager Servicing
Standard advance from its own funds with respect to the Loan as a reimbursable
Cure Advance, all such amounts as are necessary to effect the timely cure of
such event of default pursuant to the terms of the related Underlying
Instruments; provided that (i) such advances
may only be made (A) to the extent that the Collateral Manager reasonably believes
that such cash advances can be repaid from future payments on the related
underlying commercial mortgage loan and in accordance with the Collateral
Manager’s Servicing Standard and (B) if the Collateral Manager receives written
instruction from holders of at least a Majority of the aggregate outstanding
notional amount of the Preferred Shares with respect thereto, and (ii) the
particular advance would not, if made, constitute a Nonrecoverable Cure
Advance.  The determination by the
Collateral Manager that it has made a Nonrecoverable Cure Advance or that any
proposed Cure Advance, if made, would constitute a Nonrecoverable Cure Advance
shall be made by the Collateral Manager in its reasonable good faith judgment
in accordance with the Collateral Manager Servicing Standard and shall be evidenced
by an Officer’s Certificate delivered promptly to the Trustee, setting forth
the basis for such determination, accompanied by an appraisal, if available, or
an independent broker’s opinion of the value of the Underlying Mortgage
Property and any information that the Collateral Manager may have obtained and
that supports such determination.  The
Collateral Manager will be entitled to reimbursement from any subsequent
payments or recoveries on each Collateral Debt Security in respect of which it
makes a Cure Advance in accordance with the Priority of Payments if such
reimbursement would not cause an Interest Shortfall; provided
that, if at any time the Collateral Manager shall determine in its sole
discretion, exercised in good faith and in accordance with the Collateral
Manager Servicing Standard, that a Cure Advance previously made is a
Nonrecoverable Cure Advance, the Collateral Manager shall be entitled to
reimbursements for such Nonrecoverable Cure Advance from subsequent payments or
collections with respect to the Assets on any Business Day during any Interest
Accrual Period prior to the related Determination Date (or on a Payment Date
prior to any payment of interest on or principal of the Notes in accordance with
the Priority of Payments). 
Notwithstanding the foregoing, the Collateral Manager will be permitted
(but not obligated) to defer or otherwise structure the timing of recovery of
any Nonrecoverable Cure Advance in such manner as the Collateral Manager determines
is in the best interest of the Noteholders as a collective whole, which may
include being reimbursed for such Nonrecoverable Cure Advance in installments;
provided that the Collateral Manager will not be permitted to defer recovery of
any Nonrecoverable Cure Advance (or any portion thereof) on any Payment Date to
the extent that there are amounts available to be distributed to the Preferred
Shares Paying Agent for deposit into the Preferred Shares Distribution Account
on such Payment Date for


 


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distribution to
the holders of the Preferred Shares in accordance with the Priority of Payments
without regard to such deferral.


 


(b)      On the Business
Day preceding each Determination Date, the Collateral Manager may request by
Officer’s Certificate delivered to the Trustee, reimbursement for any (x) Cure
Advance or (y) Nonrecoverable Cure Advance, from any amounts received with
respect to the related Collateral Debt Security or the Assets, respectively.  No later than the Payment Date related to the
Determination Date for which the Collateral Manager has delivered an Officer’s
Certificate requesting reimbursement of a Cure Advance or a Nonrecoverable Cure
Advance, the Trustee shall transfer to the Collateral Manager, by wire transfer
to an account identified to the Trustee in writing, the amount of such Cure
Advance or Nonrecoverable Cure Advance, as applicable.


 


(c)      Notwithstanding
anything to the contrary set forth herein, the Collateral Manager shall not be
required to make any Cure Advance that it determines in its reasonable, good
faith judgment would constitute a Nonrecoverable Cure Advance as determined
pursuant to Section 16.3(a).


 


Section 16.4           Purchase
Right; Majority Preferred Shares Holder.


 


If the Issuer, as holder of a Participation or B Note,
has the right pursuant to the related Underlying Instruments to purchase any
related Senior Tranche(s), the Issuer may, and shall if directed by the
Majority Preferred Shares Holder, exercise such right, if the Collateral
Manager determines based on the Collateral Manager Servicing Standard that the
exercise of the option would be in the best interest of the Noteholders, but
may not exercise such right if the Collateral Manager determines otherwise.  The Collateral Manager shall deliver to the
Trustee an Officer’s Certificate certifying such determination, accompanied by
an Act of the Majority Preferred Shares Holder directing the Issuer to exercise
such right.  In connection with the
purchase of any such Senior Tranche(s), the Issuer shall assign to the Majority
Preferred Shares Holder or its designee all of its right, title and interest in
such Senior Tranche(s) in exchange for a purchase price (such price and any
other associated expense of such exercise to be paid by the Majority Preferred
Shares Holder) of the Senior Tranche(s) (or, if the Underlying Instruments
permit, the Issuer may assign the purchase right to the Majority Preferred
Shares Holder or its designee; otherwise the Majority Preferred Shares Holder
or its designee shall fund the purchase by the Issuer, which shall then assign
the Senior Tranche(s) to the Majority Preferred Shares Holder or its designee)
(the “Purchase Option Purchase Price”), which amount shall be delivered
by the Majority Preferred Shares Holder or its designee from its own funds to
or upon the instruction of the Collateral Manager in accordance with terms of
the Underlying Instruments related to the acquisition of such Senior
Tranche(s).  The Trustee or the Issuer
shall execute and deliver at the Majority Preferred Shares Holder’s direction
such instruments of transfer or assignment prepared by the Majority Preferred
Shares Holder, in each case without recourse, as shall be necessary to transfer
title to the Majority Preferred Shares Holder or its designee of the Senior
Tranche(s) and the Trustee shall have no responsibility with regard to such
Senior Tranche(s).  As long as the Issuer
owns the related Collateral Debt Security, the Issuer shall not exercise any
purchase rights with respect to a Participation or B Note that is a pari passu
interest relative to another Participation or B Note related to the same
mortgage loan; provided, however, that the Collateral
Manager may (in accordance with the Collateral Manager Servicing Standard)


 


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assign such right to third parties to the extent that
it is able to do so pursuant to the terms of the related Underlying
Instruments.


 


Section 16.5           Representations
and Warranties Related to Subsequent Collateral Debt Securities.


 


(a)      If the
Collateral Debt Security is a Subsequent Collateral Debt Security, upon the
acquisition of such Subsequent Collateral Debt Security by the Issuer, the related
seller has made or assigned to the Issuer the following:


 


(i)            (A) representations
and warranties in form and substance substantially similar to the
representations and warranties set forth as Schedule H with respect to
the Underlying Term Loan and the Underlying Mortgage Property (except with
respect to Mezzanine Loans) and (B) representations and warranties
regarding good title, no liens, no modifications, no defaults and valid
assignment with respect to the Loan itself; and


 


(ii)           in the
case of a B Note, the representations and warranties in form and substance
substantially similar to the representations and warranties set forth as Schedule
I with respect to such B Note;


 


(iii)          in
the case of a Participation, the representations and warranties in form and
substance substantially similar to the representations and warranties set forth
as Schedule J with respect to such Participation;


 


(iv)          in the case
of a Mezzanine Loan, the representations and warranties in form and substance
substantially similar to the representations and warranties set forth as Schedule
K with respect to such Mezzanine Loan;


 


(v)           in the
case of a Preferred Equity Security, the representations and warranties in form
and substance substantially similar to the representations and warranties set
forth as Schedule M with respect to such Preferred Equity Security;


 


(vi)          in the case
of a CMBS Security, the representations and warranties in form and substance
substantially similar to the representations and warranties set forth as Schedule
L with respect to such CMBS Security; and


 


(vii)         in
the case of a CRE CDO Security, the representations and warranties in form and
substance substantially similar to the representations and warranties set forth
as Schedule L with respect to such CRE CDO Security.


 


(b)      The
representations and warranties in Section 16.5(a) with respect to the
acquisition of a Subsequent Collateral Debt Security may be subject to any
modification, limitation or qualification that the Collateral Manager
determines to be acceptable in accordance with the Collateral Manager Servicing
Standard; provided that the Collateral Manager
will provide each Rating Agency with a report attached to each Monthly Report
identifying each such modification, exception, limitation or qualification
received with respect to the acquisition of any Subsequent Collateral Debt
Security during the period covered by the


 


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Monthly Report,
which report may contain explanations by the Collateral Manager as to its
determinations.


 


(c)      The Issuer
shall obtain a covenant from the Person making any representation or warranty
to the Issuer pursuant to Section 16.5(a) that such Person shall
repurchase the related Collateral Debt Security if any such representation or
warranty is breached (but only after the expiration of any permitted cure
periods and failure to cure such breach). 
The purchase price for any Collateral Debt Security repurchased (the “Repurchase
Price”) shall be a price equal to the sum of the following (in each case,
without duplication) as of the date of such repurchase: (i) the outstanding
principal amount thereof, plus (ii)
accrued and unpaid interest on such Collateral Debt Security, plus (iii) any unreimbursed advances, plus
(iv) accrued and unpaid interest on advances on the Collateral Debt Security, plus (v) any reasonable costs and expenses (including, but
not limited to, the cost of any enforcement action, incurred by the Issuer or
the Trustee in connection with any such purchase by a seller).


 


Section 16.6           Operating
Advisor; Additional Debt.


 


If the Issuer, as holder of a B Note, a Participation,
Preferred Equity Security or a Mezzanine Loan, has the right pursuant to the
related Underlying Instruments to appoint the operating advisor, directing
holder or Person serving a similar function under the Underlying Instruments,
each of the Issuer, the Trustee and the Collateral Manager shall take such
actions as are reasonably necessary to appoint the Collateral Manager to such
position.  If the Issuer, as holder of a
B Note, a Participation or a Mezzanine Loan, has the right pursuant to the
related Underlying Instruments to consent to the related borrower incurring any
additional debt, such consent will be subject to satisfaction of the Rating
Agency Condition.


 


ARTICLE 17


 


ADVANCING AGENT


 


Section 17.1           Liability
of the Advancing Agent.


 


The Advancing Agent shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Advancing Agent.  The
Advancing Agent shall promptly provide notice to the Issuer, the Co-Issuer, the
Collateral Manager, each Hedge Counterparty and the Trustee of (i) any
voluntary or involuntary proceeding or petition seeking winding up,
liquidation, reorganization or other relief under any bankruptcy, insolvency,
receivership or similar law now or hereinafter in effect, (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Advancing Agent or for a substantial part of its assets and
(iii) any general assignment made by the Advancing Agent for the benefit of its
creditors.


 


Section 17.2           Merger
or Consolidation of the Advancing Agent.


 


(a)      The Advancing
Agent will keep in full effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction in which it was formed, and will
obtain and preserve its qualification to do business as a foreign corporation
in each jurisdiction


 


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in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture to perform its duties under this Indenture.


 


(b)      Any Person into
which the Advancing Agent may be merged or consolidated, or any corporation
resulting from any merger or consolidation to which the Advancing Agent shall
be a party, or any Person succeeding to the business of the Advancing Agent
shall be the successor of the Advancing Agent, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding (it being understood
and agreed by the parties hereto that the consummation of any such transaction
by the Advancing Agent shall have no effect on the Trustee’s obligations under Section
10.7, which obligations shall continue pursuant to the terms of Section
10.7).


 


Section 17.3           Limitation
on Liability of the Advancing Agent and Others.


 


None of the Advancing Agent or any of its affiliates,
directors, officers, employees or agents shall be under any liability for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Indenture, or for errors in judgment; provided,
however, that this provision shall not protect the Advancing Agent
against liability to the Issuer or Noteholders for any breach of warranties or
representations made herein or any liability which would otherwise be imposed
by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of negligent disregard of obligations and
duties hereunder.  The Advancing Agent
and any director, officer, employee or agent of the Advancing Agent may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Advancing
Agent and any director, officer, employee or agent of the Advancing Agent shall
be indemnified by the Issuer pursuant to the priorities set forth in Section
11.1(a) and held harmless against any loss, liability or expense incurred
in connection with any legal action relating to this Indenture or the Notes,
other than any loss, liability or expense (i) specifically required to be borne
by the Advancing Agent pursuant to the terms hereof or otherwise incidental to
the performance of obligations and duties hereunder (except as any such loss,
liability or expense shall be otherwise reimbursable pursuant to this
Indenture); or (ii) incurred by reason of any breach of a representation,
warranty or covenant made herein, any misfeasance, bad faith or negligence by
the Advancing Agent in the performance of or negligent disregard of,
obligations or duties hereunder or any violation of any state or federal
securities law.


 


Section 17.4           Representations
and Warranties of the Advancing Agent.


 


The Advancing Agent represents and warrants that:


 


(a)      the Advancing
Agent (i) has been duly organized, is validly existing and is in good standing
under the laws of the State of Delaware, (ii) has full power and authority to
own the Advancing Agent’s assets and to transact the business in which it is
currently engaged, and (iii) is duly qualified and in good standing under the
laws of each jurisdiction where the Advancing Agent’s ownership or lease of
property or the conduct of the Advancing Agent’s business requires, or the performance
of this Indenture would require, such qualification, except for failures to be
so qualified that would not in the aggregate have a


 


241





















 


material adverse
effect on the business, operations, assets or financial condition of the
Advancing Agent or the ability of the Advancing Agent to perform its
obligations under, or on the validity or enforceability of, the provisions of
this Indenture applicable to the Advancing Agent;


 


(b)      the Advancing
Agent has full power and authority to execute, deliver and perform this
Indenture; this Indenture has been duly authorized, executed and delivered by
the Advancing Agent and constitutes a legal, valid and binding agreement of the
Advancing Agent, enforceable against it in accordance with the terms hereof,
except that the enforceability hereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in effect relating to creditors’ rights and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);


 


(c)      neither the
execution and delivery of this Indenture nor the performance by the Advancing
Agent of its duties hereunder conflicts with or will violate or result in a
breach or violation of any of the terms or provisions of, or constitutes a
default under: (i) the Certificate of Formation and limited liability company
agreement of the Advancing Agent, (ii) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement or other evidence of
indebtedness or other agreement, obligation, condition, covenant or instrument
to which the Advancing Agent is a party or is bound, (iii) any law, decree,
order, rule or regulation applicable to the Advancing Agent of any court or
regulatory, administrative or governmental agency, body or authority or
arbitrator having jurisdiction over the Advancing Agent or its properties, and
which would have, in the case of any of (i), (ii) or (iii) of this subsection
(c), either individually or in the aggregate, a material adverse effect on the
business, operations, assets or financial condition of the Advancing Agent or
the ability of the Advancing Agent to perform its obligations under this
Indenture;


 


(d)      no litigation
is pending or, to the best of the Advancing Agent’s knowledge, threatened,
against the Advancing Agent that would materially and adversely affect the
execution, delivery or enforceability of this Indenture or the ability of the
Advancing Agent to perform any of its obligations under this Indenture in accordance
with the terms hereof; and


 


(e)      no consent,
approval, authorization or order of or declaration or filing with any
government, governmental instrumentality or court or other person is required
for the performance by the Advancing Agent of its duties hereunder, except such
as have been duly made or obtained.


 


Section 17.5           Resignation
and Removal; Appointment of Successor.


 


(a)      No resignation
or removal of the Advancing Agent and no appointment of a successor Advancing
Agent pursuant to this Article 17 shall become effective until the
acceptance of appointment by the successor Advancing Agent under Section
17.6.


 


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(b)      The Advancing
Agent may resign at any time by giving written notice thereof to the Issuer,
the Co-Issuer, the Trustee, the Collateral Manager, each Hedge Counterparty,
the Noteholders and each Rating Agency.


 


(c)      The Advancing
Agent may be removed at any time by Act of 66 2/3% of the Preferred Shares upon
written notice delivered to the Trustee and to the Issuer and the Co-Issuer.


 


(d)      If the
Advancing Agent fails to make an Interest Advance required by this Indenture
with respect to a Distribution Date, the Trustee, in its capacity as Back-Up
Advancing Agent, shall be required to make such Interest Advance and shall be
entitled to receive, in consideration thereof, the Advancing Agent Fee (in lieu
of the Back-Up Advancing Fee) in accordance with the Priority of Payments.


 


(e)      In addition, if
the Advancing Agent shall have failed, on more than two occasions prior to date
on which no Class A Notes or Class B Notes remain Outstanding, to make an
Interest Advance required by this Indenture, which failure, in each case, is
not cured by the remittance of the amount of such Interest Advance by the
Advancing Agent to the Trustee with 30 days of such failure, such Advancing
Agent shall be deemed to have automatically (and without the need for any act
on the part of any Person) resigned as an advancing agent hereunder and the
Trustee shall automatically (and without the need for any act on the part of
any Person) assume the capacity of the successor Advancing Agent
hereunder.  Thereafter, the Trustee shall
be entitled to receive, in consideration of becoming the successor Advancing
Agent, the Advancing Agent Fee (for so long as the Trustee acts as successor
Advancing Agent and in lieu of the Backup Advancing Agent Fee) in accordance
with the Priority of Payments.


 


(f)       If the
Advancing Agent shall resign or be removed, upon receiving such notice of
resignation or removal, the Issuer and the Co-Issuer shall promptly appoint a
successor advancing agent by written instrument, in duplicate, executed by an
Authorized Officer of the Issuer and an Authorized Officer of the Co-Issuer,
one copy of which shall be delivered to the Advancing Agent so resigning and
one copy to the successor Advancing Agent, together with a copy to each
Noteholder, the Trustee, each Hedge Counterparty and the Collateral Manager; provided that such successor Advancing Agent shall be
appointed only subject to satisfaction of the Rating Agency Condition and upon
the written consent of a Majority of the Preferred Shares.  If no successor Advancing Agent shall have
been appointed and an instrument of acceptance by a successor Advancing Agent
shall not have been delivered to the Advancing Agent within 30 days after the
giving of such notice of resignation, the resigning Advancing Agent, the
Trustee or any Preferred Shareholder, on behalf of himself and all others
similarly situated, may petition any court of competent jurisdiction for the
appointment of a successor Advancing Agent.


 


(g)      The Issuer and
the Co-Issuer shall give prompt notice of each resignation and each removal of
the Advancing Agent and each appointment of a successor Advancing Agent by
mailing written notice of such event by first class mail, postage prepaid, to
each Rating Agency, each Hedge Counterparty and to the Holders of the Notes as
their names and addresses appear in the Notes Register.


 


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(h)      No resignation
or removal of the Advancing Agent and no appointment of a Successor Advancing
Agent shall become effective until the acceptance of appointment by the
Successor Advancing Agent.


 


Section 17.6           Acceptance
of Appointment by Successor Advancing Agent.


 


(a)      Every successor
Advancing Agent appointed hereunder shall execute, acknowledge and deliver to
the Issuer, the Co-Issuer, each Hedge Counterparty, the Collateral Manager, the
Trustee and the retiring Advancing Agent an instrument accepting such
appointment.  Upon delivery of the
required instruments, the resignation or removal of the retiring Advancing
Agent shall become effective and such successor Advancing Agent, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, duties and obligations of the retiring Advancing Agent.


 


(b)      No appointment
of a successor Advancing Agent shall become effective unless each Rating Agency
has confirmed in writing that the employment of such successor would not
adversely affect the rating on the Notes.


 


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IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Indenture as of the day and year first above written.


