**Exhibit10.19**

 

 

 

GRAMERCYREAL ESTATE CDO 2005-1, LTD.,as Issuer

 

 

GRAMERCYREAL ESTATE CDO 2005-1 LLC,as Co-Issuer

 

 

GKK LIQUIDITYLLC,as Advancing Agent

 

 

AND

 

 

WELLSFARGO BANK, NATIONAL ASSOCIATION,as Trustee, Paying Agent, Calculation Agent, Transfer Agent,Custodial Securities Intermediary, Backup Advancing Agent and Notes Registrar

 

 

INDENTURE

 

 

Datedas of July 14, 2005

 

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TABLEOF 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                                                       |   |

 

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| 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                                                  |   |

 

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| 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                                                |   |

 

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| 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                                                           |   |

 

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| 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                                                                                                |   |

 

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| 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 |   |

 

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| 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                                                                                                                                           |

 

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| 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                           |

 

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

 

PRELIMINARYSTATEMENT

 

Each of the Issuer and the Co-Issuer is dulyauthorized to execute and deliver this Indenture to provide for the Notesissuable as provided in this Indenture. All covenants and agreements made by the Issuer and Co-Issuer herein arefor 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 AdvancingAgent are entering into this Indenture, and the Trustee is accepting the trustscreated hereby, for good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged.

 

All things necessary to make this Indenture a validagreement of the Issuer and Co-Issuer in accordance with this Indenture’s termshave been done.

 

GRANTINGCLAUSES

 

The Issuer hereby Grants to the Trustee, for thebenefit and security of the Secured Parties, all of its right, title andinterest in, to and under, in each case, whether now owned or existing, orhereafter acquired or arising (other than Excepted Assets and amounts in thePreferred Shares Distribution Account), (a) the Collateral Debt Securitieslisted in the Schedule of Closing Date Collateral Debt Securities which theIssuer 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 withrespect thereto and all Collateral Debt Securities which are delivered to theTrustee (directly or through an agent or bailee) after the Closing Datepursuant to the terms hereof (including the Collateral Debt Securities listed,as of the Effective Date, on the Schedule of Closing Date Collateral DebtSecurities delivered by the Issuer pursuant to Section 7.17) and allpayments thereon or with respect thereto, (b) the rights of the Issuer undereach Hedge Agreement, (c) the Payment Account, the Interest Collection Account,the Principal Collection Account, the Expense Account, the Unused ProceedsAccount, the Delayed Funding Obligations Account, the Custodial Account, each HedgeCollateral Account, each Hedge Termination Account and all Eligible Investmentspurchased with funds on deposit therein, the Custodial Account and all relatedsecurity entitlements and all income from the investment of funds in any of theforegoing, (d) the rights of the Issuer under each Collateral Debt SecuritiesPurchase Agreement (including any Collateral Debt Securities Purchase Agreemententered into after the Closing Date), the Collateral Management Agreement, theAsset Servicing Agreement, the GMACCMC Servicing Agreement and any otherprimary or special servicing agreement, (e)

 

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all Cash or Money delivered to the Trustee (or itsbailee) in respect of the Notes or the Assets, (f) all other investmentproperty, accounts, instruments and general intangibles in which the Issuer hasan interest, other than the Excepted Assets and (g) all proceeds with respectto the foregoing clauses (a)-(f).  Thecollateral described in the foregoing clauses (a)-(g) is referred to as the “Assets.”  For the avoidance of doubt, the Assets do notinclude the Excepted Assets.  Such Grantsare 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 ofdifference in time of issuance or otherwise, except as expressly provided inthis Indenture, and to secure (i) the payment of all amounts due on and inrespect 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 thisIndenture.  For the avoidance of doubt,the Assets shall not include the Excepted Assets, the Preferred SharesDistribution Account and any amounts in the Preferred Shares DistributionAccount.  The foregoing Grant shall, forthe purpose of determining the property subject to the lien of this Indenture(but not for the purpose of determining compliance with any of the CoverageTests or compliance by the Issuer with any of the other provisions hereof), bedeemed to include any securities and any investments granted by or on behalf ofthe Issuer to the Trustee for the benefit of the Noteholders and each HedgeCounterparty, whether or not such securities or such investments satisfy thecriteria set forth in the definitions of “Collateral Debt Security” or “EligibleInvestment,” 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 theState 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 thecontinuation of any Event of Default hereunder, and in addition to any otherrights available under this Indenture or any other Assets held for the benefitand security of the Noteholders and each Hedge Counterparty or otherwiseavailable at law or in equity but subject to the terms hereof, the Trusteeshall have all rights and remedies of a secured party on default under the lawsof the State of New York and other applicable law to enforce the assignmentsand security interests contained herein and, in addition, shall have the right,subject to compliance with any mandatory requirements of applicable law and theterms of this Indenture, to sell or apply any rights and other interestsassigned or pledged hereby in accordance with the terms hereof at public andprivate sale.

 

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

 

# **ARTICLE 1**

 

# **DEFINITIONS**

 

## Section 1.1             Definitions.

##  

Except as otherwise specified herein or as the contextmay otherwise require, the following terms have the respective meanings setforth below for all purposes of this Indenture,

 

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andthe definitions of such terms are equally applicable both to the singular andplural forms of such terms and to the masculine, feminine and neuter genders ofsuch terms.  The word “including” and itsvariations shall mean “including without limitation.”  Whenever any reference is made to an amountthe determination of which is governed by Section 1.2, the provisions ofSection 1.2 shall be applicable to such determination or calculation,whether or not reference is specifically made to Section 1.2, unlesssome other method of calculation or determination is expressly specified in theparticular provision. All references in this Indenture to designated “Articles,”“Sections,” “Subsections” and other subdivisions are to the designatedArticles, Sections, Subsections and other subdivisions of this Indenture asoriginally executed.  The words “herein,”“hereof,” “hereunder” and other words of similar import refer to this Indentureas a whole and not to any particular Article, Section, Subsection or othersubdivision.

 

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

 

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

 

“AboveCap Security”:  AnyCollateral Debt Security, which initially bore interest based upon a floatingrate index subject to a cap (which, if exceeded, would cause such CollateralDebt Security to bear interest at a fixed rate) and which currently bearsinterest at a fixed rate as a result of such cap being exceeded, but only forso long as such cap is exceeded.

 

“Account”:Any of the Interest Collection Account, the Principal Collection Account, theUnused Proceeds Account, the Delayed Funding Obligations Account, the PaymentAccount, the Expense Account, the Custodial Account, each Hedge TerminationAccount, the Preferred Shares Distribution Account and each Hedge CollateralAccount, and any subaccount thereof that the Trustee deems necessary orappropriate.

 

“Accountants’Report”:  A report of afirm of Independent certified public accountants of recognized nationalreputation appointed by the Issuer pursuant to Section 10.11(a), whichmay be the firm of independent accountants that reviews or performs procedureswith respect to the financial reports prepared by the Issuer or the CollateralManager.

 

“AccountsReceivable”:  Themeaning specified in Section 3.3(a)(vi) hereof.

 

“AcquiredProperty”:  Any realproperty located in metropolitan New York or Washington D.C. in which theIssuer acquires a direct or indirect interest by foreclosure or other similarconveyance, or by transfer in lieu thereof, as a result of the Issuer’s ownershipof a related Collateral Debt Security.

 

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

 

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

 

3

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“AdvancingAgent Fee”:  The feepayable quarterly in arrears on each Payment Date to the Advancing Agent inaccordance with the Priority of Payments, equal to 0.07% *per**annum* on the Aggregate OutstandingAmount of the Class A Notes and the Class B Notes on such Payment Date prior togiving effect to distributions with respect to such Payment Date.

 

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

 

“AdvisoryCommittee”: The meaning specified in the CollateralManagement Agreement.

 

“Affiliate”or “Affiliated”:  With respect to a Person, (i) any other Personwho, directly or indirectly, is in control of, or controlled by, or is undercommon 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 companyof such Person or (c) of any Person described in clause (i) above.  For the purposes of this definition, controlof a Person shall mean the power, direct or indirect, (i) to vote a more than50% of the securities having ordinary voting power for the election ofdirectors of such Person, or (ii) to direct or cause the direction of themanagement and policies of such Person whether by contract or otherwise; *provided*that (x) neither the Company Administrator nor anyother company, corporation or person to which the Company Administratorprovides direction and/or acts as share trustee shall be an Affiliate of theIssuer or Co-Issuer and (y) neither the Collateral Manager, SLG GramercyServices LLC, Gramercy Investment nor any of their respective subsidiariesshall be deemed to be Affiliates of the Issuer.

 

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

 

“AggregateAmortized Cost”  Withrespect to any Interest Only Security or Principal Only Security, as of anydate of determination (a) on the date of acquisition thereof by the Issuer, thecost of purchase thereof and (b) on any date thereafter, the present value ofall remaining payments on such security discounted to such date ofdetermination as of each subsequent due date for such security at a discountrate per annum equal to the internal rate of return on such security ascalculated in good faith by the Collateral Manager at the time of purchasethereof by the Issuer.

 

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

 

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

 

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

 

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“ApplicableRecovery Rate”:  Thelowest of the Moody’s Recovery Rate, the Fitch Applicable Recovery Rate and theS&P Recovery Rate, as applicable.

 

“ARDLoan”:  A Loan with ananticipated repayment date, after which (if not repaid in full by suchanticipated repayment date) the loan provides for changes in payments andaccrual of interest.

 

“Article15 Agreement”:  Themeaning specified in Section 15.1(a) hereof.

 

“AssetServicing 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 paragraphof the Granting Clause of this Indenture.

 

“AssumedPortfolio”:  Theportfolio with characteristics developed in accordance with the EligibilityCriteria and Collateral Quality Tests for purposes of determining the Class A-1Break Even Loss Rate, the Class A-2 Break Even Loss Rate, the Class BBreak-Even Loss Rate, the Class C Break-Even Loss Rate, the Class D Break-EvenLoss 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 JBreak-Even Loss Rate and the Class K Break-Even Loss Rate.

 

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

 

“AuctionBid Date”:  The meaningspecified in Section 12.4(b)(ii) hereof.

 

“AuctionCall Period”:  Themeaning specified in Section 9.2(a) hereof.

 

“AuctionCall Redemption”:  Themeaning specified in Section 9.2(a) hereof.

 

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

 

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

 

“AuctionProcedures”:  Therequired procedures with respect to an Auction set forth in Section 12.4(b)hereof.

 

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

 

“AuctionPurchase Closing Date”: The meaning specified in Section12.4(b)(v) hereof.

 

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“AuthenticatingAgent”:  With respectto the Notes or a Class of the Notes, the Person designated by the Trustee toauthenticate such Notes on behalf of the Trustee pursuant to Section 2.12hereof.

 

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

 

“AverageLife”:  On anyMeasurement Date with respect to any Collateral Debt Security (other than aDefaulted Security), the quotient obtained by dividing (i) the summing of theproducts of (a) the number of years (rounded to the nearest one tenth thereof)from such Measurement Date to the respective dates of each successive expecteddistribution of principal of such Collateral Debt Security and (b) therespective amounts of such expected distributions of principal by (ii) the sumof all successive expected distributions of principal on such Collateral DebtSecurity, calculated by the Collateral Manager.

 

“BackupAdvancing Agent”: Wells Fargo Bank, National Association, a national banking association,solely in its capacity as Backup Advancing Agent hereunder, or any successor BackupAdvancing Agent; *provided* that any such successorBackup Advancing Agent must be a financial institution having a long-term debtrating 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,” asapplicable.

 

“BackupAdvancing 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 ofPayments, equal to 0.00125% *per annum*onthe Aggregate Outstanding Amount of the Class A Notes and the Class B Notes onsuch Payment Date prior to giving effect to distributions with respect to suchPayment Date.

 

“BaileeLetter”:  The meaningspecified in Section 12.4(b)(v) hereof.

 

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

 

“BankruptcyCode”:  The federalBankruptcy Code, Title 11 of the United States Code, as amended.

 

“BearerSecurities”:  Themeaning specified in Section 3.3(a)(iv) hereof.

 

“BenefitPlan”:  The meaningspecified in Section 2.5(g)(vi) hereof.

 

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

 

“Boardof Directors”:  Withrespect to the Issuer, the directors of the Issuer duly appointed and, withrespect to the Co-Issuer, the LLC Managers duly appointed by the sole member ofthe Co-Issuer or otherwise.

 

“BoardResolution”:  Withrespect to the Issuer, a resolution of the Board of Directors of the Issuerand, with respect to the Co-Issuer, a resolution or unanimous written consent ofthe LLC Managers or the sole member of the Co-Issuer.

 

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

 

“CalculationAgent”:  The meaningspecified in Section 7.14(a) hereof.

 

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

 

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

 

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

 

“Certificateof 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 formwithout interest coupons, pursuant to this Indenture.

 

“CertificatedSecurity”:  A “certificatedsecurity” as defined in Section 8-102(a)(4) of theUCC.

 

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

 

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

 

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

 

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assumptions on recoveries andtiming and to the Priority of Payments, will result in sufficient fundsremaining for the timely payment of interest and the ultimate payment ofprincipal of the Class A-1 Notes.

 

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

 

“Class A-1Interest Distribution Amount”:  On each Payment Date, the amount due toHolders 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 therelated Interest Accrual Period, (ii) the actual number of days in suchInterest Accrual Period divided by 360 and (iii) the Class A-1 Rate.

 

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

 

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

 

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

 

“Class A-1Scenario Loss Rate”: At any time, an estimate of the cumulative default rate for the CurrentPortfolio 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 theS&P CDO Monitor at such time.

 

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

 

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

 

“Class A-2Interest Distribution Amount”:  On each Payment Date, the amount due toHolders 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 therelated Interest Accrual Period, (ii) the actual number of days in suchInterest Accrual Period divided by 360 and (iii) the Class A-2 Rate.

 

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

 

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

 

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

 

“Class A-2Scenario Loss Rate”: At any time, an estimate of the cumulative default rate for the CurrentPortfolio 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 theS&P CDO Monitor at such time.

 

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

 

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

 

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

 

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

 

“ClassA/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 suchMeasurement Date by (b) the sum of the Aggregate Outstanding Amount of theClass A Notes and the Class B Notes and the amount ofany unreimbursed Interest Advances.

 

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

 

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

 

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

 

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“ClassB Interest Distribution Amount”:  On each Payment Date, the amount due toHolders 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 therelated Interest Accrual Period, (ii) the actual number of days in suchInterest Accrual Period divided by 360 and (iii) the Class B Rate.

 

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

 

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

 

“ClassB Rate”:  With respectto any Class B Note, the *per annum* rateat which interest accrues on such Note for any Interest Accrual Period, whichshall be equal to LIBOR for the related Interest Accrual Period plus 0.45% *per annum*.

 

“ClassB Scenario Loss Rate”: At any time, an estimate of the cumulative default rate for the CurrentPortfolio 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&PCDO Monitor at such time.

 

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

 

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

 

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

 

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

 

“ClassC Interest Distribution Amount”:  On each Payment Date, the amount due toHolders 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.

 

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

 

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

 

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“ClassC Rate”:  With respectto any Class C Note, the *per annum*rateat which interest accrues on such Note for any Interest Accrual Period, whichshall be equal to LIBOR for the related Interest Accrual Period plus 0.70% *per annum*.

 

“ClassC Scenario Loss Rate”: At any time, an estimate of the cumulative default rate for the CurrentPortfolio 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&PCDO Monitor at such time.

 

“ClassC 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/EInterest Coverage Ratio”: The meaning specified in the definition of “Interest Coverage Ratio.”

 

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

 

“Class C/D/EPar Value Ratio”: As of any Measurement Date, the number(expressed as a percentage) calculated by dividing (a) the Net OutstandingPortfolio Balance on such Measurement Date by (b) the sum of the AggregateOutstanding Amount (including any Class C Capitalized Interest, Class DCapitalized 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 theamount of any unreimbursed Interest Advances.

 

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

 

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

 

“ClassD Capitalized Interest”: The meaning specified in Section2.7(e) hereof.

 

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

 

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“ClassD Interest Distribution Amount”:  On each Payment Date, the amount due toHolders 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.

 

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

 

“ClassD Notes”:  The Class DFifth Priority Floating Rate Capitalized Interest Term Notes due 2035, issuedby the Issuer and the Co-Issuer pursuant to this Indenture.

 

“ClassD Rate”:  With respectto any Class D Note, the *per annum* rateat which interest accrues on such Note for any Interest Accrual Period, whichshall be equal to LIBOR for the related Interest Accrual Period plus 0.80% *per annum*.

 

“ClassD Scenario Loss Rate”: At any time, an estimate of the cumulative default rate for the CurrentPortfolio 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&PCDO Monitor at such time.

 

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

 

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

 

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

 

“ClassE 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 ENotes (other than Class E Capitalized Interest) that is due and payable but isnot punctually paid or duly provided for on or prior to the due date thereforand which remains unpaid, together with interest accrued thereon (to the extentlawful).

 

“Class EInterest Distribution Amount”:  On each Payment Date, the amount due toHolders 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 ELoss Differential”:  Atany time, the rate calculated by subtracting the Class E Scenario Loss Ratefrom the Class E Break-Even Loss Rate at such time.

 

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

 

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“Class ERate”:  With respect toany Class E Note, the *per annum*rateat which interest accrues on such Note for any Interest Accrual Period, whichshall be equal to LIBOR for the related Interest Accrual Period plus 0.90% *per annum*.

 

“Class EScenario Loss Rate”: At any time, an estimate of the cumulative default rate for the CurrentPortfolio 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&PCDO Monitor at such time.

 

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

 

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

 

“ClassF Capitalized Interest”: The meaning specified in Section2.7(g) hereof.

 

“ClassF 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 onthe Class F Notes (other than Class F Capitalized Interest) that is due andpayable but is not punctually paid or duly provided for on or prior to the duedate therefor and which remains unpaid, together with interest accrued thereon(to the extent lawful).

 

“ClassF Interest Distribution Amount”:  On each Payment Date, the amount due toHolders 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.

 

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

 

“ClassF Notes”:  The Class FSeventh Priority Floating Rate Capitalized Interest Term Notes due 2035, issuedby the Issuer and the Co-Issuer pursuant to this Indenture.

 

“ClassF Rate”:  With respectto any Class F Note, the *per annum* rateat which interest accrues on such Note for any Interest Accrual Period, whichshall be equal to LIBOR for the related Interest Accrual Period plus 1.50% *per annum*.

 

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

 

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

 

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

 

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

 

“ClassF/G/H Interest Coverage Test”: The test that is met as of anyMeasurement Date on which any Class F Notes, Class G Notes or Class H Notesremain Outstanding if the Class F/G/HInterest Coverage Ratio as of such Measurement Date is equal to or greater than132.85%.

 

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

 

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

 

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

 

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

 

“ClassG 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 orprior to the due date therefor and which remains unpaid, together with interestaccrued thereon (to the extent lawful).

 

“ClassG Interest Distribution Amount”:  On each Payment Date, the amount due toHolders of the Class G Noteson account of interest equal to the product of (i) the Aggregate OutstandingAmount (including any Class G Capitalized Interest) of the Class G Notes withrespect to the related Interest Accrual Period, (ii) the actual number of daysin such Interest Accrual Period divided by 360 and (iii) the Class G Rate.

 

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

 

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

 

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“ClassG Rate”:  With respectto any Class G Note, the *per annum*rateat which interest accrues on such Note for any Interest Accrual Period, whichshall be equal to LIBOR for the related Interest Accrual Period plus 1.65% *per annum*.

 

“ClassG Scenario Loss Rate”: At any time, an estimate of the cumulative default rate for the CurrentPortfolio 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&PCDO Monitor at such time.

 

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

 

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

 

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

 

“ClassH 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 areOutstanding, any interest on the Class H Notes (other than Class H CapitalizedInterest) that is due and payable but is not punctually paid or duly providedfor on or prior to the due date therefor and which remains unpaid, togetherwith interest accrued thereon (to the extent lawful).

 

“ClassH Interest Distribution Amount”:  On each Payment Date, the amount due toHolders of the Class H Noteson account of interest equal to the product of (i) the Aggregate OutstandingAmount (including any Class H Capitalized Interest) of the Class H Notes withrespect to the related Interest Accrual Period, (ii) the actual number of daysin such Interest Accrual Period divided by 360 and (iii) the Class H Rate.

 

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

 

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

 

“ClassH Rate”:  With respectto any Class H Note, the *per annum*rateat which interest accrues on such Note for any Interest Accrual Period, whichshall be equal to LIBOR for the related Interest Accrual Period plus 2.00% *per annum*.

 

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

 

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

 

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

 

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

 

“ClassJ 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 orClass H Notes are Outstanding, any interest on the Class J Notes (other thanClass J Capitalized Interest) that is due and payable but is not punctuallypaid or duly provided for on or prior to the due date therefor and whichremains unpaid, together with interest accrued thereon (to the extent lawful).

 

“ClassJ Interest Distribution Amount”:  On each Payment Date, the amount due toHolders of the Class J Noteson account of interest equal to the product of (i) the Aggregate OutstandingAmount (including any Class J Capitalized Interest) of the Class J Notes withrespect to the related Interest Accrual Period, (ii) the actual number of daysin such Interest Accrual Period divided by 360 and (iii) the Class J Rate.

 

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

 

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

 

“ClassJ Rate”:  With respectto any Class J Note, the *per annum*rateat which interest accrues on such Note for any Interest Accrual Period, whichshall be equal to LIBOR for the related Interest Accrual Period plus 3.50% *per annum*.

 

“ClassJ Scenario Loss Rate”: At any time, an estimate of the cumulative default rate for the CurrentPortfolio 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&PCDO Monitor at such time.

 

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

 

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

 

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

 

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“ClassK 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 KNotes (other than Class K Capitalized Interest) that is due and payable but isnot punctually paid or duly provided for on or prior to the due date thereforand which remains unpaid, together with interest accrued thereon (to the extentlawful).

 

“ClassK Interest Distribution Amount”:  On each Payment Date, the amount due toHolders 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.

 

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

 

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

 

“ClassK Rate”:  With respectto any Class K Note, the *per annum*rateat which interest accrues on such Note for any Interest Accrual Period, whichshall be equal to LIBOR for the related Interest Accrual Period plus 6.50% *per annum*.

 

“ClassK Scenario Loss Rate”: At any time, an estimate of the cumulative default rate for the CurrentPortfolio 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&PCDO Monitor at such time.

 

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

 

“Clean-upCall”:  The meaningspecified in Section 9.1 hereof.

 

“ClearingAgency”: 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.

 

“ClearingCorporation Security”: A security subject to book-entrytransfers and pledges deposited with the Clearing Agency.

 

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

 

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

 

“ClosingDate”:  July 14, 2005.

 

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“CMBSConduit Securities”: Collateral Debt Securities (A) issued bya single-seller or multi-seller conduit under which the holders of such CollateralDebt Securities have recourse to a specified pool of assets (but not otherassets 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 timelydistribution of proceeds to holders of the Collateral Debt Securities) on thecash flow from a pool of commercial mortgage loans generally having thefollowing characteristics: (i) the commercial mortgage loans have varyingcontractual maturities; (ii) the commercial mortgage loans are secured by realproperty purchased or improved with the proceeds thereof (or to refinance anoutstanding loan the proceeds of which were so used); (iii) the commercialmortgage loans are obligations of a relatively limited number of obligors (withthe creditworthiness of individual obligors being less material than for CMBSLarge Loan Securities) and accordingly represent a relatively undiversifiedpool of obligor credit risk; (iv) upon original issuance of such CollateralDebt Securities no five commercial mortgage loans account for more than 20% ofthe aggregate principal balance of the entire pool of commercial mortgage loanssupporting payments on such securities; and (v) repayment thereof can varysubstantially from the contractual payment schedule (if any), with earlyprepayment of individual loans depending on numerous factors specific to theparticular obligors and upon whether, in the case of loans bearing interest ata fixed rate, such loans or securities include an effective prepayment premium.

 

“CMBSLarge Loan Securities”: Collateral Debt Securities (other than CMBS Conduit Securities) thatentitle the holders thereof to receive payments that depend (except for rightsor other assets designed to assure the servicing or timely distribution ofproceeds to holders of the Collateral Debt Securities) on the cash flow from apool of commercial mortgage loans made to finance the acquisition, constructionand improvement of properties.  Theygenerally have the following characteristics: (i) the commercial mortgage loanshave varying contractual maturities; (ii) the commercial mortgage loans aresecured by real property purchased or improved with the proceeds thereof (or torefinance one or more outstanding loans the proceeds of which were so used);(iii) the commercial mortgage loans are obligations of a relatively limitednumber of obligors and accordingly represent a relatively undiversified pool ofobligor credit risk; (iv) repayment thereof can vary substantially from thecontractual payment schedule (if any), with early prepayment of individualloans depending on numerous factors specific to the particular obligors andupon whether, in the case of loans bearing interest at a fixed rate, such loansor securities include an effective prepayment premium; and (v) the valuation ofindividual properties securing the commercial mortgage loans is the primaryfactor in any decision to invest in those securities.

 

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

 

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

 

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

 

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“Code”:  The United States Internal Revenue Code of1986, as amended.

 

“CollateralDebt Securities Purchase Agreement”: The collateral debtsecurities purchase agreement entered into on or about the Closing Date and anyother collateral debt securities purchase agreement entered into after theClosing Date if a purchase agreement is necessary to comply with thisIndenture, which agreement is assigned to the Trustee pursuant to thisIndenture.

 

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

 

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

 

“Collateral Management Fee”:  The Senior Collateral Management Fee and theSubordinate Collateral Management Fee.

 

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

 

“CollateralManager Servicing Standard”: With respect to the Collateral Manager, to manage the Collateral DebtSecurities that such Person is obligated to service and administer pursuant tothis 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 practiceof prudent institutional commercial mortgage lenders servicing their ownmortgage loans and (2) the same manner in which, and with the same care, skill,prudence and diligence with which, the Collateral Manager manages securitiescomparable to the Collateral Debt Securities for its own account; (B)applicable law and (C) the terms of this Indenture, the Collateral ManagementAgreement and the terms of each such Collateral Debt Security and the relatedUnderlying Instruments and (ii) without regard to (A) any relationship,including as lender on any other debt, that the Collateral Manager or anyAffiliate of the Collateral Manager, may have with the underlying borrower, orany Affiliate of the borrower, or any other party to this Indenture (or anyagreements relating to this Indenture); (B) the election by the CollateralManager whether or not to make Cure Advances from time to time; (C) the rightof the Collateral Manager or any Affiliate thereof, to receive compensation orreimbursement of costs hereunder generally or with respect to any particulartransaction (including, without limitation, any transaction related to theCollateral Management Agreement); (D) the ownership, servicing or managementfor others of any security not subject to this Indenture by the CollateralManager or any Affiliate thereof or the obligation of any Affiliate of theCollateral Manager to repurchase the Collateral Debt Security; and (E) theownership of any Notes by the Collateral Manager or any affiliate therof.

 

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

 

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

 

(i)            the AggregatePrincipal Balance of Collateral Debt Securities (other than CMBS Securities,CRE CDO Securities and REIT Debt Securities) backed or otherwise invested inproperties 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) thegreater of (x) 60% of the Aggregate Collateral Balance and (y) $600,000,000 mayconsist of Collateral Debt Securities (other than CMBS Securities, CRE CDOSecurities and REIT Debt Securities) backed or otherwise invested in propertieslocated in the State of New York, (B) the greater of (x) 35% of the AggregateCollateral Balance and (y) $350,000,000 may consist of Collateral DebtSecurities (other than CMBS Securities, CRE CDO Securities and REIT DebtSecurities) backed or otherwise invested in properties located in the State ofCalifornia, (C) the greater of (x) 30% of the Aggregate Collateral Balance and(y) $300,000,000 may consist of Collateral Debt Securities (other than CMBSSecurities, CRE CDO Securities and REIT Debt Securities) backed or otherwiseinvested 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 ofCollateral Debt Securities (other than CMBS Securities, CRE CDO Securities andREIT Debt Securities) backed or otherwise invested in properties located in theState of Florida;

 

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

 

(iii)          the Aggregate Principal Balance of CRE CDO Securities doesnot exceed the greater of (A) 2% of the Aggregate Collateral Balance and (B) $20,000,000;

 

(iv)          the AggregatePrincipal Balance of all Collateral Debt Securities (that are not MezzanineLoans 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 toany Loan, the related borrower shall be deemed to be the issuer thereof);

 

(v)           the AggregatePrincipal Balance of all Mezzanine Loans issued by any single issuer does notexceed the greater of (A) $100,000,000 and (B) 10% of the Aggregate CollateralBalance (*provided* that, for avoidance of doubt,with respect to any Mezzanine Loan, the issuer of such Mezzanine Loan shall bedeemed to be the borrower of such Mezzanine Loan);

 

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(vi)          the AggregatePrincipal Balance of all B Notes issued by any single issuer does not exceedthe 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 theborrower of such B Note);

 

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

 

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

 

(ix)           the AggregatePrincipal Balance of Collateral Debt Securities (other than CMBS Securities,REIT Debt Securities and CRE CDO Securities) that are collateralized or backedby 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, REITDebt Securities and CRE CDO Securities) that are collateralized or backed byinterests on any Urban Office Property or Suburban Office Property; (B) thegreater of (x) 30% of the Aggregate Collateral Balance and (y) $300,000,000 mayconsist of Collateral Debt Securities (other than CMBS Securities, REIT DebtSecurities and CRE CDO Securities) that are collateralized or backed byinterests on any Multi Family Properties; (C) the greater of (x) 30% of theAggregate Collateral Balance and (y) $300,000,000 may consist of CollateralDebt Securities (other than CMBS Securities, REIT Debt Securities and CRE CDOSecurities) that are collateralized or backed by interests on RetailProperties; (D) the greater of (x) 30% of the Aggregate Collateral Balance and(y) $300,000,000, may consist of Collateral Debt Securities (other than CMBSSecurities, REIT Debt Securities and CRE CDO Securities) that arecollateralized or backed by interests on Hospitality Properties; (E) thegreater of (x) 25% of the Aggregate Collateral Balance and (y) $250,000,000 mayconsist of Collateral Debt Securities (other than CMBS Securities, REIT DebtSecurities and CRE CDO Securities) that are collateralized or backed byinterests on Industrial Properties; (F) the greater of (x) 15% of the AggregateCollateral Balance and (y) $150,000,000 may consist of Collateral DebtSecurities (other than CMBS Securities, REIT Debt Securities and CRE CDOSecurities) that are collateralized or backed by interests on HealthcareProperties (including skilled nursing facilities); and (G) the greater of (x) 10%of the Aggregate Collateral Balance and (y) $100,000,000 may consist ofCollateral Debt Securities (other than CMBS Securities, REIT Debt Securities andCRE CDO Securities) that are collateralized or backed by interests on skillednursing facilities; *provided* thatfor the avoidance of doubt, any Collateral Debt Security categorized pursuantto this clause (G) shall also be included when calculating the applicableamount under the preceding clause (F);

 

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(x)            the AggregatePrincipal Balance of Floating Rate Securities that bear interest based upon afloating rate index other than LIBOR and that are not subject to LiabilityHedges does not exceed the greater of (A) 5% of the Aggregate CollateralBalance and (B) $50,000,000;

 

(xi)           the Aggregate Principal Balance of Fixed Rate Securitiesthat 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 orequal to 20 (*provided* that, for the avoidanceof doubt, with respect to any Loan, the related borrower shall be deemed to bethe obligor thereon) ;

 

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

 

(xiv)        the Aggregate Principal Balance of Loans related toundeveloped real estate intended to be developed into residential property doesnot 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 issatisfied;

 

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

 

(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&PCDO Monitor Test is satisfied;

 

(xxiii)       S&PRecovery Test is satisfied; and

 

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

 

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

 

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be taken into account for thepurposes of any reports to be prepared pursuant to Section 10.9 of thisIndenture.

 

“CollectionAccounts”:  The trustaccounts so designated and established pursuant to Section 10.2(a) hereof.

 

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

 

“CompanyAdministrative Expenses”: All fees, expenses and other amounts due or accrued with respect to anyPayment Date and payable by the Issuer or the Co-Issuer to (i) the Trusteepursuant to Section 6.7 hereof or any co-trustee appointed pursuant to thisIndenture (including amounts payable by the Issuer as indemnification pursuantto this Indenture), (ii) the Company Administrator under the CompanyAdministration Agreement (including amounts payable by the Issuer asindemnification pursuant to the Company Administration Agreement) and toprovide for the costs of liquidating the Issuer following redemption of theNotes, (iii) the LLC Managers (including indemnification), (iv) the Independentaccountants, agents and counsel of the Issuer for reasonable fees and expenses(including amounts payable in connection with the preparation of tax forms onbehalf of the Issuer and the Co-Issuer) and any registered office andgovernment filing fees, (v) the Rating Agencies for fees and expenses inconnection with any rating (including the annual fee payable with respect tothe monitoring of any rating) of the Notes, including fees and expenses due oraccrued in connection with any credit estimate or rating of the Collateral DebtSecurities, (vi) the Collateral Manager under this Indenture and the CollateralManagement Agreement, (vii) the Collateral Manager or other Persons asindemnification pursuant to the Collateral Management Agreement, (viii) theAdvancing Agent or other Persons as indemnification pursuant to Section 17.3,(ix) each member of the Advisory Committee (including amounts payable asindemnification) under each agreement between such Advisory Committee memberand the Issuer (and the amounts payable by the Issuer to each member of theAdvisory Committee as indemnification pursuant to each such agreement); (x) thePreferred Shares Paying Agent and the Shares Registrar under the PreferredShares Paying Agency Agreement, (xi) any other Person in respect of anygovernmental fee, charge or tax in relation to the Issuer or the Co-Issuer (ineach case as certified by an Authorized Officer of the Issuer or the Co-Issuerto the Trustee), and (xii) any other Person in respect of any other fees orexpenses (including indemnifications) permitted under this Indenture and thedocuments delivered pursuant to or in connection with this Indenture and theNotes and any amendment or other modification of any such documentation, ineach case unless expressly prohibited under this Indenture (including, withoutlimitation, the payment of all transaction fees and all legal and other feesand expenses required in connection with the purchase of any Collateral DebtSecurities or any other transaction authorized by this Indenture and anyamounts due in respect of the listing of any Notes on the Irish Stock Exchange);*provided* that Company AdministrativeExpenses shall not include (a) amounts payable in respect of the Notes, (b)amounts payable under any Hedge Agreement and (c) any Collateral Management Feepayable pursuant to the Collateral Management Agreement.

 

“CompanyAdministrator”:  MaplesFinance Limited, as administrator pursuant to the Company AdministrationAgreement, unless a successor Person shall have become

 

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administrator pursuant to theCompany Administration Agreement, and thereafter, Company Administrator shallmean such successor Person.

 

“ControllingClass”:  The Class A-1Notes, so long as any Class A-1 Notes are Outstanding, then the Class A-2Notes, 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 asany Class C Notes are Outstanding, then the Class D Notes, so long as any ClassD Notes are Outstanding, then the Class E Notes, so long as any Class E Notesare Outstanding, then the Class F Notes, so long as any Class F Notes areOutstanding, 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 theClass J Notes, so long as any Class J Notes are Outstanding, then the Class KNotes, so long as any Class K Notes are Outstanding, and after the Notes are nolonger Outstanding, the Preferred Shares.

 

“CorporateTrust Office”:  Theprincipal corporate trust office of the Trustee, currently located at (i) forNote transfer purposes, Wells Fargo Center, Sixth Street and Marquette Avenue,Minneapolis, Minnesota 55479, Attention:  Corporate Trust Services – Gramercy RealEstate CDO 2005-1, Ltd. and (ii) for all other purposes, 9062 Old AnnapolisRoad, Columbia, Maryland 21045, Attention:  CDO Trust Services – Gramercy Real Estate CDO2005-1, Ltd., telephone number (410) 884-2000, or such other address as theTrustee may designate from time to time by notice to the Noteholders, theholders of the Preferred Shares, the Collateral Manager, the Rating Agencies,the Issuer and each Hedge Counterparty or the principal corporate trust officeof any successor Trustee.

 

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

 

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

 

“CoveredFixed Rate Security”:  AnyFixed Rate Security (including any Above Cap Security) (i) for which the Issuerhas entered into one or more interest rate swap agreements (either individuallyor together with other Collateral Debt Securities), which (A) is a market rateswap 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 FixedRate Security, (C) requires the related Hedge Counterparty to make floatingrate payments to the Issuer based on the related notional amount based on theLondon interbank offered rate for U.S. Dollar deposits in Europe and (D) requiresthe Issuer to make fixed rate payments to the related Hedge Counterparty or(ii) that is subject to a Liability Hedge.

 

“CRECDO Security”: Collateralized debt obligation, collateralized bond obligation orcollateralized loan obligation (including, without limitation, any syntheticcollateralized debt obligation or synthetic collateralized loan obligation)that entitles the holder thereof to receive payments that depend (except forrights or other assets designed to assure the servicing or timely distributionof proceeds to the holder of such CRE CDO Security) on the cash flow from (andnot the market value of) a portfolio of securities related to commercialmortgage property.

 

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

 

“CreditRisk Security”: Any Collateral Debt Security that, in theCollateral Manager’s reasonable business judgment, has a significant risk ofdeclining in credit quality or, with a lapse of time, becoming a DefaultedSecurity.

 

“CureAdvance”:  An advanceby the Collateral Manager, in connection with the exercise of a cure right bythe Issuer, as controlling holder or directing holder or other similarfunction, with respect to a Collateral Debt Security.

 

“CurrentPortfolio”:  Theportfolio of Collateral Debt Securities and Eligible Investments prior togiving effect to a proposed reinvestment in a Substitute Collateral DebtSecurity.

 

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

 

“CustodialSecurities 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 thatis, or with notice or the lapse of time or both would become, an Event ofDefault.

 

“DefaultedSecurity”:  AnyCollateral Debt Security or any other security included in the Assets:

 

(i)            withrespect to a Preferred Equity Security (1) with respect to which there hasoccurred and is continuing a payment default (after giving effect to anyapplicable grace period but without giving effect to any waiver); *provided*, *however*, thatnotwithstanding the foregoing, a Preferred Equity Security shall not be deemedto be a Defaulted Security as a result of (A) the related issuer’s failure topay dividends or distributions on the initial due date therefor, if theCollateral Manager or the Issuer consents to extend the due date when suchdividend or distribution is due and payable, and such dividend or distributionis paid on or before such extended due date (*provided*that such dividend or distribution is paid not more than 60 days (or if the duedate for such dividend or distribution was previously so extended, not morethan 30 days) after the initial date that it was due), or (B) the failure ofthe issuer or affiliate of the issuer of the Preferred Equity Security toredeem or purchase such Preferred Equity Security on the date when suchredemption or purchase is required pursuant to the terms of the agreementsetting forth the rights of the holder of that Preferred Equity Security (aftergiving effect to all extensions of such redemption or purchase date that theissuer or affiliate of the issuer of the Preferred Equity Security had theright to elect and did elect under the terms of the agreement setting forth therights of the

 

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holder of that Preferred Equity Security), if theCollateral Manager or the Issuer consents to extend such redemption or purchasedate; *provided* that such consent does notextend the redemption or purchase date by more than two (2) years after theredemption or purchase date required under such agreement (that is, theoriginal redemption or purchase date under such agreement as extended by allextensions of such date that the issuer or affiliate of the issuer of the PreferredEquity Security had the right to elect and did elect under the terms of suchagreement) and the amount required to be paid in connection with suchredemption or purchase is paid on or before such extended redemption orpurchase date, or (2) with respect to which there is known to the Issuer or theCollateral Manager a default (other than any payment default) which defaultentitles the holders thereof to accelerate the maturity of all or a portion ofthe principal amount of such obligation; *provided*, *however*, in each case, if such default is cured or waivedthen such asset shall no longer be a Defaulted Security or (3) with respect towhich there is known to the Collateral Manager that (A) any bankruptcy,insolvency or receivership proceeding has been initiated in connection with theissuer of such Collateral Debt Security, or (B) there has been proposed oreffected any distressed exchange or other debt restructuring where the issuerof such Collateral Debt Security has offered the debt holders a new security orpackage of securities that either (x) amounts to a diminished financialobligation 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 byFitch, (5) with respect to which there is known to the Collateral Manager thatthe issuer thereof is in default (without giving effect to any applicable graceperiod or waiver) as to payment of principal and/or interest on anotherobligation (and such default has not been cured or waived) which is senior or *pari passu*in right of payment to such Collateral DebtSecurity, except that a Collateral Debt Security will not constitute a “DefaultedSecurity” under this clause (5) if each of the Rating Agencies has confirmed inwriting that such event shall not result in the reduction, qualification orwithdrawal of any rating of the Notes;

 

(ii)           withrespect to a Loan, if a foreclosure or default (whether or not declared) withrespect to the related commercial mortgage loan has occurred; *provided*, *however*, thatnotwithstanding the foregoing, a Loan shall not be deemed to be a DefaultedSecurity as a result of (1) the related borrower’s failure to pay interest onsuch Loan or on the related commercial mortgage loan on the initial due datetherefor, if the related lender or holder of such Loan or the relatedcommercial mortgage loan consents to extend the due date when such interest isdue 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 than30 days) after the initial date that it was due), or (2) the related borrower’sfailure to pay principal on such Loan or the related commercial mortgage loanon the original maturity date thereof (as defined below), if the related lenderor holder of such Loan or the related commercial mortgage loan consents toextend such maturity date (so long as the Maturity Extension Requirements aremet) and such principal is paid on or before such extended maturity date, or (3)the occurrence of any default (other

 

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

 

(iii)          withrespect to a CMBS Security, CRE CDO Security or REIT Debt Security (1) as towhich there has occurred and is continuing a principal payment default (withoutgiving effect to any applicable grace period or waiver) or (2) as to whichthere is known to the Issuer or the Collateral Manager a default (other thanany payment default) which default entitles the holders thereof to acceleratethe maturity of all or a portion of the principal amount of such obligation; *provided*, *however*, ineach case, if such default is cured or waived then such asset shall no longerbe a Defaulted Security or (3) as to which there is known to the CollateralManager that (A) any bankruptcy, insolvency or receivership proceeding has beeninitiated in connection with the issuer of such CMBS Security, CRE CDO Securityor REIT Debt Security, or (B) there has been proposed or effected anydistressed exchange or other debt re-structuring where the issuer of such CMBSSecurity, CRE CDO Security or REIT Debt Security has offered the debt holders anew security or package of securities that either (x) amounts to a diminishedfinancial obligation or (y) has the purpose of helping the issuer to avoiddefault, 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 DebtSecurities, the issuer of which has a credit rating of “D” or “SD” or as towhich S&P has withdrawn its rating or (5) as to which there is known to theCollateral Manager that the issuer thereof is in default (without giving effectto any applicable grace period or waiver) as to payment of principal and/orinterest on another obligation (and such default has not been cured or waived)which is senior or *pari passu*inright 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 notconstitute a “Defaulted Security” under this clause (5) if each of the RatingAgencies has confirmed in writing that such event shall not result in thereduction, 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 forthe lesser of (x) six months or (y) three payment periods (if such CMBSSecurity, CRE CDO Security or REIT Debt Security is rated (or privately ratedfor 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 CMBSSecurity, CRE CDO Security or REIT Debt Security is satisfied with

 

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respect to S&P and Moody’s, the Collateral Managermay choose not to treat such a CMBS Security, CRE CDO Security or REIT DebtSecurity as a Defaulted Security or (B) as to which there has been a failure topay interest in whole or in part for the lesser of (x) one year or (y) sixconsecutive payment periods (if such CMBS Security, CRE CDO Security or REITDebt Security is rated (or privately rated for purposes of the issuance of theSecurities) “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 ofinterest thereon.

 

*provided***that any Collateral Debt Security which has sustained awrite-down of principal balance in accordance with its terms will notnecessarily be considered a Defaulted Security solely due to such writedown.

 

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

 

For purposes of the definition of “Defaulted Security,”the “Maturity Extension Requirements” will be satisfied with respect to anyextension if the maturity date is extended (i) in the case of Loans other thanARD Loans, to a new maturity date that is (A) not more than two (2) years afterthe original maturity date and (B) not less than ten years prior to the StatedMaturity and (ii) in the case of ARD Loans, such that (A) the anticipatedrepayment 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 StatedMaturity; *provided, however,*that notwithstandingthe requirements in the foregoing clauses (i) and (ii), “Maturity ExtensionRequirements” will be deemed satisfied with respect to any extensions as towhich the Rating Agency Condition has been satisfied.

 

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

 

“Delayed Draw Term Loan”: Any Loan that isfully committed on the initial funding date of such Loan but is required to befully funded in one or more installments but which, once all such installmentshave been made, has the characteristics of a term loan; *provided*that no Loan with respect to which the additional funding obligation is heldseparately outside the Issuer by an affiliate of the Seller or by anunaffiliated 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, theprincipal 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

 

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

 

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

 

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

 

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

 

“DeterminationDate”:  With respect tothe initial Payment Date, October 19, 2005, and thereafter quarterly on each January19, April 19, July 19 and October 19 (or if such date is not a Business Day,then the next succeeding Business Day).

 

“DisqualifiedTransferee”:  The meaningspecified in Section 2.5(l) hereof.

 

“DistressedDebt Security”:  AnyCollateral Debt Security (other than any CMBS Security, CRE CDO Security orREIT Debt Security owned by the Issuer) relating to real property located inmetropolitan New York or Washington, D.C. on which (i) there is a paymentdefault, an acceleration, bankruptcy or foreclosure, (ii) a default is highlylikely because the loan-to-value is greater than 100% or (iii) the debt serviceon such security exceeds the available cash flow from the underlying propertyon a current and projected basis.

 

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

 

“DueDate”:  Each date onwhich a Scheduled Distribution is due on a Pledged Obligation.

 

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

 

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

 

“EligibilityCriteria”:  Thecriteria set forth below, which if satisfied with respect to any asset at thetime it is purchased, as evidenced by an Officer’s Certificate of theCollateral 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 DebtSecurity:

 

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

 

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

 

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

 

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

 

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

 

(vi)          itsacquisition would not cause the Issuer, the Co-Issuer or the pool of PledgedObligations to be required to register as an investment company under the InvestmentCompany Act; and if the issuer of such Collateral Debt Security is exceptedfrom the definition of an “investment company” solely by reason of Section3(c)(1) of the Investment Company Act, then either (A) such Collateral DebtSecurity does not constitute a “voting security” for purposes of the InvestmentCompany Act or (B) the aggregate amount of such Collateral Debt Security heldby the Issuer is less than 10% of the entire issue of such Collateral DebtSecurity;

 

(vii)         (A)if it is a Loan (including a Mezzanine Loan but excluding an ARD Loan), nocommercial mortgage loan underlying, securing or constituting such CollateralDebt Security has a maturity date (including any extension option) that islater than ten (10) years prior to the Stated Maturity, (B) if it is a REITDebt Security, such REIT Debt Security (without regard to the maturities of anycollateral underlying such REIT Debt Security) does not have a stated finalmaturity later than the Stated Maturity, (C) if it is a CMBS Security, suchCMBS Security (without regard to the maturities of any collateral underlyingsuch CMBS Security) does not have a rated final maturity later than the StatedMaturity; *provided* that up to 5% of the aggregateprincipal balance of all Collateral Debt Securities may consist of CMBSSecurities with a rated final maturity of not more than 5 years after theStated Maturity, (D) if it is an ARD Loan, (i) the anticipated repayment dateof such ARD Loan is not later than fifteen (15) years prior to the StatedMaturity and (ii) the new maturity date is not less than six (6) months priorto the Stated Maturity; *provided* thatup to 5% of the aggregate principal balance of all Collateral Debt Securitiesmay consist of ARD Loans with a stated maturity of not more than five (5) yearsafter the Stated Maturity, (E) if it is a CRE CDO

 

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

 

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

 

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

 

(x)            otherthan any Loan with respect to which the Collateral Manager has a reasonableindication from the related borrower that such borrower plans to prepay suchLoan, it is not the subject of (a) any Offer by the issuer of such security orby any other person made to all of the holders of such security to purchase orotherwise acquire such security (other than pursuant to any redemption inaccordance with the terms of the related Underlying Instruments) or to convertor exchange such security into or for cash, securities or any other type ofconsideration or (b) any solicitation by an issuer of such security or anyother person to amend, modify or waive any provision of such security or anyrelated Underlying Instruments, and has not been called for redemption;

 

(xi)           it is notan Ineligible Equity Security, Step-Up Security, Step-Down Bond, Market ValueCollateralized Debt Obligation, any security the repayment of which is subjectto substantial non-credit related risk, as determined by the Collateral Managerin its reasonable business judgment, or a synthetic security;

 

(xii)          except with respect to Preferred Equity Securities, it isnot a security that by the terms of its Underlying Instruments provides forconversion or exchange (whether mandatory or at the option of the issuer or theholder thereof) into equity capital at any time prior to its maturity;

 

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

 

(xiv)        except with respect to Delayed Draw Term Loans, it will notrequire the Issuer to make any future payments after the initial purchasethereof;

 

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

 

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(xvi)        except with respect to Partially Deferred Loans, it does nothave any outstanding deferred or capitalized interest;

 

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

 

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

 

(xix)         ifit is a Participation, (a) it is a real estate related Participation, (b) exceptin the case of any Initial Collateral Debt Security, the Mayacama Loan or anyother Participation with respect to which the Rating Agency Condition issatisfied, either (i) the Underlying Term Loan, A Note or B Note has beenincluded in a transaction that would be classified as a CMBS Conduit Securityor a CMBS Large Loan Security or (ii) the Underlying Term Loan is servicedpursuant to a commercial mortgage servicing arrangement, which includes thestandard servicing provisions found in CMBS Securities transactions, (c) therequirements regarding the representations and warranties with respect to the UnderlyingTerm Loan, the Underlying Mortgage Property (as applicable) and theParticipation set forth in Section 16.5 have been met, (d) the terms ofthe Underlying Instruments are consistent with the terms of similar UnderlyingInstruments in the CMBS industry and (e) except in the case of any InitialCollateral Debt Security, if it is a Participation, the ParticipatingInstitution is either a “special purpose vehicle” or qualifies as a “qualifiedinstitutional lender” as typically defined in the Underlying Instrumentsrelated to Participations; *provided* that asecuritization trust, a CDO issuer or a similar securitization vehicle shall bedeemed to be a “special purpose vehicle” hereunder;

 

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

 

(xxi)         ifit is a Mezzanine Loan (other than the LNR Loan), (a) except in the case of anyInitial Collateral Debt Security or any other Mezzanine Loan with respect towhich the Rating Agency Condition is satisfied, the Mezzanine Loan is servicedpursuant to a commercial mortgage servicing arrangement, which includes thestandard servicing provisions found in CMBS Securities transactions,

 

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

 

(xxii)        ifit is a Loan (that is not a Participation, a B Note or a Mezzanine Loan), (a) exceptin the case of any Initial Collateral Debt Security or any other Loan withrespect to which the Rating Agency Condition is satisfied, it is a real estaterelated Loan that is serviced pursuant to (A) the GMACCMC Servicing Agreementor (B) a commercial mortgage servicing arrangement, which includes the standardservicing provisions found in CMBS Securities transactions, and (b) therequirements regarding the representations and warranties with respect to theLoan and the Underlying Mortgage Property (as applicable) set forth in Section16.5 have been met;

 

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

 

(xxiv)       it is one of the Specified Types;

 

(xxv)        ifit is a Loan or CMBS Security, the principal balance of the Loan or CMBSSecurity has not been reduced by a realized loss, expected loss, appraisalevent, appraisal reduction or similar item since initial issuance, other than aLoan as to which a workout or other restructuring has occurred but as to whichno such reduction has occurred since the completion of such workout orrestructuring;

 

(xxvi)       any requirements regarding opinions with respect to certainpurchases of Collateral Debt Securities as provided in this Indenture have beenmet;

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding the foregoing provisions of thisdefinition, with respect to any Collateral Debt Security acquired by the Issueron or prior to the Closing Date, if the Eligibility Criteria above pertains tothe subject matter of a representation and warranty under the relatedCollateral Debt Securities Purchase Agreement as to which an exception has beendisclosed in the related exception schedule, such Collateral Debt Securityshall be deemed to satisfy such criterion notwithstanding such exception.

 

“EligibleInvestments”:  AnyDollar-denominated investment that, at the time it is Grantedto the Trustee (directly or through a Securities Intermediary or bailee), isRegistered and is one or more of the following obligations or securities:

 

(i)            directobligations of, and obligations the timely payment of principal of and intereston which is fully and expressly guaranteed by, the United States, or any agencyor instrumentality of the United States, the obligations of which are expresslybacked by the full faith and credit of the United States;

 

(ii)           demand andtime deposits in, certificates of deposit of, bankers’ acceptances issued by,or federal funds sold by, any depository institution or trust companyincorporated under the laws of the United States or any state thereof or theDistrict of Columbia (including the Trustee or the commercial department of anysuccessor Trustee, as the case may be; *provided*thatsuch successor otherwise meets the criteria specified herein) and subject tosupervision and examination by federal and/or state banking authorities so longas the commercial paper and/or the debt obligations of such depositaryinstitution or trust company (or, in the case of the principal depositaryinstitution in a holding company system, the commercial paper or debtobligations of such holding company) at the time of such investment orcontractual commitment providing for such investment have a credit rating notless than “A1” by Moody’s, “A+” by Fitch and “A+” by S&P, in the case oflong-term debt obligations, and “P-1” by Moody’s, “F1” by Fitch and “A-1” byS&P for Eligible Investments which have a maturity of 30 days or less;

 

(iii)          unleveragedrepurchase or forward purchase obligations with respect to (a) any securitydescribed in clause (i) above or (b) any other security issued or guaranteed byan agency or instrumentality of the United States, in either case entered intowith a depository institution or trust company (acting as principal) describedin clause (ii) above (including Wells Fargo Bank, National Association or thecommercial department of any successor Trustee, as the case may be; *provided*that such person otherwise meets the criteriaspecified 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 whoseshort-term credit rating is not less than “P-1” by Moody’s, “F1” by Fitch and “A-1+”by S&P for Eligible

 

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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 timeof 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&Pare Outstanding);

 

(iv)          registeredsecurities bearing interest or sold at a discount issued by any corporationincorporated under the laws of the United States or any state thereof or theDistrict 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&Pare Outstanding) at the time of such investment or contractual commitmentproviding for such investment;

 

(v)           commercialpaper or other similar short-term obligations (including that of the Trustee orthe commercial department of any successor Trustee, as the case may be, or anyaffiliate thereof; *provided*thatsuch person otherwise meets the criteria specified herein) having at the timeof 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 maturityof 30 days or less (for so long as any Notes rated by S&P are Outstanding);*provided*that the issuer thereof mustalso have at the time of such investment a senior long-term debt rating of notless than “Aa3” by Moody’s, “AA” by Fitch and “AA” by S&P (for so long asany Notes rated by S&P are Outstanding);

 

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

 

(vii)         moneymarket funds which have at all times the highest credit rating assigned by eachof the Rating Agencies (including funds for which the Trustee or an affiliateprovides services or received compensation); and

 

(viii)        anyother investment similar to those described in clauses (i) through (vii) abovethat (1) each of Moody’s and S&P has confirmed may be included in theportfolio of Pledged Obligations as an Eligible Investment without adverselyaffecting its then-current ratings on the Notes and (2) has a long-term creditrating 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 ratingof 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);

 

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

 

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

 

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

 

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

 

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

 

“Eventof Default”:  Themeaning specified in Section 5.1 hereof.

 

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

 

“ExchangeAct”:  The SecuritiesExchange Act of 1934, as amended.

 

“Exchange Security”: The meaning specified in Section12.1(b) hereof.

 

“ExpenseAccount”:  The accountestablished 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 ofall extension options that are exercisable at the option of the relatedborrower under the terms of such Collateral Debt Security.

 

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

 

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“FinancialAsset”:  The meaningspecified in Section 8-102(a)(9) of the UCC.

 

“FinancingStatements”:  Financingstatements relating to the Assets naming the Issuer as debtor and the Trusteeon 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 DebtSecurity that is a CMBS Security, a CRE Security or a REIT Debt Security on anyMeasurement Date, an amount equal to the percentage corresponding to thedomicile and seniority of such Collateral Debt Security, as set forth in ScheduleN (the Fitch Recovery Matrix); *provided* thatthe applicable percentage shall be the percentage corresponding to the ratingof the most senior Outstanding Class of Notes then rated by Fitch and (ii) withrespect to any Collateral Debt Security that is a Loan, the Market Valuethereof.

 

“FitchLoan Diversity Index Score” means the amount determined bythe Collateral Manager on any Measurement Date, by the sum of the series ofproducts obtained for each Collateral Debt Security, by squaring the quotientof (x) the Principal Balance on such Measurement Date of each such CollateralDebt Security and (y) the Aggregate Principal Balance of all Collateral DebtSecurities on such Measurement Date, multiplied by 10,000.  In the event that cash has been received inrespect of Principal Proceeds since the immediately preceding Measurement Datebut has not been reinvested in additional Collateral Debt Securities as of thecurrent Measurement Date, the aggregate amount then held in cash shall bedivided into one or more “Cash Security Exposures.”  Each Cash Security Exposure will be sized inan amount equal to the result obtained by averaging the Principal Balance ofall Collateral Debt Securities on such Measurement Date; provided that if thecash position as of such Measurement Date is less than such average, or ifthere is cash remaining in an amount less than such average, the Cash SecurityExposure, or the additional Cash Security Exposure, as applicable, representedthereby will be sized in the actual amount of such cash position.  The Fitch Loan Diversity Index Score shallthen be calculated as the quotient of (x) the Principal Balance on such MeasurementDate of each such Collateral Debt Security and each Cash Security Exposure and (y)the Aggregate Principal Balance of all Collateral Debt Securities and all CashSecurity Exposures on such Measurement Date, multiplied by 10,000.

 

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

 

“Fitch Rating”: With respect to any CollateralDebt Security,

 

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

 

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

 

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

 

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

 

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

 

“FixedRate Excess”:  As ofany Measurement Date, a fraction (expressed as a percentage) the numerator ofwhich is equal to the product of (i) the greater of zero and the excess, ifany, of the Weighted Average Coupon for such Measurement Date over 7.00% and(ii) the Aggregate Principal Balance of all Collateral Debt Securities that areFixed Rate Securities (excluding all Defaulted Securities and Written DownSecurities) and the denominator of which is the Aggregate Principal Balance ofall Collateral Debt Securities that are Floating Rate Securities (excluding allDefaulted Securities and Written Down Securities), multiplying the resultingfigure 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.

 

“FloatingRate Security”:  AnyCollateral 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 CapSecurity); *provided*that any Covered Fixed RateSecurity will be deemed to be a Floating Rate Security for purposes ofcalculating the Fixed Rate Excess, Spread Excess, Weighted Average Coupon andWeighted Average Spread and for purposes of calculating the Spread Excess andWeighted Average Spread, such Covered Fixed Rate Security shall be assumed tohave a spread (i) above LIBOR equal to the spread over the London interbankoffered rate for U.S. Dollar deposits in Europe for the related swap agreementor (ii) equal to the sum of (a) the coupon on the underlying related CollateralDebt Security plus (b) the floating amount receivable from the applicable HedgeCounterparty under the related swap agreement minus (c) the fixed amountpayable by the Issuer under the applicable swap agreement minus (d) LIBOR.

 

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

 

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Condition was previously received in respect of theNotes (as certified to the Trustee by the Collateral Manager), *provided*that any Rating Agency may withdraw its approval ofa form at any time and (ii) for which the Issuer has provided each RatingAgency with written notice of the purchase of the related Collateral DebtSecurity 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.

 

“GlobalSecurities”:  The Rule144A Global Securities and the Regulation S Global Securities.

 

“GMACCMC”: The GMAC Commercial Mortgage Corporation.

 

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

 

“GoverningDocuments”:  Withrespect to (i) the Issuer, the memorandum and articles of association of theIssuer, as amended and restated and/or supplemented and in effect from time totime and (ii) all other Persons, the articles of incorporation, certificate ofincorporation, by-laws, certificate of limited partnership, limited partnershipagreement, limited liability company agreement, certificate of formation,articles of association and similar charter documents, as applicable to anysuch Person.

 

“GovernmentItems”:  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 orinstrumentality thereof representing a full faith and credit obligation of theUnited States of America and, with respect to each of the foregoing, that ismaintained in book-entry on the records of a Federal Reserve Bank.

 

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

 

“Grant”:  To grant, bargain, sell, warrant, alienate,remise, demise, release, convey, assign, transfer, mortgage, pledge, create andgrant a security interest in and right of set-off against, deposit, set overand confirm.  A Grant of the PledgedObligations or of any other security or instrument shall include all rights,powers and options (but none of the obligations) of the granting partythereunder, including without limitation the immediate continuing right toclaim, collect, receive and take receipt for principal and interest payments inrespect of the Pledged Obligations (or any other security or instrument), andall other Monies payable thereunder, to give and receive notices and othercommunications, to make waivers or other agreements, to exercise all rights andoptions, 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 beentitled to do or receive thereunder or with respect thereto.

 

“HedgeAgreement”:  One ormore interest rate cap agreements, interest rate floor agreements, InterestRate Swap Agreements or similar agreements (including Liability Hedges),including any related ISDA Master Agreement and hedge confirmations, enteredinto between

 

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

 

“HedgeCollateral Account”:  Eachtrust account established pursuant to Section 16.1(e) hereof.

 

“HedgeCounterparty”:  Anyinstitution or institutions with whom the Issuer enters into interest rate capagreements, interest rate floor agreements, Interest Rate Swap Agreements orother similar agreements (including Liability Hedges) that address interestrate exposure, or any permitted assignees or successors of such institutionsunder any Hedge Agreements.

 

“HedgeCounterparty Credit Support”: With respect to any Hedge Agreement, the agreement to providecollateral, if necessary, substantially in the form of the ISDA Credit SupportAnnex attached to such Hedge Agreement, which in each case will besubstantially similar to the ISDA Credit Support Annex attached to theForm-Approved Liability Hedge.

 

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

 

“HedgeCounterparty Required Rating”: (i) with respect to a Personas 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 (forso long as any Notes are Outstanding and are rated by Moody’s); or (b) “A2” byMoody’s to the extent such Person has both a long-term and short-term ratingand the short-term rating is “P-1” (for so long as any Notes are Outstandingand are rated by Moody’s); and (ii) with respect to a Person as an issuer orwith respect to long-term senior unsecured debt of such Person, “BBB-”, byFitch (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 seniorunsecured debt of such Person, “BBB-” by S&P (for so long as any Notes areOutstanding 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 byS&P); *provided* that should a Rating Agencyeffect an overall downward adjustment of its short-term or long-term ratings,then the applicable Hedge Counterparty Required Rating shall be downwardlyadjusted accordingly; *provided*,*further*, that any adjustment to a rating shall be subjectto the prior written consent of the applicable Rating Agency.

 

“HedgeCounterparty Collateral Threshold Rating”:  With respect to a person as an issuer or withrespect to the debt of such person, as the case may be, (i) (a) if any Class ofNotes are rated “A” or higher by Fitch, with respect to a Person as an issueror with respect to the long-term senior unsecured debt of such Person, “A” (andthe short-term debt of such Person is rated at least “F-1”) or “A+” (if suchPerson 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 anyClass of Notes are rated “A-” or “BBB+” by Fitch, with respect to a Person asan issuer or with respect to the long-term senior unsecured debt of suchPerson, “BBB+” (and the short-term debt

 

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of such Person is rated at least “F-2”), in each caseby 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 aPerson as an issuer or with respect to the long-term senior unsecured debt ofsuch Person, a rating equal to the rating on the highest rated Notes, in eachcase 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 anyClass of Notes is Outstanding and is rated by S&P) and Moody’s (for so longas any Class of Notes is Outstanding and is rated by Moody’s) at the time ofentering into the applicable Hedge Agreement and as specifically set forth inthe related Hedge Agreement; *provided* thatshould a Rating Agency effect an overall downward adjustment of its short-termor long-term ratings, then the applicable Hedge Counterparty CollateralThreshold Rating shall be downwardly adjusted accordingly; *provided*,*further*, that any adjustment to a ratingshall be subject to the prior written consent of the applicable Rating Agency.

 

“Hedge PaymentAmount”:  With respectto each Hedge Agreement, the amount of any payment then due and payablethereunder by the Issuer to each Hedge Counterparty, including withoutlimitation any payments due and payable upon a termination of such HedgeAgreement.

 

“HedgeTermination Account”:  Eachtrust account established pursuant to Section 16.1(g) hereof.

 

“HerfindahlDiversity Test”:  Atest that will be satisfied if on any Measurement Date the Herfindahl Score forthe Collateral Debt Securities is greater than 26.5.  In the event that Cash has been received inrespect of Principal Proceeds of the Collateral Debt Securities since theimmediately preceding Measurement Date but has not been reinvested inadditional Collateral Debt Securities as of the current Measurement Date, theHerfindahl Diversity Test also will be deemed satisfied on the currentMeasurement Date notwithstanding a Herfindahl Score of 26.5 or less if (i) theHerfindahl Test was satisfied or deemed satisfied on the immediately precedingMeasurement Date and (ii) the reason for the failure on the current MeasurementDate is the existence of such Cash. Similarly, if the Herfindahl Diversity Test was not satisfied or deemedsatisfied on the immediately preceding Measurement Date and the HerfindahlScore has worsened as of the current Measurement Date, the Herfindahl Score asof the immediately preceding Measurement Date will be deemed to have beenmaintained on the current Measurement Date to the extent that the reason forsuch worsened Herfindahl Score is the existence of such Cash.

 

“HerfindahlScore”:  The amountdetermined 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 DebtSecurity, by squaring the quotient of (x) the Principal Balance on suchMeasurement Date of each such Collateral Debt Security and (y) AggregatePrincipal Balance of all Collateral Debt Securities on such Measurement Date.

 

“HighestAuction Price”:  Themeaning specified in Section 12.4(b)(iv)hereof.

 

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

 

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Person in whose name such Preferred Share isregistered 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 indenturessupplemental 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 orlawyers 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 orany material indirect financial interest in such Person or in any Affiliate ofsuch Person, and (ii) is not connected with such Person as an Officer,employee, promoter, underwriter, voting trustee, partner, director or Personperforming similar functions.  “Independent”when used with respect to any accountant may include an accountant who auditsthe books of such Person if in addition to satisfying the criteria set forthabove the accountant is independent with respect to such Person within themeaning of Rule 101 of the Code of Ethics of the American Institute ofCertified Public Accountants.

 

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

 

“Ineligible Equity Security”: Any equitysecurity or any other security which is not eligible for purchase by the Issueras a Collateral Debt Security; *provided* thatthe term “Ineligible Equity Security” will not include any Preferred EquitySecurity or any asset backed security structured as a certificate or other formof beneficial interest.

 

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

 

“Initial Deposit”:  Any Cash or Money deposited with the Trustee bythe Issuer on the Closing Date for inclusion as Assets and deposited by theTrustee in the Unused Proceeds Account on the Closing Date, which shall beequal 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 anyextension options available under the terms of such Collateral Debt Security.

 

“InitialPurchaser”:  WachoviaCapital Markets, LLC.

 

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

 

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

 

“InterestAccrual Period”:  Withrespect to the first Payment Date, the period from and including the ClosingDate to but excluding the initial Payment Date and with respect to eachsuccessive Payment Date, the period from and including the immediatelypreceding Payment Date to but excluding such Payment Date.

 

“InterestAdvance”:  The meaningspecified in Section 10.7(a) hereof.

 

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

 

“InterestCoverage Ratio”: With respect to the Class A Notes and theClass B Notes (the “Class A/BInterest Coverage Ratio”), the Class C Notes, the Class DNotes and the Class E Notes (the “Class C/D/E Interest Coverage Ratio”) or theClass 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) thesum of (A) Cash standing to the credit of the Expense Account, plus (B) theScheduled Distributions of interest due (or, in the case of the PreferredEquity Securities, the scheduled payments of dividends or other distributionsnot attributable to the return of capital by their governing documents) due (ineach case regardless of whether the due date for any such interest (or dividendor other distribution) payment has yet occurred) in the Due Period in whichsuch Measurement Date occurs on (x) the Collateral Debt Securities (excludingaccrued and unpaid interest on Defaulted Securities); *provided*that no interest (or dividends or other distributions) will be included withrespect to any Collateral Debt Security (including, without limitation, thedeferred or capitalized interest component of a Partially Deferred Loan) to theextent that such Collateral Debt Security does not provide for the scheduledpayment of interest (or dividends or other distributions) in Cash; and (y) theEligible Investments held in the Payment Account, the Collection Accounts, the DelayedFunding Obligations Account and the Expense Account (whether purchased withInterest Proceeds or Principal Proceeds), plus (C) any net amount (other thanany termination payments) scheduled to be received by the Issuer from any HedgeCounterparty under any related Hedge Agreement on or before the followingPayment Date, plus (D) Interest Advances, if any, advanced by the AdvancingAgent or the Trustee, in its capacity as Backup Advancing Agent, with respectto the related Payment Date, minus (ii) the sum of (A) any net amount (otherthan any termination payments) scheduled to be paid by the Issuer to any HedgeCounterparty under any related Hedge Agreement on or before the followingPayment Date, plus, without duplication, (B) any amounts scheduled to be paid pursuantto Section 11.1(a)(i)(1) through (5); by

 

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(2)           (i) in thecase of the Class A/B Interest Coverage Ratio, the sum of the scheduledinterest on the Class A-1 Notes, the Class A-2 Notes and the Class B Notespayable on the Payment Date immediately following such Measurement Date plusany Class A-1 Defaulted Interest Amount, any Class A-2 Defaulted InterestAmount and any Class B Defaulted Interest Amount payable on the Payment Dateimmediately following such Measurement Date; (ii) in the case of the Class C/D/EInterest Coverage Ratio, the amount determined by the foregoing clause (i) plusthe scheduled interest on the Class C Notes (including any Class C Defaulted InterestAmount and interest on Class C Capitalized Interest, if any, but excluding anyClass C Capitalized Interest), the Class D Notes (including any Class D DefaultedInterest Amount and interest on Class D Capitalized Interest, if any, butexcluding any Class D Capitalized Interest) and the Class E Notes (includingany Class E Defaulted Interest and interest on any Class E CapitalizedInterest, if any, but excluding any Class E Capitalized Interest) payable onthe Payment Date immediately following such Measurement Date; or (iii) in thecase of the Class F/G/H Interest Coverage Ratio, the amount determined by theforegoing clause (ii) plus the scheduled interest on the Class F Notes(including any Class F Defaulted Interest Amount and interest on Class FCapitalized Interest, if any, but excluding any Class F Capitalized Interest), theClass G Notes (including any Class G Defaulted Interest Amount and interest onClass G Capitalized Interest, if any, but excluding any Class G CapitalizedInterest) and the Class H Notes (including any Class H Defaulted Interest andinterest on Class H Capitalized Interest, if any, but excluding any Class HCapitalized Interest), in each case payable on the Payment Date immediatelyfollowing such Measurement Date.

 

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

 

“InterestOnly Security”:  Anysecurity that by its terms provides for periodic payments of interest on anotional amount and does not provide for the repayment of a principal amount.

 

“InterestProceeds”:  With respectto any Payment Date, (a) the sum (without duplication) of (i) all Cash paymentsof interest (including any amount representing the accreted portion of adiscount from the face amount of an Eligible Investment) or dividends and otherdistributions (but excluding distributions on Preferred Equity Securitiesattributable to the return of capital by their governing documents) receivedduring the related Due Period on the Collateral Debt Securities other than DefaultedSecurities (net of the Servicing Fee) and Eligible Investments, including, inthe Collateral Manager’s commercially reasonable discretion (exercised as ofthe trade date), the accrued interest received in connection with a sale ofsuch

 

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Collateral Debt Securities or Eligible Investments (tothe extent such accrued interest was not applied to the purchase of SubstituteCollateral Debt Securities), in each case, excluding any accrued interestincluded in Principal Proceeds pursuant to clause (a)(iv), (v) or (vii) of thedefinition of Principal Proceeds, (ii) all make whole premiums, yieldmaintenance or any interest amount paid in excess of the stated interest amountof a Collateral Debt Security received during the related Due Period, (iii) allamendment and waiver fees, late payment fees, commitment fees, exit fees,extension fees and other fees and commissions received during such Due Periodin connection with such Collateral Debt Securities and Eligible Investments(other than, in each such case, fees and commissions received in connectionwith the restructuring of a Defaulted Security or default of Collateral DebtSecurities and Eligible Investments), (iv) all payments pursuant to any HedgeAgreement for the Payment Date immediately following such Due Period (excludingany amounts payable upon a termination under any Hedge Agreement during suchDue Period), (v) funds in the Unused Proceeds Account designated as InterestProceeds by the Collateral Manager pursuant to Section 10.4(c), (vi) fundsin the Expense Account designated as Interest Proceeds by the CollateralManager pursuant to Section 10.6(a), (vii) funds remaining on deposit inthe Expense Account upon redemption of the Notes in whole, pursuant to Section10.6(a), (viii) except for distributions on Preferred Equity Securitiesattributable to the return of capital by their governing documents and otherthan as specified in item (i) above, all proceeds received in respect of equityfeatures, if any, of the Collateral Debt Securities, (ix) with respect to anyDefaulted Security sold by the Issuer during the related Due Period, theexcess, if any, of the amount received by the Issuer in connection with such saleover the par amount of such Defaulted Security, and (x) all payments ofprincipal on Eligible Investments purchased with proceeds of items (a)(i), (ii)and (iii) of this definition; *provided*thatInterest Proceeds will in no event include any payment or proceeds specificallydefined as “Principal Proceeds” in the definition thereof; minus (b) (i) theaggregate amount of any Nonrecoverable Advances that were previously reimbursedto the Advancing Agent or the Trustee, in its capacity as Backup AdvancingAgent, and the aggregate amount of any Nonrecoverable Cure Advances reimbursedto the Collateral Manager during the related Due Period from Interest Proceedsand (ii) the aggregate amount of any Hedge Payment Amounts that were previouslypaid to the applicable Hedge Counterparty from Interest Proceeds during therelated Due Period.

 

“InterestRate Swap Agreement” means an interest rate swap agreement,including any related ISDA Master Agreement and hedge confirmations, forpurposes of managing the Issuer’s interest rate exposure related to thevariable rate of interest applicable to the Notes.

 

“InterestShortfall”:  The meaningset forth in Section 10.7(a) hereof.

 

“InvestmentCompany Act”:  TheInvestment Company Act of 1940, as amended.

 

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

 

“IrishPaying Agent Agreement”: The agreement between the Issuer and the Irish Paying Agent that will beentered into in the event that the listing of the Notes on the Irish StockExchange is obtained.

 

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“Issuer”:  Gramercy Real Estate CDO 2005-1, Ltd., anexempted company incorporated with limited liability under the laws of theCayman Islands, until a successor Person shall have become the Issuer pursuantto the applicable provisions of this Indenture, and thereafter “Issuer” shallmean such successor Person.

 

“IssuerOrder” and “IssuerRequest”:  A writtenorder 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 AuthorizedOfficer of each of the Issuer and the Co-Issuer, or by an Authorized Officer ofthe Collateral Manager.

 

“Liability Hedge”: Any agreement, in the formof an interest rate exchange agreement, between the Issuer and a HedgeCounterparty that is entered into by the Issuer in connection with the purchaseor holding of (i) a Fixed Rate Security or (ii) a Floating Rate Security thatbears interest upon a floating rate index other than LIBOR, and which, in eachcase, entitles the Issuer to receive from the related Hedge Counterpartypayments based on LIBOR, plus or minus a spread, at prevailing market rates, asdetermined by the Collateral Manager at the date of execution of suchagreement.  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 noevent exceed the scheduled principal amount of the Collateral Debt Security towhich it is related;

 

(b)           eachLiability Hedge (i) (other than Liability Hedges entered into in respect of anARD Loan) will amortize according to the same schedule as, and terminate on thematurity 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 ofPayments;

 

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

 

(d)           ifthe Collateral Debt Security related to a Liability Hedge (i) is a DefaultedSecurity, or (ii) is sold by the Issuer, such Liability Hedge shall beterminated; *provided* that if any unscheduled HedgePayment Amount is payable by the Issuer under the related Hedge Agreementsolely as a result of the early termination of such Liability Hedge and is notoffset by any amount payable by the relevant Hedge Counterparty, (A) suchLiability Hedge may only be terminated if the Rating Agency Condition withrespect to Moody’s and S&P shall have been satisfied in connection withsuch 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 Priorityof Payments;

 

(e)           ifthe Collateral Debt Security related to such Liability Hedge is not a DefaultedObligation and such Collateral Debt Security is called or prepaid, suchLiability Hedge shall be terminated; *provided* thatif any unscheduled Hedge Payment Amount is payable by the Issuer solely as aresult of the early termination of such Liability Hedge and is not offset byany amount payable by the relevant Hedge Counterparty, (i) such Liability Hedgemay only be terminated if the Rating Agency

 

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Condition with respect toMoody’s and S&P shall have been satisfied in connection with suchtermination 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 andprepayment premiums received from such Collateral Debt Security, and (iii) anyremaining amount so payable shall be paid in accordance with the Priority ofPayments;

 

(f)            exceptupon satisfaction of the Rating Agency Condition with respect to Moody’s andS&P, each Liability Hedge entered into in respect of an ARD Loan will befor a term that terminates at least three years after the anticipated repaymentdate of such ARD Loan; and

 

(g)           each Liability Hedge will contain appropriate limitedrecourse and non-petition provisions equivalent (*mutatismutandis*) to those contained in this Indenture.

 

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

 

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

 

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

 

“ListedBidders”:  The meaningspecified in Section 12.4(a)(ii) hereof.

 

“LLC Managers”: The managers of the Co-Issuer duly appointed by the sole member of theCo-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 asthe LNR Corporate Loan.

 

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

 

“LondonBanking Day”:  Themeaning set forth in Schedule F attached hereto.

 

“Majority”:  With respect to:

 

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

 

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

 

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

 

“MandatoryRedemption”:  Themeaning specified in Section 9.6 hereof.

 

“MarginStock”:  As definedunder Regulation U issued by the Board of Governors of the Federal ReserveSystem.

 

“MarketValue”:  With respectto 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 CollateralDebt Security obtained by the Collateral Manager at such time from any threenationally recognized dealers, which dealers are Independent from one anotherand from the Collateral Manager, (ii) if the Collateral Manager is in goodfaith unable to obtain bids from three such dealers, the lesser of the bonafide bids for such Collateral Debt Security obtained by the Collateral Managerat such time from any two nationally recognized dealers chosen by theCollateral Manager, which dealers are Independent from each other and theCollateral Manager, or (iii) if the Collateral Manager is in good faith unableto obtain bids from two such dealers, the bona fide bid for such CollateralDebt Security obtained by the Collateral Manager at such time from anynationally recognized dealer chosen by the Collateral Manager, which dealer isIndependent from the Collateral Manager.