 


 


	
   

  	
  Executed as a Deed

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GRAMERCY
  REAL ESTATE CDO 2005-1,

  LTD., as Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Witness:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GRAMERCY
  REAL ESTATE CDO 2005-1

  LLC, as Co-Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK,
  NATIONAL

  ASSOCIATION, solely as Trustee, Paying

  Agent, Calculation Agent, Transfer Agent,

  Custodial Securities Intermediary, Backup

  Advancing Agent and Notes Registrar and not

  in its individual capacity

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
							



 





















 


	
   

  	
  GKK LIQUIDITY LLC, as
  Advancing Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 





















 


EXHIBIT A


 


FORM OF CLASS [   ]

[REGULATION S] [RULE 144A] GLOBAL SECURITY


 


THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND NEITHER THE
ISSUER NOR THE CO-ISSUER HAS BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE “1940 ACT”).  THIS NOTE MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A)(1) TO A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A “QIB”) WHO IS
A QUALIFIED PURCHASER AS DEFINED IN SECTION 2(A)(51) OF THE INVESTMENT
COMPANY ACT (A “QUALIFIED PURCHASER”) AND IS EITHER PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER WHO IS A
QUALIFIED PURCHASER, IN A PRINCIPAL AMOUNT OF NOT LESS THAN $500,000 (AND
INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF), FOR THE PURCHASER AND FOR EACH
SUCH ACCOUNT, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS
THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, OR (2) TO A
NON-U.S.  PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF
REGULATION S UNDER THE SECURITIES ACT IN A PRINCIPAL AMOUNT OF NOT LESS THAN $500,000
(AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF), SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES AND ANY OTHER APPLICABLE JURISDICTION.  EACH PURCHASER OF A BENEFICIAL INTEREST IN A GLOBAL
SECURITY WILL BE DEEMED TO HAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET FORTH
IN SECTION 2.5 OF THE INDENTURE.  ANY
TRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE
VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE,
NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE CO-ISSUER,
AS APPLICABLE, THE TRUSTEE OR ANY INTERMEDIARY. 
IF AT ANY TIME, THE ISSUER AND THE CO-ISSUER, IF APPLICABLE, DETERMINE
OR ARE NOTIFIED THAT THE HOLDER OF SUCH BENEFICIAL INTEREST IN SUCH SECURITY
WAS IN BREACH, AT THE TIME GIVEN, OF ANY OF THE REPRESENTATIONS SET FORTH IN
THE INDENTURE, THE TRUSTEE MAY CONSIDER THE ACQUISITION OF THIS NOTE OR
SUCH INTEREST IN SUCH SECURITY VOID AND REQUIRE THAT THIS NOTE OR SUCH INTEREST
HEREIN BE TRANSFERRED TO A PERSON DESIGNATED BY THE ISSUER AND THE CO-ISSUER,
IF APPLICABLE.


 


ANY TRANSFER, PLEDGE OR OTHER USE OF THIS NOTE FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO. HAS AN INTEREST HEREIN, UNLESS THIS NOTE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”),
NEW YORK, NEW YORK, TO THE CO-ISSUERS OR THEIR AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR OF SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.).


 


THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY.  THIS NOTE MAY NOT BE
EXCHANGED OR TRANSFERRED IN WHOLE OR IN PART FOR A NOTE REGISTERED IN THE
NAME OF ANY PERSON OTHER THAN THAT DEPOSITARY OR ITS NOMINEE EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.


 


PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF
THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN


 


A-1





















 


ON THE FACE HEREOF.  ANY PERSON ACQUIRING THIS NOTE MAY ASCERTAIN
ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE.


 


A-2





















 


GRAMERCY REAL ESTATE CDO 2005-1, LTD.

GRAMERCY REAL ESTATE CDO 2005-1 LLC


 


CLASS [   ] [SECOND] [THIRD]
[FOURTH] [FIFTH] 

[SIXTH] [SEVENTH] [EIGHTH] [NINTH] 
 [SENIOR] [SECURED] FLOATING RATE [CAPITALIZED
INTEREST] TERM NOTES DUE 2035


 


	
  No. [Reg.
  S][144A]/R-     

  	
   

  	
  Up to

  
	
  CUSIP No.

  	
   

  	
  U.S. $[      ]

  



 


Each of GRAMERCY REAL ESTATE CDO 2005-1, LTD., a
Cayman Islands exempted company with limited liability (the “Issuer”)
and GRAMERCY REAL ESTATE CDO 2005-1 LLC, a limited liability company formed
under the laws of Delaware (the “Co-Issuer”) for value received, hereby
promises to pay to CEDE & CO. or its registered assigns (a) upon
presentation and surrender of this Note (except as otherwise permitted by the
Indenture referred to below), the principal sum of up to [          ]
United States Dollars (U.S. $[          ])
on July 25, 2035 (the “Stated Maturity”), to the extent not
previously paid, in accordance with the Indenture referred to below unless the unpaid
principal of this Note becomes due and payable at an earlier date by
declaration of acceleration, call for redemption or otherwise and (b) the Class [   ]
Interest Distribution Amount allocable to this Note in accordance with the
Indenture payable initially on October 25, 2005, and quarterly on each January 25,
April 25, July 25 and October 25 thereafter (or if such day is
not a Business Day, then on the next succeeding Business Day) (each, a “Payment
Date”).  Interest shall be computed
on the basis of the actual number of days in the Interest Accrual Period
applicable to the Class [   ] Notes divided by 360.  The interest so payable on any Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Note (or one or more predecessor Notes) is registered at the close of business
on the Record Date for such interest, which shall be the fifteenth day (whether
or not a Business Day) prior to the applicable Payment Date.


 


The obligations of the Issuer and the Co-Issuer under
this Note and the Indenture are limited recourse obligations of the Issuer and
the Co-Issuer payable solely from the Collateral Debt Securities and other
Assets pledged by the Issuer, and in the event the Collateral Debt Securities
and other such Assets are insufficient to satisfy such obligations, any claims
of the Holders of the Notes shall be extinguished.


 


The aggregate principal amount of this Class [   ]
Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee as custodian for CEDE & Co. in the manner
provided in Section 2.2(b) of the Indenture.


 


Payments of principal and interest on this Note are
subordinated to the payment on each Distribution Date of certain other amounts
in accordance with the Priority of Payments and Section 13.1 of the
Indenture.


 


[Under certain circumstances specified in the
Indenture, certain amounts payable hereunder that are not available to be paid
as a result of the operation of the Priority of Payments on any Payment Date
shall not be considered “due and payable” for the purposes of the Indenture
until the Payment Date on which they are to be paid in accordance with the
Priority of Payments.](1)


 


Payments in respect of principal and interest and any
other amounts due on any Payment Date on this Note shall be payable by the
Trustee or a Paying Agent, subject to any laws or regulations applicable
thereto, by wire transfer in immediately available funds to a Dollar account
maintained by the Registered Holder hereof; provided that
the Registered Holder shall have provided wiring instructions to the Trustee on
or before the related Record Date, or, if wire transfer cannot be effected, by
Dollar check drawn on a bank as provided in the Indenture and mailed to the
Registered Holder at its address in the Notes Register.


 










(1) Applicable to Class C,
D, E, F, G, H, J and K Notes.


 


A-3





















 


Interest will cease to accrue on this Note, or in the
case of a partial repayment, on such part, from the date of repayment or Stated
Maturity unless payment of principal is improperly withheld or unless a Default
is otherwise made with respect to such payments of principal.


 


Notwithstanding the foregoing, the final payment of
interest and principal due on this Note shall be made only upon presentation
and surrender of this Note (except as otherwise provided in the Indenture) at
the Corporate Trust Office of the Trustee or at any Paying Agent.


 


The Registered Holder of this Note shall be treated as
the owner hereof for all purposes.


 


Except as specifically provided herein and in the
Indenture, neither the Issuer nor the Co-Issuer shall be required to make any
payment with respect to any tax, assessment or other governmental charge
imposed by any government or any political subdivision or taxing authority
thereof or therein.


 


Unless the certificate of authentication hereon has
been executed by the Trustee by the manual signature of one of its authorized
officers, this Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.


 


This Note is one of a duly authorized issue of Class [  ]
[Second] [Third] [Fourth] [Fifth] [Sixth] [Seventh] [Eighth] [Ninth] [Senior] [Secured]
Floating Rate [Capitalized Interest] Term Notes Due 2035, of the Issuer and the
Co-Issuer (the “Class [   ] Notes”), limited in
aggregate principal amount to U.S. $[            ]
to be issued under an indenture dated as of July 14, 2005 (the “Indenture”)
by and among the Issuer, the Co-Issuer, Wells Fargo Bank, National Association
as trustee, paying agent, calculation agent, transfer agent, custodial
securities intermediary, backup advancing agent and notes registrar (in such
capacity and together with any successor trustee permitted under the Indenture,
the “Trustee”) and GKK Liquidity LLC, as advancing agent.


 


The Issuer will also issue 105,000,000 Preferred
Shares having a par value of U.S. $0.01 per share and a notional amount of U.S.
$1.00 per share (the “Preferred Shares”), under the Issuer’s Memorandum
and Articles of Association as part of its issued share capital.


 


Reference is hereby made to the Indenture and all
indentures supplemental thereto for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Issuer, the
Co-Issuer, the Trustee, the Holders of the Notes and the Preferred Shareholders
and the terms upon which the Notes and the Preferred Shares are, and are to be,
executed, authenticated and delivered.


 


Payments of principal of the Class [  ]
Notes shall be payable in accordance with Section 11.1(a) of the
Indenture.


 


Capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the Indenture.


 


Pursuant to Section 9.1 of the Indenture, the
Notes are subject to redemption by the Issuer at the direction of the
Collateral Manager, in whole but not in part, upon notice given in the manner
provided in the Indenture, on or after the Payment Date on which the Aggregate
Outstanding Amount of the Notes (excluding any Class C Capitalized
Interest, Class D Capitalized Interest, Class E Capitalized Interest,
Class F Capitalized Interest, Class G Capitalized Interest, Class H
Capitalized Interest, Class J Capitalized Interest or Class K
Capitalized Interest) has been reduced to 10% of the Aggregate Outstanding
Amount of the Notes on the Closing Date; provided that
no such redemption may be made until any payments due and payable upon a
termination of each Hedge Agreement shall be made in accordance with the
procedures as set forth therein; provided, further, that the funds available to be used for such
redemption will be sufficient to pay the Total Redemption Price.


 


Pursuant to Section 9.1 of the Indenture, the
Notes and the Preferred Shares are subject to redemption by the Issuer at a price
equal to the applicable Redemption Price, on any Payment Date on or after the
Payment Date occurring in July 2008 at the direction of the Issuer (such
redemption, an “Optional Redemption”), in whole but not in part (i) by
Act of a Majority of the Preferred Shares delivered to the Trustee, or (ii) at
the direction of the Collateral Manager unless a Majority of the Preferred
Shares object; provided, however,
that any payments due and payable upon a termination of each Hedge Agreement
will be made in accordance with the terms thereof and the


 


A-4





















 


Indenture; and provided further, the funds available to be used for such
Optional Redemption will be sufficient to pay the Total Redemption Price.


 


Pursuant to Section 9.2 of the Indenture, the
Notes and the Preferred Shares are subject to redemption by the Issuer, during
the period from and including the Payment Date occurring in July 2015 and
to but not including the first Payment Date on which the Clean-up Call may be
exercised, in whole but not in part, if a Successful Auction is completed (such
redemption, an “Auction Call Redemption”), at their applicable
Redemption Prices; provided, that
any payments due and payable upon a termination of each Hedge Agreement shall
be made on the Auction Call Redemption Date in accordance with the terms
thereof and in the Indenture; provided, further, that the funds available to be used for such
Auction Call Redemption will be sufficient to pay the Total Redemption
Price.  In addition, the Notes are
subject to redemption by the Issuer and the Co-Issuer or, in the case of the
Preferred Shares, by the Issuer, upon notice given in the manner provided
below, on any Payment Date under certain circumstances as provided in the
Indenture.  The Redemption Price for any
Note redeemed pursuant to Section 9.1 or Section 9.2 of the Indenture
shall be as set forth in the Indenture.


 


In the case of any redemption of the Notes, interest
installments whose Payment Date is on or prior to the applicable redemption
date will be payable to the Holders of such Notes (or one or more predecessor
Notes) registered as such at the close of business on the relevant Record
Date.  Notes for whose redemption and
payment provision is made in accordance with the Indenture shall cease to bear
interest on the applicable redemption date (unless the Issuer shall default in
the payment of the Redemption Price).


 


Pursuant to Section 9.6 of the Indenture, if any
Coverage Tests applicable to any Class of Notes are not met on a
Measurement Date, then on the following Payment Date certain Interest Proceeds
and certain Principal Proceeds may be used to redeem the Notes, in the order
and manner provided in Section 9.6 of the Indenture, until each applicable
Coverage Test is satisfied.


 


Pursuant to Section 9.7 of the Indenture, the
Notes may be amortized in part by the Issuer (at the election and direction of
the Collateral Manager) if, during the Reinvestment Period, under certain
circumstances, the Collateral Manager has been unable, for a period of at least
30 consecutive days, to identify Substitute Collateral Debt Securities that it
determines would be appropriate and would meet the Eligibility Criteria in
sufficient amounts to permit the reinvestment of all or a portion of the Principal
Proceeds then on deposit in the Principal Collection Account and the amounts on
deposit in the Unused Proceeds Account in Substitute Collateral Debt
Securities.


 


If an Event of Default shall occur and be continuing,
the Class [   ] Notes may become or be declared due and
payable in the manner and with the effect provided in the Indenture.


 


By written notice to the Issuer, the Co-Issuer, the
Trustee and each Hedge Counterparty, a Majority of each and every Class of
Notes (voting as a separate Class) may rescind a declaration of acceleration of
the maturity of the Notes at any time prior to a judgment or decree for payment
of money due, provided that certain conditions
set forth in the Indenture are satisfied.


 


The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Co-Issuer and the rights of the Holders under
the Indenture at any time by the Issuer and the Co-Issuer with the consent of
each Hedge Counterparty, a Majority of each Class of Notes adversely
affected thereby and a Majority of the Preferred Shares adversely affected
thereby and subject to satisfaction of the Rating Agency Condition.  Upon the execution of any supplemental
indenture, the Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of the Indenture for all purposes; and
every Holder of Notes theretofore authenticated and delivered thereunder shall
be bound thereby.  The Indenture also
contains provisions permitting, on behalf of the Holders of all the Notes, a
Majority of each and every Class of Notes (voting as a separate Class) to
waive compliance by the Issuer with certain provisions of the Indenture and
certain past Defaults under the Indenture and their consequences.


 


No reference herein to the Indenture and no provision
of this Note or of the Indenture shall alter or impair the obligations of the
Issuer and the Co-Issuer, which are absolute and unconditional to the extent
permitted by applicable law, to pay the principal of and interest on this Note
at the times, places and rate, and in the coin or currency, herein prescribed.


 


A-5





















 


The Notes are issuable in minimum denominations of
$500,000 and integral multiples of $1,000 in excess thereof.


 


The principal of each Note shall be payable at the
Stated Maturity thereof unless the unpaid principal of such Note becomes due
and payable on an earlier date by declaration of acceleration, call for
redemption or otherwise.


 


The term “Issuer” as used in this Note includes any
successor to the Issuer under the Indenture and the term “Co-Issuer” as used in
this Note includes any successor to the Co-Issuer under the Indenture.


 


The Class [  ] Notes are limited
recourse obligations of the Issuer and the Co-Issuer and are limited in right
of payment to amounts available from the Assets as provided in the
Indenture.  No other assets will be
available to satisfy payments on the Class [   ] Notes.


 


Each purchaser and any subsequent transferee of this
Note or any interest herein shall, by virtue of its purchase or other
acquisition of this Note or interest herein, be deemed to have agreed to treat
this Note as debt for U.S. federal income tax purposes.


 


No service charge shall be made for exchange or
registration of transfer of this Note, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.


 


The remedies of the Trustee or the Holder hereof, as
provided herein or in the Indenture, shall be cumulative and concurrent and may
be pursued solely against the assets of the Issuer and the Co-Issuer.  No failure on the part of the Holder in exercising
any right or remedy hereunder shall operate as a waiver or release thereof, nor
shall any single or partial exercise of any such right or remedy preclude any
other further exercise thereof or the exercise of any other right or remedy
hereunder.


 


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


 


THE HOLDER OF THIS NOTE AGREES NOT TO CAUSE THE FILING
OF A PETITION IN BANKRUPTCY AGAINST THE ISSUER OR THE CO-ISSUER IN ANY
APPLICABLE OR RELEVANT JURISDICTION UNTIL AT LEAST ONE YEAR AND ONE DAY, OR IF
LONGER THE APPLICABLE PREFERENCE PERIOD THEN IN EFFECT PLUS ONE DAY, AFTER THE
PAYMENT IN FULL OF ALL NOTES ISSUED UNDER THE INDENTURE.


 


AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THE
NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.


 


A-6





















 


IN WITNESS WHEREOF, the Issuer has caused this Note to
be duly executed.


 


Dated as of July 14, 2005


 


	
   

  	
  GRAMERCY REAL ESTATE
  CDO 2005-1, LTD.,

  
	
   

  	
     as
  Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRAMERCY REAL ESTATE
  CDO 2005-1 LLC,

  
	
   

  	
     as
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


 


CERTIFICATE OF AUTHENTICATION


 


This is one of the Notes referred to in the
within-mentioned Indenture.


 


 


	
   

  	
  WELLS FARGO BANK,
  NATIONAL ASSOCIATION,

  
	
   

  	
     as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  



 


A-7


 





















 


ASSIGNMENT FORM


 


	
  For value received

  	
   

  	
   

  
	
   

  
	
  hereby sell, assign and transfer unto

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Please insert
  social security or

  	
   

  
	
   

  	
  other
  identifying number of assignee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Please print or
  type name

  	
   

  
	
   

  	
  and address,
  including zip code,

  	
   

  
	
   

  	
  of assignee:

  	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  the within Note and does hereby irrevocably
  constitute and appoint

  	
   

  	
  Attorney to transfer the Note on 

  
	
  the books of the Issuer with full power of
  substitution in the premises.

  
							



 


	
  Date:

  	
  Your Signature:

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name

  appears on this Note)

  	
   

  



 


A-8





















 


SCHEDULE OF EXCHANGES IN GLOBAL SECURITY


 


On the Closing Date the Principal Amount of this Note
was $[         ].  The following exchanges of a part of this
Global Security have been made since the Closing Date:


 


	
  Date of Exchange

  	
   

  	
  Amount of

  Decrease in Principal

  Amount of this

  Global Security

  	
   

  	
  Amount of

  Increase in Principal

  Amount of this

  Global Security

  	
   

  	
  Principal Amount of

  this Global Security

  following such

  decrease (or increase)

  	
   

  	
  Signature of

  authorized officer

  of Trustee or

  securities

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


A-9





















 


EXHIBIT B


 


FORM OF CLASS [   ]

[REGULATION S] [RULE 144A] CERTIFICATED SECURITY]


 


THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND NEITHER THE
ISSUER NOR THE CO-ISSUER HAS BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (THE “1940 ACT”).  THIS NOTE MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A)(1) TO A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A
“QIB”) WHO IS A QUALIFIED PURCHASER AS DEFINED IN SECTION 2(A)(51) OF THE
INVESTMENT COMPANY ACT (A “QUALIFIED PURCHASER”) AND IS EITHER PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER WHO IS A
QUALIFIED PURCHASER, IN A PRINCIPAL AMOUNT OF NOT LESS THAN $500,000 (AND
INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF), FOR THE PURCHASER AND FOR EACH
SUCH ACCOUNT, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO LONG AS
THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, OR (2) TO A
NON-U.S.  PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF
REGULATION S UNDER THE SECURITIES ACT IN A PRINCIPAL AMOUNT OF NOT LESS THAN
$500,000 (AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF), SUBJECT TO THE
SATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES AND ANY OTHER APPLICABLE JURISDICTION. 
EACH PURCHASER OF THIS NOTE (OR ANY INTEREST THEREIN) WILL BE DEEMED TO
HAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET FORTH IN SECTION 2.5 OF
THE INDENTURE.  ANY TRANSFER IN VIOLATION
OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND
WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY
INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE CO-ISSUER, AS APPLICABLE, THE
TRUSTEE OR ANY INTERMEDIARY.  IF AT ANY
TIME, THE ISSUER AND THE CO-ISSUER, IF APPLICABLE, DETERMINE OR ARE NOTIFIED
THAT THE HOLDER OF SUCH BENEFICIAL INTEREST IN SUCH SECURITY WAS IN BREACH, AT
THE TIME GIVEN, OF ANY OF THE REPRESENTATIONS SET FORTH IN THE INDENTURE, THE
TRUSTEE MAY CONSIDER THE ACQUISITION OF THIS NOTE OR SUCH INTEREST IN SUCH
SECURITY VOID AND REQUIRE THAT THIS NOTE OR SUCH INTEREST HEREIN BE TRANSFERRED
TO A PERSON DESIGNATED BY THE ISSUER AND THE CO-ISSUER, IF APPLICABLE.


 


PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH
HEREIN.  ACCORDINGLY, THE OUTSTANDING
PRINCIPAL OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON
THE FACE HEREOF.  ANY PERSON ACQUIRING
THIS NOTE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE
TRUSTEE.


 


B-1





















 


GRAMERCY REAL ESTATE CDO 2005-1, LTD.