 

“MarketValue Collateralized Debt Obligation”:  Any collateralized debt obligation that isvalued on the basis of the market value of the underlying debt obligationsrather than the cash flow related to the underlying debt obligations.

 

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

 

“Mayacama Loan” means a Participation relatingto the Whole Loan collateralized by a private membership golf course and resortcommunity located in Sonoma, California which the Issuer expects to acquireduring the Ramp-Up Period.

 

“MeasurementDate”:  Any of thefollowing: (i) the Closing Date, (ii) the date of acquisition or disposition ofany Collateral Debt Security, (iii) any date on which any Collateral DebtSecurity becomes a Defaulted Security, (iv) each Determination Date, (v) thelast Business Day of each calendar month (other than any calendar month inwhich a Determination Date occurs) and (vi) with reasonable notice to theIssuer and the Trustee, any other Business Day that any Rating Agency or the Holdersof at least 66 2/3% of the Aggregate Outstanding Amount of any Class of Notesrequests be a “Measurement Date”;*provided*that if any such date wouldotherwise fall on a day that is not a Business Day, the relevant MeasurementDate will be the immediately preceding Business Day.

 

“MezzanineLoan”:  The LNR Loan andany Loan secured by one or more direct or indirect ownership interests in acompany, partnership or other entity owning, operating or controlling, directlyor through subsidiaries or affiliates, one or more commercial properties,including a participation interest therein.

 

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

 

“MinimumWeighted Average Coupon Test”:  A test that will be satisfied on any MeasurementDate if the Weighted Average Coupon for the Collateral Debt Securities isgreater than or equal to 7.00%.

 

“MinimumWeighted Average Spread Test”:  A test that will be satisfied as of anyMeasurement Date if the Weighted Average Spread as of such Measurement Date forthe 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) ofthe UCC.

 

“MonthlyReport”:  The meaningspecified in Section 10.9(c) hereof.

 

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

 

“Moody’s Maximum Rating Factor Test”:  A test that will be satisfied on anyMeasurement Date if the Weighted Average Moody’s Rating Factor does not exceed4200.

 

“Moody’sRating”:  Of anyCollateral Debt Security will be determined as follows:

 

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

 

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

 

(A)          withrespect to any REIT Debt Security not publicly rated by Moody’s that is a REITDebt Securities—Diversified; REIT Debt Securities—Health Care; REIT DebtSecurities—Hotel; REIT Debt Securities—Industrial; REIT DebtSecurities—Multi-Family; REIT Debt Securities—Office; REIT DebtSecurities—Residential; REIT Debt Securities—Retail; or REIT DebtSecurities—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’sequivalent 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 ratingassigned by S&P if the rating assigned by S&P is below “BBB”;

 

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(B)           withrespect to any CMBS Conduit Security not publicly rated by Moody’s, (x) ifMoody’s has rated a tranche or class of CMBS Conduit Security senior to therelevant issue, then the Moody’s Rating thereof will be one and one-half ratingsubcategories below the Moody’s equivalent of the lower of the rating assignedby S&P and Fitch for purposes of determining the Moody’s Rating Factor andone rating subcategory below the Moody’s equivalent of the lower ratingassigned by S&P and Fitch for all other purposes and (y) if Moody’s has notrated any such tranche or class and S&P and Fitch have rated the subjectCMBS Conduit Security, then the Moody’s Rating thereof will be two ratingsubcategories below the Moody’s equivalent of the lower of the rating assignedby S&P and Fitch;

 

(C)           withrespect to any CMBS Large Loan Security not rated by Moody’s, the Issuer or theCollateral Manager on behalf of the Issuer will request Moody’s to assign arating 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 DebtSecurities of a Specified Type not referred to in clauses (A) through (C) above,pursuant to subclause (y) of clause (i) above;

 

(iii)          withrespect to corporate guarantees on REIT Debt Securities, if such corporateguarantees are not publicly rated by Moody’s but another security or obligationof 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’sRating of such Collateral Debt Security will be determined as follows:

 

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

 

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

 

(C)           ifthe corporate guarantee is a subordinated obligation of the guarantor orobligor 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 corporateguarantee will be three rating subcategories below the rating of the othersecurity; or (2) rated “B1” or lower by Moody’s, the Moody’s Rating of suchcorporate guarantee will be two rating subcategories below the rating of theother security;

 

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(D)          ifthe corporate guarantee is a senior secured obligation of the guarantor orobligor 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 corporateguarantee will be the rating of the other security; or (2) rated “Ba1” or lowerby Moody’s, the Moody’s Rating of such corporate guarantee will be one ratingsubcategory above the rating of the other security;

 

(E)           ifthe corporate guarantee is a senior unsecured obligation of the guarantor orobligor and the other security is also a senior unsecured obligation, the Moody’sRating of such corporate guarantee will be the rating of the other security;

 

(F)           ifthe corporate guarantee is a subordinated obligation of the guarantor orobligor 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 guaranteewill 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 guaranteewill be one rating subcategory below the rating of the other security;

 

(G)           ifthe corporate guarantee is a senior secured obligation of the guarantor orobligor 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 beone 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 guaranteewill 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)          ifthe corporate guarantee is a senior unsecured obligation of the guarantor orobligor 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 beone 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 alsobe one rating subcategory above the rating of the other security; and

 

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

 

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

 

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

 

“Moody’sRating Factor”: Relating to any Collateral Debt Security, the number set forth in thetable 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’sRecovery Rate”:  Withrespect to any Collateral Debt Security on any Measurement Date, an amountequal to (A) if the Specified Type of Collateral Debt Security is included inthe Moody’s Loss Scenario Matrix the percentage for such Collateral DebtSecurity set forth in Schedule A (the Moody’s Loss Scenario Matrix)hereto in (x) the table corresponding to the relevant Specified Type ofCollateral Debt Security, (y) the column in such table setting forth the Moody’sRating of such Collateral Debt Security on such Measurement Date and (z) therow in such table opposite the percentage of the issue of which such CollateralDebt Security is a part relative to the total capitalization of (including bothdebt and equity securities issued by) the relevant issuer of or obligor on suchCollateral Debt Security determined on the date on which such Collateral DebtSecurity was originally issued or (B) if the Specified Type of Collateral DebtSecurity is not included in the table set forth in Schedule A (the Moody’sLoss Scenario Matrix) hereto, the Recovery Rate set forth following such tablewith respect to the applicable Specified Type.

 

“Moody’sSpecial Amortization Pro Rata Condition”:  A condition that will be satisfied withrespect to any Payment Date if either (i) the Collateral Quality Tests (otherthan the Weighted Average Coupon Test, the Weighted Average Spread Test and theS&P CDO Monitor

 

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Test) are satisfied as of the related DeterminationDate or (ii) the Rating Agency Condition has been satisfied with respect toMoody’s.

 

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

 

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

 

“NetOutstanding Portfolio Balance”:  On any Measurement Date, the sum (withoutduplication) of:

 

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

 

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

 

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

 

“Non-Advancing Collateral Debt Security”: AnyCollateral 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 termsof the Underlying Instruments governing such Collateral Debt Security, to makeany liquidity advances to ensure the timely receipt of interest by and for thebenefit of the holder of such Collateral Debt Security.

 

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

 

“NonrecoverableAdvance”: Any Interest Advance made or proposed to be madepursuant 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 expectedto accrue thereon, will not be ultimately recoverable from subsequent paymentsor collections with respect to the Assets.

 

“NonrecoverableCure Advance”:  AnyCure Advance previously made or proposed to be made pursuant to Section 16.3hereof with respect to any Collateral Debt Security that the Collateral Managerhas determined in its sole discretion, exercised in good faith, that the amountso advanced or proposed to be advanced will not be ultimately recoverable fromcollections from the specific Collateral Debt Security with respect to whichsuch Cure Advance was made or proposed to be made.

 

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

 

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

 

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

 

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

 

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

 

“NotesValuation Report”:  Themeaning specified in Section 10.9(e) hereof.

 

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

 

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

 

“Officer”:  With respect to any corporation or limitedliability company, including the Issuer, the Co-Issuer and the CollateralManager, any Director, the Chairman of the Board of Directors, the President,any Senior Vice President any Vice President, the Secretary, any AssistantSecretary, the Treasurer, any Assistant Treasurer, General Partner of suchentity; and with respect to the Trustee, any Trust Officer.

 

“Officer’sCertificate”:  Withrespect to the Issuer, the Co-Issuer and the Collateral Manager, anycertificate executed by an Officer thereof.

 

“Opinionof Counsel”:  A writtenopinion addressed to the Trustee and each Rating Agency in form and substancereasonably satisfactory to the Trustee, each Rating Agency (and each HedgeCounterparty, if applicable, pursuant to the provisions below) of an attorneyat law admitted to practice before the highest court of any state of the UnitedStates or the District of Columbia (or the Cayman Islands, in the case of anopinion relating to the laws of the Cayman

 

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Islands), which attorney may, except as otherwiseexpressly provided in this Indenture, be counsel for the Issuer, and whichattorney shall be reasonably satisfactory to the Trustee.  Whenever an Opinion of Counsel is requiredhereunder, such Opinion of Counsel may rely on opinions of other counsel whoare so admitted and so satisfactory which opinions of other counsel shallaccompany such Opinion of Counsel and shall either be addressed to the Trusteeand each Rating Agency or shall state that the Trustee and each Rating Agencyshall be entitled to rely thereon; *provided, however*,that such Opinion of Counsel shall be addressed to each Hedge Counterparty (oreach Hedge Counterparty may rely on such Opinion of Counsel) to the extent thatsuch Opinion of Counsel relates to or affects the interests of each HedgeCounterparty.

 

“OptionalRedemption”:  Themeaning specified in Section 9.1(c) hereof.

 

“Origination Agreement”:  That certain origination agreement, dated asof August 2, 2004 between SLG and Gramercy Capital Corp, as modified by theOrigination 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 heretoas 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 ofdetermination, all of the Notes or any Class of Notes, as the case may be,theretofore authenticated and delivered under this Indenture except:

 

(i)            Notestheretofore canceled by the Notes Registrar or delivered to the Notes Registrarfor cancellation;

 

(ii)           Notes orportions thereof for whose payment or redemption funds in the necessary amounthave been theretofore irrevocably deposited with the Trustee or the PayingAgent in trust for the Holders of such Notes pursuant to Section 4.1(a)(ii); *provided*thatif such Notes or portions thereof are to be redeemed, notice of such redemptionhas been duly given pursuant to this Indenture or provision thereforsatisfactory to the Trustee has been made;

 

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

 

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

 

*provided*that in determiningwhether the Noteholders of the requisite Aggregate Outstanding Amount havegiven any request, demand, authorization, direction, notice, consent or waiver

 

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

 

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

 

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

 

“ParticipatingInstitution”:  Anentity that creates a Participation.

 

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

 

“PayingAgent”:  Any Personauthorized by the Issuer and the Co-Issuer to pay the principal of or intereston any Notes on behalf of the Issuer and the Co-Issuer as specified in Section7.2 hereof.

 

“PaymentAccount”:  The paymentaccount of the Trustee in respect of the Notes established pursuant to Section10.3 hereof.

 

“PaymentDate”:  With respect toeach Class of Notes, October 25, 2005, and thereafter quarterly on each January25, April 25, July 25 and October 25 (or if such day is not a Business Day, thenext succeeding Business Day) to and including the Stated Maturity related tosuch Class unless redeemed or repaid prior thereto.

 

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“Person”:  An individual, corporation (including abusiness 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 subdivisionthereof.

 

“PlanAssets”:  The meaningspecified in Section 2.5(g)(vi) hereof.

 

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

 

“PledgedObligations”:  On anydate of determination, any Pledged Collateral Debt Securities and the EligibleInvestments that have been Granted to the Trustee for the benefit of theNoteholders 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, apartnership or a limited liability company) that is a borrower under a mortgageloan secured by commercial properties (or in an entity operating orcontrolling, directly or through affiliates, such commercial properties), whichis generally senior with respect to the payments of dividends and otherdistributions, redemption rights and rights upon liquidation to such entity’scommon equity.

 

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

 

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

 

“Preferred Shares Distribution Account”:  A segregated account established anddesignated as such by the Preferred Shares Paying Agent pursuant to thePreferred 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 SharesPaying Agent relating to the Preferred Shares, as amended from time to time inaccordance with the terms thereof.

 

“Preferred Shares Paying Agent”:  The Bank, solely in its capacity as PreferredShares Paying Agent under the Preferred Shares Paying Agency Agreement and notindividually, unless a successor Person shall have become the Preferred SharesPaying Agent pursuant to the applicable provisions of the Preferred SharesPaying Agency Agreement, and thereafter Preferred Shares Paying Agent shallmean such successor Person.

 

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

 

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“PrincipalBalance” or “par”:  With respect to any Collateral Debt Securityor Eligible Investment, as of any date of determination, the outstandingprincipal amount of such Collateral Debt Security or Eligible Investment; *provided* that:

 

(i)            thePrincipal Balance of a Collateral Debt Security received upon acceptance of anOffer for another Collateral Debt Security, which Offer expressly states thatfailure to accept such Offer may result in a default under the UnderlyingInstruments, will be deemed to be the Calculation Amount of such otherCollateral Debt Security until such time as Interest Proceeds and PrincipalProceeds, as applicable, are received when due with respect to such otherCollateral Debt Security;

 

(ii)           the Principal Balance of any Eligible Investment that doesnot pay Cash interest on a current basis will be the accreted value thereof;

 

(iii)          thePrincipal Balance of any Collateral Debt Security that permits thecapitalization or deferral of any interest payable thereon in accordance withthe terms of its Underlying Instruments will be deemed to exclude any deferredor capitalized interest;

 

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

 

(v)           thePrincipal Balance of any Written Down Security will exclude any portion of theprincipal balance of such security that (x) has been written down as a resultof a “realized loss,” “collateral support deficit,” “additional trust fundexpense” or other event that under the terms of such security results in awrite-down of principal balance or (y) would be affected by an appraisalreduction;

 

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

 

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

 

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

 

“PrincipalOnly Security”:  AnyCollateral Debt Security (other than a Step-Up Security) that does not providefor payment of interest or provides that all payments of interest will bedeferred until the final maturity thereof.

 

“PrincipalProceeds”:  Withrespect to any Payment Date, (a) the sum (without duplication) of (i) allprincipal payments (including prepayments and Unscheduled Principal Payments)received during the related Due Period (excluding those previously reinvestedor designated by the Collateral Manager for reinvestment in Collateral DebtSecurities) on (A)

 

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Eligible Investments (other than Eligible Investmentspurchased with Interest Proceeds, Eligible Investments in the Unused ProceedsAccount designated as Interest Proceeds in accordance with the definitionthereof by the Collateral Manager with respect to the Effective Date, EligibleInvestments in the Delayed Funding Obligations Account and Eligible Investmentsin the Expense Account and any amount representing the accreted portion of adiscount from the face amount of an Eligible Investment) and (B) Collateral DebtSecurities as a result of (1) a maturity, scheduled amortization, mandatoryprepayment or mandatory sinking fund payment on a Collateral Debt Security, (2)optional redemptions, prepayments, exchange offers or tender offers made at theoption of the issuer thereof, (3) recoveries on Defaulted Securities or (4) anyother principal payments with respect to Collateral Debt Securities (notincluded in Sale Proceeds), (ii) distributions on Preferred Equity Securitiesattributable to the return of capital by their governing documents, (iii) allfees and commissions received during such Due Period in connection withEligible Investments and the restructuring or default of such EligibleInvestments, (iv) any interest received during such Due Period on suchCollateral Debt Securities or Eligible Investments to the extent such interestconstitutes proceeds from accrued interest purchased with Principal Proceedsother than accrued interest purchased by the Issuer on or prior to the EffectiveDate and interest included in clause (a)(i) of the definition of InterestProceeds, (v) Sale Proceeds received during such Due Period in respect of sales(excluding those previously reinvested or currently being reinvested inCollateral Debt Securities in accordance with the Transaction Documents andexcluding accrued interest included in Sale Proceeds (unless such accruedinterest was purchased with Principal Proceeds) that are designated by theCollateral Manager as Interest Proceeds in accordance with clause (a)(i) of thedefinition of Interest Proceeds), (vi) all Cash payments of interest ordividends received during such Due Period on Defaulted Securities, (vii) anyinterest received during such Due Period on a Written Down Security to theextent such interest constitutes accrued interest on the excess of the principalamount of such Written Down Security over the Principal Balance of such WrittenDown Security, (viii) any proceeds resulting from (A) the termination (in wholeor in part) of any Hedge Agreement during such Due Period to the extent suchproceeds are received from the Hedge Counterparty to such Hedge Agreement and,to the extent such proceeds exceed the cost of entering into a replacementHedge Agreement in accordance with the requirements set forth in Section16.1(a) hereof, (B) payments received from a replacement Hedge Counterpartyto the extent such proceeds exceed the amount owed to a previous HedgeCounterparty in connection with the termination of the related Hedge Agreementand (C) all amounts transferred from each Hedge Termination Account pursuant toSection 16.1(g) hereof, (ix) during the Reinvestment Period, the SpecialAmortization Amount, if any, (x) on the first Payment Date following the EffectiveDate, if a Rating Confirmation Failure has not occurred, funds in the UnusedProceeds Account to the extent the Collateral Manager has not designated suchamounts as Interest Proceeds pursuant to Section 10.4(c) hereof, (xi) fundstransferred to the Principal Collection Account from the Delayed FundingObligations Account in respect of amounts previously held on deposit in respectof unfunded commitments for Delayed Draw Term Loans that have been sold orotherwise disposed before such commitments thereunder have been drawn or as towhich excess funds remain, (xii) all amounts received during such Due Period inrespect of Defaulted Securities (other than any amounts included in thedefinition of “Interest Proceeds” pursuant to item (ix) of the definitionthereof) and (xiii) all other payments received in connection with theCollateral Debt Securities and Eligible Investments that are not included inInterest Proceeds; *provided*thatin no event will Principal Proceeds include any proceeds from the ExceptedAssets; minus (b)(i) the aggregate amount of

 

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

 

“Priorityof Payments”:  Themeaning specified in Section 11.1(a) hereof.

 

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

 

“PropertyType”:  Each of thefollowing types of property:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(xi)           “Urban Office Properties”means office buildings (including medical offices), conference facilities andother similar real property interests used in the commercial real estatebusiness 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 WarehouseProperties.

 

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

 

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

 

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

 

“PurchaseAgreement”:  Thepurchase agreement relating to the Notes dated on or about the Closing Date byand 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 identifiedfor each Collateral Debt Security against its name in Schedule E.

 

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

 

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

 

“QualifiedHedge Party”:  A party that:

 

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

 

(ii)           legallyand effectively accepts the rights and obligations of a Hedge Counterparty inrespect of the Hedge Agreement pursuant to a written agreement reasonablyacceptable to the Issuer and the Trustee; and

 

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

 

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

 

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

 

“QualifiedPurchaser”:  A “qualifiedpurchaser” within the meaning of Section 2(a)(51) ofthe Investment Company Act.

 

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

 

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

 

“RatingAgency”:  Each of Moody’s,Fitch and S&P and any successor thereto, or, with respect to PledgedObligations generally, if at any time Moody’s, Fitch or S&P or any suchsuccessor ceases to provide rating services with respect to the Notes orcertificates similar to the Notes, any other nationally recognized investmentrating agency selected by the Issuer and reasonably satisfactory to each HedgeCounterparty and a Majority of the Notes voting as a single Class.

 

“RatingAgency Condition”:  Withrespect to any proposed action or matter, the receipt by the Trustee ofconfirmation in writing from the applicable Rating Agencies that the thencurrent ratings on the Notes, as applicable, shall not be reduced, qualified orwithdrawn as a result of such action or matter; *provided*,*however*, that for purposes of thisdefinition, “Rating Agencies” shall not be deemed to include Fitch unless theproposed action or matter relates to any amendment or modification, or anyproposed amendment or modification, to any Transaction Document.

 

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

 

“RecordDate”:  The date onwhich the Holders of Notes entitled to receive a payment in respect ofprincipal or interest on the succeeding Payment Date is determined, such dateas to any Payment Date being the 15th day (whether or not a Business Day) priorto the applicable Payment Date.

 

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“RedemptionDate”:  Any PaymentDate specified for a redemption of the Securities pursuant to Section 9.1or 9.2 hereof.

 

“RedemptionDate Statement”:  The meaningspecified in Section 10.9(i) hereof.

 

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

 

*Class A-1 Notes*.  The redemption price of the Class A-1 Noteswill be calculated on the related Determination Date and will be equal to theAggregate Outstanding Amount of the Class A-1 Notes to be redeemed, togetherwith the Class A-1 Interest Distribution Amount (plus any Class A-1 DefaultedInterest Amount) due on that day of redemption;

 

*Class A-2 Notes*.  The redemption price of the Class A-2 Noteswill be calculated on the related Determination Date and will be equal to theAggregate Outstanding Amount of the Class A-2 Notes to be redeemed, togetherwith the Class A-2 Interest Distribution Amount (plus any Class A-2 DefaultedInterest Amount) due on that day of redemption;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

*Preferred Shares*.  The redemption price for the Preferred Shareswill be calculated on the related Determination Date and will be equal to thesum of all net proceeds and Cash, if any, remaining after redemption of theNotes 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.

 

“ReferenceBanks”:  The meaningset forth in Schedule F attached hereto.

 

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

 

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

 

“RegulationS”:  Regulation S underthe Securities Act.

 

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

 

“ReimbursementInterest”:  Interestaccrued on the amount of any Interest Advance made by the Advancing Agent orthe 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” aspublished in the “Money Rates” section of The Wall Street Journal, as such “primerate” 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 InitialDeposit or funds in the Unused Proceeds Account that have not been designatedas Interest Proceeds by the Collateral Manager with respect to the EffectiveDate.

 

“ReinvestmentPeriod”:  The periodbeginning on the Closing Date and ending on and including the first to occur ofthe following events or dates:  (i) theend of the Due Period related to the Payment Date in July 2010; (ii) the end ofthe Due Period related to the Payment Date immediately following the date onwhich the Collateral Manager (with the written consent of Holders of theMajority of the Preferred Shares) notifies the Trustee that, in light of thecomposition of Collateral Debt Securities, general market conditions and otherfactors, investments in additional Collateral Debt Securities within theforeseeable future would be either impractical or not beneficial to the Issuerand the holders of the Preferred Shares; (iii) the end of the Due Periodrelated to the date on which all of the Securities are redeemed as describedherein under Section 9.1 and (iv) the date on which the principal of andaccrued and unpaid interest on the Notes are declared immediately due andpayable pursuant to Section 5.2 hereof following the occurrence of anEvent of Default.

 

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

 

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

 

“REIT Debt Securities—Health Care”:  Collateral Debt Securities issued by a realestate investment trust (as defined in Section 856 of the Code or any successorprovision) whose assets consist (except for rights or other assets designed toassure the servicing or timely distribution of proceeds to holders of theCollateral Debt Securities) of mortgages on hospitals, clinics, sport clubs,spas and other health care facilities and other similar real property interestsused in one or more similar businesses, *provided* thatany Collateral Debt Security falling within this definition will be excludedfrom 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 realestate investment trust (as defined in Section 856 of the Code or any successorprovision) whose assets consist (except for rights or other assets designed toassure the servicing or timely distribution of proceeds to holders of theCollateral Debt Securities) of mortgages on hotels, motels, youth hostels, bedand breakfasts and other similar real property interests used in one or moresimilar businesses, *provided* thatany Collateral Debt Security falling within this definition will be excludedfrom the definition of each other Specified Type of Collateral Debt Security.

 

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

 

“REIT Debt Securities—Mortgage”:  Collateral Debt Securities issued by a realestate investment trust (as defined in Section 856 of the Code or any successorprovision) whose assets consist (except for rights or other assets designed toassure the servicing or timely distribution of proceeds to holders of theCollateral Debt Securities) of mortgages, commercial mortgage backedsecurities, collateralized mortgage obligations and other similar mortgage relatedsecurities (including Collateral Debt Securities issued by a hybrid form ofsuch trust that invests in both commercial real estate and commercialmortgages), *provided* that any Collateral DebtSecurity falling within this definition will be excluded from the definition ofeach other Specified Type of Collateral Debt Security.

 

“REIT Debt Securities—Multi Family”:  Collateral Debt Securities issued by a realestate investment trust (as defined in Section 856 of the Code or any successorprovision) whose assets consist (except for rights or other assets designed toassure the servicing or timely distribution of proceeds to holders of theCollateral Debt Securities) of residential mortgages on multi family dwellingssuch as apartment blocks, condominiums and co operative owned buildings, *provided* that any Collateral Debt Security falling withinthis definition will be excluded from the definition of each other SpecifiedType of Collateral Debt Security.

 

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

 

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

 

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

 

“REIT Debt Securities—Storage”:  Collateral Debt Securities issued by a realestate investment trust (as defined in Section 856 of the Code or any successorprovision) whose assets consist (except for rights or other assets designed toassure the servicing or timely distribution of proceeds to holders of theCollateral Debt Securities) of storage facilities and other similar realproperty interests used in one or more similar businesses, *provided*that any Collateral Debt Security falling within this definition will beexcluded from the definition of each other Specified Type of Collateral DebtSecurity.

 

“Repurchase Price”: The meaning specified in Section16.5(c) hereof.

 

“Rule144A”:  Rule 144A underthe Securities Act.

 

“Rule144A Global Security”: The meaning specified in Section 2.2(b)(i)hereof.

 

“Rule144A Information”:  Themeaning specified in Section 7.13 hereof.

 

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

 

“S&PCDO Monitor”:  Adynamic, analytical computer model provided prior to the initial Payment Date byS&P to the Collateral Manager and the Trustee, with written instructionsand assumptions to be applied when running such computer model, for the purposeof estimating the default risk of a pool of Collateral Debt Securities.

 

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

 

“S&PRating”:  Of anyCollateral Debt Security will be determined as follows:

 

(i)            ifS&P has assigned a rating to such Collateral Debt Security either publiclyor privately (in the case of a private rating, with the appropriate consentsfor the use of such private rating), the S&P Rating shall be the ratingassigned

 

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

 

(ii)           if suchCollateral Debt Security is not rated by S&P but the Issuer or theCollateral Manager on behalf of the Issuer has requested that S&P assign arating to such Collateral Debt Security, the S&P Rating shall be the ratingso assigned by S&P; *provided*thatpending receipt from S&P of such rating, if such Collateral Debt Securityis of a type listed on Schedule C hereto or is not eligible for notchingin accordance with Schedule D hereto, such Collateral Debt Securityshall have an S&P Rating of “CCC-”, otherwise such S&P Rating shall bethe rating assigned according to Schedule D hereto until such time asS&P shall have assigned a rating thereto; or

 

(iii)          ifany Collateral Debt Security is a Collateral Debt Security that has not beenassigned a rating by S&P and is not a Collateral Debt Security listed in ScheduleC hereto, as identified by the Collateral Manager, the S&P Rating shallbe the rating assigned according to Schedule D hereto; *provided*that if any Collateral Debt Security shall, at thetime of its purchase by the Issuer, be listed for a possible upgrade ordowngrade 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 onesubcategory above or below, respectively, the rating then assigned to such itemin accordance with Schedule D hereto; *provided*,*further*, that the Aggregate PrincipalBalance that may be given a rating based on this paragraph (c) may not exceed20%, of the Aggregate Principal Balance of all Collateral Debt Securities.

 

“S&PRecovery Rate”:  Withrespect to any Collateral Debt Security on any Measurement Date, an amountequal to the percentage for such Collateral Debt Security set forth inSchedule B (the Standard & Poor’s Recovery Matrix) hereto (or, in thecase of a Defaulted Security under Clause A of Schedule B (theStandard & Poor’s Recovery Matrix) hereto, corresponding to the S&PRating at the time of issuance of such Collateral Debt Security).

 

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

 

“S&PSpecial Amortization Pro Rata Condition”: A condition thatwill be satisfied with respect to any Payment Date if either (i) the aggregateprincipal balance of the Collateral Debt Securities as of the relatedDetermination Date is greater than an amount equal to 50% of the aggregateprincipal balance of the Collateral Debt Securities on the Effective Date andthe 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 DebtSecurities, as of any Measurement Date, the number obtained by summing theproducts obtained by multiplying the Principal Balance of each Collateral DebtSecurity, other than a Defaulted Security, by its S&P Recovery Rate, and dividingsuch sum by the Aggregate Principal Balance of all such Collateral DebtSecurities and rounding up to the first decimal place.

 

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

 

“SaleProceeds”:  Allproceeds (including accrued interest) received with respect to Collateral DebtSecurities and Eligible Investments as a result of sales of such CollateralDebt Securities and Eligible Investments, in accordance with this Indenture, netof any reasonable out-of-pocket expenses of the Collateral Manager or theTrustee in connection with any such sale.

 

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

 

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

 

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

 

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

 

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

 

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

 

“SecuritiesAct”:  The SecuritiesAct of 1933, as amended.

 

“SecuritiesIntermediary”:  Themeaning specified in Section 8-102(a)(14) of the UCC.

 

“SecurityEntitlement”:  Themeaning specified in Section 8-102(a)(17) of the UCC.

 

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

 

“SeniorCollateral Management Fee”: The fee payable quarterly in arrears on each Payment Date to theCollateral 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 suchPayment Date, to the extent funds are available for such purpose in accordancewith the Priority of Payments.

 

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

 

“SeniorTranche”:  (i) Withrespect to a Participation or B Note, any senior interest in the sameUnderlying Term Loan as a Participation or any senior debt secured by the sameUnderlying Mortgage Property as a B Note or Participation and (ii) with respectto a Mezzanine Loan, any commercial mortgage loan related to the sameUnderlying Mortgage Property or Properties as the Mezzanine Loan.

 

“Servicing Agreement”:  The GMACCMC Servicing Agreement, theAdministrative Servicing Agreement and any other servicing agreement entered intoby 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 Servicersunder the related primary servicing agreements during such Due Period, includingservicing fees payable to GMACCMC pursuant to the GMACCMC Servicing Agreement, (ii)the SLG Gramercy Administrative Fee and (iii) the aggregate amount of allspecial servicing fees in respect of serviced loans payable to (x) SLG Gramercyunder the Asset Servicing Agreement and (y) any other special servicer pursuantto the related special servicing agreement between the Issuer and such specialservicer, in each case during such Due Period.

 

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

 

“SimilarLaw”:  The meaningspecified in Section 2.5(g)(vi) hereof.

 

“Single Asset Mortgage Security”:  A commercial mortgage pass-throughcertificate or similar security backed primarily by a single mortgage loan onone or more commercial properties included in a property-specificsecuritization transaction.

 

“Single Borrower Mortgage Security”:  A commercial mortgage pass-throughcertificate or similar security backed primarily by one or more mortgage loansto the same borrower (or affiliated borrowers) on one or more commercial propertiesincluded 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 “bookvalue” of each Collateral Debt Security (other than any CMBS Security ratedinvestment grade at the time of issuance thereof, any CRE CDO Security or any REITDebt Security, in each case owned by the Issuer) payable to SLG Gramercy underthe Asset Servicing Agreement during such Due Period; *provided*,*however*, that the SLG GramercyAdministrative Fee will be reduced by the fees payable to the Primary Servicersto the extent described on Schedule O hereto during such DuePeriod.  During any period in which SLGGramercy is acting as special servicer under the Asset Servicing Agreement withrespect to a Collateral Debt Security which is subject to special servicingthereunder, SLG Gramercy will not be entitled to the SLG GramercyAdministrative Fee with respect to such Collateral Debt Security.

 

“SpecialAmortization”:  Themeaning specified in Section 9.7 hereof.

 

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

 

“SpecifiedPerson”:  The meaningspecified in Section 2.6(a) hereof.

 

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

 

“SpreadExcess”:  As of anyMeasurement Date, a fraction (expressed as a percentage), the numerator ofwhich is equal to the product of (a) the greater of zero and the excess, ifany, of the Weighted Average Spread for such Measurement Date over 2.75% and(b) the Aggregate Principal Balance of all Collateral Debt Securities that areFloating Rate Securities (excluding all Defaulted Securities and Written DownSecurities) and the denominator of which is the Aggregate Principal Balance ofall Collateral Debt Securities that are Fixed Rate Securities (excluding allDefaulted Securities and Written Down Securities), multiplying the resultingfigure by 365 and then dividing by 360.

 

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

 

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

 

“Step-DownBond”:  A securitywhich by the terms of the related Underlying Instruments provides for adecrease, 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, inthe spread over the applicable index or benchmark rate, solely as a function ofthe passage of time; *provided*that theterm Step-Down Bond shall not include any such security providing for paymentof a constant rate of interest at all times after the date of acquisition bythe Issuer or any Loan.

 

“Step-UpSecurity”:  A securitywith a current interest rate of zero percent *per annum*at the time of purchase but which increases to predetermined levels on specificdates; *provided* that the term Step-Up Securityshall not include any Loan.

 

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

 

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

 

“SubordinateInterests”:  The Class A-2Subordinate Interests, the Class B Subordinate Interests, the Class CSubordinate Interests, the Class D Subordinate Interests, the Class ESubordinate Interests, the Class F Subordinate Interests, the Class GSubordinate Interests, the Class H Subordinate Interests, the Class JSubordinate Interests and/or the Class K Subordinate Interests, as the contextmay require.

 

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

 

“SubstituteCollateral Debt Security”: A Collateral Debt Security that is acquired by the Issuer insubstitution for securities previously pledged to the Trustee in accordanceherewith.

 

“SuccessfulAuction”:  (i) AnAuction which is conducted in accordance with Section 9.2(b) or (ii) thepurchase of Collateral Debt Securities by the Collateral Manager or itsAffiliates for a price equal to the Total Redemption Price pursuant to Section12.4(c).

 

“TaxEvent”: Means (i) any obligor is, or on the next scheduledpayment date under any Collateral Debt Security, will be, required to deduct orwithhold from any payment under any Collateral Debt Security to the Issuer foror on account of any tax for whatever reason and such obligor is not requiredto pay to the Issuer such additional amount as is necessary to ensure that thenet amount actually received by the Issuer (free and clear of taxes, whetherassessed against such obligor or the Issuer) will equal the full amount thatthe Issuer would have received had no such deduction or withholding beenrequired, (ii) any jurisdiction imposes net income, profits, or similar tax onthe Issuer, (iii) the Issuer is required to deduct or withhold from any paymentunder a Hedge Agreement for or on account of any tax and the Issuer isobligated to make a gross up payment (or otherwise pay additional amounts) tothe Hedge Counterparty, (iv) a Hedge Counterparty is required to deduct orwithhold from any payment under a Hedge Agreement for or on account of any taxfor whatever reason and such Hedge Counterparty is not required to pay to theIssuer such additional amount as is necessary to ensure that the net amountactually received by the Issuer (free and clear of taxes, whether assessedagainst such obligor or the Issuer) will equal the full amount that the Issuerwould have received had no such deduction or withholding been required or (v)the Issuer fails to maintain its status as a qualified REIT subsidiary (withinthe meaning of Section 856(i)(2) of the Code).

 

“TaxMateriality Condition”: The condition that will be satisfied if either (i) as a result of theoccurrence of a Tax Event, a tax or taxes are imposed on the Issuer or withheldfrom payments to the Issuer and with respect to which the Issuer receives lessthan the full amount that the Issuer would have received had no such deductionoccurred, and such amount exceeds, in the aggregate, U.S. $1 million during any12-month period or (ii) the Issuer fails to maintain its status as a qualifiedREIT subsidiary (within the meaning of Section 856(i)(2) of the Code).

 

“TaxOpinion”:  A writtenopinion addressed to the Issuer, in form and substance reasonably satisfactoryto 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 thehighest court of any state of the United States or the District of Columbia andexperienced in such matters for which such Tax Opinion is sought.

 

“TaxRedemption”:  The meaningspecified in Section 9.1(b) hereof.

 

“TotalRedemption Price”:  Theamount equal to funds sufficient to pay all amounts and expenses describedunder clauses (1) through (5), (31), (32) and (33) of Section 11.1(a)(i) and to redeem all Notes at their applicableRedemption Prices.

 

“TransactionDocuments”:  ThisIndenture, the Collateral Management Agreement, the Collateral Debt SecuritiesPurchase Agreements, the Servicing Agreements, the Company AdministrationAgreement, the Preferred Shares Paying Agency Agreement and each HedgeAgreement.

 

“TransferAgent”:  The Person orPersons, which may be the Issuer, authorized by the Issuer to exchange orregister the transfer of Notes.

 

“TreasuryRegulations”: Temporary or final regulations promulgated under the Code by the UnitedStates Treasury Department.

 

“TrustOfficer”:  When usedwith respect to the Trustee, any officer within the CDO Trust Services Group ofthe Corporate Trust Office (or any successor group of the Trustee) includingany vice president, assistant vice president or officer of the Trusteecustomarily performing functions similar to those performed by the persons whoat the time shall be such officers, respectively, or to whom any corporatetrust matter is referred at the CDO Trust Services Group of the Corporate TrustOffice because of his knowledge of and familiarity with the particular subject.

 

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

 

“UCC”:  The applicable Uniform Commercial Code.

 

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

 

“UncertificatedSecurity”:  The meaningspecified in Section 3.3(a)(ii) hereof.

 

“UnderlyingInstruments”:  Theindenture, loan agreement, note, mortgage, intercreditor agreement, pooling andservicing agreement, participation agreement or other agreement pursuant towhich a Collateral Debt Security or Eligible Investment has been issued orcreated and each other agreement that governs the terms of or secures theobligations represented by such Collateral Debt Security or Eligible Investmentor of which holders of such Collateral Debt Security or Eligible Investment arethe beneficiaries.

 

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

 

“UnderlyingTerm Loan”:  Withrespect to (i) a Loan (other than Participation or Mezzanine Loan), such Loanor (ii) a Participation, the underlying commercial mortgage loan.

 

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

 

“UnregisteredSecurities”:  Themeaning specified in Section 5.17(c) hereof.

 

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

 

“Unused Proceeds Account”:  The trust account established pursuant to Section10.4(a) hereof.

 

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

 

“WeightedAverage Coupon”:  As ofany Measurement Date, (a) the number obtained (rounded up to the next 0.001%)by (i) summing the products obtained by multiplying (x) the current interestrate on each Collateral Debt Security that is a Fixed Rate Security (excludingall Defaulted Securities and Written Down Securities) by (y) the PrincipalBalance of each such Collateral Debt Security and (ii) dividing such sum by theAggregate Principal Balance of all Collateral Debt Securities that are FixedRate Securities (excluding all Defaulted Securities and Written DownSecurities) plus (b) if the amount obtained pursuant to clause (a) is less than7.00%, the Spread Excess, if any, as of such Measurement Date.

 

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

 

“WeightedAverage Life Test”: With respect to any Collateral Debt Securities, a test that will besatisfied as of any Measurement Date if the Weighted Average Life of suchCollateral Debt Securities as of such Measurement Date is less than or equal to4.5 years.

 

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

 

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“WeightedAverage Spread”:  As ofany 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 aboveLIBOR at which interest accrues on each Collateral Debt Security that is aFloating Rate Security (other than a Defaulted Security or Written DownSecurity) as of such date by (y) the Principal Balance of such Collateral DebtSecurity as of such date, and (ii) dividing such sum by the Aggregate PrincipalBalance of all Collateral Debt Securities that are Floating Rate Securities(excluding all Defaulted Securities and Written Down Securities) plus (b) ifthe amount obtained pursuant to clause (a) is less than 2.75%, the Fixed RateExcess, if any, as of such Measurement Date. For purposes of this definition, a Fixed Rate Security that is subjectto a Liability Hedge will be deemed to be a Floating Rate Security and thefloating rate applicable thereto shall be the rate payable taking into accountthe related Liability Hedge.

 

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

 

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

 

## Section 1.2             Assumptionsas to Pledged Obligations.

##  

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

###  

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

###  

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

 

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### disbursed on aprevious Payment Date and do not constitute amounts which have been used asreimbursement with respect to a prior Interest Advance pursuant to the terms ofthis Indenture.

###  

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

###  

### (e)      For purposes ofcalculating any Interest Coverage Ratio, the expected interest income onfloating rate Collateral Debt Securities and Eligible Investments and undereach Hedge Agreement and the expected interest payable on the Notes shall becalculated using (i) the interest rates applicable thereto on the applicableMeasurement Date and (ii) accrued original issue discount on EligibleInvestments shall be deemed to be Scheduled Distributions of interest due onthe date such original issue discount is scheduled to be paid.  Notwithstanding the foregoing, for thepurposes of calculating any Interest Coverage Ratio, there shall be excludedall scheduled or deferred payments of interest on or principal of CollateralDebt Securities and any payment, including any amount payable to the Issuer byeach Hedge Counterparty, which the Collateral Manager has determined in itsreasonable judgment shall not be made in Cash or received when due.

###  

### (f)       Each ScheduledDistribution receivable with respect to a Pledged Obligation shall be assumedto be received on the applicable Due Date, and each such Scheduled Distributionshall be assumed to be immediately deposited in the applicable CollectionAccount except to the extent the Collateral Manager has a reasonable expectationthat such Scheduled Distribution will not be received on the applicable DueDate.  All such funds shall be assumed tocontinue to earn interest until the date on which they are required to beavailable in the applicable Collection Account for transfer to the PaymentAccount for application, in accordance with the terms hereof, to payments ofprincipal of or interest on the Notes or other amounts payable pursuant to thisIndenture.

###  

### (g)      Allcalculations required to be made and all reports which are to be preparedpursuant to this Indenture with respect to the Pledged Obligations, shall bemade on the basis of the date on which the Issuer makes a commitment topurchase or sell an asset (the “tradedate”), not the settlement date.

###  

### (h)      For purposes ofcalculating the Par Value Ratio, an appraisal reduction of a Collateral DebtSecurity will be assumed to result in an implied reduction of Principal Balancefor such Collateral Debt Security only if such appraisal reduction is intendedto reduce the interest payable on such Collateral Debt Security and only inproportion to such interest reduction. For purposes of the Par Value Ratio, any Collateral Debt Security thathas sustained an implied reduction of Principal Balance due to an appraisalreduction will not be considered a Defaulted Security solely due to suchimplied reduction.  The CollateralManager

 

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### willnotify the Trustee of any appraisal reductions of Collateral Debt Securities ifthe Collateral Manager has actual knowledge thereof.

###  

## Section 1.3             InterestCalculation Convention.

##  

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

 

## Section 1.4             RoundingConvention.

##  

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

 

# **ARTICLE 2**

#  

# **THE NOTES**

#  

## Section 2.1             FormsGenerally.

##  

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

 

## Section 2.2             Formsof Notes and Certificate of Authentication.

##  

### (a)      Form.  The form of each Class of Notes, includingthe Certificate of Authentication, shall be substantially as set forth in ExhibitsA and B hereto.

###  

### (b)      GlobalSecurities and Certificated Notes.

###  

#### (i)            TheSenior 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 globalnotes in definitive, fully registered form without interest coupons with theapplicable legend set forth in Exhibit A hereto added to the form ofsuch Notes (each, a “Rule 144AGlobal Security”), which shall be registered in the name ofthe nominee of the Depository and deposited with the Trustee, at its CorporateTrust Office, as custodian for the Depository, duly executed by the Issuer andthe Co-Issuer and authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the Rule144A Global Securities

 

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#### mayfrom time to time be increased or decreased by adjustments made on the recordsof the Trustee or the Depository or its nominee, as the case may be, ashereinafter provided.

####  

#### (ii)           The SeniorNotes initially sold in offshore transactions in reliance on Regulation S shallbe represented by one or more permanent global notes in definitive, fullyregistered form without interest coupons with the applicable legend set forthin 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 Notesrepresented thereby with the Trustee as custodian for the Depository andregistered in the name of a nominee of the Depository for the respectiveaccounts of Euroclear and Clearstream, Luxembourg or their respectivedepositories, duly executed by the Issuer and the Co-Issuer and authenticatedby the Trustee as hereinafter provided. The aggregate principal amount of the Regulation S Global Securities mayfrom time to time be increased or decreased by adjustments made on the recordsof the Trustee or the Depository or its nominee, as the case may be, ashereinafter provided.

####  

#### (iii)          TheClass J Notes and the Class K Notes initially sold in the United States to QRSCorp. pursuant to a transaction exempt from registration under Section 4(2) ofthe Securities Act shall be represented by one or more Certificated Notes indefinitive, fully registered form without interest coupons with the applicablelegend set forth in Exhibit B, duly executed by the Issuer andauthenticated by the Trustee or Authenticating Agent as hereinafterprovided.  No Class J Note or Class KNote shall be issued in the form of a Global Security.

####  

### (c)      Book-EntryProvisions.  This Section 2.2(c)shall apply only to Global Securities deposited with or on behalf of theDepository.

###  

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

 

Agent Members shall have no rights under thisIndenture with respect to any Global Security held on their behalf by theTrustee, as custodian for the Depository or under the Global Security, and theDepository may be treated by the Issuer, the Co-Issuer, the Trustee, and anyagent of the Issuer, the Co-Issuer or the Trustee as the absolute owner of suchGlobal 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 theTrustee, from giving effect to any written certification, proxy or otherauthorization furnished by the Depository or impair, as between the Depositoryand its Agent Members, the operation of customary practices governing theexercise of the rights of a holder of any Global Security.

 

### (d)      Delivery of CertificatedNotes in Lieu of Global Securities. Except as provided in Section 2.10 hereof, owners of beneficialinterests in a Class of Global Securities shall not be entitled to receivephysical delivery of a Certificated Note.

 

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## Section 2.3             AuthorizedAmount; Stated Maturity; and Denominations.

##  

### (a)      The aggregateprincipal amount of Notes that may be authenticated and delivered under thisIndenture is limited to $895,000,000, except for Notes authenticated anddelivered 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) Classeshaving 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 shallbe 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 Issuerand the Co-Issuer by an Authorized Officer of the Issuer and the Co-Issuer,respectively.  The signature of suchAuthorized Officers on the Notes may be manual or facsimile.

 

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Notes bearing the manual or facsimile signatures ofindividuals who were at any time the Authorized Officers of the Issuer or theCo-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 tohold such offices prior to the authentication and delivery of such Notes or didnot hold such offices at the date of issuance of such Notes.

 

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

 

Each Note authenticated and delivered by the Trusteeor the Authenticating Agent upon Issuer Order on the Closing Date shall bedated as of the Closing Date.  All otherNotes that are authenticated after the Closing Date for any other purpose underthis Indenture shall be dated the date of their authentication.

 

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

 

No Note shall be entitled to any benefit under thisIndenture or be valid or obligatory for any purpose, unless there appears onsuch Note a Certificate of Authentication, substantially in the form providedfor herein, executed by the Trustee or by the Authenticating Agent by themanual signature of one of their Authorized Officers, and such certificate uponany Note shall be conclusive evidence, and the only evidence, that such Notehas been duly authenticated and delivered hereunder.

 

## Section 2.5             Registration, Registration of Transfer andExchange.

##  

### (a)      The Issuer andthe Co-Issuer shall cause to be kept a register (the “Notes Register”) inwhich, subject to such reasonable regulations as it may prescribe, the Issuerand the Co-Issuer shall provide for the registration of Notes and theregistration of transfers of Notes.  TheTrustee is hereby initially appointed “Notes Registrar” for the purpose ofregistering Notes and transfers of such Notes with respect to any duplicatecopy of the Notes Register kept in the United States as herein provided.  Upon any resignation or removal of the NotesRegistrar, 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 theIssuer and the Co-Issuer as Notes Registrar, the Issuer and the Co-Issuer shallgive the Trustee prompt written notice of the appointment of a successor NotesRegistrar and of the location, and any change in the location,

 

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of the Notes Registrar, and the Trustee shall have theright to inspect the Notes Register at all reasonable times and to obtaincopies thereof and the Trustee shall have the right to rely upon a certificateexecuted on behalf of the Notes Registrar by an Officer thereof as to the namesand addresses of the Holders of the Notes and the principal amounts and numbersof such Notes.

 

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

 

At the option of the Holder, Notes may be exchangedfor Notes of like terms, in any authorized denominations and of like aggregateprincipal amount, upon surrender of the Notes to be exchanged at such office oragency.  Whenever any Note is surrenderedfor exchange, the Issuer and the Co-Issuer shall execute, and the Trustee shallauthenticate and deliver, the Notes that the Noteholder making the exchange isentitled to receive.

 

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

 

Every Note presented or surrendered for registrationof transfer or exchange shall be duly endorsed, or be accompanied by a writteninstrument of transfer in form satisfactory to the Issuer and the NotesRegistrar duly executed by the Holder thereof or his attorney duly authorizedin writing.

 

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

 

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

 

### (b)      No Note may besold or transferred (including, without limitation, by pledge or hypothecation)unless such sale or transfer is exempt from the registration requirements ofthe Securities Act and is exempt from the registration requirements underapplicable state securities laws.

###  

### (c)      No Senior Notemay be offered, sold, resold or delivered, within the United States or to, orfor 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 Purchaserspurchasing for their own account or for the accounts of one or more QIBs whoare Qualified Purchasers, for which the purchaser is acting as fiduciary oragent.  The Senior Notes may be offered,sold, resold or delivered, as the case may be, in offshore transactions tonon-U.S. Persons in

 

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### relianceon Regulation S.  None of the Issuer, theCo-Issuer, the Trustee or any other Person may register the Notes under theSecurities Act or any state securities laws.

###  

### (d)      Upon finalpayment due on the Stated Maturity of a Note, the Holder thereof shall presentand surrender such Note at the Corporate Trust Office of the Trustee or at theoffice of the Paying Agent (outside the United States if then required byapplicable law in the case of a Note in definitive form issued in exchange fora beneficial interest in a Regulation S Global Security pursuant to Section2.10).

###  

### (e)      Transfers ofGlobal Securities.  Notwithstandingany provision to the contrary herein, so long as a Global Security remainsoutstanding and is held by or on behalf of the Depository, transfers of aGlobal Security, in whole or in part, shall only be made in accordance with Section2.2(c) and this Section 2.5(e).

###  

#### (i)            Subjectto clauses (ii) through (iv) of this Section 2.5(e), transfers of aGlobal 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 theDepository or such successor’s nominee.

####  

#### (ii)           RegulationS Global Security to Rule 144A Global Security.  If a holder of a beneficial interest in aRegulation S Global Security wishes to transfer all or a part of its interestin such Regulation S Global Security to a Person who wishes to take deliverythereof in the form of a Rule 144A Global Security, such holder may, subject tothe terms hereof and the rules and procedures of Euroclear, Clearstream,Luxembourg or the Depository, as the case may be, exchange or cause theexchange of such interest for an equivalent beneficial interest in a Rule 144AGlobal Security of the same Class.  Uponreceipt by the Trustee, as Notes Registrar, of (A) instructions from Euroclear,Clearstream, Luxembourg or the Depository, as the case may be, directing theTrustee, as Notes Registrar, to cause such Rule 144A Global Security to beincreased by an amount equal to such beneficial interest in such Regulation SGlobal Security but not less than the minimum denomination applicable to therelated Class of Notes, and (B) a certificate substantially in the form of ExhibitD hereto given by the prospective transferee of such beneficial interestand stating, among other things, that such transferee acquiring such interestin a Rule 144A Global Security is a QIB and a Qualified Purchaser, is obtainingsuch beneficial interest in a transaction pursuant to Rule 144A and inaccordance with any applicable securities laws of any state of the UnitedStates or any other applicable jurisdiction, then Euroclear, Clearstream,Luxembourg or the Trustee, as Notes Registrar, as the case may be, shall approvethe instruction at the Depository to reduce such Regulation S Global Securityby the aggregate principal amount of the interest in such Regulation S GlobalSecurity to be transferred and increase the Rule 144A Global Security specifiedin such instructions by an Aggregate Outstanding Amount equal to such reductionin such principal amount of the Regulation S Global Security.

####  

#### (iii)          Rule144A Global Security to Regulation S Global Security.  If a holder of a beneficial interest in aRule 144A Global Security wishes to transfer all or a part of its interest insuch Rule 144A Global Security to a Person who wishes to take delivery thereofin the form of a Regulation S Global Security, such holder may, subject to the

 

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#### terms hereof andthe rules and procedures of Euroclear, Clearstream, Luxembourg or theDepository, as the case may be, exchange or cause the exchange of such interestfor an equivalent beneficial interest in a Regulation S Global Security of the sameClass.  Upon receipt by the Trustee, asNotes Registrar, of (A) instructions from Euroclear, Clearstream, Luxembourg orthe 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 equalto the beneficial interest in such Rule 144A Global Security but not less thanthe minimum denomination applicable to the related Class of Notes to beexchanged, and (B) a certificate substantially in the form of Exhibit Chereto given by the prospective transferee of such beneficial interest andstating, among other things, that such transferee acquiring such interest in aRegulation S Global Security is a not a U.S. Person and that such transfer isbeing 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 GlobalSecurity by the aggregate principal amount of the interest in such Rule 144AGlobal Security to be transferred and increase the Regulation S Global Securityspecified in such instructions by an Aggregate Outstanding Amount equal to suchreduction in the principal amount of the Rule 144A Global Security.

####  

#### (iv)          OtherExchanges.  (A)  In the event that, pursuant to Section2.10 hereof, a Global Security is exchanged for Certificated Notes, suchNotes may be exchanged for one another only in accordance with such proceduresas are substantially consistent with the provisions above (includingcertification requirements intended to ensure that such transfers are to a QIBwho is also a Qualified Purchaser or are to a non-U.S. Person, or otherwisecomply with Rule 144A or Regulation S, as the case may be) and as may be fromtime to time adopted by the Issuer, the Co-Issuer and the Trustee.

####  

###### (B)     Subject tosatisfaction of the conditions set forth in subparagraph (D) of this Section2.5(e)(iv), a Class J Note or Class K Note represented by a CertificatedNote may be transferred to a Qualified Institutional Buyer in the form of a CertificatedNote upon receipt by the Trustee, as Notes Registrar, of a certificatesubstantially in the form of Exhibit E-2 hereto given by the prospectivetransferee of such beneficial interest and stating, among other things, thatsuch transferee acquiring such interest in a Rule 144A Global Security is a QIBand a Qualified Purchaser, is obtaining such beneficial interest in atransaction pursuant to Rule 144A and in accordance with any applicablesecurities laws of any state of the United States or any other applicablejurisdiction.  In connection with anysuch transfer, such prospective transferee shall be deemed to have made theapplicable representations contained in Section 2.5(g) hereof.

######  

###### (C)     Subject tosatisfaction of the conditions set forth in subparagraph (D) of this Section2.5(e)(iv), a Class J Note or Class K Noterepresented by a Certificated Note may be transferred to a Person other than aU.S. Person in the form of a Certificated Note upon receipt by the Trustee, asNotes Registrar, of a certificate substantially in the

 

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

######  

###### (D)     Notwithstandinganything contained in this Indenture to the contrary, as long as any Class ofSenior Notes is Outstanding, no wholly-owned, direct or indirect, subsidiary ofGKK may sell or otherwise transfer or finance any Class J Note or Class K Noteto any other Person that is not a wholly-owned, direct or indirect, subsidiaryof GKK unless the Issuer and the Trustee shall have received an appropriate TaxOpinion 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 ofsuch sale, transfer or financing.

######  

### (f)       Removal ofLegend.  If Notes are issued upon thetransfer, exchange or replacement of Notes bearing the applicable legends setforth in Exhibits A and B hereto, and if a request is made toremove such applicable legend on such Notes, the Notes so issued shall bearsuch applicable legend, or such applicable legend shall not be removed, as thecase may be, unless there is delivered to the Issuer and the Co-Issuer suchsatisfactory evidence, which may include an Opinion of Counsel of an attorneyat law licensed to practice law in the State of New York (and addressed to theIssuer and the Trustee), as may be reasonably required by the Issuer and theCo-Issuer, if applicable, to the effect that neither such applicable legend northe restrictions on transfer set forth therein are required to ensure thattransfers thereof comply with the provisions of Rule 144A or Regulation S, asapplicable, the Investment Company Act or ERISA.  So long as the Issuer or the Co-Issuer isrelying on an exemption under or promulgated pursuant to the Investment CompanyAct, the Issuer or the Co-Issuer shall not remove that portion of the legendrequired to maintain an exemption under or promulgated pursuant to theInvestment Company Act.  Upon provisionof such satisfactory evidence, as confirmed in writing by the Issuer and theCo-Issuer, if applicable, to the Trustee, the Trustee, at the direction of theIssuer and the Co-Issuer, if applicable, shall authenticate and deliver Notesthat do not bear such applicable legend.

###  

### (g)      Each beneficialowner of Rule 144A Global Securities shall be deemed to represent and agree asfollows (terms used in this paragraph that are defined in Rule 144A are usedherein as defined therein):

###  

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

 

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#### (ii)           The ownerunderstands that the Notes are being offered only in a transaction notinvolving any public offering in the United States within the meaning of theSecurities Act, the Notes have not been and shall not be registered under theSecurities 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 theapplicable legend on such Notes set forth in Exhibits A and B, asapplicable.  The owner acknowledges thatno representation is made by the Issuer, the Co-Issuer, or the InitialPurchaser, as the case may be, as to the availability of any exemption underthe Securities Act or any state securities laws for resale of the Notes.

####  

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

####  

#### (iv)          Inconnection with the purchase of the Notes (A) none of the Issuer, theCo-Issuer, the Initial Purchaser, the Collateral Manager or the Trustee isacting as a fiduciary or financial or investment adviser for the owner; (B) theowner is not relying (for purposes of making any investment decision orotherwise) upon any advice, counsel or representations (whether written ororal) of the Issuer, the Co-Issuer, the Initial Purchaser, the CollateralManager or the Trustee other than in a current offering memorandum for suchNotes and any representations expressly set forth in a written agreement withsuch party; (C) none of the Issuer, the Co-Issuer, the Initial Purchaser, theCollateral Manager or the Trustee has given to the owner (directly orindirectly through any other person) any assurance, guarantee, orrepresentation 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 itspurchase, (D) the owner has consulted with its own legal, regulatory, tax,business, investment, financial, and accounting advisers to the extent it hasdeemed necessary, and it has made its own investment decisions (includingdecisions regarding the suitability of any transaction pursuant to thisIndenture) based upon its own judgment and upon any advice from such advisersas it has deemed necessary and not upon any view expressed by the Issuer, theCo-Issuer, the Initial Purchaser, the Collateral Manager or the Trustee; and(E) the owner is purchasing the Notes with a fullunderstanding of all of the terms, conditions and risks thereof (economic andotherwise), and is capable of assuming and willing to assume (financially andotherwise) these risks.

####  

#### (v)           The owner understandsthat the Notes shall bear the applicable legend set forth in Exhibits Aand B as applicable.  The Rule144A Global Securities may not at any time be held byor on behalf of any U.S. Person that is not a QIB who is a QualifiedPurchaser.  The owner must inform aprospective transferee of the transfer restrictions.

 

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#### (vi)          Unless aprospective Holder of a Senior Note otherwise provides another representationacceptable to the Trustee, the Collateral Manager, the Issuer and theCo-Issuer, each Holder of a Senior Note, by its acquisition thereof, shall bedeemed to have represented to the Issuer, the Co-Issuer, the Collateral Managerand the Trustee that either (A) no part of the funds being used to pay thepurchase price for such Senior Notes constitutes an asset of any “employeebenefit plan” (as defined in Section 3(3) of ERISA) or “plan” (as defined inSection 4975(e)(1) of the Code) that is subject to ERISA or Section 4975 of theCode or any other plan which is subject to any federal, state or local law (“Similar Law”) thatis 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 underlyingassets include Plan Assets of any such Benefit Plan, or (B) if the funds beingused to pay the purchase price for such Senior Notes include Plan Assets of anyBenefit Plan, its purchase and holding are eligible for the exemptive relieffrom the prohibited transaction rules granted by Prohibited Transaction ClassExemption (“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 SimilarLaw, do not result in a non-exempt violation of Similar Law.

####  

#### (vii)         Theowner shall not, at any time, offer to buy or offer to sell the Notes by anyform of general solicitation or advertising, including, but not limited to, anyadvertisement, article, notice or other communication published in anynewspaper, magazine or similar medium or broadcast over television or radio orat a seminar or meeting whose attendees have been invited by generalsolicitations or advertising.

####  

#### (viii)        Theowner is not a member of the public in the Cayman Islands, within the meaningof Section 194 of the Cayman Islands Companies Law (2004 Revision), unless the Issuerhas been listed on the Cayman Islands Stock Exchange.

####  

#### (ix)           The ownerunderstands that the Issuer, Co-Issuer, Trustee or Paying Agent shall requirecertification acceptable to it (A) as a condition to the payment of principalof and interest on any Notes without, or at a reduced rate of, U.S. withholdingor backup withholding tax, and (B) to enable the Issuer, Co-Issuer, Trustee andPaying Agent to determine their duties and liabilities with respect to anytaxes or other charges that they may be required to pay, deduct or withholdfrom payments in respect of such Notes or the Holder of such Notes under anypresent or future law or regulation of the Cayman Islands or the United Statesor any present or future law or regulation of any political subdivision thereofor taxing authority therein or to comply with any reporting or otherrequirements under any such law or regulation. Such certification may include U.S. federal income tax forms (such asIRS Form W-8BEN (Certification of Foreign Status of Beneficial Owner), IRS FormW-8IMY (Certification of Foreign Intermediary Status), IRS Form W-9 (Requestfor Taxpayer Identification Number and Certification), or IRS Form W-8ECI(Certification of Foreign Person’s Claim for Exemption from Withholding onIncome Effectively Connected with Conduct of a U.S. Trade or Business) or anysuccessors to such IRS forms).  Inaddition, the Issuer, Co-Issuer, Trustee or Paying Agent may requirecertification acceptable to it to enable the Issuer to qualify for a reducedrate of withholding in any jurisdiction from or through which the Issuerreceives payments on its assets.  Eachowner agrees to provide any certification requested pursuant to this

 

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#### paragraphand to update or replace such form or certification in accordance with itsterms or its subsequent amendments.

####  

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

####  

#### (xi)           The owner,if not a “United States person” (as defined in Section 7701(a)(30) of theCode), either: (A) is not a bank (within the meaning of Section 881(c)(3)(A) ofthe Code); (B) if such owner is a bank (within the meaning of Section881(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) or50% by value of the aggregate of the preferred and all classes of notes thatare treated as equity for US federal income tax purposes either directly orindirectly, and will not otherwise be related to the Issuer (within the meaningof section 267(b) of the Code) and (y) has not purchased the Notes in whole orin 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 theCollateral Debt Securities if held directly by the owner); (C) has provided anIRS Form W-8ECI representing that all payments received or to be received by itfrom the Issuer are effectively connected with the conduct of a trade orbusiness in the United States; or (D) is eligible for benefits under an incometax treaty with the United States that eliminates U.S. federal income taxationof U.S. source interest not attributable to a permanent establishment in theUnited States and the Issuer is treated as a fiscally transparent entity (asdefined in Treasury Regulations section 1.894-1(d)(3)(ii)) under the laws ofowner’s jurisdiction with respect to payments made on the Collateral DebtSecurities held by the owner.

####  

### (h)      Each beneficialowner of Regulation S Global Securities shall be deemed to have made therepresentations 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 furtherrepresented and agreed as follows:

###  

#### (i)            The owneris aware that the sale of such Senior Notes to it is being made in reliance onthe exemption from registration provided by Regulation S and understands thatthe Senior Notes offered in reliance on Regulation S will bear the appropriatelegend set forth in Exhibit A or B, as applicable, and berepresented by one or more Regulation S Global Securities.  The Senior Notes so represented may not atany time be held by or on behalf of U.S. Persons.  Each of the owner and the related Holder isnot, 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 theform of a Rule 144A Global Security, the transferee shall be required toprovide the Trustee with a written certification substantially in the form of ExhibitsC and D as applicable hereto as to compliance with the transferrestrictions.  The owner must inform aprospective transferee of the transfer restrictions.

 

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

###  

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

###  

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

###  

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

 

### (l)       Each Holder ofNotes approves and consents to (i) the initial purchase of the Collateral DebtSecurities by the Issuer from Affiliates of the Collateral Manager on or priorto the Closing Date and (ii) any other transaction between the Issuer and theCollateral Manager or its Affiliates that are permitted under the terms of thisIndenture 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 toa 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 reasonablesatisfaction of the destruction, loss or theft of any Note, and (b) there isdelivered to the Specified Person such security or indemnity as may be requiredby each Specified Person to save each of them and any agent of any of themharmless (an unsecured indemnity agreement delivered to the Trustee by aninstitutional investor with a net worth of at least $200,000,000 being deemedsufficient to satisfy such security or indemnity requirement), then, in theabsence of notice to the Specified Persons that such Note has been acquired bya bona fide purchaser, the Issuer and the Co-Issuer shall execute and, uponIssuer Request, the Trustee shall authenticate and deliver, in lieu of any suchmutilated, defaced, destroyed, lost or stolen Note, a new Note, of like tenor(including the same date of issuance) and equal principal amount, registered inthe same manner, dated the date of its authentication, bearing interest fromthe 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 fidepurchaser of the predecessor Note presents for payment, transfer or exchangesuch predecessor Note, any Specified Person shall be entitled to recover suchnew Note from the Person to whom it was delivered or any Person takingtherefrom, and each Specified Person shall be entitled to recover upon thesecurity or indemnity provided therefor to the extent of any loss, damage, costor expense incurred by such Specified Person in connection therewith.

 

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

 

Upon the issuance of any new Note under this Section2.6, the Issuer and the Co-Issuer, if applicable, may require the paymentby the registered Holder thereof of a sum sufficient to cover any tax or othergovernmental charge that may be imposed in relation thereto and any otherexpenses (including the fees and expenses of the Trustee) connected therewith.

 

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

 

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

 

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## Section 2.7             Paymentof Principal and Interest and Other Amounts; Principal and Interest RightsPreserved.

##  

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

###  

### (b)      The Class A-2Notes shall accrue interest during each Interest Accrual Period at the ClassA-2 Rate.  Interest on each Class A-2Note shall be due and payable on each Payment Date immediately following therelated Interest Accrual Period in the proportion that the outstandingprincipal amount of such Class A-2 Note bears to the Aggregate OutstandingAmount of all Class A-2 Notes; *provided*, *however*, that the payment of interest on the Class A-2 Notesis subordinated to the payment on each Payment Date of the interest due andpayable on the Class A-1 Notes (including any Class A-1 Defaulted InterestAmount) and certain other amounts in accordance with the Priority of Payments.

###  

### (c)      The Class BNotes shall accrue interest during each Interest Accrual Period at the Class BRate.  Interest on each Class B Noteshall be due and payable on each Payment Date immediately following the relatedInterest Accrual Period in the proportion that the outstanding principal amountof such Class B Note bears to the Aggregate Outstanding Amount of all Class BNotes; *provided*,*however*,that payment of interest on the Class B Notes is subordinated to the payment oneach Payment Date of the interest due and payable on the Class A-1 Notes andthe Class A-2 Notes, (including any Class A-1 Defaulted Interest Amount and anyClass A-2 Defaulted Interest Amount) and certain other amounts in accordancewith the Priority of Payments.

###  

### (d)      The Class CNotes shall accrue interest during each Interest Accrual Period at the Class CRate.  Interest on each Class C Noteshall be due and payable on each Payment Date immediately following the relatedInterest Accrual Period in the proportion that the outstanding principal amountof such Class C Note bears to the Aggregate Outstanding Amount of all Class CNotes; *provided, however*, that payment ofinterest on the Class C Notes is subordinated to the payment on each PaymentDate of the interest due and payable on the Class A-1 Notes, the Class A-2Notes 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 certainother amounts in accordance with the Priority of Payments.

###  

For so long as any Class B Notes are Outstanding, anypayment of interest due on the Class C Notes which is not available to be paid(the “Class C CapitalizedInterest”) in accordance with the Priority of Payments on anyPayment Date shall not be considered “due and payable” for the purpose of Section5.1(a) hereof (and the failure to pay such Class C Capitalized Interestshall not be an Event of Default) until the Payment Date on which funds areavailable to pay all or any portion of such Class C Capitalized Interest inaccordance with the Priority of Payments. On or after such Payment Date, only such portion of any payment of ClassC

 

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Capitalized Interest for which funds are available inaccordance 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 anEvent of Default.  Class C CapitalizedInterest shall be added to the principal amount of the Class C Notes, shallbear interest thereafter at the Class C Rate (to the extent lawful) and shallbe payable on the first Payment Date on which funds are permitted to be usedfor such purpose in accordance with the Priority of Payments.  On or after the Payment Date on which theClass B Notes are no longer Outstanding, to the extent interest is due(excluding any previously deferred Class C Capitalized Interest) but not paidon the Class C Notes, the failure to pay such interest shall constitute anEvent of Default hereunder.

 

### (e)      The Class DNotes shall accrue interest during each Interest Accrual Period at the Class DRate.  Interest on each Class D Noteshall be due and payable on each Payment Date immediately following the relatedInterest Accrual Period in the proportion that the outstanding principal amountof such Class D Note bears to the Aggregate Outstanding Amount of all Class DNotes; *provided*,*however*,that payment of interest on the Class D Notes is subordinated to the payment oneach Payment Date of the interest due and payable on the Class A-1 Notes, theClass A-2 Notes, the Class B Notes and the Class C Notes (including any ClassA-1 Defaulted Interest Amount, Class A-2 Defaulted Interest Amount, Class BDefaulted Interest Amount, Class C Defaulted Interest Amount and Class CCapitalized Interest) and certain other amounts in accordance with the Priorityof Payments.

###  

For so long as any Class C Notes are Outstanding, anypayment 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 beconsidered “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 Eventof Default) until the Payment Date on which funds are available to pay all orany portion of such Class D Capitalized Interest in accordance with thePriority of Payments.  On or after suchPayment Date, only such portion of any payment of Class D Capitalized Interestfor which funds are available in accordance with the Priority of Payments shallbe considered “due and payable” and the failure to pay such portion of Class DCapitalized Interest shall be an Event of Default.  Class D Capitalized Interest shall be addedto the principal amount of the Class D Notes, shall bear interest thereafter atthe Class D Rate (to the extent lawful) and shall be payable on the firstPayment Date on which funds are permitted to be used for such purpose inaccordance with the Priority of Payments. On or after the Payment Date on which the Class C Notes are no longerOutstanding, to the extent interest is due (excluding any previously deferredClass D Capitalized Interest) but not paid on the Class D Notes, the failure topay such interest shall constitute an Event of Default hereunder.

 

### (f)       The Class ENotes shall accrue interest during each Interest Accrual Period at the Class ERate.  Interest on each Class E Note shallbe due and payable on each Payment Date immediately following the relatedInterest Accrual Period in the proportion that the outstanding principal amountof such Class E Note bears to the Aggregate Outstanding Amount of all Class ENotes; *provided, however*, that payment ofinterest on the Class E Notes is subordinated to the payment on each PaymentDate of the interest due and payable on the Class A-1 Notes, the Class A-2Notes, the Class B Notes, the Class C Notes and the Class D Notes (includingany 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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### CapitalizedInterest, 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, anypayment of interest due on the Class E Notes which is not available to be paid(the “Class E CapitalizedInterest”) in accordance with the Priority of Payments on anyPayment Date shall not be considered “due and payable” for the purpose of Section5.1(a) hereof (and the failure to pay such Class E Capitalized Interestshall not be an Event of Default) until the Payment Date on which funds areavailable to pay all or any portion of such Class E Capitalized Interest inaccordance with the Priority of Payments. On or after such Payment Date, only such portion of any payment of ClassE Capitalized Interest for which funds are available in accordance with thePriority of Payments shall be considered “due and payable” and the failure topay such portion of Class E Capitalized Interest shall be an Event ofDefault.  Class E Capitalized Interestshall be added to the principal amount of the Class E Notes, shall bearinterest thereafter at the Class E Rate (to the extent lawful) and shall bepayable on the first Payment Date on which funds are permitted to be used forsuch purpose in accordance with the Priority of Payments.  On or after the Payment Date on which theClass D Notes are no longer Outstanding, to the extent interest is due(excluding any previously deferred Class E Capitalized Interest) but not paidon the Class E Notes, the failure to pay such interest shall constitute anEvent of Default hereunder.

 

### (g)      The Class FNotes shall accrue interest during each Interest Accrual Period at the Class FRate.  Interest on each Class F Noteshall be due and payable on each Payment Date immediately following the relatedInterest Accrual Period in the proportion that the outstanding principal amountof such Class F Note bears to the Aggregate Outstanding Amount of all Class FNotes; *provided*,*however*,that payment of interest on the Class F Notes is subordinated to the payment oneach Payment Date of the interest due and payable on the Class A-1 Notes, theClass A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes andthe Class E Notes (including any Class A-1 Defaulted Interest Amount, Class A-2Defaulted Interest Amount, Class B Defaulted Interest Amount, Class C DefaultedInterest Amount, Class C Capitalized Interest, Class D Defaulted InterestAmount, Class D Capitalized Interest, Class E Defaulted Interest Amount andClass E Capitalized Interest) and certain other amounts in accordance with thePriority of Payments.

###  

For so long as any Class E Notes are Outstanding, anypayment 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 beconsidered “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 Eventof Default) until the Payment Date on which funds are available to pay all orany portion of such Class F Capitalized Interest in accordance with thePriority of Payments.  On or after suchPayment Date, only such portion of any payment of Class F Capitalized Interestfor which funds are available in accordance with the Priority of Payments shallbe considered “due and payable” and the failure to pay such portion of Class FCapitalized Interest shall be an Event of Default.  Class F Capitalized Interest shall be addedto the principal amount of the Class F Notes, shall bear interest thereafter atthe Class F Rate (to the extent lawful) and shall be payable on the firstPayment Date on which funds are permitted to be used for such purpose inaccordance with the Priority of Payments. On or after the Payment Date on which the Class E Notes are no longerOutstanding, to the extent interest is due (excluding any previously deferred

 

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

 

### (h)      The Class GNotes shall accrue interest during each Interest Accrual Period at the Class GRate.  Interest on each Class G Noteshall be due and payable on each Payment Date immediately following the relatedInterest Accrual Period in the proportion that the outstanding principal amountof such Class G Note bears to the Aggregate Outstanding Amount of all Class GNotes; *provided*,*however*,that payment of interest on the Class G Notes is subordinated to the payment oneach Payment Date of the interest due and payable on the Class A-1 Notes, ClassA-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes 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 CDefaulted Interest Amount, Class C Capitalized Interest, Class D DefaultedInterest Amount, Class D Capitalized Interest, Class E Defaulted Interest Amount,Class E Capitalized Interest, Class F Defaulted Interest Amount and Class FCapitalized Interest) and certain other amounts in accordance with the Priorityof Payments.

###  

For so long as any Class F Notes are Outstanding, anypayment of interest due on the Class G Notes which is not available to be paid(the “Class G CapitalizedInterest”) in accordance with the Priority of Payments on anyPayment Date shall not be considered “due and payable” for the purpose of Section5.1(a) hereof (and the failure to pay such Class G Capitalized Interestshall not be an Event of Default) until the Payment Date on which funds areavailable to pay all or any portion of such Class G Capitalized Interest inaccordance with the Priority of Payments. On or after such Payment Date, only such portion of any payment of ClassG Capitalized Interest for which funds are available in accordance with thePriority of Payments shall be considered “due and payable” and the failure topay such portion of Class G Capitalized Interest shall be an Event ofDefault.  Class G Capitalized Interestshall be added to the principal amount of the Class G Notes, shall bearinterest thereafter at the Class G Rate (to the extent lawful) and shall bepayable on the first Payment Date on which funds are permitted to be used forsuch purpose in accordance with the Priority of Payments.  On or after the Payment Date on which theClass F Notes are no longer Outstanding, to the extent interest is due(excluding any previously deferred Class G Capitalized Interest) but not paidon the Class G Notes, the failure to pay such interest shall constitute anEvent of Default hereunder.

 

### (i)       The Class HNotes shall accrue interest during each Interest Accrual Period at the Class HRate.  Interest on each Class H Noteshall be due and payable on each Payment Date immediately following the relatedInterest Accrual Period in the proportion that the outstanding principal amountof such Class H Note bears to the Aggregate Outstanding Amount of all Class HNotes; *provided*,*however*,that payment of interest on the Class H Notes is subordinated to the payment oneach Payment Date of the interest due and payable on the Class A-1 Notes, ClassA-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes and the Class G Notes (including any Class A-1Defaulted Interest Amount, Class A-2 Defaulted Interest Amount, Class BDefaulted Interest Amount, Class C Defaulted Interest Amount, Class CCapitalized Interest, Class D Defaulted Interest Amount, Class D CapitalizedInterest, Class E Defaulted Interest Amount, Class E Capitalized Interest,Class F Defaulted Interest Amount, Class F Capitalized Interest, Class G

 

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### DefaultedInterest Amount and Class G Capitalized Interest) and certain other amounts inaccordance with the Priority of Payments.

###  

For so long as any Class G Notes are Outstanding, anypayment 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 beconsidered “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 Eventof Default) until the Payment Date on which funds are available to pay all orany portion of such Class H Capitalized Interest in accordance with thePriority of Payments.  On or after suchPayment Date, only such portion of any payment of Class H Capitalized Interest forwhich funds are available in accordance with the Priority of Payments shall beconsidered “due and payable” and the failure to pay such portion of Class HCapitalized Interest shall be an Event of Default.  Class H Capitalized Interest shall be added tothe principal amount of the Class H Notes, shall bear interest thereafter atthe Class H Rate (to the extent lawful) and shall be payable on the firstPayment Date on which funds are permitted to be used for such purpose inaccordance with the Priority of Payments. On or after the Payment Date on which the Class G Notes are no longerOutstanding, to the extent interest is due (excluding any previously deferredClass H Capitalized Interest) but not paid on the Class H Notes, the failure topay such interest shall constitute an Event of Default hereunder.

 

### (j)       The Class JNotes shall accrue interest during each Interest Accrual Period at the Class JRate.  Interest on each Class J Noteshall be due and payable on each Payment Date immediately following the relatedInterest Accrual Period in the proportion that the outstanding principal amountof such Class J Note bears to the Aggregate Outstanding Amount of all Class JNotes; *provided*, *however*,that payment of interest on the Class J Notes is subordinated to the payment oneach Payment Date of the interest due and payable on the Class A-1 Notes, ClassA-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes and the Class H Notes (includingany Class A-1 Defaulted Interest, Class A-2 Defaulted Interest Amount, Class BDefaulted Interest Amount, Class C Defaulted Interest Amount, Class CCapitalized Interest, Class D Defaulted Interest Amount, Class D CapitalizedInterest, Class E Defaulted Interest Amount, Class E Capitalized Interest,Class F Defaulted Interest Amount, Class F Capitalized Interest, Class GDefaulted Interest Amount, Class G Capitalized Interest, Class H DefaultedInterest Amount and Class H Capitalized Interest) and certain other amounts inaccordance with the Priority of Payments.