GRAMERCY REAL ESTATE CDO 2005-1 LLC


 


CLASS [   ] [SECOND] [THIRD]
[FOURTH] [FIFTH] [SIXTH] [SEVENTH] 

[EIGHTH] [NINTH] [TENTH] [ELEVENTH]

[SENIOR] [SECURED] FLOATING RATE [CAPITALIZED INTEREST] TERM NOTES DUE 2035


 


	
  No. C-  

  	
   

  	
  U.S. $[     ]

  



 


Each of GRAMERCY REAL ESTATE CDO 2005-1, LTD., a
Cayman Islands exempted company with limited liability (the “Issuer”)
and GRAMERCY REAL ESTATE CDO 2005-1 LLC, a limited liability company formed
under the laws of Delaware (the “Co-Issuer”) for value received, hereby
promises to pay to [           ],
or its registered assigns (a) upon presentation and surrender of this Note
(except as otherwise permitted by the Indenture referred to below), the
principal sum of up to [           ]
United States Dollars (U.S. $[           ])
on July 25, 2035 (the “Stated Maturity”), to the extent not
previously paid, in accordance with the Indenture referred to below unless the
unpaid principal of this Note becomes due and payable at an earlier date by
declaration of acceleration, call for redemption or otherwise and (b) the Class [  ]
Interest Distribution Amount allocable to this Note in accordance with the
Indenture payable initially on October 25, 2005, and quarterly on each October 25,
January 25, April 25 and July 25 thereafter (or if such day is
not a Business Day, then on the next succeeding Business Day) (each, a “Payment
Date”).  Interest shall be computed
on the basis of the actual number of days in the Interest Accrual Period
applicable to the Class [  ] Notes divided by 360.  The interest so payable on any Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Note (or one or more predecessor Notes) is registered at the close of business
on the Record Date for such interest, which shall be the fifteenth day (whether
or not a Business Day) prior to the applicable Payment Date.


 


The obligations of the Issuer and the Co-Issuer under
this Note and the Indenture are limited recourse obligations of the Issuer and
the Co-Issuer payable solely from the Collateral Debt Securities and other
Assets pledged by the Issuer, and in the event the Collateral Debt Securities
and other such Assets are insufficient to satisfy such obligations, any claims
of the Holders of the Notes shall be extinguished.


 


Payments of principal and interest on this Note are
subordinated to the payment on each Distribution Date of certain other amounts
in accordance with the Priority of Payments and Section 13.1 of the
Indenture.


 


[Under certain circumstances specified in the
Indenture, certain amounts payable hereunder that are not available to be paid
as a result of the operation of the Priority of Payments on any Payment Date
shall not be considered “due and payable” for the purposes of the Indenture
until the Payment Date on which they are to be paid in accordance with the
Priority of Payments.](1)


 


Payments in respect of principal and interest and any
other amounts due on any Payment Date on this Note shall be payable by the
Trustee or a Paying Agent, subject to any laws or regulations applicable
thereto, by wire transfer in immediately available funds to a Dollar account
maintained by the Registered Holder hereof; provided that the Registered Holder
shall have provided wiring instructions to the Trustee on or before the related
Record Date, or, if wire transfer cannot be effected, by Dollar check drawn on
a bank as provided in the Indenture and mailed to the Registered Holder at its
address in the Notes Register.


 


Interest will cease to accrue on this Note, or in the
case of a partial repayment, on such part, from the date of repayment or Stated
Maturity unless payment of principal is improperly withheld or unless a Default
is otherwise made with respect to such payments of principal.


 


Notwithstanding the foregoing, the final payment of
interest and principal due on this Note shall be made only upon presentation
and surrender of this Note (except as otherwise provided in the Indenture) at
the Corporate Trust Office of the Trustee or at any Paying Agent.


 










(1)  Applicable to Class C,
D, E, F, G, H, J and K Notes.


 


B-2





















 


The Registered Holder of this Note shall be treated as
the owner hereof for all purposes.


 


Except as specifically provided herein and in the
Indenture, neither the Issuer nor the Co-Issuer shall be required to make any
payment with respect to any tax, assessment or other governmental charge
imposed by any government or any political subdivision or taxing authority
thereof or therein.


 


Unless the certificate of authentication hereon has
been executed by the Trustee by the manual signature of one of its authorized
officers, this Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.


 


This Note is one of a duly authorized issue of Class [  ]
[Second] [Third] [Fourth] [Fifth] [Sixth] [Seventh] [Eighth] [Ninth] [Tenth]
[Eleventh] [Senior] [Secured] Floating Rate [Capitalized Interest] Term Notes
Due 2035, of the Issuer and the Co-Issuer (the “Class [  ]
Notes”), limited in aggregate principal amount to U.S. $[            ]
to be issued under an indenture dated as of July 14, 2005 (the “Indenture”)
by and among the Issuer, the Co-Issuer, Wells Fargo Bank, National Association
as trustee, paying agent, calculation agent, transfer agent, custodial
securities intermediary, backup advancing agent and notes registrar (in such
capacity and together with any successor trustee permitted under the Indenture,
the “Trustee”) and GKK Liquidity LLC, as advancing agent.


 


The Issuer will also issue 105,000,000 Preferred
Shares having a par value of U.S. $0.01 per share and a notional amount of U.S.
$1.00 per share (the “Preferred Shares”), under the Issuer’s Memorandum
and Articles of Association as part of its issued share capital.


 


Reference is hereby made to the Indenture and all
indentures supplemental thereto for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Issuer, the
Co-Issuer, the Trustee, the Holders of the Notes and the Preferred Shareholders
and the terms upon which the Notes and the Preferred Shares are, and are to be,
executed, authenticated and delivered.


 


Payments of principal of the Class [  ]
Notes shall be payable in accordance with Section 11.1(a) of the
Indenture.


 


Capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the Indenture.


 


Pursuant to Section 9.1 of the Indenture, the
Notes are subject to redemption by the Issuer at the direction of the
Collateral Manager, in whole but not in part, upon notice given in the manner
provided in the Indenture, on or after the Payment Date on which the Aggregate
Outstanding Amount of the Notes (excluding any Class C Capitalized
Interest, Class D Capitalized Interest, Class E Capitalized Interest,
Class F Capitalized Interest, Class G Capitalized Interest, Class H
Capitalized Interest, Class J Capitalized Interest or Class K
Capitalized Interest) has been reduced to 10% of the Aggregate Outstanding
Amount of the Notes on the Closing Date; provided that no such redemption may
be made until any payments due and payable upon a termination of each Hedge Agreement
shall be made in accordance with the procedures as set forth therein; provided,
further, that the funds available to be used for such redemption will be
sufficient to pay the Total Redemption Price.


 


Pursuant to Section 9.1 of the Indenture, the Notes
and the Preferred Shares are subject to redemption by the Issuer at a price
equal to the applicable Redemption Price, on any Payment Date on or after the
Payment Date occurring in July 2008 at the direction of the Issuer (such
redemption, an “Optional Redemption”), in whole but not in part (i) by
Act of a Majority of the Preferred Shares delivered to the Trustee, or (ii) at
the direction of the Collateral Manager unless a Majority of the Preferred
Shares object; provided, however, that any payments due and payable upon a
termination of each Hedge Agreement will be made in accordance with the terms
thereof and the Indenture; and provided further, the funds available to be used
for such Optional Redemption will be sufficient to pay the Total Redemption Price.


 


Pursuant to Section 9.2 of the Indenture, the
Notes and the Preferred Shares are subject to redemption by the Issuer, during
the period from and including the Payment Date occurring in July 2015 and
to but not including the first Payment Date on which the Clean-up Call may be
exercised, in whole but not in part, if a Successful Auction is completed (such
redemption, an “Auction Call Redemption”), at their applicable
Redemption Prices; provided, that any payments due and payable upon a
termination of each Hedge Agreement shall be made on the Auction Call


 


B-3





















 


Redemption Date in
accordance with the terms thereof and in the Indenture; provided, further, that
the funds available to be used for such Auction Call Redemption will be
sufficient to pay the Total Redemption Price. 
In addition, the Notes are subject to redemption by the Issuer and the
Co-Issuer or, in the case of the Preferred Shares, by the Issuer, upon notice
given in the manner provided below, on any Payment Date under certain
circumstances as provided in the Indenture. 
The Redemption Price for any Note redeemed pursuant to Section 9.1
or Section 9.2 of the Indenture shall be as set forth in the Indenture.


 


In the case of any redemption of the Notes, interest
installments whose Payment Date is on or prior to the applicable redemption
date will be payable to the Holders of such Notes (or one or more predecessor
Notes) registered as such at the close of business on the relevant Record Date.  Notes for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
on the applicable redemption date (unless the Issuer shall default in the
payment of the Redemption Price).


 


Pursuant to Section 9.6 of the Indenture, if any
Coverage Tests applicable to any Class of Notes are not met on a
Measurement Date, then on the following Payment Date certain Interest Proceeds
and certain Principal Proceeds may be used to redeem the Notes, in the order
and manner provided in Section 9.6 of the Indenture, until each applicable
Coverage Test is satisfied.


 


Pursuant to Section 9.7 of the Indenture, the
Notes may be amortized in part by the Issuer (at the election and direction of
the Collateral Manager) if, during the Reinvestment Period, under certain
circumstances, the Collateral Manager has been unable, for a period of at least
30 consecutive days, to identify Substitute Collateral Debt Securities that it
determines would be appropriate and would meet the Eligibility Criteria in
sufficient amounts to permit the reinvestment of all or a portion of the
Principal Proceeds then on deposit in the Principal Collection Account and the
amounts on deposit in the Unused Proceeds Account in Substitute Collateral Debt
Securities.


 


If an Event of Default shall occur and be continuing,
the Class [   ] Notes may become or be declared due and
payable in the manner and with the effect provided in the Indenture.


 


By written notice to the Issuer, the Co-Issuer, the
Trustee and each Hedge Counterparty, a Majority of each and every Class of
Notes (voting as a separate Class) may rescind a declaration of acceleration of
the maturity of the Notes at any time prior to a judgment or decree for payment
of money due, provided that certain conditions set forth in the Indenture are
satisfied.


 


The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Co-Issuer and the rights of the Holders under
the Indenture at any time by the Issuer and the Co-Issuer with the consent of
each Hedge Counterparty, a Majority of each Class of Notes adversely
affected thereby and a Majority of the Preferred Shares adversely affected
thereby and subject to satisfaction of the Rating Agency Condition.  Upon the execution of any supplemental
indenture, the Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of the Indenture for all purposes; and
every Holder of Notes theretofore authenticated and delivered thereunder shall
be bound thereby.  The Indenture also
contains provisions permitting, on behalf of the Holders of all the Notes, a
Majority of each and every Class of Notes (voting as a separate Class) to
waive compliance by the Issuer with certain provisions of the Indenture and
certain past Defaults under the Indenture and their consequences.


 


No reference herein to the Indenture and no provision
of this Note or of the Indenture shall alter or impair the obligations of the
Issuer and the Co-Issuer, which are absolute and unconditional to the extent
permitted by applicable law, to pay the principal of and interest on this Note
at the times, places and rate, and in the coin or currency, herein prescribed.


 


The Notes are issuable in minimum denominations of
$500,000 and integral multiples of $1,000 in excess thereof.


 


The principal of each Note shall be payable at the
Stated Maturity thereof unless the unpaid principal of such Note becomes due
and payable on an earlier date by declaration of acceleration, call for
redemption or otherwise.


 


B-4





















 


The term “Issuer” as used in this Note includes any
successor to the Issuer under the Indenture and the term “Co-Issuer” as used in
this Note includes any successor to the Co-Issuer under the Indenture.


 


The Class [  ] Notes are non-recourse
obligations of the Issuer and the Co-Issuer and are limited in right of payment
to amounts available from the Assets as provided in the Indenture.  No other assets will be available to satisfy
payments on the Class [  ] Notes.


 


Each purchaser and any subsequent transferee of this
Note or any interest herein shall, by virtue of its purchase or other
acquisition of this Note or interest herein, be deemed to have agreed to treat
this Note as debt for U.S. federal income tax purposes.


 


No service charge shall be made for exchange or
registration of transfer of this Note, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.


 


The remedies of the Trustee or the Holder hereof, as
provided herein or in the Indenture, shall be cumulative and concurrent and may
be pursued solely against the assets of the Issuer and the Co-Issuer.  No failure on the part of the Holder in
exercising any right or remedy hereunder shall operate as a waiver or release
thereof, nor shall any single or partial exercise of any such right or remedy
preclude any other further exercise thereof or the exercise of any other right
or remedy hereunder.


 


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


 


THE HOLDER OF THIS NOTE AGREES NOT TO CAUSE THE FILING
OF A PETITION IN BANKRUPTCY AGAINST THE ISSUER OR THE CO-ISSUER IN ANY
APPLICABLE OR RELEVANT JURISDICTION UNTIL AT LEAST ONE YEAR AND ONE DAY, OR IF
LONGER THE APPLICABLE PREFERENCE PERIOD THEN IN EFFECT PLUS ONE DAY, AFTER THE
PAYMENT IN FULL OF ALL NOTES ISSUED UNDER THE INDENTURE.


 


AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THE
NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.


 


B-5





















 


IN WITNESS WHEREOF, the Issuer has caused this Note to
be duly executed.


 


Dated as of January 14, 2005


 


 


	
   

  	
  GRAMERCY REAL ESTATE
  CDO 2005-1, LTD.,

  
	
   

  	
     as
  Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRAMERCY REAL ESTATE
  CDO 2005-1 LLC,

  
	
   

  	
     as
  Co-Issuer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


 


CERTIFICATE OF AUTHENTICATION


 


This is one of the Notes referred to in the within-mentioned
Indenture.


 


 


	
   

  	
  WELLS FARGO BANK,
  NATIONAL ASSOCIATION,

  
	
   

  	
     as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  



 


B-6





















 


ASSIGNMENT FORM


 


	
  For value received

  	
   

  	
   

  
	
   

  
	
  hereby sell, assign and transfer unto

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Please insert social security or

  	
   

  
	
   

  	
  other identifying number of assignee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Please print or type name

  	
   

  
	
   

  	
  and address, including zip code,

  	
   

  
	
   

  	
  of assignee:

  	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  the within Note and does hereby irrevocably
  constitute and appoint

  	
   

  	
  Attorney to transfer the Note

  
	
  on the books of the Issuer with full power of
  substitution in the premises.

  
							



 


	
  Date:

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your
  name

  
	
   

  	
   

  	
  appears on this Note)

  



 


B-7





















 


EXHIBIT C


 


FORM OF TRANSFER CERTIFICATE

FOR (1) TRANSFER AT THE CLOSING TO A REGULATION S GLOBAL SECURITY OR

(2) SUBSEQUENT TRANSFER FROM A RULE 144A GLOBAL SECURITY TO A
REGULATION S

GLOBAL SECURITY (Transfer pursuant to §2.5(e)(iii) of the Indenture)


 


Wells
Fargo Bank, National Association

                                                as
Trustee

9062 Old Annapolis Road 

Columbia, Maryland 21045

Attention:  CDO Trust Services Group,
Gramercy Real Estate CDO 2005-1


 


Re:                               GRAMERCY
REAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE CDO 2005-1 LLC,
as Co-Issuer of: Class A-1 Senior Secured Floating Rate Term Notes Due
2035, Class A-2 Second Priority Senior Secured Floating Rate Term Notes
Due 2035, Class B Third Priority Floating Rate Term Notes Due 2035, Class C
Fourth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class D
Fifth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class E
Sixth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class F
Seventh Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class G
Eighth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class H
Ninth Priority Floating Rate Capitalized Interest Term Notes Due 2035 (the “Transferred Notes”)


 


Reference is hereby made to the Indenture, dated as of
July 14, 2005 (the “Indenture”) by and
among GRAMERCY REAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE
CDO 2005-1 LLC, as Co-Issuer of the Class A-1 Notes, the Class A-2
Notes, the Class B Notes, the Class C Notes, the Class D Notes,
the Class E Notes, the Class F Notes, the Class G Notes, the Class H
Notes, the Class J Notes and the Class K Notes, Wells Fargo Bank,
National Association, as Trustee, and GKK Liquidity LLC, as Advancing
Agent.  Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the Indenture
and if not defined in the Indenture then such terms shall have the meanings
assigned to them in Regulation S (“Regulation S”),
or Rule 144A (“Rule 144A”), under the
United States Securities Act of 1933, as amended (the “Securities Act”), and the rules promulgated
thereunder or as defined under the Investment Company Act of 1940, as amended
(the “Investment Company Act”).


 


This letter relates to the [purchase] [transfer] of $[    ]
aggregate principal amount of [Class A-1][Class A-2][Class B][Class C][Class D][Class E][Class F][Class G][Class H]
Notes [being transferred for an equivalent beneficial interest in a
Regulation S Global Security of the same Class] in the name of [name of
transferee] (the “Transferee”).


 


In connection with such request, the Transferee hereby
certifies that such transfer has been effected in accordance with the transfer
restrictions set forth in the Indenture and the Offering Memorandum dated as of
July 8, 2005 and hereby represents, warrants and agrees for the benefit of
the Issuer, the Co-Issuer, the Trustee, the Collateral Manager and their
counsel that:


 


(i)                                                 at
the time the buy order was originated, the Transferee was outside the United
States;


 


(ii)                                              the
Transferee is not a U.S. Person;


 


(iii)                                           the
transfer is being made pursuant to Rule 903 or 904 under Regulation S
of the Securities Act;


 


(iv)                                          the
Transferee will notify future transferees of the transfer restrictions;


 


(v)                                             the
Transferee understands that the Notes, including the Transferred Notes, are
being offered only in a transaction not involving any public offering in the
United States within the meaning of the Securities


 


C-1





















 


Act, the Notes, including the Transferred Notes, have
not been and will not be registered under the Securities Act, and, if in the
future the owner decides to offer, resell, pledge or otherwise transfer the
Transferred Notes, such Transferred Notes may only be offered, resold, pledged
or otherwise transferred in accordance with the Indenture and the legend on
such Transferred Notes.  The Transferee
acknowledges that no representation is made by the Issuer, the Co-Issuer or the
Initial Purchaser, as the case may be, as to the availability of any exemption
under the Securities Act or any State securities laws for resale of the
Transferred Notes;


 


(vi)                                          the
Transferee is not purchasing the Transferred Notes with a view to the resale,
distribution or other disposition thereof in violation of the Securities
Act.  The Transferee understands that an
investment in the Transferred Notes involves certain risks, including the risk
of loss of all or a substantial part of its investment under certain
circumstances.  The Transferee has had
access to such financial and other information concerning the Issuer, the Co-Issuer
and the Transferred Notes as it deemed necessary or appropriate in order to
make an informed investment decision with respect to its purchase of the
Transferred Notes, including an opportunity to ask questions of and request
information from the Collateral Manager, the Initial Purchaser, the Issuer and
the Co-Issuer, including without limitation, an opportunity to request and
review the Moody’s Weighted Average Rating Factor/Weighted Average Recovery
Rate Matrix incorporated by reference in the Offering Memorandum;


 


(vii)                                       in
connection with the purchase of the Transferred Notes (A) none of the
Issuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager or the
Trustee is acting as a fiduciary or financial or investment adviser for the
Transferee; (B) the Transferee is not relying (for purposes of making any
investment decision or otherwise) upon any advice, counsel or representations
(whether written or oral) of the Issuer, the Co-Issuer, the Initial Purchaser,
the Collateral Manager or the Trustee other than in a current offering
memorandum for such Transferred Notes and any representations expressly set
forth in a written agreement with such party; (C) none of the Issuer, the
Co-Issuer, the Initial Purchaser, the Collateral Manager or the Trustee has
given to the Transferee (directly or indirectly through any other person) any
assurance, guarantee, or representation whatsoever as to the expected or
projected success, profitability, return, performance, result, effect,
consequence, or benefit (including legal, regulatory, tax, financial,
accounting, or otherwise) of its purchase; (D) the Transferee has
consulted with its own legal, regulatory, tax, business, investment, financial,
and accounting advisers to the extent it has deemed necessary, and it has made
its own investment decisions (including decisions regarding the suitability of
any transaction pursuant to this Indenture) based upon its own judgment and
upon any advice from such advisers as it has deemed necessary and not upon any
view expressed by the Issuer, the Co-Issuer, the Initial Purchaser, the
Collateral Manager or the Trustee; and (E) the Transferee is purchasing
the Transferred Notes with a full understanding of all of the terms, conditions
and risks thereof (economic and otherwise), and is capable of assuming and
willing to assume (financially and otherwise) these risks;


 


(viii)                                    the
Transferee understands that the Transferred Notes will bear the applicable
legend set forth on such Transferred Notes;


 


(ix)                                            the
Transferee understands that the Issuer, Co-Issuer, Trustee or Paying Agent
shall require certification acceptable to it (A) as a condition to the
payment of principal of and interest on any Notes without, or at a reduced rate
of, U.S. withholding or backup withholding tax, and (B) to enable the
Issuer, Co-Issuer, Trustee and Paying Agent to determine their duties and
liabilities with respect to any taxes or other charges that they may be
required to pay, deduct or withhold from payments in respect of such Notes or
the Holder of such Notes under any present or future law or regulation of the
Cayman Islands or the United States or any present or future law or regulation
of any political subdivision thereof or taxing authority therein or to comply
with any reporting or other requirements under any such law or regulation.  Such certification may include U.S. federal
income tax forms (such as IRS Form W-8BEN (Certification of Foreign Status
of Beneficial Owner), Form W-8IMY (Certification of Foreign Intermediary
Status), IRS Form W-9 (Request for Taxpayer Identification Number and
Certification), or IRS Form W-8ECI (Certification of Foreign Person’s
Claim for Exemption from Withholding on Income Effectively Connected with
Conduct of a U.S. Trade or Business) or any successors to such IRS forms).  In addition, the Issuer, Co-Issuer, Trustee
or Paying Agent may require certification acceptable to it to enable the Issuer
to qualify for a reduced rate of withholding in any jurisdiction from or
through which the Issuer receives


 


C-2





















 


payments on its assets.  Each Transferee agrees to provide any
certification requested pursuant to this paragraph and to update or replace
such form or certification in accordance with its terms or its subsequent
amendments;


 


(x)                                               the
Transferee hereby agrees that, for purposes of U.S. federal, state and local
income and franchise tax and any other income taxes, (A) the Notes will be
treated as indebtedness, and (B) the Preferred Shares will be treated as
equity; the Transferee agrees to such treatment and agrees to take no action
inconsistent with such treatment, unless required by law;


 


(xi)                                            the
Transferee, if not a “United States person” (as defined in Section 7701(a)(30)
of the Code), either: (A) is not a bank (within the meaning of Section 881(c)(3)(A) of
the Code); (B) if such Transferee is a bank (within the meaning of Section 881(c)(3)(A) of
the Code), after giving effect to its purchase of the Notes, the Transferee
(x) will not own more than 50% of the Preferred Shares (by number) or 50%
by value of the aggregate of the preferred and all classes of notes that are
treated as equity for US federal income tax purposes either directly or
indirectly, and will not otherwise be related to the Issuer (within the meaning
of section 267(b) of the Code) and (y) has not purchased the
Notes in whole or in part to avoid any U.S. federal income tax liability
(including, without limitation, any U.S. withholding tax that would be imposed
on the Notes with respect to the Collateral Debt Securities if held directly by
the Transferee); (C) has provided an IRS Form W-8ECI representing
that all payments received or to be received by it from the Issuer are
effectively connected with the conduct of a trade or business in the United
States, or (D) is eligible for benefits under an income tax treaty with
the United States that eliminates U.S. federal income taxation of U.S. source
interest not attributable to a permanent establishment in the United States and
the Issuer is treated as a fiscally transparent entity (as defined in Treasury
regulations section 1.894-1(d)(3)(ii)) under the laws of Transferee’s
jurisdiction with respect to payments made on the Collateral Debt Securities
held by the Transferee;


 


(xii)                                         unless
the Transferee has provided another representation acceptable to the Trustee,
the Collateral Manager, the Issuer and the Co-Issuer, the Transferee represents
that either (a) it is not an “employee benefit plan” (as defined in section 3(3) of
ERISA) or “plan” (as defined in section 4975(e)(1) of the Code) that
is subject to ERISA or section 4975 of the Code, or any other plan which
is subject to any federal, state or local law (“Similar Law”) that is
substantially similar to section 406 of ERISA or section 4975 of the
Code (each a “Benefit Plan” and such funds, “Plan Assets”) or an entity whose underlying assets
include Plan Assets of any such Benefit Plan or (b) its purchase and
holding of Transferred Notes are eligible for the exemption to the prohibited
transaction rules granted by Prohibited Transaction Class Exemption (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38,
PTCE 95-60, PTCE 96-23, or a similar exemption; or, in the case of a
Benefit Plan subject to Similar Law, do not result in a non-exempt violation of
Similar Law;


 


(xiii)                                      the
Transferee is not a member of the public in the Cayman Islands, within the
meaning of Section 194 of the Cayman Islands Companies Law (2004
Revision); and


 


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


 


You, the Issuer, the Co-Issuer and the Collateral
Manager are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.


 


C-3





















 


	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  cc:

  	
  GRAMERCY REAL ESTATE CDO 2005-1, LTD.

  
	
   

  	
  GRAMERCY REAL ESTATE CDO 2005-1 LLC

  
							



 


C-4










 













 


EXHIBIT D


 


FORM OF TRANSFER CERTIFICATE

FOR (1) TRANSFER AT THE CLOSING TO A RULE 144A GLOBAL SECURITY OR

(2) SUBSEQUENT TRANSFER FROM A REGULATION S GLOBAL SECURITY TO A
RULE 144A

GLOBAL SECURITY

(Transfer pursuant to §2.5(e)(ii) of the Indenture)


 


Wells
Fargo Bank, National Association

                                                as
Trustee

9062 Old Annapolis Road 

Columbia, Maryland 21045

Attention:  CDO Trust Services, Gramercy
Real Estate CDO 2005-1


 


Re:                               GRAMERCY
REAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE CDO 2005-1
LLC, as Co-Issuer of: Class A-1 Senior Secured Floating Rate Term Notes
Due 2035, Class A-2 Second Priority Senior Secured Floating Rate Term
Notes Due 2035, Class B Third Priority Floating Rate Term Notes Due 2035, Class C
Fourth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class D
Fifth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class E
Sixth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class F
Seventh Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class G
Eighth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class H
Ninth Priority Floating Rate Capitalized Interest Term Notes Due 2035 (the “Transferred Notes”)


 


Reference is hereby made to the Indenture dated as of July 14,
2005 (the “Indenture”), by and among GRAMERCY
REAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE CDO 2005-1 LLC,
as Co-Issuer of the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes,
the Class G Notes, the Class H Notes, the Class J Notes and the Class K
Notes, Wells Fargo Bank, National Association, as Trustee, and GKK Liquidity
LLC, as Advancing Agent.  Capitalized
terms used but not defined herein shall have the meanings assigned to such
terms in the Indenture and if not defined in the Indenture then such terms
shall have the meanings assigned to them in Regulation S (“Regulation S”), or Rule 144A (“Rule 144A”), under the United States Securities
Act of 1933, as amended (the “Securities Act”),
and the rules promulgated thereunder or as defined under the Investment
Company Act of 1940, as amended (the “Investment
Company Act”).


 


This letter relates to the [purchase] [transfer] of $[    ]
aggregate principal amount of [Class A-1][Class A-2][Class B][Class C][Class D][Class E][Class F][Class G][Class H]
Notes [being transferred in exchange for an equivalent beneficial interest in a
Rule 144A Global Security of the same Class] in the name of [name of
transferee] (the “Transferee”).


 


In connection with such request, the Transferee hereby
certifies that such transfer has been effected in accordance with the transfer
restrictions set forth in the Indenture and the Offering Memorandum dated as of
July 8, 2005 and hereby represents, warrants and agrees for the benefit of
the Issuer, the Co-Issuer and the Trustee that:


 


(i)                                                 the
Transferee is a qualified institutional buyer within the meaning of Rule 144A
under the Securities Act and a Qualified Purchaser as defined in Section 2(a)(51)
of the Investment Company Act;


 


(ii)                                              (A) the
Transferee is acquiring a beneficial interest in such Transferred Notes for its
own account or for an account that is both a qualified institutional buyer
within the meaning of Rule 144A and a Qualified Purchaser as defined in Section 2(a)(51)
of the Investment Company Act and as to each of which the Transferee exercises
sole investment discretion and (B) the Transferee and each such account is
acquiring not less than the minimum denomination of the Transferred Notes;


 


(iii)                                           the
Transferee will notify future transferees of the transfer restrictions;


 


D-1





















 


(iv)                                          the
Transferee is obtaining the Transferred Notes in a transaction pursuant to Rule 144A;


 


(v)                                             the
Transferee is obtaining the Transferred Notes in accordance with any applicable
securities laws of any state of the United States or any other applicable
jurisdiction;


 


(vi)                                          the
Transferee understands that the Notes, including the Transferred Notes, are
being offered only in a transaction not involving any public offering in the
United States within the meaning of the Securities Act, the Notes, including
the Transferred Notes, have not been and will not be registered under the
Securities Act, and, if in the future the owner decides to offer, resell,
pledge or otherwise transfer the Transferred Notes, such Transferred Notes may
only be offered, resold, pledged or otherwise transferred in accordance with
the Indenture and the legend on such Transferred Notes.  The Transferee acknowledges that no
representation is made by the Issuer, the Co-Issuer or the Initial Purchaser,
as the case may be, as to the availability of any exemption under the
Securities Act or any State securities laws for resale of the Transferred Notes;


 


(vii)                                       the
Transferee is not purchasing the Transferred Notes with a view to the resale,
distribution or other disposition thereof in violation of the Securities
Act.  The Transferee understands that an
investment in the Transferred Notes involves certain risks, including the risk
of loss of all or a substantial part of its investment under certain
circumstances.  The Transferee has had
access to such financial and other information concerning the Issuer, the Co-Issuer
and the Transferred Notes as it deemed necessary or appropriate in order to
make an informed investment decision with respect to its purchase of the
Transferred Notes, including an opportunity to ask questions of and request
information from the Collateral Manager, the Initial Purchaser, the Issuer and
the Co-Issuer, including without limitation, an opportunity to request and
review the Moody’s Weighted Average Rating Factor/Weighted Average Recovery
Rate Matrix incorporated by reference in the Offering Memorandum;


 


(viii)                                    in
connection with the purchase of the Transferred Notes (A) none of the
Issuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager or the
Trustee is acting as a fiduciary or financial or investment adviser for the
Transferee; (B) the Transferee is not relying (for purposes of making any
investment decision or otherwise) upon any advice, counsel or representations
(whether written or oral) of the Issuer, the Co-Issuer, the Initial Purchaser,
the Collateral Manager or the Trustee other than in a current offering memorandum
for such Transferred Notes and any representations expressly set forth in a
written agreement with such party; (C) none of the Issuer, the Co-Issuer,
the Initial Purchaser, the Collateral Manager or the Trustee has given to the
Transferee (directly or indirectly through any other person) any assurance,
guarantee, or representation whatsoever as to the expected or projected
success, profitability, return, performance, result, effect, consequence, or
benefit (including legal, regulatory, tax, financial, accounting, or otherwise)
of its purchase; (D) the Transferee has consulted with its own legal,
regulatory, tax, business, investment, financial, and accounting advisers to
the extent it has deemed necessary, and it has made its own investment
decisions (including decisions regarding the suitability of any transaction
pursuant to this Indenture) based upon its own judgment and upon any advice
from such advisers as it has deemed necessary and not upon any view expressed
by the Issuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager or
the Trustee; and (E) the Transferee is purchasing the Transferred Notes
with a full understanding of all of the terms, conditions and risks thereof
(economic and otherwise), and is capable of assuming and willing to assume
(financially and otherwise) these risks;


 


(ix)                                            the
Transferee understands that the Transferred Notes will bear the applicable
legend set forth on such Transferred Notes;


 


(x)                                               the
Transferee understands that the Issuer, Co-Issuer, Trustee or Paying Agent
shall require certification acceptable to it (A) as a condition to the
payment of principal of and interest on any Notes without, or at a reduced rate
of, U.S. withholding or backup withholding tax, and (B) to enable the
Issuer, Co-Issuer, Trustee and Paying Agent to determine their duties and
liabilities with respect to any taxes or other charges that they may be
required to pay, deduct or withhold from payments in respect of such Notes or
the Holder of such Notes under any present or future law or regulation of the
Cayman Islands or the United States or any present or future law or regulation
of any political subdivision thereof or taxing authority therein or to comply
with any reporting or other requirements under any such law or regulation.  Such certification may include U.S. federal
income tax forms (such as IRS Form W-8BEN (Certification of


 


D-2





















 


Foreign Status of Beneficial Owner), Form W-8IMY
(Certification of Foreign Intermediary Status), IRS Form W-9 (Request for
Taxpayer Identification Number and Certification), or IRS Form W-8ECI
(Certification of Foreign Person’s Claim for Exemption from Withholding on
Income Effectively Connected with Conduct of a U.S. Trade or Business) or any
successors to such IRS forms).  In
addition, the Issuer, Co-Issuer, Trustee or Paying Agent may require
certification acceptable to it to enable the Issuer to qualify for a reduced
rate of withholding in any jurisdiction from or through which the Issuer
receives payments on its assets.  Each
Transferee agrees to provide any certification requested pursuant to this
paragraph and to update or replace such form or certification in accordance
with its terms or its subsequent amendments;


 


(xi)                                            the
Transferee hereby agrees that, for purposes of U.S. federal, state and local
income and franchise tax and any other income taxes, (A) the Notes will be
treated as indebtedness, and (B) the Preferred Shares will be treated as
equity; the Transferee agrees to such treatment and agrees to take no action
inconsistent with such treatment, unless required by law;


 


(xii)                                         the
Transferee, if not a “United States person” (as
defined in Section 7701(a)(30) of the Code), either: (A) is not a
bank (within the meaning of Section 881(c)(3)(A) of the Code); (B) if
such Transferee is a bank (within the meaning of Section 881(c)(3)(A) of
the Code), after giving effect to its purchase of the Notes, the Transferee
(x) will not own more than 50% of the Preferred Shares (by number) or 50%
by value of the aggregate of the preferred and all classes of notes that are
treated as equity for US federal income tax purposes either directly or
indirectly, and will not otherwise be related to the Issuer (within the meaning
of section 267(b) of the Code) and (y) has not purchased the
Notes in whole or in part to avoid any U.S. federal income tax liability
(including, without limitation, any U.S. withholding tax that would be imposed
on the Notes with respect to the Collateral Debt Securities if held directly by
the Transferee); (C) has provided an IRS Form W-8ECI representing
that all payments received or to be received by it from the Issuer are
effectively connected with the conduct of a trade or business in the United
States, or (D) is eligible for benefits under an income tax treaty with
the United States that eliminates U.S. federal income taxation of U.S. source
interest not attributable to a permanent establishment in the United States and
the Issuer is treated as a fiscally transparent entity (as defined in Treasury
regulations section 1.894-1(d)(3)(ii)) under the laws of Transferee’s
jurisdiction with respect to payments made on the Collateral Debt Securities
held by the Transferee;


 


(xiii)                                      unless
the Transferee has provided another representation acceptable to the Trustee,
the Collateral Manager, the Issuer and the Co-Issuer, the Transferee represents
that either (a) it is not and is not investing on behalf of an “employee benefit plan” (as defined in section 3(3) of
ERISA) or “plan” (as defined in section 4975(e)(1) of
the Code) that is subject to ERISA or section 4975 of the Code or any
other plan which is subject to any federal, state or local law (“Similar Law”) that is substantially similar to section 406
of ERISA or section 4975 of the Code (each a “Benefit
Plan” and such funds “Plan Assets”) or
an entity whose underlying assets include Plan Assets of any such Benefit Plan
or (b) its purchase and holding of the Transferred Notes are eligible for
the exemption to the prohibited transaction rules granted by Prohibited
Transaction Class Exemption (“PTCE”) 84-14,
PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23, or a similar
exemption; or, in the case of a Benefit Plan subject to Similar Law, do not
result in a non-exempt violation of Similar Law;


 


(xiv)                                     the
Transferee is not a member of the public in the Cayman Islands, within the
meaning of Section 194 of the Cayman Islands Companies Law (2004
Revision); and


 


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


 


D-3





















 


You, the Issuer, the Co-Issuer
and the Collateral Manager are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.


 


 


	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  cc:

  	
  GRAMERCY REAL ESTATE CDO 2005-1, LTD.

  
	
   

  	
  GRAMERCY REAL ESTATE CDO 2005-1 LLC

  
							



 


D-4





















 


EXHIBIT E-1


 


FORM OF TRANSFER CERTIFICATE

FOR A TRANSFER FROM A CERTIFICATED RULE 144A SECURITY

TO A CERTIFICATED REGULATION S SECURITY

(Transfer pursuant to §2.5(e)(iv) of the Indenture)


 


Wells
Fargo Bank, National Association

                                                as
Trustee

9062 Old Annapolis Road 

Columbia, Maryland 21045

Attention:  CDO Trust Services Group,
Gramercy Real Estate CDO 2005-1


 


Re:                               GRAMERCY
REAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE CDO 2005-1
LLC, as Co-Issuer of: Class A-1 Senior Secured Floating Rate Term Notes
Due 2035, Class A-2 Second Priority Senior Secured Floating Rate Term
Notes Due 2035, Class B Third Priority Floating Rate Term Notes Due 2035, Class C
Fourth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class D
Fifth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class E
Sixth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class F
Seventh Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class G
Eighth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class H
Ninth Priority Floating Rate Capitalized Interest Term Notes Due 2035 (the “Transferred Notes”)


 


Reference is hereby made to the Indenture, dated as of
July 14, 2005 (the “Indenture”) by and
among GRAMERCY REAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE
CDO 2005-1 LLC, as Co-Issuer of the Class A Notes, the Class B Notes,
the Class C Notes, the Class D Notes, the Class E Notes, the Class F
Notes, the Class G Notes, the Class H Notes, the Class J Notes
and the Class K Notes, Wells Fargo Bank, National Association, as Trustee,
and GKK Liquidity LLC, as Advancing Agent. 
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Indenture and if not defined in the Indenture
then such terms shall have the meanings assigned to them in Regulation S (“Regulation S”), or Rule 144A (“Rule 144A”), under the United States Securities
Act of 1933, as amended (the “Securities Act”),
and the rules promulgated thereunder or as defined under the Investment
Company Act of 1940, as amended (the “Investment
Company Act”).


 


This letter relates to the transfer of $[    ]
aggregate principal amount of [Class A-1][Class A-2][Class B][Class C][Class D][Class E][Class F][Class G][Class H]
Notes being transferred for an equivalent interest in a Regulation S Global
Security of the same Class in the name of [name of transferee] (the “Transferee”).