###  

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

 

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

 

### (k)      The Class KNotes shall accrue interest during each Interest Accrual Period at the Class KRate.  Interest on each Class K Noteshall be due and payable on each Payment Date immediately following the relatedInterest Accrual Period in the proportion that the outstanding principal amountof such Class K Note bears to the Aggregate Outstanding Amount of all Class KNotes; *provided*, *however*,that payment of interest on the Class K Notes is subordinated to the payment oneach Payment Date of the interest due and payable on the Class A-1 Notes, ClassA-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes, the Class H Notes and the Class JNotes (including any Class A-1 Defaulted Interest Amount, Class A-2 DefaultedInterest Amount, Class B Defaulted Interest Amount, Class C Defaulted InterestAmount, Class C Capitalized Interest, Class D Defaulted Interest Amount, ClassD Capitalized Interest, Class E Defaulted Interest Amount, Class E CapitalizedInterest, Class F Defaulted Interest Amount, Class F Capitalized Interest,Class G Defaulted Interest Amount, Class G Capitalized Interest, Class HDefaulted Interest Amount, Class H Capitalized Interest, Class J DefaultedInterest Amount and Class J Capitalized Interest) and certain other amounts inaccordance with the Priority of Payments.

###  

For so long as any Class J Notes are Outstanding, anypayment 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 beconsidered “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 Eventof Default) until the Payment Date on which funds are available to pay all orany portion of such Class K Capitalized Interest in accordance with thePriority of Payments.  On or after suchPayment Date, only such portion of any payment of Class K Capitalized Interestfor which funds are available in accordance with the Priority of Payments shallbe considered “due and payable” and the failure to pay such portion of Class KCapitalized Interest shall be an Event of Default.  Class K Capitalized Interest shall be addedto the principal amount of the Class K Notes, shall bear interest thereafter atthe Class K Rate (to the extent lawful) and shall be payable on the firstPayment Date on which funds are permitted to be used for such purpose inaccordance with the Priority of Payments. On or after the Payment Date on which the Class J Notes are no longerOutstanding, to the extent interest is due (excluding any previously deferredClass K Capitalized Interest) but not paid on the Class K Notes, the failure topay such interest shall constitute an Event of Default hereunder.

 

### (l)       Upon anyOptional Redemption, Tax Redemption, Auction Call Redemption or Clean-up Call,all net proceeds from such liquidation and all available Cash (other than theIssuer’s right, title and interest in the Excepted Assets), after the paymentof 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 distributedby Trustee to the Preferred Shares Paying Agent for distribution to the holdersof the Preferred Shares, whereupon the Preferred Shares will be cancelled anddeemed paid in full for all purposes.

 

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### (m)     Interest shallcease 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 ofprincipal is improperly withheld or unless a Default has occurred with respectto such payments of principal.

###  

### (n)      The principalof each Class of Notes matures at par and is due and payable on the StatedMaturity, unless the unpaid principal of such Class of Notes becomes due andpayable at an earlier date by declaration of acceleration, call for redemptionor otherwise; *provided*,*however*,that the payment of principal of the Class A-2 Notes (other than payment ofprincipal pursuant to Section 9.6 or Section 9.7) may only occurafter the principal of the Class A-1 Notes has been paid in full and issubordinated to the payment on each Payment Date of the principal and interestdue and payable on the Class A-1 Notes and other amounts in accordance with thePriority of Payments and any payment of principal of the Class A-2 Notes whichis not paid, in accordance with the Priority of Payments, on any Payment Date,shall not be considered “due and payable” solely for purposes of Section5.1(b) until the Payment Date on which such principal may be paid inaccordance with the Priority of Payments or all of the Class A-1 Notes havebeen paid in full; *provided*,*further*,**that thepayment of principal of the Class B Notes (other than payment of principalpursuant to Section 9.6 or Section 9.7) may only occur after theprincipal of the Class A-1 Notes and the Class A-2 Notes has been paid in fulland is subordinated to the payment on each Payment Date of the principal andinterest due and payable on the Class A-1 Notes and the Class A-2 Notes andother amounts in accordance with the Priority of Payments and any payment ofprincipal of the Class B Notes which is not paid, in accordance with thePriority of Payments, on any Payment Date, shall not be considered “due andpayable” solely for purposes of Section 5.1(b) until the Payment Date onwhich such principal may be paid in accordance with the Priority of Payments orall of the Class A-1 Notes and Class A-2 Notes have been paid in full; *provided*,*further*, thatthe payment of principal of the Class C Notes (other than payment of theamounts constituting Class C Capitalized Interest, notwithstanding that suchClass C Capitalized Interest may be deemed to constitute additions toprincipal, and other than the payment of principal pursuant to Section 9.6or Section 9.7) may only occur after the principal of the Class A-1Notes, the Class A-2 Notes and the Class B Notes has been paid in full and issubordinated to the payment on each Payment Date of the principal and interestdue and payable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notesand other amounts in accordance with the Priority of Payments and any paymentof principal of the Class C Notes which is not paid, in accordance with thePriority of Payments, on any Payment Date, shall not be considered “due andpayable” solely for purposes of Section 5.1(b) until the Payment Date onwhich such principal may be paid in accordance with the Priority of Payments orall of the Class A-1 Notes, the Class A-2 Notes and the Class B Notes have beenpaid in full; *provided*,*further*,that the payment of principal of the Class D Notes (other than payment of theamounts constituting Class D Capitalized Interest, notwithstanding that suchClass D Capitalized Interest may be deemed to constitute additions toprincipal, and other than the payment of principal pursuant to Section 9.6or Section 9.7) may only occur after the principal of the Class A-1Notes, the Class A-2 Notes, the Class B Notes and the Class C Notes has beenpaid in full and is subordinated to the payment on each Payment Date of theprincipal and interest due and payable on the Class A-1 Notes, the Class A-2Notes, the Class B Notes, the Class C Notes and other amounts in accordancewith the Priority of Payments and any payment of principal of the Class D Noteswhich is not paid, in accordance with the Priority of Payments, on any

 

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### Payment Date,shall not be considered “due and payable” solely for purposes of Section5.1(b) until the Payment Date on which such principal may be paid inaccordance with the Priority of Payments or all of the Class A Notes, the ClassB 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 toconstitute additions to principal, and other than the payment of principalpursuant to Section 9.6 or Section 9.7) may only occur after theprincipal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes and the Class D Notes has been paid in full and is subordinatedto the payment on each Payment Date of the principal and interest due andpayable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes and other amounts in accordance with thePriority of Payments and any payment of principal of the Class E Notes which isnot paid, in accordance with the Priority of Payments, on any Payment Date, shallnot 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 withthe 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 infull; *provided*,*further*,that the payment of principal of the Class F Notes (other than payment of theamounts constituting Class F Capitalized Interest, notwithstanding that suchClass F Capitalized Interest may be deemed to constitute additions toprincipal, and other than the payment of principal pursuant to Section 9.6or Section 9.7) may only occur after the principal of the Class A-1Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class DNotes and the Class E Notes has been paid in full and is subordinated to thepayment on each Payment Date of the principal and interest due and payable onthe 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 thePriority of Payments and any payment of principal of the Class F Notes which isnot paid, in accordance with the Priority of Payments, on any Payment Date,shall not be considered “due and payable” solely for purposes of Section5.1(b) until the Payment Date on which such principal may be paid inaccordance with the Priority of Payments or all of the Class A-1 Notes, theClass A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes andthe 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 toconstitute additions to principal, and other than the payment of principalpursuant to Section 9.6 or Section 9.7) may only occur after theprincipal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes, the Class E Notes and the Class F Notes hasbeen paid in full and is subordinated to the payment on each Payment Date ofthe principal and interest due and payable on the Class A-1 Notes, the ClassA-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes and other amounts in accordance with the Priority ofPayments 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 beconsidered “due and payable” solely for purposes of Section 5.1(b) untilthe Payment Date on which such principal may be paid in accordance with thePriority of Payments or all of the Class A-1 Notes, the Class A-2 Notes, theClass B Notes, the Class C Notes, the Class D Notes, the Class E Notes and theClass 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 CapitalizedInterest, notwithstanding that such Class H Capitalized Interest may be deemedto constitute additions to principal, and other than the payment of principalpursuant to Section 9.6 or Section 9.7) may only occur after theprincipal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes, the Class E Notes, the Class F Notes and theClass G Notes has been paid in full and is subordinated to the payment on eachPayment Date of the principal and interest due and payable on the Class A-1Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class DNotes, the Class E Notes, the Class F Notes, the Class G Notes and otheramounts in accordance with the Priority of Payments and any payment ofprincipal of the Class H Notes which is not paid, in accordance with thePriority of Payments, on any Payment Date, shall not be considered “due andpayable” solely for purposes of Section 5.1(b) until the Payment Date onwhich such principal may be paid in accordance with the Priority of Payments orall of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class CNotes, the Class D Notes, the Class E Notes, the Class F Notes and the Class GNotes 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 toconstitute additions to principal, and other than the payment of principalpursuant to Section 9.6 or Section 9.7) may only occur after theprincipal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes, the Class E Notes, the Class F Notes, theClass G Notes and the Class H Notes has been paid in full and is subordinatedto the payment on each Payment Date of the principal and interest due andpayable on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes, the Class E Notes, the Class F Notes, theClass G Notes, the Class H Notes and other amounts in accordance with thePriority of Payments and any payment of principal of the Class H Notes which isnot paid, in accordance with the Priority of Payments, on any Payment Date,shall not be considered “due and payable” solely for purposes of Section5.1(b) until the Payment Date on which such principal may be paid inaccordance with the Priority of Payments or all of the Class A-1 Notes, theClass A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, theClass E Notes, the Class F Notes, the Class G Notes and the Class H Notes havebeen 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 toconstitute additions to principal, and other than the payment of principalpursuant to Section 9.6 or Section 9.7) may only occur after theprincipal of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes, the Class E Notes, the Class F Notes, theClass G Notes, the Class H Notes and the Class J Notes has been paid in fulland is subordinated to the payment on each Payment Date of the principal andinterest due and payable on the Class A-1 Notes, the Class A-2 Notes, the ClassB Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class FNotes, the Class G Notes, the Class H Notes, the Class J Notes and otheramounts in accordance with the Priority of Payments and any payment ofprincipal of the Class H Notes which is not paid, in accordance with thePriority of Payments, on any Payment Date, shall not be considered “due andpayable” solely for purposes of Section 5.1(b) until the Payment Date onwhich such principal may be paid in accordance with the Priority of Payments orall of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class CNotes, the Class D Notes, the Class E Notes, the Class F Notes, the Class GNotes, the Class H Notes and the Class J Notes have been paid in full.

 

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

###  

### (p)      Payments inrespect of interest on and principal of the Notes shall be payable by wiretransfer in immediately available funds to a Dollar account maintained by theHolder or its nominee; *provided* thatthe Holder has provided wiring instructions to the Trustee on or before therelated Record Date or, if wire transfer cannot be effected, by a Dollar checkdrawn on a bank in the United States, or by a Dollar check mailed to the Holderat its address in the Notes Register. The Issuer expects that the Depository or its nominee, upon receipt ofany payment of principal or interest in respect of a Global Security held bythe Depository or its nominee, shall immediately credit the applicable AgentMembers’ accounts with payments in amounts proportionate to the respectivebeneficial interests in such Global Security as shown on the records of theDepository or its nominee.  The Issueralso expects that payments by Agent Members to owners of beneficial interestsin such Global Security held through Agent Members will be governed by standinginstructions and customary practices, as is now the case with securities heldfor the accounts of customers registered in the names of nominees for suchcustomers.  Such payments will be theresponsibility of the Agent Members. Upon final payment due on the Maturity of a Note, the Holder thereofshall present and surrender such Note at the Corporate Trust Office of theTrustee or at the office of the Paying Agent (outside of the United States ifthen required by applicable law in the case of a Certificated Note issued inexchange for a beneficial interest in the Regulation S Global Security) on orprior to such Maturity.  None of theIssuer, the Co-Issuer, the Trustee or the Paying Agent will have anyresponsibility or liability with respect to any records maintained by theHolder of any Note with respect to the beneficial holders thereof or paymentsmade thereby on account of beneficial interests held therein.  In the case where any final payment ofprincipal and interest is to be made on any Note (other than on the StatedMaturity thereof) the Issuer or, upon Issuer Request, the Trustee, in the nameand at the expense of the Issuer shall, not more than 30 nor fewer than fiveBusiness Days prior to the date on which such payment is to be made, mail tothe Persons entitled thereto at their addresses appearing on the NotesRegister, a notice which shall state the date on which such payment will bemade and the amount of such payment per $500,000 initial principal amount ofNotes and shall specify the place where such Notes may be presented andsurrendered for such payment.

###  

### (q)      Subject to theprovisions of Sections 2.7(a) through (l) hereof, Holders ofNotes as of the Record Date in respect of a Payment Date shall be entitled tothe interest accrued and payable in accordance with the Priority of Paymentsand principal payable in accordance with the Priority of Payments on such PaymentDate.  All such payments that are mailedor wired and returned to the Paying Agent shall be held for payment as hereinprovided at the office or agency of the Issuer and the Co-Issuer to bemaintained as provided in Section 7.2 (or returned to the Trustee).

 

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### (r)       Interest onany Note which is payable, and is punctually paid or duly provided for, on anyPayment Date shall be paid to the Person in whose name that Note (or one ormore predecessor Notes) is registered at the close of business on the RecordDate for such interest.

###  

### (s)      Payments ofprincipal to Holders of the Notes of each Class shall be made in the proportionthat the Aggregate Outstanding Amount of the Notes of such Class registered inthe name of each such Holder on such Record Date bears to the AggregateOutstanding Amount of all Notes of such Class on such Record Date.

###  

### (t)       Interestaccrued with respect to the Notes shall be calculated as described in theapplicable form of Note attached hereto.

###  

### (u)      All reductionsin the principal amount of a Note (or one or more predecessor Notes) effectedby payments of installments of principal made on any Payment Date, RedemptionDate or upon Maturity shall be binding upon all future Holders of such Note andof any Note issued upon the registration of transfer thereof or in exchangetherefor or in lieu thereof, whether or not such payment is noted on such Note.

###  

### (v)      Notwithstandinganything contained in this Indenture to the contrary, the obligations of theIssuer and the Co-Issuer under the Notes and this Indenture are non-recourseobligations of the Issuer and the Co-Issuer payable solely from the Assets andfollowing realization of the Assets, any claims of the Noteholders or theTrustee shall be extinguished.  Norecourse shall be had for the payment of any amount owing in respect of theNotes against any Officer, director, employee, shareholder, limited partner orincorporator of the Issuer, the Co-Issuer or any of their respective successorsor assigns for any amounts payable under the Notes or this Indenture.  It is understood that the foregoingprovisions of this paragraph shall not (i) prevent recourse to the Assets forthe sums due or to become due under any security, instrument or agreement whichis part of the Assets or (ii) constitute a waiver, release or discharge of anyindebtedness 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 orobligation in respect of the Notes shall be extinguished.  It is further understood that the foregoingprovisions of this paragraph shall not limit the right of any Person to namethe Issuer or the Co-Issuer as a party defendant in any Proceeding or in theexercise of any other remedy under the Notes or this Indenture, so long as nojudgment in the nature of a deficiency judgment or seeking personal liabilityshall be asked for or (if obtained) enforced against any such Person or entity.

###  

### (w)     Subject to theforegoing provisions of this Section 2.7, each Note delivered under thisIndenture and upon registration of transfer of or in exchange for or in lieu ofany other Note shall carry the rights of unpaid interest and principal thatwere carried by such other Note.

###  

### (x)      Notwithstandingany of the foregoing provisions with respect to payments of principal of andinterest on the Notes (but subject to Section 2.7(l)), if the Notes havebecome or been declared due and payable following an Event of Default and suchacceleration of Maturity and its consequences have not been rescinded andannulled and the provisions of

 

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### Section 5.5are not applicable, then payments of principal of and interest on such Notesshall be made in accordance with Section 5.7 hereof.

###  

### (y)      Payments inrespect of the Preferred Shares as contemplated by Sections 11.1(a)(i)(34) and 11.1(a)(ii)(17) shall be made by theTrustee to the Preferred Shares Paying Agent.

###  

## Section 2.8             PersonsDeemed Owners.

##  

The Issuer, the Co-Issuer, the Trustee, and any agentof the Issuer, the Co-Issuer or the Trustee may treat as the owner of a Notethe Person in whose name such Note is registered on the Notes Register on theapplicable Record Date for the purpose of receiving payments of principal ofand interest and other amounts on such Note and on any other date for all otherpurposes whatsoever (whether or not such Note is overdue), and none of theIssuer, the Co-Issuer or the Trustee nor any agent of the Issuer, the Co-Issueror the Trustee shall be affected by notice to the contrary; *provided*,*however*, thatthe Depository, or its nominee, shall be deemed the owner of the GlobalSecurities, and owners of beneficial interests in Global Securities will not beconsidered the owners of any Notes for the purpose of receiving notices.  With respect to the Preferred Shares, on anyPayment Date, the Trustee shall deliver to the Preferred Shares Paying Agentthe distributions thereon for distribution to the Preferred Shareholders.

 

## Section 2.9             Cancellation.

##  

All Notes surrendered for payment, registration oftransfer, exchange or redemption, or deemed lost or stolen, shall, ifsurrendered 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 orresold.  No Notes shall be authenticatedin lieu of or in exchange for any Notes canceled as provided in this Section2.9, except as expressly permitted by this Indenture.  All canceled Notes held by the Trustee shallbe destroyed or held by the Trustee in accordance with its standard retentionpolicy unless the Issuer and the Co-Issuer shall direct by an Issuer Order thatthey be returned to them.

 

## Section 2.10           GlobalSecurities; Temporary Notes.

##  

### (a)      In the eventthat the Depository notifies the Issuer and the Co-Issuer that it is unwillingor unable to continue as Depository for a Global Security or if at any timesuch Depository ceases to be a “Clearing Agency” registered under the ExchangeAct and a successor depository is not appointed by the Issuer within 90 days ofsuch notice, the Global Securities deposited with the Depository pursuant to Section2.2 hereof shall be transferred to the beneficial owners thereof subject tothe procedures and conditions set forth in this Section 2.10.

###  

### (b)      Any GlobalSecurity that is transferable to the beneficial owners thereof pursuant to Section2.10(a) above shall be surrendered by the Depository to the Trustee’sCorporate Trust Office together with necessary instruction for the registrationand 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 indefinitive registered form without interest coupons to the beneficial owners(or such owner’s nominee) holding the ownership

 

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### interestsin such Global Security.  Any suchtransfer shall be made, without charge, and the Trustee shall authenticate anddeliver, upon such transfer of each portion of such Global Security, an equalaggregate principal amount of Certificated Notes of the same Class andauthorized denominations.  Any CertificatedNotes delivered in exchange for an interest in a Global Security shall, exceptas otherwise provided by Section 2.5(f), bear the applicable legend setforth in Exhibit A or B, as applicable, and shall be subject tothe transfer restrictions referred to in such applicable legend.  The Holder of each such registered individualGlobal Security may transfer such Global Security by surrendering it at theCorporate Trust Office of the Trustee, or at the office of the Paying Agent orIrish Paying Agent.

###  

### (c)      Subject to theprovisions of Section 2.10(b) above, the registered Holder of a GlobalSecurity may grant proxies and otherwise authorize any Person, including AgentMembers and Persons that may hold interests through Agent Members, to take anyaction which a Holder is entitled to take under this Indenture or the Notes.

###  

### (d)      In the event ofthe occurrence of either of the events specified in Section 2.10(a)above, the Issuer and the Co-Issuer shall promptly make available to theTrustee a reasonable supply of Certificated Notes.

###  

Pending the preparation of Certificated Notes pursuantto this Section 2.10, the Issuer and the Co-Issuer may execute and, uponIssuer Order, the Trustee shall authenticate and deliver, temporary Class A-1Notes, Class A-2 Notes, Class B Notes, Class C Notes, Class D Notes, Class ENotes, Class F Notes Class G Notes or Class H Notes that are printed,lithographed, typewritten, mimeographed or otherwise reproduced, in anyauthorized denomination, substantially of the tenor of the Certificated Notesin lieu of which they are issued and with such appropriate insertions,omissions, substitutions and other variations as the Officers executing such CertificatedNotes may determine, as conclusively evidenced by their execution of such CertificatedNotes.

 

If temporary Certificated Notes are issued, the Issuerand the Co-Issuer shall cause permanent Certificated Notes to be preparedwithout unreasonable delay.  The CertificatedNotes shall be printed, lithographed, typewritten or otherwise reproduced, orprovided by any combination thereof, or in any other manner permitted by therules and regulations of any applicable notes exchange, all as determined bythe Officers executing such Certificated Notes. After the preparation of Certificated Notes, the temporary Notes shall beexchangeable for Certificated Notes upon surrender of the applicable temporaryClass 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 oragency maintained by the Issuer and the Co-Issuer for such purpose, withoutcharge to the Holder.  Upon surrender forcancellation 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, andthe Trustee shall authenticate and deliver, in exchange therefor the sameaggregate principal amount of Certificated Notes of authorizeddenominations.  Until so exchanged, thetemporary Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C Notes, ClassD Notes, Class E Notes, Class F Notes, Class G Notes or Class H Notes shall inall respects be entitled to the same benefits under this Indenture as CertificatedNotes.

 

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## Section 2.11           U.S.Tax Treatment of Notes.

##  

### (a)      Each of theIssuer and the Co-Issuer intends that, for U.S. federal income tax purposes,the Notes be treated as debt.  Eachprospective purchaser and any subsequent transferee of a Note or any interesttherein shall, by virtue of its purchase or other acquisition of such Note orinterest therein, be deemed to have agreed to treat such Note as debt for U.S.federal income tax purposes.

###  

### (b)      In the case ofthe 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 Holderof such Security so requests, the Issuer agrees to timely provide each Holderof such a Security with a PFIC Annual Information Statement, signed by theIssuer or its authorized representative, on an annual basis that contains thefollowing information as required under Treasury Regulation section1.1295-1(g)(i):

###  

#### (i)            the first and last days of the taxable year of the Issuer towhich the PFIC Annual Information Statement applies;

####  

#### (ii)           sufficient information to enable each Holder of suchSecurities to calculate its *pro rata* shareof the Issuer’s ordinary earnings and net capital gain for that taxable year;

####  

#### (iii)          theamount of cash and the fair market value of other property distributed ordeemed distributed to such Holder of such Securities during the taxable year ofthe Issuer to which the PFIC Annual Information Statement pertains; and

####  

#### (iv)          a statementthat the Issuer shall permit the Holder of any such Securities to inspect andcopy the Issuer’s permanent books of account, records and such other documentsas may be maintained by the Issuer to establish that the Issuer’s ordinaryearnings and net capital gain are computed in accordance with U.S. federalincome tax principles and to verify these amounts and the Holder’s *pro rata* interest thereof.

####  

Notwithstanding the foregoing, if the Holder of suchSecurity so requests and such Holder informs the Issuer or its authorizedrepresentative of the par value of each Class of Securities held by such Holderduring such taxable year (including, if any Securities were acquired or soldduring such taxable year, the date such Securities were acquired or sold, andpar value of such Securities), the Issuer or its authorized representative willinform such Holder of its *pro rata* shareof the Issuer’s ordinary earnings and net capital gain in a timely manner.

 

### (c)      The Issuer andthe Co-Issuer shall account for the aforementioned Securities and prepare anyreports to Noteholders and tax authorities, including without limitation thereport specified in paragraph (b) above, consistent with the intentionsexpressed in Sections 2.11(a) above.

###  

### (d)      Each Holder ofNotes 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), IRSForm W-8IMY (Certification of Foreign Intermediary Status), IRS Form W-9(Request for Taxpayer

 

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### IdentificationNumber and Certification), or IRS Form W-8ECI (Certification of Foreign Person’sClaim for Exemption from Withholding on Income Effectively Connected withConduct of a U.S. Trade or Business) or any successors to such IRS forms thatthe Issuer, the Co-Issuer or its agents may reasonable request and shall updateor replace such forms or certification in accordance with its terms or itssubsequent amendments.

###  

## Section 2.12           AuthenticatingAgents.

##  

Upon the request of the Issuer and the Co-Issuer, theTrustee shall, and if the Trustee so chooses the Trustee may pursuant to thisIndenture, appoint one or more Authenticating Agents with power to act on itsbehalf and subject to its direction in the authentication of Notes inconnection with issuance, transfers and exchanges under Sections 2.4, 2.5,2.6 and 8.5 hereof, as fully to all intents and purposes asthough each such Authenticating Agent had been expressly authorized by suchSections to authenticate such Notes.  Forall purposes of this Indenture, the authentication of Notes by anAuthenticating Agent pursuant to this Section 2.12 shall be deemed to bethe authentication of Notes by the Trustee.

 

Any corporation or banking association into which anyAuthenticating Agent may be merged or converted or with which it may beconsolidated, or any corporation or banking association resulting from anymerger, consolidation or conversion to which any Authenticating Agent shall bea party, or any corporation succeeding to the corporate trust business of anyAuthenticating Agent, shall be the successor of such Authenticating Agenthereunder, without the execution or filing of any further act on the part of theparties hereto or such Authenticating Agent or such successor corporation.  Any Authenticating Agent may at any timeresign by giving written notice of resignation to the Trustee, the Issuer andthe Co-Issuer.  The Trustee may at anytime terminate the agency of any Authenticating Agent by giving written noticeof termination to such Authenticating Agent, the Issuer and the Co-Issuer.  Upon receiving such notice of resignation orupon such a termination, the Trustee shall promptly appoint a successor AuthenticatingAgent and shall give written notice of such appointment to the Issuer.

 

The Trustee agrees to pay to each Authenticating Agentappointed by it from time to time reasonable compensation for its services, andreimbursement for its reasonable expenses relating thereto and the Trusteeshall be entitled to be reimbursed for such payments, subject to Section 6.7hereof.  The provisions of Sections2.9, 6.4 and 6.5 hereof shall be applicable to anyAuthenticating Agent.

 

## Section 2.13           ForcedSale on Failure to Comply with Restrictions.

##  

### (a)      Notwithstandinganything to the contrary elsewhere in this Indenture, any transfer of a Note orinterest 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 ofacquisition of the Note or interest therein shall be null and void and any suchproposed transfer of which the Issuer, the Co-Issuer or the Trustee shall havenotice may be disregarded by the Issuer, the Co-Issuer and the Trustee for allpurposes.

###  

### (b)      If the Issuerdetermines that any Holder of a Note has not satisfied the applicablerequirement described in Section 2.13(a) above (any such person a “Non-Permitted

 

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### Holder”), then the Issuershall promptly after discovery that such Person is a Non-Permitted Holder bythe Issuer, the Co-Issuer or the Trustee (and notice by the Trustee or theCo-Issuer to the Issuer, if either of them makes the discovery), send notice tosuch Non-Permitted Holder demanding that such Non-Permitted Holder transfer itsinterest to a Person that is not a Non-Permitted Holder within 30 days of thedate of such notice.  If suchNon-Permitted Holder fails to so transfer its Note or interest therein, theIssuer shall have the right, without further notice to the Non-PermittedHolder, to sell such Note or interest therein to a purchaser selected by theIssuer that is not a Non-Permitted Holder on such terms as the Issuer maychoose.  The Issuer, or the Trusteeacting on behalf of the Issuer, may select the purchaser by soliciting one ormore bids from one or more brokers or other market professionals that regularlydeal in securities similar to the Note, and selling such Note to the highestsuch bidder.  However, the Issuer or theTrustee may select a purchaser by any other means determined by it in its solediscretion.  The Holder of such Note, theNon-Permitted Holder and each other Person in the chain of title from theHolder to the Non-Permitted Holder, by its acceptance of an interest in theNote, agrees to cooperate with the Issuer and the Trustee to effectsuch transfers.  The proceeds of suchsale, net of any commissions, expenses and taxes due in connection with suchsale shall be remitted to the Non-Permitted Holder.  The terms and conditions of any sale underthis Section 2.13(b) shall be determined in the sole discretion of theIssuer, and the Issuer shall not be liable to any Person having an interest inthe Note sold as a result of any such sale of exercise of such discretion.

###  

# **ARTICLE 3**

 

# **CONDITIONSPRECEDENT; PLEDGED OBLIGATIONS**

 

## Section 3.1             GeneralProvisions.

##  

The Notes to be issued on the Closing Date shall beexecuted by the Issuer and the Co-Issuer upon compliance with Section 3.2and shall be delivered to the Trustee for authentication and thereupon the sameshall be authenticated and delivered by the Trustee upon Issuer Request andupon receipt by the Trustee of the items described below:

 

### (a)      an Officer’sCertificate of the Issuer (i) evidencing the authorization by Board Resolutionof the execution and delivery of this Indenture, the Collateral ManagementAgreement, each Hedge Agreement and related documents, the execution,authentication and delivery of the Notes and specifying the Stated Maturity ofeach Class of Notes, the principal amount of each Class of Notes and theapplicable Note Interest Rate of each Class of Notes to be authenticated anddelivered, and (ii) certifying that (A) the attached copy of the BoardResolution is a true and complete copy thereof, (B) such resolutions have notbeen 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 theoffices and have the signatures indicated thereon and (4) at least $105,000,000of proceeds on account of the sale on the Closing Date of the Preferred Sharesshall have been received;

###  

### (b)      an Officer’sCertificate of the Co-Issuer (i) evidencing the authorization by BoardResolution of the execution and delivery of this Indenture and relateddocuments, the execution, authentication and delivery of the Notes andspecifying the Stated Maturity of

 

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### each Class ofNotes, the principal amount of each Class of Notes and the applicable NoteInterest 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 andcomplete copy thereof, (B) such resolutions have not been rescinded and are infull force and effect on and as of the Closing Date and (C) the Officersauthorized to execute and deliver such documents hold the offices and have thesignatures indicated thereon;

###  

### (c)      (i) either (A)certificates of the Issuer or other official document evidencing the dueauthorization, approval or consent of any governmental body or bodies, at thetime having jurisdiction in the premises, together with an Opinion of Counselof the Issuer that no other authorization, approval or consent of anygovernmental body is required for the valid issuance of such Notes, or (B) anOpinion of Counsel of the Issuer reasonably satisfactory in form and substanceto the Trustee that no such authorization, approval or consent of anygovernmental body is required for the valid issuance of such Notes except asmay have been given; and

###  

#### (ii)      either (A)certificates of the Co-Issuer or other official document evidencing the dueauthorization, approval or consent of any governmental body or bodies, at thetime having jurisdiction in the premises, together with an Opinion of Counselof the Co-Issuer that no other authorization, approval or consent of anygovernmental body is required for the valid issuance of such Notes, or (B) anOpinion of Counsel of the Co-Issuer reasonably satisfactory in form andsubstance to the Trustee that no such authorization, approval or consent of anygovernmental body is required for the valid issuance of such Notes except asmay have been given;

####  

### (d)      opinions ofCadwalader, Wickersham & Taft LLP, special U.S. counsel to the Issuer, theCo-Issuer and the Collateral Manager (which opinions may be limited to the lawsof the State of New York and the federal law of the United States and mayassume, among other things, the correctness of the representations andwarranties made or deemed made by the owners of Notes pursuant to Sections2.5(g) and (i)) dated the Closing Date, substantially in the form ofExhibit F attached hereto;

###  

### (e)      an opinion of Maples and Calder, Cayman Islands counsel tothe Issuer (which opinion shall be limited to the laws of the Cayman Islands),dated the Closing Date, substantially in the form of Exhibit G attachedhereto;

###  

### (f)       an opinion of counsel to each Hedge Counterparty, dated theClosing Date, substantially in the form of Exhibit H attached hereto;

###  

### (g)      opinions ofClifford Chance, (i) special tax counsel to Gramercy Investment regarding itsqualification and taxation as a REIT, substantially in the form of Exhibit Kattached hereto, (ii) special counsel to Gramercy Investment, as the Seller,dated the Closing Date, substantially in the form of Exhibit I attachedhereto and (iii) special counsel to the Advancing Agent, dated the ClosingDate, substantially in the form of Exhibit I attached hereto;

 

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### (h)      an Officer’sCertificate, given on behalf of the Issuer and without personal liability,stating that the Issuer is not in Default under this Indenture and that theissuance of the Notes will not result in a breach of any of the terms,conditions or provisions of, or constitute a Default under, the GoverningDocuments of the Issuer, any indenture or other agreement or instrument towhich the Issuer is a party or by which it is bound, or any order of any courtor administrative agency entered in any Proceeding to which the Issuer is aparty or by which it may be bound or to which it may be subject; that allconditions precedent provided in this Indenture relating to the authenticationand delivery of the Notes applied for and all conditions precedent provided inthe Preferred Shares Paying Agency Agreement relating to the issuance by theIssuer of the Preferred Shares have been complied with;

###  

### (i)       an Officer’sCertificate stating that the Co-Issuer is not in Default under this Indentureand that the issuance of the Securities will not result in a breach of any ofthe terms, conditions or provisions of, or constitute a Default under, theGoverning Documents of the Co-Issuer, any indenture or other agreement orinstrument to which the Co-Issuer is a party or by which it is bound, or anyorder of any court or administrative agency entered in any Proceeding to whichthe Co-Issuer is a party or by which it may be bound or to which it may besubject; that all conditions precedent provided in this Indenture relating tothe authentication and delivery of the Notes applied for have been compliedwith; and that all expenses due or accrued with respect to the offering orrelating to actions taken on or in connection with the Closing Date have beenpaid;

###  

### (j)       an executed counterpart of the initial Collateral DebtSecurities Purchase Agreement and the Collateral Management Agreement;

###  

### (k)      an executed copy of each Hedge Agreement;

###  

### (l)       an executed counterpart of the Preferred Shares PayingAgency Agreement;

###  

### (m)     an opinion of counsel to the Trustee, dated the ClosingDate, 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 PrincipalBalance and the Purchase Price) with respect to each Collateral Debt Securityset forth on the Schedule of Closing Date Collateral Debt Securities attachedhereto as Schedule E by reference to such sources as shall be specifiedtherein and (ii) specifying the procedures undertaken by the accountants toreview data and computations relating to the foregoing;

###  

### (o)      an Officer’sCertificate from the Collateral Manager (i) confirming that each CollateralDebt Security set forth on the Schedule E attached hereto meets theEligibility Criteria and that Schedule E correctly lists the CollateralDebt 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 filingoffice in the District of Columbia of a financing statement executed on behalfof the Issuer relating to the perfection of the lien of this Indenture;

###  

### (q)      an Issuer Orderexecuted by the Issuer and the Co-Issuer directing the Trustee to (i)authenticate the Notes specified therein, in the amounts set forth therein andregistered in the name(s) set forth therein and (ii) deliver the authenticatedNotes as directed by the Issuer and the Co-Issuer; and

###  

### (r)       such other documents as the Trustee may reasonably require.

###  

## Section 3.2             Securityfor Notes.

##  

Prior to the issuance of the Notes on the ClosingDate, the Issuer shall cause the following conditions to be satisfied:

 

### (a)      Grant ofSecurity Interest; Delivery of Collateral Debt Securities.  The Grant pursuant to the Granting clauses ofthis Indenture of all of the Issuer’s right, title and interest in and to theAssets and the transfer of all Collateral Debt Securities acquired inconnection therewith purchased by the Issuer on the Closing Date (as set forthin the Schedule of Closing Date Collateral Debt Securities) to the Trustee,without recourse (except as expressly provided in each applicable CollateralDebt Security Purchase Agreement), in the manner provided in Section 3.3(a)and the crediting to the Custodial Account by the Custodial SecuritiesIntermediary of such Collateral Debt Securities shall have occurred;

###  

### (b)      Certificateof the Issuer.  A certificate of anAuthorized Officer of the Issuer given on behalf of the Issuer and withoutpersonal liability, dated as of the Closing Date, delivered to the Trustee, tothe effect that, in the case of each Collateral Debt Security pledged to theTrustee for inclusion in the Assets on the Closing Date and immediately priorto the delivery thereof on the Closing Date:

###  

#### (i)            theIssuer is the owner of such Collateral Debt Security free and clear of anyliens, claims or encumbrances of any nature whatsoever except for those whichare being released on the Closing Date;

####  

#### (ii)           the Issuerhas acquired its ownership in such Collateral Debt Security in good faithwithout notice of any adverse claim, except as described in paragraph (i)above;

####  

#### (iii)          theIssuer has not assigned, pledged or otherwise encumbered any interest in suchCollateral Debt Security (or, if any such interest has been assigned, pledgedor otherwise encumbered, it has been released) other than interests Grantedpursuant to this Indenture;

####  

#### (iv)          the Underlying Instrument with respect to such CollateralDebt Security does not prohibit the Issuer from Granting a security interest inand assigning and pledging such Collateral Debt Security to the Trustee;

 

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#### (v)           the information set forth with respect to such CollateralDebt Security in the Schedule of Closing Date Collateral Debt Securities iscorrect;

####  

#### (vi)          the Collateral Debt Securities included in the Assetssatisfy the requirements of the definition of Eligibility Criteria and therequirements of Section 3.2(a); and

####  

#### (vii)         theGrant pursuant to the Granting Clauses of this Indenture shall result in afirst priority security interest in favor of the Trustee for the benefit of theHolders 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 theTrustee for inclusion in the Assets on the Closing Date.

####  

### (c)      RatingLetters.  The Trustee’s receipt of aletter signed by each Rating Agency and confirming that (i) the Class A-1 Noteshave been rated “Aaa” by Moody’s and “AAA” by S&P and Fitch, (ii) the ClassA-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” byS&P and Fitch, (iv) the Class C Notes have been rated at least “A1” byMoody’s and “A+” by S&P and Fitch, (v) the Class D Notes have been rated atleast “A2” by Moody’s and “A” by S&P and Fitch, (vi) the Class E Notes havebeen rated at least “A3” by Moody’s and “A-” by S&P and Fitch, (vii) theClass F Notes have been rated at least “Baa1” by Moody’s and “BBB+” by S&Pand Fitch, (viii) the Class G Notes have been rated at least “Baa2” by Moody’sand “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 havebeen rated at least “Ba2” by Moody’s and “BB” by S&P and Fitch and (xi) theClass K Notes have been rated at least “B2” by Moody’s and “B” by S&P andFitch and that such ratings are in full force and effect on the Closing Date.

###  

### (d)      Accounts.  Evidence of theestablishment of the Payment Account, the Collection Account, the InterestCollection Account, the Principal Collection Account, the Unused ProceedsAccount, the Delayed Funding Obligations Account, the Expense Account, eachHedge Collateral Account, each Hedge Termination Account, the Preferred SharesDistribution Account and the Custodial Account.

###  

### (e)      Deposit toExpense Account.  On the ClosingDate, the Issuer shall deposit into the Expense Account from the gross proceedsof the offering of the Securities, approximately $11,234,432.

###  

### (f)       Deposit to Delayed Funding Obligations Account.  On the Closing Date, the Issuer or the Sellershall deposit into the Delayed Funding Obligations Account approximately $2,218,133,which, in the aggregate is sufficient to fulfill the maximum fundingobligations under all Delayed Draw Term Loans included in the InitialCollateral Debt Securities.

###  

### (g)      Deposit toUnused Proceeds Account.  On theClosing Date, the Issuer shall deposit the Initial Deposit with the Trustee inan amount equal to approximately $190,718,894.

 

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### (h)      Issuance ofPreferred Shares.  The Issuer shallhave delivered to the Trustee evidence that the Preferred Shares have been, orcontemporaneously with the issuance of the Notes will be, (1) issued by theIssuer and (2) acquired in their entirety by QRS Corp.

###  

## Section 3.3             Transferof Pledged Obligations.

##  

### (a)      Wells FargoBank, National Association is hereby appointed as Securities Intermediary (insuch capacity, the “Custodial Securities Intermediary”) to hold allPledged Obligations delivered to it in physical form at its office in Minneapolis,Minnesota.  Any successor to suchSecurities Intermediary shall be a U.S. state or national bank or trust companythat is not an Affiliate of the Issuer or the Co-Issuer and has capital andsurplus of at least $100,000,000. Subject to the limited right to relocate Pledged Obligations set forthin Section 7.5(b), the Custodial Securities Intermediary, as aSecurities Intermediary, shall hold all Collateral Debt Securities in theCustodial Account and Eligible Investments and other investments purchased inaccordance with this Indenture in the respective Accounts in which the fundsused to purchase such investments are held in accordance with Article 10,and, in respect of each Account (other than the Payment Account), the Trusteeshall have entered into an agreement with the Securities Intermediary (the “SecuritiesAccounts Control Agreement”) providing, *inter alia*,that the establishment and maintenance of such Account will be governed by alaw satisfactory to the Issuer, the Trustee and the Custodial SecuritiesIntermediary.  To the maximum extentfeasible, Pledged Obligations shall be transferred to the Trustee as SecurityEntitlements in the manner set forth in clause (i) below.  In the event that the measures set forth inclause (i) below cannot be taken as to any Pledged Obligations, such PledgedObligation 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 perfectedand otherwise evidenced as follows:

###  

#### (i)            in thecase of such Pledged Obligations consisting of Security Entitlements by (A) theIssuer causing the Custodial Securities Intermediary, in accordance with theSecurities Accounts Control Agreement, to indicate by book entry that aFinancial Asset has been credited to the Custodial Account and (B) the Issuercausing the Custodial Securities Intermediary to agree pursuant to theSecurities Accounts Control Agreement that it will comply with Entitlement Ordersoriginated by the Trustee with respect to each such Security Entitlementwithout further consent by the Issuer;

####  

#### (ii)           in thecase of Pledged Obligations that are “uncertificated securities” (as such termis defined in the UCC) to the extent that any such uncertificated securities donot constitute Financial Assets forming the basis of Security Entitlements bythe Trustee pursuant to clause (i) (the “Uncertificated Securities”), bythe Issuer (A)  causing the issuer(s) ofsuch Uncertificated Securities to register on their respective books theTrustee as the registered owner thereof upon original issue or transfer thereofor (B) causing another Person, other than a Securities Intermediary, either tobecome the registered owner of such Uncertificated Securities on behalf of theTrustee, or such Person having previously become the registered owner, toacknowledge that it holds such Uncertificated Securities for the Trustee;

 

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#### (iii)          inthe case of Pledged Obligations consisting of Certificated Securities inregistered form to the extent that any such Certificated Securities do notconstitute Financial Assets forming the basis of Security Entitlements acquiredby the Trustee pursuant to clause (i) (the “Registered Securities”), bythe Issuer (A) causing (1) the Trustee to obtain possession of such RegisteredSecurities in the State of Minnesota or (2) another Person, other than aSecurities Intermediary, either to acquire possession of such RegisteredSecurities on behalf of the Trustee, or having previously acquired suchRegistered Securities, in either case, in the State of Minnesota to acknowledgethat it holds such Registered Securities for the Trustee and (B) causing (1)the endorsement of such Registered Securities to the Trustee by an effectiveendorsement; or (2) the registration of such Registered Securities in the nameof the Trustee by the issuer thereof upon its original issue or registration oftransfer;

####  

#### (iv)          in the caseof Pledged Obligations consisting of Certificated Securities in bearer form tothe extent that any such Certificated Securities do not constitute FinancialAssets forming the basis of Security Entitlements acquired by the Trusteepursuant to clause (i) (the “Bearer Securities”), by the Issuer causing(A) the Trustee to obtain possession of such Bearer Securities in the State ofMinnesota or (B) another Person, other than a Securities Intermediary, eitherto acquire possession of such Bearer Securities on behalf of the Trustee or, havingpreviously acquired possession of such Bearer Securities, in either case, inthe State of Minnesota to acknowledge that it holds such Bearer Securities forthe Trustee;

####  

#### (v)           in thecase of Pledged Obligations that consist of Money or Instruments (the “Minnesota Collateral”),to the extent that any such Minnesota Collateral does not constitute aFinancial Asset forming the basis of a Security Entitlement acquired by theTrustee pursuant to clause (i), by the Issuer causing (A) the Trustee toacquire possession of such Minnesota Collateral in the State of Minnesota or(B) another Person (other than the Issuer or a Person controlling, controlledby, or under common control with, the Issuer) (1) to (x) take possession ofsuch Minnesota Collateral in the State of Minnesota and (y) authenticate arecord acknowledging that it holds such possession for the benefit of theTrustee or (2) to (x) authenticate a record acknowledging that it will holdpossession 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 caseof Pledged Obligations that consist of UCC Accounts or General Intangibles (“AccountsReceivable”), by the Issuer (A) notifying, or causing the notification of,the account debtors (as such term is defined in Section 9-102(a) of theUCC) for such Accounts Receivable of the security interest of the Trustee insuch Accounts Receivable and causing the Securities Intermediary to credit suchAccounts Receivable to the Custodial Account and to treat such AccountsReceivable 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 securityinterest in such Accounts Receivable under the UCC as in effect at the time oftransfer of such Accounts Receivable to the Trustee hereunder, filing orcausing the filing of a UCC financing statement that encompasses such AccountsReceivable with the Recorder of Deeds of the District of Columbia and such otheroffices as applicable; and

 

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#### (vii)         tothe maximum extent reasonably possible, in the case of any Loans, PreferredEquity Securities or Participations that are not evidenced by Instruments,Certificated Securities or Uncertificated Securities, by the Issuer (A) takingall steps necessary (including obtaining any necessary consents to the transferof the Loan, Participation or Preferred Equity Security, as applicable) to makethe Custodial Securities Intermediary the registered owner thereof, (B) causingthe Custodial Securities Intermediary to credit such Loans, Participations orPreferred Equity Securities, as applicable, to the Custodial Account and totreat such Loans, Participations or Preferred Equity Securities, as applicable,as Financial Assets within the meaning of Article 8 of the UCC and (C) to theextent that doing so would be effective to perfect a security interest in suchLoans, Participations or Preferred Equity Securities, as applicable, under theUCC as in effect at the time of transfer of such Loans, Participations orPreferred Equity Securities to the Trustee hereunder, filing or causing thefiling of a UCC financing statement that encompasses such Loans, Participationsor Preferred Equity Securities, as applicable, with the Recorder of Deeds ofthe District of Columbia and such other offices as applicable.

####  

### (b)      The Issuerhereby authorizes the filing of UCC financing statements describing as thecollateral covered thereby “all of the debtor’s personal property and assets,”or words to that effect, notwithstanding that such wording may be broader inscope than the Assets described in this Indenture.

###  

### (c)      Withoutlimiting the foregoing, the Issuer and the Trustee on behalf of the Bank agree,and the Bank shall cause the Custodial Securities Intermediary, to take suchdifferent or additional action as the Trustee may reasonably request in orderto maintain the perfection and priority of the security interest of the Trusteein the event of any change in applicable law or regulation, including Articles8 and 9 of the UCC and Treasury Regulations governing transfers of interests inGovernment Items (it being understood that the Trustee shall be entitled torely upon an Opinion of Counsel, including an Opinion of Counsel delivered inaccordance with Section 3.1(d), as to the need to file any financingstatements or continuation statements, the dates by which such filings arerequired to be made and the jurisdictions in which such filings are required tobe made).

###  

### (d)      Withoutlimiting any of the foregoing,

###  

#### (i)            inconnection with each Grant of a Collateral Debt Security hereunder, the Issuershall deliver (or cause to be delivered by the applicable Seller) to theCustodial Securities Intermediary (A) the original of any note (or a copy ofsuch note together with a lost note affidavit), certificate or other instrumentconstituting or evidencing such Collateral Debt Security and any otherUnderlying Instrument related to such Collateral Debt Security the delivery ofwhich is necessary in order to perfect the security interest of the Trustee insuch Collateral Debt Security granted pursuant to this Indenture and (B) copiesof the other Underlying Instruments then in possession of the Issuer;

####  

#### (ii)           from time to time upon the request of the Trustee orCollateral Manager, the Issuer shall deliver (or cause to be delivered) to theCustodial Securities Intermediary any Underlying Instrument in the possessionof the Issuer and not previously delivered

 

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#### hereunder(including originals of Underlying Instruments not previously required to bedelivered as originals) and as to which the Trustee or Collateral Manager, asapplicable, shall have reasonably determined to be necessary or appropriate forthe administration of such Collateral Debt Security hereunder or under theCollateral Management Agreement or for the protection of the security interestof the Trustee under this Indenture;

####  

#### (iii)          inconnection with any delivery of documents to the Custodial SecuritiesIntermediary pursuant to clauses (i) and (ii) above, the Trustee shall deliverto the Collateral Manager, on behalf of the Issuer, a Trust Receipt in the formof Exhibit K acknowledging the receipt of such documents by theCustodial Securities Intermediary and that it is holding such documents subjectto 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 CollateralManager of a duly completed Request for Release in the form of Exhibit Lhereto, release to the Collateral Manager such of the Underlying Instrumentsthen in its custody as the Collateral Manager reasonably so requests.  By submission of any such Request forRelease, the Collateral Manager shall be deemed to have represented andwarranted that it has determined, in accordance with the Collateral ManagerServicing Standard, that the requested release isnecessary for one or more of the purposes described in clause (ii) above.  The Collateral Manager shall return to theCustodial Securities Intermediary each Underlying Instrument released fromcustody 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 thisIndenture, of the related Collateral Debt Security that is consummated withinsuch 20-day period).  Notwithstanding theforegoing provisions of this clause (iv), (A) any note, certificate or otherinstrument evidencing a Pledged Collateral Debt Security shall be released onlyfor the purpose of (1) a sale, exchange or other disposition of such PledgedCollateral Debt Security that is permitted in accordance with the terms of thisIndenture or (2) presentation, collection, renewal or registration of transferof such Collateral Debt Security and (B) the Custodial Securities Intermediarymay refuse to honor any Request for Release following the occurrence of anEvent of Default under this Indenture.

####  

### (e)      As of theClosing Date (with respect to the Assets) and each date on which an Asset isacquired (only with respect to the Asset so acquired) the Issuer represents andwarrants as follows:

###  

#### (i)            thisIndenture creates a valid and continuing security interest (as defined in theUCC) in the Assets in favor of the Trustee for the benefit of the Noteholdersand each Hedge Counterparty, which security interest is prior to all otherliens, and is enforceable as such against creditors of and purchasers from theIssuer;

####  

#### (ii)           the Issuer owns and has good and marketable title to suchAssets free and clear of any lien, claim or encumbrance of any Person;

 

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#### (iii)          inthe case of each Asset, the Issuer has acquired its ownership in such Asset ingood faith without notice of any adverse claim as defined in Section8-102(a)(1) of the UCC as in effect on the date hereof;

####  

#### (iv)          other thanthe security interest granted to the Trustee for the benefit of the Noteholdersand each Hedge Counterparty pursuant to this Indenture, the Issuer has not,pledged, assigned, sold, granted a security interest in, or otherwise conveyedany of the Assets;

####  

#### (v)           the Issuerhas not authorized the filing of and is not aware of any financing statementsagainst the Issuer that include a description of collateral covering the Assetsother than any financing statement relating to the security interest granted tothe Trustee for the benefit of the Noteholders and each Hedge Counterpartyhereunder or that has been terminated; the Issuer is not aware of any judgmentor Pension Benefit Guarantee Corporation lien and tax lien filings against theIssuer;

####  

#### (vi)          the Issuer has received all consents and approvals requiredby the terms of each Asset and the Underlying Instruments to grant to theTrustee its interest and rights in such Asset hereunder;

####  

#### (vii)         theIssuer has caused or will have caused, within 10 days, the filing of allappropriate financing statements in the proper filing office in the appropriatejurisdictions under applicable law in order to perfect the security interest inthe Assets granted to the Trustee for the benefit of the Noteholders and eachHedge Counterparty hereunder;

####  

#### (viii)        each Asset is an Instrument, a General Intangible or aCertificated Security or Uncertificated Security or has been and will have beencredited to a Securities Account;

####  

#### (ix)           the Custodial Securities Intermediary has agreed to treatall assets credited to the Securities Account as Financial Assets;

####  

#### (x)            theIssuer has delivered a fully executed Securities Accounts Control Agreementpursuant to which the Custodial Securities Intermediary has agreed to complywith all instructions originated by the Trustee relating to the CustodialAccount without further consent of the Issuer; the Custodial Account is not in the name of any person other than theIssuer or the Trustee;  the Issuer hasnot consented to the Securities Intermediary of the Custodial Account to complywith Entitlement Orders of any person other than the Trustee;

####  

#### (xi)           (A) alloriginal executed copies of each promissory note or other writings thatconstitute or evidence any pledged obligation that constitutes Instruments havebeen delivered to the Custodial Securities Intermediary for the benefit of theTrustee, (B) the Issuer has received a written acknowledgement from theCustodial Securities Intermediary that the Custodial Securities Intermediary isacting solely as agent of the Trustee and (C) none of the promissory notes orother writings that constitute or evidence such collateral has any marks ornotations indicating that they have been pledged, assigned or otherwiseconveyed 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 FundingObligations Account, each Hedge Termination Account, each Hedge CollateralAccount, the Expense Account and the Payment Account (collectively, the “DepositAccounts”) constitute “deposit accounts” within the meaning of the UCC, (B)the Issuer has taken all steps necessary to cause the Trustee to become thecustomer and account holder of the Deposit Accounts, (C) other than the securityinterest granted to the Trustee pursuant to this Indenture, the Issuer has notpledged, assigned, sold, granted a security interest in, or otherwise conveyedany of the Deposit Accounts, and (D) the Deposit Accounts are not in the nameof any person other than the Issuer or the Trustee.  The Issuer has not consented to the bankmaintaining the Deposit Accounts to comply with the instructions of any personother than the Trustee; and

####  

#### (xiii)         TheIssuer has established procedures such that any Eligible Investments purchasedwith funds withdrawn from the Deposit Accounts will be either (i) credited to aSecurities Account over which the Trustee will have a first priority perfectedsecurity interest, (ii) purchased in the name of the Trustee, or (iii) held inanother manner sufficient to establish the Trustee’s first priority perfectedsecurity interest over such Eligible Investments.

####  

### (f)       The Trusteeshall only invest in Eligible Investments which the applicable CustodialSecurities Intermediary agrees to credit to the applicable account.  To the extent any Eligible Investment shallnot be delivered to the Trustee by causing the Custodial SecuritiesIntermediary to create a Security Entitlement in the Securities Account infavor of the Trustee, the Issuer shall deliver an Opinion of Counsel to theTrustee to the effect that any other delivery will effect a first prioritysecurity interest in favor of the Trustee in such Eligible Instrument.

###  

# **ARTICLE 4**

 

# **SATISFACTION AND DISCHARGE**

 

## Section 4.1             Satisfactionand Discharge of Indenture.

##  

This Indenture shall be discharged and shall cease tobe of further effect with respect to the Assets securing the Notes and theIssuer’s obligations under each Hedge Agreement except as to (i) rights ofregistration of transfer and exchange, (ii) substitution of mutilated, defaced,destroyed, lost or stolen Notes, (iii) rights of Noteholders to receivepayments of principal thereof and interest thereon as provided herein, (iv) therights, obligations and immunities of the Trustee on their behalf hereunder,(v) the rights of Noteholders as beneficiaries hereof with respect to theproperty deposited with the Trustee on their behalf and payable to all or anyof them; and the Trustee, on demand of and at the expense of the Issuer, shallexecute proper instruments acknowledging satisfaction and discharge of thisIndenture, when:

 

### (a)      either:

###  

 

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#### (i)            all Notestheretofore authenticated and delivered (other than (A) Notes which havebeen mutilated, defaced, destroyed, lost or stolen and which have been replacedor paid as provided in Section 2.6 and (B) Notes for whosepayment Money has theretofore irrevocably been deposited in trust andthereafter 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 Notesnot theretofore delivered to the Trustee for cancellation (A) have becomedue and payable, or (B) will become due and payable at their StatedMaturity within one year, or (C) are to be called for redemption pursuantto Section 9.1 or Section 9.2 under an arrangementsatisfactory to the Trustee for the giving of notice of redemption by theIssuer and the Co-Issuer pursuant to Section 9.4 and the Issuer orthe 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 trustfor such purpose, Cash or non-callable direct obligations of the United Statesof America; *provided*that the obligations areentitled to the full faith and credit of the United States of America or aredebt obligations which are rated “Aaa” by Moody’s, “AAA” by Fitch and “AAA” byS&P in an amount sufficient, as verified by a firm of certified publicaccountants which are nationally recognized, to pay and discharge the entireindebtedness (including, in the case of a redemption pursuant to Section 9.1or Section 9.2, the Redemption Price) on such Notes not theretoforedelivered to the Trustee for cancellation, for principal and interest to thedate 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 ineach case in respect of the Notes, subject to the Priority of Payments); *provided*,*further*, thatany such deposit of funds with the Trustee in satisfaction of this Indentureshall be subject to the Rating Agency Condition; *provided,however*, this subsection (ii) shall not apply if anelection to act in accordance with the provisions of Section 5.5(a) shallhave been made and not rescinded;

####  

### (b)      (i) theIssuer has paid or caused to be paid or provided for (to the satisfaction ofthe Person entitled thereto) all other sums payable hereunder and under theCollateral Management Agreement, Preferred Shares Paying Agency Agreement andthe Company Administration Agreement, and (ii) all Hedge Agreements thenin effect have been terminated and Issuer has paid all amounts, includingpayments due and payable in connection with such termination and has paid allother outstanding amounts, including any outstanding payments due and payablefor any previously terminated Hedge Agreement.

###  

### (c)      Each of theIssuer and the Co-Issuer has delivered to the Trustee an Officer’s Certificateand an Opinion of Counsel, each stating that all conditions precedent hereinprovided for relating to the satisfaction and discharge of this Indenture have beencomplied with.

###  

Notwithstanding the satisfaction and discharge of thisIndenture, the rights and obligations of the Issuer, the Co-Issuer, theTrustee, and, if applicable, the Noteholders, as the case may be, under Sections2.7, 4.2, 5.4(d), 5.9, 5.18, 6.7 and 7.3 hereof shall survive.

 

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## Section 4.2             Applicationof Trust Money.

##  

All Monies deposited with the Trustee pursuant to Section4.1 shall be held in trust and applied by it in accordance with theprovisions of the Notes and this Indenture to the payment of the principal andinterest, either directly or through the Paying Agent, as the Trustee maydetermine, to the Person entitled thereto of the principal and interest forwhose payment such Money has been deposited with the Trustee; but such Moneyneed not be segregated from other funds except to the extent required herein orwhen commingling of funds is prohibited by law.

 

## Section 4.3             Repaymentof Monies Held by Paying Agent.

##  

In connection with the satisfaction and discharge ofthis Indenture with respect to the Notes, all Monies then held by the PayingAgent other than the Trustee under the provisions of this Indenture shall, upondemand of the Issuer and the Co-Issuer, be paid to the Trustee to be held andapplied pursuant to Section 7.3 hereof and, in the case of Moniespayable on the Notes, in accordance with the Priority of Payments and thereuponsuch Paying Agent shall be released from all further liability with respect tosuch Monies.

 

# **ARTICLE 5**

 

# **REMEDIES**

 

## Section 5.1             Eventsof Default.

##  

“Event of Default,” wherever used herein, means anyone of the following events (whatever the reason for such Event of Default andwhether it shall be voluntary or involuntary or be effected by operation of lawor pursuant to any judgment, decree or order of any court or any order, rule orregulation of any administrative or governmental body):

 

### (a)      a default inthe 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 areOutstanding, solely for the purposes of this Section 5.1(a), no interestshall 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 Section5.1(a), no interest shall be “due and payable” on any Class D Notes, ClassE Notes, Class F Notes, Class G Notes, Class H Notes, Class J Notes or Class KNotes, (c) if any Class D Notes are Outstanding, solely for the purposes ofthis Section 5.1(a), no interest shall be “due and payable” on any ClassE Notes, Class F Notes, Class G Notes, Class H Notes, Class J Notes or Class KNotes, (d) if any Class E Notes are Outstanding, solely for the purposes ofthis Section 5.1(a), no interest shall be “due and payable” on any ClassF Notes, Class G Notes, Class H Notes, Class J Notes or Class K Notes, (e) ifany Class F Notes are Outstanding, solely for the purposes of this Section5.1(a), no interest shall be “due and payable” on any Class G Notes, ClassH 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 “dueand payable” on any Class H Notes, Class J Notes or Class K Notes, (g) if anyClass H Notes are outstanding, solely for purposes of this Section 5.1(a),no

 

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### interest shall be “dueand payable” on any Class J Notes or Class K Notes, (h) if any Class J Notesare Outstanding, solely for purposes for this Section 5.1(a), nointerest shall be “due and payable” on any Class K Notes and (g) if any Class KNotes 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 ofPayments), which default continues for a period of three Business Days or, inthe case of a default in payment due to an administrative error or omission bythe Trustee or Paying Agent, which default continues for five Business Days;

###  

### (b)      a default inthe payment of principal (or the related Redemption Price, if applicable) ofany Class A-1 Note when the same becomes due and payable, at its StatedMaturity or any Redemption Date, or if there are no Class A-1 Notes Outstandinga default in the payment of principal (or the related Redemption Price, ifapplicable) of any Class A-2 Note when the same becomes due and payable, at itsStated Maturity or any Redemption Date, or if there are no Class A-2 NotesOutstanding, a default in the payment of principal (or the related RedemptionPrice, if applicable) of any Class B Note when the same becomes due and payableat its Stated Maturity or any Redemption Date, or if there are no Class B NotesOutstanding, a default in the payment of principal (or the related RedemptionPrice, if applicable) of any Class C Note (plus any Class C CapitalizedInterest) when the same becomes due and payable at its Stated Maturity or anyRedemption Date, or if there are no Class C Notes Outstanding, a default in thepayment of principal (or the related Redemption Price, if applicable) of anyClass D Note (plus any Class D Capitalized Interest) when the same becomes dueand payable at its Stated Maturity or any Redemption Date, or if there are noClass D Notes Outstanding, a default in the payment of principal (or therelated Redemption Price, if applicable) of any Class E Note (including anyClass E Capitalized Interest) when the same becomes due and payable at itsStated Maturity or any Redemption Date, or if there are no Class E NotesOutstanding, a default in the payment of principal (or the related RedemptionPrice, if applicable) of any Class F Note (including Class F CapitalizedInterest) when the same becomes due and payable at its Stated Maturity or anyRedemption Date, or if there are no Class F Notes Outstanding, a default in thepayment of principal (or the related Redemption Price, if applicable) of anyClass G Note (including any Class G Capitalized Interest) when the same becomesdue and payable at its Stated Maturity or any Redemption Date, or if there areno Class G Notes Outstanding, a default in the payment of principal (or therelated Redemption Price, if applicable) of any Class H Note (including Class HCapitalized Interest) when the same becomes due and payable at its StatedMaturity 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, ifapplicable) of any Class J Note (including Class J Capitalized Interest) whenthe 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, ifapplicable) of any Class K Note (including Class K Capitalized Interest) whenthe 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 oromission by the Trustee or the Paying Agent, such default continues for aperiod of five Business Days);

###  

### (c)      the failure onany Payment Date to disburse amounts available in the Payment Account inaccordance 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), whichfailure continues

 

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### fora period of three Business Days or, in the case of a failure to disburse suchamounts due to an administrative error or omission by the Trustee or PayingAgent, which failure continues for five Business Days;

###  

### (d)      either the Issuer, the Co-Issuer or the pool of Assetsbecomes an investment company required to be registered under the InvestmentCompany Act;

###  

### (e)      a default inthe performance, or breach, of any other covenant or other agreement (otherthan the covenant to meet or improve the Collateral Quality Tests or theCoverage Tests) of the Issuer or the Co-Issuer hereunder or any representationor warranty of the Issuer or the Co-Issuer hereunder or in any certificate orother writing delivered pursuant hereto or in connection herewith proves to beincorrect in any material respect when made, and the continuation of such defaultor breach for a period of 30 days (or, if such default, breach or failure hasan adverse effect on the validity, perfection or priority of the securityinterest granted hereunder, 15 days) after either the Issuer, the Co-Issuer orthe Collateral Manager has actual knowledge thereof or after notice thereof tothe Issuer, the Co-Issuer and the Collateral Manager by the Trustee or to theIssuer, the Co-Issuer, the Collateral Manager and the Trustee by Holders of atleast 25% of the Aggregate Outstanding Amount of the Controlling Class; *provided* that a default in the performance by the Issuer ofthe obligations imposed on it by this Indenture in connection with the entryinto a replacement Hedge Agreement upon the early termination of a HedgeAgreement shall not be an Event of Default if the Rating Agency Condition hasbeen satisfied;

###  

### (f)       the entry of adecree or order by a court having competent jurisdiction adjudging the Issueror the Co-Issuer as bankrupt or insolvent, or approving as properly filed a petitionseeking reorganization, arrangement, adjustment or composition of or in respectof the Issuer or the Co-Issuer under the Bankruptcy Code or any otherapplicable law, or appointing a receiver, liquidator, assignee, or sequestrator(or other similar official) of the Issuer or the Co-Issuer or of anysubstantial part of its property, respectively, or ordering the winding up orliquidation of its affairs, and the continuance of any such decree or orderunstayed and in effect for a period of 60 consecutive days;

###  

### (g)      the institutionby the Issuer or the Co-Issuer of proceedings to be adjudicated as bankrupt orinsolvent, or the consent by it to the institution of bankruptcy or insolvencyproceedings against it, or the filing by it of a petition or answer or consentseeking reorganization or relief under the Bankruptcy Code or any other similarapplicable law, or the consent by it to the filing of any such petition or tothe appointment of a receiver, liquidator, assignee, trustee or sequestrator(or other similar official) of the Issuer or the Co-Issuer or of anysubstantial part of its property, respectively, or the making by it of anassignment for the benefit of creditors, or the admission by it in writing ofits inability to pay its debts generally as they become due, or the taking ofany action by the Issuer in furtherance of any such action;

###  

### (h)      one or morefinal judgments being rendered against the Issuer or the Co-Issuer whichexceed, in the aggregate, U.S. $1,000,000 (or such lesser amount as any RatingAgency may specify) and which remain unstayed, undischarged and unsatisfied for30 days after such judgment(s) becomes nonappealable, unless adequate fundshave been reserved or

 

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### setaside for the payment thereof, and unless (except as otherwise specified inwriting by each Rating Agency) the Rating Agency Condition shall have beensatisfied; or

###  

### (i)       the Issuerloses its status as a qualified REIT subsidiary (within the meaning of Section856(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 theUnited States experienced in such matters to the effect that, notwithstandingthe Issuer’s loss of qualified REIT subsidiary status, the Issuer is not, andhas not been, an association (or publicly traded partnership) taxable as acorporation, or is not, and has not been, otherwise subject to U.S. federalincome tax on a net basis and the Noteholders are not otherwise materiallyadversely affected by the loss of qualified REIT subsidiary status or (2)receives an amount from the Preferred Shareholders sufficient to discharge infull the amounts then due and unpaid on the Notes and amounts and expensesdescribed in clauses (1) through (5), (31), (32) and (33) under Section11.1(a)(i) in accordance with the Priority of Payments or (B) all Classesof the Notes are subject to a Tax Redemption announced by the Issuer incompliance with this Indenture, and such redemption has not been rescinded.

###  

Upon becoming aware of the occurrence of an Event ofDefault, 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 arelisted on the Irish Stock Exchange, the Irish Paying Agent in writing.  If the Collateral Manager has actualknowledge of the occurrence of an Event of Default, the Collateral Managershall promptly notify, in writing, the Trustee. Upon such notification from the Collateral Manager, the Trustee shallpromptly notify the Noteholders, each Rating Agency and each Hedge Counterpartyof the occurrence of such Event of Default.

 

## Section 5.2             Accelerationof Maturity; Rescission and Annulment.

##  

### (a)      If an Event ofDefault shall occur and be continuing (other than the Events of Defaultspecified 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 eachClass of Notes voting as a separate Class (excluding in each case any Notesheld by the Collateral Manager, any of its Affiliates or any funds (other thanthe Issuer) managed by the Collateral Manager or its Affiliates)) declare theprincipal of and accrued and unpaid interest on all the Notes to be immediatelydue and payable (and any such acceleration shall automatically terminate theReinvestment Period).  If an Event ofDefault described in Section 5.1(f), Section 5.1(g) or Section 5.1(i)above occurs, such an acceleration shall occurautomatically and without any further action. If the Notes are accelerated, payments shall be made in the order andpriority set forth in Section 11.1(a)(i) and Section 11.1(a)(ii)hereof.

###  

### (b)      At any timeafter such a declaration of acceleration of Maturity of the Notes has been madeand before a judgment or decree for payment of the Money due has been obtainedby the Trustee as hereinafter provided in this Article 5, a Majority ofeach and every Class of Notes (voting as a separate Class), by written noticeto the Issuer and the Co-Issuer, the Trustee and each Hedge Counterparty, mayrescind and annul such declaration and its consequences if:

 

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#### (i)            the Issuer or the Co-Issuer has paid or deposited with theTrustee a sum sufficient to pay:

####  

###### (A)     all unpaid installments of interest on and principal of theNotes that would be due and payable hereunder if the Event of Default givingrise to such acceleration had not occurred;

######  

###### (B)     to the extentthat payment of such interest is lawful, interest on the Class C CapitalizedInterest at the Class C Rate, interest on the Class D Capitalized Interest atthe Class D Rate, interest on the Class E Capitalized Interest at the Class ERate, 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 onthe Class H Capitalized Interest at the Class H Rate, interest on the Class JCapitalized Interest at the Class J Rate and interest on the Class K CapitalizedInterest at the Class K Rate;

######  

###### (C)     all unpaid taxesof the Issuer and the Co-Issuer, Company Administrative Expenses and other sumspaid or advanced by or otherwise due and payable to the Trustee hereunder;

######  

###### (D)     with respect toeach Hedge Agreement, any amount then due and payable thereunder; and

######  

###### (E)      with respect tothe Collateral Management Agreement, any Senior Collateral Management Fee thendue and any Company Administrative Expense due and payable to the CollateralManager thereunder.

######  

#### (ii)           if anyHedge Agreement has been reduced or terminated, the Rating Agency Condition hasbeen satisfied with respect to such reduction or termination; and

####  

#### (iii)          theTrustee has determined that all Events of Default of which it has actualknowledge, other than the non-payment of the interest and principal on theNotes that have become due solely by such acceleration, have been cured and aMajority of the Controlling Class, by written notice to the Trustee and eachHedge Counterparty has agreed with such determination (which agreement shallnot be unreasonably withheld or delayed) or waived as provided in Section5.14.

####  

At any such time that the Trustee shall rescind andannul such declaration and its consequences as permitted hereinabove, theTrustee shall preserve the Assets in accordance with the provisions of Section5.5 with respect to the Event of Default that gave rise to suchdeclaration; *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 Section5.2, notwithstanding any previous rescission and annulment of a declarationof acceleration pursuant to this paragraph.

 

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No such rescission shall affect any subsequent Defaultor impair any right consequent thereon. In addition, no such rescission shall affect any Hedge Agreement if ithas been terminated in accordance with its terms.

 

### (c)      Subject to Sections5.4 and 5.5, a Majority of the Controlling Class shall have theright to direct the Trustee in the conduct of any proceedings for any remedyavailable 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 suchdirection; (iii) the Trustee has been provided with an indemnity or reasonablesecurity satisfactory to it (and the Trustee need not take any action that itdetermines might involve it in liability unless it has received such indemnityor security against such liability); and (iv) any direction to undertake a saleof the Assets may be made only as described in Section 5.17.  The Trustee shall provide written notice ofthe receipt of such direction to each Hedge Counterparty promptly after receiptthereof.

###  

### (d)      As security forthe payment by the Issuer of the compensation and expenses of the Trustee andany sums the Trustee may be entitled to receive as indemnification by theIssuer, the Issuer hereby grants the Trustee a lien on the Assets, which lienis senior to the lien of the Noteholders. The Trustee’s lien shall be subjectto the Priority of Payments and exercisable by the Trustee only if the Noteshave been declared due and payable following an Event of Default and suchacceleration has not been rescinded or annulled.

###  

### (e)      A Majority ofthe Controlling Class, may, prior to the time ajudgment or decree for the payment of money due has been obtained by theTrustee, waive any past Default on behalf of the holders of all the Notes andits consequences in accordance with Section 5.14.

###  

### (f)       In determiningwhether the holders of the requisite percentage of Notes have given anydirection, notice or consent hereunder, (i) Notes owned by the Issuer, theCo-Issuer or any Affiliate thereof shall be disregarded and deemed not to beoutstanding and (ii) in relation to (x) any amendment or other modification of,or assignment or termination of, any of the express rights or obligations ofthe Collateral Manager under the Collateral Management Agreement or thisIndenture (including the exercise of any rights to remove the CollateralManager or terminate the Collateral Management Agreement or approve or objectto a replacement for the Collateral Manager except as specifically provided inthe Collateral Management Agreement with respect to the termination of theCollateral Manager without cause and with respect to the replacement of theCollateral Manager) and (y) the exercise by the Noteholders of their right, inconnection with certain Events of Default, to accelerate amounts due under theNotes, Notes owned by the Collateral Manager or any of its Affiliates, or byany accounts managed by them, shall be disregarded and deemed not to be outstanding.  The Collateral Manager and its Affiliatesshall 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             Collectionof Indebtedness and Suits for Enforcement by Trustee.

##  

The Issuer covenants that if a Default shall occur inrespect of the payment of any interest on any Class A-1 Note, the payment ofprincipal on any Class A-1 Note (but only after interest with respect to theClass 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 onany Class A-2 Note (but only after interest with respect to the Class A-1 Notesand any amounts payable pursuant to Section 11.1(a) having a higherpriority have been paid in full), the payment of principal on any Class A-2Note (but only after interest with respect to the Class A-2 Notes and anyamounts payable pursuant to Section 11.1(a) having a higher priorityhave been paid in full), the payment of interest on any Class B Note (but onlyafter interest with respect to the Class A-1 Notes and the Class A-2 Notes andany amounts payable pursuant to Section 11.1(a) having a higher priorityhave been paid in full), the payment of principal on any Class B Note (but onlyafter interest and principal with respect to the Class A-1 Notes and the ClassA-2 Notes and interest with respect to the Class B Notes and any amountspayable pursuant to Section 11.1(a) having a higher priority have beenpaid in full), the payment of interest on any Class C Note (but only afterinterest with respect to the Class A-1 Notes, the Class A-2 Notes and the ClassB Notes and any amounts payable pursuant to Section 11.1(a) having ahigher priority have been paid in full), the payment of principal on any ClassC Note (but only after interest and principal with respect to the Class A-1Notes, the Class A-2 Notes and the Class B Notes and interest with respect tothe 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 onany 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 amountspayable pursuant to Section 11.1(a) having a higher priority have beenpaid in full) or the payment of principal on any Class D Note (but only afterinterest and principal with respect to the Class A-1 Notes, the Class A-2Notes, the Class B Notes and the Class C Notes and interest with respect to theClass D Notes and any amounts payable pursuant to Section 11.1(a) havinga higher priority have been paid in full), the payment of interest on any ClassE Note (but only after interest with respect to the Class A-1 Notes, the ClassA-2 Notes, the Class B Notes, the Class C Notes and the Class D Notes and anyamounts payable pursuant to Section 11.1(a) having a higher priorityhave been paid in full), the payment of principal on any Class E Note (but onlyafter interest and principal with respect to the Class A-1 Notes, the Class A-2Notes, the Class B Notes, the Class C Notes and the Class D Notes and interestwith respect to the Class E Notes and any amounts payable pursuant to Section11.1(a) having a higher priority have been paid in full), the payment ofinterest on any Class F Note (but only after interest with respect to the ClassA-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the ClassD Notes and the Class E Notes and any amounts payable pursuant to Section11.1(a) having a higher priority have been paid in full), the payment ofprincipal on any Class F Note (but only after interest and principal withrespect to the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes and the Class E Notes and interest withrespect to the Class F Notes and any amounts payable pursuant to Section11.1(a) having a higher priority have been paid in full), the payment ofinterest on any Class G Note (but only after interest with respect to the ClassA-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the ClassD Notes, the Class E Notes and the Class F Notes and any amounts payablepursuant to Section 11.1(a) having a higher priority have been paid infull), the payment of principal on any Class G Note (but only after interestand principal with respect to the Class A-1 Notes, the Class A-2 Notes, theClass 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 withrespect to the Class G Notes and any amounts payable pursuant to Section11.1(a) having a higher priority have been paid in full), the payment ofinterest on any Class H Note (but only after interest with respect to the ClassA-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the ClassD Notes, the Class E Notes, the Class F Notes and the Class G Notes and anyamounts payable pursuant to Section 11.1(a) having a higher priorityhave been paid in full), the payment of principal on any Class H Note (but onlyafter interest and principal with respect to the Class A-1 Notes, the Class A-2Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes and the Class G Notes and interest with respect to theClass H Notes and any amounts payable pursuant to Section 11.1(a) havinga higher priority have been paid in full), the payment of interest on any ClassJ Note (but only after interest with respect to the Class A-1 Notes, the ClassA-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes and the Class H Notes and anyamounts payable pursuant to Section 11.1(a) having a higher priorityhave been paid in full), the payment of principal on any Class J Note (but onlyafter interest and principal with respect to the Class A-1 Notes, the Class A-2Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes and the Class H Notes and interestwith respect to the Class J Notes and any amounts payable pursuant to Section11.1(a) having a higher priority have been paid in full), the payment ofinterest on any Class K Note (but only after interest with respect to the ClassA-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the ClassD Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class HNotes and the Class J Notes and any amounts payable pursuant to Section11.1(a) having a higher priority have been paid in full) or the payment ofprincipal on any Class K Note (but only after interest and principal withrespect to the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes, the Class E Notes, the Class F Notes, theClass G Notes, the Class H Notes and the Class J Notes and interest withrespect to the Class K Notes and any amounts payable pursuant to Section11.1(a) having a higher priority have been paid in full), the Issuer andCo-Issuer shall, upon demand of the Trustee or any affected Noteholder, pay tothe Trustee, for the benefit of the Holder of such Note, the whole amount, ifany, then due and payable on such Note for principal and interest or otherpayment with interest on the overdue principal and, to the extent that paymentsof such interest shall be legally enforceable, upon overdue installments ofinterest, at the applicable interest rate and, in addition thereto, suchfurther amount as shall be sufficient to cover the costs and expenses ofcollection, including the reasonable compensation, expenses, disbursements andadvances of the Trustee and such Noteholder and their respective agents and counsel.

 

If the Issuer or the Co-Issuer fails to pay suchamounts forthwith upon such demand, the Trustee, in its own name and as Trusteeof an express trust, may institute a Proceeding for the collection of the sumsso due and unpaid, and may prosecute such Proceeding to judgment or finaldecree, and may enforce the same against the Issuer and the Co-Issuer or anyother obligor upon the Notes and collect the Monies adjudged or decreed to bepayable in the manner provided by law out of the Assets.