 


In connection with such request, the Transferee hereby
certifies that such transfer has been effected in accordance with the transfer
restrictions set forth in the Indenture and the Offering Memorandum dated as of
July 8, 2005 and hereby represents, warrants and agrees for the benefit of
the Issuer, the Co-Issuer, the Trustee, the Collateral Manager and their
counsel that:


 


(i)                                                 at
the time the buy order was originated, the Transferee was outside the United
States;


 


(ii)                                              the
Transferee is not a U.S. Person;


 


(iii)                                           the
transfer is being made pursuant to Rule 903 or 904 under Regulation S
of the Securities Act;


 


(iv)                                          the
Transferee will notify future transferees of the transfer restrictions;


 


(v)                                             the
Transferee understands that the Notes, including the Transferred Notes, are
being offered only in a transaction not involving any public offering in the
United States within the meaning of the Securities Act, the Notes, including
the Transferred Notes, have not been and will not be registered under the


 


E-1-1





















 


Securities Act, and, if in the future the owner
decides to offer, resell, pledge or otherwise transfer the Transferred Notes,
such Transferred Notes may only be offered, resold, pledged or otherwise
transferred in accordance with the Indenture and the legend on such Transferred
Notes.  The Transferee acknowledges that
no representation is made by the Issuer, the Co-Issuer or the Initial
Purchaser, as the case may be, as to the availability of any exemption under
the Securities Act or any State securities laws for resale of the Transferred
Notes;


 


(vi)                                          the
Transferee is not purchasing the Transferred Notes with a view to the resale,
distribution or other disposition thereof in violation of the Securities
Act.  The Transferee understands that an
investment in the Transferred Notes involves certain risks, including the risk
of loss of all or a substantial part of its investment under certain circumstances.  The Transferee has had access to such
financial and other information concerning the Issuer, the Co-Issuer and the
Transferred Notes as it deemed necessary or appropriate in order to make an
informed investment decision with respect to its purchase of the Transferred
Notes, including an opportunity to ask questions of and request information
from the Collateral Manager, the Initial Purchaser, the Issuer and the Co-Issuer,
including without limitation, an opportunity to request and review the Moody’s
Weighted Average Rating Factor/Weighted Average Recovery Rate Matrix
incorporated by reference in the Offering Memorandum;


 


(vii)                                       in
connection with the purchase of the Transferred Notes (A) none of the
Issuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager or the
Trustee is acting as a fiduciary or financial or investment adviser for the
Transferee; (B) the Transferee is not relying (for purposes of making any
investment decision or otherwise) upon any advice, counsel or representations
(whether written or oral) of the Issuer, the Co-Issuer, the Initial Purchaser,
the Collateral Manager or the Trustee other than in a current offering
memorandum for such Transferred Notes and any representations expressly set
forth in a written agreement with such party; (C) none of the Issuer, the
Co-Issuer, the Initial Purchaser, the Collateral Manager or the Trustee has
given to the Transferee (directly or indirectly through any other person) any
assurance, guarantee, or representation whatsoever as to the expected or
projected success, profitability, return, performance, result, effect,
consequence, or benefit (including legal, regulatory, tax, financial,
accounting, or otherwise) of its purchase; (D) the Transferee has
consulted with its own legal, regulatory, tax, business, investment, financial,
and accounting advisers to the extent it has deemed necessary, and it has made
its own investment decisions (including decisions regarding the suitability of
any transaction pursuant to this Indenture) based upon its own judgment and
upon any advice from such advisers as it has deemed necessary and not upon any
view expressed by the Issuer, the Co-Issuer, the Initial Purchaser, the
Collateral Manager or the Trustee; and (E) the Transferee is purchasing
the Transferred Notes with a full understanding of all of the terms, conditions
and risks thereof (economic and otherwise), and is capable of assuming and
willing to assume (financially and otherwise) these risks;


 


(viii)                                    the
Transferee understands that the Transferred Notes will bear the applicable legend
set forth on such Transferred Notes;


 


(ix)                                            the
Transferee understands that the Issuer, Co-Issuer, Trustee or Paying Agent
shall require certification acceptable to it (A) as a condition to the
payment of principal of and interest on any Notes without, or at a reduced rate
of, U.S. withholding or backup withholding tax, and (B) to enable the
Issuer, Co-Issuer, Trustee and Paying Agent to determine their duties and
liabilities with respect to any taxes or other charges that they may be
required to pay, deduct or withhold from payments in respect of such Notes or
the Holder of such Notes under any present or future law or regulation of the
Cayman Islands or the United States or any present or future law or regulation
of any political subdivision thereof or taxing authority therein or to comply
with any reporting or other requirements under any such law or regulation.  Such certification may include U.S. federal
income tax forms (such as IRS Form W-8BEN (Certification of Foreign Status
of Beneficial Owner), Form W-8IMY (Certification of Foreign Intermediary
Status), IRS Form W-9 (Request for Taxpayer Identification Number and
Certification), or IRS Form W-8ECI (Certification of Foreign Person’s
Claim for Exemption from Withholding on Income Effectively Connected with
Conduct of a U.S. Trade or Business) or any successors to such IRS forms).  In addition, the Issuer, Co-Issuer, Trustee
or Paying Agent may require certification acceptable to it to enable the Issuer
to qualify for a reduced rate of withholding in any jurisdiction from or
through which the Issuer receives payments on its assets.  Each Transferee agrees to provide any
certification requested pursuant to this


 


E-1-2





















 


paragraph and to update or replace such form or
certification in accordance with its terms or its subsequent amendments;


 


(x)                                               the
Transferee hereby agrees that, for purposes of U.S. federal, state and local
income and franchise tax and any other income taxes, (A) the Notes will be
treated as indebtedness, and (B) the Preferred Shares will be treated as
equity; the Transferee agrees to such treatment and agrees to take no action
inconsistent with such treatment, unless required by law;


 


(xi)                                            the
Transferee, if not a “United States person” (as defined in Section 7701(a)(30)
of the Code), either: (A) is not a bank (within the meaning of Section 881(c)(3)(A) of
the Code); (B) if such Transferee is a bank (within the meaning of Section 881(c)(3)(A) of
the Code), after giving effect to its purchase of the Notes, the Transferee
(x) will not own more than 50% of the Preferred Shares (by number) or 50%
by value of the aggregate of the preferred and all classes of notes that are
treated as equity for US federal income tax purposes either directly or indirectly,
and will not otherwise be related to the Issuer (within the meaning of section 267(b) of
the Code) and (y) has not purchased the Notes in whole or in part to avoid
any U.S. federal income tax liability (including, without limitation, any U.S.
withholding tax that would be imposed on the Notes with respect to the
Collateral Debt Securities if held directly by the Transferee); (C) has
provided an IRS Form W-8ECI representing that all payments received or to
be received by it from the Issuer are effectively connected with the conduct of
a trade or business in the United States, or (D) is eligible for benefits
under an income tax treaty with the United States that eliminates U.S. federal
income taxation of U.S. source interest not attributable to a permanent
establishment in the United States and the Issuer is treated as a fiscally
transparent entity (as defined in Treasury regulations section 1.894-1(d)(3)(ii))
under the laws of Transferee’s jurisdiction with respect to payments made on
the Collateral Debt Securities held by the Transferee;


 


(xii)                                         unless
the Transferee has provided another representation acceptable to the Trustee,
the Collateral Manager, the Issuer and the Co-Issuer, the Transferee represents
that either (a) it is not an “employee benefit plan” (as defined in section 3(3) of
ERISA) or “plan” (as defined in section 4975(e)(1) of the Code) that
is subject to ERISA or section 4975 of the Code, or any other plan which
is subject to any federal, state or local law (“Similar Law”) that is substantially
similar to section 406 of ERISA or section 4975 of the Code (each a “Benefit Plan” and such funds, “Plan Assets”) or an entity whose underlying assets
include Plan Assets of any such Benefit Plan or (b) its purchase and
holding of Transferred Notes are eligible for the exemption to the prohibited
transaction rules granted by Prohibited Transaction Class Exemption (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38,
PTCE 95-60, PTCE 96-23, or a similar exemption; or, in the case of a
Benefit Plan subject to Similar Law, do not result in a non-exempt violation of
Similar Law;


 


(xiii)                                      the
Transferee is not a member of the public in the Cayman Islands, within the
meaning of Section 194 of the Cayman Islands Companies Law (2004
Revision); and


 


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


 


You, the Issuer, the Co-Issuer and the Collateral
Manager are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.


 


E-1-3





















 


	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  cc:

  	
  GRAMERCY REAL ESTATE
  CDO 2005-1, LTD.

  
	
   

  	
  GRAMERCY REAL ESTATE
  CDO 2005-1 LLC

  
						



 


E-1-4





















 


EXHIBIT E-2


 


FORM OF TRANSFER CERTIFICATE

FOR A TRANSFER FROM A CERTIFICATED REGULATION S SECURITY

TO A CERTIFICATED RULE 144A SECURITY

(Transfer pursuant to §2.5(e)(iv) of the Indenture)


 


Wells
Fargo Bank, National Association

                                                as
Trustee

9062 Old Annapolis Road 

Columbia, Maryland 21045

Attention:  CDO Trust Services, Gramercy
Real Estate CDO 2005-1


 


Re:                               GRAMERCY
REAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE CDO 2005-1
LLC, as Co-Issuer of: Class A-1 Senior Secured Floating Rate Term Notes
Due 2035, Class A-2 Second Priority Senior Secured Floating Rate Term
Notes Due 2035, Class B Third Priority Floating Rate Term Notes Due 2035, Class C
Fourth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class D
Fifth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class E
Sixth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class F
Seventh Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class G
Eighth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class H
Ninth Priority Floating Rate Capitalized Interest Term Notes Due 2035 (the “Transferred Notes”)


 


Reference is hereby made to the Indenture dated as of July 14,
2005 (the “Indenture”), by and among GRAMERCY
REAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE CDO 2005-1
LLC, as Co-Issuer of the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes,
the Class G Notes, the Class H Notes, the Class J Notes and the Class K
Notes, Wells Fargo Bank, National Association, as Trustee, and GKK Liquidity
LLC, as Advancing Agent.  Capitalized
terms used but not defined herein shall have the meanings assigned to such
terms in the Indenture and if not defined in the Indenture then such terms
shall have the meanings assigned to them in Regulation S (“Regulation S”), or Rule 144A (“Rule 144A”), under the United States Securities
Act of 1933, as amended (the “Securities Act”),
and the rules promulgated thereunder or as defined under the Investment
Company Act of 1940, as amended (the “Investment
Company Act”).


 


This letter relates to the transfer of $[    ]
aggregate principal amount of [Class A-1][Class A-2][Class B][Class C][Class D][Class E][Class F][Class G][Class H]
Notes being transferred in exchange for an equivalent interest in a Rule 144A
Global Security of the same Class in the name of [name of transferee] (the
“Transferee”).


 


In connection with such request, the Transferee hereby
certifies that such transfer has been effected in accordance with the transfer
restrictions set forth in the Indenture and the Offering Memorandum dated as of
July 8, 2005 and hereby represents, warrants and agrees for the benefit of
the Issuer, the Co-Issuer and the Trustee that:


 


(i)                                                 the
Transferee is a qualified institutional buyer within the meaning of Rule 144A
under the Securities Act and a Qualified Purchaser as defined in Section 2(a)(51)
of the Investment Company Act;


 


(ii)                                              (A) the
Transferee is acquiring an interest in such Transferred Notes for its own
account or for an account that is both a qualified institutional buyer within
the meaning of Rule 144A and a Qualified Purchaser as defined in Section 2(a)(51)
of the Investment Company Act and as to each of which the Transferee exercises
sole investment discretion and (B) the Transferee and each such account is
acquiring not less than the minimum denomination of the Transferred Notes;


 


(iii)                                           the
Transferee will notify future transferees of the transfer restrictions;


 


E-2-1





















 


(iv)                                          the
Transferee is obtaining the Transferred Notes in a transaction pursuant to Rule 144A;


 


(v)                                             the
Transferee is obtaining the Transferred Notes in accordance with any applicable
securities laws of any state of the United States or any other applicable jurisdiction;


 


(vi)                                          the
Transferee understands that the Notes, including the Transferred Notes, are
being offered only in a transaction not involving any public offering in the
United States within the meaning of the Securities Act, the Notes, including
the Transferred Notes, have not been and will not be registered under the
Securities Act, and, if in the future the owner decides to offer, resell,
pledge or otherwise transfer the Transferred Notes, such Transferred Notes may
only be offered, resold, pledged or otherwise transferred in accordance with
the Indenture and the legend on such Transferred Notes.  The Transferee acknowledges that no
representation is made by the Issuer, the Co-Issuer or the Initial Purchaser,
as the case may be, as to the availability of any exemption under the
Securities Act or any State securities laws for resale of the Transferred
Notes;


 


(vii)                                       the
Transferee is not purchasing the Transferred Notes with a view to the resale,
distribution or other disposition thereof in violation of the Securities
Act.  The Transferee understands that an
investment in the Transferred Notes involves certain risks, including the risk
of loss of all or a substantial part of its investment under certain
circumstances.  The Transferee has had
access to such financial and other information concerning the Issuer, the Co-Issuer
and the Transferred Notes as it deemed necessary or appropriate in order to
make an informed investment decision with respect to its purchase of the
Transferred Notes, including an opportunity to ask questions of and request
information from the Collateral Manager, the Initial Purchaser, the Issuer and
the Co-Issuer, including without limitation, an opportunity to request and
review the Moody’s Weighted Average Rating Factor/Weighted Average Recovery
Rate Matrix incorporated by reference in the Offering Memorandum;


 


(viii)                                    in
connection with the purchase of the Transferred Notes (A) none of the
Issuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager or the
Trustee is acting as a fiduciary or financial or investment adviser for the
Transferee; (B) the Transferee is not relying (for purposes of making any
investment decision or otherwise) upon any advice, counsel or representations
(whether written or oral) of the Issuer, the Co-Issuer, the Initial Purchaser,
the Collateral Manager or the Trustee other than in a current offering
memorandum for such Transferred Notes and any representations expressly set
forth in a written agreement with such party; (C) none of the Issuer, the
Co-Issuer, the Initial Purchaser, the Collateral Manager or the Trustee has
given to the Transferee (directly or indirectly through any other person) any
assurance, guarantee, or representation whatsoever as to the expected or
projected success, profitability, return, performance, result, effect,
consequence, or benefit (including legal, regulatory, tax, financial,
accounting, or otherwise) of its purchase; (D) the Transferee has
consulted with its own legal, regulatory, tax, business, investment, financial,
and accounting advisers to the extent it has deemed necessary, and it has made
its own investment decisions (including decisions regarding the suitability of
any transaction pursuant to this Indenture) based upon its own judgment and
upon any advice from such advisers as it has deemed necessary and not upon any
view expressed by the Issuer, the Co-Issuer, the Initial Purchaser, the
Collateral Manager or the Trustee; and (E) the Transferee is purchasing
the Transferred Notes with a full understanding of all of the terms, conditions
and risks thereof (economic and otherwise), and is capable of assuming and
willing to assume (financially and otherwise) these risks;


 


(ix)                                            the
Transferee understands that the Transferred Notes will bear the applicable
legend set forth on such Transferred Notes;


 


(x)                                               the
Transferee understands that the Issuer, Co-Issuer, Trustee or Paying Agent
shall require certification acceptable to it (A) as a condition to the
payment of principal of and interest on any Notes without, or at a reduced rate
of, U.S. withholding or backup withholding tax, and (B) to enable the
Issuer, Co-Issuer, Trustee and Paying Agent to determine their duties and
liabilities with respect to any taxes or other charges that they may be
required to pay, deduct or withhold from payments in respect of such Notes or
the Holder of such Notes under any present or future law or regulation of the
Cayman Islands or the United States or any present or future law or regulation
of any political subdivision thereof or taxing authority therein or to comply
with any reporting or other requirements under any such law or regulation.  Such certification may include U.S. federal
income tax forms (such as IRS Form W-8BEN (Certification of


 


E-2-2





















 


Foreign Status of Beneficial Owner), Form W-8IMY
(Certification of Foreign Intermediary Status), IRS Form W-9 (Request for
Taxpayer Identification Number and Certification), or IRS Form W-8ECI
(Certification of Foreign Person’s Claim for Exemption from Withholding on
Income Effectively Connected with Conduct of a U.S. Trade or Business) or any
successors to such IRS forms).  In
addition, the Issuer, Co-Issuer, Trustee or Paying Agent may require
certification acceptable to it to enable the Issuer to qualify for a reduced
rate of withholding in any jurisdiction from or through which the Issuer
receives payments on its assets.  Each
Transferee agrees to provide any certification requested pursuant to this
paragraph and to update or replace such form or certification in accordance
with its terms or its subsequent amendments;


 


(xi)                                            the
Transferee hereby agrees that, for purposes of U.S. federal, state and local
income and franchise tax and any other income taxes, (A) the Notes will be
treated as indebtedness, and (B) the Preferred Shares will be treated as
equity; the Transferee agrees to such treatment and agrees to take no action
inconsistent with such treatment, unless required by law;


 


(xii)                                         the
Transferee, if not a “United States person” (as
defined in Section 7701(a)(30) of the Code), either: (A) is not a
bank (within the meaning of Section 881(c)(3)(A) of the Code); (B) if
such Transferee is a bank (within the meaning of Section 881(c)(3)(A) of
the Code), after giving effect to its purchase of the Notes, the Transferee
(x) will not own more than 50% of the Preferred Shares (by number) or 50%
by value of the aggregate of the preferred and all classes of notes that are
treated as equity for US federal income tax purposes either directly or
indirectly, and will not otherwise be related to the Issuer (within the meaning
of section 267(b) of the Code) and (y) has not purchased the
Notes in whole or in part to avoid any U.S. federal income tax liability
(including, without limitation, any U.S. withholding tax that would be imposed
on the Notes with respect to the Collateral Debt Securities if held directly by
the Transferee); (C) has provided an IRS Form W-8ECI representing
that all payments received or to be received by it from the Issuer are
effectively connected with the conduct of a trade or business in the United
States, or (D) is eligible for benefits under an income tax treaty with
the United States that eliminates U.S. federal income taxation of U.S. source
interest not attributable to a permanent establishment in the United States and
the Issuer is treated as a fiscally transparent entity (as defined in Treasury
regulations section 1.894-1(d)(3)(ii)) under the laws of Transferee’s
jurisdiction with respect to payments made on the Collateral Debt Securities
held by the Transferee;


 


(xiii)                                      unless
the Transferee has provided another representation acceptable to the Trustee,
the Collateral Manager, the Issuer and the Co-Issuer, the Transferee represents
that either (a) it is not and is not investing on behalf of an “employee benefit plan” (as defined in section 3(3) of
ERISA) or “plan” (as defined in section 4975(e)(1) of
the Code) that is subject to ERISA or section 4975 of the Code or any
other plan which is subject to any federal, state or local law (“Similar Law”) that is substantially similar to section 406
of ERISA or section 4975 of the Code (each a “Benefit
Plan” and such funds “Plan Assets”) or
an entity whose underlying assets include Plan Assets of any such Benefit Plan
or (b) its purchase and holding of the Transferred Notes are eligible for
the exemption to the prohibited transaction rules granted by Prohibited
Transaction Class Exemption (“PTCE”) 84-14,
PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23, or a similar
exemption; or, in the case of a Benefit Plan subject to Similar Law, do not
result in a non-exempt violation of Similar Law;


 


(xiv)                                     the
Transferee is not a member of the public in the Cayman Islands, within the
meaning of Section 194 of the Cayman Islands Companies Law (2004
Revision); and


 


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


 


E-2-3





















 


You, the Issuer, the Co-Issuer
and the Collateral Manager are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.


 


 


	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  cc:

  	
  GRAMERCY REAL ESTATE
  CDO 2005-1, LTD.

  
	
   

  	
  GRAMERCY REAL ESTATE
  CDO 2005-1 LLC

  
						



 


E-2-4





















 


EXHIBIT K


 


FORM OF TRUST RECEIPT


 


GRAMERCY REAL ESTATE CDO 2005-1, LTD.

(the “Issuer”)

GKK Manager LLC

(the “Collateral Manager”)


 


Re:                               GRAMERCY
REAL ESTATE CDO 2005-1, LTD.


 


Ladies and
Gentlemen:


 


In accordance with the provisions of the Indenture,
the undersigned, as the Custodial Securities Intermediary, hereby certifies
that it has received the documents identified on Schedule A hereto
with respect to the Collateral Debt Securities identified on such schedule and
that it is holding all such documents in its capacity as the Custodial
Securities Intermediary subject to the terms of the Indenture, dated as of July 14,
2005, by and among the Issuer, Gramercy Real Estate CDO 2005-1 LLC, as
Co-Issuer, GKK Liquidity LLC, as Advancing Agent, and Wells Fargo Bank,
National Association, as Trustee, Paying Agent, Calculation Agent, Transfer
Agent, Custodial Securities Intermediary, Backup Advancing Agent and Notes
Registrar.  Capitalized terms used but
not defined in this Receipt have the meanings assigned to them in the
Indenture.


 


The Custodial Securities Intermediary makes no
representations as to, and shall not be responsible to verify, (i) the
validity, legality, enforceability, due authorization, recordability,
sufficiency, or genuineness of any of the documents in its custody relating to
a Collateral Debt Security, or (ii) the collectability, insurability,
effectiveness or suitability of any such in its custody relating to a
Collateral Debt Security.


 


 


	
   

  	
  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, solely in its capacity

  
	
   

  	
  as Trustee and Custodial
  Security Intermediary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  



 


K-1





















 


EXHIBIT L


 


FORM OF REQUEST FOR RELEASE OF DOCUMENTS AND
RECEIPT


 


To:                              Wells
Fargo Bank, National Association


 


In connection with the administration of the
Collateral Debt Securities held by you as the Custodial Securities Intermediary
on behalf of the Issuer, we request the release, to the Collateral Manager of
[specify document] for the Collateral Debt Security described below, for the
reason indicated.


 


	
  Borrower’s
  Name, Address & Zip Code:

  	
   

  	
  Ship Files To:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone Number:

  	
   

  
	
   

  	
   

  	
   

  
	
  Collateral Debt Security Description:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Current Outstanding Principal Balance:

  	
   

  	
   

  	
   

  
					



 


Reason for Requesting
Documents (check one):


 


	
  o 1.

  	
   

  	
  Purchased Asset
  Paid in Full. (The Collateral Manager hereby certifies that all amounts
  received in connection therewith that are required to be remitted by the
  borrower or other obligors thereunder have been paid in full and that any
  amounts in respect thereof required to be remitted to the Trustee pursuant to
  the Indenture have been so remitted.