 

If an Event of Default occurs and is continuing, theTrustee may in its discretion proceed to protect and enforce its rights and therights of the Noteholders by such appropriate Proceedings as the Trustee shalldeem most effectual (if no direction by a Majority of the Controlling Class isreceived 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 suchProceedings as the Trustee may be directed by Majority of the ControllingClass, to protect and enforce any such rights, whether for the specificenforcement of any covenant or agreement in this Indenture or in aid of theexercise of any power granted herein, or to enforce any other proper remedy or legalor equitable right vested in the Trustee by this Indenture or by law.

 

In case there shall be pending Proceedings relative tothe Issuer or the Co-Issuer under the Bankruptcy Code or any other applicablebankruptcy, insolvency or other similar law, or in case a receiver, assignee ortrustee in bankruptcy or reorganization, liquidator, sequestrator or similarofficial shall have been appointed for or taken possession of the Issuer or theCo-Issuer, or their respective property, or in case of any other comparableProceedings relative to the Issuer or the Co-Issuer, or the creditors orproperty of the Issuer or the Co-Issuer, the Trustee, regardless of whether theprincipal of any Notes shall then be due and payable as therein expressed or bydeclaration or otherwise and regardless of whether the Trustee shall have madeany demand pursuant to the provisions of this Section 5.3, shall beentitled and empowered, by intervention in such Proceedings or otherwise:

 

### (a)      to file andprove a claim or claims for the whole amount of principal and interest owingand unpaid in respect of the Notes and to file such other papers or documentsas may be necessary or advisable in order to have the claims of the Trustee(including any claim for reasonable compensation to the Trustee and eachpredecessor Trustee, and their respective agents, attorneys and counsel, andfor reimbursement of all expenses and liabilities incurred, and all advancesmade, by the Trustee and each predecessor Trustee, except as a result ofnegligence or bad faith) and of the Noteholders allowed in any Proceedingsrelative to the Issuer, the Co-Issuer or other obligor upon the Notes or to thecreditors or property of the Issuer, the Co-Issuer or such other obligor;

###  

### (b)      unlessprohibited by applicable law and regulations, to vote on behalf of the Holdersof the Notes in any election of a trustee or a standby trustee in arrangement,reorganization, liquidation or other bankruptcy or insolvency proceedings orPerson performing similar functions in comparable Proceedings; and

###  

### (c)      to collect andreceive any Monies or other property payable to or deliverable on any suchclaims, and to distribute all amounts received with respect to the claims ofthe Noteholders and of the Trustee on their behalf; and any trustee, receiveror liquidator, custodian or other similar official is hereby authorized by eachof the Noteholders to make payments to the Trustee, and, in the event that theTrustee shall consent to the making of payments directly to the Noteholders, topay to the Trustee such amounts as shall be sufficient to cover reasonablecompensation to the Trustee, each predecessor Trustee and their respectiveagents, attorneys and counsel, and all other reasonable expenses andliabilities incurred, and all advances made, by the Trustee and eachpredecessor Trustee except as a result of its own negligence or bad faith.

###  

Nothing herein contained shall be deemed to authorizethe Trustee to authorize or consent to or vote for or accept or adopt on behalfof any Noteholder, any plan of reorganization, arrangement, adjustment orcomposition affecting the Notes or the rights of any Holder thereof, or toauthorize the Trustee to vote in respect of the claim of any Noteholder in anysuch

 

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Proceeding except, as aforesaid, to vote for theelection of a trustee in bankruptcy or similar Person.

 

All rights of action and of asserting claims underthis Indenture, or under any of the Notes, may be enforced by the Trusteewithout the possession of any of the Notes or the production thereof in anytrial or other Proceedings relative thereto, and any action or Proceedingsinstituted by the Trustee shall be brought in its own name as trustee of anexpress trust, and any recovery of judgment, shall be applied as set forth in Section5.7.

 

In any Proceedings brought by the Trustee on behalf ofthe Holders, the Trustee shall be held to represent all the Holders of theNotes.

 

Notwithstanding anything in this Section 5.3 tothe contrary, the Trustee may not sell or liquidate the Assets or instituteProceedings in furtherance thereof pursuant to this Section 5.3 unlessthe conditions specified in Section 5.5(a) are met.

 

## Section 5.4             Remedies.

##  

### (a)      If an Event ofDefault shall have occurred and be continuing, and the Notes have been declareddue and payable and such declaration and its consequences have not beenrescinded and annulled, the Issuer and the Co-Issuer agree that the Trusteemay, after notice to the Noteholders and each Hedge Counterparty, and shall,upon direction by a Majority of the Controlling Class, to the extent permittedby applicable law, exercise one or more of the following rights, privileges andremedies:

###  

#### (i)            instituteProceedings for the collection of all amounts then payable on the Notes orotherwise payable under this Indenture, whether by declaration or otherwise,enforce any judgment obtained, and collect from the Assets any Monies adjudgeddue;

####  

#### (ii)           sell allor a portion of the Assets or rights of interest therein, at one or more publicor private sales called and conducted in any manner permitted by law and inaccordance with Section 5.17 hereof;

####  

#### (iii)          institute Proceedings from time to time for the complete orpartial foreclosure of this Indenture with respect to the Assets;

####  

#### (iv)          exercise any remedies of a secured party under the UCC andtake any other appropriate action to protect and enforce the rights andremedies of the Trustee and the Holders of the Notes hereunder; and

####  

#### (v)           exercise any other rights and remedies that may be availableat law or in equity;

####  

*provided*,*however*,that the Trustee may not sell or liquidate the Assets or institute Proceedingsin furtherance thereof pursuant to this Section 5.4 unless either of theconditions specified in Section 5.5(a) is met.

 

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The Trustee may, but need not, obtain and rely upon anopinion of an Independent investment banking firm of national reputation withdemonstrated capabilities in structuring and distributing notes or certificatessimilar to the Notes as to the feasibility of any action proposed to be takenin accordance with this Section 5.4 and as to the sufficiency of theproceeds and other amounts receivable with respect to the Assets to make therequired payments of principal of and interest on the Notes and other amountspayable hereunder, which opinion shall be conclusive evidence as to suchfeasibility or sufficiency.

 

### (b)      If an Event ofDefault as described in Section 5.1(e) hereof shall have occurred and becontinuing, the Trustee may, and at the request of the Holders of not less than25% of the Aggregate Outstanding Amount of the Controlling Class shall,institute a Proceeding solely to compel performance of the covenant oragreement or to cure the representation or warranty, the breach of which gaverise to the Event of Default under such Section, and enforce any equitabledecree or order arising from such Proceeding.

###  

### (c)      Upon any Sale,whether made under the power of sale hereby given or by virtue of judicialproceedings, any Noteholder or Noteholders or Preferred Shareholder orPreferred Shareholders or the Collateral Manager or any of its Affiliates maybid for and purchase the Assets or any part thereof and, upon compliance withthe terms of Sale, may hold, retain, possess or dispose of such property in itsor their own absolute right without accountability; and any purchaser at anysuch Sale may, in paying the purchase Money, turn in any of the Notes in lieuof Cash equal to the amount which shall, upon distribution of the net proceedsof such sale, be payable on the Notes so turned in by such Holder (taking intoaccount the Class of such Notes).  SuchNotes, in case the amounts so payable thereon shall be less than the amount duethereon, shall be returned to the Holders thereof after proper notation hasbeen made thereon to show partial payment.

###  

Upon any Sale, whether made under the power of salehereby given or by virtue of judicial proceedings, the receipt of the Trusteeor of the Officer making a sale under judicial proceedings shall be asufficient discharge to the purchaser or purchasers at any sale for its ortheir purchase Money and such purchaser or purchasers shall not be obliged tosee to the application thereof.

 

Any such Sale, whether under any power of sale herebygiven or by virtue of judicial proceedings, shall bind the Issuer, theCo-Issuer, the Trustee, the Noteholders and the Preferred Shareholders, shalloperate to divest all right, title and interest whatsoever, either at law or inequity, of each of them in and to the property sold, and shall be a perpetualbar, both at law and in equity, against each of them and their successors andassigns, and against any and all Persons claiming through or under them.

 

### (d)      Notwithstandingany other provision of this Indenture, the Trustee may not, prior to the datewhich is one year and one day, or, if longer, the applicable preference periodthen in effect after the payment in full of all Notes, institute against, orjoin any other Person in instituting against, the Issuer or the Co-Issuer anybankruptcy, reorganization, arrangement, insolvency, moratorium or liquidationproceedings, or other proceedings under federal or State bankruptcy or similarlaws.  Nothing in this Section 5.4shall preclude, or be deemed to stop, the Trustee (i) from taking any actionprior to the expiration of the

 

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### aforementioned oneyear and one day (or, if longer, the applicable preference period then ineffect) period in (A) any case or proceeding voluntarily filed or commenced bythe Issuer or the Co-Issuer or (B) any involuntary insolvency proceeding filedor commenced by a Person other than the Trustee, or (ii) from commencingagainst the Issuer or the Co-Issuer or any of their respective properties anylegal action which is not a bankruptcy, reorganization, arrangement,insolvency, moratorium or liquidation proceeding.

###  

## Section 5.5             Preservationof Assets.

##  

### (a)      Notwithstandinganything to the contrary herein, if an Event of Default shall have occurred andbe continuing when any of the Notes are Outstanding, the Trustee shall retainthe Assets securing the Notes, collect and cause the collection of the proceedsthereof and make and apply all payments and deposits and maintain all accountsin respect of the Assets and the Notes in accordance with the Priority ofPayments and the provisions of Articles 10, 12 and 13unless either:

###  

#### (i)            theTrustee, pursuant to Section 5.5(c), determines that the anticipatedproceeds of a sale or liquidation of the Assets (after deducting the reasonableexpenses of such sale or liquidation) would be sufficient to discharge in fullthe amounts then due and unpaid on the Notes, Company Administrative Expensesdue 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 CollateralManagement 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 HedgeCounterparty, including without limitation, any payments (however described)due and payable by the Issuer under each Hedge Agreement upon a termination ofsuch Hedge Agreement (including any interest that may accrue thereon) andamounts due and payable to the Advancing Agent and the Trustee, in its capacityas Backup Advancing Agent, in respect of unreimbursed Interest Advances andReimbursement Interest, and a Majority of the Controlling Class agrees withsuch determination; or

####  

#### (ii)           theHolders of a Majority of the Aggregate Outstanding Amount of each Class ofNotes (each voting as a separate Class) (and each Hedge Counterparty, unlesseach shall be paid in full the amounts due and unpaid, including, withoutlimitation, any payments (however described) due and payable by the Issuerunder each Hedge Agreement upon a termination of such Hedge Agreement(including any interest that may accrue thereon)), direct, subject to the provisionsof this Indenture, the sale and liquidation of the Assets.

####  

The Trustee shall give written notice of the retentionof the Assets to the Issuer, the Co-Issuer, the Collateral Manager, each HedgeCounterparty and the Rating Agencies.  Solong as such Event of Default is continuing, any such retention pursuant tothis Section 5.5(a) may be rescinded at any time when the conditionsspecified in clause (i) or (ii) above exist.

 

### (b)      Nothingcontained in Section 5.5(a) shall be construed to require the Trustee tosell the Assets securing the Notes if the conditions set forth in Section5.5(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 theNotes if prohibited by applicable law.

###  

### (c)      In determiningwhether the condition specified in Section 5.5(a)(i) exists, theCollateral Manager shall obtain bid prices with respect to each PledgedCollateral Debt Security from two dealers (Independent of the CollateralManager and any of its Affiliates) at the time making a market in such PledgedCollateral Debt Securities (or, if there is only one market maker, then theCollateral Manager shall obtain a bid price from that market maker or, if nomarket maker, from a pricing service). The Collateral Manager shall compute the anticipated proceeds of sale orliquidation on the basis of the lowest of such bid prices for each such PledgedCollateral Debt Security.  For thepurposes of determining issues relating to the Market Value of the PledgedCollateral Debt Security and the execution of a sale or other liquidationthereof, the Trustee may, but need not, retain at the expense of the Issuer andrely on an opinion of an Independent investment banking firm of nationalreputation in connection with a determination (notwithstanding that suchopinion will not be the basis for such determination) as to whether thecondition specified in Section 5.5(a)(i) exists.

###  

The Trustee shall promptly deliver to the Noteholdersand each Hedge Counterparty a report stating the results of any determinationrequired to be made pursuant to Section 5.5(a)(i).  The Trustee shall make the determinationsrequired by Section 5.5(a)(i) within 30 daysafter an Event of Default if requested by a Majority of the Controlling Class.

 

## Section 5.6             TrusteeMay Enforce Claims Without Possession of Notes.

##  

All rights of action and claims under this Indentureor under any of the Notes may be prosecuted and enforced by the Trustee withoutthe possession of any of the Notes or the production thereof in any trial orother Proceeding relating thereto, and any such action or Proceeding institutedby the Trustee shall be brought in its own name as trustee of an express trust.  Any recovery of judgment in respect of theNotes shall be applied as set forth in Section 5.7 hereof.

 

In any Proceedings brought by the Trustee (and anyProceedings involving the interpretation of any provision of this Indenture towhich the Trustee shall be a party), in respect of the Notes, the Trustee shallbe held to represent all the Holders of the Notes.

 

## Section 5.7             Applicationof Money Collected.

##  

Any Money collected by the Trustee with respect to theNotes pursuant to this Article 5 and any Money that may then be held orthereafter received by the Trustee with respect to the Notes hereunder shall beapplied subject to Section 13.1 hereof and in accordance with thePriority of Payments set forth in Section 11.1 hereof, at the date ordates fixed by the Trustee.

 

## Section 5.8             Limitationon Suits.

##  

No Holder of any Notes shall have any right toinstitute any Proceedings, judicial or otherwise, with respect to thisIndenture, or for the appointment of a receiver or trustee, or for any otherremedy hereunder, unless:

 

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### (a)      such Holder has previously given to the Trustee writtennotice of an Event of Default;

###  

### (b)      except asotherwise provided in Section 5.9 hereof, the Holders of at least 25% ofthe then Aggregate Outstanding Amount of the Controlling Class shall have madewritten request to the Trustee to institute Proceedings in respect of suchEvent of Default in its own name as Trustee hereunder and such Holder orHolders have offered to the Trustee reasonable indemnity against the costs,expenses and liabilities to be incurred in compliance with such request;

###  

### (c)      the Trustee for30 days after its receipt of such notice, request and offer of indemnity hasfailed to institute any such Proceeding; and

###  

### (d)      no directioninconsistent with such written request has been given to the Trustee duringsuch 30 day period by a Majority of the Controlling Class; it being understoodand intended that no one or more Holders of Notes shall have any right in anymanner whatever by virtue of, or by availing of, any provision of thisIndenture to affect, disturb or prejudice the rights of any other Holders ofNotes of the same Class or to obtain or to seek to obtain priority orpreference over any other Holders of the Notes of the same Class or to enforceany right under this Indenture, except in the manner herein provided and forthe equal and ratable benefit of all the Holders of Notes of the same Classsubject to and in accordance with Section 13.1 hereof and the Priorityof Payments.

###  

In the event the Trustee shall receive conflicting orinconsistent requests and indemnity from two or more groups of Holders of theControlling Class, each representing less than a Majority of the ControllingClass, 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             UnconditionalRights 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 Classof Note shall have the right, which is absolute and unconditional, to receivepayment of the principal of and interest on such Class of Note as suchprincipal, interest and other amounts become due and payable in accordance withthe Priority of Payments and Section 13.1, and, subject to theprovisions of Section 5.4(d) and Section 5.8 to instituteProceedings for the enforcement of any such payment, and such right shall notbe impaired without the consent of such Holder; *provided*,*however*, that the right of such Holder to instituteproceedings for the enforcement of any such payment shall not be subject to the25% threshold requirement set forth in Section 5.8(b).

 

## Section 5.10           Restorationof Rights and Remedies.

##  

If the Trustee or any Noteholder has instituted anyProceeding to enforce any right or remedy under this Indenture and suchProceeding has been discontinued or abandoned for any reason, or has beendetermined adversely to the Trustee, or to such Noteholder, then and in everysuch case the Issuer, the Co-Issuer, the Trustee, and the Noteholder shall,subject to any determination in such Proceeding, be restored severally andrespectively to their former positions

 

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hereunder,and thereafter all rights and remedies of the Trustee, and the Noteholdersshall continue as though no such Proceeding had been instituted.

 

## Section 5.11           Rightsand Remedies Cumulative.

##  

No right or remedy herein conferred upon or reservedto the Trustee, or to the Noteholders, is intended to be exclusive of any otherright or remedy, and every right and remedy shall, to the extent permitted bylaw, be cumulative and in addition to every other right and remedy givenhereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right orremedy hereunder, or otherwise, shall not prevent the concurrent assertion oremployment of any other appropriate right or remedy.

 

## Section 5.12           Delayor Omission Not Waiver.

##  

No delay or omission of the Trustee, or of anyNoteholder to exercise any right or remedy accruing upon any Event of Defaultshall impair any such right or remedy or constitute a waiver of any such Eventof Default or an acquiescence therein or a waiver of a subsequent Event ofDefault.  Every right and remedy given bythis Article 5 or by law to the Trustee, or tothe Noteholders may be exercised from time to time, and as often as may bedeemed expedient, by the Trustee, or by the Noteholders, as the case may be.

 

## Section 5.13           Controlby the Controlling Class.

##  

Notwithstanding any other provision of this Indenture,if an Event of Default shall have occurred and be continuing when any of theNotes are Outstanding, a Majority of the Controlling Class shall have the rightto cause the institution of and direct the time, method and place of conductingany Proceeding for any remedy available to the Trustee for exercising anytrust, 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 orwith this Indenture;

###  

### (b)      the Trustee maytake any other action deemed proper by the Trustee that is not inconsistentwith such direction; *provided*,*however*, that, subject to Section 6.1, the Trusteeneed not take any action that it determines might involve it in liability(unless the Trustee has received satisfactory indemnity against such liabilityas set forth below);

###  

### (c)      the Trustee shall have been provided with indemnitysatisfactory to it; and

###  

### (d)      any direction to the Trustee to undertake a Sale of theAssets shall be by the Holders of Notes secured thereby representing a Majorityof the Aggregate Outstanding Amount of each Class of Notes.

###  

## Section 5.14           Waiverof Past Defaults.

##  

Prior to the time a judgment or decree for payment ofthe Money due has been obtained by the Trustee, as provided in this Article5, a Majority of each and every Class of

 

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Notes voting as a separate Class may on behalf of theHolders of all the Notes waive any past Default in respect of the Notes and itsconsequences, except a Default:

 

### (a)      inthe payment of principal of any Note;

###  

### (b)      inthe payment of interest in respect of the Controlling Class;

###  

### (c)      inrespect of a covenant or provision hereof that under Section 8.2 cannotbe modified or amended without the waiver or consent of the Holder of eachOutstanding Note adversely affected thereby; or

###  

### (d)      in respect of any covenant or provision hereof for theindividual protection or benefit of the Trustee (without the Trustee’s expresswritten consent thereto).

###  

In the case of any such waiver, the Issuer, theCo-Issuer, the Trustee, and the Holders of the Notes shall be restored to theirformer positions and rights hereunder, respectively, but no such waiver shallextend to any subsequent or other Default or impair any right consequentthereto.  The Trustee shall promptly givewritten notice of any such waiver to the Collateral Manager, each Noteholderand each Hedge Counterparty.

 

Upon any such waiver, such Default shall cease toexist, and any Event of Default arising therefrom shall be deemed to have beencured, for every purpose of this Indenture, but no such waiver shall extend toany subsequent or other Default or impair any right consequent thereto.

 

## Section 5.15           Undertakingfor Costs.

##  

All parties to this Indenture agree, and each Holderof any Note by its acceptance thereof shall be deemed to have agreed, that anycourt may in its discretion require, in any suit for the enforcement of anyright or remedy under this Indenture, or in any suit against the Trustee forany action taken, or omitted by it as Trustee, the filing by any party litigantin such suit of an undertaking to pay the costs of such suit, and that suchcourt may in its discretion assess reasonable costs, including reasonableattorneys’ fees, against any party litigant in such suit, having due regard tothe merits and good faith of the claims or defenses made by such partylitigant; but the provisions of this Section 5.15 shall not apply to anysuit instituted by the Trustee, to any suit instituted by any Noteholder, orgroup of Noteholders, holding in the aggregate more than 10% of the AggregateOutstanding Amount of the Controlling Class, or to any suit instituted by anyNoteholder for the enforcement of the payment of the principal of or intereston any Note or any other amount payable hereunder on or after the StatedMaturity (or, in the case of redemption, on or after the applicable RedemptionDate).

 

## Section 5.16           Waiverof Stay or Extension Laws.

##  

Each of the Issuer and the Co-Issuer covenants (to theextent that it may lawfully do so) that it will not at any time insist upon, orplead, 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 inforce, which may affect the covenants, the performance of or any remedies underthis Indenture; and each of the Issuer and the Co-Issuer (to the extent that itmay lawfully do so)

 

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herebyexpressly waives all benefit or advantage of any such law, and covenants thatit will not hinder, delay or impede the execution of any power herein granted tothe Trustee, but will suffer and permit the execution of every such power asthough no such law had been enacted.

 

## Section 5.17           Saleof Assets.

##  

### (a)      The power toeffect any sale (a “Sale”)of any portion of the Assets pursuant to Sections 5.4 and 5.5 hereofshall not be exhausted by any one or more Sales as to any portion of suchAssets remaining unsold, but shall continue unimpaired until all amountssecured by the Assets shall have been paid or if there are insufficientproceeds to pay such amount until the entire Assets shall have been sold.  The Trustee may upon notice to theSecurityholders and each Hedge Counterparty, and shall, upon direction of aMajority of the Controlling Class, from time to time postpone any Sale bypublic announcement made at the time and place of such Sale; *provided*,*however*, thatif the Sale is rescheduled for a date more than three Business Days after thedate 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 thedetermination required by Section 5.5 hereof.  The Trustee hereby expressly waives itsrights to any amount fixed by law as compensation for any Sale; *provided*that the Trustee shall be authorized to deduct thereasonable costs, charges and expenses incurred by it in connection with suchSale from the proceeds thereof notwithstanding the provisions of Section 6.7hereof.

###  

### (b)      The Trustee maybid for and acquire any portion of the Assets in connection with a public Salethereof, and may pay all or part of the purchase price by crediting againstamounts owing on the Notes or other amounts secured by the Assets, all or partof the net proceeds of such Sale after deducting the reasonable costs, chargesand expenses incurred by the Trustee in connection with such Salenotwithstanding the provisions of Section 6.7 hereof.  The Notes need not be produced in order tocomplete any such Sale, or in order for the net proceeds of such Sale to becredited against amounts owing on the Notes. The Trustee may hold, lease, operate, manage or otherwise deal with anyproperty so acquired in any manner permitted by law in accordance with thisIndenture.

###  

### (c)      If any portionof the Assets consists of securities issued without registration under theSecurities Act (“UnregisteredSecurities”), the Trustee may seek an Opinion of Counsel, or,if no such Opinion of Counsel can be obtained and with the consent of aMajority of the Controlling Class, seek a no action position from theSecurities and Exchange Commission or any other relevant federal or Stateregulatory authorities, regarding the legality of a public or private Sale ofsuch Unregistered Securities.  In noevent shall the Trustee be required to register Unregistered Securities underthe Securities Act.

###  

### (d)      The Trusteeshall execute and deliver an appropriate instrument of conveyance transferringits interest in any portion of the Assets in connection with a Salethereof.  In addition, the Trustee ishereby irrevocably appointed the agent and attorney in fact of the Issuer totransfer and convey its interest in any portion of the Assets in connectionwith a Sale thereof, and to take all action necessary to effectsuch Sale.  No purchaser or transferee atsuch a Sale shall be bound to ascertain the Trustee’s authority, to inquireinto the satisfaction of any conditions precedent or see to the application ofany Monies.

 

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### (e)      In the event ofany Sale of the Assets pursuant to Section 5.4 or Section 5.5, paymentsshall 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 beenaccelerated.

###  

## Section 5.18           Actionon the Notes.

##  

The Trustee’s right to seek and recover judgment onthe Notes or under this Indenture shall not be affected by the seeking orobtaining of or application for any other relief under or with respect to thisIndenture.  Neither the lien of thisIndenture nor any rights or remedies of the Trustee, or the Noteholders shallbe impaired by the recovery of any judgment by the Trustee against the Issueror the Co-Issuer or by the levy of any execution under such judgment upon anyportion of the Assets or upon any of the assets of the Issuer or the Co-Issuer.

 

# **ARTICLE 6**

 

# **THE TRUSTEE**

#  

## Section 6.1             CertainDuties and Responsibilities.

##  

### (a)      Except duringthe continuance of an Event of Default:

###  

#### (i)            theTrustee undertakes to perform such duties and only such duties as are set forthin this Indenture, and no implied covenants or obligations shall be read intothis Indenture against the Trustee; and

####  

#### (ii)           in theabsence of manifest error, or bad faith on its part, the Trustee mayconclusively rely, as to the truth of the statements and the correctness of theopinions expressed therein, upon certificates or opinions furnished to theTrustee and conforming to the requirements of this Indenture; *provided*,*however*, thatin the case of any such certificates or opinions which by any provision hereofare specifically required to be furnished to the Trustee, the Trustee shall beunder a duty to examine the same to determine whether or not they substantiallyconform to the requirements of this Indenture and shall promptly, but in anyevent within three Business Days in the case of an Officer’s Certificatefurnished by the Collateral Manager, notify the party delivering the same ifsuch certificate or opinion does not conform. If a corrected form shall not have been delivered to the Trustee within15 days after such notice from the Trustee, the Trustee shall so notify theNoteholders.

####  

### (b)      In case anEvent of Default known to the Trustee has occurred and is continuing, theTrustee shall, prior to the receipt of directions, if any, from a Majority ofthe Controlling Class (or other Noteholders to the extent provided in Article5 hereof), exercise such of the rights and powers vested in it by thisIndenture, and use the same degree of care and skill in its exercise as aprudent person would exercise or use under the circumstances in the conduct ofsuch person’s own affairs.

###  

### (c)      If, inperforming its duties under this Agreement, the Trustee is required to decidebetween alternative courses of action, the Trustee may request writteninstructions from

 

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### theCollateral Manager as to courses of action desired by it.  If the Trustee does not receive suchinstructions within two Business Days after it has requested them, it may, butshall be under no duty to, take or refrain from taking such action.  The Trustee shall act in accordance withinstructions received after such two-Business Day period except to the extentit has already taken, or committed itself to take, action inconsistent withsuch instructions.  The Trustee shall beentitled to rely on the advice of legal counsel and Independent accountants inperforming its duties hereunder and be deemed to have acted in good faith if itacts in accordance with such advice.

###  

### (d)      No provision ofthis Indenture shall be construed to relieve the Trustee from liability for itsown negligent action, its own negligent failure to act, or its own willfulmisconduct, except that:

###  

#### (i)            this subsection shall not be construed to limit the effectof subsection (a) of this Section 6.1;

####  

#### (ii)           the Trustee shall not be liable for any error of judgmentmade in good faith by a Trust Officer, unless it shall be proven that theTrustee was negligent in ascertaining the pertinent facts;

####  

#### (iii)          theTrustee shall not be liable with respect to any action taken or omitted to betaken by it in good faith in accordance with the direction of the Issuer inaccordance with this Indenture and/or the Controlling Class relating to thetime, method and place of conducting any Proceeding for any remedy available tothe Trustee in respect of any Note or exercising any trust or power conferredupon the Trustee under this Indenture;

####  

#### (iv)          noprovision of this Indenture shall require the Trustee to expend or risk its ownfunds or otherwise incur any financial liability in the performance of any ofits duties hereunder, or in the exercise of any of its rights or powerscontemplated hereunder, if it shall have reasonable grounds for believing thatrepayment of such funds or adequate indemnity against such risk or liability isnot reasonably assured to it (if the amount of such funds or risk or liabilitydoes not exceed the amount payable to the Trustee pursuant to Section11.1(a)(i)(3) and Section 11.1(a)(ii)(1) net of the amountsspecified in Section 6.7(a)(i), the Trustee shall be deemed to bereasonably assured of such repayment) unless such risk or liability relates toits ordinary services under this Indenture, except where this Indentureprovides otherwise; and

####  

#### (v)           theTrustee shall not be liable to the Noteholders for any action taken or omittedby it at the direction of the Issuer, the Co-Issuer, the Collateral Manager,the Controlling Class and/or a Noteholder under circumstances in which suchdirection is required or permitted by the terms of this Indenture.

####  

### (e)      For allpurposes under this Indenture, the Trustee shall not be deemed to have noticeor 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 Section5.1(e) unless a Trust Officer assigned to and working in the CorporateTrust Office has actual knowledge thereof or unless written notice of any eventwhich is in fact such an Event of Default or Default is received by the

 

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### Trustee at theCorporate Trust Office, and such notice references, asapplicable, the Notes generally, the Issuer, the Assets or this Indenture.  For purposes of determining the Trustee’sresponsibility and liability hereunder, whenever reference is made in thisIndenture to such an Event of Default or a Default, such reference shall beconstrued to refer only to such an Event of Default or Default of which theTrustee is deemed to have notice as described in this Section 6.1.

###  

### (f)       Whether or nottherein expressly so provided, every provision of this Indenture relating tothe conduct or affecting the liability of or affording protection to theTrustee 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 Trusteeshall, upon reasonable prior written notice to the Trustee, permit the Issuer,the Co-Issuer, the Collateral Manager or the Rating Agencies, during theTrustee’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 andextracts therefrom (the reasonable out-of-pocket expenses incurred in makingany such copies or extracts to be reimbursed to the Trustee by such Person) andto discuss the Trustee’s actions, as such actions relate to the Trustee’sduties with respect to the Notes, with the Trustee’s officers and employeesresponsible for carrying out the Trustee’s duties with respect to the Notes.

###  

## Section 6.2             Noticeof Default.

##  

Promptly (and in no event later than three BusinessDays) after the occurrence of any Default known to the Trustee or after anydeclaration of acceleration has been made or delivered to the Trustee pursuantto Section 5.2, the Trustee shall transmit by mail to the CollateralManager, the Irish Paying Agent (for so long as any Notes are listed on theIrish Stock Exchange), each Hedge Counterparty and each Rating Agency (for solong as any Class of Notes is Outstanding and rated by such Rating Agency), toall Holders of Notes as their names and addresses appear on the Notes Register,notice of all Defaults hereunder known to the Trustee, unless such Defaultshall have been cured or waived.

 

## Section 6.3             CertainRights of Trustee.

##  

Except as otherwise provided in Section 6.1:

 

### (a)      the Trustee mayrely and shall be protected in acting or refraining from acting upon anyresolution, certificate, statement, instrument, opinion, report, notice,request, direction, consent, order, note or other paper or document believed byit to be genuine and to have been signed or presented by the proper party orparties;

###  

### (b)      any request or direction of the Issuer or the Co-Issuermentioned herein shall be sufficiently evidenced by an Issuer Request or IssuerOrder, as the case may be;

###  

### (c)      whenever in theadministration of this Indenture the Trustee shall (i) deem it desirable that amatter be proved or established prior to taking, suffering or omitting anyaction hereunder, the Trustee (unless other evidence be herein specificallyprescribed) may, in the absence of bad faith on its part, rely upon an Officer’sCertificate or (ii) be required to determine the value of any Assets or fundshereunder or the cash flows projected to be

 

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### receivedtherefrom, the Trustee may, in the absence of bad faith on its part, rely onreports of nationally recognized accountants, investment bankers or otherpersons qualified to provide the information required to make suchdetermination, including nationally recognized dealers in securities of thetype being valued and securities quotation services;

###  

### (d)      as a conditionto the taking or omitting of any action by it hereunder, the Trustee mayconsult with counsel and the advice of such counsel or any Opinion of Counselshall be full and complete authorization and protection in respect of any actiontaken or omitted by it hereunder in good faith and in reliance thereon;

###  

### (e)      the Trusteeshall be under no obligation to exercise or to honor any of the rights orpowers vested in it by this Indenture at the request or direction of any of theNoteholders pursuant to this Indenture, unless such Noteholders shall haveoffered to the Trustee reasonable security or indemnity against the costs,expenses and liabilities which might reasonably be incurred by it in compliancewith such request or direction;

###  

### (f)       the Trusteeshall not be bound to make any investigation into the facts or matters statedin any resolution, certificate, statement, instrument, opinion, report, notice,request, direction, consent, order, note or other paper documents, but theTrustee, in its discretion, may and, upon the written direction of a Majorityof the Controlling Class or of a Rating Agency, shall make such further inquiryor investigation into such facts or matters as it may see fit or as it shall bedirected and shall have received indemnification reasonably acceptable to theTrustee, and, the Trustee shall be entitled, on reasonable prior notice to theIssuer, the Co-Issuer and the Collateral Manager, to examine the books andrecords relating to the Notes and the Assets, as applicable, at the premises ofthe Issuer, the Co-Issuer and the Collateral Manager, personally or by agent orattorney during the Issuer’s, the Co-Issuer’s or the Collateral Manager’snormal business hours upon not less than three Business Days’ prior writtennotice; *provided*that the Trustee shall, andshall 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 determinethat such disclosure is consistent with its obligations hereunder;

###  

### (g)      the Trustee mayexecute any of the trusts or powers hereunder or perform any duties hereunder(except with respect to its duty to make any Interest Advance under thecircumstances specified in Section 10.7) either directly or by orthrough agents or attorneys; *provided*thatthe Trustee shall not be responsible for any willful misconduct or negligenceon the part of any agent appointed and supervised, or attorney appointed, withdue care by it hereunder;

###  

### (h)      the Trustee shall not be liable for any action it takes oromits to take in good faith that it reasonably and prudently believes to beauthorized or within its rights or powers hereunder;

###  

### (i)       the Trustee shall not be responsible for the accuracy of thebooks or records of, or for any acts or omissions of, the Depository, anyTransfer Agent (other than the Trustee itself acting in that capacity),Clearstream, Luxembourg, Euroclear, any Calculation

 

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### Agent (other thanthe Trustee itself acting in that capacity) or any Paying Agent (other than theTrustee itself acting in that capacity); and

 

### (j)       the Trusteeshall not be liable for the actions or omissions of the Collateral Manager; andwithout limiting the foregoing, the Trustee shall not (except to the extent, ifat all, otherwise expressly stated in this Indenture) be under any obligationto monitor, evaluate or verify compliance by the Collateral Manager with theterms hereof or the Collateral Management Agreement, or to verify orindependently determine the accuracy of information received by it from theCollateral Manager (or from any selling institution, agent bank, trustee orsimilar source) with respect to the Collateral Debt Securities.

###  

## Section 6.4             NotResponsible for Recitals or Issuance of Notes.

##  

The recitals contained herein and in the Notes, otherthan the Certificate of Authentication thereon, shall be taken as thestatements of the Issuer and the Co-Issuer, and the Trustee assumes noresponsibility for their correctness. The Trustee makes no representation as to the validity or sufficiency ofthis Indenture (except as may be made with respect to the validity of theTrustee’s obligations hereunder), the Assets or the Notes.  The Trustee shall not be accountable for theuse or application by the Issuer or the Co-Issuer of the Notes or the proceedsthereof or any Money paid to the Issuer or the Co-Issuer pursuant to theprovisions hereof.

 

## Section 6.5             MayHold Notes.

##  

The Trustee, the Paying Agent, the Notes Registrar orany other agent of the Issuer or the Co-Issuer, in its individual or any othercapacity, may become the owner or pledgee of Notes and may otherwise deal withthe Issuer and the Co-Issuer with the same rights it would have if it were notTrustee, Paying Agent, Notes Registrar or such other agent.

 

## Section 6.6             MoneyHeld in Trust.

##  

Money held by the Trustee hereunder shall be held intrust to the extent required herein.  TheTrustee shall be under no liability for interest on any Money received by ithereunder except as otherwise agreed upon with the Issuer and except to theextent of income or other gain on investments which are deposits in orcertificates of deposit of the Trustee in its commercial capacity and income orother gain actually received by the Trustee on Eligible Investments.

 

## Section 6.7             Compensationand Reimbursement.

##  

### (a)      The Issueragrees:

###  

#### (i)            to paythe Trustee on each Payment Date in accordance with the Priority of Payments reasonablecompensation for all services rendered by it hereunder (which compensationshall not be limited by any provision of law in regard to the compensation of atrustee of an express trust);

####  

#### (ii)           except as otherwise expressly provided herein, to reimbursethe Trustee (subject to any written agreement between the Issuer and theTrustee) in a timely manner

 

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#### upon its requestfor all reasonable expenses, disbursements and advances (except as otherwiseprovided herein with respect to Interest Advances) incurred or made by theTrustee in accordance with any provision of this Indenture (includingsecurities transaction charges to the extent not waived due to the Trustee’sreceipt of payments from a financial institution with respect to certainEligible Investments, as specified by the Collateral Manager and the reasonablecompensation and expenses and disbursements of its agents and legal counsel andof any accounting firm or investment banking firm employed by the Trusteepursuant to Section 5.4, 5.5, 10.9 or 10.11 hereof,except any such expense, disbursement or advance as may be attributable to itsnegligence, willful misconduct or bad faith);

####  

#### (iii)          toindemnify the Trustee and its Officers, directors, employees and agents for,and to hold them harmless against, any loss, liability or expense incurredwithout negligence, willful misconduct or bad faith on their part, arising outof or in connection with the acceptance or administration of this trust,including the costs and expenses of defending themselves against any claim orliability in connection with the exercise or performance of any of their powersor duties hereunder; and

####  

#### (iv)          to pay the Trustee reasonable additional compensation togetherwith its expenses (including reasonable counsel fees) for any collection actiontaken pursuant to Section 6.13 hereof.

####  

### (b)      The Issuer mayremit payment for such fees and expenses to the Trustee or, in the absencethereof, the Trustee may from time to time deduct payment of its fees andexpenses hereunder from Monies on deposit in the Payment Account in accordancewith the Priority of Payments.

###  

### (c)      The Trustee inits 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 theIssuer or the Co-Issuer until at least one year and one day or, if longer, theapplicable preference period then in effect after the payment in full of allNotes issued under this Indenture.  Thisprovision shall survive termination of this Agreement.

###  

### (d)      The Trusteeagrees that the payment of all amounts to which it is entitled pursuant to sub-sections6.7(a)(i), (a)(ii), (a)(iii) and (a)(iv) shall besubject to the Priority of Payments, shall be payable only to the extent fundsare available in accordance with such Priority of Payments, shall be payablesolely from the Assets and following realization of the Assets, any such claimsof the Trustee against the Issuer shall be extinguished.  The Trustee will have a lien upon the Assetsto secure the payment of such payments to it in accordance with the Priority ofPayments; *provided*that the Trustee shall notinstitute any proceeding for enforcement of such lien except in connection withan action taken pursuant to Section 5.3 hereof for enforcement of thelien of this Indenture for the benefit of the Noteholders.

###  

Fees shall be accrued on the actual number of days inthe related Interest Accrual Period.  TheTrustee shall receive amounts pursuant to this Section 6.7 and Sections11.1(a)(i) and (ii) only to the extent thatsuch payment is made in accordance with the Priority of Payments

 

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andthe failure to pay such amounts to the Trustee will not, by itself, constitutean Event of Default.  Subject to Section6.9, the Trustee shall continue to serve as Trustee under this Indenturenotwithstanding the fact that the Trustee shall not have received amounts due toit hereunder.  No direction by a Majorityof the Controlling Class shall affect the right of the Trustee to collectamounts owed to it under this Indenture.

 

If on any Payment Date when any amount shall bepayable to the Trustee pursuant to this Indenture is not paid because there areinsufficient funds available for the payment thereof, all or any portion ofsuch amount not so paid shall be deferred and payable on any later Payment Dateon which a fee shall be payable and sufficient funds are available therefor inaccordance with the Priority of Payments.

 

## Section 6.8             CorporateTrustee Required; Eligibility.

##  

There shall at all times be a Trustee hereunder whichshall be a corporation organized and doing business under the laws of theUnited States of America or of any State thereof, authorized under such laws toexercise corporate trust powers, having a combined capital and surplus of atleast $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” byFitch and a long-term senior unsecured debt rating of at least “A+” and ashort-term debt rating of at least “A-1” by S&P and having an office withinthe United States.  If such corporationpublishes reports of condition at least annually, pursuant to law or to therequirements of the aforesaid supervising or examining authority, then for thepurposes of this Section 6.8, the combined capital and surplus of suchcorporation shall be deemed to be its combined capital and surplus as set forthin its most recent report of condition so published.  If at any time the Trustee shall cease to beeligible in accordance with the provisions of this Section 6.8, it shallresign immediately in the manner and with the effect hereinafter specified inthis Article 6.

 

## Section 6.9             Resignation and Removal; Appointment of Successor.

##  

### (a)      No resignationor removal of the Trustee and no appointment of a successor Trustee pursuant tothis Article 6 shall become effective until the acceptance ofappointment by the successor Trustee under Section 6.10.

###  

### (b)      The Trustee mayresign at any time by giving written notice thereof to the Issuer, theCo-Issuer, the Collateral Manager, each Hedge Counterparty, the Noteholders andeach Rating Agency.  Upon receiving suchnotice of resignation, the Issuer and the Co-Issuer shall promptly appoint asuccessor trustee or trustees by written instrument, in duplicate, executed byan 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 copyto the successor Trustee or Trustees, together with a copy to each Noteholder,each Hedge Counterparty and the Collateral Manager; *provided*thatsuch successor Trustee shall be appointed only upon the written consent of aMajority of the Notes (or if there are no Notes Outstanding, a Majority of thePreferred Shares) or, at any time when an Event of Default shall have occurredand be continuing or when a successor Trustee has been appointed pursuant to Section6.10, by Act of a Majority of the Controlling Class.  If no successor Trustee shall have beenappointed and an instrument of acceptance by a successor Trustee shall not havebeen delivered to the Trustee

 

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### within30 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 himselfand all others similarly situated, may petition any court of competentjurisdiction for the appointment of a successor Trustee.

###  

### (c)      The Trustee issubject to removal by act of a Majority of the Holders of the Notes (or ifthere are no Notes Outstanding, a Majority of the Preferred Shares) or, at anytime when an Event of Default shall have occurred and be continuing or when asuccessor Trustee has been appointed pursuant to Section 6.10, by Act ofa Majority of the Controlling Class, upon written notice delivered to the Trusteeand to the Issuer and the Co-Issuer.

###  

### (d)      If at any time:

###  

#### (i)            the Trustee shall cease to be eligible under Section 6.8and shall fail to resign after written request therefor by the Issuer, theCo-Issuer, or by any Holder; or

####  

#### (ii)           theTrustee shall become incapable of acting or there shall be instituted anyproceeding pursuant to which it could be adjudged as bankrupt or insolvent or areceiver or liquidator of the Trustee or of its property shall be appointed orany public officer shall take charge or control of the Trustee or of itsproperty or affairs for the purpose of rehabilitation, conservation orliquidation;

####  

then, in any such case (subject to Section 6.9(a)),(a) the Issuer or the Co-Issuer, by Issuer Order, subject to the writtenconsent of each Hedge Counterparty, may remove the Trustee or (b) subject to Section5.15, a Majority of the Controlling Class or any Holder may, on behalf ofhimself and all others similarly situated, petition any court of competentjurisdiction for the removal of the Trustee and the appointment of a successorTrustee.

 

### (e)      If the Trusteeshall resign, be removed or become incapable of acting, or if a vacancy shalloccur in the office of the Trustee for any reason, the Issuer and theCo-Issuer, by Issuer Order, subject to the written consent of each HedgeCounterparty and the Collateral Manager, shall promptly appoint a successorTrustee.  If the Issuer and the Co-Issuershall fail to appoint a successor Trustee within 60 days after suchresignation, removal or incapability or the occurrence of such vacancy, asuccessor Trustee may be appointed by Act of a Majority of the ControllingClass delivered to the Issuer, the Co-Issuer, the Collateral Manager and theretiring Trustee.  The successor Trusteeso appointed shall, forthwith upon its acceptance of such appointment, becomethe successor Trustee and supersede any successor Trustee proposed by theIssuer and the Co-Issuer.  If nosuccessor Trustee shall have been so appointed by the Issuer and the Co-Issueror a Majority of the Controlling Class and shall have accepted appointment inthe manner hereinafter provided, subject to Section 5.15, each HedgeCounterparty, the Controlling Class or any Holder may, on behalf of itself orhimself and all others similarly situated, petition any court of competentjurisdiction for the appointment of a successor Trustee.

###  

### (f)       The Issuer andthe Co-Issuer shall give prompt notice of each resignation and each removal ofthe Trustee and each appointment of a successor Trustee by mailing writtennotice of such event by first class mail, postage prepaid, to each RatingAgency, each

 

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### HedgeCounterparty, the Preferred Shares Paying Agent and to the Holders of the Notesas their names and addresses appear in the Notes Register.  Each notice shall include the name of thesuccessor 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 ofappointment by the successor Trustee, the successor Trustee shall cause suchnotice to be given at the expense of the Issuer or the Co-Issuer, as the casemay be.

###  

## Section 6.10           Acceptanceof 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 suchappointment.  Upon delivery of therequired instruments, the resignation or removal of the retiring Trustee shallbecome effective and such successor Trustee, without any further act, deed orconveyance, shall become vested with all the rights, powers, trusts, duties andobligations of the retiring Trustee; but, on request of the Issuer and the Co-Issueror a Majority of the Controlling Class or the Collateral Manager or thesuccessor Trustee, such retiring Trustee shall, upon payment of its chargesthen unpaid, execute and deliver an instrument transferring to such successorTrustee all the rights, powers and trusts of the retiring Trustee, and shallduly assign, transfer and deliver to such successor Trustee all property andMoney held by such retiring Trustee hereunder, subject nevertheless to itslien, 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 morefully and certainly vesting in and confirming to such successor Trustee allsuch rights, powers and trusts.

 

No successor Trustee shall accept its appointmentunless at the time of such acceptance such successor shall be qualified andeligible under this Article 6 and (a) such successor shall have longterm debt rated within the four highest rating categories by each RatingAgency, and (b) each Rating Agency has confirmed in writing that the employmentof 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 theTrustee may be merged or converted or with which it may be consolidated, or anycorporation or banking association resulting from any merger, conversion orconsolidation to which the Trustee shall be a party, or any corporationsucceeding to all or substantially all of the corporate trust business of theTrustee, shall be the successor of the Trustee hereunder, *provided*such corporation shall be otherwise qualified and eligible under this Article6, without the execution or filing of any paper or any further act on thepart of any of the parties hereto.  Incase any of the Notes have been authenticated, but not delivered, by theTrustee then in office, any successor by merger, conversion or consolidation tosuch authenticating Trustee may adopt such authentication and deliver the Notesso authenticated with the same effect as if such successor Trustee had itselfauthenticated such Notes.

 

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## Section 6.12           Co-Trusteesand Separate Trustee.

##  

At any time or times, including for the purpose ofmeeting the legal requirements of any jurisdiction in which any part of theAssets may at the time be located, the Issuer, the Co-Issuer and the Trusteeshall have power to appoint, one or more Persons to act as co-trustee jointlywith the Trustee of all or any part of the Assets, with the power to file suchproofs of claim and take such other actions pursuant to Section 5.6herein and to make such claims and enforce such rights of action on behalf ofthe 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 withthe Trustee in the execution, delivery and performance of all instruments andagreements necessary or proper to appoint a co-trustee.  If the Issuer and the Co-Issuer do not bothjoin in such appointment within 15 days after the receipt by them of a requestto do so, the Trustee shall have power to make such appointment.

 

Should any written instrument from the Issuer or theCo-Issuer be required by any co-trustee, so appointed, more fully confirming tosuch co-trustee such property, title, right or power, any and all suchinstruments shall, on request, be executed, acknowledged and delivered by theIssuer 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 Section11.1(a)(i), for any reasonable fees and expensesin connection with such appointment.

 

Every co-trustee, shall, to the extent permitted by law, but to such extent only, be appointedsubject to the following terms:

 

### (a)      the Notes shallbe authenticated and delivered and all rights, powers, duties and obligationshereunder in respect of the custody of securities, Cash and other personalproperty held by, or required to be deposited or pledged with, the Trusteehereunder, shall be exercised solely by the Trustee;

###  

### (b)      the rights,powers, duties and obligations hereby conferred or imposed upon the Trustee inrespect of any property covered by the appointment of a co-trustee shall beconferred or imposed upon and exercised or performed by the Trustee or by theTrustee and such co-trustee jointly in the case of the appointment of aco-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 anyparticular act is to be performed, the Trustee shall be incompetent or unqualifiedto perform such act, in which event such rights, powers, duties and obligationsshall be exercised and performed by a co-trustee;

###  

### (c)      the Trustee atany time, by an instrument in writing executed by it, with the concurrence ofthe Issuer and the Co-Issuer evidenced by an Issuer Order, may accept theresignation 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 Trusteeshall have the power to accept the resignation of, or remove, any suchco-trustee without the concurrence of the Issuer or the Co-

 

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### Issuer. A successor to any co-trustee soresigned or removed may be appointed in the manner provided in this Section6.12;

###  

### (d)      no co-trustee hereunder shall be personally liable by reasonof any act or omission of the Trustee hereunder;

###  

### (e)      the Trustee shall not be liable by reason of any act oromission of a co-trustee; and

###  

### (f)       any Act of Securityholders delivered to the Trustee shall bedeemed to have been delivered to each co-trustee.

###  

## Section 6.13           CertainDuties of Trustee Related to Delayed Payment of Proceeds.

##  

In the event that in any month the Trustee shall nothave received a Scheduled Distribution, (a) the Trustee shall promptly notifythe Issuer and the Collateral Manager in writing and (b) unless within threeBusiness Days (or the end of the applicable grace period for such payment, iflonger) 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 Section10.2(a)), shall have made provision for such payment satisfactory to theTrustee in accordance with Section 10.2(a), the Trustee shall requestthe obligor of such Pledged Obligation, the trustee under the relatedUnderlying Instrument or paying agent designated by either of them, as the casemay be, to make such payment as soon as practicable after such request but inno event later than three Business Days after the date of such request.  In the event that such payment is not madewithin such time period, the Trustee, subject to the provisions of clause (iv) of Section 6.1(d), shall take such action as theCollateral Manager reasonably shall direct in writing.  Any such action shall be without prejudice toany right to claim a Default or Event of Default under this Indenture.  In the event that the Issuer or theCollateral Manager requests a release of a Pledged Obligation in connectionwith any such action under the Collateral Management Agreement, such releaseshall be subject to Section 10.10 and Article 12 of thisIndenture, as the case may be. Notwithstanding any other provision hereof, the Trustee shall deliver tothe Issuer or its designee any payment with respect to any Pledged Obligationreceived after the Due Date thereof to the extent the Issuer previously madeprovisions for such payment satisfactory to the Trustee in accordance with thisSection 6.13 and such payment shall not be deemed part of the Assets.

 

## Section 6.14           Representationsand Warranties of the Trustee.

##  

The Trustee represents and warrants that:

 

### (a)      the Trustee isa national banking association with trust powers, duly and validly existingunder the laws of the United States of America, with corporate power andauthority 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 Indenturehas been duly authorized, executed and delivered by the Trustee and constitutesthe valid and binding obligation of the Trustee, enforceable against it inaccordance with its terms except (i) as limited by bankruptcy, fraudulentconveyance, fraudulent transfer, insolvency, reorganization, liquidation,receivership, moratorium or other

 

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### similar laws nowor hereafter in effect relating to creditors’ rights generally and by generalequitable principles, regardless of whether considered in a proceeding inequity or at law, and (ii) that the remedy of specific performance andinjunctive and other forms of equitable relief may be subject to equitabledefenses and to the discretion of the court before which any proceedingtherefor may be brought;

###  

### (c)      neither theexecution or delivery by the Trustee of this Indenture nor the performance bythe Trustee of its obligations under this Indenture requires the consent orapproval of, the giving of notice to or the registration or filing with, anygovernmental authority or agency under any existing law of the United States ofAmerica governing the banking or trust powers of the Trustee;

###  

### (d)      neither theexecution, delivery and performance of this Indenture, nor the consummation ofthe transactions contemplated by this Indenture, (i) is prohibited by, orrequires the Trustee to obtain any consent, authorization, approval orregistration under, any law, statute, rule, regulation, or any judgment, order,writ, injunction or decree that is binding upon the Trustee or any of itsproperties or assets, (ii) will violate the provisions of the GoverningDocuments of the Trustee or (iii) will violate any provision of, result in anydefault or acceleration of any obligations under, result in the creation orimposition of any lien pursuant to, or require any consent under, any materialagreement to which the Trustee is a party or by which it or any of its propertyis bound, the violation of which would have a material adverse effect on theTrustee or its property; and

###  

### (e)      there are noproceedings pending or, to the best knowledge of the Trustee, threatenedagainst the Trustee before any Federal, state or other governmental agency,authority, administrator or regulatory body, arbitrator, court or othertribunal, foreign or domestic, which could have a material adverse effect onthe Pledged Obligations or the performance by the Trustee of its obligationsunder this Indenture.

###  

## Section 6.15           Requestsfor Consents.

##  

In the event that the Trustee receives written noticeof any proposed amendment, consent or waiver under the Underlying Instrumentsof any Collateral Debt Security (before or after any default) or in the eventany action is required to be taken in respect to an Underlying Instrument, theTrustee shall promptly contact the Issuer and the Collateral Manager.  The Collateral Manager may, on behalf of theIssuer, instruct the Trustee pursuant to an Issuer Order to, and the Trusteeshall, with respect to which a Collateral Debt Security as to which a consentor waiver under the Underlying Instruments of such Collateral Debt Security(before or after any default) has been proposed or with respect to actionrequired 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 respectto any such Collateral Debt Security in accordance with such Issuer Order.  In the absence of any instruction from theCollateral Manager, the Trustee shall not engage in any vote or take any actionwith respect to such a Collateral Debt Security.

 

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# **ARTICLE 7**

 

# **COVENANTS**

 

## Section 7.1             Paymentof Principal and Interest.

##  

The Issuer and the Co-Issuer shall duly and punctuallypay the principal of and interest on each Class of Notes in accordance with theterms of such Notes and this Indenture. Amounts properly withheld under theCode or other applicable law by any Person from a payment to any Noteholder ofinterest and/or principal shall be considered as having been paid by the Issuerand the Co-Issuer, and, with respect to the Preferred Shares, by the Issuer, tosuch Preferred Shareholder for all purposes of this Indenture.

 

The Trustee shall, unless prevented from doing so forreasons beyond its reasonable control, give notice to each Securityholder ofany such withholding requirement no later than ten days prior to the relatedPayment Date from which amounts are required (as directed by the Issuer or theCollateral Manager on behalf of the Issuer) to be withheld, *provided*that despite the failure of the Trustee to givesuch notice amounts withheld pursuant to applicable tax laws shall beconsidered as having been paid by the Issuer and the Co-Issuer, as providedabove.

 

## Section 7.2             Maintenanceof Office or Agency.

##  

The Issuer and the Co-Issuer hereby appoint theTrustee as a Paying Agent for the payment of principal of and interest on theNotes and where Notes may be surrendered for registration of transfer orexchange and the Issuer and the Co-Issuer hereby appoint the Trustee, as theiragent where notices and demands to or upon the Co-Issuer in respect of theNotes or this Indenture, or the Issuer in respect of the Notes or thisIndenture, may be served.

 

The Issuer and the Co-Issuer hereby appoint the IrishPaying Agent as a Paying Agent for the payment of principal of and interest onthe Notes and to act as their agent where notices and demands to or upon theIssuer or the Co-Issuer in respect of the Notes or this Indenture may be servedand where Notes may be surrendered for registration of transfer or exchange.

 

The Issuer or the Co-Issuer may at any time and fromtime to time vary or terminate the appointment of any such agent or appoint anyadditional 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 oragency where notices and demands to or upon the Issuer and the Co-Issuer inrespect of the Notes and this Indenture may be served, and, subject to any lawsor regulations applicable thereto, an office or agency outside of the UnitedStates where Notes may be presented and surrendered for payment; *provided*,*further*, thatno paying agent shall be appointed in a jurisdiction which subjects payments onthe 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 theNoteholders of the appointment or termination of any such agent and of thelocation and any change in the location of any such office or agency.

 

If at any time the Issuer and the Co-Issuer, ifapplicable, shall fail to maintain any such required office or agency in theBorough of Manhattan, The City of New York, or outside the United States, orshall fail to furnish the Trustee with the address thereof, presentations and

 

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surrenders may be made (subject to the limitationsdescribed in the preceding paragraph) at and notices and demands may be servedon the Issuer and the Co-Issuer, and Notes may be presented and surrendered forpayment to the appropriate Paying Agent at its main office and the Issuer andthe Co-Issuer hereby appoint the same as their agent to receive such respectivepresentations, surrenders, notices and demands.

 

## Section 7.3             Moneyfor Note Payments to be Held in Trust.

##  

All payments of amounts due and payable with respectto any Notes that are to be made from amounts withdrawn from the PaymentAccount shall be made on behalf of the Issuer and the Co-Issuer by the Trusteeor a Paying Agent (in each case, from and to the extent of available funds inthe Payment Account and subject to the Priority of Payments) with respect topayments 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 tofurnish, no later than the fifth calendar day after each Record Date a list, ifnecessary, in such form as such Paying Agent may reasonably request, of thenames and addresses of the Holders of Notes and of the certificate numbers ofindividual Notes held by each such Holder.

 

Whenever the Paying Agent is not also the Trustee, theIssuer, the Co-Issuer, and such Paying Agent shall, on or before the BusinessDay 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, ifnecessary, an aggregate sum sufficient to pay the amounts then becoming due pursuantto the terms of this Indenture (to the extent funds are then available for suchpurpose in the Payment Account, and subject to the Priority of Payments), suchsum to be held for the benefit of the Persons entitled thereto and (unless suchPaying Agent is the Trustee) the Issuer and the Co-Issuer shall promptly notifythe Trustee of its action or failure so to act. Any Monies deposited with aPaying Agent (other than the Trustee) in excess of an amount sufficient to paythe amounts then becoming due on the Notes with respect to which such depositwas made shall be paid over by such Paying Agent to the Trustee for applicationin accordance with Article 11. Any such Paying Agent shall be deemed to agree by assuming such role notto cause the filing of a petition in bankruptcy against the Issuer or theCo-Issuer for the non-payment to the Paying Agent of any amounts payablethereto until at least one year and one day or, if longer, the applicablepreference period then in effect after the payment in full of all Notes issuedunder this Indenture.

 

The initial Paying Agent shall be as set forth in Section7.2. Any additional or successor Paying Agents shall be appointed by IssuerOrder of the Issuer and Issuer Order of the Co-Issuer with written noticethereof to the Trustee; *provided*,*however*, that so long as any Class of the Notes are ratedby a Rating Agency and with respect to any additional or successor Paying Agentfor 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 ora short-term debt rating of “P-1” by Moody’s, “F1+” by Fitch and “A1+” byS&P or (ii) each Rating Agency confirms that employing such Paying Agentshall not adversely affect the then-current ratings of the Notes.  In the event that such successor Paying Agentceases to have a long-term debt rating of “Aa3” or higher by Moody’s, “AA-”orhigher 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 Fitchand “A-1+” by S&P, the Issuer and the Co-Issuer shall promptly remove suchPaying Agent and appoint a successor Paying Agent. The Issuer and the Co-Issuershall not appoint any Paying Agent that is not, at the time of suchappointment, a depository institution or trust company subject to supervisionand examination by federal and/or state and/or national banking authorities.The Issuer and the Co-Issuer shall cause the Paying Agent other than theTrustee to execute and deliver to the Trustee an instrument in which suchPaying Agent shall agree with the Trustee (and if the Trustee acts as PayingAgent, it hereby so agrees), subject to the provisions of this Section 7.3,that such Paying Agent will:

 

### (a)      allocate allsums received for payment to the Holders of Notes for which it acts as PayingAgent on each Payment Date and Redemption Date among such Holders in theproportion specified in the applicable report or Redemption Date Statement, asthe case may be, in each case to the extent permitted by applicable law;

###  

### (b)      hold all sumsheld by it for the payment of amounts due with respect to the Notes for thebenefit of the Persons entitled thereto until such sums shall be paid to suchPersons or otherwise disposed of as herein provided and pay such sums to suchPersons as herein provided;

###  

### (c)      if such PayingAgent is not the Trustee, immediately resign as a Paying Agent and forthwithpay to the Trustee all sums held by it for the payment of Notes if at any timeit ceases to meet the standards set forth above required to be met by a PayingAgent at the time of its appointment;

###  

### (d)      if such PayingAgent is not the Trustee, immediately give the Trustee notice of any Default bythe Issuer or the Co-Issuer (or any other obligor upon the Notes) in the makingof any payment required to be made; and

###  

### (e)      if such PayingAgent is not the Trustee at any time during the continuance of any suchDefault, upon the written request of the Trustee, forthwith pay to the Trusteeall sums so held by such Paying Agent.

###  

The Issuer or the Co-Issuer may at any time, for thepurpose of obtaining the satisfaction and discharge of this Indenture or forany other purpose, pay, or by Issuer Order direct the Paying Agent to pay, tothe Trustee all sums held by the Issuer or the Co-Issuer or held by the PayingAgent for payment of the Notes, such sums to be held by the Trustee in trustfor 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 Agentto the Trustee, the Paying Agent shall be released from all further liabilitywith respect to such Money.

 

Except as otherwise required by applicable law, anyMoney deposited with the Trustee in trust or deposited with the Paying Agentfor the payment of the principal of or interest on any Note and remainingunclaimed for two years after such principal or interest has become due andpayable shall be paid to the Issuer; and the Holder of such Note shallthereafter, as an unsecured general creditor, look only to the Issuer forpayment of such amounts and all liability of the Trustee or the Paying Agent withrespect to such Money (but only to the extent of the amounts so paid to theIssuer or the Co-Issuer, as applicable) shall thereupon cease; *provided*,

 

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*however*, that the Irish PayingAgent, before being required to make any such payment, shall at the expense ofthe Issuer cause to be published once, in a newspaper published in the Englishlanguage, customarily published on each Business Day and of general circulationin Dublin, Ireland, notice that such money remains unclaimed and that, after adate specified therein, which shall not be less than thirty (30) days from thedate of such publication, any unclaimed balance of such money then remainingshall be repaid to the Issuer. The Trustee or the Paying Agent, before beingrequired to make any such release of payment, may, but shall not be requiredto, adopt and employ, at the expense of the Issuer or the Co-Issuer, as thecase may be, any reasonable means of notification of such release of payment,including, but not limited to, mailing notice of such release to Holders whoseNotes have been called but have not been surrendered for redemption or whoseright to or interest in Monies due and payable but not claimed is determinablefrom the records of the Paying Agent, at the last address of record of eachsuch Holder.

 

## Section 7.4             Existenceof the Issuer and Co-Issuer.

##  

### (a)      So long as anyNote is outstanding, the Issuer shall maintain in full force and effect itsexistence and rights as an exempted company incorporated with limited liabilityunder the laws of the Cayman Islands and shall obtain and preserve itsqualification to do business as a foreign limited liability company in eachjurisdiction in which such qualifications are or shall be necessary to protectthe validity and enforceability of this Indenture, the Notes or any of theAssets; *provided*that the Issuer shall beentitled to change its jurisdiction of registration from the Cayman Islands toany other jurisdiction reasonably selected by the Issuer so long as (i) suchchange is not disadvantageous in any material respect to the Holders of theNotes or the Preferred Shares, (ii) written notice of such change shall havebeen given by the Trustee to the Holders of the Notes or Preferred Shares, thePreferred Shares Paying Agent and each Rating Agency fifteen Business Daysprior to such change and (iii) on or prior to the 15th Business Day followingsuch notice the Trustee shall not have received written notice from a Majorityof the Controlling Class or a Majority of the Preferred Shares objecting tosuch change.  So long as any Note isoutstanding, the Issuer will maintain at all times at least one director who isIndependent of the Collateral Manager and its Affiliates.

###  

### (b)      So long as anyNote is outstanding, the Co-Issuer shall maintain in full force and effect itsexistence and rights as a limited liability company organized under the laws ofDelaware and shall obtain and preserve its qualification to do business as aforeign limited liability company in each jurisdiction in which suchqualifications are or shall be necessary to protect the validity andenforceability of this Indenture or the Notes; *provided*,*however*, that the Co-Issuer shall be entitled to change itsjurisdiction of formation from Delaware to any other jurisdiction reasonablyselected by the Co-Issuer so long as (i) such change is not disadvantageous inany material respect to the Holders of the Notes, (ii) written notice of suchchange shall have been given by the Trustee to the Holders of the Notes andeach Rating Agency fifteen Business Days prior to such change and (iii) on orprior to the 15th Business Day following such notice the Trustee shall not havereceived written notice from a Majority of the Controlling Class objecting tosuch change.  So long as any Note isoutstanding, the Co-Issuer shall maintain at all times at least one manager whois Independent of the Collateral Manager and its Affiliates.

 

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### (c)      So long as anyNote is outstanding, the Issuer shall ensure that all corporate or otherformalities regarding its existence are followed (including correcting anyknown misunderstanding regarding its separate existence).  So long as any Note is outstanding, theIssuer shall not take any action or conduct its affairs in a manner that islikely to result in its separate existence being ignored or its assets andliabilities being substantively consolidated with any other Person in abankruptcy, reorganization or other insolvency proceeding.  So long as any Note is outstanding, theIssuer shall maintain and implement administrative and operating proceduresreasonably 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 andmaintained, separate books, records, accounts and other information customarilymaintained for the performance of the Issuer’s obligations hereunder. Withoutlimiting the foregoing, so long as any Note is outstanding, (i) the Issuershall (A) pay its own liabilities only out of its own funds and (B) useseparate stationery, invoices and checks, (ii) the Issuer shall not have anysubsidiaries, and (iii) the Issuer shall not have any employees, (B) engage inany transaction with any shareholder that is not permitted under the terms ofthe Collateral Management Agreement, (C) pay dividends other than in accordancewith the terms of this Indenture or (D) conduct business under an assumed name(i.e. no DBAs); *provided* that the foregoing shallnot prohibit the Issuer from entering into the transactions contemplated by theAdministration Agreement with the Company Administrator and the PreferredShares Paying Agency Agreement with the Shares Registrar.

###  

### (d)      So long as anyNote is outstanding, the Co-Issuer shall ensure that all limited liabilitycompany or other formalities regarding its existence) are followed, as well ascorrecting any known misunderstanding regarding its separate existence.  The Co-Issuer shall not take any action orconduct its affairs in a manner, that is likely to result in its separateexistence being ignored or its assets and liabilities being substantivelyconsolidated with any other Person in a bankruptcy, reorganization or otherinsolvency proceeding.  The Co-Issuershall maintain and implement administrative and operating procedures reasonablynecessary in the performance of the Co-Issuer’s obligations hereunder, and theCo-Issuer shall at all times keep and maintain, or cause to be kept andmaintained, books, records, accounts and other information customarilymaintained for the performance of the Co- Issuer’s obligations hereunder.  Without limiting the foregoing, (i) theCo-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 withany member that is not permitted under the terms of the Collateral ManagementAgreement or (C) pay dividends other than in accordance with the terms of thisIndenture.

###  

## Section 7.5             Protectionof Assets.

##  

### (a)      The Trustee, onbehalf of the Issuer, pursuant to any Opinion of Counsel received pursuant to Section7.5(d) shall execute and deliver all such Financing Statements,continuation statements, instruments of further assurance and otherinstruments, and shall take such other action as may be necessary or advisableor desirable to secure the rights and remedies of the Holders and each HedgeCounterparty hereunder and to:

###  

#### (i)            Grantmore effectively all or any portion of the Assets;

 

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#### (ii)           maintainor preserve the lien (and the priority thereof) of this Indenture or to carryout more effectively the purposes hereof;

####  

#### (iii)          perfect,publish notice of or protect the validity of any Grant made or to be made bythis Indenture (including, without limitation, any and all actions necessary ordesirable as a result of changes in law or regulations);

####  

#### (iv)          enforce anyof the Pledged Obligations or other instruments or property included in theAssets;

####  

#### (v)           preserveand defend title to the Assets and the rights of the Trustee, the Holders ofthe Notes and each Hedge Counterparty in the Assets against the claims of allpersons and parties; and

####  

#### (vi)          pursuant toSections 11.1(a)(i)(1) and 11.1(a)(ii)(1), pay or cause to bepaid any and all taxes levied or assessed upon all or any part of the Assets.

####  

The Issuer hereby designates the Trustee, its agentand attorney-in-fact to execute any Financing Statement, continuation statementor other instrument required pursuant to this Section 7.5.  The Trustee agrees that it will from time totime execute and cause to be filed Financing Statements and continuationstatements (it being understood that the Trustee shall be entitled to rely uponan Opinion of Counsel described in Section 7.5(d), at the expense of theIssuer, as to the need to file such Financing Statements and continuationstatements, the dates by which such filings are required to be made and thejurisdictions in which such filings are required to be made).

 

### (b)      The Trusteeshall not (i) except in accordance with Section 10.10(a), (b) or (c)and except for payments, deliveries and distributions otherwise expresslypermitted under this Indenture, remove any portion of the Assets that consistsof Cash or is evidenced by an instrument, certificate or other writing (A) fromthe jurisdiction in which it was held at the date as described in the Opinionof 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 orpermit the Custodial Account or the Custodial Securities Intermediary to belocated in a different jurisdiction from the jurisdiction in which suchsecurities accounts and Custodial Securities Intermediary were located on theClosing Date, unless the Trustee shall have first received an Opinion ofCounsel to the effect that the lien and security interest created by thisIndenture with respect to such property will continue to be maintained aftergiving effect to such action or actions.

###  

### (c)      The Issuershall pay or cause to be paid taxes, if any, levied on account of thebeneficial ownership by the Issuer of any Pledged Obligations that secure theNotes.

###  

### (d)      For so long asthe Notes are Outstanding, (i) on July 31, 2010 and (ii) every 60 months aftersuch date, the Issuer (or the Collateral Manager on behalf of the Issuer) shalldeliver 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 interestcreated by this Indenture with respect to the Assets, and

 

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### confirming thematters set forth in the Opinion of Counsel, furnished pursuant to Section3.1(d), with regard to the perfection and priority of such securityinterest (and such Opinion may likewise be subject to qualifications andassumptions similar to those set forth in the Opinion delivered pursuant to Section3.1(d)); *provided* that the Issuer shall berequired to deliver an Opinion of Counsel with respect to the foregoing matterswithin 60 days after any change in the jurisdiction of organization of theTrustee; and *provided, further,* that aMajority of the Controlling Class shall be entitled to direct the Issuer todeliver 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             Noticeof Any Amendments.

##  

Each of the Issuer and the Co-Issuer shall give noticeto the Rating Agencies of, and satisfy the Rating Agency Condition with respectto, any amendments to its Governing Documents.

 

## Section 7.7             Performanceof Obligations.

##  

### (a)      Each of theIssuer and the Co-Issuer shall not take any action, and will use its besteffort not to permit any action to be taken by others, that would release anyPerson from any of such Person’s covenants or obligations under any instrumentincluded in the Assets, except in the case of enforcement action taken withrespect to any Defaulted Security in accordance with the provisions hereof andas otherwise required hereby.

###  

### (b)      The Issuer orthe 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 orthe Co-Issuer, as the case may be, hereunder by such Persons and theperformance of the actions and other obligations with respect to the Assets ofthe nature set forth in the Collateral Management Agreement by the CollateralManager. Notwithstanding any such arrangement, the Issuer or the Co-Issuer, asthe case may be, shall remain primarily liable with respect thereto. In theevent of such contract, the performance of such actions and obligations by suchPersons shall be deemed to be performance of such actions and obligations bythe Issuer or the Co-Issuer; and the Issuer or the Co-Issuer shall punctuallyperform, and use its best efforts to cause the Collateral Manager or such otherPerson to perform, all of their obligations and agreements contained in theCollateral Management Agreement or such other agreement.

###  

## Section 7.8             NegativeCovenants.

##  

### (a)      The Issuer andthe 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 suffersuch to exist), any part of the Assets, except as otherwise expressly permittedby this Indenture or the Collateral Management Agreement;

 

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#### (ii)           claim anycredit on, make any deduction from, or dispute the enforceability of, thepayment of the principal or interest payable in respect of the Notes (otherthan amounts required to be paid, deducted or withheld in accordance with anyapplicable law or regulation of any governmental authority) or assert any claimagainst any present or future Noteholder by reason of the payment of any taxeslevied or assessed upon any part of the Assets;

####  

#### (iii)          (A)incur or assume or guarantee any indebtedness, other than the Notes and thisIndenture and the transactions contemplated hereby; (B) issue any additionalclass of securities, other than the Notes, the Preferred Shares, the ordinaryshares of the Issuer and the limited liability company membership interests ofthe Co-Issuer; or (C) issue any additional shares of stock, other than theordinary shares of the Issuer and the Preferred Shares;

####  

#### (iv)          (A) permitthe validity or effectiveness of this Indenture or any Grant hereunder to beimpaired, or permit the lien of this Indenture to be amended, hypothecated,subordinated, terminated or discharged, or permit any Person to be releasedfrom 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 thelien of this Indenture) to be created on or extend to or otherwise arise uponor burden the Assets or any part thereof, any interest therein or the proceedsthereof, except as may be expressly permitted hereby or (C) take any actionthat would permit the lien of this Indenture not to constitute a valid firstpriority security interest in the Assets, except as may be expressly permittedhereby;

####  

#### (v)           amend theCollateral Management Agreement, except pursuant to the terms thereof;

####  

#### (vi)          amend anyServicing Agreement, except pursuant to the terms thereof;

####  

#### (vii)         amendthe Preferred Shares Paying Agency Agreement, except pursuant to the termsthereof;

####  

#### (viii)        dissolveor liquidate in whole or in part, except as permitted hereunder;

####  

#### (ix)           make orincur any capital expenditures, except as reasonably required to perform itsfunctions in accordance with the terms of this Indenture;

####  

#### (x)            becomeliable in any way, whether directly or by assignment or as a guarantor or othersurety, for the obligations of the lessee under any lease, hire any employeesor pay any dividends to its shareholders, except with respect to the PreferredShares in accordance with the Priority of Payments;

####  

#### (xi)           maintainany bank accounts other than the Accounts and the bank account in the CaymanIslands in which (*inter alia*) the proceeds of theIssuer’s issued share capital and the transaction fees paid to the Issuer foragreeing to issue the Securities will be kept;

 

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#### (xii)          conductbusiness under an assumed name, or change its name without first delivering atleast 30 days’ prior written notice to the Trustee, the Noteholders and theRating Agencies and an Opinion of Counsel to the effect that such name changewill not adversely affect the security interest hereunder of the Trustee;

####  

#### (xiii)         engagein any activity that would cause the Issuer to be subject to U.S. Federal,state or local income or franchises tax; or

####  

#### (xiv)        exceptfor any agreements (other than a Hedge Agreement) involving the purchase andsale of Collateral Debt Securities having customary purchase or sale terms anddocumented with customary loan trading documentation, enter into any agreementsunless such agreements contain “non-petition” and “limited recourse”provisions.

####  

### (b)      Neither theIssuer nor the Trustee shall sell, transfer, exchange or otherwise dispose ofAssets, or enter into or engage in any business with respect to any part of theAssets, except as expressly permitted or required by this Indenture or theCollateral Management Agreement.

###  

### (c)      The Co-Issuershall not invest any of its assets in “securities” (as such term is defined inthe Investment Company Act) and shall keep all of the Co-Issuer’s assets inCash.

###  

### (d)      For so long asany of the Notes are Outstanding, the Co-Issuer shall not issue any limitedliability company membership interests of the Co-Issuer to any Person otherthan Gramercy Investment or a wholly-owned subsidiary of Gramercy Investment.

###  

### (e)      The Issuershall not enter into any material new agreements (other than any HedgeAgreement, 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 ofa Majority of the Notes (or if there are no Notes Outstanding, a Majority ofthe Preferred Shares) and shall provide notice of all new agreements (otherthan any Hedge Agreement, Collateral Debt Security or other agreementspecifically contemplated by this Indenture) the Holders of the Notes.  The foregoing notwithstanding, the Issuer mayagree to any new agreements; *provided* that(i) the Issuer, or the Collateral Manager on behalf of the Issuer, determinesthat such new agreements would not, upon or after becoming effective, adverselyaffect 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 anySenior Note is outstanding, QRS Corp. may not transfer the Preferred Shares toany other Person.

###  

### (g)      For so long asany Senior Note is Outstanding, QRS Corp. may not sell, transfer or finance anyClass J Note or Class K Note except in accordance with the transferrestrictions set forth in Section 2.5(e)(iv).

 

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## Section 7.9             Statementas to Compliance.

##  

### (a)      On or beforeJanuary 31, in each calendar year, commencing in 2006 or immediately if therehas 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 eachHedge Counterparty and each Rating Agency) an Officer’s Certificate given onbehalf of the Issuer and without personal liability stating, as to each signerthereof, that, since the date of the last certificate or, in the case of thefirst certificate, the Closing Date, to the best of the knowledge, informationand belief of such Officer, the Issuer has fulfilled all of its obligationsunder this Indenture or, if there has been a Default in the fulfillment of anysuch obligation, specifying each such Default known to them and the nature andstatus thereof.

###  

## Section 7.10           Issuerand Co-Issuer May Consolidate or Merge Only on Certain Terms.

##  

### (a)      The Issuershall not consolidate or merge with or into any other Person or transfer orconvey all or substantially all of its assets to any Person, unless permittedby the Governing Documents and Cayman Islands law and unless:

###  

#### (i)            theIssuer 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 allor substantially all of the assets of the Issuer are transferred shall be anentity organized and existing under the laws of the Cayman Islands or suchother 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 inconnection with any such transaction undertaken solely to effect a change inthe jurisdiction of registration pursuant to Section 7.4 hereof; and *provided*,*further*, thatthe surviving entity shall expressly assume, by an indenture supplementalhereto, executed and delivered to the Trustee and each Noteholder, the due andpunctual payment of the principal of and interest on all Notes and otheramounts payable hereunder and under each Hedge Agreement and the CollateralManagement Agreement and the performance and observance of every covenant ofthis Indenture and under each Hedge Agreement and the Collateral ManagementAgreement on the part of the Issuer to be performed or observed, all asprovided herein;

####  

#### (ii)           eachRating Agency shall have been notified in writing of each proposedconsolidation or merger of the Issuer and the Trustee shall have receivedwritten confirmation from each Rating Agency that the ratings issued withrespect to each Class of Notes shall not be reduced or withdrawn as a result ofthe consummation of such transaction;

####  

#### (iii)          ifthe Issuer is not the surviving entity, the Person formed by such consolidationor into which the Issuer is merged or to which all or substantially all of theassets of the Issuer are transferred shall have agreed with the Trustee (A) toobserve the same legal requirements for the recognition of such formed orsurviving entity as a legal entity separate and apart from any of itsAffiliates 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 conveyall or substantially all of the Assets or all or substantially all of itsassets to any other Person except in accordance with the provisions of this Section7.10, unless in connection with a sale of the Assets pursuant to Article5, Article 9 or Article 12;

####  

#### (iv)          if theIssuer is not the surviving entity, the Person formed by such consolidation orinto which the Issuer is merged or to which all or substantially all of theassets of the Issuer are transferred shall have delivered to the Trustee, each HedgeCounterparty, the Collateral Manager and each Rating Agency an Officer’sCertificate and an Opinion of Counsel each stating that such Person is dulyorganized, validly existing and in good standing in the jurisdiction in whichsuch Person is organized; that such Person has sufficient power and authorityto assume the obligations set forth in subsection (i) above and to execute anddeliver an indenture supplemental hereto for the purpose of assuming suchobligations; that such Person has duly authorized the execution, delivery andperformance of an indenture supplemental hereto for the purpose of assumingsuch obligations and that such supplemental indenture is a valid, legal andbinding obligation of such Person, enforceable in accordance with its terms,subject only to bankruptcy, reorganization, insolvency, moratorium and otherlaws affecting the enforcement of creditors’ rights generally and to generalprinciples of equity (regardless of whether such enforceability is consideredin a proceeding in equity or at law); that, immediately following the eventwhich causes such Person to become the successor to the Issuer, (A) such Personhas good and marketable title, free and clear of any lien, security interest orcharge, other than the lien and security interest of this Indenture, to theAssets securing, in the case of a consolidation or merger of the Issuer, all ofthe Notes or, in the case of any transfer or conveyance of the Assets securingany of the Notes, such Notes, (B) the Trustee continues to have a validperfected first priority security interest in the Assets securing, in the caseof a consolidation or merger of the Issuer, all of the Notes, or, in the caseof any transfer or conveyance of the Assets securing any of the Notes, suchNotes and (C) such other matters as the Trustee, each Hedge Counterparty, theCollateral Manager or any Noteholder may reasonably require;

####  

#### (v)           immediatelyafter giving effect to such transaction, no Default or Event of Default shallhave occurred and be continuing;

####  

#### (vi)          the Issuershall have delivered to the Trustee, the Preferred Shares Paying Agent, each HedgeCounterparty, the Collateral Manager and each Noteholder, an Officer’sCertificate and an Opinion of Counsel each stating that such consolidation,merger, transfer or conveyance and such supplemental indenture comply with thisArticle 7 and that all conditions precedent in this Article 7provided for relating to such transaction have been complied with and that noadverse tax consequences will result therefrom to the Holders of the Notes, thePreferred Shareholders and any Hedge Counterparty; and

####  

#### (vii)         aftergiving effect to such transaction, the Issuer shall not be required to registeras an investment company under the Investment Company Act.

####  

#### 156

#### 

####  

### (b)      The Co-Issuershall not consolidate or merge with or into any other Person or transfer orconvey all or substantially all of its assets to any Person, unless no Notesremain Outstanding or:

###  

#### (i)            theCo-Issuer shall be the surviving entity, or the Person (if other than theCo-Issuer) formed by such consolidation or into which the Co-Issuer is mergedor to which all or substantially all of the assets of the Co-Issuer aretransferred shall be a company organized and existing under the laws ofDelaware or such other jurisdiction approved by a Majority of the ControllingClass; *provided*that no such approval shall berequired in connection with any such transaction undertaken solely to effect achange in the jurisdiction of formation pursuant to Section 7.4; and *provided*,*further*, thatthe surviving entity shall expressly assume, by an indenture supplementalhereto, executed and delivered to the Trustee and each Noteholder, the due andpunctual payment of the principal of and interest on all Notes and theperformance and observance of every covenant of this Indenture on the part ofthe Co-Issuer to be performed or observed, all as provided herein;

####  

#### (ii)           eachRating Agency shall have been notified in writing of each proposedconsolidation or merger of the Co-Issuer and the Trustee shall have receivedwritten confirmation from each Rating Agency that the ratings issued withrespect to each Class of Notes shall not be reduced or withdrawn as a result ofthe consummation of such transaction;

####  

#### (iii)          ifthe Co-Issuer is not the surviving entity, the Person formed by suchconsolidation or into which the Co-Issuer is merged or to which all orsubstantially all of the assets of the Co-Issuer are transferred shall haveagreed with the Trustee (A) to observe the same legal requirements for therecognition of such formed or surviving entity as a legal entity separate andapart from any of its Affiliates as are applicable to the Co-Issuer withrespect to its Affiliates and (B) not to consolidate or merge with or into anyother Person or transfer or convey all or substantially all of its assets toany other Person except in accordance with the provisions of this Section7.10;

####  

#### (iv)          if theCo-Issuer is not the surviving entity, the Person formed by such consolidationor into which the Co-Issuer is merged or to which all or substantially all ofthe assets of the Co-Issuer are transferred shall have delivered to the Trusteeand each Rating Agency an Officer’s Certificate and an Opinion of Counsel eachstating that such Person is duly organized, validly existing and in goodstanding in the jurisdiction in which such Person is organized; that suchPerson has sufficient power and authority to assume the obligations set forthin subsection (i) above and to execute and deliver an indenture supplementalhereto for the purpose of assuming such obligations; that such Person has dulyauthorized the execution, delivery and performance of an indenture supplementalhereto for the purpose of assuming such obligations and that such supplementalindenture is a valid, legal and binding obligation of such Person, enforceablein 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 whethersuch enforceability is

 

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#### considered in aproceeding in equity or at law); such other matters as the Trustee or any Noteholdermay reasonably require;

####  

#### (v)           immediatelyafter giving effect to such transaction, no Default or Event of Default shallhave occurred and be continuing;

####  

#### (vi)          theCo-Issuer shall have delivered to the Trustee, the Preferred Shares PayingAgent and each Noteholder an Officer’s Certificate and an Opinion of Counseleach stating that such consolidation, merger, transfer or conveyance and suchsupplemental indenture comply with this Article 7 and that allconditions precedent in this Article 7 provided for relating to suchtransaction have been complied with and that no adverse tax consequences willresult therefrom to the Holders of the Notes or the Preferred Shareholders; and

####  

#### (vii)         aftergiving effect to such transaction, the Co-Issuer shall not be required toregister as an investment company under the Investment Company Act.

####  

## Section 7.11           SuccessorSubstituted.

##  

Upon any consolidation or merger, or transfer orconveyance of all or substantially all of the assets of the Issuer or theCo-Issuer, in accordance with Section 7.10 hereof, the Person formed byor surviving such consolidation or merger (if other than the Issuer or theCo-Issuer), or the Person to which such consolidation, merger, transfer orconveyance is made, shall succeed to, and be substituted for, and may exerciseevery 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 asthe 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 shalltheretofore have become such in the manner prescribed in this Article 7may be dissolved, wound-up and liquidated at any time thereafter, and suchPerson thereafter shall be released from its liabilities as obligor and makeron all the Notes or Notes, as applicable, and from its obligations under thisIndenture.

 

## Section 7.12           NoOther Business.

##  

The Issuer shall not engage in any business oractivity other than issuing and selling the Notes pursuant to this Indentureand any supplements thereto, issuing and selling the Preferred Shares inaccordance with its Governing Documents, entering into any Hedge Agreement, theCollateral Management Agreement, and acquiring, owning, holding and pledgingthe Assets in connection with the Notes and such other activities which arenecessary, suitable or convenient to accomplish the foregoing or are incidentalthereto or connected therewith.  TheCo-Issuer shall not engage in any business or activity other than issuing andselling the Notes pursuant to this Indenture and any supplements thereto andsuch other activities which are necessary, suitable or convenient to accomplishthe 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 isnot subject to Section 13 or 15(d) of the Exchange Act and is not exempt fromreporting pursuant to Rule 12g3-2(b) under the Exchange Act, upon the requestof a Holder or beneficial owner of a Note, the Issuer and/or the Co-Issuershall promptly furnish or cause to be furnished “Rule 144A Information” (asdefined below) to such holder or beneficial owner, to a prospective purchaserof such Note designated by such holder or beneficial owner or to the Trusteefor delivery to such holder or beneficial owner or a prospective purchaserdesignated by such holder or beneficial owner, as the case may be, in order topermit compliance by such holder or beneficial owner with Rule 144A under theSecurities Act in connection with the resale of such Note by such holder orbeneficial owner.  “Rule 144A Information”shall be such information as is specified pursuant to Rule 144A(d)(4) under theSecurities Act (or any successor provision thereto).  The Trustee shall reasonably cooperate withthe Issuer and/or the Co-Issuer in mailing or otherwise distributing (at theIssuer’s expense) to such Noteholders or prospective purchasers, at andpursuant to the Issuer’s and/or the Co-Issuer’s written direction the foregoingmaterials prepared by or on behalf of the Issuer and/or the Co-Issuer; *provided*,*however*, that theTrustee shall be entitled to prepare and affix thereto or enclose therewithreasonable disclaimers to the effect that such Rule 144A Information was notassembled by the Trustee, that the Trustee has not reviewed or verified theaccuracy thereof, and that it makes no representation as to such accuracy or asto the sufficiency of such information under the requirements of Rule 144A orfor any other purpose.

 

## Section 7.14           CalculationAgent.

##  

### (a)      The Issuer andthe Co-Issuer hereby agree that for so long as any Notes remain Outstandingthere shall at all times be an agent appointed to calculate LIBOR in respect ofeach Interest Accrual Period in accordance with the terms of Schedule Fhereto (the “Calculation Agent”).  The Issuer and the Co-Issuer have initiallyappointed the Trustee as Calculation Agent for purposes of determining LIBORfor each Interest Accrual Period.  TheCalculation Agent may be removed by the Issuer and the Co-Issuer at any time.  The Calculation Agent may resign at any timeby giving written notice thereof to the Issuer, the Co-Issuer, the CollateralManager, each Hedge Counterparty, the Noteholders and each Rating Agency.  If the Calculation Agent is unable orunwilling to act as such or is removed by the Issuer and the Co-Issuer in respectof any Interest Accrual Period, the Issuer and the Co-Issuer shall, with theprior written consent of each Hedge Counterparty, promptly appoint as areplacement Calculation Agent a leading bank which is engaged in transactionsin Eurodollar deposits in the international Eurodollar market and which doesnot control or is not controlled by or under common control with the Issuer orthe Co-Issuer.  The Calculation Agent maynot resign its duties without a successor having been duly appointed, and shallpromptly inform the Hedge Counterparty of any such appointment.  If no successor Calculation Agent shall havebeen appointed within 30 days after giving of a notice of resignation, theresigning Calculation Agent, each Hedge Counterparty, a Majority of the Notesor any Holder of a Note, on behalf of himself and all others similarlysituated, may petition a court of competent jurisdiction for the appointment ofa successor Calculation Agent.

###  

### (b)      The CalculationAgent 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 eventlater than 11:00 a.m. (New York time) on the London Banking Day immediatelyfollowing each LIBOR Determination Date, the Calculation Agent shall calculate(x) LIBOR for the next Interest Accrual Period and (y) the amount of interestfor such Interest Accrual Period payable in respect of each U.S. $1,000principal amount of each Class of Notes (rounded to the nearest cent, with halfa cent being rounded upward) on the related Payment Date, and will communicatesuch rates and amounts to the Issuer, the Co-Issuer, the Trustee, theCollateral Manager, the Paying Agent, each Hedge Counterparty and, if anyFloating Rate Note is in the form of a Regulation S Global Security, toEuroclear and Clearstream, Luxembourg. The Calculation Agent shall also specify to the Issuer and the Co-Issuerthe quotations upon which LIBOR is based, and in any event the CalculationAgent shall notify the Issuer and the Co-Issuer before 5:00 p.m. (New Yorktime) on each LIBOR Determination Date if it has not determined and is not inthe process of determining LIBOR and the Interest Distribution Amounts for eachClass 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 FRate, Class G Rate, Class H Rate, Class J Rate and Class K Rate and the relatedClass 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 andClass K Interest Distribution Amount, respectively, by the Calculation Agentshall, absent manifest error, be final and binding on all parties.

###  

## Section 7.15           CertainTax Matters.

##  

The Issuer will provide, upon request of any Holder ofany Class of Notes deemed equity for U.S. federal income tax purposes, anyinformation with regard to any filing requirements that such Holder may have asa result of the Issuer being classified as a “passive foreign investmentcompany” or a “controlled foreign corporation” (as applicable) for U.S. federalincome tax purposes.

 

## Section 7.16           Maintenanceof Listing.

##  

### (a)      For so long asany of the Senior Notes remain Outstanding, the Issuer and Co-Issuer shall useall reasonable efforts to arrange and maintain the listing of the Senior Noteson the Irish Stock Exchange.

###  

### (b)      If the Senior Notesare listed on the Irish Stock Exchange, the Issuer shall:

###  

#### (i)            in eachcalendar year commencing in 2005, request from the Irish Stock Exchange awaiver of the Irish Stock Exchange’s requirement to publish annual reports andaccounts;

####  

#### (ii)           submit tothe Irish Stock Exchange draft copies of any proposed amendments to theGoverning Documents which would affect the rights of the Holders of the Senior Noteslisted on the Irish Stock Exchange;

 

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#### (iii)          paythe annual fee for listing the Senior Notes on the Irish Stock Exchange, ifany; and

####  

#### (iv)          inform theIrish Stock Exchange if the rating assigned to any of the Senior Notes isreduced or withdrawn.

####  

### (c)      All notices,documents, reports and other announcements delivered to such CompanyAnnouncements Office shall be in the English language.

###  

### (d)      Notwithstandingthe foregoing, if the Collateral Manager on behalf of the Co-Issuers determinesthat the maintenance of the listing of any Class of Senior Notes on the IrishStock Exchange (or any alternative listing on another securities exchange) isunduly onerous or burdensome, the Co-Issuers will have the right to cause suchClass of Senior Notes to be delisted from the Irish Stock Exchange (or suchother securities exchange).  Withoutlimiting the Collateral Manager’s discretion with respect to any determinationthat maintaining or obtaining a listing is unduly onerous or burdensome, theCollateral Manager may take into account various factors, including anyrequirement, resulting from a listing, that either Co-Issuer prepare financialstatements of any particular kind or provide additional disclosure of anyparticular kind, in each case including any such requirement arising out ofdisclosure or transparency directives of the European Union or any other law orgovernmental rule.  Notwithstanding theforegoing, the consent of a Majority of the Controlling Class shall be requiredunless the reason for delisting relates to a legal/compliance, regulatory,accounting or tax issue

###  

## Section 7.17           Purchaseof Assets.

##  

The Issuer (or the Collateral Manager on behalf of theIssuer) shall use reasonable commercial efforts to invest Principal Proceedsand any remaining Initial Deposit and any Reinvestment Income during theRamp-Up Period in Collateral Debt Securities in accordance with the provisionshereof.  Subject to the provisions ofthis Section 7.17, Principal Proceeds and all or any portion of anyremaining Initial Deposit and any Reinvestment Income thereon may be appliedprior to the Effective Date to purchase Collateral Debt Securities (which shallbe, and hereby are, Granted to the Trustee pursuant to the Granting Clause ofthis Agreement) for inclusion in the Assets upon receipt by the Trustee of anIssuer Order executed by the Issuer (or the Collateral Manager on behalf of theIssuer) with respect thereto directing the Trustee to pay out the amountspecified therein against delivery of the Collateral Debt Security specifiedtherein and a certificate of an Authorized Officer of the Issuer (or theCollateral Manager), dated as of the trade date, and delivered to the Trusteeon or prior to the date of such purchase and Grant, to the effect that thecriteria set forth below in this Section 7.17 will be satisfied (suchcriteria to be applied as of the trade date) after giving effect to suchpurchase and Grant of the Collateral Debt Securities:

 

(a)           theEligibility Criteria are met with respect to the Collateral Debt Securitiespurchased;

 

(b)           theReinvestment Criteria are satisfied after giving effect to such investment; and

 

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(c)           theprocedures relating to the perfection of the Trustee’s security interest in theCollateral Debt Securities described in this Agreement have been satisfied.

 

## Section 7.18           EffectiveDate Actions.

##  

(a)           The Issuer(or the Collateral Manager on behalf of the Issuer) shall cause to be deliveredto the Trustee and each Rating Agency on the Effective Date an amended Scheduleof Closing Date Collateral Debt Securities listing all Collateral DebtSecurities Granted to the Trustee pursuant to Section 7.17 on or beforethe Effective Date, which schedule shall supersede any prior Schedule ofClosing Date Collateral Debt Securities delivered to the Trustee.

 

(b)           Within ten(10) Business Days after the Effective Date, the Issuer (or the CollateralManager on behalf of the Issuer) shall request each Rating Agency rating aClass of Notes to confirm within twenty (20) Business Days after the EffectiveDate, and to so notify in writing the Trustee and any Hedge Counterparty, thatit has not reduced or withdrawn the ratings assigned by it on the Closing Dateto such Class of Notes.  If any ratingassigned as of the Closing Date to any Class of Notes has not been soconfirmed, or is reduced or withdrawn, within twenty (20) Business Days afterthe Effective Date by any such Rating Agency, the Collateral Manager may, onbehalf of the Issuer, within 10 Business Days provide to such Rating Agency aproposal (a “Proposal”)with respect to the Collateral Debt Securities. If such Rating Agency does not accept the Proposal or the CollateralManager, on behalf of the Issuer, elects not to submit a Proposal, a “RatingConfirmation Failure” shall have occurred. If such Rating Agency accepts the Proposal, a Rating Confirmation Failureshall not be deemed to have occurred unless and until the Collateral Managerfails to meet the conditions set forth in the Proposal in accordance with thetime requirements set forth in such Proposal. Within 10 Business Days after the conditions set forth in the Proposalhave been satisfied, the Issuer must request a Rating Confirmation. Failure toreceive such Rating Confirmation shall result in a Rating ConfirmationFailure.  If a Rating ConfirmationFailure occurs on the first Payment Date thereafter, (i) as provided in Section10.4, amounts on deposit in the Unused Proceeds Account, (ii) as providedin Section 11.1(a)(i), all Interest Proceeds remaining after payment ofamounts 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 Proceedsremaining 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 ofeach such Class of Notes, sequentially in accordance with the Priority ofPayments, until each such rating is confirmed or reinstated or such Class ofNotes has been paid in full.

 

(c)           TheCollateral Manager on behalf of the Issuer shall cause to be delivered to theTrustee, each Hedge Counterparty and each Rating Agency, within six BusinessDays after the Effective Date, an Accountants’ Report, dated as of theEffective Date, confirming that the Collateral Quality Tests and the CoverageTests have been satisfied and that the Collateral Debt Securities have an aggregatepar amount equal to at least the Minimum Ramp-Up Amount and certifying theprocedures applied and such accountants’ associated findings with respect tothe Eligibility Criteria and specifying the procedures undertaken by them toreview data and computations relating to such information. The CollateralManager may on any date, prior to the 120th day following the Closing Date orthe purchase of Collateral Debt Securities having an aggregate par amount equalto the Minimum Ramp-Up Amount, upon written notice to the Trustee, the Issuerand the Co-Issuer and each Rating Agency (with a copy to each Hedge

 

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Counterparty), declare that the Effective Date shalloccur on the date specified in such notice; *provided* thateach of the Collateral Quality Tests and the Coverage Tests will be satisfiedas of such Effective Date and the Rating Agency Condition has beensatisfied.  The Issuer (or the CollateralManager on behalf of the Issuer) shall cause to be delivered to S&P on theEffective Date a Microsoft Excel file that provides all of the inputs requiredto determine whether the S&P CDO Monitor Test has been satisfied.

 

# **ARTICLE 8**

 

# **SUPPLEMENTAL INDENTURES**

 

## Section 8.1             SupplementalIndentures Without Consent of Securityholders.

##  

Without the consent of the Holders of any Notes or anyPreferred Shareholders, the Issuer, the Co-Issuer, when authorized by BoardResolutions, and the Trustee, with the written consent of each HedgeCounterparty delivered to the Issuer, the Co-Issuer and the Trustee, and, atany time and from time to time subject to the requirement provided below inthis Section 8.1, may enter into one or more indentures supplementalhereto, in form satisfactory to the Trustee, for any of the following purposes:

 

### (a)      to evidence thesuccession of another Person to the Issuer or the Co-Issuer and the assumptionby any such successor Person of the covenants of the Issuer or the Co-Issuerherein and in the Notes;

###  

### (b)      to add to thecovenants of the Issuer, the Co-Issuer or the Trustee for the benefit of theHolders of the Notes, Preferred Shareholders, each Hedge Counterparty or tosurrender 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, oradd 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 andprovide for the acceptance of appointment hereunder by a successor Trustee andto add to or change any of the provisions of this Indenture as shall benecessary to facilitate the administration of the trusts hereunder by more thanone Trustee, pursuant to the requirements of Sections 6.9, 6.10 and 6.12hereof;

###  

### (e)      to correct oramplify the description of any property at any time subject to the lien of thisIndenture, or to better assure, convey and confirm unto the Trustee anyproperty subject or required to be subjected to the lien of this Indenture(including, without limitation, any and all actions necessary or desirable as aresult of changes in law or regulations) or to subject to the lien of thisIndenture any additional property;

###  

### (f)       to modify therestrictions on and procedures for resales and other transfers of Notes toreflect any changes in applicable law or regulation (or the interpretationthereof) or to enable the Issuer and the Co-Issuer to rely upon any exemptionfrom registration under the

 

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### Securities Act orthe Investment Company Act or to remove restrictions on resale and transfer tothe extent not required thereunder;

###  

### (g)      to accommodatethe issuance, if any, of Notes in global or book-entry form through thefacilities of the Depository Trust Company or otherwise;

###  

### (h)      to enable theIssuer and the Trustee to rely upon any exemption from registration under theExchange Act or the Investment Company Act or to remove certain existingrestrictions to the extent not required under such exemption;

###  

### (i)       otherwise tocorrect any inconsistency or cure any ambiguity or mistake;

###  

### (j)       to take anyaction commercially reasonably necessary or advisable to prevent the Issuerfrom failing to qualify as a qualified REIT subsidiary (within the meaning ofSection 856(i)(2) of the Code) or to prevent the Issuer from being subject toU.S. federal, state or local income or franchise tax on a net income tax basisor to prevent the Issuer, the Holders of the Securities or the Trustee frombeing subject to withholding or other taxes, fees or assessments; and

###  

### (k)      to conform thisIndenture to the provisions described in the Offering Memorandum dated July 8,2005 (or any supplement thereto).

###  

The Trustee is hereby authorized to join in theexecution of any such supplemental indenture and to make any furtherappropriate agreements and stipulations which may be therein contained, but theTrustee shall not be obligated to enter into any such supplemental indenturewhich affects the Trustee’s own rights, duties, liabilities or immunities underthis Indenture or otherwise, except to the extent required by law.

 

If any Class of Notes is Outstanding and rated by aRating Agency, the Trustee shall not enter into any such supplemental indentureif, as a result of such supplemental indenture, such Rating Agency would causethe rating of any such Notes to be reduced or withdrawn.  At the cost of the Issuer, for so long as anyClass of Notes shall remain Outstanding and is rated by a Rating Agency, theTrustee shall provide to such Rating Agency a copy of any proposed supplementalindenture 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 writtenconfirmation that such Rating Agency will not, as a result of such supplementalindenture, cause the rating of any such Class of Notes to be reduced orwithdrawn, and, as soon as practicable after the execution by the Trustee, theIssuer and the Co-Issuer of any such supplemental indenture, provide to suchRating Agency a copy of the executed supplemental indenture.

 

The Trustee shall not enter into any such supplementalindenture if, as a result of such supplemental indenture, the interests of anyHolder of Securities would be materially and adversely affected thereby or suchaction will cause the Holders of the Notes to experience any material change tothe timing, character or source of the income from the Notes, unless theMajority of each and every Class of Notes or the Preferred Shares so affected haveapproved such Supplemental Indenture. The Trustee shall be entitled to rely upon an Opinion of Counselprovided by and at the expense of the party requesting such supplementalindenture in determining whether or not the Holders of Securities would be adverselyaffected by such change

 

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(after giving notice of such change to the Holders ofSecurities).  Such determination shall beconclusive and binding on all present and future Holders of Securities.  The Trustee shall not be liable for any suchdetermination made in good faith and in reliance upon an Opinion of Counseldelivered to the Trustee as described in Section 8.3 hereof.

 

Furthermore, the Trustee shall not enter into any suchsupplemental indenture unless the Trustee has received an Opinion of Counselfrom Cadwalader, Wickersham & Taft LLP or other nationally recognized U.S.tax counsel experienced in such matters that the proposed supplementalindenture will not cause the Issuer to fail to be treated as a qualified REITsubsidiary (within the meaning of Section 856(i)(2) of the Code) or otherwisebe subject to U.S. federal income tax on a net income tax basis.

 

## Section 8.2             SupplementalIndentures 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 (excludingany Notes owned by the Collateral Manager or any of its Affiliates, or by anyaccounts managed by them) of the Notes of each class materially and adversely affectedthereby and all of the Holders of Preferred Shares if materially and adverselyaffected thereby by Act of said Securityholders delivered to the Trustee andthe Co-Issuers, and (b) the consent of each Hedge Counterparty that is materiallyand adversely affected thereby, the Trustee and the Co-Issuers may enter intoone or more indentures supplemental hereto to add any provisions to, or changein any manner or eliminate any of the provisions of, this Indenture or modifyin any manner the rights of the Holders of the Notes of such Class or the PreferredShares, as the case may be, under this Indenture.  Unless notified by Holders of a Majority (excludingany Notes owned by the Collateral Manager or any of its Affiliates, or by anyaccounts managed by them) of the Notes of any Class that such Class of Noteswill be materially and adversely affected, the Trustee may, based on thesatisfaction of the Rating Agency Condition, determine whether or not suchClass of Notes would be materially and adversely affected by such change (aftergiving 15 Business Days’ notice of such change to the Holders of such Class ofNotes, the holders of the Preferred Shares and each Hedge Counterparty).  The Trustee may, in reliance on the consentof the Holders of the Preferred Shares or on a written Opinion of Counselprovided by and at the expense of the party requesting such supplementalindenture to determine whether or not the Holders of the Preferred Shares wouldbe adversely affected by such change (after giving notice of such change to theHolders of the Preferred Shares).  Suchdeterminations shall be conclusive and binding on all present and futureNoteholders and Holders of the Preferred Shares.  The consent of the Holders of the Preferred Sharesshall be binding on all present and future Holders of the Preferred Shares.

 

Without the consent of (x) each Hedge Counterparty (ifany) (to the extent set forth in the related Hedge Agreement) and (y) in thecase of clauses (a) through (h) and (j) below, all of the holders of each OutstandingClass of Notes adversely affected, or, in the case of clause (i) below, all ofthe Holders of the Controlling Class and in each such case subject tosatisfaction of the Rating Agency Condition, no supplemental indenture may:

 

### (a)      change theStated Maturity of the principal of or the due date of any installment ofinterest on any Note, reduce the principal amount thereof or the Note InterestRate thereon or the Redemption Price with respect to any Note, change the dateof any

 

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### scheduleddistribution on the Preferred Shares, or the Redemption Price with respectthereto, or change the earliest date on which any Note may be redeemed at theoption of the Issuer, change the provisions of this Indenture that apply theproceeds of any Assets to the payment of principal of or interest on Notes orof distributions to the Preferred Shares Paying Agent for the payment ofdistributions in respect of the Preferred Shares or change any place where, orthe coin or currency in which, any Note or the principal thereof or interestthereon is payable, or impair the right to institute suit for the enforcementof any such payment on or after the Stated Maturity thereof (or, in the case ofredemption, on or after the applicable Redemption Date);

###  

### (b)      reduce thepercentage of the Aggregate Outstanding Amount of Holders of Notes of eachClass or the Notional Amount of Preferred Shares of Preferred Shareholderswhose consent is required for the authorization of any such supplementalindenture or for any waiver of compliance with certain provisions of thisIndenture or certain Defaults hereunder or their consequences provided for inthis Indenture;

###  

### (c)      impair oradversely affect the Assets except as otherwise permitted in this Indenture;

###  

### (d)      permit thecreation of any lien ranking prior to or on a parity with the lien of thisIndenture with respect to any part of the Assets or terminate such lien on anyproperty at any time subject hereto or deprive the Holder of any Note, or theHolder of any Preferred Share as an indirect beneficiary, of the securityafforded to such Holder by the lien of this Indenture;

###  

### (e)      reduce thepercentage of the Aggregate Outstanding Amount of Holders of Notes of eachClass whose consent is required to request the Trustee to preserve the Assetsor rescind the Trustee’s election to preserve the Assets pursuant to Section5.5 or to sell or liquidate the Assets pursuant to Section 5.4 or 5.5hereof;

###  

### (f)       modify any of theprovisions of this Section 8.2, except to increase any percentage ofoutstanding Notes whose holders’ consent is required for any such action or toprovide that other provisions of this Indenture cannot be modified or waivedwithout the consent of the Holder of each outstanding Note affected thereby;

###  

### (g)      modify thedefinition of the term “Outstanding” or the provisions of Section 11.1 orSection 13.1 hereof;

###  

### (h)      modify or amendany of the non-petition and limited-recourse provisions set forth herein or inany of the related Transaction Documents;

###  

### (i)       modify thedefinition of the term “Collateral Manager Servicing Standard,” or

###  

### (j)       modify any ofthe provisions of this Indenture in such a manner as to affect the calculationof the amount of any payment of interest or principal on any Note on anyPayment Date or of distributions to the Preferred Shares Paying Agent for thepayment of distributions in respect of the Preferred Shares on any Payment Date(or any other date) or to

 

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### affect the rightsof the Holders of Securities to the benefit of any provisions for theredemption of such Securities contained herein;

###  

*provided*,*however*,that no supplemental indenture may reduce the permitted minimum denominationsof the Notes or modify any provisions regarding limited recourse ornon-petition covenants with respect to the Issuer and the Co-Issuer.

 

If any Class of Notes are Outstanding and rated by aRating Agency, the Trustee shall not enter into any such supplemental indentureif, as a result of such supplemental indenture, such Rating Agency would causethe rating of any such Notes to be immediately reduced or withdrawn.  At the cost of the Issuer, for so long as anyClass of Notes shall remain Outstanding and is rated by a Rating Agency, theTrustee shall provide to such Rating Agency a copy of any proposed supplementalindenture 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 writtenconfirmation that such Rating Agency will not, as a result of such supplementalindenture, cause the rating of any such Class of Notes to be reduced orwithdrawn.

 

The Trustee shall be entitled to rely upon an Opinionof Counsel provided by and at the expense of the party requesting suchsupplemental indenture in determining whether or not the Holders of Securitieswould be adversely affected by such change (after giving notice of such changeto the Holders of Securities).  Suchdetermination shall be conclusive and binding on all present and future Holdersof Securities.  The Trustee shall not beliable for any such determination made in good faith and in reliance upon anOpinion of Counsel delivered to the Trustee as described in Section 8.3hereof.

 

It shall not be necessary for any Act ofSecurityholders under this Section 8.2 to approve the particular form ofany proposed supplemental indenture, but it shall be sufficient if such Actshall approve the substance thereof.

 

Promptly after the execution by the Issuer, theCo-Issuer and the Trustee of any supplemental indenture pursuant to this Section8.2, the Trustee, at the expense of the Issuer, shall mail to theSecurityholders, 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 mailsuch notice, or any defect therein, shall not, however, in any way impair oraffect the validity of any such supplemental indenture.

 

## Section 8.3             Executionof Supplemental Indentures.

##  

In executing or accepting the additional trustscreated by any supplemental indenture permitted by this Article 8 or themodifications thereby of the trusts created by this Indenture, the Trusteeshall be entitled to receive, and shall be fully protected in relying upon, anOpinion of Counsel stating that the execution of such supplemental indenture isauthorized or permitted by this Indenture and that all conditions precedentthereto have been satisfied. The Trustee may, but shall not be obligated to,enter into any such supplemental indenture which affects the Trustee’s ownrights, duties or immunities under this Indenture or otherwise.  The Collateral Manager will be bound tofollow any amendment or supplement to this Indenture of

 

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which it has received written notice at least tenBusiness Days prior to the execution and delivery of such amendment orsupplement; *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 CollateralManager, the Collateral Manager shall not be bound (and the Issuer agrees thatit will not permit any such amendment to become effective) unless theCollateral Manager gives written consent to the Trustee and the Issuer to suchamendment.  The Issuer and the Trusteeshall give written notice to the Collateral Manager of any amendment made tothis Indenture pursuant to its terms.  Inaddition, the Collateral Manager’s written consent shall be required prior toany amendment to this Indenture by which it is adversely affected.

 

## Section 8.4             Effectof Supplemental Indentures.

##  

Upon the execution of any supplemental indenture underthis Article 8, this Indenture shall be modified in accordancetherewith, and such supplemental indenture shall form a part of this Indenturefor all purposes; and every Holder of Notes and Preferred Shares theretoforeand thereafter authenticated and delivered hereunder shall be bound thereby.

 

## Section 8.5             Referencein Notes to Supplemental Indentures.

##  

Notes authenticated and delivered after the executionof any supplemental indenture pursuant to this Article 8 may, and ifrequired by the Trustee shall, bear a notice in form approved by the Trustee asto any matter provided for in such supplemental indenture.  If the Issuer and the Co-Issuer shall sodetermine, new Notes, so modified as to conform in the opinion of the Trusteeand the Issuer and the Co-Issuer to any such supplemental indenture, may beprepared and executed by the Issuer and the Co-Issuer and authenticated anddelivered by the Trustee in exchange for Outstanding Notes.

 

# **ARTICLE 9**

 

# **REDEMPTIONOF SECURITIES; REDEMPTION PROCEDURES**

#  

## Section 9.1             Clean-upCall; Tax Redemption and Optional Redemption.

##  

### (a)      The Notes maybe redeemed at the option of and at the direction of the Collateral Manager, inwhole but not in part, on any Payment Date (the “Clean-up Call Date”), on or after the PaymentDate on which the Aggregate Outstanding Amount of the Notes has been reduced to15% of the Aggregate Outstanding Amount of the Notes on the Closing Date, at aprice equal to the applicable Redemption Price (such redemption, a “Clean-up Call”); *provided*that any payments due and payable upon atermination of each Hedge Agreement will be made on the Clean-up Call Date inaccordance with the terms thereof and this Indenture; and *provided*,*further*, that the funds available to be used for suchClean-up Call will be sufficient to pay the Total Redemption Price.

###  

### (b)      The Notes andthe Preferred Shares shall be redeemable, in whole but not in part, by Act of aMajority 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 MaterialityCondition 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 atermination of each Hedge Agreement will be made in accordance with the termsthereof and this Indenture; and *provided*,*further*, the funds available to be used for such Tax Redemptionwill be sufficient to pay the Total Redemption Price.  Upon the occurrence of a Tax Event, theIssuer and the Co-Issuer, at the direction of the Collateral Manager shallprovide written notice thereof to the Trustee, the Irish Paying Agent (for solong as any Notes are listed on the Irish Stock Exchange), each HedgeCounterparty and each Rating Agency.

###  

### (c)      The Notes andthe Preferred Shares shall be redeemable, in whole but not in part, at a priceequal to the applicable Redemption Price, on any Payment Date on or after thePayment Date occurring in July 2008 at the direction of the Issuer (suchredemption, an “OptionalRedemption”) (i) by Act of a Majority of the Preferred Sharesdelivered to the Trustee, or (ii) at the direction of the Collateral Managerunless a Majority of the Preferred Shares object; *provided*,*however*, that any payments due and payable upon atermination of each Hedge Agreement will be made in accordance with the termsthereof and this Indenture; and *provided*,*further*, that the funds available to be used for suchOptional Redemption will be sufficient to pay the Total Redemption Price.

###  

### (d)      The election bythe Collateral Manager to redeem the Notes pursuant to a Clean-up Call shall beevidenced by an Officer’s Certificate from the Collateral Manager directing theTrustee to make the payment to the Paying Agent of the applicable RedemptionPrice of all of the Notes to be redeemed from funds in the Payment Account inaccordance with the Priority of Payments. In connection with a Tax Redemption, the occurrence of a Tax Event andsatisfaction of the Tax Materiality Condition shall be evidenced by an IssuerOrder from the Issuer or from the Collateral Manager on behalf of the Issuercertifying that such conditions for a Tax Redemption have occurred.  The election by the Collateral Manager toredeem the Notes pursuant to an Optional Redemption shall be evidenced by anOfficer’s Certificate from the Collateral Manager on behalf of the Issuercertifying that the conditions for an Optional Redemption have occurred.

###  

### (e)      A redemptionpursuant to Sections 9.1(a), 9.1(b) or 9.1(c) shall not occurunless (1) (i) at least six (6) Business Days before the scheduled RedemptionDate, the Collateral Manager shall have certified to the Trustee that theCollateral Manager on behalf of the Issuer has entered into a binding agreementor agreements, with (A) one or more financial institutions whose long-termunsecured debt obligations (other than such obligations whose rating is basedon the credit of a person other than such institution) have a credit ratingfrom each Rating Agency of at least equal to the highest rating of any Notesthen Outstanding or whose short-term unsecured debt obligations have a creditrating 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 theCollateral Manager, to sell all or part of the Pledged Obligations, not laterthan the Business Day immediately preceding the scheduled Redemption Date or(ii) the Trustee shall have received written confirmation that the method ofredemption satisfies the Rating Agency Condition and (2) the related SaleProceeds (in immediately available funds), together with all other availablefunds (including proceeds from the sale of the Assets, Eligible Investmentsmaturing on or prior to the scheduled Redemption Date, all amounts in theCollection Accounts and available Cash), shall be an aggregate amountsufficient to pay all

 

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### amounts, payments,fees and expenses in accordance with the Priority of Payments due and owing onsuch Redemption Date.

###  

## Section 9.2             AuctionCall Redemption.

##  

### (a)      During theperiod from and including the Payment Date occurring in July 2015 and to butnot including the first Payment Date on which the Clean-up Call may beexercised (the “Auction CallPeriod”), the Notes and the Preferred Shares will be redeemed,in whole but not in part, if a Successful Auction is completed (suchredemption, an “Auction CallRedemption”), at their applicable Redemption Prices; *provided*that any payments due and payable upon atermination of each Hedge Agreement will be made on the Auction Call RedemptionDate in accordance with the terms thereof and this Indenture; and *provided*,*further*, that thefunds available to be used for such Auction Call Redemption will be sufficientto pay the Total Redemption Price.  AnAuction Call Redemption may only occur on a Payment Date occurring in Januaryor July during the Auction Call Period (such Payment Date, the “Auction Call Redemption Date”).

###  

### (b)      The Trusteeshall sell and transfer the Collateral Debt Securities to the highest bidderfor all of the Collateral Debt Securities (or to each highest bidder for one ormore (but not all) of the Collateral Debt Securities), at the Auction, as longas:

###  

#### (i)            theAuction has been conducted in accordance with the Auction Procedures, asevidenced by a certification of the Collateral Manager;

####  

#### (ii)           at leastone bidder delivers to the Collateral Manager a bid (which bid may be basedupon 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 ofeach Collateral Debt Security (which bid may be for one or more (but not all)of the Collateral Debt Securities);

####  

#### (iii)          basedon the Collateral Manager’s certification to the Trustee of the amount of thecash purchase price of each bid, the Trustee, in consultation with theCollateral Manager, determines that the Highest Auction Price would result in acash purchase price for the Collateral Debt Securities which, together with thebalance of all Eligible Investments and Cash in the Collection Accounts, thePayment Account and the Expense Account, will be at least equal to the TotalRedemption Price; and

####  

#### (iv)          each bidderwho offered the Highest Auction Price for all of the Collateral Debt Securitiesor for one or more of the Collateral Debt Securities enters into a writtenagreement with the Issuer (which the Issuer shall execute if the conditions setforth in clauses (i) through (iii) above are satisfied) obligating the highestbidder for all of the Collateral Debt Securities (or the highest bidder for oneor more (but not all) of the Collateral Debt Securities) to purchase all(either individually or together with other bidders, as applicable) of theCollateral Debt Securities with the closing of such purchase (and full paymentin Cash to the Trustee) to occur on or before the tenth Business Day prior tothe scheduled Redemption Date.

 

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### (c)      If any of theforegoing conditions is not met with respect to any Auction, or if the highestbidder or the Collateral Manager, as the case may be, fails to pay the purchaseprice on or before the sixth Business Day following the relevant Auction Date,(i) the Auction Call Redemption shall not occur on the Payment Date followingthe relevant Auction Date, (ii) the Trustee shall give notice of the withdrawalpursuant to Section 9.3, (iii) subject to subclause (iv) below, theTrustee shall decline to consummate such sale and shall not solicit any furtherbids or otherwise negotiate any further sale of Collateral Debt Securities inrelation to such Auction and (iv) unless the Notes and the Preferred Shares areredeemed in full prior to the next succeeding Auction Date, or the CollateralManager notifies the Trustee that market conditions are such that such Auctionis not likely to be successful, the Trustee shall conduct another Auction onthe next succeeding Auction Date.

###  

## Section 9.3             Noticeof Redemption.

##  

### (a)      In connectionwith an Optional Redemption, a Clean-up Call or a Tax Redemption pursuant to Section9.1 or an Auction Call Redemption pursuant to Section 9.2, theTrustee on behalf of the Issuer and the Co-Issuer shall (i) set the applicableRecord Date and (ii) at least 45 days prior to the proposed Redemption Date,notify the Collateral Manager, each Hedge Counterparty, the Rating Agencies andeach Preferred Shareholder at such Preferred Shareholder’s address in theregister maintained by the Share Registrar, of such proposed Redemption Date,the applicable Record Date, the principal amount of Notes to be redeemed onsuch Redemption Date and the Redemption Price of such Notes in accordance with Section9.1 or Section 9.2.  TheRedemption Price shall be determined no earlier than 60 days prior to theproposed Redemption Date.

###  

### (b)      Any such noticeof an Auction Call Redemption, an Optional Redemption, a Clean-up Call or a TaxRedemption may be withdrawn by the Issuer and the Co-Issuer at the direction ofthe Collateral Manager up to the fourth Business Day prior to the scheduledRedemption Date by written notice to the Trustee, the Irish Paying Agent (forso long as any Notes are listed on the Irish Stock Exchange), each HedgeCounterparty, to each Holder of Notes to be redeemed, and the CollateralManager only if (i) in the case of an Optional Redemption, a Clean-up Call or aTax Redemption the Collateral Manager is unable to deliver the sale agreementor agreements or certifications referred to in Section 9.1(e), as thecase may be or (ii) in the case of an Auction Call Redemption, the Auction isunable to be consummated pursuant to the Auction Procedures.

###  

## Section 9.4             Noticeof Redemption or Maturity by the Issuer.

##  

Notice of redemption pursuant to Section 9.1, Section9.2 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 OptionalRedemption, a Clean-up Call or a Tax Redemption is withdrawn pursuant to Section9.3(b)) prior to the applicable Redemption Date or Maturity, to each Holderof Notes to be redeemed, at its address in the Notes Register.  In addition, so long as any Notes are listedon the Irish Stock Exchange, notice of redemption or Maturity shall bepublished in the Irish Stock Exchange’s Daily Official List or as otherwiserequired 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 applicableRedemption Date;

###  

### (b)      the applicableRedemption Price;

###  

### (c)      that all theNotes are being paid in full, and that interest on the Notes shall cease toaccrue on the Redemption Date specified in the notice; and

###  

### (d)      the place orplaces where such Notes to be redeemed in whole are to be surrendered for paymentof the Redemption Price which shall be the office or agency of the Paying Agentas provided in Section 7.2.

###  

Notice of redemption shall be given by the Issuer andCo-Issuer, or at their request, by the Trustee in their names and at theexpense of the Issuer.  Failure to givenotice of redemption, or any defect therein, to any Holder of any Note shallnot impair or affect the validity of the redemption of any other Notes.

 

## Section 9.5             NotesPayable on Redemption Date.

##  

Notice of redemption having been given as aforesaid,the Notes to be redeemed shall, on the Redemption Date, become due and payableat the Redemption Price therein specified, and from and after the RedemptionDate (unless the Issuer shall Default in the payment of the Redemption Priceand accrued interest) the Notes shall cease to bear interest on the RedemptionDate.  Upon final payment on a Note to beredeemed, the Holder shall present and surrender such Note at the placespecified in the notice of redemption on or prior to such Redemption Date; *provided*,*however*, thatif there is delivered to the Issuer, the Co-Issuer and the Trustee suchsecurity 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 andthe 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 ofnotice to the Issuer, the Co-Issuer and the Trustee that the applicable Notehas been acquired by a bona fide purchaser, such final payment shall be madewithout presentation or surrender. Payments of interest on Notes of a Class so to be redeemed whose StatedMaturity is on or prior to the Redemption Date shall be payable to the Holdersof such Notes, or one or more predecessor Notes, registered as such at theclose of business on the relevant Record Date according to the terms andprovisions of Section 2.7(m).

 

If any Note called for redemption shall not be paidupon surrender thereof for redemption, the principal thereof shall, until paid,bear interest from the Redemption Date at the applicable Note Interest Rate foreach successive Interest Accrual Period the Note remains Outstanding.

 

## Section 9.6             MandatoryRedemption.

##  

On any Payment Date on which any of the Coverage Testsapplicable to any Class of Notes is not met on the most recent MeasurementDate, the Notes shall be redeemed (a “Mandatory Redemption”), first from Interest Proceedsand then from Principal Proceeds in each

 

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case in accordance with the Priority of Payments in anamount necessary, and only to the extent necessary, to cause each of theCoverage Tests to be satisfied.  Further,each Hedge Agreement will be terminated in part in accordance with the termsthereof and any payments due and payable on the Hedge Agreement in connectionwith the termination of the Hedge Agreement will be made on such Payment Datein accordance with the terms thereof and this Indenture, including satisfactionof the Rating Agency Condition.  SuchPrincipal Proceeds and Interest Proceeds shall be applied to each of theoutstanding Classes of Notes in accordance with its relative seniority inaccordance with the Priority of Payments. On or promptly after such Mandatory Redemption, the Issuer and theCo-Issuer shall certify or cause to be certified to each of the Rating Agenciesand the Trustee whether the Coverage Tests have been met.

 

## Section 9.7             SpecialAmortization.

##  

The Notes may be amortized in part by the Issuer (atthe election and direction of the Collateral Manager) if, at any time duringthe Reinvestment Period, the Collateral Manager has been unable, for a periodof at least 30 consecutive days, to identify Substitute Collateral DebtSecurities that it determines would be appropriate and would meet theEligibility Criteria in sufficient amounts to permit the reinvestment of all ora portion of the Principal Proceeds then on deposit in the Principal CollectionAccount and the amounts on deposit in the Unused Proceeds Account in SubstituteCollateral Debt Securities.  TheCollateral Manager shall notify the Trustee, the Issuer, the Co-Issuer and eachHedge Counterparty of such election (a “Special Amortization”) and the amount to beamortized (such amount, the “SpecialAmortization Amount”). On the first Payment Date following the date on which such notice isgiven, the Special Amortization Amount will be applied to amortize the Notes inaccordance with the Priority of Payments (i) on a *pro rata*basis (based on the Aggregate Outstanding Amount of each Class) among allClasses of Notes if each of the S&P Special Amortization Pro Rata Conditionand the Moody’s Special Amortization Pro Rata Condition is satisfied withrespect to the related Payment Date and each of the Coverage Tests wassatisfied as of the related Determination Date; or (ii) sequentially among allClasses of Notes, if either the S&P Special Amortization Pro Rata Conditionor the Moody’s Special Amortization Pro Rata Condition is not satisfied withrespect to the related Payment Date or any of the Coverage Tests were notsatisfied as of the related Determination Date; *provided*,*however*, that all amounts representingrecoveries in respect of Defaulted Securities will be distributed sequentiallyin any event, in accordance with Section 11.1(a)(ii)(12).

 

# **ARTICLE 10**

 

# **ACCOUNTS,ACCOUNTINGS AND RELEASES**

 

## Section 10.1           Collectionof Money; Custodial Account.

##  

### (a)      Except asotherwise expressly provided herein, the Trustee may demand payment or deliveryof, and shall receive and collect, directly and without intervention orassistance of any fiscal agent or other intermediary, all Money and otherproperty payable to or receivable by the Trustee pursuant to this Indenture,including all payments due on the Pledged Obligations in accordance with theterms and conditions of such Pledged Obligations.  The Trustee shall segregate and hold all suchMoney and property received by it in trust for

 

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### the Holders of theNotes and each Hedge Counterparty, and shall apply it as provided in thisIndenture.

###  

### (b)      The Trusteeshall credit all Collateral Debt Securities and Eligible Securities to an accountdesignated as the “Custodial Account.”

###  

## Section 10.2           CollectionAccounts.

##  

### (a)      The Trusteeshall, prior to the Closing Date, establish a segregated trust account whichshall be designated as the “Collection Account” and will consist of twosubaccounts, the “Interest Collection Account” and the “Principal CollectionAccount” (collectively, the “CollectionAccounts”), which shall be held in trust in the name of theTrustee for the benefit of the Noteholders and each Hedge Counterparty, intowhich Collection Accounts, as applicable, the Trustee shall from time to timedeposit (i) all amounts, if any, received by the Issuer pursuant to the HedgeAgreements (other than amounts received by the Issuer by reason of an event ofdefault 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) andamounts held in each Hedge Collateral Account pursuant to Section 16.1(e),(ii) all Sale Proceeds (unless simultaneously reinvested in SubstituteCollateral Debt Securities, subject to the Reinvestment Criteria and (iii) allInterest Proceeds and all Principal Proceeds. In addition, the Issuer may, but under no circumstances shall berequired to, deposit from time to time such Monies in the Collection Accountsas it deems, in its sole discretion, to be advisable.  All Monies deposited from time to time in theCollection Accounts pursuant to this Indenture shall be held by the Trustee aspart of the Assets and shall be applied to the purposes herein provided.  The Collection Accounts shall remain at alltimes with the Corporate Trust Office or a financial institution having a long-termdebt rating at least equal to “BBB+” or “A2,” as applicable, or a short-termdebt rating at least equal to “A-1,” “P-1” or “F1,” as applicable.

###  

### (b)      Alldistributions of principal or interest received in respect of the Assets, andany Sale Proceeds from the sale or disposition of a Collateral Debt Security orother Assets received by the Trustee in Dollars shall be immediately depositedinto the Interest Collection Account or the Principal Collection Account, asInterest Proceeds or Principal Proceeds, respectively (unless, in the case ofproceeds received from the sale or disposition of any Assets, such proceeds aresimultaneously reinvested pursuant to Section 10.2(d) in SubstituteCollateral Debt Securities, subject to the Reinvestment Criteria, or inEligible Investments).  Subject to Sections10.2(d), 10.2(e) and 11.2, all such property, together with anysecurities in which funds included in such property are or will be invested orreinvested during the term of this Indenture, and any income or other gainrealized from such investments, shall be held by the Trustee in the CollectionAccounts as part of the Assets subject to disbursement and withdrawal asprovided in this Section 10.2. Subject to Section 10.2(e) by Issuer Order (which may be in theform of standing instructions), the Issuer or the Collateral Manager, on behalfof the Issuer, shall at all times direct the Trustee to, and, upon receipt ofsuch Issuer Order, the Trustee shall, invest all funds received into theCollection Accounts during a Due Period, and amounts received in prior DuePeriods and retained in the Collection Accounts, as so directed in EligibleInvestments having stated maturities no later than the Business Day immediatelypreceding the next Payment Date.  TheTrustee, within one

 

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### Business Day afterreceipt of any Scheduled Distribution or other proceeds in respect of theAssets which is not Cash, shall so notify the Issuer and the Collateral Managerand 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 suchScheduled Distribution or other non-Cash proceeds for Cash in an arm’s lengthtransaction to a Person which is not an Affiliate of the Issuer or theCollateral Manager and deposit the proceeds thereof in the applicableCollection Account for investment pursuant to this Section 10.2; *provided, however*, that the Issuer, or the CollateralManager on behalf of the Issuer, need not sell such Scheduled Distributions orother non-Cash proceeds if it delivers an Officer’s Certificate to the Trusteecertifying that such Scheduled Distributions or other proceeds constituteCollateral Debt Securities or Eligible Investments.

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### (c)      If prior to theoccurrence of an Event of Default, the Issuer, or the Collateral Manager onbehalf of the Issuer, shall not have given any investment directions pursuantto Section 10.2(b), the Trustee shall seek instructions from the Issuer,or the Collateral Manager on behalf of the Issuer, within three Business Daysafter transfer of such funds to the applicable Collection Account.  If the Trustee does not thereupon receivewritten instructions from the Issuer, or the Collateral Manager on behalf ofthe Issuer, within five Business Days after transfer of such funds to theapplicable Collection Account, it shall invest and reinvest the funds held inthe applicable Collection Account in one or more Eligible Investments describedin clause (ii) of the definition of Eligible Investments maturing no later thanthe Business Day immediately preceding the next Payment Date.  If after the occurrence of an Event ofDefault, the Issuer, or the Collateral Manager on behalf of the Issuer, shallnot have given investment directions to the Trustee pursuant to Section10.2(b) for three consecutive days, the Trustee shall invest and reinvestsuch Monies as fully as practicable in Eligible Investments described in clause(ii) of the definition of Eligible Investments maturing not later than theearlier of (i) 30 days after the date of such investment or (ii) the BusinessDay immediately preceding the next Payment Date.  All interest and other income from suchinvestments shall be deposited in the applicable Collection Account, any gainrealized from such investments shall be credited to the applicable CollectionAccount, and any loss resulting from such investments shall be charged to theapplicable Collection Account.  TheTrustee 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 suchapplicable Collection Account resulting from any loss relating to any suchinvestment, except with respect to investments in obligations of the Trustee orany Affiliate thereof.

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### (d)      During theReinvestment Period (and thereafter to the extent necessary to acquireCollateral Debt Securities pursuant to contracts entered into during theReinvestment Period), the Collateral Manager on behalf of the Issuer may byIssuer Order direct the Trustee to, and upon receipt of such Issuer Order theTrustee shall, reinvest Principal Proceeds in Collateral Debt Securitiesselected by the Collateral Manager as permitted under and in accordance withthe requirements of Article 12 and such Issuer Order.

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### (e)      Subject to Section10.2(f), the Trustee shall transfer to the Payment Account for applicationpursuant to Section 11.1(a) and in accordance with the calculations andthe instructions contained in the Notes Valuation Report prepared by theTrustee on behalf of the Issuer pursuant to Section 10.9(e), on or priorto the Business Day prior to each Payment Date, any amounts then held in theCollection Accounts other than (i) Interest

 

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### Proceeds orPrincipal Proceeds received after the end of the Due Period with respect tosuch Payment Date and (ii) amounts that the Issuer is entitled to reinvest inaccordance with Section 12.2 and which the Issuer so elects to reinvestin accordance with the terms of this Indenture.

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### (f)       Notwithstanding the foregoing, the Trusteeshall transfer to the Payment Account from amounts on deposit in the InterestCollection Account or, solely in the case of clause (iii) below, the PrincipalCollection Account, as applicable, such amounts, if any, that are dueand payable to (i) SLG Gramercy in respect of the SLG Gramercy Administrative Feein accordance with, and at the times set forth in, the Asset ServicingAgreement, (ii) SLG Gramercy in respect of any special servicing fees due toSLG Gramercy in accordance with, and at the times set forth in, the AssetServicing 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 HedgeAgreement following an Event of Default or Termination Event (other thanIllegality or Tax event) (each as defined in the related Hedge Agreement) withrespect to which such Hedge Counterpart is the Defaulting Party or the soleAffected Party (as defined in the related Hedge Agreement)), if any, then due andpayable to such Hedge Counterparty in accordance with the terms of the relatedHedge Agreement.  Any required payments to Hedge Counterparties pursuant to clause (iii)of the preceding sentence shall be made, first, from amounts on deposit in theInterest Collection Account and, second, to the extent amounts on deposit inthe Interest Collection Account are insufficient, from amounts on deposit inthe Principal Collection Account.  TheTrustee shall make each such transfer on or prior to the Business Day prior tothe related payment date.

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## Section 10.3           PaymentAccount.

##  

### (a)      The Trusteeshall, prior to the Closing Date, establish a single, segregated trust accountwhich shall be designated as the “Payment Account,” which shall be held intrust for the benefit of the Noteholders and each Hedge Counterparty and overwhich the Trustee shall have exclusive control and the sole right ofwithdrawal.  Any and all funds at any timeon deposit in, or otherwise to the credit of, the Payment Account shall be heldin trust by the Trustee for the benefit of the Noteholders.  Except as provided in Sections 11.1and 11.2, the only permitted withdrawal from or application of funds ondeposit in, or otherwise to the credit of, the Payment Account shall be (i) topay the interest on and the principal of the Notes and make other payments inrespect of the Notes in accordance with their terms and the provisions of thisIndenture, (ii) to pay the Preferred Share Paying Agent for deposit into thePreferred Share Distribution Account for distributions to the PreferredShareholders in accordance with the terms and the provisions of the PreferredShares Paying Agency Agreement, (iii) upon Issuer Order, to pay other amountsspecified therein, and (iv) otherwise to pay amounts payable pursuant to and inaccordance with the terms of this Indenture, each in accordance with thePriority of Payments.  The Trustee agreesto give the Issuer and the Co-Issuer immediate notice if it becomes aware thatthe Payment Account or any funds on deposit therein, or otherwise to the creditof 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 shallhave any legal, equitable or beneficial interest in the Payment Account otherthan in accordance with the Priority of Payments.  The Payment Account shall remain at all timeswith the Corporate Trust Office or a financial institution having a long-termdebt

 

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### rating by eachRating Agency at least equal to “BBB+” or “A2,” as applicable, or a short-termdebt rating by each Rating Agency at least equal to “A-1,”  “P-1” or “F1,” as applicable.  Amounts in the Payment Account shall not beinvested.

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## Section 10.4           UnusedProceeds Account.

##  

### (a)      The Trusteeshall prior to the Closing Date establish a single, segregated trust accountwhich shall be designated as the “Unused Proceeds Account” which shall be heldin trust in the name of the Trustee for the benefit of the Noteholders, intowhich the amount specified in Section 3.2(g) shall be deposited.  All Monies deposited from time to time in theUnused Proceeds Account pursuant to this Indenture shall be held by the Trusteeas part of the Assets and shall be applied to the purposes herein provided.

###  

### (b)      The Trusteeagrees to give the Issuer immediate notice if it becomes aware that the UnusedProceeds Account or any funds on deposit therein, or otherwise to the credit ofthe Unused Proceeds Account, shall become subject to any writ, order, judgment,warrant of attachment, execution or similar process.  The Unused Proceeds Account shall remain atall times with the Corporate Trust Office of a financial institution having along-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.

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### (c)      During theReinvestment Period, amounts on deposit in the Unused Proceeds Account may orshall be designated by the Collateral Manager as Special Amortization Amountsto be included as Principal Proceeds pursuant to Section 9.7.  If the Aggregate Principal Balance of theCollateral Debt Securities exceeds the Minimum Ramp-Up Amount on the EffectiveDate, amounts remaining on deposit in the Unused Proceeds Account at the end ofthe Ramp-Up Period not to exceed an amount equal to 15% of the Initial Depositmay, at the option of the Collateral Manager, be designated as InterestProceeds.  Any such election will be madeon a one-time basis and must be made by written notice to the Trustee not laterthan the twentieth (20th) Business Day after the Effective Date, which noticeshall 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 tothe Interest Collection Account (for subsequent transfer to the PaymentAccount), which will be treated as Interest Proceeds and applied in accordancewith the Priority of Payments.  Anyamounts remaining in the Unused Proceeds Account on the twentieth (20th)Business Day after the Effective Date, to the extent not designated as InterestProceeds and provided that a Ratings Confirmation Failure has not occurred,shall be transferred by the Trustee to the Principal Collection Account (forsubsequent transfer to the Payment Account) and treated as Principal Proceedsand applied in accordance with the Priority of Payments.

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### (d)      If a RatingConfirmation Failure occurs, upon receipt of notice from the Collateral Managerpursuant to Section 7.18, the Trustee shall transfer amounts in theUnused Proceeds Account to the Payment Account for application on theimmediately following Payment Date to pay principal of the Notes, first, to thepayment of principal of the Class A-1 Notes, second, the payment of principalof 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 principalof the Class D Notes, sixth, the payment of principal of the Class E Notes,

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### seventh, thepayment of principal of the Class F Notes, eighth, the payment of principal ofthe 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 ofprincipal of the Class K Notes, in each case until the ratings assigned on theClosing Date to each Class of Notes have been reinstated or such Class has beenpaid in full.  Any excess amount shall betreated as Principal Proceeds and applied in accordance with the Priority ofPayments.  If no Ratings ConfirmationFailure occurs, to the extent the Collateral Manager has not identified suchamounts as Interest Proceeds pursuant to Section 10.4(c), the Trusteeshall transfer the amounts on deposit in the Unused Proceeds Account to thePrincipal Collection Account, and such amounts will be treated as PrincipalProceeds and applied in accordance with the Priority of Payments.

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### (e)      During theRamp-Up Period, the Issuer (or the Collateral Manager on behalf of the Issuer) mayby Issuer Order direct the Trustee to, and upon receipt of such Issuer Orderthe Trustee shall, apply amounts on deposit in the Unused Proceeds Account toacquire Collateral Debt Securities selected by the Collateral Manager aspermitted under and in accordance with the requirements of Section 7.17and such Issuer Order.

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### (f)       To the extentnot applied pursuant to Section 7.17, the Collateral Manager on behalfof the Issuer may direct the Trustee to, and upon such direction the Trusteeshall, invest all funds in the Unused Proceeds Account in Eligible Investmentsdesignated by the Collateral Manager. All interest and other income from such investments shall be depositedin the Unused Proceeds Account, any gain realized from such investments shallbe credited to the Unused Proceeds Account, and any loss resulting from suchinvestments shall be charged to the Unused Proceeds Account.  The Trustee shall not in any way be heldliable (except as a result of negligence, willful misconduct or bad faith) byreason of any insufficiency of the Unused Proceeds Account resulting from anyloss relating to any such investment, except with respect to investments inobligations of the Trustee or any Affiliate thereof.  If the Trustee does not receive investmentinstructions from an Authorized Officer of the Collateral Manager, the Trusteemay invest funds received in the Unused Proceeds Account in EligibleInvestments of the type described in clause (ii) of the definition thereto.

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## Section 10.5           DelayedFunding Obligations Account.

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### (a)      The Trusteeshall prior to the Closing Date establish a single, segregated trust accountwhich shall be designated as the “Delayed Funding Obligations Account” whichshall be held in trust in the name of the Trustee for the benefit of the Noteholdersand each Hedge Counterparty, into which Delayed Draw Funding ObligationsAccount the Trustee shall deposit funds for any additional funding commitmentsof the Issuer under any Delayed Draw Term Loans included in the Collateral DebtSecurities.  All amounts in the DelayedFunding Obligations Account shall be deposited in overnight funds in EligibleInvestments and released to fulfill such commitments.  If a Delayed Draw Term Loan is sold orotherwise disposed before the full commitment thereunder has been drawn, or ifexcess funds remain following the termination of the funding obligation givingrise to the deposit of such funds in the Delayed Funding Obligations Account,such Eligible Investments on deposit in the Delayed Funding Obligations Accountfor the purpose of fulfilling such commitment shall be transferred to thePrincipal Collection Account as Principal Proceeds.  The Delayed Funding Obligations Account shallremain at all times with the Corporate Trust Office or a financial

 

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### institution havinga 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.

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### (b)      Funds in theDelayed Funding Obligations Account shall be available solely to fulfill anyadditional funding commitments of the Issuer under any Delayed Draw Term Loansincluded in the Collateral Debt Securities, and only funds in the DelayedFunding Obligations Account shall be used for such purpose.  Upon the purchase of any Collateral DebtSecurity that is a Delayed Draw Term Loan, the Collateral Manager shall directthe Trustee to deposit Principal Proceeds into the Delayed Funding ObligationAccount in an amount equal to the Issuer’s maximum future funding obligationunder the terms of such Delayed Draw Term Loan, and the Principal Proceeds sodeposited shall be considered part of the purchase price of such Delayed DrawTerm Loan for purposes of Article 12.  The Collateral Manager shall not permit allamounts then on deposit in the Delayed Funding Obligation Account to be lessthan the aggregate amount of all future funding obligations outstanding underthe terms of all Delayed Draw Term Loans that constitute Collateral DebtSecurities.

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### (c)      The CollateralManager shall direct the Trustee to withdraw funds from the Delayed FundingObligation Account to fund amounts drawn under any Delayed Draw Term Loan.  Pursuant to an Issuer Order, all or a portionof the funds, as specified in such Issuer Order, on deposit in the DelayedFunding Obligation Account at any time in excess of the aggregate principalamount of commitments which may be drawn upon under the Delayed Draw Term Loanshall be transferred by the Trustee to the Collection Account as PrincipalProceeds.

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## Section 10.6           ExpenseAccount.

##  

### (a)      The Trusteeshall prior to the Closing Date establish a single, segregated trust accountwhich shall be designated as the “Expense Account” which shall be held in trustin the name of the Trustee for the benefit of the Noteholders and each HedgeCounterparty.  The only permittedwithdrawal from or application of funds on deposit in, or otherwise standing tothe credit of, the Expense Account shall be to pay (on any day other than aPayment Date) accrued and unpaid Company Administrative Expenses of the Issuerand the Co-Issuer (other than accrued and unpaid expenses and indemnitiespayable to the Collateral Manager under the Collateral Management Agreement).  On the Closing Date, the Trustee shalldeposit into the Expense Account an amount equal to approximately U.S. $11,234,432from the net proceeds received by the Issuer on such date from the initialissuance of the Notes.  Funds in theExpense Account shall be replenished on each Payment Date, if necessary, inaccordance with the Priority of Payments. On or after the Effective Date, any amount remaining in the ExpenseAccount may, at the election of the Collateral Manager be designated asInterest Proceeds.  On the date on whichsubstantially all of the Issuer’s assets have been sold or otherwise disposedof, the Issuer by Issuer Order executed by an Authorized Officer of theCollateral Manager shall direct the Trustee to, and, upon receipt of suchIssuer Order, the Trustee shall, transfer all amounts on deposit in the ExpenseAccount to the Interest Collection Account for application pursuant to Section11.1(a)(i) as Interest Proceeds.  Amounts credited to the Expense Account maybe applied on or prior to the Determination

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### Date preceding thefirst Payment Date to pay amounts due in connection with the offering of theNotes.

###  

### (b)      The Trusteeagrees to give the Issuer immediate notice if it becomes aware that the ExpenseAccount or any funds on deposit therein, or otherwise to the credit of theExpense Account, shall become subject to any writ, order, judgment, warrant ofattachment, execution or similar process. The Issuer shall not have any legal, equitable or beneficial interest inthe Expense Account.  The Expense Accountshall remain at all times with the Corporate Trust Office of a financialinstitution having a long-term debt rating by each Rating Agency at least equalto “BBB+” or “Baa1,” as applicable.

###  

### (c)      The CollateralManager on behalf of the Issuer may direct the Trustee to, and upon suchdirection the Trustee shall, invest all funds in the Expense Account inEligible Investments designated by the Collateral Manager.  All interest and other income from such investmentsshall be deposited in the Expense Account, any gain realized from suchinvestments shall be credited to the Expense Account, and any loss resultingfrom such investments shall be charged to the Expense Account.  The Trustee shall not in any way be heldliable (except as a result of negligence, willful misconduct or bad faith) byreason of any insufficiency of such Expense Account resulting from any lossrelating to any such investment, except with respect to investments inobligations of the Trustee or any Affiliate thereof.  If the Trustee does not receive investmentinstructions from an Authorized Officer of the Collateral Manager, the Trusteemay invest funds received in the Expense Account in Eligible Investments of thetype described in clause (ii) of the definition thereto.

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## Section 10.7           InterestAdvances.

##  

### (a)      With respect toeach Determination Date for which the sum of Interest Proceeds and, ifapplicable, Principal Proceeds, collected during the related Due Period thatare available to pay interest on the Class A-1 Notes, the Class A-2 Notes andthe Class B Notes in accordance with the Priority of Payments, are insufficientto remit the interest due and payable with respect to the Class A-1 Notes, theClass A-2 Notes and the Class B Notes on the following Payment Date (the amountof such insufficiency, an “InterestShortfall”), the Trustee shall provide the Advancing Agentwith written notice of such Interest Shortfall no later than the close ofbusiness on the Business Day following such Determination Date.  The Trustee shall provide the Advancing Agentwith notice, prior to any funding of an Interest Advance by the AdvancingAgent, of any additional interest remittances received by the Trustee afterdelivery of such initial notice that reduce such Interest Shortfall.  No later than 5:00 p.m. (New York time) onthe Business Day immediately preceding the related Payment Date (but in anyevent no earlier than one Business Day following the Advancing Agent’s receiptof notice of such Interest Shortfall), the Advancing Agent shall advance thedifference 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 asdescribed in Section 10.7(b), and subject to a maximum limit in respectof any Payment Date equal to the lesser of (i) the aggregate of such Interest Shortfallsthat would otherwise occur on the Class A-1 Notes, the Class A-2 Notes andClass B Notes and (ii) the aggregate of the interest payments not received inrespect of Non-Advancing Collateral Debt Securities.  Notwithstanding the foregoing, in nocircumstance will

 

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### the AdvancingAgent be required to make an Interest Advance in respect of a Non-AdvancingCollateral Debt Security (x) to the extent that the aggregate outstandingamount of all unreimbursed Interest Advances would exceed the aggregateoutstanding 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 than100%. Any Interest Advance made by the Advancing Agent with respect to aPayment Date that is in excess of the actual Interest Shortfall for suchPayment Date shall be refunded to the Advancing Agent by the Trustee on thesame Business Day that such Interest Advance was made (or, if such InterestAdvance is made prior to final determination by the Trustee of such InterestShortfall, on the Business Day of such final determination).  The Advancing Agent shall provide the Trusteewritten notice of a determination by the Advancing Agent that a proposedInterest Advance would constitute a Nonrecoverable Advance no later than theclose of business on the Business Day immediately preceding the related PaymentDate (or, in the event that the Advancing Agent did not receive notice of therelated Interest Shortfall on the related Determination Date, no later than theclose of business on the Business Day immediately following the Advancing Agent’sreceipt of notice of such Interest Shortfall). If the Advancing Agent shall fail to make any required Interest Advanceat or prior to the time at which distributions are to be made pursuant to Section11.1(a), the Trustee, in its capacity as Backup Advancing Agent, shall berequired to make such Interest Advance, subject to a determination ofrecoverability by the Trustee as described in Section 10.7(b).  The Trustee shall be entitled to conclusivelyrely on any affirmative determination by the Advancing Agent that an InterestAdvance 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 NonrecoverableAdvance would result in an Interest Shortfall on the next succeeding PaymentDate.  No later than the close ofbusiness on the Determination Date related to a Payment Date on which the recoveryof a Nonrecoverable Advance would result in an Interest Shortfall, theCollateral Manager will provide each Rating Agency notice of such recovery.

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### (b)      Notwithstandinganything herein to the contrary, neither the Advancing Agent nor the Trustee,in its capacity as Backup Advancing Agent, as applicable, shall be required tomake any Interest Advance unless such Person determines, in its solediscretion, exercised in good faith that such Interest Advance, or suchproposed Interest Advance, plus interest expected to accrue thereon at theReimbursement Rate, will be recoverable from subsequent payments or collectionswith respect to all Assets and has determined in its reasonable judgment thatthe recovery would not result in an Interest Shortfall.  In determining whether any proposed InterestAdvance will be, or whether any Interest Advance previously made is, aNonrecoverable Advance, the Advancing Agent or the Trustee, in its capacity as BackupAdvancing Agent, as applicable, will take into account:

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#### (i)            amounts that may be realized on each Underlying MortgageProperty in its “as is” or then current condition and occupancy;

####  

#### (ii)           that the related Senior Tranches of any Collateral DebtSecurity 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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#### inrespect of the Underlying Mortgage Properties are allocated or otherwise made availableto the Collateral Debt Securities;

####  

#### (iii)          thepossibility and effects of future adverse change with respect to the UnderlyingMortgage Properties, the potential length of time before such Interest Advancemay be reimbursed and the resulting degree of uncertainty with respect to suchreimbursement; and

####  

#### (iv)          the fact that Interest Advances are intended to provideliquidity only and not credit support to the Class A-1 Noteholders, the ClassA-2 Noteholders and the Class B Noteholders.

####  

For purposes of any such determination of whether anInterest Advance constitutes or would constitute a Nonrecoverable Advance, anInterest Advance will be deemed to be nonrecoverable if the Advancing Agent orthe Trustee, in its capacity as Backup Advancing Agent, as applicable,determines that future Interest Proceeds and Principal Proceeds may beultimately insufficient to fully reimburse such Interest Advance, plus interestthereon at the Reimbursement Rate within a reasonable period of time.  Absent bad faith, the determination by theAdvancing Agent or the Trustee, in its capacity as Backup Advancing Agent, asapplicable, as to the nonrecoverability of any Interest Advance shall beconclusive and binding on the Holders of the Notes.

 

### (c)      The AdvancingAgent and the Trustee, in its capacity as Backup Advancing Agent, will each beentitled 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 InterestProceeds for such reimbursement), from Principal Proceeds to the extent thatsuch reimbursement would not trigger an additional Interest Shortfall; *provided*that if at any time an Interest Advance is determinedto be a Nonrecoverable Advance, the Advancing Agent or the Trustee, in itscapacity as Backup Advancing Agent, shall be entitled to recover alloutstanding Interest Advances from the Collection Accounts on any Business Dayduring any Interest Accrual Period prior to the related Determination Date (oron a Payment Date prior to any payment of interest on or principal of the Notesin accordance with the Priority of Payments). The Advancing Agent shall be permitted (but not obligated) to defer orotherwise structure the timing of recoveries of Nonrecoverable Advances in suchmanner as the Advancing Agent determines is in the best interest of theNoteholders as a collective whole, which may include being reimbursed forNonrecoverable Advances in installments.

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### (d)      The AdvancingAgent and the Trustee, in its capacity as Backup Advancing Agent, will each beentitled with respect to any Interest Advance made by it (includingNonrecoverable Advances) to interest accrued on the amount of such InterestAdvance for so long as it is outstanding at the Reimbursement Rate.

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### (e)      The AdvancingAgent’s and the Trustee’s obligations to make Interest Advances in respect ofthe Collateral Debt Securities will continue through the Stated Maturity,unless the Class A Notes and the Class B Notes are previously redeemed orrepaid in full.

 

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### (f)       In no eventwill the Advancing Agent or the Trustee, in its capacity as Backup Advancing Agent, be required to advance any payments in respect ofprincipal 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)      Inconsideration of the performance of its obligations hereunder, the AdvancingAgent shall be entitled to receive, at the times set forth herein and subjectto the Priority of Payments, to the extent funds are available therefor, theAdvancing Agent Fee. In consideration of the Trustee’s back-up advancingobligations hereunder, the Trustee shall be entitled to receive, at the timesset forth herein and subject to the Priority of Payments, to the extent fundsare available therefore, the Back-Up Advancing Agent Fee.

###  

### (h)      Thedetermination by the Advancing Agent or the Trustee, in its capacity as BackupAdvancing Agent, as applicable, (i) that it has made a Nonrecoverable Advanceor (ii) that any proposed Interest Advance, if made, would constitute aNonrecoverable Advance, shall be evidenced by an Officer’s Certificatedelivered promptly to the Trustee (or, if applicable, retained thereby), theIssuer, S&P, Fitch and Moody’s, setting forth the basis for suchdetermination; *provided*that failure to givesuch notice, or any defect therein, shall not impair or affect the validity of,or the Advancing Agent or the Trustee’s entitlement to reimbursement withrespect to, any Interest Advance.

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### (i)       If a ScheduledDistribution on any Collateral Debt Security is not paid to the Trustee on theDue Date therefor, the Trustee shall provide the Advancing Agent with notice ofsuch default on the Business Day immediately following such default.  In addition, upon request, the Trustee shallprovide the Advancing Agent (either electronically or in hard-copy format),with copies of all reports received from any trustee, trust administrator, masterservicer or similar administrative entity with respect to the Collateral DebtSecurities and the Trustee shall promptly make available to the Advancing Agentany other information reasonably available to the Trustee by reason of itsacting as Trustee hereunder to permit the Advancing Agent to make adetermination of recoverability with respect to any Interest Advance and tootherwise perform its advancing functions under this Indenture.

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### (j)       Notwithstandinganything in this Indenture to the contrary, the Advancing Agent shall bepermitted (but not obligated) to defer or otherwise structure the timing of therecoveries in such a manner as the Advancing Agent determines is in the bestinterest of the Noteholders as a collective whole, which may include beingreimbursed for Nonrecoverable Advances in installments.

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## Section 10.8           Reportsby Parties.

##  

The Trustee shall supply, in a timely fashion, to theIssuer, the Co-Issuer, the Preferred Shares Paying Agent and the CollateralManager any information regularly maintained by the Trustee that the Issuer,the Co-Issuer, the Preferred Shares Paying Agent or the Collateral Manager mayfrom time to time request with respect to the Pledged Obligations or theAccounts and provide any other information reasonably available to the Trusteeby reason of its acting as Trustee hereunder and required to be provided by Section10.9 or to permit the Collateral Manager to perform its obligations underthe Collateral Management Agreement.  TheTrustee

 

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shall forward to the Collateral Manager and each HedgeCounterparty copies of notices and other writings received by it from theissuer of any Collateral Debt Security or from any Clearing Agency with respectto any Collateral Debt Security advising the holders of such security of anyrights that the holders might have with respect thereto (including, withoutlimitation, notices of calls and redemptions of securities) as well as allperiodic financial reports received from such issuer and Clearing Agencies withrespect to such issuer.  Each of theIssuer and Collateral Manager shall promptly forward to the Trustee anyinformation in their possession or reasonably available to them concerning anyof the Pledged Obligations that the Trustee reasonably may request or thatreasonably may be necessary to enable the Trustee to prepare any report orperform any duty or function on its part to be performed under the terms ofthis Indenture.

 

## Section 10.9           Reports;Accountings.

##  

### (a)      The Trusteeshall monitor the Assets on an ongoing basis and provide access to theinformation maintained by the Trustee to, and upon reasonable request of theCollateral Manager, shall assist the Collateral Manager in performing itsduties under the Collateral Management Agreement, each in accordance with thisIndenture.