  
	
  o 2.

  	
   

  	
  Purchased Asset
  Liquidated By                           .
  (The Collateral Manager hereby certifies that all proceeds of insurance,
  condemnation or other liquidation have been finally received and that any
  amounts in respect thereof required to be remitted to the Trustee pursuant to
  the Indenture have been so remitted.)

  
	
  o 3.

  	
   

  	
  Other (explain)                                                .

  



 


If box 1 or 2 above is checked, and if all or part of
the Underlying Instruments was previously released to us, please release to us
our previous request and receipt on file with you, as well as any additional
documents in your possession relating to the specified Collateral Debt
Security.


 


If box 3 above is checked, upon our return of all of
the above documents to you as the Custodial Securities Intermediary, please
acknowledge your receipt by signing in the space indicated below and returning
this form.


 


If box 3 above is checked, it is hereby acknowledged
that a security interest pursuant to the Uniform Commercial Code in the
Collateral Debt Securities described above and in the proceeds of said
Collateral Debt Securities has been granted to the Trustee pursuant to the
Indenture.


 


If box 3 above is checked, in consideration of the
aforesaid delivery by the Custodial Securities Intermediary, the Collateral
Manager hereby agrees to hold said Collateral Debt Securities in trust for the
Trustee, as provided under and in accordance with all provisions of the
Indenture and the Collateral Management Agreement, and to return said
Collateral Debt Securities to the Custodial Securities Intermediary no later
than the close of business on


 


L-1





















 


the twentieth (20th)
Business Day following the date hereof or, if such day is not a Business Day,
on the immediately preceding Business Day.


 


The Collateral Manager hereby acknowledges that it
shall hold the above-described Collateral Debt Securities and any related
Underlying Instruments in trust for, and as the bailee of, the Trustee, and
shall return said Collateral Debt Securities and any related documents only to
the Custodial Securities Intermediary.


 


Capitalized terms used but not defined in this Request
have the meanings assigned to them in the Indenture, dated as of July 14,
2005, by and among GRAMERCY REAL ESTATE CDO 2005-1, LTD., as Issuer, GRAMERCY
REAL ESTATE CDO 2005-1 LLC, as Co-Issuer, GKK Liquidity LLC as Advancing Agent,
and Wells Fargo Bank National Association, as Trustee, Paying Agent,
Calculation Agent, Transfer Agent, Custodial Securities Intermediary and Notes
Registrar.


 


 


	
   

  	
  GKK MANAGER LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Acknowledgment of
documents returned:


 


 


WELLS FARGO BANK, NATIONAL
ASSOCIATION


 


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


 


Date:


 


L-2





















 


EXHIBIT M


 


FORM OF INFORMATION REQUEST FROM BENEFICIAL OWNERS
OF NOTES


 


[Date]


 


Wells
Fargo Bank, National Association

9062 Old Annapolis Road

Columbia, MD  21045

Attention:  CDO Trust Services – Gramercy
Real Estate CDO 2005-1, Ltd.


 


Re:                               Gramercy
Real Estate CDO 2005-1, Ltd.


 


Pursuant to the Indenture, dated as of July 14,
2005 (the “Indenture”), by and among Gramercy Real Estate CDO 2005-1,
Ltd., as issuer, Gramercy Real Estate CDO 2005-1 LLC, as co-issuer, GKK
Liquidity LLC, as advancing agent and Wells Fargo Bank, National Association,
as trustee, the undersigned hereby certifies and agrees as follows:


 


1.                                       The
undersigned is a beneficial owner of $                      
aggregate principal balance of the Class         
Notes.


 


2.                                       The
undersigned is requesting access to the information (the “Information”) on the
Trustee’s internet website pursuant to Section 10.9(c) and (g) of
the Indenture.


 


3.                                       In
consideration of the Trustee’s disclosure to the undersigned of the
Information, the undersigned will keep the Information confidential (except
from such outside persons as are assisting it in evaluating the Information),
and such Information will not, without the prior written consent of the
Trustee, be disclosed by the undersigned or by its officers, directors,
partners employees, agents or representatives in any manner whatsoever, in
whole or in part; provided that the undersigned may provide all or any part of
the Information to any other person or entity that is contemplating the
purchase of any Note, but only if such person or entity confirms in writing
such prospective ownership interest and agrees to keep it confidential; and provided
that the undersigned may provide all or any part of the Information to its
auditors, legal counsel and regulators.


 


4.                                       The
undersigned will not use or disclose the Information in any manner which could
result in a violation of any provision of the Securities Act of 1933, as
amended (the “Securities Act”), or the Securities Exchange Act of 1934,
as amended, or would require registration of any Note pursuant to Section 5
of the Securities Act or under any other applicable law.


 


5.                                       Capitalized
terms not defined herein shall have the same meaning ascribed to them in the
Indenture.


 


M-1





















 


IN WITNESS WHEREOF, the undersigned has caused its
name to be signed hereto by its duly authorized officer, as of the day and year
written above.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  BENEFICIAL OWNER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Telephone No

  
				



 


M-2










 













Schedule A


 


MOODY’S LOSS SCENARIO MATRIX


 


The following information has been provided to the
Issuer by Moody’s and the capitalized terms used therein and not otherwise
defined with respect to types of securities have the meanings ascribed thereto
by Moody’s.


 


For CMBS Securities the recovery rate is assumed as
follows:


 


	
   

  	
   

  	
  Rating of a Tranche at Issuance

  	
   

  
	
  Tranche as % of capital structure at issuance

  	
   

  	
  Aaa

  	
   

  	
  Aa

  	
   

  	
  A

  	
   

  	
  Baa

  	
   

  	
  Ba

  	
   

  	
  B

  	
   

  
	
  greater than 70%

  	
   

  	
  85

  	
  %

  	
  80

  	
  %

  	
  65

  	
  %

  	
  55

  	
  %

  	
  45

  	
  %

  	
  30

  	
  %

  
	
  greater than 10% and less than or equal to 70%

  	
   

  	
  75

  	
  %

  	
  70

  	
  %

  	
  55

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  
	
  greater than 5% and less than or equal to 10%

  	
   

  	
  65

  	
  %

  	
  55

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  	
  15

  	
  %

  
	
  greater than 2% and less than or equal to 5%

  	
   

  	
  55

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  30

  	
  %

  	
  20

  	
  %

  	
  10

  	
  %

  
	
  less than or equal to 2%

  	
   

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  	
  20

  	
  %

  	
  10

  	
  %

  	
  5

  	
  %

  



 


With respect to Loans (other than Mezzanine Loans),
the Recovery Rate is as follows:


 


	
  Tranche as % of capital structure at issuance(1)

  	
   

  	
  Aaa

  	
   

  	
  Aa

  	
   

  	
  A

  	
   

  	
  Baa

  	
   

  	
  Ba

  	
   

  	
  B

  	
   

  
	
  greater than 70%

  	
   

  	
  85

  	
  %

  	
  80

  	
  %

  	
  65

  	
  %

  	
  55

  	
  %

  	
  45

  	
  %

  	
  30

  	
  %

  
	
  greater than 10% and less than or equal to 70%

  	
   

  	
  75

  	
  %

  	
  70

  	
  %

  	
  55

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  
	
  greater than 5% and less than or equal to 10%

  	
   

  	
  65

  	
  %

  	
  55

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  	
  15

  	
  %

  
	
  greater than 2% and less than or equal to 5%

  	
   

  	
  55

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  30

  	
  %

  	
  20

  	
  %

  	
  10

  	
  %

  
	
  less than or equal to 2%

  	
   

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  	
  20

  	
  %

  	
  10

  	
  %

  	
  5

  	
  %

  



 


With respect to Mezzanine Loans and Preferred Equity
Securities, the Recovery Rate is as follows:


 


	
  Tranche as % of capital structure at issuance(2)

  	
   

  	
  Aaa

  	
   

  	
  Aa

  	
   

  	
  A

  	
   

  	
  Baa

  	
   

  	
  Ba

  	
   

  	
  B

  	
   

  
	
  greater than 70%

  	
   

  	
  75

  	
  %

  	
  70

  	
  %

  	
  55

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  20

  	
  %

  
	
  greater than 10% and less than or equal to 70%

  	
   

  	
  65

  	
  %

  	
  60

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  	
  15

  	
  %

  
	
  greater than 5% and less than or equal to 10%

  	
   

  	
  55

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  	
  15

  	
  %

  	
  5

  	
  %

  
	
  greater than 2% and less than or equal to 5%

  	
   

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  	
  20

  	
  %

  	
  10

  	
  %

  	
  0

  	
  %

  
	
  less than or equal to 2%

  	
   

  	
  35

  	
  %

  	
  25

  	
  %

  	
  15

  	
  %

  	
  10

  	
  %

  	
  0

  	
  %

  	
  0

  	
  %

  



 


For CRE CDO Securities, the Moody’s Recovery Rate is
assumed as follows:


 


	
  Tranche as % of capital structure at issuance

  	
   

  	
  Aaa

  	
   

  	
  Aa

  	
   

  	
  A

  	
   

  	
  Baa

  	
   

  	
  Ba

  	
   

  	
  B

  	
   

  
	
  greater than 70%

  	
   

  	
  80

  	
  %

  	
  75

  	
  %

  	
  60

  	
  %

  	
  50

  	
  %

  	
  45

  	
  %

  	
  30

  	
  %

  
	
  greater than 10% and less than or equal to 70%

  	
   

  	
  70

  	
  %

  	
  60

  	
  %

  	
  55

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  
	
  greater than 5% and less than or equal to 10%

  	
   

  	
  60

  	
  %

  	
  50

  	
  %

  	
  45

  	
  %

  	
  35

  	
  %

  	
  25

  	
  %

  	
  15

  	
  %

  
	
  greater than 2% and less than or equal to 5%

  	
   

  	
  50

  	
  %

  	
  40

  	
  %

  	
  35

  	
  %

  	
  30

  	
  %

  	
  20

  	
  %

  	
  10

  	
  %

  
	
  less than or equal to 2%

  	
   

  	
  30

  	
  %

  	
  25

  	
  %

  	
  20

  	
  %

  	
  15

  	
  %

  	
  7

  	
  %

  	
  4

  	
  %

  



 










(1)          For purposes of calculating the
tranche as a percentage of capital structure at issuance with respect to a
Loan, such amount shall be a percentage equal to a fraction, the numerator of
which is the aggregate Principal Balance of (a) such Loan and (b)


 


A-1





















 


any Loan
which is pari passu with such Loan and secured by the same commercial mortgage
and the denominator of which is the total principal balance of the commercial
mortgage loan related to such Loan.


 


(2)          For purposes of
calculating the tranche as a percentage of capital structure at issuance with
respect to a Mezzanine Loan, such amount shall be a percentage equal to a
fraction, the numerator of which is the aggregate Principal Balance of (a) such
Mezzanine Loan and (b) any Mezzanine Loan which is pari passu with such
Mezzanine Loan and secured by an interest in an entity related to the same
commercial property and the denominator of which is the total principal balance
of any Loans related to the same commercial property.


 


The Moody’s Recovery Rate for REIT unsecured debt
securities is 40% (other than for mortgage and healthcare related REIT debt
securities, for which it is 10%).


 


If the timely payment of principal of and interest on
a Collateral Debt Security is guaranteed by another person or entity, the Moody’s
Recovery Rate will be determined in consultation with Moody’s.


 


A-2





















 


Schedule B


 


S&P RECOVERY MATRIX


 


A.            If
the Collateral Debt Security is a CMBS Security the S&P Recovery Rate will
be as follows:


 


	
   

  	
   

  	
  Liability rating =>

  	
   

  
	
  Senior Asset Class

  	
   

  	
  AAA

  	
   

  	
  AA

  	
   

  	
  A

  	
   

  	
  BBB

  	
   

  	
  BB

  	
   

  	
  B

  	
   

  	
  CCC

  	
   

  
	
  AAA

  	
   

  	
  80.0

  	
  %

  	
  85.0

  	
  %

  	
  90.0

  	
  %

  	
  90.0

  	
  %

  	
  90.0

  	
  %

  	
  90.0

  	
  %

  	
  90.0

  	
  %

  
	
  AA

  	
   

  	
  70.0

  	
  %

  	
  75.0

  	
  %

  	
  85.0

  	
  %

  	
  90.0

  	
  %

  	
  90.0

  	
  %

  	
  90.0

  	
  %

  	
  90.0

  	
  %

  
	
  A

  	
   

  	
  60.0

  	
  %

  	
  65.0

  	
  %

  	
  75.0

  	
  %

  	
  85.0

  	
  %

  	
  90.0

  	
  %

  	
  90.0

  	
  %

  	
  90.0

  	
  %

  
	
  BBB

  	
   

  	
  50.0

  	
  %

  	
  55.0

  	
  %

  	
  65.0

  	
  %

  	
  75.0

  	
  %

  	
  85.0

  	
  %

  	
  85.0

  	
  %

  	
  85.0

  	
  %

  



 


	
  Junior Asset Class

  	
   

  	
  AAA

  	
   

  	
  AA

  	
   

  	
  A

  	
   

  	
  BBB

  	
   

  	
  BB

  	
   

  	
  B

  	
   

  	
  CCC

  	
   

  
	
  AAA

  	
   

  	
  65.0

  	
  %

  	
  70.0

  	
  %

  	
  80.0

  	
  %

  	
  85.0

  	
  %

  	
  85.0

  	
  %

  	
  85.0

  	
  %

  	
  85.0

  	
  %

  
	
  AA

  	
   

  	
  55.0

  	
  %

  	
  65.0

  	
  %

  	
  75.0

  	
  %

  	
  80.0

  	
  %

  	
  80.0

  	
  %

  	
  80.0

  	
  %

  	
  80.0

  	
  %

  
	
  A

  	
   

  	
  40.0

  	
  %

  	
  45.0

  	
  %

  	
  55.0

  	
  %

  	
  65.0

  	
  %

  	
  80.0

  	
  %

  	
  80.0

  	
  %

  	
  80.0

  	
  %

  
	
  BBB

  	
   

  	
  30.0

  	
  %

  	
  35.0

  	
  %

  	
  40.0

  	
  %

  	
  45.0

  	
  %

  	
  50.0

  	
  %

  	
  60.0

  	
  %

  	
  70.0

  	
  %

  
	
  BB

  	
   

  	
  10.0

  	
  %

  	
  10.0

  	
  %

  	
  10.0

  	
  %

  	
  25.0

  	
  %

  	
  35.0

  	
  %

  	
  40.0

  	
  %

  	
  50.0

  	
  %

  
	
  B

  	
   

  	
  2.5

  	
  %

  	
  5.0

  	
  %

  	
  5.0

  	
  %

  	
  10.0

  	
  %

  	
  10.0

  	
  %

  	
  20.0

  	
  %

  	
  25.0

  	
  %

  
	
  CCC

  	
   

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  0.0

  	
  %

  	
  2.5

  	
  %

  	
  5.0

  	
  %

  	
  5.0

  	
  %

  



 


B.            If
the Collateral Security is a CRE CDO Security, the S&P Recovery Rate will
be as follows:


 


	
  S&P Priority Category

  	
   

  	
  S&P Recovery Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Asset-Backed Securities or CBO/CLO/CRE CDO
  Securities

  	
   

  	
  Per S&P
  recovery table

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Non-US SF Obligations*

  	
   

  	
  On a case by
  case basis

  	
   

  



 










*If the Underlying Instruments permit investment in
non-U.S. securities in excess of 20% of the underlying collateral by principal
amount of underlying collateral, the recovery rate will be assigned by S&P
upon the acquisition of such security by the Issuer.


 


C.                If the
Collateral Debt Security is a REIT Debt Security or a debt security issued by a
real estate operating company, the recovery rate will be 40%.  The recovery rate will be 50% for monolines
and 40% for all other third party guarantees. 
If the Underlying Instruments permit investment in non-U.S. securities
in excess of 20% of the underlying collateral by principal amount of underlying
collateral, the recovery rate will be assigned by S&P upon the acquisition
of such security by the Issuer.


 


D.                Each first
loss tranche security, Interest Only Security and Principal Only Security will
be assigned an S&P Recovery Rate on a case by case basis.


 


E.                  If the
Collateral Debt Security is a Whole Loan, the recovery rate will be 50%.  If the Participation is a senior
Participation, senior B-Note or Rake Bond at the level of the underlying
commercial mortgage loan, the recovery rate will be 35%; all other
Participations, B Notes, Single Asset Mortgage Securities or Single Borrower
Mortgage Securities will have a recovery rate of 30%.  If the Collateral Debt Security is a
Mezzanine Loan or Preferred Equity Security, the recovery rate will be 25%.


 


B-1





















 


Schedule C


 


S&P NON-ELIGIBLE NOTCHING ASSET TYPES


 


The following asset classes are not eligible to be
notched.

Credit estimates must be performed.

This schedule may be modified or adjusted at any time, so please verify
applicability.


 


Asset Type


 


(1)          Non-U.S.
Structured Finance Securities


 


(2)          Guaranteed
Securities


 


(3)          CDOs
of Structured Finance and Real Estate


 


(4)          CBOs
of CDOs


 


(5)          CLOs
of Distressed Debt


 


(6)          Mutual
Fund Fee Securities


 


(7)          Catastrophe
Bonds


 


(8)          First
Loss Tranches of any public securitization


 


(9)          Synthetics


 


(10)    Synthetic
CBOs


 


(11)    Combination
Securities


 


(12)    Re-REMICs


 


(13)    Market
value collateralized debt obligations


 


(14)    Net
Interest Margin Securities (NIMs)


 


(15)    Loans


 


C-1





















 


Schedule D


 


S&P ELIGIBLE NOTCHING ASSET TYPES


 


Asset classes eligible for notching if they are not
first loss tranches or combination securities. 
If the security is rated by two agencies, notch down as shown below
based on the lowest rating.  If rated
only by one agency, then notch down what is shown below plus one more
notch.  This schedule may be
modified or adjusted at any time, so please verify applicability.


 


	
   

  	
   

  	
  Issued prior to 8/1/01

  Current rating is:

  	
   

  	
  Issued after 8/1/01

  Current rating is:

  	
   

  
	
   

  	
   

  	
  Inv. Grade

  	
   

  	
  Non Inv. Grade

  	
   

  	
  Inv. Grade

  	
   

  	
  Non Inv. Grade

  	
   

  
	
  1.

  	
  CONSUMER ABS

  	
   

  	
  -1

  	
   

  	
  -2

  	
   

  	
  -2

  	
   

  	
  -3

  	
   

  
	
   

  	
  Automobile Loan Receivable Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Automobile Lease Receivable Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Credit Card Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Healthcare Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Student Loan Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  COMMERCIAL ABS

  	
   

  	
  -1

  	
   

  	
  -2

  	
   

  	
  -2

  	
   

  	
  -3

  	
   

  
	
   

  	
  Cargo Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Equipment Leasing Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Aircraft Leasing Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Small Business Loan Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Restaurant and Food Services Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Tobacco Litigation Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Non-RE-REMIC RMBS

  	
   

  	
  -1

  	
   

  	
  -2

  	
   

  	
  -2

  	
   

  	
  -3

  	
   

  
	
   

  	
  Manufactured Housing Loan Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Non-RE-REMIC CMBS

  	
   

  	
  -1

  	
   

  	
  -2

  	
   

  	
  -2

  	
   

  	
  -3

  	
   

  
	
   

  	
  CMBS - Conduit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CMBS - Credit Tenant Lease

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CMBS - Large Loan

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CMBS - Single Borrower

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CMBS - Single Property

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  REITs

  	
   

  	
  -1

  	
   

  	
  -2

  	
   

  	
  -2

  	
   

  	
  -3

  	
   

  
	
   

  	
  REIT - Multifamily & Mobile Home Park

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REIT - Retail

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REIT - Hospitality

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REIT - Office

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REIT - Industrial

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REIT - Healthcare

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REIT - Warehouse

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REIT - Self Storage

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REIT - Mixed Use

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  SPECIALTY STRUCTURED

  	
   

  	
  -3

  	
   

  	
  -4

  	
   

  	
  -3

  	
   

  	
  -4

  	
   

  
	
   

  	
  Stadium Financings

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Project Finance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Future flows

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  RESIDENTIAL MORTGAGES

  	
   

  	
  -1

  	
   

  	
  -2

  	
   

  	
  -2

  	
   

  	
  -3

  	
   

  
	
   

  	
  Residential “A”

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Residential “B/C”

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Home equity loans

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  REAL ESTATE OPERATING COMPANIES

  	
   

  	
  -1

  	
   

  	
  -2

  	
   

  	
  -2

  	
   

  	
  -3

  	
   

  



 


D-1





















 


Loans (including
Participations, B Notes and Mezzanine Loans): With respect to Loans (including
Participations, B Notes and Mezzanine Loans), if such Loan is not rated by
S&P and the aggregate Principal Balance of Loans not rated (or shadow
rated) by S&P does not exceed 15% of the Aggregate Collateral Balance, then
the S&P Rating of such Loan will be the rating corresponding to the LTV of
such Loan classified by the type of mortgage property securing such Loan or the
related underlying Loan as set forth on Annex 1 (Whole Loans), Annex 2 (B Notes
and Participations) and Annex 3 (Mezzanine Loans) with respect to the specific
Loan type.