###  

### (b)      The Trusteeshall perform the following functions during the term of this Agreement:

###  

#### (i)            Createand maintain a database with respect to the Collateral Debt Securities (the “Database”);

####  

#### (ii)           Permitaccess to the information contained in the Database by the Collateral Managerand the Issuer;

####  

#### (iii)          Ona monthly basis monitor and update the Database for ratings changes;

####  

#### (iv)          Updatethe Database for Collateral Debt Securities or Eligible Investments acquired orsold or otherwise disposed of;

####  

#### (v)           Prepareand arrange for the delivery to each Rating Agency, the Collateral Manager,each Hedge Counterparty, the Initial Purchaser, and upon request therefor, anyHolder of a Note shown on the Note Registrar, any Preferred Shareholder shownon the register maintained by the Share Registrar, and, for so long as anyNotes are listed on the Irish Stock Exchange, the Irish Paying Agent of theMonthly Reports;

####  

#### (vi)          prepare andarrange 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 ShareRegistrar, the firm of Independent certified public accountants appointedpursuant to Section 10.11(a) hereof, each Rating Agency, the Depository(with instructions to forward it to each of its participants who are holders ofany Notes) and, for so long as any Notes are listed on the Irish StockExchange, the Irish Paying Agent, of the Notes Valuation Report;

 

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#### (vii)         Assistin preparation and arrange for the delivery to the Collateral Manager and eachHedge Counterparty of the Redemption Date Statement;

####  

#### (viii)        Arrangefor the delivery to each Rating Agency of all information or reports requiredunder this Indenture, including, but not limited to, providing S&P, Moody’sand Fitch with (A) written notice of (1) any breaches under any of theTransaction Documents and (2) the termination or change of any parties to theTransaction Documents, in each case, for which the Trustee has received priorwritten notice pursuant to the terms of the Transaction Document and (B) eachMonthly Report in Excel spreadsheet format; and

####  

#### (ix)           Assist theIndependent certified public accountants in the preparation of those reportsrequired under Section 10.11 hereof by providing access to theinformation contained in the Database.

####  

### (c)      The Trustee, onbehalf of the Issuer, shall compile and provide or make available on itswebsite initially located at www.cdolink.com to each Rating Agency, theCollateral Manager, each Hedge Counterparty, the Initial Purchaser, for so longas 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 aNote who provides to the Trustee a certification in the form of Exhibit Mhereto, any Preferred Shareholder shown on the register maintained by the ShareRegistrar, not later than the fifth Business Day after the first day of eachmonth commencing in September 2005 (or solely in the case of the first MonthlyReport, the fifteenth Business Day), determined as of the last Business Day ofthe preceding month, a monthly report (the “Monthly Report”). The Monthly Report shall contain the following information andinstructions with respect to the Pledged Obligations included in the Assetsbased in part on information provided by the Collateral Manager:

###  

#### (i)            (1) theAggregate Principal Balance of all Collateral Debt Securities, together with acalculation, in reasonable detail, of the sum of (A) the Aggregate PrincipalBalance of all Collateral Debt Securities (other than Defaulted Securities andWritten Down Securities) plus (B) the Principal Balance of each PledgedObligation which is Written Down Security and (C) the Principal Balance of eachPledged Obligation which is a Defaulted Security;

####  

#### (ii)           the balance of all Eligible Investments and Cash in each ofthe Interest Collection Account, the Principal Collection Account, the DelayedFunding Obligations Account and the Expense Account;

####  

#### (iii)          the nature, source and amount of any proceeds in theCollection Accounts, including Interest Proceeds, Principal Proceeds,Unscheduled Principal Payments and Sale Proceeds, received since the date ofdetermination of the last Monthly Report;

####  

#### (iv)          with respect to each Collateral Debt Security and eachEligible Investment that is part of the Assets, its Principal Balance, annualinterest rate, average life, issuer, Moody’s Rating, S&P Rating and FitchRating;

 

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#### (v)           theidentity of each Collateral Debt Security that was sold or disposed of pursuantto Section 12.1 (indicating whether such Collateral Debt Security is aDefaulted Security, Credit Risk Security or otherwise (in each case, asreported in writing to the Issuer by the Collateral Manager) and whether suchCollateral Debt Security was sold pursuant to Section 12.1(a)(i) or (ii)) or Granted to the Trustee since thedate of determination of the most recent Monthly Report;

####  

#### (vi)          the identity of each Collateral Debt Security which became aDefaulted Security, Credit Risk Security or a Written Down Security since thedate of determination of the last Monthly Report;

####  

#### (vii)         the identity of each Collateral Debt Security that has beenupgraded or downgraded by one or more Rating Agencies;

####  

#### (viii)        the Aggregate Principal Balance of all Fixed RateSecurities;

####  

#### (ix)           the Aggregate Principal Balance of all Floating RateSecurities;

####  

#### (x)            based on information provided by the Collateral Manager, theAggregate Principal Balance of all Floating Rate Securities that constituteCovered Fixed Rate Securities;

####  

#### (xi)           the Aggregate Principal Balance of all Collateral DebtSecurities that are guaranteed as to ultimate or timely payment of principal orinterest;

####  

#### (xii)          withrespect to each Specified Type of Collateral Debt Security, the AggregatePrincipal Balance of all Collateral Debt Securities consisting of such SpecifiedType of Collateral Debt Securities;

####  

#### (xiii)         basedon information provided by the Collateral Manager, the identity of, and theAggregate Principal Balance of all Collateral Debt Securities whose Moody’sRating is determined as provided in each clause of the definition of “Moody’sRating” and the identity of, and the Aggregate Principal Balance of allCollateral Debt Securities whose S&P Rating is determined as provided ineach of the clauses of the definition of “S&P Rating,” identifying inreasonable detail the basis for such calculation with respect to CollateralDebt Securities with an S&P Rating assigned pursuant to Annex 1, 2 or 3 of ScheduleD, based on information provided by the Collateral Manager;

####  

#### (xiv)        withrespect to each Collateral Debt Security, the Aggregate Principal Balance ofall Collateral Debt Securities that are part of the same issuance;

####  

#### (xv)         the Aggregate Principal Balance of all Collateral DebtSecurities that are securities that provide for periodic payments of interestless frequently than quarterly;

####  

#### (xvi)        basedupon the information supplied by the Collateral Manager, the AggregatePrincipal 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 theborrower of such Loan);

 

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#### (xvii)       based upon the information supplied by the CollateralManager, the Aggregate Collateral Balance of the Collateral Debt Securitiesconsisting of CMBS Securities issued in any single calendar year;

####  

#### (xviii)      theAggregate Principal Balance of all Collateral Debt Securities (other than CMBSSecurities, CRE CDO Securities and REIT Debt Securities) backed by each singleProperty Type based on information provided by the Collateral Manager;

 

#### (xix)         theAggregate Principal Balance of all Collateral Debt Securities (other than CMBSSecurities, CRE CDO Securities and REIT Debt Securities) that are backed orotherwise invested in properties located in any single U.S. state (for eachsuch state) based on information provided by the Collateral Manager;

####  

#### (xx)          the ClassA/B Par Value Ratio, the Class A/B Interest Coverage Ratio, the Class C/D/E ParValue Ratio, the Class C/D/E Interest Coverage Ratio, the Class F/G/H Par ValueRatio and the Class F/G/H Interest Coverage Ratio, and a statement as towhether the Interest Coverage Test and the Par Value Test are satisfied;

####  

#### (xxi)         the Moody’s Rating Factor and a statement as to whether theMoody’s Maximum Rating Factor Test is satisfied;

####  

#### (xxii)          the Herfindahl Score, theamount of Cash that has been received in respect of Principal Proceeds of theCollateral Debt Securities since the immediately preceding Measurement Date buthas not been reinvested in additional Collateral Debt Securities (and what theHerfindahl score would have been had such Cash in respect of such PrincipalProceeds not existed), a statement as to whether the Herfindahl Test wassatisfied or deemed satisfied on the immediately preceding Measurement Date anda statement as to whether the Herfindahl Diversity Test is satisfied;

####  

#### (xxiii)       the Weighted Average Coupon and a statement as to whetherthe Minimum Weighted Average Coupon Test is satisfied;

####  

#### (xxiv)          the Weighted Average Spread and a statement as to whetherthe Minimum Weighted Average Spread Test is satisfied;

####  

#### (xxv)          theExtended Weighted Average Maturity and a statement as to whether the Moody’sWeighted Average Extended Maturity Test is satisfied;

####  

#### (xxvi)           the Initial Weighted Average Maturity and a statement as towhether 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 Lifeand a statement as to whether the Weighted Average Life Test is satisfied;

####  

#### (xxviii)     the Class A-1 Loss Differential, the Class A-2 LossDifferential, the Class B Loss Differential, the Class C LossDifferential, the Class D Loss Differential, the Class E LossDifferential, the Class F Loss Differential, the Class G Loss Differential,

 

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#### theClass H Loss Differential, the Class J Loss Differential and the Class K LossDifferential of the Current Portfolio and a statement as to whether the S&PCDO Monitor Test is satisfied;

####  

#### (xxix)       the S&P Weighted Average Recovery Rate and a statementas to whether the S&P Recovery Test is satisfied;

####  

#### (xxx)        a calculation in reasonable detail necessary to determinecompliance with each of the other Collateral Quality Tests;

####  

#### (xxxi)         thePrincipal Balance of each Collateral Debt Security that is on credit watch withnegative implications;

####  

#### (xxxii)        thePrincipal Balance of each Collateral Debt Security that is on credit watch withpositive implications;

####  

#### (xxxiii)       theamount of the current portion and the unpaid portion, if any, of the SeniorCollateral Management Fee and the Subordinated Collateral Management Fee withrespect to the related Payment Date;

####  

#### (xxxiv)       basedupon information supplied by the Collateral Manager, the current ratings of anyHedge Counterparty and the credit support provider of any Hedge Counterparty;

####  

#### (xxxv)        the aggregatenotional amount as of the end of such month and each following month for alloutstanding Transactions under all Hedge Agreements which the Issuer hasentered into; and

####  

#### (xxxvi)       suchother information as the Collateral Manager, the Trustee or any HedgeCounterparty may reasonably request.

####  

### (d)      The Trustee, onbehalf of the Issuer, shall perform the following functions and report to theIssuer, the Co-Issuer and the Collateral Manager on each Measurement Date:

###  

#### (i)            Calculatethe Class A/B Par Value Ratio and the Class A/B Interest Coverage Ratio andindicate whether the Class A/B Par Value Test and the Class A/B InterestCoverage Test are met;

####  

#### (ii)           Calculatethe Class C/D/E Par Value Ratio and the Class C/D/E Interest Coverage Ratio andindicate whether the Class C/D/E Par Value Test and the Class C/D/E Interest CoverageTest are met; and

####  

#### (iii)          Calculatethe Class F/G/H Par Value Ratio and the Class F/G/H Interest Coverage Ratio andindicate whether the Class F/G/H Par Value Test and the Class F/G/H InterestCoverage Test are met.

####  

### (e)      The Trustee, onbehalf of the Issuer, shall perform the following functions and prepare areport thereof relating to the most recently ended Due Period determined as of

 

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### each DeterminationDate not later than the Business Day preceding the Payment Date (the “Notes Valuation Report”),which shall contain the following information, based in part on informationprovided by the Collateral Manager:

###  

#### (i)            Calculatethe percentage (based on the outstanding Aggregate Principal Balances of thePledged Collateral Debt Securities) of the Pledged Collateral Debt Securitieswhich have a maturity date occurring on or prior to each Payment Date;

####  

#### (ii)           Identifythe Principal Proceeds and Interest Proceeds;

####  

#### (iii)          Determinethe Net Outstanding Portfolio Balance as of the close of business on the lastBusiness Day of each Due Period after giving effect to the Principal Proceedsas of the last Business Day of such Due Period, principal collections receivedfrom Collateral Debt Securities in the related Due Period, the reinvestment ofsuch proceeds in Eligible Investments during such Due Period and the CollateralDebt Securities that were released during such Due Period;

####  

#### (iv)          Determinethe Aggregate Outstanding Amount of the Notes of each Class at the beginning ofthe Due Period and such Aggregate Outstanding Amount as a percentage of theoriginal Aggregate Outstanding Amount of the Notes of such Class, the amount ofprincipal payments to be made on the Notes of each Class on the next PaymentDate, the amount of any Class C Capitalized Interest on the Class C Notes, theamount of any Class D Capitalized Interest on the Class D Notes, the amount ofany Class E Capitalized Interest on the Class E Notes, the amount of any ClassF Capitalized Interest on the Class F Notes, the amount of any Class GCapitalized Interest on the Class G Notes, the amount of any Class HCapitalized Interest on the Class H Notes, the amount of any Class JCapitalized Interest on the Class J Notes, the amount of any Class K CapitalizedInterest on the Class K Notes, the Aggregate Outstanding Amount of the Notes ofeach Class after giving effect to the payment of principal (and with respect tothe Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, theClass G Notes, the Class H Notes, the Class J Notes and the Class K Notes, ClassC Capitalized Interest, Class D Capitalized Interest, Class E CapitalizedInterest, Class F Capitalized Interest, Class G Capitalized Interest, Class HCapitalized Interest, Class J Capitalized Interest or Class K CapitalizedInterest as applicable), on the related Payment Date and such AggregateOutstanding Amount as a percentage of the original Aggregate Outstanding Amountof the Notes of such Class;

####  

#### (v)           Calculatethe Class A-1 Interest Distribution Amount, the Class A-2 Interest DistributionAmount, the Class B Interest Distribution Amount, the Class C InterestDistribution Amount, the Class D Interest Distribution Amount, the Class EInterest Distribution Amount, the Class F Interest Distribution Amount, theClass 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 PaymentDates in respect of such amounts;

 

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#### (vi)          Withthe assistance of the Collateral Manager, determine the Company AdministrativeExpenses on an itemized basis, the Senior Collateral Management Fee and theSubordinate Collateral Management Fee payable by the Issuer on the relatedPayment Date;

####  

#### (vii)         Withthe 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 thePrincipal Collection Account at the end of the related Due Period, (B) theamounts payable from the Collection Accounts to the Payment Account in order tomake 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 clauseto be set forth and identified separately) and (C) the balance of PrincipalProceeds and the balance of Interest Proceeds remaining in the CollectionAccounts immediately after all payments and deposits to be made on the relatedPayment Date;

####  

#### (viii)        Calculatethe amount to be paid to each Hedge Counterparty and the amount to be paid byeach Hedge Counterparty in each case, specifying (a) the amount to be paidunder each Hedge Agreement (other than any payments due and payable upon atermination of the related Hedge Agreement) and (b) the amount owing as aresult of a termination with respect to each Hedge Agreement;

####  

#### (ix)           Calculatethe amount to be paid to the Advancing Agent or the Trustee, as applicable, as reimbursementof Interest Advances and Reimbursement Interest and calculate the amount of theNonrecoverable Advances to be paid to the Advancing Agent or the Trustee, asapplicable;

####  

#### (x)            Calculatethe amount on deposit in the Expense Account, the Unused Proceeds Account, theDelayed Funding Obligations Account, each Hedge Collateral Account and eachHedge Termination Account;

####  

#### (xi)           the nature, source and amount of any proceeds in theCollection Accounts, including Interest Proceeds, Principal Proceeds, UnscheduledPrincipal Payments and Sale Proceeds, received since the date of determinationof the last Monthly Report;

####  

#### (xii)          with respect to each Collateral Debt Security and eachEligible Investment that is part of the Assets, its Principal Balance, annual interestrate, average life, issuer, Moody’s Rating, S&P Rating and Fitch Rating;

####  

#### (xiii)         theidentity of each Collateral Debt Security that was sold or disposed of pursuantto Section 12.1 (indicating whether such Collateral Debt Security is aDefaulted Security, Credit Risk Security or otherwise (in each case, asreported in writing to the Issuer by the Collateral Manager) and whether suchCollateral Debt Security was sold pursuant to Section 12.1(a)(i) or (ii)) or Granted to the Trustee since thedate of determination of the most recent Monthly Report; and

####  

#### (xiv)        theidentity of each Collateral Debt Security which became a Defaulted Security,Credit Risk Security or a Written Down Security since the date of determinationof the last Monthly Report.

 

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### (f)       Upon receiptof each Monthly Report, each Notes Valuation Report and each Redemption DateStatement, the Collateral Manager shall compare the information contained inits records with respect to the Pledged Obligations and shall, within fiveBusiness Days after receipt of each such Monthly Report, such Notes ValuationReport or such Redemption Date Statement, notify the Issuer and the Trusteewhether such information contained in the Monthly Report, the Notes ValuationReport or the Redemption Date Statement, as the case may be, conforms to theinformation maintained by the Collateral Manager with respect to the PledgedObligations, or detail any discrepancies. If any discrepancy exists, the Trustee, the Issuer and the CollateralManager shall attempt to resolve the discrepancy and shall provide notice to adesignated representative of the Controlling Class.  If such discrepancy cannot be promptlyresolved, the Trustee shall cause the firm of Independent certified publicaccountants appointed by the Issuer pursuant to Section 10.11 hereof toreview such Monthly Report, Notes Valuation Report or Redemption DateStatement, as the case may be, and the Collateral Manager’s records and theTrustee’s records to determine the cause of such discrepancy.  If such review reveals an error in theMonthly Report, Notes Valuation Report or Redemption Date Statement, as thecase may be, or the Trustee’s or the Collateral Manager’s records, the MonthlyReport, Notes Valuation Report or Redemption Date Statement, as the case maybe, or the Trustee’s or the Collateral Manager’s records, shall be revisedaccordingly and, as so revised, shall be utilized in making all calculationspursuant to this Indenture.  Each RatingAgency (in each case only so long as any Class of Notes is rated), the InitialPurchaser and the Collateral Manager shall be notified in writing of any suchrevisions by the Trustee on behalf of the Issuer.

###  

### (g)      The Trusteeshall prepare the Notes Valuation Report and shall deliver or make available onits website initially located at www.cdolink.com such Notes Valuation Report tothe Collateral Manager, each Hedge Counterparty, and upon request therefor, anyHolder of a Note shown on the Notes Register, any beneficial owner of a Notewho provides to the Trustee a certification in the form of Exhibit Mhereto, any Holder of a Preferred Share shown on the register maintained by theShare Registrar, the firm of Independent certified public accountants appointedpursuant to Section 10.11(a) hereof, each Rating Agency, the Depository(with instructions to forward it to each of its participants who are holders ofany Notes) and, for so long as any Senior Notes are listed on the Irish StockExchange, the Irish Paying Agent not later than the related Payment Date.  The Notes Valuation Report shall haveattached to it (with the exception of the first Notes Valuation Report) themost recent Monthly Report.  Allinformation made available on the Trustee’s website will be restricted and theTrustee will only provide access to such reports to those parties entitledthereto pursuant to this Indenture.  Inconnection with providing access to its website, the Trustee may requireregistration and the acceptance of a disclaimer.  Questions regarding the Trustee’s website canbe directed to the Trustee’s customer service desk at (301) 815-6600.

###  

The Notes Valuation Report shall also contain thefollowing statements:

 

“Instructionto Participant:  Please sendthis to the beneficial owners of the Senior Notes”

 

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**Reminder to Owners of each Classof Senior Notes:**

 

Each owner or beneficial owner of Senior Notes must beeither a U.S. Person who is a qualified institutional buyer as defined in Rule144A under the Securities Act of 1933 and a Qualified Purchaser as defined bythe 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 adiscretionary basis less than $25 million in securities of unaffiliatedissuers;

####  

#### (ii)           it is not a participant-directed employee plan such as a401(k) plan;

####  

#### (iii)          it is acting for its own account or for the account ofanother who is a qualified institutional buyer and a qualified purchaser thatis 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, shallhold at least the minimum denomination therefor; and

####  

#### (vi)          it will provide notice of these transfer restrictions to anytransferee from it.

####  

### (h)      Each NotesValuation Report (after approval by the Collateral Manager after giving effectto any revisions thereto in accordance with Section 10.9(f)) shallconstitute instructions from the Collateral Manager, on behalf of the Issuer,to the Trustee to transfer funds from the Collection Accounts to the PaymentAccount pursuant to Section 10.2(e) and to withdraw on the relatedPayment Date from the Payment Account and pay or transfer the amounts set forthin the Notes Valuation Report, as applicable, in the manner specified, and inaccordance with the priorities established, in Section 11.1 hereof.

###  

### (i)       Not more thanfive Business Days after receiving an Issuer Request requesting informationregarding a redemption of the Notes of a Class as of a proposed Redemption Dateset forth in such Issuer Request, the Trustee shall compute thefollowing information and provide such information in a statement (the “Redemption Date Statement”)delivered to the Collateral Manager (which shall review such statement in themanner provided for in Section 10.9(f)), the Preferred Shares PayingAgent and each Hedge Counterparty:

###  

#### (i)            the Aggregate Outstanding Amount of the Notes of the Classor Classes to be redeemed as of such Redemption Date;

####  

#### (ii)           the amount of accrued interest due on such Notes as of thelast day of the Interest Accrual Period immediately preceding such RedemptionDate;

####  

#### (iii)          the Redemption Price;

####  

#### (iv)          the sum of all amounts due and unpaid under Section11.1(a) (other than amounts payable on the Notes being redeemed or to theNoteholders thereof);

 

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#### (v)           the amount due and payable to each Hedge Counterpartypursuant to the applicable Hedge Agreement; and

####  

#### (vi)          the amount in the Accounts available for application to theredemption of such Notes.

####  

### (j)       In the eventof a sale by the Issuer of any Collateral Debt Security that is subject to aLiability Hedge, the Issuer (at the direction Collateral Manager) shall providewritten notice to each Hedge Counterparty under such Liability Hedge at least 5Business Days prior to such sale.

###  

## Section 10.10         Releaseof Pledged Collateral Debt Securities; Release of Assets.

##  

### (a)      If no Event ofDefault has occurred and is continuing and subject to Article 12 hereof,the Issuer may, by Issuer Order delivered to the Trustee at least two BusinessDays prior to the settlement date for any sale of a Pledged Collateral DebtSecurity certifying that (i) it has sold such Pledged Collateral Debt Securitypursuant to and in compliance with Article 12 or (ii) in the case of aredemption pursuant to Section 9.1 or Section 9.2 the proceedsfrom any such sale of Pledged Collateral Debt Securities are sufficient toredeem the Notes pursuant to Section 9.1 or Section 9.2, directthe Trustee to release such Pledged Collateral Debt Security and, upon receiptof such Issuer Order, the Trustee shall deliver any such Pledged CollateralDebt Security, if in physical form, duly endorsed to the broker or purchaserdesignated in such Issuer Order or, if such Pledged Collateral Debt Security isrepresented by a Security Entitlement, cause an appropriate transfer thereof tobe made, in each case against receipt of the sales price therefor as set forthin such Issuer Order; *provided*, *however*, that the Trustee may deliver any such PledgedCollateral Debt Security in physical form for examination (prior to receipt ofthe sales proceeds) in accordance with street delivery custom.  The Trustee shall (i) deliver any agreementsand other documents in its possession relating to such Pledged Collateral DebtSecurity and (ii) if applicable, duly assign each such agreement and otherdocument, in each case, to the broker or purchaser designated in such IssuerOrder.

###  

### (b)      The Issuer may,by Issuer Order, delivered to the Trustee at least three Business Days prior tothe date set for redemption or payment in full of a Pledged Collateral DebtSecurity, certifying that such Pledged Collateral Debt Security is beingredeemed or paid in full, direct the Trustee, or at the Trustee’s instructions,the Custodial Securities Intermediary, to deliver such Pledged Collateral DebtSecurity, if in physical form, duly endorsed, or, if such Pledged CollateralDebt Security is a Clearing Corporation Security, to cause it to be presented,to the appropriate paying agent therefor on or before the date set forredemption or payment, in each case against receipt of the applicableredemption price or payment in full thereof.

###  

### (c)      If no Event ofDefault has occurred and is continuing and subject to Article 12, theIssuer may, by Issuer Order delivered to the Trustee at least two Business Daysprior to the date set for an exchange, tender or sale, certifying that a CollateralDebt Security is subject to an Offer and setting forth in reasonable detail theprocedure for response to such Offer, direct the Trustee or at the Trustee’sinstructions, the Custodial Securities Intermediary,

 

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### todeliver such security, if in physical form, duly endorsed, or, if such securityis a Clearing Corporation Security, to cause it to be delivered, in accordancewith such Issuer Order, in each case against receipt of payment therefor.

###  

### (d)      The Trusteeshall deposit any proceeds received by it from the disposition of a PledgedCollateral Debt Security in the Principal Collection Account unlesssimultaneously applied to the purchase of Substitute Collateral DebtSecurities, subject to the Reinvestment Criteria, or Eligible Investments underand in accordance with the requirements of Article 12 and this Article10.  Neither the Trustee nor theCustodial Securities Intermediary shall be responsible for any loss resultingfrom delivery or transfer of any security prior to receipt of payment inaccordance herewith.

###  

### (e)      The Trusteeshall, upon receipt of an Issuer Order at such time as there areno Notes Outstanding and all obligations of the Issuer hereunder have beensatisfied, release the Assets from the lien of this Indenture.

###  

## Section 10.11         Reportsby Independent Accountants.

##  

### (a)      On or about theClosing Date, the Issuer shall appoint a firm of Independent certified publicaccountants of recognized national reputation for purposes of preparing anddelivering the reports or certificates of such accountants required by thisIndenture.  The Collateral Manager, onbehalf of the Issuer, shall have the right to remove such firm or any successorfirm.  Upon any resignation by or removalof such firm, the Collateral Manager, on behalf of the Issuer, shall promptlyappoint, by Issuer Order delivered to the Trustee, each Hedge Counterparty andeach Rating Agency, a successor thereto that shall also be a firm ofIndependent certified public accountants of recognized national reputation andshall provide notice to a designated representative of the Controlling Class.  If the Collateral Manager, on behalf of theIssuer, shall fail to appoint a successor to a firm of Independent certifiedpublic accountants which has resigned or been removed, within 30 days aftersuch resignation or removal, the Issuer shall promptly notify the Trustee ofsuch failure in writing.  If theCollateral Manager, on behalf of the Issuer, shall not have appointed asuccessor within 10 days thereafter, the Trustee shall promptly appoint asuccessor firm of Independent certified public accountants of recognizednational reputation.  The fees of suchIndependent certified public accountants and its successor shall be payable bythe Issuer or by the Trustee as provided in the Priority of Payments.

###  

### (b)      Within 60 daysafter December 31 of each year (commencing with December 31, 2006), the Issuershall cause to be delivered to the Trustee, the Collateral Manager and eachRating Agency an Accountants’ Report specifying the procedures applied and theassociated findings with respect to the Monthly Reports, the Notes ValuationReports and any Redemption Date Statements prepared in the year ending on suchdate.  At least 60 days prior to the PaymentDate in April 2006 (and, if at any time a successor firm of Independentcertified public accountants is appointed, to the Payment Date following thedate of such appointment), the Issuer shall deliver to the Trustee anAccountant’s Report specifying in advance the procedures that such firm willapply in making the aforementioned findings throughout the term of its serviceas accountants to the Issuer.  TheTrustee shall promptly forward a copy of such Accountant’s Report to theCollateral Manager and each Holder of

 

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### Notesof the Controlling Class, at the address shown on the Note Register.  The Issuer shall not approve the institutionof such procedures if a Majority of the Aggregate Outstanding Amount of Notesof the Controlling Class, by written notice to the Issuer and the Trusteewithin 30 days after the date of the related notice to the Trustee, objectthereto.

###  

### (c)      If any HedgeCounterparty is required to post collateral pursuant to the related HedgeAgreement during any Due Period, then on or prior to the Payment Date followingsuch Due Period and on or prior to each anniversary of such Payment Date theIssuer shall cause a firm of Independent certified public accountants to reviewand verify that the value of collateral posted is in accordance with theapplicable provisions of the related Hedge Agreement.

###  

## Section 10.12         Reportsto Rating Agencies.

##  

### (a)      In addition tothe information and reports specifically required to be provided to each RatingAgency pursuant to the terms of this Indenture, the Trustee shall provide eachRating Agency and each Hedge Counterparty with all information or reportsdelivered by the Trustee hereunder, and such additional information as eachRating Agency may from time to time reasonably request and the Trusteedetermines in its sole discretion may be obtained and provided withoutunreasonable burden or expense.  TheIssuer shall promptly notify the Trustee and the Preferred Shares Paying Agentif a Rating Agency’s rating of any Class of Notes has been, or it is known bythe Issuer that such rating will be, reduced, or qualified or withdrawn.

###  

### (b)      The Issuer, orthe Collateral Manager on behalf of the Issuer, shall provide the RatingAgencies with all information and reports delivered to the Trustee hereunder,and shall provide to Fitch on a quarterly basis, (i) the Operating StatementAnalysis Report for each applicable Collateral Debt Obligation, and (ii) thefile, shown in Exhibit O attached hereto, in excel format.

###  

### (c)      All additionalreports to be sent to the Rating Agencies pursuant to clause (a) above shall bereviewed prior to such transmission by the Collateral Manager.

###  

## Section 10.13         UnitedStates Federal Income Tax Reporting.

##  

### (a)      If the Class KNotes (or any other Notes) are deemed equity for U.S. federal income taxpurposes, the Collateral Manager shall provide to the Trustee, for furtherdelivery to the Holders of the Class K Notes (or any other Notes deemed equityfor U.S. federal income tax purposes), information as the Collateral Managermay possess necessary for a Holder of Class K Notes (or any other Notes deemedequity for U.S. federal income tax purposes) to make an election to treat theIssuer as a Qualified Electing Fund under Section 1295 of the Code, and forsuch Holder to file returns consistent with such election.

###  

The Issuer shall provide the Trustee with suchinformation as is required for the Trustee to perform its obligations underthis Section 10.13.

 

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## Section 10.14         CertainProcedures.

##  

### (a)      For so long asthe Notes may be transferred only in accordance with Rule 144A or anotherexemption from registration under the Securities Act, the Issuer (or theCollateral Manager on behalf of the Issuer) will ensure that any Bloombergscreen containing information about the Rule 144A Global Notes includes thefollowing (or similar) language:

###  

#### (i)            the “Note Box” on the bottom of the “Security Display” pagedescribing the Rule 144A Global Notes will state: “Iss’d Under 144A/3c7”;

####  

#### (ii)           the “Security Display” page will have the flashing redindicator “See Other Available Information”; and

####  

#### (iii)          theindicator will link to the “Additional Security Information” page, which willstate that the Notes “are being offered in reliance on the exemption fromregistration under Rule 144A of the Securities Act to persons who are both (i)qualified institutional buyers (as defined in Rule 144A under the SecuritiesAct) and (ii) qualified purchasers (as defined under Section 3(c)(7) under the Investment Company Act of 1940).

####  

### (b)      For so long asthe 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 instructDTC to take these or similar steps with respect to the Rule 144A Global Notes:

###  

#### (i)            the DTC 20-character security descriptor and 48-characteradditional 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 DTCafter settlement is physical, it will have the 20-character security descriptorprinted on it.  Where the DTC deliverorder ticket is electronic, it will have a “3c7” indicator and a related usermanual for participants, which will contain a description of the relevantrestriction; and

####  

#### (iii)          DTCwill send an “Important Notice” outlining the 3(c)(7)restrictions applicable to the Rule 144A Global Notes to all DTC participantsin connection with the initial offering of Notes by the issuers.

####  

# **ARTICLE 11**

 

# **APPLICATION OF MONIES**

#  

## Section 11.1           Disbursementsof Monies from Payment Account.

##  

### (a)      Notwithstandingany other provision in this Indenture, but subject to the other subsections ofthis Section 11.1 and Section 13.1 hereof, on each Payment Date,or Redemption Date the Trustee shall disburse amounts transferred to thePayment Account from

 

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### theInterest Collection Account and the Principal Collection Account pursuant to Section10.2 hereof in accordance with the following priorities (the “Priority of Payments”):

###  

#### (i)            InterestProceeds. On each Payment Date or Redemption Date, (except as otherwiseprovided in Section 11.1(c)) Interest Proceeds with respect to therelated Due Period shall be distributed in the following order of priority:

####  

##### (1)           to thepayment of taxes and filing fees (including any registered office andgovernment 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 anyNonrecoverable Advances due and payable to such party, (b) second, to theextent not previously reimbursed, to the Collateral Manager, the aggregate amountof any Nonrecoverable Cure Advance due and payable to the Collateral Manager,(c) third, to the Advancing Agent, the Advancing Agent Fee and any previouslydue but unpaid Advancing Agent Fee (*provided* thatthe Advancing Agent has not failed to make any Interest Advance required to bemade 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 BackupAdvancing Agent, (i) to the extent due and payable to such party, ReimbursementInterest and (ii) reimbursement of any outstanding Interest Advances not (inthe case of this clause (ii)) to exceed the amount that would result in anInterest Shortfall with respect to such Payment Date and (e) fifth, to theextent due and payable to the Collateral Manager, reimbursement of anyoutstanding Cure Advance (but only to the extent of the applicable proceeds inrespect of the Collateral Debt Security and not to exceed the amount that wouldresult 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, theBackup Advancing Agent Fee (or if the Advancing Agent has failed to make anyInterest Advance required to be made by the Advancing Agent in respect of suchDistribution Date pursuant to the terms of this Indenture, the Advancing AgentFee otherwise payable to the Advancing Agent on such Distribution Date) and anypreviously due but unpaid Backup Advancing Agent Fee, (b) second, to the paymentto the Trustee of the accrued and unpaid fees in respect of its services equalto 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 andunpaid Company Administrative Expenses of the Trustee, the Paying Agent, thePreferred Shares Paying Agent and the Calculation Agent and (d) fourth, to thepayment of any other accrued and unpaid Company Administrative Expenses, theaggregate of all such amounts in clauses (c) and (d) above (including suchamounts paid since the previous Payment Date from the Expense Account) not toexceed 0.05% per annum of the Aggregate Collateral Balance;

 

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##### (4)           to thepayment of the Senior Collateral Management Fee and any previously due butunpaid Senior Collateral Management Fees;

#####  

##### (5)           pro rataon the basis of amounts payable under each Hedge Agreement (if any), to thepayment of any amounts (including, without limitation, any Hedge PaymentAmounts) scheduled to be paid to each Hedge Counterparty, if any, pursuant toany Hedge Agreement, along with any payments (however described) due andpayable by the Issuer under any Hedge Agreement in connection with atermination (in whole or in part) of any Hedge Agreement (including anyinterest that may accrue thereon), other than by reason of an Event of Default(as defined in the related Hedge Agreement) or Termination Event (other thanIllegality or Tax Event) (each as defined in the related Hedge Agreement) ineach case, with respect to which the Hedge Counterparty is the Defaulting Partyor the sole Affected Party (as defined in the related Hedge Agreement);

#####  

##### (6)           to the payment of the Class A-1 Interest DistributionAmount, plus, any Class A-1 Defaulted Interest Amount;

#####  

##### (7)           to the payment of the Class A-2 Interest DistributionAmount, plus, any Class A-2 Defaulted Interest Amount;

#####  

##### (8)           to thepayment of the Class B Interest Distribution Amount, plus, any Class BDefaulted Interest Amount;

#####  

##### (9)           as long asany of the Class A Notes or the Class B Notes areoutstanding, to the payment of the following amounts:

#####  

(a)           in theevent that the Class A-1 Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 ofprincipal of the Class A-1 Notes;

 

(b)           in theevent that the Class A-2 Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 ofprincipal of, first, the Class A-1 Notes and second, the Class A-2 Notes;

 

(c)           in theevent that the Class B Notes become due and payable (x) as a result of anacceleration 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 StatedMaturity 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 theevent 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 thepayment of principal of the Class A-2 Notes and third, to the payment ofprincipal of the Class B Notes, to the extent necessary to cause each of theClass A/B Coverage Tests to be satisfied (after giving effect to the payment ofall amounts previously paid on such Payment Date pursuant to this Section 11.1(a)(i)and this Section 11.1(a)(ii);

 

##### (10)         to thepayment of the Class C Interest Distribution Amount, plus, any Class CDefaulted Interest Amount;

#####  

##### (11)         to thepayment of the Class C Capitalized Interest (if any);

#####  

##### (12)         to thepayment of the Class D Interest Distribution Amount, plus, any Class DDefaulted Interest Amount;

#####  

##### (13)         to thepayment of the Class D Capitalized Interest (if any);

#####  

##### (14)         to thepayment of the Class E Interest Distribution Amount, plus, any Class EDefaulted Interest Amount;

#####  

##### (15)         to thepayment of the Class E Capitalized Interest (if any);

#####  

##### (16)         as long asany 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 theevent that the Class C Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 principalof first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class BNotes and fourth, the Class C Notes;

 

(b)           in theevent that the Class D Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 principalof first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class BNotes, fourth, the Class C Notes and fifth, the Class D Notes;

 

(c)           in theevent that the Class E Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 principalof first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class BNotes, fourth, the Class C Notes, fifth, the Class D Notes and sixth, the ClassE Notes; or

 

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(d)           in theevent of a Mandatory Redemption of the Class C Notes, the Class D Notes and theClass 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 thepayment of principal of the Class B Notes, fourth, to the payment of principalof the Class C Notes, fifth, to the payment of principal of the Class D Notesand sixth, to the payment of principal of the Class E Notes, to the extentnecessary 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 suchPayment Date pursuant to this Section 11.1(a)(i));

 

##### (17)         to thepayment of the Class F Interest Distribution Amount, plus, any Class FDefaulted Interest Amount;

#####  

##### (18)         to thepayment of the Class F Capitalized Interest (if any);

#####  

##### (19)         to thepayment of the Class G Interest Distribution Amount, plus, any Class GDefaulted Interest Amount;

#####  

##### (20)         to thepayment of the Class G Capitalized Interest (if any);

#####  

##### (21)         to thepayment of the Class H Interest Distribution Amount, plus, any Class HDefaulted Interest Amount;

#####  

##### (22)         to thepayment of the Class H Capitalized Interest (if any);

#####  

##### (23)         as long asany of the Class F Notes, Class G Notes or Class H Notes are Outstanding, tothe payment of the following amounts:

#####  

(a)           in theevent that the Class F Notes become due and payable (x) as a result of an accelerationfollowing an Event of Default, (y) pursuant to an Auction Call Redemption, anOptional Redemption, a Clean-up Call or a Tax Redemption or (z) upon StatedMaturity 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 Notesand seventh, the Class F Notes;

 

(b)           in theevent that the Class G Notes become due and payable (x) as a result of an accelerationfollowing an Event of Default, (y) pursuant to an Auction Call Redemption, anOptional Redemption, a Clean-up Call or a Tax Redemption or (z) upon StatedMaturity 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 theevent that the Class H Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 CNotes, fifth, the Class D Notes, sixth, the Class E Notes, seventh, the Class FNotes, eighth, the Class G Notes and ninth, the Class H Notes; or

 

(d)           in theevent of a Mandatory Redemption of the Class F Notes, the Class G Notes and theClass 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 thepayment of principal of the Class B Notes, fourth, to the payment of principalof 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 thepayment of principal of the Class F Notes, eighth, to the payment of principalof the Class G Notes and ninth, to the payment of principal of the Class HNotes, to the extent necessary to cause the Class F/G/H Coverage Tests to besatisfied (after giving effect to the payment of all amounts previously paid onsuch Payment Date pursuant to this Section 11.1(a)(i));

 

##### (24)         to thepayment of the Class J Interest Distribution Amount, plus, any Class JDefaulted Interest Amount;

#####  

##### (25)         to the paymentof the Class J Capitalized Interest (if any);

#####  

##### (26)         as long asany of the Class J Notes are Outstanding, in the event that the Class J Notesbecome due and payable (x) as a result of an acceleration following an Event ofDefault, (y) pursuant to an Auction Call Redemption, an Optional Redemption, a Clean-upCall or a Tax Redemption or (z) upon Stated Maturity of the Class J Notes, tothe payment in full of principal of first, the Class A-1 Notes, second, theClass 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 JNotes;

#####  

##### (27)         to thepayment of the Class K Interest Distribution Amount, plus, any Class KDefaulted Interest Amount;

#####  

##### (28)         to thepayment of the Class K Capitalized Interest (if any);

#####  

##### (29)         as long asany of the Class K Notes are Outstanding, in the event that the Class K Notesbecome due and payable (x) as a result of an acceleration following an Event ofDefault, (y) pursuant to an Auction Call Redemption, an Optional Redemption, a Clean-upCall or a Tax Redemption or (z) upon Stated Maturity of the Class K Notes, tothe payment in full of principal of first, the Class A-1 Notes, second, theClass 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 Notesand eleventh, the Class K Notes;

 

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##### (30)         on the firstPayment Date following the occurrence of a Rating Confirmation Failure, to theextent that application of any unused proceeds remaining on deposit on theUnused Proceeds Account is insufficient to cause the ratings assigned to eachClass of Notes to be reinstated or any affected Class to be paid in full, tothe payment of principal of each Class of Notes, (i) first, to the Class A-1Notes, (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, tothe Class G Notes, (ix) ninth, to the Class H Notes, (x) tenth, to the Class JNotes and (xi) eleventh, to the Class K Notes, in each case until the ratingsassigned on the Closing Date to each Class of Notes have been reinstated orsuch Class has been paid in full;

#####  

##### (31)         to the payment of any Company Administrative Expenses notpaid pursuant to paragraph (3) above in the order specified therein;

#####  

##### (32)         to thepayment of the Subordinate Collateral Management Fee and any accrued and unpaidSubordinate Collateral Management Fee;

#####  

##### (33)         pro rata onthe basis of amounts payable under each Hedge Agreement (if any), to thepayment of any amounts (including, without limitation, any Hedge PaymentAmounts) (including any interest accrued thereon), if any, payable by theIssuer to the Hedge Counterparty under the related Hedge Agreement following anEvent of Default or Termination Event (other than Illegality or Tax Event)(each as defined in the related Hedge Agreement) with respect to which theHedge Counterparty is the Defaulting Party or the sole Affected Party (as definedin the related Hedge Agreement); and

#####  

##### (34)         any remaining Interest Proceeds to the Preferred SharesPaying Agent for deposit into the Preferred Shares Distribution Account fordistribution subject to Section 11.1(g) to the holders of the PreferredShares as payments of the Preferred Shares Distribution Amount.

#####  

#### (ii)           PrincipalProceeds. On each Payment Date or Redemption Date, Principal Proceeds withrespect to the related Due Period shall be distributed in the following orderof priority:

####  

##### (1)           to the paymentof 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 notpaid 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 fullthereunder and any Class A Notes or Class B Notes are outstanding, to thepayment of the following amounts:

#####  

(a)           inthe 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 theStated Maturity of the Class A-1 Notes, to the payment in full of principal ofthe Class A-1 Notes;

 

(b)           in theevent that the Class A-2 Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 ofprincipal of, first, the Class A-1 Notes and second, the Class A-2 Notes;

 

(c)           in theevent that the Class B Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 principalof, first, the Class A-1 Notes, second, the Class A-2 Notes and third, theClass B Notes; or

 

(d)           in theevent 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 thepayment of principal of the Class A-2 Notes and third, to the payment ofprincipal of the Class B Notes, to the extent necessary to cause each of theClass A/B Coverage Tests to be satisfied (after giving effect to the payment ofall amounts previously paid on such Payment Date pursuant to Section11.1(a)(i) and Section 11.1(a)(ii));

 

##### (3)           (a)           ifthe Class A Notes and the Class B Notes are no longer Outstanding, to thepayment of first, the amounts referred to in paragraph (10) of Section11.1(a)(i) and second, the amounts referred to in paragraph (11) of Section11.1(a)(i), but only to the extent not paid in full thereunder;

#####  

(b)           if theClass 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 Section11.1(a)(i) and second, the amounts referred to in paragraph (13) of Section11.1(a)(i), but only to the extent not paid in full thereunder;

 

(c)           if theClass A Notes, the Class B Notes, the Class C Notes and the Class D Notes areno longer outstanding, to the payment of first, the amounts referred to inparagraph (14) of Section 11.1(a)(i) andsecond, 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 theextent that the amounts paid pursuant to paragraph (16) of Section11.1(a)(i) are insufficient to pay such amounts in full thereunder and anyClass C Notes, Class D Notes or Class E Notes are outstanding, to the paymentof the following amounts:

 

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(a)           in theevent that the Class C Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 principalof first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class BNotes and fourth, the Class C Notes;

 

(b)           in theevent that the Class D Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 principalof first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class BNotes, fourth, the Class C Notes and fifth, the Class D Notes;

 

(c)           in theevent that the Class E Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 principalof first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class BNotes, fourth, the Class C Notes, fifth, the Class D Notes and sixth, the ClassE Notes; or

 

(d)           in theevent of a Mandatory Redemption of the Class C Notes, the Class D Notes and theClass 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 thepayment of principal of the Class B Notes, fourth, to the payment of principalof the Class C Notes, fifth, to the payment of principal of the Class D Notesand sixth, to the payment of principal of the Class E Notes, to the extentnecessary to cause the Class C/D/E Coverage Tests to be satisfied (after givingeffect to the payment of all amounts previously paid on such Payment Datepursuant to Section 11.1(a)(i) and Section 11.1(a)(ii));

 

##### (5)           (a)           ifthe Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes andthe Class E Notes are no longer Outstanding, to the payment of first, theamounts 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 theClass A Notes, the Class B Notes, the Class C Notes, the Class D Notes, theClass E Notes and the Class F Notes are no longer Outstanding, to the paymentof 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 fullthereunder;

 

(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 Notesare no longer Outstanding, to the payment of first, the amounts referred to in

 

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paragraph (21) of Section 11.1(a)(i) andsecond, 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 theextent that the amounts paid pursuant to paragraph (23) of Section11.1(a)(i) are insufficient to pay such amounts in full thereunder and anyClass F Notes, Class G Notes or Class H Notes are Outstanding, to the paymentof the following amounts:

#####  

(a)           in the eventthat the Class F Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 principalof first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class BNotes, fourth, the Class C Notes, fifth, the Class D Notes, sixth, the Class ENotes and seventh, the Class F Notes;

 

(b)           in theevent that the Class G Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 principalof first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class BNotes, fourth, the Class C Notes, fifth, the Class D Notes, sixth, the Class ENotes, seventh, the Class F Notes and eighth, the Class G Notes;

 

(c)           in theevent that the Class H Notes become due and payable (x) as a result of anacceleration following an Event of Default, (y) pursuant to an Auction CallRedemption, 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 principalof first, the Class A-1 Notes, second, the Class A-2 Notes, third, the Class BNotes, fourth, the Class C Notes, fifth, the Class D Notes, sixth, the Class ENotes, seventh, the Class F Notes, eighth, the Class G Notes and ninth, theClass H Notes; or

 

(d)           in theevent of a Mandatory Redemption of the Class F Notes, the Class G Notes and theClass 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 thepayment of principal of the Class B Notes, fourth, to the payment of principalof 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 thepayment of principal of the Class F Notes, eighth, to the payment of principalof the Class G Notes and ninth, to the payment of principal of the Class HNotes, to the extent necessary to cause the Class F/G/H Coverage Tests to besatisfied (after giving effect to the payment of all amounts previously paid onsuch Payment Date pursuant to Section 11.1(a)(i) and Section11.1(a)(ii);

 

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##### (7)           if theClass A Notes, the Class B Notes, the Class C Notes, the Class D Notes, theClass E Notes, the Class F Notes, the Class G Notes and Class H Notes are nolonger Outstanding, to the payment of first, the amounts referred to inparagraph (24) of Section 11.1(a)(i), and second, the amounts referredto in paragraph (25) of Section 11.1(a)(i), but only to the extent notpaid in full thereunder;

#####  

##### (8)           to theextent that the amounts paid pursuant to paragraph (26) of Section11.1(a)(i) are insufficient to pay such amounts in full thereunder and anyClass J Notes are outstanding, in the event that the Class J Notes become dueand 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-upCall or a Tax Redemption or (z) upon Stated Maturity of the Class J Notes, tothe payment in full of principal of first, the Class A-1 Notes, second, theClass 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 JNotes;

#####  

##### (9)           if theClass A Notes, the Class B Notes, the Class C Notes, the Class D Notes, theClass E Notes, the Class F Notes, the Class G Notes, the Class H Notes and theClass J Notes are no longer Outstanding, to the payment of first, the amountsreferred to in paragraph (27) of Section 11.1(a)(ii), and second, theamounts referred to in paragraph (28) of Section 11.1(a)(i), but only tothe extent not paid in full thereunder;

#####  

##### (10)         to theextent that the amounts paid pursuant to paragraph (29) of Section11.1(a)(i) are insufficient to pay such amounts in full thereunder and anyClass K Notes are Outstanding, in the event that the Class K Notes become dueand 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-upCall or a Tax Redemption or (z) upon Stated Maturity of the Class K Notes, tothe payment in full of principal of first, the Class A-1 Notes, second, theClass 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 Notesand eleventh, the Class K Notes;

#####  

##### (11)         to theextent that the amounts paid pursuant to paragraph (30) of Section11.1(a)(i) are insufficient to pay such amounts in full thereunder and anyNotes are outstanding, on the first Payment Date following the occurrence of aRating Confirmation Failure, to the payment of principal of each Class ofNotes, (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, theClass 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 caseuntil the ratings assigned on the Closing

#####  

##### 206

##### 

#####  

##### Date to each Classof Notes have been reinstated or such Class has been paid in full;

#####  

##### (12)         prior to thelast day of the Reinvestment Period, to the investment in Eligible Investmentsand reinvestment in Substitute Collateral Debt Securities subject to theReinvestment Criteria or, if determined by the Collateral Manager, to pay anySpecial 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, theClass F Notes, the Class G Notes, the Class H Notes, the Class J Notes and theClass K Notes as follows: (x) if each of the S&P Special Amortization ProRata Condition and the Moody’s Special Amortization Pro Rata Condition issatisfied with respect to such Payment Date and each Coverage Test wassatisfied as of the related Determination Date, on a pro rata basis (based onthe 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’sSpecial Amortization Pro Rata Condition is not satisfied with respect to suchPayment Date or any of the Coverage Tests were not satisfied as of the relatedDetermination Date, sequentially among all Classes of Notes; *provided*, *however*, thatamounts representing recoveries in respect of Defaulted Securities will bedistributed sequentially in any event;

#####  

##### (13)         after theReinvestment Period (x) on each Payment Date that is not also a Redemption Dateor the Stated Maturity of the Notes and (y) in the absence of an accelerationfollowing an Event of Default, to the payment of principal of (i) first, theClass 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 infull, (ix) ninth, the Class H Notes, until the Class H Notes have been paid infull, (x) tenth, the Class J Notes, until the Class J Notes have been paid infull and (xi) eleventh, the Class K Notes, until the Class K Notes have beenpaid in full;

#####  

##### (14)         to the payment of amounts referred to in paragraph (31) of Section11.1(a)(i) to the extent not paid thereunder;

#####  

##### (15)         to the payment of amounts referred to in paragraph (32) of Section11.1(a)(i) to the extent not paid thereunder;

#####  

##### (16)         to the payment of amounts referred to in paragraph (33) of Section11.1(a)(i) to the extent not paid thereunder; and

#####  

##### (17)         any remaining Principal Proceeds to the Preferred SharesPaying Agent for deposit into the Preferred Shares Distribution Account fordistribution

 

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##### subjectto Section 11.1(g) to the holders of the Preferred Shares as payments ofthe Preferred Shares Distribution Amount.

#####  

### (b)      On or beforethe Business Day prior to each Payment Date, the Issuer shall, pursuant to Section10.2(e), remit or cause to be remitted to the Trustee for deposit in thePayment Account an amount of Cash sufficient to pay the amounts described in Section11.1(a) required to be paid on such Payment Date.

###  

### (c)      If on anyPayment Date the amount available in the Payment Account from amounts receivedin the related Due Period is insufficient to make the full amount of thedisbursements required by the statements furnished by the Trustee pursuant to Section10.9(e) hereof, the Trustee shall make the disbursements called for in theorder and according to the priority set forth under Section 11.1(a)above, subject to Section 13.1 hereof, to the extent funds are availabletherefor.

###  

### (d)      Except asotherwise expressly provided in this Section 11.1, if on any PaymentDate the amount available in the Payment Account from amounts received in therelated Due Period are insufficient to make the full amount of thedisbursements required by any lettered subclause of Section 11.1(a)(i)or Section 11.1(a)(ii), the Trustee shall make the disbursements calledfor by such subclause ratably in accordance with the respective amounts of suchdisbursements then due and payable to the extent funds are available therefor,unless such subclause provides otherwise.

###  

### (e)      In connectionwith the application of funds to pay Company Administrative Expenses of theIssuer, in accordance with clauses (3) and (4) of clause (i) of Section11.1(a) and sub-clause (1) of clause (ii) of Section 11.1(a), theTrustee shall remit such funds, to the extent available, to the Issuer (or asthe Issuer may otherwise direct), as directed by the Issuer to the Trustee orotherwise set forth in the written instructions delivered to the Trustee by theIssuer (net of amounts payable to the Trustee) no later than the Business Dayprior to the applicable Payment Date. All such payments shall be made pursuant to the Priority of Payments.

###  

### (f)       In connectionwith the payment to each Hedge Counterparty pursuant to each Hedge Agreement ofany amount scheduled to be paid from time to time between Payment Dates fromamounts received with respect to the Collateral Debt Securities, such amountsshall be distributed to each Hedge Counterparty pursuant to the related HedgeAgreement.

###  

### (g)      In connectionwith any required payment by the Issuer to SLG Gramercy pursuant to the AssetServicing Agreement of any amount scheduled to be paid from time to timebetween Payment Dates from amounts received with respect to the Collateral DebtSecurities, such amounts shall be distributed to SLG Gramercy pursuant to theAsset Servicing Agreement.

###  

## Section 11.2           TrustAccounts.

##  

All Monies held by, or deposited with the Trustee inthe Collection Accounts, the Payment Account, the Expense Account, the UnusedProceeds Account or the Delayed Funding

 

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Obligations Account pursuant to the provisions of thisIndenture, and not invested in Eligible Investments as herein provided, shallbe deposited in one or more trust accounts, maintained at the Corporate TrustOffice or at a financial institution whose long-term rating is at least equalto, “A2” by Moody’s and “BBB+” by S&P to be held in trust for the benefitof the Noteholders.  To the extent Moniesdeposited in such trust account exceed amounts insured by the Bank InsuranceFund or Savings Association Insurance Fund administered by the Federal DepositInsurance Corporation, or any agencies succeeding to the insurance functionsthereof, and are not fully collateralized by direct obligations of the UnitedStates of America, such excess shall be invested in Eligible Investments asdirected by Issuer Order.

 

# **ARTICLE 12**

 

# **SALE OFCOLLATERAL DEBT SECURITIES**

 

## Section 12.1           Salesof Collateral Debt Securities.

##  

### (a)   Except asotherwise expressly permitted or required by this Indenture, the Issuer shallnot sell or otherwise dispose of any Collateral Debt Security, *provided* that subject to satisfaction of any applicableconditions in Section 10.10, so long as (A) no Event of Default hasoccurred and is continuing and (B) on or prior to the trade date for such salethe Collateral Manager has certified to the Trustee that each of the conditionsapplicable to such sale set forth below has been satisfied, the CollateralManager on behalf of the Issuer acting pursuant to the Collateral ManagementAgreement may direct the Trustee in writing to sell, and the Trustee shall sellin the manner directed by the Collateral Manager in writing (which writingshall specify whether such security is a Defaulted Security or Credit RiskSecurity, if applicable, or whether such security is otherwise permitted to besold pursuant to this Section 12.1(a)):

###  

#### (i)            anyDefaulted Security at any time;

####  

#### (ii)           a CreditRisk Security, (A) during the Reinvestment Period, if the Collateral Managerhas certified to the Trustee that it shall use commercially reasonable effortsto purchase one or more Substitute Collateral Debt Securities having anAggregate Principal Balance no less than the Sale Proceeds (excluding accruedinterest) from such sale, and after giving effect to such sale and to thepurchase of Substitute Collateral Debt Securities with the Sale Proceedsthereof, in the reasonable business judgment of the Collateral Manager (whichshall not be called into question solely as a result of subsequent events), theReinvestment Criteria shall be met and (B) after the Reinvestment Period, atany time;

####  

#### (iii)          ifa Collateral Debt Security that is a Defaulted Security is not sold by theIssuer (at the direction of the Collateral Manager) within three (3) years ofsuch Collateral Debt Security becoming a Defaulted Security, the CollateralManager, on behalf of the Issuer, shall use its commercially reasonable effortsto sell such Collateral Debt Security as soon as commercially practicablethereafter; and

 

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#### (iv)          withoutlimiting the foregoing, (x) any Collateral Debt Security that is a CMBSSecurity, a CRE CDO Security or a REIT Debt Security and in each case is not aDefaulted Security or a Credit Risk Security, (y) any Participation relating toa 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 ora Credit Risk Security, may be sold during the Reinvestment Period if (A) theAggregate Principal Balance of Collateral Debt Securities sold pursuant to thisparagraph for a given calendar year does not exceed 15% of the AggregateCollateral Balance at the beginning of that year, (B) the Collateral Managerbelieves in good faith that proceeds from the sale of such Collateral DebtSecurity can be reinvested, within five (5) Business Days after the trade dateon which such Collateral Debt Security is sold in one or more SubstituteCollateral Debt Securities having an Aggregate Principal Balance of not less than100% of the Principal Balance of the Collateral Debt Security being sold, (C)after giving effect to such sale and to the purchase of Substitute CollateralDebt Securities with the Sale Proceeds thereof, the Reinvestment Criteria willbe met and (D) such Collateral Manager has not been removed, or voted to beremoved, for “cause” as described in Section 12 of the Collateral ManagementAgreement.  For the purpose of effecting thesale of any Participation described in clause (y) above, the Collateral Managermay, on behalf of the Issuer, effect the sale of a Whole Loan to an Affiliateof the Collateral Manager that is either a “special purpose vehicle” or “qualifiedinstitutional lender” as typically defined in the Underlying Instrumentsrelated to Participations, which Affiliate shall, within one (1) Business Day(i) create two or more Participations in such Whole Loan and (ii) sellback to the Issuer at least one of such Participations; *provided*that a securitization trust, a CDO issuer or a similar securitization vehicleshall be deemed to be a “special purpose vehicle” for purposes hereof.  For purposes of measuring compliance with therequirements set forth in clauses (A), (B) and (C) above, the Issuer shallbe deemed to have sold a Participation with a Principal Balance equal to thePrincipal Balance of the Whole Loan that was sold to an Affiliate less thePrincipal Balance of the related Participation(s) purchased by the Issuer fromsuch Affiliate.

####  

### (b)  Notwithstanding theforegoing, the Collateral Manager (at its option and at any time) shall bepermitted to effect a sale of a Credit Risk Security or a Defaulted Securityhereunder by purchasing (or causing its Affiliate to purchase) such DefaultedSecurity or Credit Risk Security from the Issuer for a cash purchase price thatshall 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 EquitySecurity, all accrued and unpaid dividends or other distributions not attributableto the return of capital by its governing documents) thereon.  Notwithstanding anything to the contrary setforth herein, no Advisory Committee consent shall be required in connectionwith such cash purchase (the “Credit Risk/Defaulted Security Cash Purchase”).

###  

In addition and notwithstanding anything to thecontrary set forth herein (and *provided* thatno Event of Default has occurred and is continuing), the Collateral Manager (atits option but only upon disclosure to, and with the prior consent of, theAdvisory Committee) shall be permitted to effect a sale of a Defaulted Securityor a Credit Risk Security hereunder by directing the Issuer to exchange suchDefaulted Security or Credit Risk Security for (i) a Substitute Collateral DebtSecurity (that is not a Defaulted Security or a Credit Risk Security)

 

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owned by an Affiliate of the Collateral Manager (suchSubstitute Collateral Debt Security, the “Exchange Security”) or (ii) acombination of an Exchange Security and cash, *provided*that:

 

#### (i)            (A) thesum of (1) the Principal Balance of such Exchange Security plus (2) all accruedand unpaid interest (or, in the case of a Preferred Equity Security, allaccrued and unpaid dividends or other distributions not attributable to thereturn 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 Affiliateof 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 soughtto be substituted plus (2) all accrued and unpaid interest (or, in the case ofa Preferred Equity Security, all accrued and unpaid dividends or otherdistributions not attributable to the return of capital by its governingdocuments) thereon;

####  

#### (ii)           theEligibility Criteria and the Reinvestment Criteria shall be satisfiedimmediately after such exchange; and

####  

#### (iii)          theAggregate Principal Balance of the Defaulted Securities and Credit RiskSecurities so exchanged shall not exceed 10% of the Aggregate CollateralBalance as of the Closing (such limitation, the “10% Limit”).

####  

### (c)      Notwithstandinganything contained herein to the contrary, the Collateral Manager, on behalf ofthe Issuer, shall (at any time) be permitted to effect a sale of (i) anyOrigination Agreement Security hereunder by selling (or causing the Trustee tosell) such Origination Agreement Security to SLG (an “Origination AgreementSecurity Sale”) for a purchase price and upon such terms as determined inaccordance with the Origination Agreement and (ii) the Starrett Lehigh Loan, tothe extent such Loan is called pursuant to its terms on August 13, 2005.  Notwithstanding anything to the contrary setforth herein, no Advisory Committee consent shall be required in connectionwith any such sales.

###  

### (d)      After theIssuer has notified the Trustee of an Optional Redemption, a Clean-Up Call or aTax Redemption in accordance with Section 9.1 or an Auction Call Redemptionin accordance with Section 9.2, the Collateral Manager on behalf of theIssuer acting pursuant to the Collateral Management Agreement may at any timedirect the Trustee in writing to sell, and the Trustee shall sell in the mannerdirected by the Collateral Manager in writing, any Collateral Debt Securitywithout regard to the foregoing limitations in Section 12.1(a), *provided* that:

###  

#### (i)            the SaleProceeds therefrom must be used to pay certain expenses and redeem all of theNotes in whole but not in part pursuant to Sections 9.1 and Section9.2, and upon any such sale the Trustee shall release such Collateral DebtSecurity pursuant to Section 10.10;

####  

#### (ii)           the Issuermay not direct the Trustee to sell (and the Trustee shall not be required torelease) a Collateral Debt Security pursuant to this Section 12.1(d)unless:

####  

##### (1)           theCollateral Manager certifies to the Trustee that (x) in the Collateral Manager’sjudgment based on calculations included in the certification

 

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##### (which shallinclude the sales prices of each of the Collateral Debt Securities), the SaleProceeds from the sale of one or more of the Collateral Debt Securities and allCash and proceeds from Eligible Investments will be at least equal to the TotalRedemption Price, and (y) an Independent bond pricing service (which shall beone or more broker-dealers selected by the Collateral Manager which are ratedat least “P-1” by Moody’s and at least “A-1+” by Standard & Poor’s andwhich make a market in the applicable Collateral Debt Securities) has confirmed(which confirmation may be in the form of a firm bid) the sales pricescontained in the certification in clause (x) above (and attaching a copy ofsuch confirmation); and

#####  

##### (2)           theIndependent accountants appointed by the Issuer pursuant to Section 10.11shall confirm in writing the calculations made in clause (1)(x) above.

#####  

#### (iii)          inconnection with an Optional Redemption, an Auction Call Redemption, a Clean-upCall or a Tax Redemption, all the Collateral Debt Securities to be soldpursuant to this Section 12.1(d) must be sold in accordance with therequirements set forth in Section 9.1(e) and Section 9.2, asapplicable.

####  

### (e)      In the eventthat any Collateral Debt Security becomes the subject of a conversion,exchange, redemption or offer, whether voluntary or involuntary, the Issuer (orthe Collateral Manager acting on behalf of the Issuer) shall take no action toacquire the asset or instrument into which such Collateral Debt Security isconvertible or exchangeable unless such asset or instrument would qualify as aSubstitute Collateral Debt Security.  Inthe event of an involuntary exchange or conversion of a Collateral DebtSecurity, if the resulting asset or instrument would not qualify as a SubstituteCollateral Debt Security, the Issuer (or the Collateral Manager acting onbehalf of the Issuer) shall use its best efforts to sell such Collateral DebtSecurity prior to conversion or exchange and, in any event, shall refuse toaccept, and shall not acquire or hold, the asset or instrument offered inexchange.

###  

### (f)       In the eventthat any Notes remain Outstanding as of the Payment Date occurring six monthsprior to the Stated Maturity of the Notes, the Collateral Manager will berequired to determine whether proceeds expected to be received on the Assets priorto the Stated Maturity of the Notes will be sufficient to pay in full theprincipal amount of (and accrued interest on) the Notes on the StatedMaturity.  If the Collateral Managerdetermines, in its sole discretion, that such proceeds will not be sufficientto 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 theCollateral Manager, be obligated to liquidate the portion of Collateral DebtSecurities sufficient to pay the remaining principal amount of and interest onthe Notes on or before the Stated Maturity. The Collateral Debt Securities to be liquidated by the Issuer will beselected by the Collateral Manager.

###  

## Section 12.2           ReinvestmentCriteria and Trading Restrictions.

##  

### (a)      Except asprovided in Section 12.3(c), during the Reinvestment Period, UnscheduledPrincipal Payments, Sale Proceeds and other Principal Proceeds will bereinvested in Substitute Collateral Debt Securities (which shall be, and herebyare, Granted to

 

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### the Trusteepursuant to the Granting Clause of this Agreement) only if after giving effectto such reinvestment, the following criteria (the “Reinvestment Criteria”) are satisfied, asevidenced by an Officer’s Certificate of the Issuer or the Collateral Managerdelivered to the Trustee, as of the date of the commitment to purchase suchSubstitute Collateral Debt Securities:

###  

#### (i)            theCollateral Quality Tests are satisfied, or, if any Collateral Quality Test wasnot satisfied immediately prior to such reinvestment, the extent of compliancewith such Collateral Quality Test will be maintained or improved following suchreinvestment, except as otherwise specified in the Reinvestment Criteria below;

####  

#### (ii)           theCoverage Tests are satisfied (or, if not satisfied, are maintained orimproved);

####  

#### (iii)          ifimmediately prior to such investment the S&P CDO Monitor Test or theS&P Recovery Test was not satisfied, such test result is maintained orimproved after giving effect to such reinvestment; *provided*,*however*, that notwithstanding theforegoing, Sale Proceeds of Collateral Debt Securities may be reinvested aslong as the Collateral Manager provides written notice of each such sale andreinvestment to S&P within three (3) Business Days after such reinvestment;and

####  

#### (iv)          no Event ofDefault has occurred and is continuing.

####  

### (b)      Notwithstandingthe foregoing provisions, (i) Cash on deposit in the Collection Accounts may beinvested in Eligible Investments, pending investment in Substitute CollateralDebt Securities and (ii) if an Event of Default shall have occurred and becontinuing, no Substitute Collateral Debt Security may be acquired unless itwas the subject of a commitment entered into by the Issuer prior to theoccurrence of such Event of Default.

###  

## Section 12.3           ConditionsApplicable to all Transactions Involving Sale or Grant.

##  

### (a)      Any transactioneffected after the Closing Date under this Article 12 or Section10.10 shall be conducted in accordance with the requirements of theCollateral Management Agreement, *provided* that,(1) the Collateral Manager shall not direct the Trustee to acquire anySubstitute Collateral Debt Security for inclusion in the Assets from theCollateral Manager or any of its Affiliates as principal or to sell anyCollateral Debt Security from the Assets to the Collateral Manager or any ofits Affiliates as principal unless the transaction is effected in accordancewith the Collateral Management Agreement and (2) the Collateral Manager shallnot direct the Trustee to acquire any Substitute Collateral Debt Security forinclusion in the Assets from any account or portfolio for which the CollateralManager serves as investment adviser or direct the Trustee to sell anyCollateral Debt Security to any account or portfolio for which the CollateralManager serves as investment adviser unless such transactions comply with therequirements of any applicable laws.  TheTrustee shall have no responsibility to oversee compliance with this clause bythe other parties.

###  

### (b)      Upon any Grantpursuant to this Article 12, all of the Issuer’s right, title andinterest to the Pledged Obligation or Securities shall be Granted to theTrustee pursuant to this Indenture, such Pledged Obligation or Securities shallbe registered in the name of the

 

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### Trustee, and, ifapplicable, the Trustee shall receive such Pledged Collateral Debt Security orSecurities.  The Trustee shall alsoreceive, not later than the date of delivery of any Collateral Debt Securitydelivered after the Closing Date, an Officer’s Certificate of the CollateralManager certifying that, as of the date of such Grant, such Grant complies withthe applicable conditions of and is permitted by this Article 12 (andsetting forth, to the extent appropriate, calculations in reasonable detailnecessary to determine such compliance).

###  

### (c)      Notwithstandinganything contained in this Article 12 to the contrary, the Issuer shall,subject to this Section 12.3(c), have the right to effect anytransaction which has been consented to (i) by the Holders of Notes evidencing100% of the Aggregate Outstanding Amount of each and every Class of Notes (orif there are no Notes Outstanding, 100% of the Preferred Shares) and (ii) eachHedge Counterparty, and of which each Rating Agency has been notified.

###  

## Section 12.4           Saleof Collateral Debt Securities with respect to an Auction Call Redemption.

##  

### (a)      Pre-AuctionProcess.

###  

#### (i)            EachAuction will occur on the Business Day that is at least 13 Business Days priorto the proposed Auction Call Redemption Date (such date, the “Auction Date”).

####  

#### (ii)           TheCollateral Manager will initiate the Auction Procedures at least 24 BusinessDays before the proposed Auction Call Redemption Date by: (a) preparing a listof Collateral Debt Securities (including CUSIP Number, if any, par amount andissuer name for each Collateral Debt Security); (b) deriving a list of not lessthan three qualified bidders (the “Listed Bidders”) and requesting from each ListedBidder bids by the applicable Auction Date; and (c) notifying the Trustee ofthe list of Listed Bidders (the “List”).

####  

#### (iii)          TheCollateral Manager will deliver a general solicitation package to the ListedBidders 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 isirrevocably obligated to purchase, and the Issuer is irrevocably obligated tosell, the Collateral Debt Securities on the date and on the terms statedtherein, (II) each bidder may tender a separate bid for one or more CollateralDebt Securities in an Auction, (III) if the Collateral Debt Securities are tobe sold to different bidders, that the consummation of the purchase of allCollateral Debt Securities must occur simultaneously and that the closing ofeach purchase is conditional on the closing of the other purchases, (IV) if forany reason whatsoever the Trustee has not received, by a specified Business Day(which shall be more than ten Business Days before the proposed Auction CallRedemption Date), payment in full in immediately available funds of thepurchase price for all Collateral Debt Securities, the obligations of theparties shall terminate and the Issuer shall have no obligation or liabilitywhatsoever and (V) any prospective purchasers will be subject to the “limitedrecourse” 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 theCollateral Manager as the Total Redemption Price less the balance of allEligible Investments and Cash in the Collection Accounts, the Payment Account,the Delayed Funding Obligations Account, each Hedge Termination Account and theExpense Account; (c) the list of Collateral Debt Securities; (d) a formal bidsheet (which will permit a bidder to bid for all of the Collateral DebtSecurities or separately for any one or more (but not all) Collateral DebtSecurities and will include a representation from the bidder that it iseligible 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 theCollateral Manager; (e) a detailed timetable; and (f) copies of all transferdocuments provided to the Trustee by the Collateral Manager (including transfercertificates and subscription agreements which a bidder must execute pursuantto the underlying instruments and a list of the requirements which the biddermust satisfy under the underlying instruments (i.e., QIB status, QualifiedPurchaser status, etc.)).

####  

#### (iv)          TheCollateral Manager will send solicitation packages to all Listed Bidders on theList at least 20 Business Days before the proposed Auction Call RedemptionDate. The Listed Bidders will be required to submit any due diligence questions(or comments on the draft purchase agreement) in writing to the CollateralManager by a date specified in the solicitation package. The Collateral Managerwill be required to answer all reasonable and relevant questions by the datespecified in the solicitation package and the Collateral Manager willdistribute the questions and answers and the revised final Auction PurchaseAgreement to all Listed Bidders (with a copy to the Issuer and the Trustee).

####  

### (b)      AuctionProcess.

###  

#### (i)            WellsFargo Bank, National Association or its Affiliates may, but shall not berequired to, bid at the Auction.  TheCollateral Manager and its Affiliates may bid in the Auction if the CollateralManager deems such bidding to be appropriate but is not required to do so.

####  

#### (ii)           On theSecond Business Day prior to the Auction Date (the “Auction Bid Date”), all bids will be due byfacsimile at the offices of the Trustee by 11:00 a.m. New York City time, withthe winning bidder or bidders to be notified by 2:00 p.m. New York Citytime.  All bids from Listed Bidders onthe 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 ormore (but not all) of the Collateral Debt Securities.

####  

#### (iii)          Unlessthe Trustee receives (A) at least one bid from a Listed Bidder to purchase allof the Collateral Debt Securities or (B) receives bids from one or more ListedBidders (to purchase one or more (but not all) Collateral Debt Securities) forall Collateral Debt Securities in the aggregate, the Trustee will decline toconsummate the sale.

 

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#### (iv)          Subject toclause (iii) above, with the advice of the Collateral Manager, the Trusteeshall select the bid or bids which result in the Highest Auction Price from oneor more Listed Bidders (in excess of the specified minimum purchase price). “HighestAuction Price” means the higher of (i) the highest price bid by any ListedBidder for all of the Collateral Debt Securities or (ii) the sum of the highestprices bid by one or more Listed Bidders (for one or more (but not all)Collateral Debt Securities) for all Collateral Debt Securities in theaggregate. In each case, the price bid by a Listed Bidder will be the dollaramount which the Collateral Manager certifies to the Trustee based on theCollateral Manager’s review of the bids, which certification shall be bindingand conclusive.

####  

#### (v)           Uponnotification to the winning bidder or bidders, the winning bidder (or, if theHighest Auction Price requires the sale of the Collateral Debt Securities tomore than one bidder, each winning bidder) will be required to deliver to theTrustee a signed counterpart of the Auction Purchase Agreement no later than4:00 p.m. New York City time on the Auction Date. The winning bidder (or, ifthe Highest Auction Price requires the sale of the Collateral Debt Securitiesto more than one bidder, each winning bidder) will make payment in full of thepurchase price on the Business Day (the “Auction Purchase Closing Date”) specified in thegeneral solicitation package (which will be no later than ten Business Daysprior to the proposed Auction Call Redemption Date). If a winning bidder sorequests, the Trustee and the Issuer will enter into a bailee letter in theform 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 toapproval by the Issuer or the Collateral Manager on behalf of the Issuer), *provided* that such bank enters into an account controlagreement with the Trustee and the Issuer and has a long term debt rating of atleast “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 aboverequirements are satisfied, the Trustee will deliver the Collateral DebtSecurities (to be sold to such bidder) pursuant thereto to the bailee bank atleast one Business Day prior to the closing on the sale of the Collateral DebtSecurities and accept payment of the purchase price pursuant thereto. Ifpayment in full of the purchase price is not made by the Auction PurchaseClosing Date for any reason whatsoever (or, if the Collateral Debt Securitiesare to be sold to more than one bidder, if any bidder fails to make payment infull of the purchase price by the Auction Purchase Closing Date for any reasonwhatsoever), the Issuer will decline to consummate the sale of all CollateralDebt Securities, the Trustee and the Issuer will direct the bailee bank toreturn the Collateral Debt Securities to the Trustee, and (if notice ofredemption has been given by the Trustee) the Trustee will give notice (inaccordance with the terms of this Indenture) that the Auction Call Redemptionwill not occur.

####  

#### (vi)          Notwithstandingthe foregoing, but subject to the satisfaction of the conditions set forth in Section9.2(b), the Collateral Manager or any of its Affiliates, although it maynot have been the highest bidder, will have the option to purchase any one ormore Collateral Debt Securities for a purchase price equal to the highest bidtherefor.

 

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### (c)      Notwithstandinganything to the contrary set forth in this Section 12.4, but subject tothe satisfaction of the conditions set forth in Section 9.2(b) and theconsummation of the Auction Call Redemption, at the election of the CollateralManager, in lieu of initiating or conducting any Auction, the CollateralManager or any of its Affiliates will have the option to purchase all of theCollateral Debt Securities that would otherwise be subject to such Auction fora price equal to the Total Redemption Price. Such purchase of Collateral Debt Securities by the Collateral Manager orits Affiliates pursuant to this Section 12.4(c) will be deemed to be aSuccessful Auction pursuant to this Indenture.

###  

## Section 12.5           Modificationsto Collateral Quality Tests or Coverage Tests.

##  

In the event any of the Rating Agencies modifies thedefinitions or calculations relating to (i) the method of calculating any ofits respective Collateral Quality Tests (a “Collateral Quality TestModification”) 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, butis under no obligation solely as a result of this Section 12.5 to, incorporatecorresponding changes into the Indenture by an amendment hereto without theconsent of the Holders of the Notes (but with written notice to theNoteholders) or the Preferred Shares if (x)(1) in the case of a CollateralQuality Test Modification, the Rating Agency Condition is satisfied withrespect to the Rating Agency that made such modification or (2) in the case ofa Coverage Test Modification, the Rating Agency Condition is satisfied withrespect to each Rating Agency then rating the Notes and (y) written notice ofsuch modification is delivered by the Collateral Manager to the Trustee and tothe Holders of the Notes and Preferred Shares (which notice may be included inthe next regularly scheduled report to Noteholders).  Any such Collateral Quality Test Modificationor Coverage Test Modification, as the case may be, shall be effected withoutexecution of a supplemental indenture; *provided*, *however*, that such amendment shall be (i) evidenced by awritten instrument executed and delivered by each of the Co-Issuers and theCollateral Manager and delivered to the Trustee, (ii) accompanied by deliveryby the Issuer to the Trustee of (A) an Officer’s Certificate of the Issuercertifying that such amendment has been made pursuant to and in compliance withthis Section 12.5 and (B) if requested by the Trustee, an Opinion ofCounsel stating that such amendment is authorized or permitted by this Section12.5 and that all applicable conditions precedent under this Section 12.5have been satisfied, on which such Officer’s Certificate or such Officer’sCertificate and Opinion of Counsel, as the case may be, the Trustee shall beentitled to rely.  Notwithstanding theforegoing, any such amendment reasonably determined by the Trustee to be undulyburdensome to the Trustee, shall not take effect without the Trustee’s expresswritten consent.

 

# **ARTICLE 13**

 

# **NOTEHOLDERS’ RELATIONS**

 

## Section 13.1           Subordination.

##  

### (a)      Anything inthis Indenture or the Notes to the contrary notwithstanding, the Issuer and theHolders of the Class A-2 Notes, the Class B Notes, the Class C Notes, the ClassD Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class HNotes, the

 

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### Class J Notes andthe Class K Notes agree for the benefit of the Holders of the Class A-1 Notesand each Hedge Counterparty that the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes, the Class E Notes, the Class F Notes, theClass G Notes, the Class H Notes, the Class J Notes and the Class K Notes, andthe Issuer’s rights in and to the Assets (the “Class A-2 SubordinateInterests”) shall be subordinate and junior to the Class A-1 Notes to theextent and in the manner set forth in this Indenture including as set forth in Section11.1(a) and hereinafter provided.  Ifany Event of Default has not been cured or waived and acceleration occurs inaccordance with Article 5, including as a result of an Event of Defaultspecified in Section 5.1(f) or 5.1(g), the Class A-1 Notes shallbe paid in full before any further payment or distribution is made on accountof the Class A-2 Subordinate Interests. The Holders of the Class A-2 Notes, the Class B Notes, the Class CNotes, the Class D Notes, the Class E Notes, the Class F Notes, the Class GNotes, the Class H Notes, the Class J Notes and the Class K Notes agree, forthe 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 forfailure to pay to them amounts due under the Class A-2 Notes, the Class BNotes, the Class C Notes, the Class D Notes, the Class E Notes, the Class FNotes, the Class G Notes, the Class H Notes, the Class J Notes and the Class KNotes hereunder until the payment in full of the Class A-1 Notes and not beforeone year and one day, or, if longer, the applicable preference period then ineffect, has elapsed since such payment.

###  

### (b)      Anything inthis Indenture or the Notes to the contrary notwithstanding, the Issuer and theHolders of the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes, the Class H Notes, the Class JNotes and the Class K Notes agree for the benefit of the Holders of the ClassA-1 Notes and the Class A-2 Notes and each Hedge Counterparty that the Class BNotes, the Class C Notes, the Class D Notes, the Class E Notes, the Class FNotes, the Class G Notes, the Class H Notes, the Class J Notes and the Class KNotes 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 Notesto the extent and in the manner set forth in this Indenture including as setforth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured orwaived and acceleration occurs in accordance with Article 5, includingas 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 anyfurther payment or distribution is made on account of the Class B SubordinateInterests.  The Holders of the Class BNotes, the Class C Notes, the Class D Notes, the Class E Notes, the Class FNotes, the Class G Notes, the Class H Notes, the Class J Notes and the Class KNotes agree, for the benefit of the Holders of the Class A-1 Notes and theClass A-2 Notes and each Hedge Counterparty, not to cause the filing of apetition in bankruptcy against the Issuer for failure to pay to them amountsdue under the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes, the Class H Notes, the Class JNotes and the Class K Notes hereunder until the payment in full of the ClassA-1 Notes and the Class A-2 Notes and not before one year and one day, or, iflonger, the applicable preference period then in effect, has elapsed since suchpayment.

###  

### (c)      Anything inthis Indenture or the Notes to the contrary notwithstanding, the Issuer and theHolders of the Class C Notes, the Class D Notes, the Class E Notes, the Class FNotes, the Class G Notes, the Class H Notes, the Class J Notes and the Class KNotes agree for the benefit of the Holders of the Class A-1 Notes, the ClassA-2 Notes, the Class B

 

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### Notes and eachHedge Counterparty that the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes, the Class H Notes, the Class JNotes 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 andthe Class B Notes to the extent and in the manner set forth in this Indentureincluding as set forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured orwaived and acceleration occurs in accordance with Article 5, includingas 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 infull before any further payment or distribution is made on account of the ClassC Subordinate Interests.  The Holders ofthe Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes, theClass G Notes, the Class H Notes, the Class J Notes and the Class K Notesagree, for the benefit of the Holders of the Class A-1 Notes, the Class A-2Notes and the Class B Notes and each Hedge Counterparty, not to cause thefiling of a petition in bankruptcy against the Issuer for failure to pay tothem 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 andthe 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 elapsedsince such payment.

###  

### (d)      Anything inthis Indenture or the Notes to the contrary notwithstanding, the Issuer and theHolders of the Class D Notes, the Class E Notes, the Class F Notes, the Class GNotes, the Class H Notes, the Class J Notes and the Class K Notes agree for thebenefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, the Class BNotes, 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, theClass J Notes and the Class K Notes and the Issuer’s rights in and to theAssets (the “Class D SubordinateInterests”) shall be subordinate and junior to the Class A-1Notes, the Class A-2 Notes, the Class B Notes and the Class C Notes to theextent and in the manner set forth in this Indenture including as set forth in Section11.1(a) and hereinafter provided.  Ifany Event of Default has not been cured or waived and acceleration occurs inaccordance with Article 5, including as a result of an Event of Defaultspecified in Section 5.1(f) or 5.1(g), the Class A-1 Notes, theClass A-2 Notes, the Class B Notes and the Class C Notes shall be paid in fullbefore any further payment or distribution is made on account of the Class DSubordinate Interests.  The Holders ofthe Class D Notes, the Class E Notes, the Class F Notes, the Class G Notes, theClass H Notes, the Class J Notes and the Class K Notes agree, for the benefitof 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 apetition in bankruptcy against the Issuer for failure to pay to them amountsdue under the Class D Notes, the Class E Notes, the Class F Notes, the Class GNotes, the Class H Notes, the Class J Notes and the Class K Notes hereunderuntil the payment in full of the Class A-1 Notes, the Class A-2 Notes, theClass B Notes and the Class C Notes and not before one year and one day, or, iflonger, the applicable preference period then in effect, has elapsed since suchpayment.

###  

### (e)      Anything inthis Indenture or the Notes to the contrary notwithstanding, the Issuer and theHolders of the Class E Notes, the Class F Notes, the Class G Notes, the Class HNotes, the Class J Notes and the Class K Notes agree for the benefit of theHolders of

 

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### the Class A-1Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes and the ClassD 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 andthe 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 setforth in this Indenture including as set forth in Section 11.1(a) andhereinafter provided.  If any Event ofDefault has not been cured or waived and acceleration occurs in accordance withArticle 5, including as a result of an Event of Default specified in Section5.1(f) or 5.1(g), the Class A-1 Notes, the Class A-2 Notes, theClass B Notes, the Class C Notes, and the Class D Notes shall be paid in fullbefore any further payment or distribution is made on account of the Class ESubordinate Interests.  The Holders ofthe Class E Notes, the Class F Notes, the Class G Notes, the Class H Notes, theClass J Notes and the Class K Notes agree, for the benefit of the Holders ofthe Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notesand the Class D Notes and each Hedge Counterparty, not to cause the filing of apetition in bankruptcy against the Issuer for failure to pay to them amountsdue under the Class E Notes, the Class F Notes, the Class G Notes, the Class HNotes, the Class J Notes and the Class K Notes hereunder until the payment infull of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the ClassC Notes and the Class D Notes and not before one year and one day, or, iflonger, the applicable preference period in effect, has elapsed since such payment.

###  

### (f)       Anything inthis Indenture or the Notes to the contrary notwithstanding, the Issuer and theHolders of the Class F Notes, the Class G Notes, the Class H Notes, the Class JNotes and the Class K Notes agree for the benefit of the Holders of the ClassA-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the ClassD 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 Notesand the Issuer’s rights in and to the Assets (the “Class F SubordinateInterests”) shall be subordinate and junior to the Class A-1 Notes, theClass A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes andthe Class E Notes to the extent and in the manner set forth in this Indentureincluding as set forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured orwaived and acceleration occurs in accordance with Article 5, includingas 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 anyfurther payment or distribution is made on account of the Class F SubordinateInterests.  The Holders of the Class FNotes, the Class G Notes, the Class H Notes, the Class J Notes and the Class KNotes agree, for the benefit of the Holders of the Class A-1 Notes, the ClassA-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes and each Hedge Counterparty, not to cause the filing of a petition inbankruptcy against the Issuer for failure to pay to them amounts due under theClass F Notes, the Class G Notes, the Class H Notes, the Class J Notes and theClass K Notes hereunder until the payment in full of the Class A-1 Notes, theClass A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes andthe Class E Notes and not before one year and one day, or, if longer, theapplicable preference period then in effect, has elapsed since such payment.

###  

### (g)      Anything inthis Indenture or the Notes to the contrary notwithstanding, the Issuer and theHolders of the Class G Notes, the Class H Notes, the Class J Notes and the

 

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### Class K Notesagree for the benefit of the Holders of the Class A-1 Notes, the Class A-2Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, 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’srights in and to the Assets (the “Class G Subordinate Interests”) shallbe subordinate and junior to the Class A-1 Notes, the Class A-2 Notes, theClass B Notes, the Class C Notes, the Class D Notes, the Class E Notes and theClass F Notes to the extent and in the manner set forth in this Indentureincluding as set forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured orwaived and acceleration occurs in accordance with Article 5, includingas 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 infull before any further payment or distribution is made on account of the ClassG Subordinate Interests.  The Holders ofthe Class G Notes, the Class H Notes, the Class J Notes and the Class K Notesagree, for the benefit of the Holders of the Class A-1 Notes, the Class A-2Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes and the Class F Notes and each Hedge Counterparty, not to cause thefiling of a petition in bankruptcy against the Issuer for failure to pay tothem amounts due under the Class G Notes, the Class H Notes, the Class J Notesand the Class K Notes hereunder until the payment in full of the Class A-1Notes, 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 elapsedsince such payment.

###  

### (h)      Anything inthis Indenture or the Notes to the contrary notwithstanding, the Issuer and theHolders of the Class H Notes, the Class J Notes and the Class K Notes agree forthe benefit of the Holders of the Class A-1 Notes, the Class A-2 Notes, theClass B Notes, the Class C Notes, the Class D Notes, the Class E Notes, the ClassF 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 theAssets (the “Class H Subordinate Interests”) shall be subordinate andjunior to the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes, the Class E Notes, the Class F Notes and theClass G Notes to the extent and in the manner set forth in this Indentureincluding as set forth in Section 11.1(a) and hereinafter provided.  If any Event of Default has not been cured orwaived and acceleration occurs in accordance with Article 5, includingas 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 Notesshall be paid in full before any further payment or distribution is made onaccount of the Class H Subordinate Interests. The Holders of the Class H Notes, the Class J Notes and the Class KNotes agree, for the benefit of the Holders of the Class A-1 Notes, the ClassA-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes and the Class G Notes and each Hedge Counterparty, notto cause the filing of a petition in bankruptcy against the Issuer for failureto pay to them amounts due under the Class H Notes, the Class J Notes and theClass K Notes hereunder until the payment in full of the Class A-1 Notes, theClass A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, theClass E Notes, the Class F Notes and the Class G Notes and not before one yearand one day, or if longer, the applicable preference period then in effect, haselapsed since such payment.

 

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### (i)       Anything inthis Indenture or the Notes to the contrary notwithstanding, the Issuer and theHolders of the Class J Notes and the Class K Notes agree for the benefit of theHolders of the Class A -1 Notes, the Class A-2 Notes, the Class B Notes, theClass C Notes, the Class D Notes, the Class E Notes, the Class F Notes, theClass G Notes, the Class H Notes and each Hedge Counterparty that the Class JNotes 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, theClass F Notes, the Class G Notes and the Class H Notes to the extent and in themanner set forth in this Indenture including as set forth in Section 11.1(a)and hereinafter provided.  If any Eventof Default has not been cured or waived and acceleration occurs in accordancewith Article 5, including as a result of an Event of Default specifiedin Section 5.1(f) or 5.1(g), the Class A-1 Notes, the Class A-2Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes and the Class H Notes shall be paidin full before any further payment or distribution is made on account of theClass J Subordinate Interests.  TheHolders of the Class J Notes and the Class K Notes agree, for the benefit ofthe 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, theClass G Notes and the Class H Notes and each Hedge Counterparty, not to causethe filing of a petition in bankruptcy against the Issuer for failure to pay tothem amounts due under the Class J Notes and the Class K Notes hereunder untilthe payment in full of the Class A-1 Notes and the Class A-2 Notes, the Class BNotes, the Class C Notes, the Class D Notes, the Class E Notes, the Class FNotes, the Class G Notes and the Class H Notes and not before one year and oneday, or if longer, the applicable preference period then in effect, has elapsedsince such payment.

###  

### (j)       Anything inthis Indenture or the Notes to the contrary notwithstanding, the Issuer and theHolders of the Class K Notes agree for the benefit of the Holders of the ClassA-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the ClassD Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class HNotes and the Class J Notes and each Hedge Counterparty that the Class K Notesand the Issuer’s rights in and to the Assets (the “Class K Subordinate Interests”) shall besubordinate and junior to the Class A-1 Notes, the Class A-2 Notes, the Class BNotes, the Class C Notes, the Class D Notes, the Class E Notes, the Class FNotes, the Class G Notes, the Class H Notes and the Class J Notes to the extentand in the manner set forth in this Indenture including as set forth in Section11.1(a) and hereinafter provided.  Ifany Event of Default has not been cured or waived and acceleration occurs inaccordance with Article 5, including as a result of an Event of Defaultspecified in Section 5.1(f) or 5.1(g), the Class A-1 Notes, theClass A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, theClass E Notes, the Class F Notes, the Class G Notes, the Class H Notes and theClass J Notes shall be paid in full before any further payment or distributionis made on account of the Class J Subordinate Interests.  The Holders of the Class K Notes agree, forthe benefit of the Holders of the Class A -1 Notes, the Class A-2 Notes, theClass B Notes, the Class C Notes, the Class D Notes, the Class E Notes, theClass F Notes, the Class G Notes, the Class H Notes and the Class J Notes andeach Hedge Counterparty, not to cause the filing of a petition in bankruptcyagainst the Issuer for failure to pay to them amounts due under the Class KNotes hereunder until the payment in full of the Class A-1 Notes, the Class A-2Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes, the Class H Notes and the

 

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### Class J Notes andnot before one year and one day, or if longer, the applicable preference periodthen in effect, has elapsed since such payment.

###  

### (k)      In the eventthat notwithstanding the provisions of this Indenture, any holder of anySubordinate Interests shall have received any payment or distribution inrespect of such Subordinate Interests contrary to the provisions of thisIndenture, then, unless and until the Class A-1 Notes, the Class A-2 Notes, theClass B Notes, the Class C Notes, the Class D Notes, the Class E Notes, theClass F Notes, the Class G Notes, the Class H Notes, the Class J Notes and theClass K Notes, as the case may be, shall have been paid in full in accordancewith this Indenture, such payment or distribution shall be received and held intrust 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 ClassA-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the ClassD Notes, the Class E Notes, the Class F Notes, the Class G Notes, the Class HNotes, the Class J Notes and the Class K Notes, as the case may be, inaccordance with this Indenture.

###  

### (l)       Each Holder ofSubordinate Interests agrees with all Holders of the Class A-1 Notes, the ClassA-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes, the Class H Notes, the Class JNotes and the Class K Notes, as the case may be, that such Holder ofSubordinate Interests shall not demand, accept, or receive any payment ordistribution in respect of such Subordinate Interests in violation of theprovisions of this Indenture including this Section 13.1; *provided, however*, that after the Class A-1 Notes, the ClassA-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class ENotes, the Class F Notes, the Class G Notes, the Class H Notes, the Class JNotes and the Class K Notes, as the case may be, have been paid in full, theHolders of Subordinate Interests shall be fully subrogated to the rights of theHolders of the Class A Notes, the Class B Notes, the Class C Notes, the Class DNotes, the Class E Notes, the Class E Notes, the Class F Notes, the Class GNotes, the Class H Notes, the Class J Notes and the Class K Notes, as the casemay be.  Nothing in this Section 13.1shall affect the obligation of the Issuer to pay Holders of SubordinateInterests.

###  

## Section 13.2           Standardof Conduct.

##  

In exercising any of its or their voting rights,rights to direct and consent or any other rights as a Securityholder under thisIndenture, subject to the terms and conditions of this Indenture, including,without limitation, Section 5.9, a Securityholder or Securityholdersshall not have any obligation or duty to any Person or to consider or take intoaccount the interests of any Person and shall not be liable to any Person forany action taken by it or them or at its or their direction or any failure byit or them to act or to direct that an action be taken, without regard towhether such action or inaction benefits or adversely affects anySecurityholder, the Issuer, or any other Person, except for any liability towhich such Securityholder may be subject to the extent the same results fromsuch Securityholder’s taking or directing an action, or failing to take ordirect an action, in bad faith or in violation of the express terms of thisIndenture.

 

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# **ARTICLE 14**

 

# **MISCELLANEOUS**

 

## Section 14.1           Formof Documents Delivered to the Trustee.

##  

In any case where several matters are required to becertified by, or covered by an opinion of, any specified Person, it is notnecessary 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 onedocument, but one such Person may certify or give an opinion with respect tosome matters and one or more other such Persons as to other matters, and anysuch Person may certify or give an opinion as to such matters in one or severaldocuments.

 

Any certificate or opinion of an Authorized Officer ofthe Issuer or the Co-Issuer may be based, insofar as it relates to legalmatters, upon a certificate or opinion of, or representations by, counsel,unless such Authorized Officer knows, or in the exercise of reasonable careshould know, that the certificate or opinion or representations with respect tothe matters upon which his certificate or opinion is based are erroneous.  Any such certificate of an Authorized Officerof the Issuer or the Co-Issuer or Opinion of Counsel may be based, insofar asit relates to factual matters, upon a certificate or opinion of, orrepresentations by, the Issuer, the Co-Issuer, the Collateral Manager or anyother Person, stating that the information with respect to such factual mattersis in the possession of the Issuer, the Co-Issuer, the Collateral Manager orsuch other Person, unless such Authorized Officer of the Issuer or theCo-Issuer or such counsel knows that the certificate or opinion orrepresentations 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, orrepresentations by, an Authorized Officer of the Issuer or the Co-Issuer,stating that the information with respect to such matters is in the possessionof the Issuer or the Co-Issuer, unless such counsel knows that the certificateor opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or executetwo or more applications, requests, consents, certificates, statements,opinions or other instruments under this Indenture, they may, but need not, beconsolidated and form one instrument.

 

Whenever in this Indenture it is provided that theabsence of the occurrence and continuation of a Default or Event of Default isa condition precedent to the taking of any action by the Trustee at the requestor direction of the Issuer or the Co-Issuer, then notwithstanding that thesatisfaction of such condition is a condition precedent to the Issuer’s or theCo-Issuer’s rights to make such request or direction, the Trustee shall beprotected in acting in accordance with such request or direction if it does nothave knowledge of the occurrence and continuation of such Default or Event ofDefault as provided in Section 6.1(e).

 

## Section 14.2           Actsof Securityholders.

##  

### (a)      Any request,demand, authorization, direction, notice, consent, waiver or other actionprovided by this Indenture to be given or taken by Securityholders may beembodied in and evidenced by one or more instruments of substantially similartenor signed by such Securityholders in person or by an agent duly appointed inwriting; and, except as herein otherwise expressly provided, such action shallbecome effective when such instrument or instruments are delivered to theTrustee, and, where it is hereby expressly required, to the Issuer and/or theCo-Issuer.  Such instrument orinstruments (and the action or actions

 

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### embodied thereinand evidenced thereby) are herein sometimes referred to as the “Act” of theSecurityholders signing such instrument or instruments.  Proof of execution of any such instrument orof a writing appointing any such agent shall be sufficient for any purpose ofthis Indenture and conclusive in favor of the Trustee, the Issuer and theCo-Issuer, if made in the manner provided in this Section 14.2.

###  

### (b)      The fact anddate of the execution by any Person of any such instrument or writing may beproved in any manner which the Trustee deems sufficient.

###  

### (c)      The principalamount and registered numbers of Notes held by any Person, and the date of hisholding the same, shall be proved by the Notes Register.  The Notional Amount and registered numbers ofthe 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 PreferredShares.

###  

### (d)      Any request,demand, authorization, direction, notice, consent, waiver or other action bythe Securityholder shall bind such Securityholder (and any transferee thereof)of such Security and of every Security issued upon the registration thereof orin exchange therefor or in lieu thereof, in respect of anything done, omittedor suffered to be done by the Trustee, the Preferred Shares Paying Agent, the SharesRegistrar, the Issuer or the Co-Issuer in reliance thereon, whether or notnotation of such action is made upon such Security.

###  

## Section 14.3           Notices,etc., to the Trustee, the Issuer, the Co-Issuer, the Collateral Manager, theInitial Purchaser, each Hedge Counterparty and each Rating Agency.

##  

Any request, demand, authorization, direction, notice,consent, waiver or Act of Securityholders or other documents provided orpermitted by this Indenture to be made upon, given or furnished to, or filedwith:

 

### (a)      the Trustee byany Securityholder or by the Issuer or the Co-Issuer shall be sufficient forevery purpose hereunder if made, given, furnished or filed in writing to andmailed, by certified mail, return receipt requested, hand delivered, sent byovernight courier service guaranteeing next day delivery or by telecopy inlegible form, to the Trustee addressed to it at P.O. Box 98, Columbia, Maryland21046, Attention:  CDO Trust ServicesGroup – Gramercy Real Estate CDO 2005-1, facsimile number:  (410) 715-3748, with a copy to its CorporateTrust Office, or at any other address previously furnished in writing to theIssuer, the Co-Issuer or Securityholders by the Trustee;

###  

### (b)      the Issuer bythe Trustee or by any Securityholder shall be sufficient for every purposehereunder (unless otherwise herein expressly provided) if in writing andmailed, first class postage prepaid, hand delivered, sent by overnight courierservice or by telecopy in legible form, to the Issuer addressed to it c/oGramercy Real Estate CDO 2005-1, Ltd. at Maples Finance Limited, P.O. Box1093GT, Queensgate House, South Church Street, George Town, Grand Cayman,Cayman Islands, facsimile number:  345-945-7100,Attention:  The Directors, or at anyother 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-Issuerby the Trustee or by any Securityholder shall be sufficient for every purposehereunder (unless otherwise herein expressly provided) if in writing andmailed, first class postage prepaid, hand delivered, sent by overnight courierservice or by telecopy in legible form, to the Co-Issuer addressed to it in c/oNational 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 theCo-Issuer, with a copy to the Collateral Manager at its address set forthbelow;

###  

### (d)      the PreferredShares Paying Agent shall be sufficient for every purpose hereunder if made,given, furnished or filed in writing to and mailed, by certified mail, returnreceipt requested, hand delivered, sent by overnight courier serviceguaranteeing next day delivery or by telecopy in legible form, to the PreferredShares 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 addresspreviously furnished in writing by the Trustee;

###  

### (e)      the CollateralManager by the Issuer, the Co-Issuer or the Trustee shall be sufficient forevery purpose hereunder if in writing and mailed, first class postage prepaid,hand delivered, sent by overnight courier service or by telecopy in legibleform, to the Collateral Manager addressed to it at GKK Manager LLC, 420Lexington Avenue, 19th Floor, New York, New York 10170, Attention:  Marc Holliday and Andrew Levine, facsimilenumber:  (212) 216-1785, or at any otheraddress previously furnished in writing to the Issuer, the Co-Issuer or theTrustee;

###  

### (f)       each Rating Agency, as applicable, by theIssuer, the Co-Issuer, the Collateral Manager or the Trustee shall besufficient for every purpose hereunder (unless otherwise herein expresslyprovided) if in writing and mailed, first class postage prepaid, handdelivered, sent by overnight courier service or by telecopy in legible form, toeach Rating Agency addressed to it at Standard & Poor’s Ratings Services, adivision of The McGraw-Hill Companies, Inc., 55 Water Street, 41st Floor, NewYork, New York 10041-0003, facsimile no. (212) 438-2664, Attention:  Structured Finance Ratings, Asset-Backed SecuritiesCBO/CLO Surveillance (and by electronic mail atcdosurveillance@standardandpoors.com; *provided*thatall reports required to be submitted to S&P pursuant to this Indenture onlyshall be provided in electronic form to such e-mail address); Moody’s InvestorServices, Inc., 99 Church Street, New York, New York 10007, facsimile no.:(212) 553-4170, Attention:  CBO/CLOMonitoring (or by electronic mail at cdomonitoring@moodys.com) and FitchRatings, One State Street Plaza, New York, New York 10004, facsimile no.: (212)558-2415, Attention:  Credit ProductsSurveillance–Additional Reporting (or by electronic mail atcdo.surveillance@fitchratings.com) or such other address that a Rating Agencyshall designate in the future;

###  

### (g)      each HedgeCounterparty by the Issuer, the Co-Issuer, the Collateral Manager or theTrustee shall be sufficient for every purpose hereunder if in writing andmailed, first class postage prepaid, hand delivered, sent by overnight courierservice or by telecopy in legible form, to each Hedge Counterparty addressed toit at the address specified in the related Hedge Agreement or at any otheraddress previously furnished in writing to the

 

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### Issuer, theCo-Issuer, the Collateral Manager and the Trustee by each Hedge Counterparty;and

###  

### (h)      the InitialPurchaser by the Issuer, the Co-Issuer, the Trustee or the Collateral Managershall be sufficient for every purpose hereunder if in writing and mailed, firstclass postage prepaid, hand delivered, sent by overnight courier service or bytelecopy 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           Noticesto Noteholders; Waiver.

##  

Except as otherwise expressly provided herein, wherethis Indenture provides for notice to Holders of Notes of any event,

 

### (a)      such noticeshall be sufficiently given to Holders of Notes if in writing and mailed, firstclass postage prepaid, to each Holder of a Note affected by such event, at theaddress of such Holder as it appears in the Notes Register, not earlier thanthe earliest date and not later than the latest date, prescribed for the givingof such notice;

###  

### (b)      such noticeshall be in the English language;

###  

### (c)      such noticeshall also be provided to the Irish Paying Agent (for so long as any Notes arelisted on the Irish Stock Exchange); and

###  

### (d)      all reports ornotices to Preferred Shareholders shall be sufficiently given if provided inwriting and mailed, first class postage prepaid, to the Preferred Shares PayingAgent.

###  

Notwithstanding clause (a) above, a Holder of Notesmay give the Trustee written notice that it is requesting that notices to it begiven by facsimile transmissions and stating the facsimile number for suchtransmission.  Thereafter, the Trusteeshall give notices to such Holder by facsimile transmission; *provided*that if such notice also requests that notices begiven by mail, then such notice shall also be given by mail in accordance withclause (a) above.

 

The Trustee shall deliver to the Holders of the Notesany information or notice requested to be so delivered by at least 25% of theHolders of any Class of Notes.

 

Neither the failure to mail any notice, nor any defectin any notice so mailed, to any particular Holder of a Note shall affect thesufficiency of such notice with respect to other Holders of Notes.  In case by reason of the suspension ofregular mail service or by reason of any other cause, it shall be impracticableto give such notice by mail, then such notification to Holders of Notes shallbe made with the approval of the Trustee and shall constitute sufficientnotification to such Holders of Notes for every purpose hereunder.

 

Where this Indenture provides for notice in anymanner, such notice may be waived in writing by any Person entitled to receivesuch notice, either before or after the event, and such waiver shall be theequivalent of such notice.  Waivers ofnotice by Noteholders shall

 

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be filed with the Trustee but such filing shall not bea condition precedent to the validity of any action taken in reliance upon suchwaiver.

 

In the event that, by reason of the suspension of theregular mail service as a result of a strike, work stoppage or similaractivity, it shall be impractical to mail notice of any event to Noteholderswhen such notice is required to be given pursuant to any provision of thisIndenture, then any manner of giving such notice as shall be satisfactory tothe Trustee shall be deemed to be a sufficient giving of such notice.

 

For so long as any Notes are listed on the Irish StockExchange and the rules of such exchange so require, all notices to Noteholdersof such Notes will be published in the Daily Official List of the Irish StockExchange.

 

## Section 14.5           Effectof Headings and Table of Contents.

##  

The Article and Section headings herein and the Tableof Contents are for convenience only and shall not affect the constructionhereof.

 

## Section 14.6           Successorsand Assigns.

##  

All covenants and agreements in this Indenture by theIssuer 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 theNotes shall be invalid, illegal or unenforceable, the validity, legality, andenforceability of the remaining provisions shall not in any way be affected orimpaired thereby.

 

## Section 14.8           Benefitsof Indenture.

##  

Nothing in this Indenture or in the Securities,expressed or implied, shall give to any Person, other than (i) the partieshereto and their successors hereunder and (ii) the Collateral Manager, eachHedge Counterparty, the Preferred Shareholders, the Preferred Shares PayingAgent, the Shares Registrar and the Noteholders (each of whom, in the case ofthis 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           GoverningLaw.

##  

THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED INACCORDANCE WITH AND GOVERNED BY THE LAWS OF STATE OF NEW YORK APPLICABLE TOAGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAWSPRINCIPLES.

 

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## Section 14.10         Submissionto Jurisdiction.

##  

Each of the Issuer and the Co-Issuer herebyirrevocably submits to the non-exclusive jurisdiction of any New York State orfederal court sitting in the Borough of Manhattan in The City of New York inany action or proceeding arising out of or relating to the Notes or thisIndenture, and each of the Issuer and the Co-Issuer hereby irrevocably agreesthat all claims in respect of such action or proceeding may be heard anddetermined in such New York State or federal court.  Each of the Issuer and the Co-Issuer herebyirrevocably waives, to the fullest extent that they may legally do so, thedefense of an inconvenient forum to the maintenance of such action or proceeding.  Each of the Issuer and the Co-Issuerirrevocably consents to the service of any and all process in any action orproceeding by the mailing or delivery of copies of such process to it at theoffice of the Issuer’s and the Co-Issuer’s agent set forth in Section 7.2.  Each of the Issuer and the Co-Issuer agreesthat a final judgment in any such action or proceeding shall be conclusive andmay be enforced in other jurisdictions by suit on the judgment or in any othermanner provided by law.

 

## Section 14.11         Counterparts.

##  

This instrument may be executed in any number ofcounterparts, each of which so executed shall be deemed to be an original, butall such counterparts shall together constitute but one and the sameinstrument.

 

## Section 14.12         Liabilityof Co-Issuers.

##  

Notwithstanding any other terms of this Indenture, theNotes or any other agreement entered into between, *inter alios*,the Issuer and the Co-Issuer or otherwise, neither the Issuer nor the Co-Issuershall have any liability whatsoever to the Co-Issuer or the Issuer,respectively, under this Indenture, the Notes, any such agreement or otherwiseand, without prejudice to the generality of the foregoing, neither the Issuernor the Co-Issuer shall be entitled to take any steps to enforce, or bring any actionor proceeding, in respect of this Indenture, the Notes, any such agreement orotherwise against the other Co-Issuer or the Issuer, respectively.  In particular, neither the Issuer nor theCo-Issuer shall be entitled to petition or take any other steps for the windingup or bankruptcy of the Co-Issuer or the Issuer, respectively or shall have anyclaim in respect of any assets of the Co-Issuer or the Issuer, respectively.

 

# **ARTICLE 15**

 

# **ASSIGNMENTOF COLLATERAL DEBT SECURITIES PURCHASE AGREEMENTS AND COLLATERAL MANAGEMENTAGREEMENT**

 

## Section 15.1           Assignmentof Collateral Debt Securities Purchase Agreement and the Collateral ManagementAgreements.

##  

### (a)      The Issuer, infurtherance of the covenants of this Indenture and as security for the Notesand amounts payable to the Noteholders hereunder and the performance andobservance of the provisions hereof, hereby collaterally assigns, transfers,conveys and sets over to the Trustee, for the benefit of the Noteholders andeach Hedge Counterparty, all of

 

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### the Issuer’sestate, right, title and interest in, to and under each Collateral DebtSecurities Purchase Agreement (now or hereafter entered into) and theCollateral Management Agreement (each, an “Article 15 Agreement”), including, withoutlimitation, (i) the right to give all notices, consents and releasesthereunder, (ii) the right to give all notices of termination and to take anylegal action upon the breach of an obligation of a Seller or the CollateralManager thereunder, including the commencement, conduct and consummation ofproceedings at law or in equity, (iii) the right to receive all notices,accountings, consents, releases and statements thereunder and (iv) the right todo any and all other things whatsoever that the Issuer is or may be entitled todo thereunder; *provided*,*however*,the Trustee hereby grants the Issuer a license to exercise all of the Issuer’srights pursuant to the Article 15 Agreements without notice to or the consentof the Trustee (except as otherwise expressly required by this Indenture,including, without limitation, as set forth in subsection (f) of this Section15.1) which license shall be and is hereby deemed to be automaticallyrevoked 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 assignmentmade hereby is executed as collateral security, and the execution and deliveryhereby shall not in any way impair or diminish the obligations of the Issuerunder the provisions of each of the Article 15 Agreements, nor shall any of theobligations contained in each of the Article 15 Agreements be imposed on theTrustee.

###  

### (c)      Upon theretirement of the Notes, the payment by the Issuer of all amounts payable undereach Hedge Agreement and the release of the Assets from the lien of thisIndenture, this assignment and all rights herein assigned to the Trustee forthe benefit of the Noteholders and each Hedge Counterparty shall cease andterminate and all the estate, right, title and interest of the Trustee in, toand under each of the Article 15 Agreements shall revert to the Issuer and nofurther instrument or act shall be necessary to evidence such termination andreversion.

###  

### (d)      The Issuerrepresents that it has not executed any assignment of any of the Article 15Agreements other than this collateral assignment.

###  

### (e)      The Issueragrees that this assignment is irrevocable, and that it shall not take anyaction which is inconsistent with this assignment or make any other assignmentinconsistent herewith.  The Issuer shall,from time to time upon the request of the Trustee, execute all instruments offurther assurance and all such supplemental instruments with respect to this assignmentas the Trustee may specify.

###  

### (f)       The Issuerhereby agrees, and hereby undertakes to obtain the agreement and consent of theSeller and the Collateral Manager, as applicable, in the Collateral DebtSecurities Purchase Agreements and the Collateral Management Agreement, asapplicable, to the following:

###  

#### (i)            each ofthe Seller and the Collateral Manager consents to the provisions of thiscollateral assignment and agrees to perform any provisions of this Indenturemade expressly applicable to each of the Seller and the Collateral Manager pursuantto the applicable Article 15 Agreement;

 

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#### (ii)           each ofthe Seller and the Collateral Manager, as applicable, acknowledges that theIssuer is collaterally assigning all of its right, title and interest in, toand under the Collateral Debt Securities Purchase Agreements and the CollateralManagement Agreement, as applicable, to the Trustee for the benefit of theNoteholders, each Hedge Counterparty and each of the Seller and the CollateralManager, as applicable, agrees that all of the representations, covenants andagreements made by each of the Seller and the Collateral Manager, asapplicable, in the applicable Article 15 Agreement are also for the benefit of,and enforceable by, the Trustee, the Noteholders and each Hedge Counterparty;

####  

#### (iii)          eachof the Seller and the Collateral Manager, as applicable, shall deliver to theTrustee duplicate original copies of all notices, statements, communicationsand instruments delivered or required to be delivered to the Issuer pursuant tothe applicable Article 15 Agreement;

####  

#### (iv)          none of theIssuer, the Seller or the Collateral Manager shall enter into any agreementamending, modifying or terminating the applicable Article 15 Agreement, (otherthan in respect of an amendment or modification to cure any inconsistency,ambiguity or manifest error) or selecting or consenting to a successorcollateral manager, without notifying each Rating Agency and without the priorwritten consent and written confirmation of each Rating Agency that suchamendment, modification or termination will not cause its then-current ratingsof the Notes to be reduced;

####  

#### (v)           except asotherwise set forth herein and therein (including, without limitation, pursuantto Sections 12 and 13 of the Collateral Management Agreement),the Collateral Manager shall continue to serve as Collateral Manager under theCollateral Management Agreement, notwithstanding that the Collateral Managershall not have received amounts due it under the Collateral ManagementAgreement because sufficient funds were not then available hereunder to paysuch amounts pursuant to the Priority of Payments.  The Collateral Manager agrees not to causethe filing of a petition in bankruptcy against the Issuer for the nonpayment ofthe fees or other amounts payable to the Collateral Manager under theCollateral Management Agreement until the payment in full of all Notes issuedunder this Indenture and the expiration of a period equal to the applicablepreference period under the Bankruptcy Code plus ten days following suchpayment; and

####  

#### (vi)          theCollateral Manager irrevocably submits to the non-exclusive jurisdiction of anyNew York State or federal court sitting in the Borough of Manhattan in The Cityof New York in any action or proceeding arising out of or relating to the Notesor this Indenture, and the Collateral Manager irrevocably agrees that allclaims in respect of such action or proceeding may be heard and determined insuch New York State or federal court. The Collateral Manager irrevocably waives, to the fullest extent it maylegally do so, the defense of an inconvenient forum to the maintenance of suchaction or proceeding.  The CollateralManager irrevocably consents to the service of any and all process in anyaction or Proceeding by the mailing by certified mail, return receiptrequested, or delivery requiring signature and proof of delivery of copies ofsuch initial process to it at GKK Manager LLC, 420 Lexington Avenue, 19thFloor, New York, New

 

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#### York 10170, Attention: Andrew Levine.  The Collateral Manager agrees that a finaland non-appealable judgment by a court of competent jurisdiction in any suchaction or proceeding shall be conclusive and may be enforced in otherjurisdictions by suit on the judgment or in any other manner provided by law.

 

# **ARTICLE 16**

 

# **HEDGE AGREEMENT**

 

## Section 16.1           Issuer’sObligations under Hedge Agreement.

##  

### (a)      On the ClosingDate and thereafter, and on and after any date on which the Issuer enters intoan additional or replacement Hedge Agreement (including any related HedgeCounterparty Credit Support), the Issuer as directed by the Collateral Managershall (i) require that each Hedge Counterparty thereto, or any third party(including an Affiliate of such Hedge Counterparty) that (A) has absolutely andunconditionally guaranteed the obligations of the Hedge Counterparty under therelated Hedge Agreement (with such form of guaranty as shall be satisfactory toeach Rating Agency then rating any Notes hereunder), (B) has entered intocredit intermediation arrangements in respect of the obligations of the HedgeCounterparty under the related Hedge Agreement satisfactory to each RatingAgency then rating any Notes hereunder, (C) is the issuing bank on one or moreletters of credit supporting the obligations of the Hedge Counterparty underthe related Hedge Agreement and that shall be reasonably acceptable to eachRating Agency then rating any Notes hereunder or (D) has provided any otheradditional credit support and such inclusion of additional credit support shallhave satisfied the Rating Agency Condition (any such third party, including anAffiliate of such Hedge Counterparty, a “Hedge Counterparty Credit Support Provider”)) hasobtained, and will maintain (at the Hedge Counterparty’s or the HedgeCounterparty’s Credit Support Provider’s expense), with respect to itself as anissuer or with respect to its indebtedness, credit ratings at least equal tothe Hedge Counterparty Collateral Threshold Ratings, if any, by each RatingAgency then rating any Notes hereunder, (ii) except with respect to aForm-Approved Liability Hedge, obtain a written confirmation from each RatingAgency then rating any Notes hereunder that any additional or replacement HedgeAgreement and the related Hedge Counterparty would not cause such Rating Agency’sthen-current rating on any Class of Notes to be adversely qualified, reduced,suspended or withdrawn and (iii) assign and grant a security interest in suchHedge Agreement to the Trustee pursuant to this Indenture.  Each Hedge Agreement will provide that noamendment, modification or waiver in respect of such Hedge Agreement, includingany additional or replacement Hedge Agreement will be effective unless (A)evidenced by a writing executed by each party thereto, (B) the Trustee hasacknowledged its consent thereto in writing and (C) each Rating Agencyconfirms that such amendment, modification or waiver will not cause thereduction or withdrawal of its then-current rating on any Class of Notes.

###  

### (b)      The Trusteeshall, on behalf of the Issuer, pay amounts due to each Hedge Counterpartyunder the related Hedge Agreements in accordance with Section 10.2(f), thePriority of Payments and Section 16.1(g) hereof.

###  

### (c)      The notionalamount of certain Hedge Agreements providing for floating rate payments to theIssuer will be calculated as a percentage of the principal amount of the

 

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### Notes originallyanticipated to be Outstanding on each Payment Date based on certainassumptions.  In accordance with theterms of each Hedge Agreement, such notional amount will be reduced by theIssuer (or the Collateral Manager on behalf of the Issuer) or each HedgeCounterparty on each Payment Date to the extent that (i) the outstandingprincipal amount of the Notes is less than the scheduled aggregate notionalamount of the related Hedge Agreements for such Payment Date and/or (ii) theNet Outstanding Portfolio Balance is less than the scheduled aggregate notionalamount of the related Hedge Agreements for such Payment Date and/or (iii) inthe case of a Liability Hedge or other single asset-specific Hedge Agreement,the outstanding Principal Balance of the related underlying Collateral DebtSecurity is less than a percentage (as set forth in the related HedgeAgreement) of the Scheduled material amount of the related Hedge Agreement; *provided* that if any Notes are then Outstanding, the Trusteeshall first have received written evidence that the Rating Agency Conditionwith respect to Moody’s and S&P has been satisfied with respect to suchreduction other than as scheduled and Fitch shall have been notified of suchreduction other than as scheduled. Additionally, subject to satisfaction of the Rating Agency Conditionwith respect to Moody’s and S&P and the notification of Fitch in respectthereof, a termination in part of a Hedge Agreement and a correspondingreduction in the notional amount of the Hedge Agreement may occur, in the eventof a Mandatory Redemption or Special Amortization of the Notes.  The Issuer’s remaining obligations inaccordance with the Priority of Payments will not be affected by any suchreduction.  Notwithstanding any right ofthe Issuer to terminate each Hedge Agreement or related Hedge CounterpartyCredit Support upon the occurrence of a Termination Event or an Event ofDefault (each as defined in each Hedge Agreement) or otherwise pursuant to aHedge Agreement, the Issuer shall not (x) terminate any Hedge Agreement orHedge Counterparty Credit Support or (y) cause the non-replacement of anyterminated Hedge Agreement, unless in each case the Issuer notifies Fitchthereof and obtains a written confirmation from Moody’s and S&P that suchtermination or non-replacement, as applicable, would not cause such RatingAgency’s then-current rating on any Class of Notes, as applicable, to beadversely qualified, reduced, suspended or withdrawn.

###  

### (d)      Each HedgeAgreement shall provide for termination, and shall be capable of beingterminated (i) by or on behalf of the Issuer upon the failure of the relatedHedge Counterparty to post collateral under a Hedge Counterparty Credit Supportwithin the time period specified in the related Hedge Agreement or provideother alternate credit enhancement in accordance with the related HedgeAgreement, and upon the failure of the related Hedge Counterparty to transfer(at the Hedge Counterparty’s sole cost and expense) all of its rights andobligations under the related Hedge Agreement to a Qualified Hedge Party orsubject to satisfaction of the Rating Agency Condition, to a Counterparty thatmaintains the Hedge Counterparty Required Ratings within the time periodspecified in the related Hedge Agreement, after the failure of the relatedHedge Counterparty (or any Hedge Counterparty Credit Support Provider) to havethe Hedge Counterparty Collateral Threshold Ratings; (ii) by or on behalf ofthe Issuer upon the failure of the related Hedge Counterparty to transfer (atthe related Hedge Counterparty’s sole cost and expense) all of its rights andobligations under the related Hedge Agreement to a Qualified Hedge Party withinthe time period specified in the related Hedge Agreement after the failure ofthe related Hedge Counterparty (or any Hedge Counterparty Credit SupportProvider) to have the Hedge Counterparty Required Ratings (*provided*,*however*, that the related Hedge Counterparty shall continueto post collateral and use its best efforts to find a replacement pursuant tothe related Hedge Agreement until the

 

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### earlier to occurof termination of the related Hedge Agreement by or on behalf of the Issuer orconsummation of a Permitted Transfer (as defined in and in accordance with theterms of the related Hedge Agreement)) unless the Issuer has received writtenconfirmation from each Rating Agency that such failure would not cause suchRating Agency’s then-current rating on any Class of Notes to be adverselyqualified, reduced, suspended or withdrawn, (iii) by the related HedgeCounterparty, upon the failure of the Issuer to make, when due, any scheduledperiodic payments under the related Hedge Agreement, (iv) in whole or in partas 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 TaxRedemption, (v) in part as provided in the related Hedge Agreement, subject tosatisfaction of the Rating Agency Condition with respect to Moody’s andS&P, upon a Mandatory Redemption or a Special Amortization, (vi) by therelated Hedge Counterparty upon any declaration by the Trustee that the Noteshave become due and payable or (vii) as otherwise expressly provided for in therelated Hedge Agreement.  Each HedgeAgreement will further require a Hedge Counterparty, under the conditionsdescribed in clause (ii) of the preceding sentence, to provide HedgeCounterparty Credit Support, although the provision of Hedge CounterpartyCredit Support will not satisfy or discharge each Hedge Counterparty’sobligation to transfer all of its rights and obligations under the relatedHedge Agreement to a Qualified Hedge Party. The Issuer shall satisfy the Rating Agency Condition with respect toMoody’s and S&P with respect to any such termination of any provision ofHedge Counterparty Credit Support and of any transfer of all of the rights andobligations of any Hedge Counterparty under any Hedge Agreement.

###  

### (e)      The Trusteeshall, prior to the Closing Date, establish a single, segregated trust accountwith respect to each Hedge Counterparty in the name of the Trustee, eachdesignated as the “Hedge Collateral Account,” which shall be held in trust forthe benefit of the Noteholders and the applicable Hedge Counterparty, overwhich the Trustee shall have exclusive control and the sole right ofwithdrawal, and in which no Person other than the Trustee and the Noteholdersand the applicable Hedge Counterparty shall have any legal or beneficialinterest.  The Trustee shall deposit allcollateral received from the related Hedge Counterparty under the related HedgeAgreement 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 intrust by the Trustee for the benefit of the Noteholders.  The only permitted withdrawal from orapplication of funds on deposit in, or otherwise to the credit of, each HedgeCollateral Account shall be (i) for application to obligations of theapplicable Hedge Counterparty to the Issuer under the related Hedge Agreementin accordance with the terms of such Hedge Agreement or (ii) to returncollateral to the applicable Hedge Counterparty when and as required by therelated Hedge Agreement, which the Trustee shall return to the applicable HedgeCounterparty in accordance with the related Hedge Agreement.  Each Hedge Collateral Account shall remain atall times with the Corporate Trust Office or a financial institution having along-term debt rating at least equal to “A-” or “A2,” as applicable, or ashort-term debt rating at least equal to “A-1,” “P-1” or “F1,” as applicable.

###  

### (f)       Upon thedefault by a Hedge Counterparty in the payment when due of its obligations tothe Issuer under the related Hedge Agreement (following the expiration of anyapplicable grace period), the Trustee or the Collateral Manager shall forthwithprovide facsimile notice thereof to the Issuer, each of the Rating Agenciesand, if applicable, any Hedge Counterparty Credit Support Provider.  When the Trustee becomes aware of such

 

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### default, theTrustee shall make a demand on the applicable Hedge Counterparty, or any HedgeCounterparty Credit Support Provider, if applicable, demanding paymentforthwith.  The Trustee shall give noticeto the Noteholders and further notice to the Collateral Manager upon thecontinuing failure by such Hedge Counterparty or any Hedge Counterparty CreditSupport Provider to perform its obligations during the two Business Daysfollowing a demand made by the Trustee on such Hedge Counterparty or any suchHedge Counterparty Credit Support Provider.

###  

### (g)      Upon thetermination or partial termination of each Hedge Agreement, the Issuer at thedirection of the Collateral Manager and the Trustee shall take suchcommercially reasonable actions (following the expiration of any applicablegrace period and after the expiration of the applicable time period set forthin the related Hedge Agreement) to enforce the rights of the Issuer and theTrustee thereunder as may be permitted by the terms of the related HedgeAgreement and consistent with the terms hereof, and shall apply the proceeds ofany such actions (including, without limitation, the proceeds of theliquidation of any collateral pledged by or on behalf of each HedgeCounterparty) to enter into an additional or replacement Hedge Agreementswithin 30 days of the expiration of any such grace period and such applicabletime period as set forth in the related Hedge Agreement on substantially identicalterms or on such other terms as required by the related Hedge Counterparty toany such additional or replacement Hedge Agreement as each Rating Agency mayconfirm in writing would not cause such Rating Agency’s then-current rating ofany Class of Notes, as applicable, to be, adversely qualified, reduced,suspended or withdrawn.  The Trusteeshall, promptly after the Closing Date, in respect of each Hedge Counterparty,establish a single segregated trust account in the name of the Trustee, eachdesignated the “Hedge Termination Account,” which shall be held in trust forthe benefit of the Noteholders and each Hedge Counterparty and over which theTrustee will have exclusive control and the sole right of withdrawal, and ineach of which no person other than the Trustee, the Noteholders and the HedgeCounterparty will have any legal or beneficial interest.  Each Hedge Collateral Account shall remain atall times with the Corporate Trust Office or a financial institution having along-term debt rating at least equal to “A-” or “A2,” as applicable, or ashort-term debt rating at least equal to “A-1,” “P-1” or “F1,” asapplicable.  Notwithstanding anythingcontained in this Indenture to the contrary, any payments (other than paymentsrelating to past-due scheduled payments on a Hedge Agreement) received by theIssuer or Trustee in connection with either (x) the termination (in whole or inpart) of a related Hedge Agreement or (y) the execution of an additional orreplacement Hedge Agreements shall be immediately transferred to the Trusteefor deposit into the related Hedge Termination Account.  Any costs attributable to entering into anadditional or replacement Hedge Agreements (other than in connection with aPermitted Transfer as provided for and defined in the related Hedge Agreement)with respect to the related Hedge Counterparty shall be paid from the relatedHedge Termination Account, and any such amounts which are payable but exceedthe balance in the related Hedge Termination Account shall be borne solely bythe Issuer and shall constitute expenses payable under clause (5) of Section11.1(a)(i) hereof.  Additionally, anyamounts that are due and payable to a Hedge Counterparty upon a termination ofa Hedge Agreement shall be paid from any amounts on deposit in the relatedHedge Termination Account, and, to the extent the amounts on deposit in suchHedge Termination Account are insufficient to pay all such amounts, then suchamounts will be payable in accordance with Sections 11.1(a)(i) and (ii)hereof.  Any amounts remaining on depositin a Hedge Termination Account related to a

 

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### Hedge Agreementfollowing payment to the Hedge Counterparty shall be transferred to thePrincipal Collection Account and shall constitute Principal Proceeds.  If determining the amount payable under theterminated Hedge Agreement, the Issuer or the Collateral Manager on behalf ofthe Issuer shall seek quotations in accordance with the terms of the relatedHedge Agreement from reference market-makers who satisfy the definition ofQualified Hedge Party herein.  Each HedgeAgreement may provide that the applicable Hedge Counterparty is responsible fordetermining the amounts payable in certain circumstances.  In addition, the Issuer or the CollateralManager on behalf of the Issuer shall use commercially reasonable efforts tocause the termination of the related Hedge Agreement to become effectivesimultaneously with the effectiveness of a replacement thereto, described asaforesaid.

 

(h)      Notwithstanding anything to the contraryset forth herein, for so long as any Class of Notes is Outstanding under thisIndenture and is rated by Fitch, if any Hedge Counterparty fails to maintainthe Hedge Counterparty Collateral Threshold Rating with respect to Fitch, thensuch Hedge Counterparty shall, within 30 days, at such Hedge Counterparty’selection,

 

(i)            obtain a guaranty of its obligationsunder each related Hedge Agreements from a Person that satisfies the HedgeCounterparty Collateral Threshold Rating with respect to Fitch;

 

(ii)           assign its obligations under therelated Hedge Agreement to a Person that satisfies the Hedge CounterpartyCollateral Threshold Rating with respect to Fitch; or

 

(iii)          post collateral in respect of itsobligations under the related Hedge Agreement.

 

In addition, for so long as any Class of Notes isOutstanding under this Indenture and are rated by Fitch, if any HedgeCounterparty fails to maintain a rating by Fitch of at least “BBB-”, then suchHedge Counterparty shall within 30 days, at such Hedge Counterparty’s expense,either (i) transfer and assign its obligations under each related HedgeAgreement to a substitute Hedge Counterparty that has the same rating level ofsuch Hedge Counterparty before the downgrade or (ii) provide alternative creditsupport satisfactory to Fitch.

 

(i)            Notwithstandinganything to the contrary set forth herein, for so long as any Class of Notes isOutstanding under this Indenture and is rated by (i) S&P if any HedgeCounterparty falls below (A) a rating by S&P of at least “A+” (if suchHedge 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 HedgeCounterparty shall, within 30 days, post collateral in respect of its obligationsunder the related Hedge Agreement.

 

## Section 16.2           CollateralDebt Securities Purchase Agreements.

##  

Following the Closing Date, unless a Collateral DebtSecurities Purchase Agreement is necessary to comply with the provisions ofthis Indenture, the Issuer may acquire Collateral Debt Securities in accordancewith customary settlement procedures in the relevant markets. In any event, theIssuer shall obtain from any seller of a Loan, all Underlying Instruments withrespect to each Collateral Debt Security and all Underlying

 

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Instruments related to any related Senior Tranche thatgovern, directly or indirectly, the rights and obligations of the owner of theCollateral Debt Security with respect to the Underlying Term Loan, theUnderlying Mortgage Property and the Collateral Debt Security and anycertificate evidencing the Collateral Debt Security.

 

## Section 16.3           CureRights.

##  

### (a)      If the Issuer,as holder of a Loan, has the right pursuant to the related UnderlyingInstruments to cure an event of default on the Underlying Term Loan, theCollateral Manager may, in accordance with the Collateral Manager ServicingStandard advance from its own funds with respect to the Loan as a reimbursableCure Advance, all such amounts as are necessary to effect the timely cure ofsuch event of default pursuant to the terms of the related UnderlyingInstruments; *provided*that (i) such advancesmay only be made (A) to the extent that the Collateral Manager reasonably believesthat such cash advances can be repaid from future payments on the relatedunderlying commercial mortgage loan and in accordance with the CollateralManager’s Servicing Standard and (B) if the Collateral Manager receives writteninstruction from holders of at least a Majority of the aggregate outstandingnotional amount of the Preferred Shares with respect thereto, and (ii) theparticular advance would not, if made, constitute a Nonrecoverable CureAdvance.  The determination by theCollateral Manager that it has made a Nonrecoverable Cure Advance or that anyproposed Cure Advance, if made, would constitute a Nonrecoverable Cure Advanceshall be made by the Collateral Manager in its reasonable good faith judgmentin accordance with the Collateral Manager Servicing Standard and shall be evidencedby an Officer’s Certificate delivered promptly to the Trustee, setting forththe basis for such determination, accompanied by an appraisal, if available, oran independent broker’s opinion of the value of the Underlying MortgageProperty and any information that the Collateral Manager may have obtained andthat supports such determination.  TheCollateral Manager will be entitled to reimbursement from any subsequentpayments or recoveries on each Collateral Debt Security in respect of which itmakes a Cure Advance in accordance with the Priority of Payments if suchreimbursement would not cause an Interest Shortfall; *provided*that, if at any time the Collateral Manager shall determine in its solediscretion, exercised in good faith and in accordance with the CollateralManager Servicing Standard, that a Cure Advance previously made is aNonrecoverable Cure Advance, the Collateral Manager shall be entitled toreimbursements for such Nonrecoverable Cure Advance from subsequent payments orcollections with respect to the Assets on any Business Day during any InterestAccrual Period prior to the related Determination Date (or on a Payment Dateprior to any payment of interest on or principal of the Notes in accordance withthe Priority of Payments). Notwithstanding the foregoing, the Collateral Manager will be permitted(but not obligated) to defer or otherwise structure the timing of recovery ofany Nonrecoverable Cure Advance in such manner as the Collateral Manager determinesis in the best interest of the Noteholders as a collective whole, which mayinclude being reimbursed for such Nonrecoverable Cure Advance in installments;provided that the Collateral Manager will not be permitted to defer recovery ofany Nonrecoverable Cure Advance (or any portion thereof) on any Payment Date tothe extent that there are amounts available to be distributed to the PreferredShares Paying Agent for deposit into the Preferred Shares Distribution Accounton such Payment Date for

 

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### distribution tothe holders of the Preferred Shares in accordance with the Priority of Paymentswithout regard to such deferral.

###  

### (b)      On the BusinessDay preceding each Determination Date, the Collateral Manager may request byOfficer’s Certificate delivered to the Trustee, reimbursement for any (x) CureAdvance or (y) Nonrecoverable Cure Advance, from any amounts received withrespect to the related Collateral Debt Security or the Assets, respectively.  No later than the Payment Date related to theDetermination Date for which the Collateral Manager has delivered an Officer’sCertificate requesting reimbursement of a Cure Advance or a Nonrecoverable CureAdvance, the Trustee shall transfer to the Collateral Manager, by wire transferto an account identified to the Trustee in writing, the amount of such CureAdvance or Nonrecoverable Cure Advance, as applicable.

###  

### (c)      Notwithstandinganything to the contrary set forth herein, the Collateral Manager shall not berequired to make any Cure Advance that it determines in its reasonable, goodfaith judgment would constitute a Nonrecoverable Cure Advance as determinedpursuant to Section 16.3(a).

###  

## Section 16.4           PurchaseRight; 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 anyrelated Senior Tranche(s), the Issuer may, and shall if directed by theMajority Preferred Shares Holder, exercise such right, if the CollateralManager determines based on the Collateral Manager Servicing Standard that theexercise of the option would be in the best interest of the Noteholders, butmay not exercise such right if the Collateral Manager determines otherwise.  The Collateral Manager shall deliver to theTrustee an Officer’s Certificate certifying such determination, accompanied byan Act of the Majority Preferred Shares Holder directing the Issuer to exercisesuch right.  In connection with thepurchase of any such Senior Tranche(s), the Issuer shall assign to the MajorityPreferred Shares Holder or its designee all of its right, title and interest insuch Senior Tranche(s) in exchange for a purchase price (such price and anyother associated expense of such exercise to be paid by the Majority PreferredShares Holder) of the Senior Tranche(s) (or, if the Underlying Instrumentspermit, the Issuer may assign the purchase right to the Majority PreferredShares Holder or its designee; otherwise the Majority Preferred Shares Holderor its designee shall fund the purchase by the Issuer, which shall then assignthe Senior Tranche(s) to the Majority Preferred Shares Holder or its designee)(the “Purchase Option Purchase Price”), which amount shall be deliveredby the Majority Preferred Shares Holder or its designee from its own funds toor upon the instruction of the Collateral Manager in accordance with terms ofthe Underlying Instruments related to the acquisition of such SeniorTranche(s).  The Trustee or the Issuershall execute and deliver at the Majority Preferred Shares Holder’s directionsuch instruments of transfer or assignment prepared by the Majority PreferredShares Holder, in each case without recourse, as shall be necessary to transfertitle to the Majority Preferred Shares Holder or its designee of the SeniorTranche(s) and the Trustee shall have no responsibility with regard to suchSenior Tranche(s).  As long as the Issuerowns the related Collateral Debt Security, the Issuer shall not exercise anypurchase rights with respect to a Participation or B Note that is a pari passuinterest relative to another Participation or B Note related to the samemortgage loan; *provided, however,* that the CollateralManager may (in accordance with the Collateral Manager Servicing Standard)

 

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assign such right to third parties to the extent thatit is able to do so pursuant to the terms of the related UnderlyingInstruments.

 

## Section 16.5           Representationsand Warranties Related to Subsequent Collateral Debt Securities.

##  

### (a)      If theCollateral Debt Security is a Subsequent Collateral Debt Security, upon theacquisition of such Subsequent Collateral Debt Security by the Issuer, the relatedseller has made or assigned to the Issuer the following:

###  

#### (i)            (A) representationsand warranties in form and substance substantially similar to therepresentations and warranties set forth as Schedule H with respect tothe Underlying Term Loan and the Underlying Mortgage Property (except withrespect to Mezzanine Loans) and (B) representations and warrantiesregarding good title, no liens, no modifications, no defaults and validassignment with respect to the Loan itself; and

####  

#### (ii)           in thecase of a B Note, the representations and warranties in form and substancesubstantially similar to the representations and warranties set forth as ScheduleI with respect to such B Note;

####  

#### (iii)          inthe case of a Participation, the representations and warranties in form andsubstance substantially similar to the representations and warranties set forthas Schedule J with respect to such Participation;

####  

#### (iv)          in the caseof a Mezzanine Loan, the representations and warranties in form and substancesubstantially similar to the representations and warranties set forth as ScheduleK with respect to such Mezzanine Loan;

####  

#### (v)           in thecase of a Preferred Equity Security, the representations and warranties in formand substance substantially similar to the representations and warranties setforth as Schedule M with respect to such Preferred Equity Security;

####  

#### (vi)          in the caseof a CMBS Security, the representations and warranties in form and substancesubstantially similar to the representations and warranties set forth as ScheduleL with respect to such CMBS Security; and

####  

#### (vii)         inthe case of a CRE CDO Security, the representations and warranties in form andsubstance substantially similar to the representations and warranties set forthas Schedule L with respect to such CRE CDO Security.

####  

### (b)      Therepresentations and warranties in Section 16.5(a) with respect to theacquisition of a Subsequent Collateral Debt Security may be subject to anymodification, limitation or qualification that the Collateral Managerdetermines to be acceptable in accordance with the Collateral Manager ServicingStandard; *provided* that the Collateral Managerwill provide each Rating Agency with a report attached to each Monthly Reportidentifying each such modification, exception, limitation or qualificationreceived with respect to the acquisition of any Subsequent Collateral DebtSecurity during the period covered by the

 

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### Monthly Report,which report may contain explanations by the Collateral Manager as to itsdeterminations.

###  

### (c)      The Issuershall obtain a covenant from the Person making any representation or warrantyto the Issuer pursuant to Section 16.5(a) that such Person shallrepurchase the related Collateral Debt Security if any such representation orwarranty is breached (but only after the expiration of any permitted cureperiods and failure to cure such breach). The purchase price for any Collateral Debt Security repurchased (the “RepurchasePrice”) 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 outstandingprincipal 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, butnot limited to, the cost of any enforcement action, incurred by the Issuer orthe Trustee in connection with any such purchase by a seller).

###  

## Section 16.6           OperatingAdvisor; 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 therelated Underlying Instruments to appoint the operating advisor, directingholder or Person serving a similar function under the Underlying Instruments,each of the Issuer, the Trustee and the Collateral Manager shall take suchactions as are reasonably necessary to appoint the Collateral Manager to suchposition.  If the Issuer, as holder of aB Note, a Participation or a Mezzanine Loan, has the right pursuant to therelated Underlying Instruments to consent to the related borrower incurring anyadditional debt, such consent will be subject to satisfaction of the RatingAgency Condition.

 

# **ARTICLE 17**

 

# **ADVANCING AGENT**

 

## Section 17.1           Liabilityof the Advancing Agent.

##  

The Advancing Agent shall be liable in accordanceherewith only to the extent of the obligations specifically imposed upon andundertaken by the Advancing Agent.  TheAdvancing Agent shall promptly provide notice to the Issuer, the Co-Issuer, theCollateral Manager, each Hedge Counterparty and the Trustee of (i) anyvoluntary 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 appointmentof a receiver, trustee, custodian, sequestrator, conservator or similarofficial 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 itscreditors.

 

## Section 17.2           Mergeror Consolidation of the Advancing Agent.

##  

### (a)      The AdvancingAgent will keep in full effect its existence, rights and franchises as acorporation under the laws of the jurisdiction in which it was formed, and willobtain and preserve its qualification to do business as a foreign corporationin each jurisdiction

 

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### in which suchqualification is or shall be necessary to protect the validity andenforceability of this Indenture to perform its duties under this Indenture.

###  

### (b)      Any Person intowhich the Advancing Agent may be merged or consolidated, or any corporationresulting from any merger or consolidation to which the Advancing Agent shallbe a party, or any Person succeeding to the business of the Advancing Agentshall be the successor of the Advancing Agent, hereunder, without the executionor filing of any paper or any further act on the part of any of the partieshereto, anything herein to the contrary notwithstanding (it being understoodand agreed by the parties hereto that the consummation of any such transactionby the Advancing Agent shall have no effect on the Trustee’s obligations under Section10.7, which obligations shall continue pursuant to the terms of Section10.7).

###  

## Section 17.3           Limitationon 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 anyaction taken or for refraining from the taking of any action in good faithpursuant to this Indenture, or for errors in judgment; *provided,however*, that this provision shall not protect the Advancing Agentagainst liability to the Issuer or Noteholders for any breach of warranties orrepresentations made herein or any liability which would otherwise be imposedby reason of willful misfeasance, bad faith or gross negligence in theperformance of duties or by reason of negligent disregard of obligations andduties hereunder.  The Advancing Agentand any director, officer, employee or agent of the Advancing Agent may rely ingood faith on any document of any kind prima facie properly executed andsubmitted by any Person respecting any matters arising hereunder. The AdvancingAgent and any director, officer, employee or agent of the Advancing Agent shallbe indemnified by the Issuer pursuant to the priorities set forth in Section11.1(a) and held harmless against any loss, liability or expense incurredin connection with any legal action relating to this Indenture or the Notes,other than any loss, liability or expense (i) specifically required to be borneby the Advancing Agent pursuant to the terms hereof or otherwise incidental tothe performance of obligations and duties hereunder (except as any such loss,liability or expense shall be otherwise reimbursable pursuant to thisIndenture); or (ii) incurred by reason of any breach of a representation,warranty or covenant made herein, any misfeasance, bad faith or negligence bythe Advancing Agent in the performance of or negligent disregard of,obligations or duties hereunder or any violation of any state or federalsecurities law.

 

## Section 17.4           Representationsand Warranties of the Advancing Agent.

##  

The Advancing Agent represents and warrants that:

 

### (a)      the AdvancingAgent (i) has been duly organized, is validly existing and is in good standingunder the laws of the State of Delaware, (ii) has full power and authority toown the Advancing Agent’s assets and to transact the business in which it iscurrently engaged, and (iii) is duly qualified and in good standing under thelaws of each jurisdiction where the Advancing Agent’s ownership or lease ofproperty or the conduct of the Advancing Agent’s business requires, or the performanceof this Indenture would require, such qualification, except for failures to beso qualified that would not in the aggregate have a

 

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### material adverseeffect on the business, operations, assets or financial condition of theAdvancing Agent or the ability of the Advancing Agent to perform itsobligations under, or on the validity or enforceability of, the provisions ofthis Indenture applicable to the Advancing Agent;

###  

### (b)      the AdvancingAgent has full power and authority to execute, deliver and perform thisIndenture; this Indenture has been duly authorized, executed and delivered bythe Advancing Agent and constitutes a legal, valid and binding agreement of theAdvancing 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 hereafterin effect relating to creditors’ rights and (ii) general principles of equity(regardless of whether such enforcement is considered in a proceeding in equityor at law);

###  

### (c)      neither theexecution and delivery of this Indenture nor the performance by the AdvancingAgent of its duties hereunder conflicts with or will violate or result in abreach or violation of any of the terms or provisions of, or constitutes adefault under: (i) the Certificate of Formation and limited liability companyagreement of the Advancing Agent, (ii) the terms of any indenture, contract,lease, mortgage, deed of trust, note agreement or other evidence ofindebtedness or other agreement, obligation, condition, covenant or instrumentto 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 orregulatory, administrative or governmental agency, body or authority orarbitrator having jurisdiction over the Advancing Agent or its properties, andwhich 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 thebusiness, operations, assets or financial condition of the Advancing Agent orthe ability of the Advancing Agent to perform its obligations under thisIndenture;

###  

### (d)      no litigationis pending or, to the best of the Advancing Agent’s knowledge, threatened,against the Advancing Agent that would materially and adversely affect theexecution, delivery or enforceability of this Indenture or the ability of theAdvancing Agent to perform any of its obligations under this Indenture in accordancewith the terms hereof; and

###  

### (e)      no consent,approval, authorization or order of or declaration or filing with anygovernment, governmental instrumentality or court or other person is requiredfor the performance by the Advancing Agent of its duties hereunder, except suchas have been duly made or obtained.

###  

## Section 17.5           Resignationand Removal; Appointment of Successor.

##  

### (a)      No resignationor removal of the Advancing Agent and no appointment of a successor AdvancingAgent pursuant to this Article 17 shall become effective until theacceptance of appointment by the successor Advancing Agent under Section17.6.

 

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### (b)      The AdvancingAgent 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 AdvancingAgent may be removed at any time by Act of 66 2/3% of the Preferred Shares uponwritten notice delivered to the Trustee and to the Issuer and the Co-Issuer.

###  

### (d)      If theAdvancing Agent fails to make an Interest Advance required by this Indenturewith respect to a Distribution Date, the Trustee, in its capacity as Back-UpAdvancing Agent, shall be required to make such Interest Advance and shall beentitled to receive, in consideration thereof, the Advancing Agent Fee (in lieuof the Back-Up Advancing Fee) in accordance with the Priority of Payments.

###  

### (e)      In addition, ifthe Advancing Agent shall have failed, on more than two occasions prior to dateon which no Class A Notes or Class B Notes remain Outstanding, to make anInterest Advance required by this Indenture, which failure, in each case, isnot cured by the remittance of the amount of such Interest Advance by theAdvancing Agent to the Trustee with 30 days of such failure, such AdvancingAgent shall be deemed to have automatically (and without the need for any acton the part of any Person) resigned as an advancing agent hereunder and theTrustee shall automatically (and without the need for any act on the part ofany Person) assume the capacity of the successor Advancing Agenthereunder.  Thereafter, the Trustee shallbe entitled to receive, in consideration of becoming the successor AdvancingAgent, the Advancing Agent Fee (for so long as the Trustee acts as successorAdvancing Agent and in lieu of the Backup Advancing Agent Fee) in accordancewith the Priority of Payments.

###  

### (f)       If theAdvancing Agent shall resign or be removed, upon receiving such notice ofresignation or removal, the Issuer and the Co-Issuer shall promptly appoint asuccessor advancing agent by written instrument, in duplicate, executed by anAuthorized 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 andone copy to the successor Advancing Agent, together with a copy to eachNoteholder, the Trustee, each Hedge Counterparty and the Collateral Manager; *provided*that such successor Advancing Agent shall beappointed only subject to satisfaction of the Rating Agency Condition and uponthe written consent of a Majority of the Preferred Shares.  If no successor Advancing Agent shall havebeen appointed and an instrument of acceptance by a successor Advancing Agentshall not have been delivered to the Advancing Agent within 30 days after thegiving of such notice of resignation, the resigning Advancing Agent, theTrustee or any Preferred Shareholder, on behalf of himself and all otherssimilarly situated, may petition any court of competent jurisdiction for theappointment of a successor Advancing Agent.

###  

### (g)      The Issuer andthe Co-Issuer shall give prompt notice of each resignation and each removal ofthe Advancing Agent and each appointment of a successor Advancing Agent bymailing written notice of such event by first class mail, postage prepaid, toeach Rating Agency, each Hedge Counterparty and to the Holders of the Notes astheir names and addresses appear in the Notes Register.

 

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### (h)      No resignationor removal of the Advancing Agent and no appointment of a Successor AdvancingAgent shall become effective until the acceptance of appointment by theSuccessor Advancing Agent.

###  

## Section 17.6           Acceptanceof Appointment by Successor Advancing Agent.

##  

### (a)      Every successorAdvancing Agent appointed hereunder shall execute, acknowledge and deliver tothe Issuer, the Co-Issuer, each Hedge Counterparty, the Collateral Manager, theTrustee and the retiring Advancing Agent an instrument accepting suchappointment.  Upon delivery of therequired instruments, the resignation or removal of the retiring AdvancingAgent shall become effective and such successor Advancing Agent, without anyfurther act, deed or conveyance, shall become vested with all the rights,powers, trusts, duties and obligations of the retiring Advancing Agent.

###  

### (b)      No appointmentof a successor Advancing Agent shall become effective unless each Rating Agencyhas confirmed in writing that the employment of such successor would notadversely affect the rating on the Notes.

###  

### 244

### 

###  

IN WITNESS WHEREOF, the parties hereto have executedand 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:                                                                                                                                                                                                                           |
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|   | 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: |   |
|        |                                                                                                                                                                                                                                    |  |  |  |  |  |

 

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|   | 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 REGISTEREDUNDER 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 THEISSUER NOR THE CO-ISSUER HAS BEEN REGISTERED UNDER THE UNITED STATES INVESTMENTCOMPANY 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 INSTITUTIONALBUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A “QIB”) WHO ISA QUALIFIED PURCHASER AS DEFINED IN SECTION 2(A)(51) OF THE INVESTMENTCOMPANY ACT (A “QUALIFIED PURCHASER”) AND IS EITHER PURCHASING FOR ITS OWNACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER WHO IS AQUALIFIED PURCHASER, IN A PRINCIPAL AMOUNT OF NOT LESS THAN $500,000 (ANDINTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF), FOR THE PURCHASER AND FOR EACHSUCH ACCOUNT, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO LONG ASTHIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, SUBJECT TO THESATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, OR (2) TO ANON-U.S.  PERSON IN AN OFFSHORETRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OFREGULATION 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 THESATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, AND (B) INACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITEDSTATES AND ANY OTHER APPLICABLE JURISDICTION.  EACH PURCHASER OF A BENEFICIAL INTEREST IN A GLOBALSECURITY WILL BE DEEMED TO HAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET FORTHIN SECTION 2.5 OF THE INDENTURE.  ANYTRANSFER IN VIOLATION OF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BEVOID 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, DETERMINEOR ARE NOTIFIED THAT THE HOLDER OF SUCH BENEFICIAL INTEREST IN SUCH SECURITYWAS IN BREACH, AT THE TIME GIVEN, OF ANY OF THE REPRESENTATIONS SET FORTH INTHE INDENTURE, THE TRUSTEE MAY CONSIDER THE ACQUISITION OF THIS NOTE ORSUCH INTEREST IN SUCH SECURITY VOID AND REQUIRE THAT THIS NOTE OR SUCH INTERESTHEREIN BE TRANSFERRED TO A PERSON DESIGNATED BY THE ISSUER AND THE CO-ISSUER,IF APPLICABLE.

 

ANY TRANSFER, PLEDGE OR OTHER USE OF THIS NOTE FORVALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNERHEREOF, CEDE & CO. HAS AN INTEREST HEREIN, UNLESS THIS NOTE ISPRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”),NEW YORK, NEW YORK, TO THE CO-ISSUERS OR THEIR AGENT FOR REGISTRATION OFTRANSFER, EXCHANGE OR PAYMENT AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OFCEDE & CO. OR OF SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZEDREPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.).

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OFTHE INDENTURE AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF ADEPOSITARY.  THIS NOTE MAY NOT BEEXCHANGED OR TRANSFERRED IN WHOLE OR IN PART FOR A NOTE REGISTERED IN THENAME OF ANY PERSON OTHER THAN THAT DEPOSITARY OR ITS NOMINEE EXCEPT IN THELIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL OFTHIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN

 

A-1

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ON THE FACE HEREOF.  ANY PERSON ACQUIRING THIS NOTE MAY ASCERTAINITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THE TRUSTEE.

 

A-2

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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 [CAPITALIZEDINTEREST] TERM NOTES DUE 2035

 
| No. [Reg.  S][144A]/R-      |   | Up to                                        |
|-----------------------------------------------------------|--------|----------------------------------------------|
| CUSIP No.                                                 |   | U.S. $[      ] |

 

Each of GRAMERCY REAL ESTATE CDO 2005-1, LTD., aCayman Islands exempted company with limited liability (the “Issuer”)and GRAMERCY REAL ESTATE CDO 2005-1 LLC, a limited liability company formedunder the laws of Delaware (the “Co-Issuer”) for value received, herebypromises to pay to CEDE & CO. or its registered assigns (a) uponpresentation and surrender of this Note (except as otherwise permitted by theIndenture referred to below), the principal sum of up to [          ]United States Dollars (U.S. $[          ])on July 25, 2035 (the “Stated Maturity”), to the extent notpreviously paid, in accordance with the Indenture referred to below unless the unpaidprincipal of this Note becomes due and payable at an earlier date bydeclaration of acceleration, call for redemption or otherwise and (b) the Class [   ]Interest Distribution Amount allocable to this Note in accordance with theIndenture payable initially on October 25, 2005, and quarterly on each January 25,April 25, July 25 and October 25 thereafter (or if such day isnot a Business Day, then on the next succeeding Business Day) (each, a “PaymentDate”).  Interest shall be computedon the basis of the actual number of days in the Interest Accrual Periodapplicable to the Class [   ] Notes divided by 360.  The interest so payable on any Payment Datewill, as provided in the Indenture, be paid to the Person in whose name thisNote (or one or more predecessor Notes) is registered at the close of businesson the Record Date for such interest, which shall be the fifteenth day (whetheror not a Business Day) prior to the applicable Payment Date.

 

The obligations of the Issuer and the Co-Issuer underthis Note and the Indenture are limited recourse obligations of the Issuer andthe Co-Issuer payable solely from the Collateral Debt Securities and otherAssets pledged by the Issuer, and in the event the Collateral Debt Securitiesand other such Assets are insufficient to satisfy such obligations, any claimsof 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 therecords of the Trustee as custodian for CEDE & Co. in the mannerprovided in Section 2.2(b) of the Indenture.

 

Payments of principal and interest on this Note aresubordinated to the payment on each Distribution Date of certain other amountsin accordance with the Priority of Payments and Section 13.1 of theIndenture.

 

[Under certain circumstances specified in theIndenture, certain amounts payable hereunder that are not available to be paidas a result of the operation of the Priority of Payments on any Payment Dateshall not be considered “due and payable” for the purposes of the Indentureuntil the Payment Date on which they are to be paid in accordance with thePriority of Payments.](1)

 

Payments in respect of principal and interest and anyother amounts due on any Payment Date on this Note shall be payable by theTrustee or a Paying Agent, subject to any laws or regulations applicablethereto, by wire transfer in immediately available funds to a Dollar accountmaintained by the Registered Holder hereof; *provided* thatthe Registered Holder shall have provided wiring instructions to the Trustee onor before the related Record Date, or, if wire transfer cannot be effected, byDollar check drawn on a bank as provided in the Indenture and mailed to theRegistered Holder at its address in the Notes Register.

 

----

(1) Applicable to Class C,D, E, F, G, H, J and K Notes.

 

A-3

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Interest will cease to accrue on this Note, or in thecase of a partial repayment, on such part, from the date of repayment or StatedMaturity unless payment of principal is improperly withheld or unless a Defaultis otherwise made with respect to such payments of principal.

 

Notwithstanding the foregoing, the final payment ofinterest and principal due on this Note shall be made only upon presentationand surrender of this Note (except as otherwise provided in the Indenture) atthe Corporate Trust Office of the Trustee or at any Paying Agent.

 

The Registered Holder of this Note shall be treated asthe owner hereof for all purposes.

 

Except as specifically provided herein and in theIndenture, neither the Issuer nor the Co-Issuer shall be required to make anypayment with respect to any tax, assessment or other governmental chargeimposed by any government or any political subdivision or taxing authoritythereof or therein.

 

Unless the certificate of authentication hereon hasbeen executed by the Trustee by the manual signature of one of its authorizedofficers, this Note shall not be entitled to any benefit under the Indenture orbe 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 theCo-Issuer (the “Class [   ] Notes”), limited inaggregate 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 Associationas trustee, paying agent, calculation agent, transfer agent, custodialsecurities intermediary, backup advancing agent and notes registrar (in suchcapacity 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 PreferredShares 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 Memorandumand Articles of Association as part of its issued share capital.