 


D-2





















 


Annex 1 – Schedule D


 


S&P’s
Shadow Rating Grid – Whole Loans


 


	
   

  	
   

  	
  Office, Industrial, Non-Mall
  Retail

  	
   

  	
  Malls

  	
   

  
	
   

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1-99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1-99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  
	
  AAA

  	
   

  	
  35.375

  	
  %

  	
  33.625

  	
  %

  	
  31.875

  	
  %

  	
  40.250

  	
  %

  	
  38.250

  	
  %

  	
  36.250

  	
  %

  
	
  AA+

  	
   

  	
  37.125

  	
  %

  	
  35.375

  	
  %

  	
  33.625

  	
  %

  	
  42.250

  	
  %

  	
  40.250

  	
  %

  	
  38.250

  	
  %

  
	
  AA

  	
   

  	
  38.875

  	
  %

  	
  37.125

  	
  %

  	
  35.375

  	
  %

  	
  44.250

  	
  %

  	
  42.250

  	
  %

  	
  40.250

  	
  %

  
	
  AA-

  	
   

  	
  40.042

  	
  %

  	
  38.292

  	
  %

  	
  36.542

  	
  %

  	
  45.583

  	
  %

  	
  43.583

  	
  %

  	
  41.583

  	
  %

  
	
  A+

  	
   

  	
  41.208

  	
  %

  	
  39.458

  	
  %

  	
  37.708

  	
  %

  	
  46.917

  	
  %

  	
  44.917

  	
  %

  	
  42.917

  	
  %

  
	
  A

  	
   

  	
  42.375

  	
  %

  	
  40.625

  	
  %

  	
  38.875

  	
  %

  	
  48.250

  	
  %

  	
  46.250

  	
  %

  	
  44.250

  	
  %

  
	
  A-

  	
   

  	
  43.542

  	
  %

  	
  41.792

  	
  %

  	
  40.042

  	
  %

  	
  49.583

  	
  %

  	
  47.583

  	
  %

  	
  45.583

  	
  %

  
	
  BBB+

  	
   

  	
  44.708

  	
  %

  	
  42.958

  	
  %

  	
  41.208

  	
  %

  	
  50.917

  	
  %

  	
  48.917

  	
  %

  	
  46.917

  	
  %

  
	
  BBB

  	
   

  	
  45.875

  	
  %

  	
  44.125

  	
  %

  	
  42.375

  	
  %

  	
  52.250

  	
  %

  	
  50.250

  	
  %

  	
  48.250

  	
  %

  
	
  BBB-

  	
   

  	
  48.500

  	
  %

  	
  46.750

  	
  %

  	
  45.000

  	
  %

  	
  55.250

  	
  %

  	
  53.250

  	
  %

  	
  51.250

  	
  %

  
	
  BB+

  	
   

  	
  52.000

  	
  %

  	
  50.250

  	
  %

  	
  48.500

  	
  %

  	
  59.250

  	
  %

  	
  57.250

  	
  %

  	
  55.250

  	
  %

  
	
  BB

  	
   

  	
  55.500

  	
  %

  	
  53.750

  	
  %

  	
  52.000

  	
  %

  	
  63.250

  	
  %

  	
  61.250

  	
  %

  	
  59.250

  	
  %

  
	
  BB-

  	
   

  	
  57.250

  	
  %

  	
  55.500

  	
  %

  	
  53.750

  	
  %

  	
  65.250

  	
  %

  	
  63.250

  	
  %

  	
  61.250

  	
  %

  
	
  B+

  	
   

  	
  59.000

  	
  %

  	
  57.250

  	
  %

  	
  55.500

  	
  %

  	
  67.250

  	
  %

  	
  65.250

  	
  %

  	
  63.250

  	
  %

  
	
  B

  	
   

  	
  60.750

  	
  %

  	
  59.000

  	
  %

  	
  57.250

  	
  %

  	
  69.250

  	
  %

  	
  67.250

  	
  %

  	
  65.250

  	
  %

  
	
  B-

  	
   

  	
  62.500

  	
  %

  	
  60.750

  	
  %

  	
  59.000

  	
  %

  	
  71.250

  	
  %

  	
  69.250

  	
  %

  	
  67.250

  	
  %

  
	
  CCC+

  	
   

  	
  64.250

  	
  %

  	
  62.500

  	
  %

  	
  60.750

  	
  %

  	
  73.250

  	
  %

  	
  71.250

  	
  %

  	
  69.250

  	
  %

  
	
  CCC

  	
   

  	
  66.000

  	
  %

  	
  64.250

  	
  %

  	
  62.500

  	
  %

  	
  75.250

  	
  %

  	
  73.250

  	
  %

  	
  71.250

  	
  %

  
	
  CCC-

  	
   

  	
  67.750

  	
  %

  	
  66.000

  	
  %

  	
  64.250

  	
  %

  	
  77.250

  	
  %

  	
  75.250

  	
  %

  	
  73.250

  	
  %

  



 


	
   

  	
   

  	
  Multifamily &Manufactured
  Housing

  	
   

  	
  Hotels

  	
   

  
	
   

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1-99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1-99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  
	
  AAA

  	
   

  	
  37.125

  	
  %

  	
  35.375

  	
  %

  	
  33.625

  	
  %

  	
  23.125

  	
  %

  	
  21.875

  	
  %

  	
  20.625

  	
  %

  
	
  AA+

  	
   

  	
  38.875

  	
  %

  	
  37.125

  	
  %

  	
  35.375

  	
  %

  	
  24.375

  	
  %

  	
  23.125

  	
  %

  	
  21.875

  	
  %

  
	
  AA

  	
   

  	
  40.625

  	
  %

  	
  38.875

  	
  %

  	
  37.125

  	
  %

  	
  25.625

  	
  %

  	
  24.375

  	
  %

  	
  23.125

  	
  %

  
	
  AA-

  	
   

  	
  41.792

  	
  %

  	
  40.042

  	
  %

  	
  38.292

  	
  %

  	
  26.458

  	
  %

  	
  25.208

  	
  %

  	
  23.958

  	
  %

  
	
  A+

  	
   

  	
  42.958

  	
  %

  	
  41.208

  	
  %

  	
  39.458

  	
  %

  	
  27.292

  	
  %

  	
  26.042

  	
  %

  	
  24.792

  	
  %

  
	
  A

  	
   

  	
  44.125

  	
  %

  	
  42.375

  	
  %

  	
  40.625

  	
  %

  	
  28.125

  	
  %

  	
  26.875

  	
  %

  	
  25.625

  	
  %

  
	
  A-

  	
   

  	
  45.292

  	
  %

  	
  43.542

  	
  %

  	
  41.792

  	
  %

  	
  28.958

  	
  %

  	
  27.708

  	
  %

  	
  26.458

  	
  %

  
	
  BBB+

  	
   

  	
  46.458

  	
  %

  	
  44.708

  	
  %

  	
  42.958

  	
  %

  	
  29.792

  	
  %

  	
  28.542

  	
  %

  	
  27.292

  	
  %

  
	
  BBB

  	
   

  	
  47.625

  	
  %

  	
  45.875

  	
  %

  	
  44.125

  	
  %

  	
  30.625

  	
  %

  	
  29.375

  	
  %

  	
  28.125

  	
  %

  
	
  BBB-

  	
   

  	
  50.250

  	
  %

  	
  48.500

  	
  %

  	
  46.750

  	
  %

  	
  33.750

  	
  %

  	
  32.500

  	
  %

  	
  31.250

  	
  %

  
	
  BB+

  	
   

  	
  53.750

  	
  %

  	
  52.000

  	
  %

  	
  50.250

  	
  %

  	
  36.250

  	
  %

  	
  35.000

  	
  %

  	
  33.750

  	
  %

  
	
  BB

  	
   

  	
  57.250

  	
  %

  	
  55.500

  	
  %

  	
  53.750

  	
  %

  	
  38.750

  	
  %

  	
  37.500

  	
  %

  	
  36.250

  	
  %

  
	
  BB-

  	
   

  	
  59.000

  	
  %

  	
  57.250

  	
  %

  	
  55.500

  	
  %

  	
  40.000

  	
  %

  	
  38.750

  	
  %

  	
  37.500

  	
  %

  
	
  B+

  	
   

  	
  60.750

  	
  %

  	
  59.000

  	
  %

  	
  57.250

  	
  %

  	
  41.250

  	
  %

  	
  40.000

  	
  %

  	
  38.750

  	
  %

  
	
  B

  	
   

  	
  62.500

  	
  %

  	
  60.750

  	
  %

  	
  59.000

  	
  %

  	
  42.500

  	
  %

  	
  41.250

  	
  %

  	
  40.000

  	
  %

  
	
  B-

  	
   

  	
  64.250

  	
  %

  	
  62.500

  	
  %

  	
  60.750

  	
  %

  	
  43.750

  	
  %

  	
  42.500

  	
  %

  	
  41.250

  	
  %

  
	
  CCC+

  	
   

  	
  66.000

  	
  %

  	
  64.250

  	
  %

  	
  62.500

  	
  %

  	
  45.000

  	
  %

  	
  43.750

  	
  %

  	
  42.500

  	
  %

  
	
  CCC

  	
   

  	
  67.750

  	
  %

  	
  66.000

  	
  %

  	
  64.250

  	
  %

  	
  46.250

  	
  %

  	
  45.000

  	
  %

  	
  43.750

  	
  %

  
	
  CCC-

  	
   

  	
  69.500

  	
  %

  	
  67.750

  	
  %

  	
  66.000

  	
  %

  	
  47.500

  	
  %

  	
  46.250

  	
  %

  	
  45.000

  	
  %

  



 










LTV’s are based on MAI appraisal values (no more than
6 months old)


 


D-3





















 


Annex 2 – Schedule D


 


S&P’s Shadow Rating Grid – B Notes and
Participations


 


	
   

  	
   

  	
  Office, Industrial, Non-Mall
  Retail

  	
   

  	
  Malls

  	
   

  
	
   

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1-99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1-99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  
	
  AAA

  	
   

  	
  34.125

  	
  %

  	
  32.375

  	
  %

  	
  30.625

  	
  %

  	
  39.000

  	
  %

  	
  37.000

  	
  %

  	
  35.000

  	
  %

  
	
  AA+

  	
   

  	
  35.875

  	
  %

  	
  34.125

  	
  %

  	
  32.375

  	
  %

  	
  41.000

  	
  %

  	
  39.000

  	
  %

  	
  37.000

  	
  %

  
	
  AA

  	
   

  	
  37.625

  	
  %

  	
  35.875

  	
  %

  	
  34.125

  	
  %

  	
  43.000

  	
  %

  	
  41.000

  	
  %

  	
  39.000

  	
  %

  
	
  AA-

  	
   

  	
  38.792

  	
  %

  	
  37.042

  	
  %

  	
  35.292

  	
  %

  	
  44.333

  	
  %

  	
  42.333

  	
  %

  	
  40.333

  	
  %

  
	
  A+

  	
   

  	
  39.958

  	
  %

  	
  38.208

  	
  %

  	
  36.458

  	
  %

  	
  45.667

  	
  %

  	
  43.667

  	
  %

  	
  41.667

  	
  %

  
	
  A

  	
   

  	
  41.125

  	
  %

  	
  39.375

  	
  %

  	
  37.625

  	
  %

  	
  47.000

  	
  %

  	
  45.000

  	
  %

  	
  43.000

  	
  %

  
	
  A-

  	
   

  	
  42.292

  	
  %

  	
  40.542

  	
  %

  	
  38.792

  	
  %

  	
  48.333

  	
  %

  	
  46.333

  	
  %

  	
  44.333

  	
  %

  
	
  BBB+

  	
   

  	
  43.458

  	
  %

  	
  41.708

  	
  %

  	
  39.958

  	
  %

  	
  49.667

  	
  %

  	
  47.667

  	
  %

  	
  45.667

  	
  %

  
	
  BBB

  	
   

  	
  44.625

  	
  %

  	
  42.875

  	
  %

  	
  41.125

  	
  %

  	
  51.000

  	
  %

  	
  49.000

  	
  %

  	
  47.000

  	
  %

  
	
  BBB-

  	
   

  	
  47.250

  	
  %

  	
  45.500

  	
  %

  	
  43.750

  	
  %

  	
  54.000

  	
  %

  	
  52.000

  	
  %

  	
  50.000

  	
  %

  
	
  BB+

  	
   

  	
  50.750

  	
  %

  	
  49.000

  	
  %

  	
  47.250

  	
  %

  	
  58.000

  	
  %

  	
  56.000

  	
  %

  	
  54.000

  	
  %

  
	
  BB

  	
   

  	
  54.250

  	
  %

  	
  52.500

  	
  %

  	
  50.750

  	
  %

  	
  62.000

  	
  %

  	
  60.000

  	
  %

  	
  58.000

  	
  %

  
	
  BB-

  	
   

  	
  56.000

  	
  %

  	
  54.250

  	
  %

  	
  52.500

  	
  %

  	
  64.000

  	
  %

  	
  62.000

  	
  %

  	
  60.000

  	
  %

  
	
  B+

  	
   

  	
  57.750

  	
  %

  	
  56.000

  	
  %

  	
  54.250

  	
  %

  	
  66.000

  	
  %

  	
  64.000

  	
  %

  	
  62.000

  	
  %

  
	
  B

  	
   

  	
  59.500

  	
  %

  	
  57.750

  	
  %

  	
  56.000

  	
  %

  	
  68.000

  	
  %

  	
  66.000

  	
  %

  	
  64.000

  	
  %

  
	
  B-

  	
   

  	
  61.250

  	
  %

  	
  59.500

  	
  %

  	
  57.750

  	
  %

  	
  70.000

  	
  %

  	
  68.000

  	
  %

  	
  66.000

  	
  %

  
	
  CCC+

  	
   

  	
  63.000

  	
  %

  	
  61.250

  	
  %

  	
  59.500

  	
  %

  	
  72.000

  	
  %

  	
  70.000

  	
  %

  	
  68.000

  	
  %

  
	
  CCC

  	
   

  	
  64.750

  	
  %

  	
  63.000

  	
  %

  	
  61.250

  	
  %

  	
  74.000

  	
  %

  	
  72.000

  	
  %

  	
  70.000

  	
  %

  
	
  CCC-

  	
   

  	
  66.500

  	
  %

  	
  64.750

  	
  %

  	
  63.000

  	
  %

  	
  76.000

  	
  %

  	
  74.000

  	
  %

  	
  72.000

  	
  %

  



 


	
   

  	
   

  	
  Multifamily &Manufactured
  Housing

  	
   

  	
  Hotels

  	
   

  
	
   

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1-99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1-99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  
	
  AAA

  	
   

  	
  35.875

  	
  %

  	
  34.125

  	
  %

  	
  32.375

  	
  %

  	
  21.875

  	
  %

  	
  20.625

  	
  %

  	
  19.375

  	
  %

  
	
  AA+

  	
   

  	
  37.625

  	
  %

  	
  35.875

  	
  %

  	
  34.125

  	
  %

  	
  23.125

  	
  %

  	
  21.875

  	
  %

  	
  20.625

  	
  %

  
	
  AA

  	
   

  	
  39.375

  	
  %

  	
  37.625

  	
  %

  	
  35.875

  	
  %

  	
  24.375

  	
  %

  	
  23.125

  	
  %

  	
  21.875

  	
  %

  
	
  AA-

  	
   

  	
  40.542

  	
  %

  	
  38.792

  	
  %

  	
  37.042

  	
  %

  	
  25.208

  	
  %

  	
  23.958

  	
  %

  	
  22.708

  	
  %

  
	
  A+

  	
   

  	
  41.708

  	
  %

  	
  39.958

  	
  %

  	
  38.208

  	
  %

  	
  26.042

  	
  %

  	
  24.792

  	
  %

  	
  23.542

  	
  %

  
	
  A

  	
   

  	
  42.875

  	
  %

  	
  41.125

  	
  %

  	
  39.375

  	
  %

  	
  26.875

  	
  %

  	
  25.625

  	
  %

  	
  24.375

  	
  %

  
	
  A-

  	
   

  	
  44.042

  	
  %

  	
  42.292

  	
  %

  	
  40.542

  	
  %

  	
  27.708

  	
  %

  	
  26.458

  	
  %

  	
  25.208

  	
  %

  
	
  BBB+

  	
   

  	
  45.208

  	
  %

  	
  43.458

  	
  %

  	
  41.708

  	
  %

  	
  28.542

  	
  %

  	
  27.292

  	
  %

  	
  26.042

  	
  %

  
	
  BBB

  	
   

  	
  46.375

  	
  %

  	
  44.625

  	
  %

  	
  42.875

  	
  %

  	
  29.375

  	
  %

  	
  28.125

  	
  %

  	
  26.875

  	
  %

  
	
  BBB-

  	
   

  	
  49.000

  	
  %

  	
  47.250

  	
  %

  	
  45.500

  	
  %

  	
  32.500

  	
  %

  	
  31.250

  	
  %

  	
  30.000

  	
  %

  
	
  BB+

  	
   

  	
  52.500

  	
  %

  	
  50.750

  	
  %

  	
  49.000

  	
  %

  	
  35.000

  	
  %

  	
  33.750

  	
  %

  	
  32.500

  	
  %

  
	
  BB

  	
   

  	
  56.000

  	
  %

  	
  54.250

  	
  %

  	
  52.500

  	
  %

  	
  37.500

  	
  %

  	
  36.250

  	
  %

  	
  35.000

  	
  %

  
	
  BB-

  	
   

  	
  57.750

  	
  %

  	
  56.000

  	
  %

  	
  54.250

  	
  %

  	
  38.750

  	
  %

  	
  37.500

  	
  %

  	
  36.250

  	
  %

  
	
  B+

  	
   

  	
  59.500

  	
  %

  	
  57.750

  	
  %

  	
  56.000

  	
  %

  	
  40.000

  	
  %

  	
  38.750

  	
  %

  	
  37.500

  	
  %

  
	
  B

  	
   

  	
  61.250

  	
  %

  	
  59.500

  	
  %

  	
  57.750

  	
  %

  	
  41.250

  	
  %

  	
  40.000

  	
  %

  	
  38.750

  	
  %

  
	
  B-

  	
   

  	
  63.000

  	
  %

  	
  61.250

  	
  %

  	
  59.500

  	
  %

  	
  42.500

  	
  %

  	
  41.250

  	
  %

  	
  40.000

  	
  %

  
	
  CCC+

  	
   

  	
  64.750

  	
  %

  	
  63.000

  	
  %

  	
  61.250

  	
  %

  	
  43.750

  	
  %

  	
  42.500

  	
  %

  	
  41.250

  	
  %

  
	
  CCC

  	
   

  	
  66.500

  	
  %

  	
  64.750

  	
  %

  	
  63.000

  	
  %

  	
  45.000

  	
  %

  	
  43.750

  	
  %

  	
  42.500

  	
  %

  
	
  CCC-

  	
   

  	
  68.250

  	
  %

  	
  66.500

  	
  %

  	
  64.750

  	
  %

  	
  46.250

  	
  %

  	
  45.000

  	
  %

  	
  43.750

  	
  %

  



 










LTV’s are based on MAI appraisal values (no more than
6 months old)


 


D-4





















 


Annex 3 – Schedule D


 


S& P’s Shadow Rating Grid – Mezzanine Debt


 


	
   

  	
   

  	
  Office, Industrial, Non-Mall
  Retail

  	
   

  	
  Malls

  	
   

  
	
   

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1–99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1–99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  
	
  AAA

  	
   

  	
  30.375

  	
  %

  	
  28.625

  	
  %

  	
  26.875

  	
  %

  	
  35.250

  	
  %

  	
  33.250

  	
  %

  	
  31.250

  	
  %

  
	
  AA+

  	
   