 

Reference is hereby made to the Indenture and allindentures supplemental thereto for a statement of the respective rights,limitations of rights, duties and immunities thereunder of the Issuer, theCo-Issuer, the Trustee, the Holders of the Notes and the Preferred Shareholdersand 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 theIndenture.

 

Capitalized terms used herein and not otherwisedefined shall have the meanings set forth in the Indenture.

 

Pursuant to Section 9.1 of the Indenture, theNotes are subject to redemption by the Issuer at the direction of theCollateral Manager, in whole but not in part, upon notice given in the mannerprovided in the Indenture, on or after the Payment Date on which the AggregateOutstanding Amount of the Notes (excluding any Class C CapitalizedInterest, Class D Capitalized Interest, Class E Capitalized Interest,Class F Capitalized Interest, Class G Capitalized Interest, Class HCapitalized Interest, Class J Capitalized Interest or Class KCapitalized Interest) has been reduced to 10% of the Aggregate OutstandingAmount of the Notes on the Closing Date; *provided* thatno such redemption may be made until any payments due and payable upon atermination of each Hedge Agreement shall be made in accordance with theprocedures as set forth therein; *provided*, *further*, that the funds available to be used for suchredemption will be sufficient to pay the Total Redemption Price.

 

Pursuant to Section 9.1 of the Indenture, theNotes and the Preferred Shares are subject to redemption by the Issuer at a priceequal to the applicable Redemption Price, on any Payment Date on or after thePayment Date occurring in July 2008 at the direction of the Issuer (suchredemption, an “Optional Redemption”), in whole but not in part (i) byAct of a Majority of the Preferred Shares delivered to the Trustee, or (ii) atthe direction of the Collateral Manager unless a Majority of the PreferredShares object; *provided*, *however*,that any payments due and payable upon a termination of each Hedge Agreementwill be made in accordance with the terms thereof and the

 

A-4

----

 

Indenture; and *provided further*, the funds available to be used for suchOptional Redemption will be sufficient to pay the Total Redemption Price.

 

Pursuant to Section 9.2 of the Indenture, theNotes and the Preferred Shares are subject to redemption by the Issuer, duringthe period from and including the Payment Date occurring in July 2015 andto but not including the first Payment Date on which the Clean-up Call may beexercised, in whole but not in part, if a Successful Auction is completed (suchredemption, an “Auction Call Redemption”), at their applicableRedemption Prices; *provided*, thatany payments due and payable upon a termination of each Hedge Agreement shallbe made on the Auction Call Redemption Date in accordance with the termsthereof and in the Indenture; *provided*, *further*, that the funds available to be used for suchAuction Call Redemption will be sufficient to pay the Total RedemptionPrice.  In addition, the Notes aresubject to redemption by the Issuer and the Co-Issuer or, in the case of thePreferred Shares, by the Issuer, upon notice given in the manner providedbelow, on any Payment Date under certain circumstances as provided in theIndenture.  The Redemption Price for anyNote redeemed pursuant to Section 9.1 or Section 9.2 of the Indentureshall be as set forth in the Indenture.

 

In the case of any redemption of the Notes, interestinstallments whose Payment Date is on or prior to the applicable redemptiondate will be payable to the Holders of such Notes (or one or more predecessorNotes) registered as such at the close of business on the relevant RecordDate.  Notes for whose redemption andpayment provision is made in accordance with the Indenture shall cease to bearinterest on the applicable redemption date (unless the Issuer shall default inthe payment of the Redemption Price).

 

Pursuant to Section 9.6 of the Indenture, if anyCoverage Tests applicable to any Class of Notes are not met on aMeasurement Date, then on the following Payment Date certain Interest Proceedsand certain Principal Proceeds may be used to redeem the Notes, in the orderand manner provided in Section 9.6 of the Indenture, until each applicableCoverage Test is satisfied.

 

Pursuant to Section 9.7 of the Indenture, theNotes may be amortized in part by the Issuer (at the election and direction ofthe Collateral Manager) if, during the Reinvestment Period, under certaincircumstances, the Collateral Manager has been unable, for a period of at least30 consecutive days, to identify Substitute Collateral Debt Securities that itdetermines would be appropriate and would meet the Eligibility Criteria insufficient amounts to permit the reinvestment of all or a portion of the PrincipalProceeds then on deposit in the Principal Collection Account and the amounts ondeposit in the Unused Proceeds Account in Substitute Collateral DebtSecurities.

 

If an Event of Default shall occur and be continuing,the Class [   ] Notes may become or be declared due andpayable in the manner and with the effect provided in the Indenture.

 

By written notice to the Issuer, the Co-Issuer, theTrustee and each Hedge Counterparty, a Majority of each and every Class ofNotes (voting as a separate Class) may rescind a declaration of acceleration ofthe maturity of the Notes at any time prior to a judgment or decree for paymentof money due, *provided* that certain conditionsset forth in the Indenture are satisfied.

 

The Indenture permits, with certain exceptions astherein provided, the amendment thereof and the modification of the rights andobligations of the Issuer and the Co-Issuer and the rights of the Holders underthe Indenture at any time by the Issuer and the Co-Issuer with the consent ofeach Hedge Counterparty, a Majority of each Class of Notes adverselyaffected thereby and a Majority of the Preferred Shares adversely affectedthereby and subject to satisfaction of the Rating Agency Condition.  Upon the execution of any supplementalindenture, the Indenture shall be modified in accordance therewith, and suchsupplemental indenture shall form a part of the Indenture for all purposes; andevery Holder of Notes theretofore authenticated and delivered thereunder shallbe bound thereby.  The Indenture alsocontains provisions permitting, on behalf of the Holders of all the Notes, aMajority of each and every Class of Notes (voting as a separate Class) towaive compliance by the Issuer with certain provisions of the Indenture andcertain past Defaults under the Indenture and their consequences.

 

No reference herein to the Indenture and no provisionof this Note or of the Indenture shall alter or impair the obligations of theIssuer and the Co-Issuer, which are absolute and unconditional to the extentpermitted by applicable law, to pay the principal of and interest on this Noteat the times, places and rate, and in the coin or currency, herein prescribed.

 

A-5

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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 theStated Maturity thereof unless the unpaid principal of such Note becomes dueand payable on an earlier date by declaration of acceleration, call forredemption or otherwise.

 

The term “Issuer” as used in this Note includes anysuccessor to the Issuer under the Indenture and the term “Co-Issuer” as used inthis Note includes any successor to the Co-Issuer under the Indenture.

 

The Class [  ] Notes are limitedrecourse obligations of the Issuer and the Co-Issuer and are limited in rightof payment to amounts available from the Assets as provided in theIndenture.  No other assets will beavailable to satisfy payments on the Class [   ] Notes.

 

Each purchaser and any subsequent transferee of thisNote or any interest herein shall, by virtue of its purchase or otheracquisition of this Note or interest herein, be deemed to have agreed to treatthis Note as debt for U.S. federal income tax purposes.

 

No service charge shall be made for exchange orregistration of transfer of this Note, but the Trustee may require payment of asum sufficient to cover any tax or other governmental charge payable inconnection therewith.

 

The remedies of the Trustee or the Holder hereof, asprovided herein or in the Indenture, shall be cumulative and concurrent and maybe pursued solely against the assets of the Issuer and the Co-Issuer.  No failure on the part of the Holder in exercisingany right or remedy hereunder shall operate as a waiver or release thereof, norshall any single or partial exercise of any such right or remedy preclude anyother further exercise thereof or the exercise of any other right or remedyhereunder.

 

This instrument may be executed in any number ofcounterparts, each of which so executed shall be deemed to be an original, butall such counterparts shall together constitute but one and the sameinstrument.

 

THE HOLDER OF THIS NOTE AGREES NOT TO CAUSE THE FILINGOF A PETITION IN BANKRUPTCY AGAINST THE ISSUER OR THE CO-ISSUER IN ANYAPPLICABLE OR RELEVANT JURISDICTION UNTIL AT LEAST ONE YEAR AND ONE DAY, OR IFLONGER THE APPLICABLE PREFERENCE PERIOD THEN IN EFFECT PLUS ONE DAY, AFTER THEPAYMENT IN FULL OF ALL NOTES ISSUED UNDER THE INDENTURE.

 

AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THENOTES SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THESTATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREINWITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

 

A-6

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IN WITNESS WHEREOF, the Issuer has caused this Note tobe 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 thewithin-mentioned Indenture.

 

 
|   | WELLS FARGO BANK,  NATIONAL ASSOCIATION, |
|--------|------------------------------------------|
|   |    as  Trustee            |
|   |                                     |
|   |                                     |
|   | By:                                      |   |   |
|   |                                     | Authorized Signatory |

 

A-7

 

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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

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SCHEDULE OF EXCHANGES IN GLOBAL SECURITY

 

On the Closing Date the Principal Amount of this Notewas $[         ].  The following exchanges of a part of thisGlobal 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

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**EXHIBIT B**

 

**FORM OF CLASS [   ][REGULATION S] [RULE 144A] CERTIFICATED SECURITY]**

 

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTEREDUNDER 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 THEISSUER NOR THE CO-ISSUER HAS BEEN REGISTERED UNDER THE UNITED STATES INVESTMENTCOMPANY ACT OF 1940, AS AMENDED (THE “1940 ACT”).  THIS NOTE MAY NOT BE OFFERED, SOLD,PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A)(1) TO A QUALIFIEDINSTITUTIONAL 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 THEINVESTMENT COMPANY ACT (A “QUALIFIED PURCHASER”) AND IS EITHER PURCHASING FORITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER WHO IS AQUALIFIED PURCHASER, IN A PRINCIPAL AMOUNT OF NOT LESS THAN $500,000 (ANDINTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF), FOR THE PURCHASER AND FOR EACHSUCH ACCOUNT, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO LONG ASTHIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, SUBJECT TO THESATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, OR (2) TO ANON-U.S.  PERSON IN AN OFFSHORETRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OFREGULATION 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 THESATISFACTION OF CERTAIN CONDITIONS SPECIFIED IN THE INDENTURE, AND (B) INACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITEDSTATES AND ANY OTHER APPLICABLE JURISDICTION. EACH PURCHASER OF THIS NOTE (OR ANY INTEREST THEREIN) WILL BE DEEMED TOHAVE MADE THE REPRESENTATIONS AND AGREEMENTS SET FORTH IN SECTION 2.5 OFTHE INDENTURE.  ANY TRANSFER IN VIOLATIONOF THE FOREGOING WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, ANDWILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANYINSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE CO-ISSUER, AS APPLICABLE, THETRUSTEE OR ANY INTERMEDIARY.  IF AT ANYTIME, THE ISSUER AND THE CO-ISSUER, IF APPLICABLE, DETERMINE OR ARE NOTIFIEDTHAT THE HOLDER OF SUCH BENEFICIAL INTEREST IN SUCH SECURITY WAS IN BREACH, ATTHE TIME GIVEN, OF ANY OF THE REPRESENTATIONS SET FORTH IN THE INDENTURE, THETRUSTEE MAY CONSIDER THE ACQUISITION OF THIS NOTE OR SUCH INTEREST IN SUCHSECURITY VOID AND REQUIRE THAT THIS NOTE OR SUCH INTEREST HEREIN BE TRANSFERREDTO A PERSON DESIGNATED BY THE ISSUER AND THE CO-ISSUER, IF APPLICABLE.

 

PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTHHEREIN.  ACCORDINGLY, THE OUTSTANDINGPRINCIPAL OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ONTHE FACE HEREOF.  ANY PERSON ACQUIRINGTHIS NOTE MAY ASCERTAIN ITS CURRENT PRINCIPAL AMOUNT BY INQUIRY OF THETRUSTEE.

 

B-1

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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., aCayman Islands exempted company with limited liability (the “Issuer”)and GRAMERCY REAL ESTATE CDO 2005-1 LLC, a limited liability company formedunder the laws of Delaware (the “Co-Issuer”) for value received, herebypromises 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), theprincipal sum of up to [           ]United States Dollars (U.S. $[           ])on July 25, 2035 (the “Stated Maturity”), to the extent notpreviously paid, in accordance with the Indenture referred to below unless theunpaid principal of this Note becomes due and payable at an earlier date bydeclaration of acceleration, call for redemption or otherwise and (b) the Class [  ]Interest Distribution Amount allocable to this Note in accordance with theIndenture payable initially on October 25, 2005, and quarterly on each October 25,January 25, April 25 and July 25 thereafter (or if such day isnot a Business Day, then on the next succeeding Business Day) (each, a “PaymentDate”).  Interest shall be computedon the basis of the actual number of days in the Interest Accrual Periodapplicable to the Class [  ] Notes divided by 360.  The interest so payable on any Payment Datewill, as provided in the Indenture, be paid to the Person in whose name thisNote (or one or more predecessor Notes) is registered at the close of businesson the Record Date for such interest, which shall be the fifteenth day (whetheror not a Business Day) prior to the applicable Payment Date.

 

The obligations of the Issuer and the Co-Issuer underthis Note and the Indenture are limited recourse obligations of the Issuer andthe Co-Issuer payable solely from the Collateral Debt Securities and otherAssets pledged by the Issuer, and in the event the Collateral Debt Securitiesand other such Assets are insufficient to satisfy such obligations, any claimsof the Holders of the Notes shall be extinguished.

 

Payments of principal and interest on this Note aresubordinated to the payment on each Distribution Date of certain other amountsin accordance with the Priority of Payments and Section 13.1 of theIndenture.

 

[Under certain circumstances specified in theIndenture, certain amounts payable hereunder that are not available to be paidas a result of the operation of the Priority of Payments on any Payment Dateshall not be considered “due and payable” for the purposes of the Indentureuntil the Payment Date on which they are to be paid in accordance with thePriority of Payments.](1)

 

Payments in respect of principal and interest and anyother amounts due on any Payment Date on this Note shall be payable by theTrustee or a Paying Agent, subject to any laws or regulations applicablethereto, by wire transfer in immediately available funds to a Dollar accountmaintained by the Registered Holder hereof; provided that the Registered Holdershall have provided wiring instructions to the Trustee on or before the relatedRecord Date, or, if wire transfer cannot be effected, by Dollar check drawn ona bank as provided in the Indenture and mailed to the Registered Holder at itsaddress in the Notes Register.

 

Interest will cease to accrue on this Note, or in thecase of a partial repayment, on such part, from the date of repayment or StatedMaturity unless payment of principal is improperly withheld or unless a Defaultis otherwise made with respect to such payments of principal.

 

Notwithstanding the foregoing, the final payment ofinterest and principal due on this Note shall be made only upon presentationand surrender of this Note (except as otherwise provided in the Indenture) atthe Corporate Trust Office of the Trustee or at any Paying Agent.

 

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(1)  Applicable to Class C,D, E, F, G, H, J and K Notes.

 

B-2

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The Registered Holder of this Note shall be treated asthe owner hereof for all purposes.

 

Except as specifically provided herein and in theIndenture, neither the Issuer nor the Co-Issuer shall be required to make anypayment with respect to any tax, assessment or other governmental chargeimposed by any government or any political subdivision or taxing authoritythereof or therein.

 

Unless the certificate of authentication hereon hasbeen executed by the Trustee by the manual signature of one of its authorizedofficers, this Note shall not be entitled to any benefit under the Indenture orbe 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 NotesDue 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 Associationas trustee, paying agent, calculation agent, transfer agent, custodialsecurities intermediary, backup advancing agent and notes registrar (in suchcapacity 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 PreferredShares 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 Memorandumand Articles of Association as part of its issued share capital.

 

Reference is hereby made to the Indenture and allindentures supplemental thereto for a statement of the respective rights,limitations of rights, duties and immunities thereunder of the Issuer, theCo-Issuer, the Trustee, the Holders of the Notes and the Preferred Shareholdersand 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 theIndenture.

 

Capitalized terms used herein and not otherwisedefined shall have the meanings set forth in the Indenture.

 

Pursuant to Section 9.1 of the Indenture, theNotes are subject to redemption by the Issuer at the direction of theCollateral Manager, in whole but not in part, upon notice given in the mannerprovided in the Indenture, on or after the Payment Date on which the AggregateOutstanding Amount of the Notes (excluding any Class C CapitalizedInterest, Class D Capitalized Interest, Class E Capitalized Interest,Class F Capitalized Interest, Class G Capitalized Interest, Class HCapitalized Interest, Class J Capitalized Interest or Class KCapitalized Interest) has been reduced to 10% of the Aggregate OutstandingAmount of the Notes on the Closing Date; provided that no such redemption maybe made until any payments due and payable upon a termination of each Hedge Agreementshall be made in accordance with the procedures as set forth therein; provided,further, that the funds available to be used for such redemption will besufficient to pay the Total Redemption Price.

 

Pursuant to Section 9.1 of the Indenture, the Notesand the Preferred Shares are subject to redemption by the Issuer at a priceequal to the applicable Redemption Price, on any Payment Date on or after thePayment Date occurring in July 2008 at the direction of the Issuer (suchredemption, an “Optional Redemption”), in whole but not in part (i) byAct of a Majority of the Preferred Shares delivered to the Trustee, or (ii) atthe direction of the Collateral Manager unless a Majority of the PreferredShares object; provided, however, that any payments due and payable upon atermination of each Hedge Agreement will be made in accordance with the termsthereof and the Indenture; and provided further, the funds available to be usedfor such Optional Redemption will be sufficient to pay the Total Redemption Price.

 

Pursuant to Section 9.2 of the Indenture, theNotes and the Preferred Shares are subject to redemption by the Issuer, duringthe period from and including the Payment Date occurring in July 2015 andto but not including the first Payment Date on which the Clean-up Call may beexercised, in whole but not in part, if a Successful Auction is completed (suchredemption, an “Auction Call Redemption”), at their applicableRedemption Prices; provided, that any payments due and payable upon atermination of each Hedge Agreement shall be made on the Auction Call

 

B-3

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Redemption Date inaccordance with the terms thereof and in the Indenture; provided, further, thatthe funds available to be used for such Auction Call Redemption will besufficient to pay the Total Redemption Price. In addition, the Notes are subject to redemption by the Issuer and theCo-Issuer or, in the case of the Preferred Shares, by the Issuer, upon noticegiven in the manner provided below, on any Payment Date under certaincircumstances as provided in the Indenture. The Redemption Price for any Note redeemed pursuant to Section 9.1or Section 9.2 of the Indenture shall be as set forth in the Indenture.

 

In the case of any redemption of the Notes, interestinstallments whose Payment Date is on or prior to the applicable redemptiondate will be payable to the Holders of such Notes (or one or more predecessorNotes) registered as such at the close of business on the relevant Record Date.  Notes for whose redemption and paymentprovision is made in accordance with the Indenture shall cease to bear intereston the applicable redemption date (unless the Issuer shall default in thepayment of the Redemption Price).

 

Pursuant to Section 9.6 of the Indenture, if anyCoverage Tests applicable to any Class of Notes are not met on aMeasurement Date, then on the following Payment Date certain Interest Proceedsand certain Principal Proceeds may be used to redeem the Notes, in the orderand manner provided in Section 9.6 of the Indenture, until each applicableCoverage Test is satisfied.

 

Pursuant to Section 9.7 of the Indenture, theNotes may be amortized in part by the Issuer (at the election and direction ofthe Collateral Manager) if, during the Reinvestment Period, under certaincircumstances, the Collateral Manager has been unable, for a period of at least30 consecutive days, to identify Substitute Collateral Debt Securities that itdetermines would be appropriate and would meet the Eligibility Criteria insufficient amounts to permit the reinvestment of all or a portion of thePrincipal Proceeds then on deposit in the Principal Collection Account and theamounts on deposit in the Unused Proceeds Account in Substitute Collateral DebtSecurities.

 

If an Event of Default shall occur and be continuing,the Class [   ] Notes may become or be declared due andpayable in the manner and with the effect provided in the Indenture.

 

By written notice to the Issuer, the Co-Issuer, theTrustee and each Hedge Counterparty, a Majority of each and every Class ofNotes (voting as a separate Class) may rescind a declaration of acceleration ofthe maturity of the Notes at any time prior to a judgment or decree for paymentof money due, provided that certain conditions set forth in the Indenture aresatisfied.

 

The Indenture permits, with certain exceptions astherein provided, the amendment thereof and the modification of the rights andobligations of the Issuer and the Co-Issuer and the rights of the Holders underthe Indenture at any time by the Issuer and the Co-Issuer with the consent ofeach Hedge Counterparty, a Majority of each Class of Notes adverselyaffected thereby and a Majority of the Preferred Shares adversely affectedthereby and subject to satisfaction of the Rating Agency Condition.  Upon the execution of any supplementalindenture, the Indenture shall be modified in accordance therewith, and suchsupplemental indenture shall form a part of the Indenture for all purposes; andevery Holder of Notes theretofore authenticated and delivered thereunder shallbe bound thereby.  The Indenture alsocontains provisions permitting, on behalf of the Holders of all the Notes, aMajority of each and every Class of Notes (voting as a separate Class) towaive compliance by the Issuer with certain provisions of the Indenture andcertain past Defaults under the Indenture and their consequences.

 

No reference herein to the Indenture and no provisionof this Note or of the Indenture shall alter or impair the obligations of theIssuer and the Co-Issuer, which are absolute and unconditional to the extentpermitted by applicable law, to pay the principal of and interest on this Noteat 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 theStated Maturity thereof unless the unpaid principal of such Note becomes dueand payable on an earlier date by declaration of acceleration, call forredemption or otherwise.

 

B-4

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The term “Issuer” as used in this Note includes anysuccessor to the Issuer under the Indenture and the term “Co-Issuer” as used inthis Note includes any successor to the Co-Issuer under the Indenture.

 

The Class [  ] Notes are non-recourseobligations of the Issuer and the Co-Issuer and are limited in right of paymentto amounts available from the Assets as provided in the Indenture.  No other assets will be available to satisfypayments on the Class [  ] Notes.

 

Each purchaser and any subsequent transferee of thisNote or any interest herein shall, by virtue of its purchase or otheracquisition of this Note or interest herein, be deemed to have agreed to treatthis Note as debt for U.S. federal income tax purposes.

 

No service charge shall be made for exchange orregistration of transfer of this Note, but the Trustee may require payment of asum sufficient to cover any tax or other governmental charge payable inconnection therewith.

 

The remedies of the Trustee or the Holder hereof, asprovided herein or in the Indenture, shall be cumulative and concurrent and maybe pursued solely against the assets of the Issuer and the Co-Issuer.  No failure on the part of the Holder inexercising any right or remedy hereunder shall operate as a waiver or releasethereof, nor shall any single or partial exercise of any such right or remedypreclude any other further exercise thereof or the exercise of any other rightor remedy hereunder.

 

This instrument may be executed in any number ofcounterparts, each of which so executed shall be deemed to be an original, butall such counterparts shall together constitute but one and the sameinstrument.

 

THE HOLDER OF THIS NOTE AGREES NOT TO CAUSE THE FILINGOF A PETITION IN BANKRUPTCY AGAINST THE ISSUER OR THE CO-ISSUER IN ANYAPPLICABLE OR RELEVANT JURISDICTION UNTIL AT LEAST ONE YEAR AND ONE DAY, OR IFLONGER THE APPLICABLE PREFERENCE PERIOD THEN IN EFFECT PLUS ONE DAY, AFTER THEPAYMENT IN FULL OF ALL NOTES ISSUED UNDER THE INDENTURE.

 

AS PROVIDED IN THE INDENTURE, THE INDENTURE AND THENOTES SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THESTATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREINWITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

 

B-5

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IN WITNESS WHEREOF, the Issuer has caused this Note tobe 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-mentionedIndenture.

 

 
|   | WELLS FARGO BANK,  NATIONAL ASSOCIATION, |
|--------|------------------------------------------|
|   |    as  Trustee            |
|   |                                     |
|   |                                     |
|   | By:                                      |   |   |
|   |                                     | Authorized Signatory |   |

 

B-6

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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

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**EXHIBIT C**

 

FORM OF TRANSFER CERTIFICATEFOR (1) TRANSFER AT THE CLOSING TO A REGULATION S GLOBAL SECURITY OR(2) SUBSEQUENT TRANSFER FROM A RULE 144A GLOBAL SECURITY TO AREGULATION SGLOBAL SECURITY (Transfer pursuant to §2.5(e)(iii) of the Indenture)

 

WellsFargo Bank, National Association                                                asTrustee9062 Old Annapolis Road Columbia, Maryland 21045Attention:  CDO Trust Services Group,Gramercy Real Estate CDO 2005-1

 

Re:                               GRAMERCYREAL 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 Due2035, Class A-2 Second Priority Senior Secured Floating Rate Term NotesDue 2035, Class B Third Priority Floating Rate Term Notes Due 2035, Class CFourth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class DFifth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class ESixth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class FSeventh Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class GEighth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class HNinth Priority Floating Rate Capitalized Interest Term Notes Due 2035 (the “Transferred Notes”)

 

Reference is hereby made to the Indenture, dated as ofJuly 14, 2005 (the “Indenture”) by andamong GRAMERCY REAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATECDO 2005-1 LLC, as Co-Issuer of the Class A-1 Notes, the Class A-2Notes, 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 HNotes, the Class J Notes and the Class K Notes, Wells Fargo Bank,National Association, as Trustee, and GKK Liquidity LLC, as AdvancingAgent.  Capitalized terms used but notdefined herein shall have the meanings assigned to such terms in the Indentureand if not defined in the Indenture then such terms shall have the meaningsassigned to them in Regulation S (“Regulation S”),or Rule 144A (“Rule 144A”), under theUnited States Securities Act of 1933, as amended (the “Securities Act”), and the rules promulgatedthereunder 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 aRegulation S Global Security of the same Class] in the name of [name oftransferee] (the “Transferee”).

 

In connection with such request, the Transferee herebycertifies that such transfer has been effected in accordance with the transferrestrictions set forth in the Indenture and the Offering Memorandum dated as ofJuly 8, 2005 and hereby represents, warrants and agrees for the benefit ofthe Issuer, the Co-Issuer, the Trustee, the Collateral Manager and theircounsel that:

 

(i)                                                 atthe time the buy order was originated, the Transferee was outside the UnitedStates;

 

(ii)                                              theTransferee is not a U.S. Person;

 

(iii)                                           thetransfer is being made pursuant to Rule 903 or 904 under Regulation Sof the Securities Act;

 

(iv)                                          theTransferee will notify future transferees of the transfer restrictions;

 

(v)                                             theTransferee understands that the Notes, including the Transferred Notes, arebeing offered only in a transaction not involving any public offering in theUnited States within the meaning of the Securities

 

C-1

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Act, the Notes, including the Transferred Notes, havenot been and will not be registered under the Securities Act, and, if in thefuture the owner decides to offer, resell, pledge or otherwise transfer theTransferred Notes, such Transferred Notes may only be offered, resold, pledgedor otherwise transferred in accordance with the Indenture and the legend onsuch Transferred Notes.  The Transfereeacknowledges that no representation is made by the Issuer, the Co-Issuer or theInitial Purchaser, as the case may be, as to the availability of any exemptionunder the Securities Act or any State securities laws for resale of theTransferred Notes;

 

(vi)                                          theTransferee is not purchasing the Transferred Notes with a view to the resale,distribution or other disposition thereof in violation of the SecuritiesAct.  The Transferee understands that aninvestment in the Transferred Notes involves certain risks, including the riskof loss of all or a substantial part of its investment under certaincircumstances.  The Transferee has hadaccess to such financial and other information concerning the Issuer, the Co-Issuerand the Transferred Notes as it deemed necessary or appropriate in order tomake an informed investment decision with respect to its purchase of theTransferred Notes, including an opportunity to ask questions of and requestinformation from the Collateral Manager, the Initial Purchaser, the Issuer andthe Co-Issuer, including without limitation, an opportunity to request andreview the Moody’s Weighted Average Rating Factor/Weighted Average RecoveryRate Matrix incorporated by reference in the Offering Memorandum;

 

(vii)                                       inconnection with the purchase of the Transferred Notes (A) none of theIssuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager or theTrustee is acting as a fiduciary or financial or investment adviser for theTransferee; (B) the Transferee is not relying (for purposes of making anyinvestment 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 offeringmemorandum for such Transferred Notes and any representations expressly setforth in a written agreement with such party; (C) none of the Issuer, theCo-Issuer, the Initial Purchaser, the Collateral Manager or the Trustee hasgiven to the Transferee (directly or indirectly through any other person) anyassurance, guarantee, or representation whatsoever as to the expected orprojected success, profitability, return, performance, result, effect,consequence, or benefit (including legal, regulatory, tax, financial,accounting, or otherwise) of its purchase; (D) the Transferee hasconsulted with its own legal, regulatory, tax, business, investment, financial,and accounting advisers to the extent it has deemed necessary, and it has madeits own investment decisions (including decisions regarding the suitability ofany transaction pursuant to this Indenture) based upon its own judgment andupon any advice from such advisers as it has deemed necessary and not upon anyview expressed by the Issuer, the Co-Issuer, the Initial Purchaser, theCollateral Manager or the Trustee; and (E) the Transferee is purchasingthe Transferred Notes with a full understanding of all of the terms, conditionsand risks thereof (economic and otherwise), and is capable of assuming andwilling to assume (financially and otherwise) these risks;

 

(viii)                                    theTransferee understands that the Transferred Notes will bear the applicablelegend set forth on such Transferred Notes;

 

(ix)                                            theTransferee understands that the Issuer, Co-Issuer, Trustee or Paying Agentshall require certification acceptable to it (A) as a condition to thepayment of principal of and interest on any Notes without, or at a reduced rateof, U.S. withholding or backup withholding tax, and (B) to enable theIssuer, Co-Issuer, Trustee and Paying Agent to determine their duties andliabilities with respect to any taxes or other charges that they may berequired to pay, deduct or withhold from payments in respect of such Notes orthe Holder of such Notes under any present or future law or regulation of theCayman Islands or the United States or any present or future law or regulationof any political subdivision thereof or taxing authority therein or to complywith any reporting or other requirements under any such law or regulation.  Such certification may include U.S. federalincome tax forms (such as IRS Form W-8BEN (Certification of Foreign Statusof Beneficial Owner), Form W-8IMY (Certification of Foreign IntermediaryStatus), IRS Form W-9 (Request for Taxpayer Identification Number andCertification), or IRS Form W-8ECI (Certification of Foreign Person’sClaim for Exemption from Withholding on Income Effectively Connected withConduct of a U.S. Trade or Business) or any successors to such IRS forms).  In addition, the Issuer, Co-Issuer, Trusteeor Paying Agent may require certification acceptable to it to enable the Issuerto qualify for a reduced rate of withholding in any jurisdiction from orthrough which the Issuer receives

 

C-2

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payments on its assets.  Each Transferee agrees to provide anycertification requested pursuant to this paragraph and to update or replacesuch form or certification in accordance with its terms or its subsequentamendments;

 

(x)                                               theTransferee hereby agrees that, for purposes of U.S. federal, state and localincome and franchise tax and any other income taxes, (A) the Notes will betreated as indebtedness, and (B) the Preferred Shares will be treated asequity; the Transferee agrees to such treatment and agrees to take no actioninconsistent with such treatment, unless required by law;

 

(xi)                                            theTransferee, 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) ofthe Code); (B) if such Transferee is a bank (within the meaning of Section 881(c)(3)(A) ofthe 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 aretreated as equity for US federal income tax purposes either directly orindirectly, and will not otherwise be related to the Issuer (within the meaningof section 267(b) of the Code) and (y) has not purchased theNotes 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 imposedon the Notes with respect to the Collateral Debt Securities if held directly bythe Transferee); (C) has provided an IRS Form W-8ECI representingthat all payments received or to be received by it from the Issuer areeffectively connected with the conduct of a trade or business in the UnitedStates, or (D) is eligible for benefits under an income tax treaty withthe United States that eliminates U.S. federal income taxation of U.S. sourceinterest not attributable to a permanent establishment in the United States andthe Issuer is treated as a fiscally transparent entity (as defined in Treasuryregulations section 1.894-1(d)(3)(ii)) under the laws of Transferee’sjurisdiction with respect to payments made on the Collateral Debt Securitiesheld by the Transferee;

 

(xii)                                         unlessthe Transferee has provided another representation acceptable to the Trustee,the Collateral Manager, the Issuer and the Co-Issuer, the Transferee representsthat either (a) it is not an “employee benefit plan” (as defined in section 3(3) ofERISA) or “plan” (as defined in section 4975(e)(1) of the Code) thatis subject to ERISA or section 4975 of the Code, or any other plan whichis subject to any federal, state or local law (“Similar Law”) that issubstantially similar to section 406 of ERISA or section 4975 of theCode (each a “Benefit Plan” and such funds, “Plan Assets”) or an entity whose underlying assetsinclude Plan Assets of any such Benefit Plan or (b) its purchase andholding of Transferred Notes are eligible for the exemption to the prohibitedtransaction 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 aBenefit Plan subject to Similar Law, do not result in a non-exempt violation ofSimilar Law;

 

(xiii)                                      theTransferee is not a member of the public in the Cayman Islands, within themeaning of Section 194 of the Cayman Islands Companies Law (2004Revision); and

 

(xiv)                                     theTransferee will not, at any time, offer to buy or offer to sell the TransferredNotes by any form of general solicitation or advertising, including, but notlimited to, any advertisement, article, notice or other communication publishedin any newspaper, magazine or similar medium or broadcast over television orradio or at a seminar or meeting whose attendees have been invited by generalsolicitations or advertising.

 

You, the Issuer, the Co-Issuer and the CollateralManager are entitled to rely upon this letter and are irrevocably authorized toproduce this letter or a copy hereof to any interested party in anyadministrative or legal proceedings or official inquiry with respect to thematters covered hereby.

 

C-3

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|   | [Name of Transferee]                  |
|--------|---------------------------------------|
|   |                                  |
|   |                                  |
|   | By:                                   |   |   |
|   |                                  | Name: |   |
|   |                                  | Title: |   |
|   |                                  |
| Dated: |                                  |   |   |
|   |                                  |
| cc:    | GRAMERCY REAL ESTATE CDO 2005-1, LTD. |
|   | GRAMERCY REAL ESTATE CDO 2005-1 LLC   |
|        |                                       |  |  |  |  |  |

 

C-4

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**EXHIBIT D**

 

FORM OF TRANSFER CERTIFICATEFOR (1) TRANSFER AT THE CLOSING TO A RULE 144A GLOBAL SECURITY OR(2) SUBSEQUENT TRANSFER FROM A REGULATION S GLOBAL SECURITY TO ARULE 144AGLOBAL SECURITY(Transfer pursuant to §2.5(e)(ii) of the Indenture)

 

WellsFargo Bank, National Association                                                asTrustee9062 Old Annapolis Road Columbia, Maryland 21045Attention:  CDO Trust Services, GramercyReal Estate CDO 2005-1

 

Re:                               GRAMERCYREAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE CDO 2005-1LLC, as Co-Issuer of: Class A-1 Senior Secured Floating Rate Term NotesDue 2035, Class A-2 Second Priority Senior Secured Floating Rate TermNotes Due 2035, Class B Third Priority Floating Rate Term Notes Due 2035, Class CFourth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class DFifth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class ESixth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class FSeventh Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class GEighth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class HNinth 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 GRAMERCYREAL 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 CNotes, 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 KNotes, Wells Fargo Bank, National Association, as Trustee, and GKK LiquidityLLC, as Advancing Agent.  Capitalizedterms used but not defined herein shall have the meanings assigned to suchterms in the Indenture and if not defined in the Indenture then such termsshall have the meanings assigned to them in Regulation S (“Regulation S”), or Rule 144A (“Rule 144A”), under the United States SecuritiesAct of 1933, as amended (the “Securities Act”),and the rules promulgated thereunder or as defined under the InvestmentCompany Act of 1940, as amended (the “InvestmentCompany 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 aRule 144A Global Security of the same Class] in the name of [name oftransferee] (the “Transferee”).

 

In connection with such request, the Transferee herebycertifies that such transfer has been effected in accordance with the transferrestrictions set forth in the Indenture and the Offering Memorandum dated as ofJuly 8, 2005 and hereby represents, warrants and agrees for the benefit ofthe Issuer, the Co-Issuer and the Trustee that:

 

(i)                                                 theTransferee is a qualified institutional buyer within the meaning of Rule 144Aunder the Securities Act and a Qualified Purchaser as defined in Section 2(a)(51)of the Investment Company Act;

 

(ii)                                              (A) theTransferee is acquiring a beneficial interest in such Transferred Notes for itsown account or for an account that is both a qualified institutional buyerwithin 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 exercisessole investment discretion and (B) the Transferee and each such account isacquiring not less than the minimum denomination of the Transferred Notes;

 

(iii)                                           theTransferee will notify future transferees of the transfer restrictions;

 

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(iv)                                          theTransferee is obtaining the Transferred Notes in a transaction pursuant to Rule 144A;

 

(v)                                             theTransferee is obtaining the Transferred Notes in accordance with any applicablesecurities laws of any state of the United States or any other applicablejurisdiction;

 

(vi)                                          theTransferee understands that the Notes, including the Transferred Notes, arebeing offered only in a transaction not involving any public offering in theUnited States within the meaning of the Securities Act, the Notes, includingthe Transferred Notes, have not been and will not be registered under theSecurities Act, and, if in the future the owner decides to offer, resell,pledge or otherwise transfer the Transferred Notes, such Transferred Notes mayonly be offered, resold, pledged or otherwise transferred in accordance withthe Indenture and the legend on such Transferred Notes.  The Transferee acknowledges that norepresentation 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 theSecurities Act or any State securities laws for resale of the Transferred Notes;

 

(vii)                                       theTransferee is not purchasing the Transferred Notes with a view to the resale,distribution or other disposition thereof in violation of the SecuritiesAct.  The Transferee understands that aninvestment in the Transferred Notes involves certain risks, including the riskof loss of all or a substantial part of its investment under certaincircumstances.  The Transferee has hadaccess to such financial and other information concerning the Issuer, the Co-Issuerand the Transferred Notes as it deemed necessary or appropriate in order tomake an informed investment decision with respect to its purchase of theTransferred Notes, including an opportunity to ask questions of and requestinformation from the Collateral Manager, the Initial Purchaser, the Issuer andthe Co-Issuer, including without limitation, an opportunity to request andreview the Moody’s Weighted Average Rating Factor/Weighted Average RecoveryRate Matrix incorporated by reference in the Offering Memorandum;

 

(viii)                                    inconnection with the purchase of the Transferred Notes (A) none of theIssuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager or theTrustee is acting as a fiduciary or financial or investment adviser for theTransferee; (B) the Transferee is not relying (for purposes of making anyinvestment 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 memorandumfor such Transferred Notes and any representations expressly set forth in awritten agreement with such party; (C) none of the Issuer, the Co-Issuer,the Initial Purchaser, the Collateral Manager or the Trustee has given to theTransferee (directly or indirectly through any other person) any assurance,guarantee, or representation whatsoever as to the expected or projectedsuccess, profitability, return, performance, result, effect, consequence, orbenefit (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 tothe extent it has deemed necessary, and it has made its own investmentdecisions (including decisions regarding the suitability of any transactionpursuant to this Indenture) based upon its own judgment and upon any advicefrom such advisers as it has deemed necessary and not upon any view expressedby the Issuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager orthe Trustee; and (E) the Transferee is purchasing the Transferred Noteswith 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)                                            theTransferee understands that the Transferred Notes will bear the applicablelegend set forth on such Transferred Notes;

 

(x)                                               theTransferee understands that the Issuer, Co-Issuer, Trustee or Paying Agentshall require certification acceptable to it (A) as a condition to thepayment of principal of and interest on any Notes without, or at a reduced rateof, U.S. withholding or backup withholding tax, and (B) to enable theIssuer, Co-Issuer, Trustee and Paying Agent to determine their duties andliabilities with respect to any taxes or other charges that they may berequired to pay, deduct or withhold from payments in respect of such Notes orthe Holder of such Notes under any present or future law or regulation of theCayman Islands or the United States or any present or future law or regulationof any political subdivision thereof or taxing authority therein or to complywith any reporting or other requirements under any such law or regulation.  Such certification may include U.S. federalincome tax forms (such as IRS Form W-8BEN (Certification of

 

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Foreign Status of Beneficial Owner), Form W-8IMY(Certification of Foreign Intermediary Status), IRS Form W-9 (Request forTaxpayer Identification Number and Certification), or IRS Form W-8ECI(Certification of Foreign Person’s Claim for Exemption from Withholding onIncome Effectively Connected with Conduct of a U.S. Trade or Business) or anysuccessors to such IRS forms).  Inaddition, the Issuer, Co-Issuer, Trustee or Paying Agent may requirecertification acceptable to it to enable the Issuer to qualify for a reducedrate of withholding in any jurisdiction from or through which the Issuerreceives payments on its assets.  EachTransferee agrees to provide any certification requested pursuant to thisparagraph and to update or replace such form or certification in accordancewith its terms or its subsequent amendments;

 

(xi)                                            theTransferee hereby agrees that, for purposes of U.S. federal, state and localincome and franchise tax and any other income taxes, (A) the Notes will betreated as indebtedness, and (B) the Preferred Shares will be treated asequity; the Transferee agrees to such treatment and agrees to take no actioninconsistent with such treatment, unless required by law;

 

(xii)                                         theTransferee, if not a “United States person” (asdefined in Section 7701(a)(30) of the Code), either: (A) is not abank (within the meaning of Section 881(c)(3)(A) of the Code); (B) ifsuch Transferee is a bank (within the meaning of Section 881(c)(3)(A) ofthe 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 aretreated as equity for US federal income tax purposes either directly orindirectly, and will not otherwise be related to the Issuer (within the meaningof section 267(b) of the Code) and (y) has not purchased theNotes 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 imposedon the Notes with respect to the Collateral Debt Securities if held directly bythe Transferee); (C) has provided an IRS Form W-8ECI representingthat all payments received or to be received by it from the Issuer areeffectively connected with the conduct of a trade or business in the UnitedStates, or (D) is eligible for benefits under an income tax treaty withthe United States that eliminates U.S. federal income taxation of U.S. sourceinterest not attributable to a permanent establishment in the United States andthe Issuer is treated as a fiscally transparent entity (as defined in Treasuryregulations section 1.894-1(d)(3)(ii)) under the laws of Transferee’sjurisdiction with respect to payments made on the Collateral Debt Securitiesheld by the Transferee;

 

(xiii)                                      unlessthe Transferee has provided another representation acceptable to the Trustee,the Collateral Manager, the Issuer and the Co-Issuer, the Transferee representsthat either (a) it is not and is not investing on behalf of an “employee benefit plan” (as defined in section 3(3) ofERISA) or “plan” (as defined in section 4975(e)(1) ofthe Code) that is subject to ERISA or section 4975 of the Code or anyother plan which is subject to any federal, state or local law (“Similar Law”) that is substantially similar to section 406of ERISA or section 4975 of the Code (each a “BenefitPlan” and such funds “Plan Assets”) oran entity whose underlying assets include Plan Assets of any such Benefit Planor (b) its purchase and holding of the Transferred Notes are eligible forthe exemption to the prohibited transaction rules granted by ProhibitedTransaction Class Exemption (“PTCE”) 84-14,PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23, or a similarexemption; or, in the case of a Benefit Plan subject to Similar Law, do notresult in a non-exempt violation of Similar Law;

 

(xiv)                                     theTransferee is not a member of the public in the Cayman Islands, within themeaning of Section 194 of the Cayman Islands Companies Law (2004Revision); and

 

(xv)                                        theTransferee will not, at any time, offer to buy or offer to sell the TransferredNotes by any form of general solicitation or advertising, including, but notlimited to, any advertisement, article, notice or other communication publishedin any newspaper, magazine or similar medium or broadcast over television orradio or at a seminar or meeting whose attendees have been invited by generalsolicitations or advertising.

 

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You, the Issuer, the Co-Issuerand the Collateral Manager are entitled to rely upon this letter and areirrevocably authorized to produce this letter or a copy hereof to anyinterested party in any administrative or legal proceedings or official inquirywith 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   |
|        |                                       |  |  |  |  |  |

 

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**EXHIBIT E-1**

 

FORM OF TRANSFER CERTIFICATEFOR A TRANSFER FROM A CERTIFICATED RULE 144A SECURITYTO A CERTIFICATED REGULATION S SECURITY(Transfer pursuant to §2.5(e)(iv) of the Indenture)

 

WellsFargo Bank, National Association                                                asTrustee9062 Old Annapolis Road Columbia, Maryland 21045Attention:  CDO Trust Services Group,Gramercy Real Estate CDO 2005-1

 

Re:                               GRAMERCYREAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE CDO 2005-1LLC, as Co-Issuer of: Class A-1 Senior Secured Floating Rate Term NotesDue 2035, Class A-2 Second Priority Senior Secured Floating Rate TermNotes Due 2035, Class B Third Priority Floating Rate Term Notes Due 2035, Class CFourth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class DFifth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class ESixth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class FSeventh Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class GEighth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class HNinth Priority Floating Rate Capitalized Interest Term Notes Due 2035 (the “Transferred Notes”)

 

Reference is hereby made to the Indenture, dated as ofJuly 14, 2005 (the “Indenture”) by andamong GRAMERCY REAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATECDO 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 FNotes, the Class G Notes, the Class H Notes, the Class J Notesand 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 meaningsassigned to such terms in the Indenture and if not defined in the Indenturethen such terms shall have the meanings assigned to them in Regulation S (“Regulation S”), or Rule 144A (“Rule 144A”), under the United States SecuritiesAct of 1933, as amended (the “Securities Act”),and the rules promulgated thereunder or as defined under the InvestmentCompany Act of 1940, as amended (the “InvestmentCompany 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 GlobalSecurity of the same Class in the name of [name of transferee] (the “Transferee”).

 

In connection with such request, the Transferee herebycertifies that such transfer has been effected in accordance with the transferrestrictions set forth in the Indenture and the Offering Memorandum dated as ofJuly 8, 2005 and hereby represents, warrants and agrees for the benefit ofthe Issuer, the Co-Issuer, the Trustee, the Collateral Manager and theircounsel that:

 

(i)                                                 atthe time the buy order was originated, the Transferee was outside the UnitedStates;

 

(ii)                                              theTransferee is not a U.S. Person;

 

(iii)                                           thetransfer is being made pursuant to Rule 903 or 904 under Regulation Sof the Securities Act;

 

(iv)                                          theTransferee will notify future transferees of the transfer restrictions;

 

(v)                                             theTransferee understands that the Notes, including the Transferred Notes, arebeing offered only in a transaction not involving any public offering in theUnited States within the meaning of the Securities Act, the Notes, includingthe Transferred Notes, have not been and will not be registered under the

 

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Securities Act, and, if in the future the ownerdecides to offer, resell, pledge or otherwise transfer the Transferred Notes,such Transferred Notes may only be offered, resold, pledged or otherwisetransferred in accordance with the Indenture and the legend on such TransferredNotes.  The Transferee acknowledges thatno representation is made by the Issuer, the Co-Issuer or the InitialPurchaser, as the case may be, as to the availability of any exemption underthe Securities Act or any State securities laws for resale of the TransferredNotes;

 

(vi)                                          theTransferee is not purchasing the Transferred Notes with a view to the resale,distribution or other disposition thereof in violation of the SecuritiesAct.  The Transferee understands that aninvestment in the Transferred Notes involves certain risks, including the riskof loss of all or a substantial part of its investment under certain circumstances.  The Transferee has had access to suchfinancial and other information concerning the Issuer, the Co-Issuer and theTransferred Notes as it deemed necessary or appropriate in order to make aninformed investment decision with respect to its purchase of the TransferredNotes, including an opportunity to ask questions of and request informationfrom the Collateral Manager, the Initial Purchaser, the Issuer and the Co-Issuer,including without limitation, an opportunity to request and review the Moody’sWeighted Average Rating Factor/Weighted Average Recovery Rate Matrixincorporated by reference in the Offering Memorandum;

 

(vii)                                       inconnection with the purchase of the Transferred Notes (A) none of theIssuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager or theTrustee is acting as a fiduciary or financial or investment adviser for theTransferee; (B) the Transferee is not relying (for purposes of making anyinvestment 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 offeringmemorandum for such Transferred Notes and any representations expressly setforth in a written agreement with such party; (C) none of the Issuer, theCo-Issuer, the Initial Purchaser, the Collateral Manager or the Trustee hasgiven to the Transferee (directly or indirectly through any other person) anyassurance, guarantee, or representation whatsoever as to the expected orprojected success, profitability, return, performance, result, effect,consequence, or benefit (including legal, regulatory, tax, financial,accounting, or otherwise) of its purchase; (D) the Transferee hasconsulted with its own legal, regulatory, tax, business, investment, financial,and accounting advisers to the extent it has deemed necessary, and it has madeits own investment decisions (including decisions regarding the suitability ofany transaction pursuant to this Indenture) based upon its own judgment andupon any advice from such advisers as it has deemed necessary and not upon anyview expressed by the Issuer, the Co-Issuer, the Initial Purchaser, theCollateral Manager or the Trustee; and (E) the Transferee is purchasingthe Transferred Notes with a full understanding of all of the terms, conditionsand risks thereof (economic and otherwise), and is capable of assuming andwilling to assume (financially and otherwise) these risks;

 

(viii)                                    theTransferee understands that the Transferred Notes will bear the applicable legendset forth on such Transferred Notes;

 

(ix)                                            theTransferee understands that the Issuer, Co-Issuer, Trustee or Paying Agentshall require certification acceptable to it (A) as a condition to thepayment of principal of and interest on any Notes without, or at a reduced rateof, U.S. withholding or backup withholding tax, and (B) to enable theIssuer, Co-Issuer, Trustee and Paying Agent to determine their duties andliabilities with respect to any taxes or other charges that they may berequired to pay, deduct or withhold from payments in respect of such Notes orthe Holder of such Notes under any present or future law or regulation of theCayman Islands or the United States or any present or future law or regulationof any political subdivision thereof or taxing authority therein or to complywith any reporting or other requirements under any such law or regulation.  Such certification may include U.S. federalincome tax forms (such as IRS Form W-8BEN (Certification of Foreign Statusof Beneficial Owner), Form W-8IMY (Certification of Foreign IntermediaryStatus), IRS Form W-9 (Request for Taxpayer Identification Number andCertification), or IRS Form W-8ECI (Certification of Foreign Person’sClaim for Exemption from Withholding on Income Effectively Connected withConduct of a U.S. Trade or Business) or any successors to such IRS forms).  In addition, the Issuer, Co-Issuer, Trusteeor Paying Agent may require certification acceptable to it to enable the Issuerto qualify for a reduced rate of withholding in any jurisdiction from orthrough which the Issuer receives payments on its assets.  Each Transferee agrees to provide anycertification requested pursuant to this

 

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paragraph and to update or replace such form orcertification in accordance with its terms or its subsequent amendments;

 

(x)                                               theTransferee hereby agrees that, for purposes of U.S. federal, state and localincome and franchise tax and any other income taxes, (A) the Notes will betreated as indebtedness, and (B) the Preferred Shares will be treated asequity; the Transferee agrees to such treatment and agrees to take no actioninconsistent with such treatment, unless required by law;

 

(xi)                                            theTransferee, 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) ofthe Code); (B) if such Transferee is a bank (within the meaning of Section 881(c)(3)(A) ofthe 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 aretreated 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) ofthe Code) and (y) has not purchased the Notes in whole or in part to avoidany U.S. federal income tax liability (including, without limitation, any U.S.withholding tax that would be imposed on the Notes with respect to theCollateral Debt Securities if held directly by the Transferee); (C) hasprovided an IRS Form W-8ECI representing that all payments received or tobe received by it from the Issuer are effectively connected with the conduct ofa trade or business in the United States, or (D) is eligible for benefitsunder an income tax treaty with the United States that eliminates U.S. federalincome taxation of U.S. source interest not attributable to a permanentestablishment in the United States and the Issuer is treated as a fiscallytransparent 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 onthe Collateral Debt Securities held by the Transferee;

 

(xii)                                         unlessthe Transferee has provided another representation acceptable to the Trustee,the Collateral Manager, the Issuer and the Co-Issuer, the Transferee representsthat either (a) it is not an “employee benefit plan” (as defined in section 3(3) ofERISA) or “plan” (as defined in section 4975(e)(1) of the Code) thatis subject to ERISA or section 4975 of the Code, or any other plan whichis subject to any federal, state or local law (“Similar Law”) that is substantiallysimilar 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 assetsinclude Plan Assets of any such Benefit Plan or (b) its purchase andholding of Transferred Notes are eligible for the exemption to the prohibitedtransaction 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 aBenefit Plan subject to Similar Law, do not result in a non-exempt violation ofSimilar Law;

 

(xiii)                                      theTransferee is not a member of the public in the Cayman Islands, within themeaning of Section 194 of the Cayman Islands Companies Law (2004Revision); and

 

(xiv)                                     theTransferee will not, at any time, offer to buy or offer to sell the TransferredNotes by any form of general solicitation or advertising, including, but notlimited to, any advertisement, article, notice or other communication publishedin any newspaper, magazine or similar medium or broadcast over television orradio or at a seminar or meeting whose attendees have been invited by generalsolicitations or advertising.

 

You, the Issuer, the Co-Issuer and the CollateralManager are entitled to rely upon this letter and are irrevocably authorized toproduce this letter or a copy hereof to any interested party in anyadministrative or legal proceedings or official inquiry with respect to thematters covered hereby.

 

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|   | [Name of Transferee]                   |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | By:                                    |   |   |
|   |                                   | Name: |
|   |                                   | Title: |
|   |                                   |
| Dated: |                                   |   |   |
|   |                                   |
| cc:    | GRAMERCY REAL ESTATE  CDO 2005-1, LTD. |
|   | GRAMERCY REAL ESTATE  CDO 2005-1 LLC   |
|        |                                        |  |  |  |  |

 

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**EXHIBIT E-2**

 

FORM OF TRANSFER CERTIFICATEFOR A TRANSFER FROM A CERTIFICATED REGULATION S SECURITYTO A CERTIFICATED RULE 144A SECURITY(Transfer pursuant to §2.5(e)(iv) of the Indenture)

 

WellsFargo Bank, National Association                                                asTrustee9062 Old Annapolis Road Columbia, Maryland 21045Attention:  CDO Trust Services, GramercyReal Estate CDO 2005-1

 

Re:                               GRAMERCYREAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE CDO 2005-1LLC, as Co-Issuer of: Class A-1 Senior Secured Floating Rate Term NotesDue 2035, Class A-2 Second Priority Senior Secured Floating Rate TermNotes Due 2035, Class B Third Priority Floating Rate Term Notes Due 2035, Class CFourth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class DFifth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class ESixth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class FSeventh Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class GEighth Priority Floating Rate Capitalized Interest Term Notes Due 2035, Class HNinth 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 GRAMERCYREAL ESTATE CDO 2005-1, LTD., as Issuer and GRAMERCY REAL ESTATE CDO 2005-1LLC, as Co-Issuer of the Class A Notes, the Class B Notes, the Class CNotes, 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 KNotes, Wells Fargo Bank, National Association, as Trustee, and GKK LiquidityLLC, as Advancing Agent.  Capitalizedterms used but not defined herein shall have the meanings assigned to suchterms in the Indenture and if not defined in the Indenture then such termsshall have the meanings assigned to them in Regulation S (“Regulation S”), or Rule 144A (“Rule 144A”), under the United States SecuritiesAct of 1933, as amended (the “Securities Act”),and the rules promulgated thereunder or as defined under the InvestmentCompany Act of 1940, as amended (the “InvestmentCompany 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 144AGlobal Security of the same Class in the name of [name of transferee] (the“Transferee”).

 

In connection with such request, the Transferee herebycertifies that such transfer has been effected in accordance with the transferrestrictions set forth in the Indenture and the Offering Memorandum dated as ofJuly 8, 2005 and hereby represents, warrants and agrees for the benefit ofthe Issuer, the Co-Issuer and the Trustee that:

 

(i)                                                 theTransferee is a qualified institutional buyer within the meaning of Rule 144Aunder the Securities Act and a Qualified Purchaser as defined in Section 2(a)(51)of the Investment Company Act;

 

(ii)                                              (A) theTransferee is acquiring an interest in such Transferred Notes for its ownaccount or for an account that is both a qualified institutional buyer withinthe 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 exercisessole investment discretion and (B) the Transferee and each such account isacquiring not less than the minimum denomination of the Transferred Notes;

 

(iii)                                           theTransferee will notify future transferees of the transfer restrictions;

 

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(iv)                                          theTransferee is obtaining the Transferred Notes in a transaction pursuant to Rule 144A;

 

(v)                                             theTransferee is obtaining the Transferred Notes in accordance with any applicablesecurities laws of any state of the United States or any other applicable jurisdiction;

 

(vi)                                          theTransferee understands that the Notes, including the Transferred Notes, arebeing offered only in a transaction not involving any public offering in theUnited States within the meaning of the Securities Act, the Notes, includingthe Transferred Notes, have not been and will not be registered under theSecurities Act, and, if in the future the owner decides to offer, resell,pledge or otherwise transfer the Transferred Notes, such Transferred Notes mayonly be offered, resold, pledged or otherwise transferred in accordance withthe Indenture and the legend on such Transferred Notes.  The Transferee acknowledges that norepresentation 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 theSecurities Act or any State securities laws for resale of the TransferredNotes;

 

(vii)                                       theTransferee is not purchasing the Transferred Notes with a view to the resale,distribution or other disposition thereof in violation of the SecuritiesAct.  The Transferee understands that aninvestment in the Transferred Notes involves certain risks, including the riskof loss of all or a substantial part of its investment under certaincircumstances.  The Transferee has hadaccess to such financial and other information concerning the Issuer, the Co-Issuerand the Transferred Notes as it deemed necessary or appropriate in order tomake an informed investment decision with respect to its purchase of theTransferred Notes, including an opportunity to ask questions of and requestinformation from the Collateral Manager, the Initial Purchaser, the Issuer andthe Co-Issuer, including without limitation, an opportunity to request andreview the Moody’s Weighted Average Rating Factor/Weighted Average RecoveryRate Matrix incorporated by reference in the Offering Memorandum;

 

(viii)                                    inconnection with the purchase of the Transferred Notes (A) none of theIssuer, the Co-Issuer, the Initial Purchaser, the Collateral Manager or theTrustee is acting as a fiduciary or financial or investment adviser for theTransferee; (B) the Transferee is not relying (for purposes of making anyinvestment 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 offeringmemorandum for such Transferred Notes and any representations expressly setforth in a written agreement with such party; (C) none of the Issuer, theCo-Issuer, the Initial Purchaser, the Collateral Manager or the Trustee hasgiven to the Transferee (directly or indirectly through any other person) anyassurance, guarantee, or representation whatsoever as to the expected orprojected success, profitability, return, performance, result, effect,consequence, or benefit (including legal, regulatory, tax, financial,accounting, or otherwise) of its purchase; (D) the Transferee hasconsulted with its own legal, regulatory, tax, business, investment, financial,and accounting advisers to the extent it has deemed necessary, and it has madeits own investment decisions (including decisions regarding the suitability ofany transaction pursuant to this Indenture) based upon its own judgment andupon any advice from such advisers as it has deemed necessary and not upon anyview expressed by the Issuer, the Co-Issuer, the Initial Purchaser, theCollateral Manager or the Trustee; and (E) the Transferee is purchasingthe Transferred Notes with a full understanding of all of the terms, conditionsand risks thereof (economic and otherwise), and is capable of assuming andwilling to assume (financially and otherwise) these risks;

 

(ix)                                            theTransferee understands that the Transferred Notes will bear the applicablelegend set forth on such Transferred Notes;

 

(x)                                               theTransferee understands that the Issuer, Co-Issuer, Trustee or Paying Agentshall require certification acceptable to it (A) as a condition to thepayment of principal of and interest on any Notes without, or at a reduced rateof, U.S. withholding or backup withholding tax, and (B) to enable theIssuer, Co-Issuer, Trustee and Paying Agent to determine their duties andliabilities with respect to any taxes or other charges that they may berequired to pay, deduct or withhold from payments in respect of such Notes orthe Holder of such Notes under any present or future law or regulation of theCayman Islands or the United States or any present or future law or regulationof any political subdivision thereof or taxing authority therein or to complywith any reporting or other requirements under any such law or regulation.  Such certification may include U.S. federalincome tax forms (such as IRS Form W-8BEN (Certification of

 

E-2-2

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Foreign Status of Beneficial Owner), Form W-8IMY(Certification of Foreign Intermediary Status), IRS Form W-9 (Request forTaxpayer Identification Number and Certification), or IRS Form W-8ECI(Certification of Foreign Person’s Claim for Exemption from Withholding onIncome Effectively Connected with Conduct of a U.S. Trade or Business) or anysuccessors to such IRS forms).  Inaddition, the Issuer, Co-Issuer, Trustee or Paying Agent may requirecertification acceptable to it to enable the Issuer to qualify for a reducedrate of withholding in any jurisdiction from or through which the Issuerreceives payments on its assets.  EachTransferee agrees to provide any certification requested pursuant to thisparagraph and to update or replace such form or certification in accordancewith its terms or its subsequent amendments;

 

(xi)                                            theTransferee hereby agrees that, for purposes of U.S. federal, state and localincome and franchise tax and any other income taxes, (A) the Notes will betreated as indebtedness, and (B) the Preferred Shares will be treated asequity; the Transferee agrees to such treatment and agrees to take no actioninconsistent with such treatment, unless required by law;

 

(xii)                                         theTransferee, if not a “United States person” (asdefined in Section 7701(a)(30) of the Code), either: (A) is not abank (within the meaning of Section 881(c)(3)(A) of the Code); (B) ifsuch Transferee is a bank (within the meaning of Section 881(c)(3)(A) ofthe 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 aretreated as equity for US federal income tax purposes either directly orindirectly, and will not otherwise be related to the Issuer (within the meaningof section 267(b) of the Code) and (y) has not purchased theNotes 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 imposedon the Notes with respect to the Collateral Debt Securities if held directly bythe Transferee); (C) has provided an IRS Form W-8ECI representingthat all payments received or to be received by it from the Issuer areeffectively connected with the conduct of a trade or business in the UnitedStates, or (D) is eligible for benefits under an income tax treaty withthe United States that eliminates U.S. federal income taxation of U.S. sourceinterest not attributable to a permanent establishment in the United States andthe Issuer is treated as a fiscally transparent entity (as defined in Treasuryregulations section 1.894-1(d)(3)(ii)) under the laws of Transferee’sjurisdiction with respect to payments made on the Collateral Debt Securitiesheld by the Transferee;

 

(xiii)                                      unlessthe Transferee has provided another representation acceptable to the Trustee,the Collateral Manager, the Issuer and the Co-Issuer, the Transferee representsthat either (a) it is not and is not investing on behalf of an “employee benefit plan” (as defined in section 3(3) ofERISA) or “plan” (as defined in section 4975(e)(1) ofthe Code) that is subject to ERISA or section 4975 of the Code or anyother plan which is subject to any federal, state or local law (“Similar Law”) that is substantially similar to section 406of ERISA or section 4975 of the Code (each a “BenefitPlan” and such funds “Plan Assets”) oran entity whose underlying assets include Plan Assets of any such Benefit Planor (b) its purchase and holding of the Transferred Notes are eligible forthe exemption to the prohibited transaction rules granted by ProhibitedTransaction Class Exemption (“PTCE”) 84-14,PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23, or a similarexemption; or, in the case of a Benefit Plan subject to Similar Law, do notresult in a non-exempt violation of Similar Law;

 

(xiv)                                     theTransferee is not a member of the public in the Cayman Islands, within themeaning of Section 194 of the Cayman Islands Companies Law (2004Revision); and

 

(xv)                                        theTransferee will not, at any time, offer to buy or offer to sell the TransferredNotes by any form of general solicitation or advertising, including, but notlimited to, any advertisement, article, notice or other communication publishedin any newspaper, magazine or similar medium or broadcast over television orradio or at a seminar or meeting whose attendees have been invited by generalsolicitations or advertising.

 

E-2-3

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You, the Issuer, the Co-Issuerand the Collateral Manager are entitled to rely upon this letter and areirrevocably authorized to produce this letter or a copy hereof to anyinterested party in any administrative or legal proceedings or official inquirywith 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

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**EXHIBIT K**

 

**FORM OF TRUST RECEIPT**

 

GRAMERCY REAL ESTATE CDO 2005-1, LTD.(the “Issuer”)GKK Manager LLC(the “Collateral Manager”)

 

Re:                               GRAMERCYREAL ESTATE CDO 2005-1, LTD.

 

Ladies andGentlemen:

 

In accordance with the provisions of the Indenture,the undersigned, as the Custodial Securities Intermediary, hereby certifiesthat it has received the documents identified on Schedule A heretowith respect to the Collateral Debt Securities identified on such schedule andthat it is holding all such documents in its capacity as the CustodialSecurities 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, asCo-Issuer, GKK Liquidity LLC, as Advancing Agent, and Wells Fargo Bank,National Association, as Trustee, Paying Agent, Calculation Agent, TransferAgent, Custodial Securities Intermediary, Backup Advancing Agent and NotesRegistrar.  Capitalized terms used butnot defined in this Receipt have the meanings assigned to them in theIndenture.

 

The Custodial Securities Intermediary makes norepresentations as to, and shall not be responsible to verify, (i) thevalidity, legality, enforceability, due authorization, recordability,sufficiency, or genuineness of any of the documents in its custody relating toa Collateral Debt Security, or (ii) the collectability, insurability,effectiveness or suitability of any such in its custody relating to aCollateral Debt Security.

 

 
|   | **WELLS FARGO BANK, NATIONAL  ASSOCIATION**, solely in its capacity |
|--------|---------------------------------------------------------------------|
|   | as Trustee and Custodial  Security Intermediary                     |
|   |                                                                |
|   |                                                                |
|   | By:                                                                 |   |   |
|   |                                                                | Name: |
|   |                                                                | Title |

 

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**EXHIBIT L**

 

**FORM OF REQUEST FOR RELEASE OF DOCUMENTS ANDRECEIPT**

 

To:                              WellsFargo Bank, National Association

 

In connection with the administration of theCollateral Debt Securities held by you as the Custodial Securities Intermediaryon behalf of the Issuer, we request the release, to the Collateral Manager of[specify document] for the Collateral Debt Security described below, for thereason indicated.

 
| **Borrower’s  Name, Address & Zip Code:** | ** ** | **Ship Files To:** |
|---------------------------------------------------------|------------|--------------------|
| ** **                                              | ** ** | ** **         |
|                                                    |       | Name:              |   |
|                                                    |       |               |   |
|                                                    |       | Address:           |   |
|                                                    |       |               |   |
|                                                    |       | Telephone Number:  |   |
|                                                    |       |               |
| Collateral Debt Security Description:                   |       |               |   |
|                                                    |       |               |
| Current Outstanding Principal Balance:                  |       |               |   |
|                                                         |            |                    |  |  |

 

Reason for RequestingDocuments (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 ofthe Underlying Instruments was previously released to us, please release to usour previous request and receipt on file with you, as well as any additionaldocuments in your possession relating to the specified Collateral DebtSecurity.

 

If box 3 above is checked, upon our return of all ofthe above documents to you as the Custodial Securities Intermediary, pleaseacknowledge your receipt by signing in the space indicated below and returningthis form.

 

If box 3 above is checked, it is hereby acknowledgedthat a security interest pursuant to the Uniform Commercial Code in theCollateral Debt Securities described above and in the proceeds of saidCollateral Debt Securities has been granted to the Trustee pursuant to theIndenture.

 

If box 3 above is checked, in consideration of theaforesaid delivery by the Custodial Securities Intermediary, the CollateralManager hereby agrees to hold said Collateral Debt Securities in trust for theTrustee, as provided under and in accordance with all provisions of theIndenture and the Collateral Management Agreement, and to return saidCollateral Debt Securities to the Custodial Securities Intermediary no laterthan the close of business on

 

L-1

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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 itshall hold the above-described Collateral Debt Securities and any relatedUnderlying Instruments in trust for, and as the bailee of, the Trustee, andshall return said Collateral Debt Securities and any related documents only tothe Custodial Securities Intermediary.

 

Capitalized terms used but not defined in this Requesthave 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, GRAMERCYREAL 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 NotesRegistrar.

 

 
|   | **GKK MANAGER LLC** |
|--------|---------------------|
|   | ** **          |
|   |                |
|   | By:                 |   |   |
|   |                | Name: |
|   |                | Title: |

 

Acknowledgment ofdocuments returned:

 

 

**WELLS FARGO BANK, NATIONALASSOCIATION**

 

 
| By:    |   |   |
|--------|--------|--------|
|   | Name:  |
|   | Title: |

 

 

Date:

 

L-2

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**EXHIBIT M**

 

**FORM OF INFORMATION REQUEST FROM BENEFICIAL OWNERSOF NOTES**

 

[Date]

 

WellsFargo Bank, National Association9062 Old Annapolis RoadColumbia, MD  21045Attention:  CDO Trust Services – GramercyReal Estate CDO 2005-1, Ltd.

 

Re:                               GramercyReal 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, GKKLiquidity LLC, as advancing agent and Wells Fargo Bank, National Association,as trustee, the undersigned hereby certifies and agrees as follows:

 

1.                                       Theundersigned is a beneficial owner of $                      aggregate principal balance of the Class         Notes.

 

2.                                       Theundersigned is requesting access to the information (the “Information”) on theTrustee’s internet website pursuant to Section 10.9(c) and (g) ofthe Indenture.

 

3.                                       Inconsideration of the Trustee’s disclosure to the undersigned of theInformation, the undersigned will keep the Information confidential (exceptfrom such outside persons as are assisting it in evaluating the Information),and such Information will not, without the prior written consent of theTrustee, be disclosed by the undersigned or by its officers, directors,partners employees, agents or representatives in any manner whatsoever, inwhole or in part; provided that the undersigned may provide all or any part ofthe Information to any other person or entity that is contemplating thepurchase of any Note, but only if such person or entity confirms in writingsuch prospective ownership interest and agrees to keep it confidential; and providedthat the undersigned may provide all or any part of the Information to itsauditors, legal counsel and regulators.

 

4.                                       Theundersigned will not use or disclose the Information in any manner which couldresult in a violation of any provision of the Securities Act of 1933, asamended (the “Securities Act”), or the Securities Exchange Act of 1934,as amended, or would require registration of any Note pursuant to Section 5of the Securities Act or under any other applicable law.

 

5.                                       Capitalizedterms not defined herein shall have the same meaning ascribed to them in theIndenture.

 

M-1

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IN WITNESS WHEREOF, the undersigned has caused itsname to be signed hereto by its duly authorized officer, as of the day and yearwritten above.

 

 
|   |             |         |
|--------|------------------|--------------|
|   | BENEFICIAL OWNER |
|   |             |
|   |             |
|   | By:              |         |   |
|   |             | Name:        |
|   |             | Title:       |
|   |             | Telephone No |
|        |                  |              |  |

 

M-2

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**Schedule A**

 

**MOODY’S LOSS SCENARIO MATRIX**

 

The following information has been provided to theIssuer by Moody’s and the capitalized terms used therein and not otherwisedefined with respect to types of securities have the meanings ascribed theretoby Moody’s.

 

For CMBS Securities the recovery rate is assumed asfollows:

 
| ** **                                        | ** ** | **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 EquitySecurities, 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 isassumed 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     | %          |

 

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(1)          For purposes of calculating thetranche as a percentage of capital structure at issuance with respect to aLoan, such amount shall be a percentage equal to a fraction, the numerator ofwhich is the aggregate Principal Balance of (a) such Loan and (b)

 

A-1

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any Loanwhich is pari passu with such Loan and secured by the same commercial mortgageand the denominator of which is the total principal balance of the commercialmortgage loan related to such Loan.

 

(2)          For purposes ofcalculating the tranche as a percentage of capital structure at issuance withrespect to a Mezzanine Loan, such amount shall be a percentage equal to afraction, the numerator of which is the aggregate Principal Balance of (a) suchMezzanine Loan and (b) any Mezzanine Loan which is pari passu with suchMezzanine Loan and secured by an interest in an entity related to the samecommercial property and the denominator of which is the total principal balanceof any Loans related to the same commercial property.

 

The Moody’s Recovery Rate for REIT unsecured debtsecurities is 40% (other than for mortgage and healthcare related REIT debtsecurities, for which it is 10%).

 

If the timely payment of principal of and interest ona Collateral Debt Security is guaranteed by another person or entity, the Moody’sRecovery Rate will be determined in consultation with Moody’s.

 

A-2

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**Schedule B**

 

**S&P RECOVERY MATRIX**

 

**A.****           **Ifthe Collateral Debt Security is a CMBS Security the S&P Recovery Rate willbe 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.****           **Ifthe Collateral Security is a CRE CDO Security, the S&P Recovery Rate willbe 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 innon-U.S. securities in excess of 20% of the underlying collateral by principalamount of underlying collateral, the recovery rate will be assigned by S&Pupon the acquisition of such security by the Issuer.

 

**C.****               **If theCollateral Debt Security is a REIT Debt Security or a debt security issued by areal estate operating company, the recovery rate will be 40%.  The recovery rate will be 50% for monolinesand 40% for all other third party guarantees. If the Underlying Instruments permit investment in non-U.S. securitiesin excess of 20% of the underlying collateral by principal amount of underlyingcollateral, the recovery rate will be assigned by S&P upon the acquisitionof such security by the Issuer.

 

**D.****               **Each firstloss tranche security, Interest Only Security and Principal Only Security willbe assigned an S&P Recovery Rate on a case by case basis.

 

**E.****                 **If theCollateral Debt Security is a Whole Loan, the recovery rate will be 50%.  If the Participation is a seniorParticipation, senior B-Note or Rake Bond at the level of the underlyingcommercial mortgage loan, the recovery rate will be 35%; all otherParticipations, B Notes, Single Asset Mortgage Securities or Single BorrowerMortgage Securities will have a recovery rate of 30%.  If the Collateral Debt Security is aMezzanine Loan or Preferred Equity Security, the recovery rate will be 25%.

 

B-1

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**Schedule C**

 

**S&P NON-ELIGIBLE NOTCHING ASSET TYPES**

 

The following asset classes are not eligible to benotched.Credit estimates must be performed.This schedule may be modified or adjusted at any time, so please verifyapplicability.

 

**Asset Type**

 

(1)          Non-U.S.Structured Finance Securities

 

(2)          GuaranteedSecurities

 

(3)          CDOsof Structured Finance and Real Estate

 

(4)          CBOsof CDOs

 

(5)          CLOsof Distressed Debt

 

(6)          MutualFund Fee Securities

 

(7)          CatastropheBonds

 

(8)          FirstLoss Tranches of any public securitization

 

(9)          Synthetics

 

(10)    SyntheticCBOs

 

(11)    CombinationSecurities

 

(12)    Re-REMICs

 

(13)    Marketvalue collateralized debt obligations

 

(14)    NetInterest Margin Securities (NIMs)

 

(15)    Loans

 

C-1

----

 

**Schedule D**

 

**S&P ELIGIBLE NOTCHING ASSET TYPES**

 

Asset classes eligible for notching if they are notfirst loss tranches or combination securities. If the security is rated by two agencies, notch down as shown belowbased on the lowest rating.  If ratedonly by one agency, then notch down what is shown below plus one morenotch.  This schedule may bemodified 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 (includingParticipations, B Notes and Mezzanine Loans): With respect to Loans (includingParticipations, B Notes and Mezzanine Loans), if such Loan is not rated byS&P and the aggregate Principal Balance of Loans not rated (or shadowrated) by S&P does not exceed 15% of the Aggregate Collateral Balance, thenthe S&P Rating of such Loan will be the rating corresponding to the LTV ofsuch Loan classified by the type of mortgage property securing such Loan or therelated underlying Loan as set forth on Annex 1 (Whole Loans), Annex 2 (B Notesand Participations) and Annex 3 (Mezzanine Loans) with respect to the specificLoan type.

 

D-2

----

 

**Annex 1 – Schedule D**

 

**S&P’sShadow 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 than6 months old)

 

D-3

----

 

**Annex 2 – Schedule D**

 

**S&P’s Shadow Rating Grid – B Notes andParticipations**

 
| ** ** | ** ** | **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 than6 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 onMAI appraisal values (no more than 6 months old)

 

D-5

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**Schedule F**

 

**LIBOR**

 

The London interbankoffered rate (“LIBOR”) shall be determined by the Calculation Agent inaccordance with the following provisions:

 

(1)                                  Onthe second London Banking Day preceding the first Business Day of an InterestAccrual Period (each such day, a “LIBOR Determination Date”), LIBOR (other thanfor the initial Interest Accrual Period) will equal the rate, as obtained bythe 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 asmay replace that page on that service, or such other service as may benominated as the information vendor, for the purpose of displaying comparablerates 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 anyday on which commercial banks are open for general business (including dealingsin 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 whichdeposits 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 Londoninterbank market for a period of three months commencing on the LIBORDetermination Date and in a representative amount of $1,000. The CalculationAgent will request the principal London office of each of the Reference Banksto provide a quotation of its rate. If at least two such quotations areprovided, the rate for that LIBOR Determination Date will be the arithmeticmean 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 therates quoted by major banks in New York City, selected by the CalculationAgent, at approximately 11:00 a.m. (New York City time) on the LIBORDetermination Date for loans in U.S. Dollars to leading European banks for aperiod of three months commencing on the LIBOR Determination Date and in arepresentative amount of $1,000. As used herein, “Reference Banks” means fourmajor banks in the London interbank market selected by the Calculation Agentand approved by the Collateral Manager.

 

(3)                                  Inrespect of the initial Interest Accrual Period, LIBOR will be determinedthrough the use of straight line interpolation by reference to three monthsdeposits in U.S. Dollars and four months deposits in U.S. Dollars determined inaccordance with clauses (a) and (b) above, one of which will bedetermined as if the maturity of the U.S. Dollar deposits referred to thereinwere the period of time for which rates are available next shorter than theInterest Accrual Period and the other of which will be determined as if suchmaturity were the period of time for which rates are available next longer thanthe Interest Accrual Period; provided that if an Interest Accrual Period isless than or equal to seven days, then LIBOR will be determined by reference toa rate calculated in accordance with clauses (a) and (b) above as ifthe maturity of the Dollar deposits referred to therein were a period of timeequal to seven days.

 

In making the above calculations, (i) allpercentages resulting from the calculation (other than the calculationdetermined pursuant to clause (c) above) will be rounded, if necessary, tothe nearest one hundred thousandth of a percentage point (0.00001%) and (ii) allpercentages determined pursuant to clause (c) above will be rounded, ifnecessary, in accordance with the method set forth in (i), but to the samedegree of accuracy as the two rates used to make the determination (except thatsuch percentages will not be rounded to a lower degree of accuracy than thenearest one thousandth of a percentage point (0.001%)).

 

F-1

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**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

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