  	
  32.125

  	
  %

  	
  30.375

  	
  %

  	
  28.625

  	
  %

  	
  37.250

  	
  %

  	
  35.250

  	
  %

  	
  33.250

  	
  %

  
	
  AA

  	
   

  	
  33.875

  	
  %

  	
  32.125

  	
  %

  	
  30.375

  	
  %

  	
  39.250

  	
  %

  	
  37.250

  	
  %

  	
  35.250

  	
  %

  
	
  AA-

  	
   

  	
  35.042

  	
  %

  	
  33.292

  	
  %

  	
  31.542

  	
  %

  	
  40.583

  	
  %

  	
  38.583

  	
  %

  	
  36.583

  	
  %

  
	
  A+

  	
   

  	
  36.208

  	
  %

  	
  34.458

  	
  %

  	
  32.708

  	
  %

  	
  41.917

  	
  %

  	
  39.917

  	
  %

  	
  37.917

  	
  %

  
	
  A

  	
   

  	
  37.375

  	
  %

  	
  35.625

  	
  %

  	
  33.875

  	
  %

  	
  43.250

  	
  %

  	
  41.250

  	
  %

  	
  39.250

  	
  %

  
	
  A-

  	
   

  	
  38.542

  	
  %

  	
  36.792

  	
  %

  	
  35.042

  	
  %

  	
  44.583

  	
  %

  	
  42.583

  	
  %

  	
  40.583

  	
  %

  
	
  BBB+

  	
   

  	
  39.708

  	
  %

  	
  37.958

  	
  %

  	
  36.208

  	
  %

  	
  45.917

  	
  %

  	
  43.917

  	
  %

  	
  41.917

  	
  %

  
	
  BBB

  	
   

  	
  40.875

  	
  %

  	
  39.125

  	
  %

  	
  37.375

  	
  %

  	
  47.250

  	
  %

  	
  45.250

  	
  %

  	
  43.250

  	
  %

  
	
  BBB-

  	
   

  	
  43.500

  	
  %

  	
  41.750

  	
  %

  	
  40.000

  	
  %

  	
  50.250

  	
  %

  	
  48.250

  	
  %

  	
  46.250

  	
  %

  
	
  BB+

  	
   

  	
  47.000

  	
  %

  	
  45.250

  	
  %

  	
  43.500

  	
  %

  	
  54.250

  	
  %

  	
  52.250

  	
  %

  	
  50.250

  	
  %

  
	
  BB

  	
   

  	
  50.500

  	
  %

  	
  48.750

  	
  %

  	
  47.000

  	
  %

  	
  58.250

  	
  %

  	
  56.250

  	
  %

  	
  54.250

  	
  %

  
	
  BB-

  	
   

  	
  52.250

  	
  %

  	
  50.500

  	
  %

  	
  48.750

  	
  %

  	
  60.250

  	
  %

  	
  58.250

  	
  %

  	
  56.250

  	
  %

  
	
  B+

  	
   

  	
  54.000

  	
  %

  	
  52.250

  	
  %

  	
  50.500

  	
  %

  	
  62.250

  	
  %

  	
  60.250

  	
  %

  	
  58.250

  	
  %

  
	
  B

  	
   

  	
  55.750

  	
  %

  	
  54.000

  	
  %

  	
  52.250

  	
  %

  	
  64.250

  	
  %

  	
  62.250

  	
  %

  	
  60.250

  	
  %

  
	
  B-

  	
   

  	
  57.500

  	
  %

  	
  55.750

  	
  %

  	
  54.000

  	
  %

  	
  66.250

  	
  %

  	
  64.250

  	
  %

  	
  62.250

  	
  %

  
	
  CCC+

  	
   

  	
  59.250

  	
  %

  	
  57.500

  	
  %

  	
  55.750

  	
  %

  	
  68.250

  	
  %

  	
  66.250

  	
  %

  	
  64.250

  	
  %

  
	
  CCC

  	
   

  	
  61.000

  	
  %

  	
  59.250

  	
  %

  	
  57.500

  	
  %

  	
  70.250

  	
  %

  	
  68.250

  	
  %

  	
  66.250

  	
  %

  
	
  CCC-

  	
   

  	
  62.750

  	
  %

  	
  61.000

  	
  %

  	
  59.250

  	
  %

  	
  72.250

  	
  %

  	
  70.250

  	
  %

  	
  68.250

  	
  %

  



 


	
   

  	
   

  	
  Multifamily &
  Manufactured Housing

  	
   

  	
  Hotels

  	
   

  
	
   

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1–99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  	
  All In LTV <

  85%

  	
   

  	
  All In LTV

  85.1–99.9%

  	
   

  	
  All In LTV

  >100%

  	
   

  
	
  AAA

  	
   

  	
  32.125

  	
  %

  	
  30.375

  	
  %

  	
  28.625

  	
  %

  	
  18.125

  	
  %

  	
  16.875

  	
  %

  	
  15.625

  	
  %

  
	
  AA+

  	
   

  	
  33.875

  	
  %

  	
  32.125

  	
  %

  	
  30.375

  	
  %

  	
  19.375

  	
  %

  	
  18.125

  	
  %

  	
  16.875

  	
  %

  
	
  AA

  	
   

  	
  35.625

  	
  %

  	
  33.875

  	
  %

  	
  32.125

  	
  %

  	
  20.625

  	
  %

  	
  19.375

  	
  %

  	
  18.125

  	
  %

  
	
  AA-

  	
   

  	
  36.792

  	
  %

  	
  35.042

  	
  %

  	
  33.292

  	
  %

  	
  21.458

  	
  %

  	
  20.208

  	
  %

  	
  18.958

  	
  %

  
	
  A+

  	
   

  	
  37.958

  	
  %

  	
  36.208

  	
  %

  	
  34.458

  	
  %

  	
  22.292

  	
  %

  	
  21.042

  	
  %

  	
  19.792

  	
  %

  
	
  A

  	
   

  	
  39.125

  	
  %

  	
  37.375

  	
  %

  	
  35.625

  	
  %

  	
  23.125

  	
  %

  	
  21.875

  	
  %

  	
  20.625

  	
  %

  
	
  A-

  	
   

  	
  40.292

  	
  %

  	
  38.542

  	
  %

  	
  36.792

  	
  %

  	
  23.958

  	
  %

  	
  22.708

  	
  %

  	
  21.458

  	
  %

  
	
  BBB+

  	
   

  	
  41.458

  	
  %

  	
  39.708

  	
  %

  	
  37.958

  	
  %

  	
  24.792

  	
  %

  	
  23.542

  	
  %

  	
  22.292

  	
  %

  
	
  BBB

  	
   

  	
  42.625

  	
  %

  	
  40.875

  	
  %

  	
  39.125

  	
  %

  	
  25.625

  	
  %

  	
  24.375

  	
  %

  	
  23.125

  	
  %

  
	
  BBB-

  	
   

  	
  45.250

  	
  %

  	
  43.500

  	
  %

  	
  41.750

  	
  %

  	
  28.750

  	
  %

  	
  27.500

  	
  %

  	
  26.250

  	
  %

  
	
  BB+

  	
   

  	
  48.750

  	
  %

  	
  47.000

  	
  %

  	
  45.250

  	
  %

  	
  31.250

  	
  %

  	
  30.000

  	
  %

  	
  28.750

  	
  %

  
	
  BB

  	
   

  	
  52.250

  	
  %

  	
  50.500

  	
  %

  	
  48.750

  	
  %

  	
  33.750

  	
  %

  	
  32.500

  	
  %

  	
  31.250

  	
  %

  
	
  BB-

  	
   

  	
  54.000

  	
  %

  	
  52.250

  	
  %

  	
  50.500

  	
  %

  	
  35.000

  	
  %

  	
  33.750

  	
  %

  	
  32.500

  	
  %

  
	
  B+

  	
   

  	
  55.750

  	
  %

  	
  54.000

  	
  %

  	
  52.250

  	
  %

  	
  36.250

  	
  %

  	
  35.000

  	
  %

  	
  33.750

  	
  %

  
	
  B

  	
   

  	
  57.500

  	
  %

  	
  55.750

  	
  %

  	
  54.000

  	
  %

  	
  37.500

  	
  %

  	
  36.250

  	
  %

  	
  35.000

  	
  %

  
	
  B-

  	
   

  	
  59.250

  	
  %

  	
  57.500

  	
  %

  	
  55.750

  	
  %

  	
  38.750

  	
  %

  	
  37.500

  	
  %

  	
  36.250

  	
  %

  
	
  CCC+

  	
   

  	
  61.000

  	
  %

  	
  59.250

  	
  %

  	
  57.500

  	
  %

  	
  40.000

  	
  %

  	
  38.750

  	
  %

  	
  37.500

  	
  %

  
	
  CCC

  	
   

  	
  62.750

  	
  %

  	
  61.000

  	
  %

  	
  59.250

  	
  %

  	
  41.250

  	
  %

  	
  40.000

  	
  %

  	
  38.750

  	
  %

  
	
  CCC-

  	
   

  	
  64.500

  	
  %

  	
  62.750

  	
  %

  	
  61.000

  	
  %

  	
  42.500

  	
  %

  	
  41.250

  	
  %

  	
  40.000

  	
  %

  



 


LTV’s are based on
MAI appraisal values (no more than 6 months old)


 


D-5





















 


Schedule F


 


LIBOR


 


The London interbank
offered rate (“LIBOR”) shall be determined by the Calculation Agent in
accordance with the following provisions:


 


(1)                                  On
the second London Banking Day preceding the first Business Day of an Interest
Accrual Period (each such day, a “LIBOR Determination Date”), LIBOR (other than
for the initial Interest Accrual Period) will equal the rate, as obtained by
the Calculation Agent, for deposits in U.S. Dollars for a period of three months,
which appears on the Moneyline Telerate Service Page 3750 (or such other page as
may replace that page on that service, or such other service as may be
nominated as the information vendor, for the purpose of displaying comparable
rates or prices) (the “Telerate Page 3750”), in each case as of 11:00 a.m.
(London time) on such LIBOR Determination Date. “London Banking Day” means any
day on which commercial banks are open for general business (including dealings
in foreign exchange and foreign currency deposits) in London, England.


 


(2)                                  If,
on any LIBOR Determination Date, such rate does not appear on Telerate Page 3750,
the Calculation Agent will determine LIBOR on the basis of the rates at which
deposits in U.S. Dollars are offered by Reference Banks at approximately 11:00 a.m.
(London time) on the LIBOR Determination Date to prime banks in the London
interbank market for a period of three months commencing on the LIBOR
Determination Date and in a representative amount of $1,000. The Calculation
Agent will request the principal London office of each of the Reference Banks
to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that LIBOR Determination Date will be the arithmetic
mean of the quotations. If fewer than two quotations are provided as requested,
the rate for that LIBOR Determination Date will be the arithmetic mean of the
rates quoted by major banks in New York City, selected by the Calculation
Agent, at approximately 11:00 a.m. (New York City time) on the LIBOR
Determination Date for loans in U.S. Dollars to leading European banks for a
period of three months commencing on the LIBOR Determination Date and in a
representative amount of $1,000. As used herein, “Reference Banks” means four
major banks in the London interbank market selected by the Calculation Agent
and approved by the Collateral Manager.


 


(3)                                  In
respect of the initial Interest Accrual Period, LIBOR will be determined
through the use of straight line interpolation by reference to three months
deposits in U.S. Dollars and four months deposits in U.S. Dollars determined in
accordance with clauses (a) and (b) above, one of which will be
determined as if the maturity of the U.S. Dollar deposits referred to therein
were the period of time for which rates are available next shorter than the
Interest Accrual Period and the other of which will be determined as if such
maturity were the period of time for which rates are available next longer than
the Interest Accrual Period; provided that if an Interest Accrual Period is
less than or equal to seven days, then LIBOR will be determined by reference to
a rate calculated in accordance with clauses (a) and (b) above as if
the maturity of the Dollar deposits referred to therein were a period of time
equal to seven days.


 


In making the above calculations, (i) all
percentages resulting from the calculation (other than the calculation
determined pursuant to clause (c) above) will be rounded, if necessary, to
the nearest one hundred thousandth of a percentage point (0.00001%) and (ii) all
percentages determined pursuant to clause (c) above will be rounded, if
necessary, in accordance with the method set forth in (i), but to the same
degree of accuracy as the two rates used to make the determination (except that
such percentages will not be rounded to a lower degree of accuracy than the
nearest one thousandth of a percentage point (0.001%)).


 


F-1





















 


Schedule N


 


FITCH RECOVERY MATRIX


 


	
   

  	
   

  	
  Rating of Liability

  	
   

  
	
  Domicile

  	
   

  	
  Seniority

  	
   

  	
  AAA

  	
   

  	
  AA

  	
   

  	
  A

  	
   

  	
  BBB

  	
   

  	
  BB

  	
   

  	
  B

  	
   

  
	
  SF Senior AAA

  	
   

  	
  80

  	
  %

  	
  83

  	
  %

  	
  86

  	
  %

  	
  89

  	
  %

  	
  92

  	
  %

  	
  95

  	
  %

  
	
  SF Non Sr AAA

  	
   

  	
   

  	
   

  	
  65

  	
  %

  	
  70

  	
  %

  	
  75

  	
  %

  	
  80

  	
  %

  	
  85

  	
  %

  	
  90

  	
  %

  
	
  SF AA Senior

  	
   

  	
   

  	
   

  	
  65

  	
  %

  	
  69

  	
  %

  	
  73

  	
  %

  	
  77

  	
  %

  	
  81

  	
  %

  	
  85

  	
  %

  
	
  SF AA Non Sr ( >10%)

  	
   

  	
   

  	
   

  	
  50

  	
  %

  	
  56

  	
  %

  	
  62

  	
  %

  	
  68

  	
  %

  	
  74

  	
  %

  	
  80

  	
  %

  
	
  SF AA Non Sr ( 5-10%)

  	
   

  	
   

  	
   

  	
  45

  	
  %

  	
  51

  	
  %

  	
  57

  	
  %

  	
  63

  	
  %

  	
  69

  	
  %

  	
  75

  	
  %

  
	
  SF AA Non Sr ( 0-5%)

  	
   

  	
   

  	
   

  	
  40

  	
  %

  	
  46

  	
  %

  	
  52

  	
  %

  	
  58

  	
  %

  	
  64

  	
  %

  	
  70

  	
  %

  
	
  SF Senior A

  	
   

  	
   

  	
   

  	
  60

  	
  %

  	
  64

  	
  %

  	
  68

  	
  %

  	
  72

  	
  %

  	
  76

  	
  %

  	
  80

  	
  %

  
	
  SF A Non Sr ( >10%)

  	
   

  	
   

  	
   

  	
  40

  	
  %

  	
  47

  	
  %

  	
  54

  	
  %

  	
  61

  	
  %

  	
  68

  	
  %

  	
  75

  	
  %

  
	
  SF A Non Sr ( 5-10%)

  	
   

  	
   

  	
   

  	
  35

  	
  %

  	
  42

  	
  %

  	
  48

  	
  %

  	
  55

  	
  %

  	
  61

  	
  %

  	
  68

  	
  %

  
	
  SF A Non Sr ( 0-5%)

  	
   

  	
   

  	
   

  	
  30

  	
  %

  	
  36

  	
  %

  	
  42

  	
  %

  	
  48

  	
  %

  	
  54

  	
  %

  	
  60

  	
  %

  
	
  SF Senior BBB

  	
   

  	
   

  	
   

  	
  55

  	
  %

  	
  59

  	
  %

  	
  63

  	
  %

  	
  67

  	
  %

  	
  71

  	
  %

  	
  75

  	
  %

  
	
  SF BBB Non Sr ( >10%)

  	
   

  	
   

  	
   

  	
  30

  	
  %

  	
  38

  	
  %

  	
  46

  	
  %

  	
  54

  	
  %

  	
  62

  	
  %

  	
  70

  	
  %

  
	
  SF BBB Non Sr ( 5-10%)

  	
   

  	
   

  	
   

  	
  25

  	
  %

  	
  33

  	
  %

  	
  41

  	
  %

  	
  48

  	
  %

  	
  56

  	
  %

  	
  63

  	
  %

  
	
  SF BBB Non Sr ( 0-5%)

  	
   

  	
   

  	
   

  	
  20

  	
  %

  	
  27

  	
  %

  	
  35

  	
  %

  	
  42

  	
  %

  	
  50

  	
  %

  	
  55

  	
  %

  
	
  SF Senior BB

  	
   

  	
   

  	
   

  	
  50

  	
  %

  	
  54

  	
  %

  	
  58

  	
  %

  	
  62

  	
  %

  	
  66

  	
  %

  	
  70

  	
  %

  
	
  SF BB Non Sr ( >10%)

  	
   

  	
   

  	
   

  	
  15

  	
  %

  	
  19

  	
  %

  	
  23

  	
  %

  	
  27

  	
  %

  	
  32

  	
  %

  	
  35

  	
  %

  
	
  SF BB Non Sr ( 5-10%)

  	
   

  	
   

  	
   

  	
  10

  	
  %

  	
  14

  	
  %

  	
  18

  	
  %

  	
  22

  	
  %

  	
  27

  	
  %

  	
  30

  	
  %

  
	
  SF BB Non Sr ( 0-5%)

  	
   

  	
   

  	
   

  	
  5

  	
  %

  	
  9

  	
  %

  	
  13

  	
  %

  	
  17

  	
  %

  	
  21

  	
  %

  	
  25

  	
  %

  
	
  SF B Non Sr ( >10%)

  	
   

  	
   

  	
   

  	
  12

  	
  %

  	
  16

  	
  %

  	
  20

  	
  %

  	
  24

  	
  %

  	
  28

  	
  %

  	
  32

  	
  %

  
	
  SF B Non Sr ( 5-10%)

  	
   

  	
   

  	
   

  	
  8

  	
  %

  	
  11

  	
  %

  	
  15

  	
  %

  	
  19

  	
  %

  	
  23

  	
  %

  	
  27

  	
  %

  
	
  SF B Non Sr ( 0-5%)

  	
   

  	
   

  	
   

  	
  3

  	
  %

  	
  7

  	
  %

  	
  11

  	
  %

  	
  14

  	
  %

  	
  18

  	
  %

  	
  22

  	
  %

  
	
  SF < B

  	
   

  	
  0

  	
  %

  	
  4

  	
  %

  	
  8

  	
  %

  	
  12

  	
  %

  	
  16

  	
  %

  	
  20

  	
  %

  
	
  United States

  	
   

  	
  Sovereign

  	
   

  	
  20

  	
  %

  	
  21

  	
  %

  	
  23

  	
  %

  	
  24

  	
  %

  	
  24

  	
  %

  	
  25

  	
  %

  
	
  United States

  	
   

  	
  REITS

  	
   

  	
  52

  	
  %

  	
  55

  	
  %

  	
  59

  	
  %

  	
  62

  	
  %

  	
  63

  	
  %

  	
  65

  	
  %

  
	
  United States

  	
   

  	
  Senior Secured

  	
   

  	
  56

  	
  %

  	
  62

  	
  %

  	
  67

  	
  %

  	
  72

  	
  %

  	
  76

  	
  %

  	
  80

  	
  %

  
	
  United States

  	
   

  	
  Second Lien (Non
  IG)

  	
   

  	
  46

  	
  %

  	
  49

  	
  %

  	
  52

  	
  %

  	
  55

  	
  %

  	
  56

  	
  %

  	
  58

  	
  %

  
	
  United States

  	
   

  	
  Senior Unsecured
  (Non IG)

  	
   

  	
  36

  	
  %

  	
  38

  	
  %

  	
  41

  	
  %

  	
  43

  	
  %

  	
  44

  	
  %

  	
  45

  	
  %

  
	
  United States

  	
   

  	
  Subordinate (Non
  IG)

  	
   

  	
  24

  	
  %

  	
  26

  	
  %

  	
  27

  	
  %

  	
  29

  	
  %

  	
  29

  	
  %

  	
  30

  	
  %

  
	
  United States

  	
   

  	
  Senior Unsecured
  (IG)

  	
   

  	
  44

  	
  %

  	
  47

  	
  %

  	
  50

  	
  %

  	
  52

  	
  %

  	
  54

  	
  %

  	
  55

  	
  %

  
	
  United States

  	
   

  	
  Subordinate (IG)

  	
   

  	
  24

  	
  %

  	
  26

  	
  %

  	
  27

  	
  %

  	
  29

  	
  %

  	
  29

  	
  %

  	
  30

  	
  %

  
																			



 


N-1