Exhibit 10.12


 


 


EXECUTION COPY


 


Dated as of September 22,
2005


 


 


N-STAR REAL ESTATE CDO V LTD.,

as Issuer


 


 


N-STAR REAL ESTATE CDO V CORP.,

as Co-Issuer


 


 


LASALLE BANK NATIONAL ASSOCIATION,

as Trustee


 




 





 


INDENTURE




 





 

















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  PRELIMINARY STATEMENT

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  GRANTING CLAUSES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I Definitions and Interpretation

  	
   

  	
  2 

  
	
  1.1.

  	
  Definitions

  	
   

  	
  2

  
	
  1.2.

  	
  Assumptions as to Collateral Debt
  Securities, Fees, Etc.

  	
   

  	
  52

  
	
  1.3.

  	
  Rules of Construction

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II The Rated Notes

  	
   

  	
  55

  
	
  2.1.

  	
  Forms Generally

  	
   

  	
  55

  
	
  2.2.

  	
  Authorized Amount; Applicable Periodic
  Interest Rate; Stated Maturity Date; Denominations

  	
   

  	
  56

  
	
  2.3.

  	
  Execution, Authentication, Delivery and
  Dating

  	
   

  	
  57

  
	
  2.4.

  	
  Registration, Transfer and Exchange of
  Rated Notes

  	
   

  	
  58

  
	
  2.5.

  	
  Mutilated, Defaced, Destroyed, Lost or
  Stolen Rated Notes

  	
   

  	
  66

  
	
  2.6.

  	
  Payment of Principal and Interest; Rights
  Preserved

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III Conditions Precedent

  	
   

  	
  71

  
	
  3.1.

  	
  General Provisions

  	
   

  	
  71

  
	
  3.2.

  	
  Security for the Rated Notes

  	
   

  	
  74

  
	
  3.3.

  	
  Custodianship; Transfer of Collateral Debt
  Securities and Eligible Investments

  	
   

  	
  75

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV Satisfaction and Discharge

  	
   

  	
  78

  
	
  4.1.

  	
  Satisfaction and Discharge of Indenture

  	
   

  	
  78

  
	
  4.2.

  	
  Application of Trust Money

  	
   

  	
  79

  
	
  4.3.

  	
  Repayment of Funds Held by Note Paying
  Agent

  	
   

  	
  80

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V Events of Default; Remedies

  	
   

  	
  80

  
	
  5.1.

  	
  Events of Default

  	
   

  	
  80

  
	
  5.2.

  	
  Acceleration of Maturity; Rescission and
  Annulment

  	
   

  	
  81

  
	
  5.3.

  	
  Collection of Indebtedness and Suits for
  Enforcement by Trustee

  	
   

  	
  82

  
	
  5.4.

  	
  Remedies

  	
   

  	
  85

  
	
  5.5.

  	
  Preservation of Collateral

  	
   

  	
  86

  
	
  5.6.

  	
  Trustee May Enforce Claims Without
  Possession

  	
   

  	
  88

  
	
  5.7.

  	
  Application of Funds Collected

  	
   

  	
  88

  
	
  5.8.

  	
  Limitation on Suits

  	
   

  	
  88

  
	
  5.9.

  	
  Unconditional Rights of Rated Noteholders
  to Receive Principal  and Interest

  	
   

  	
  89

  
	
  5.10.

  	
  Restoration of Rights and Remedies

  	
   

  	
  89

  
	
  5.11.

  	
  Rights and Remedies Cumulative

  	
   

  	
  89

  
	
  5.12.

  	
  Delay or Omission Not Waiver

  	
   

  	
  90

  
	
  5.13.

  	
  Control by Controlling Class

  	
   

  	
  90

  
	
  5.14.

  	
  Waiver of Past Defaults

  	
   

  	
  90

  
	
  5.15.

  	
  Undertaking for Costs

  	
   

  	
  91

  
	
  5.16.

  	
  Waiver of Stay or Extension Laws

  	
   

  	
  91

  
	
  5.17.

  	
  Sale of Collateral

  	
   

  	
  91

  
	
  5.18.

  	
  Action on the Rated Notes

  	
   

  	
  92

  



 


i

















 


TABLE OF CONTENTS

(continued)


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI The Trustee

  	
   

  	
  92

  
	
  6.1.

  	
  Certain Duties and Responsibilities

  	
   

  	
  92

  
	
  6.2.

  	
  Notice of Default

  	
   

  	
  94

  
	
  6.3.

  	
  Certain Rights of Trustee

  	
   

  	
  94

  
	
  6.4.

  	
  Authenticating Agents

  	
   

  	
  96

  
	
  6.5.

  	
  Not Responsible for Recitals or Issuance of Rated Notes

  	
   

  	
  97

  
	
  6.6.

  	
  May Hold Rated Notes

  	
   

  	
  97

  
	
  6.7.

  	
  Funds Held in Trust

  	
   

  	
  97

  
	
  6.8.

  	
  Compensation and Reimbursement

  	
   

  	
  97

  
	
  6.9.

  	
  Corporate Trustee Required; Eligibility

  	
   

  	
  99

  
	
  6.10.

  	
  Resignation and Removal; Appointment of Successor

  	
   

  	
  99

  
	
  6.11.

  	
  Acceptance of Appointment by Successor

  	
   

  	
  100

  
	
  6.12.

  	
  Merger, Conversion, Consolidation or Succession to Business
  of  Trustee

  	
   

  	
  101

  
	
  6.13.

  	
  Co-Trustees

  	
   

  	
  101

  
	
  6.14.

  	
  Certain Duties Related to Delayed Payment of Proceeds;
  Other  Notices

  	
   

  	
  102

  
	
  6.15.

  	
  Representations and Warranties of the Bank

  	
   

  	
  102

  
	
  6.16.

  	
  Exchange Offers, Proposed Amendments etc.

  	
   

  	
  103

  
	
  6.17.

  	
  Fiduciary for Rated Noteholders Only; Agent For Other Secured
  Parties

  	
   

  	
  103

  
	
  6.18.

  	
  Withholding

  	
   

  	
  103

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII Covenants

  	
   

  	
  104

  
	
  7.1.

  	
  Payment of Principal and Interest

  	
   

  	
  104

  
	
  7.2.

  	
  Maintenance of Office or Agency

  	
   

  	
  104

  
	
  7.3.

  	
  Funds for Rated Note Payments to be Held in Trust

  	
   

  	
  105

  
	
  7.4.

  	
  Existence of Co-Issuers

  	
   

  	
  107

  
	
  7.5.

  	
  Protection of Collateral

  	
   

  	
  107

  
	
  7.6.

  	
  Opinions as to Collateral

  	
   

  	
  109

  
	
  7.7.

  	
  Performance of Obligations

  	
   

  	
  109

  
	
  7.8.

  	
  Negative Covenants

  	
   

  	
  110

  
	
  7.9.

  	
  Statement as to Compliance

  	
   

  	
  111

  
	
  7.10.

  	
  Co-Issuers May Consolidate, Etc., Only on Certain
  Terms

  	
   

  	
  112

  
	
  7.11.

  	
  Successor Substituted

  	
   

  	
  114

  
	
  7.12.

  	
  No Other Business

  	
   

  	
  115

  
	
  7.13.

  	
  Change or Withdrawal of Rating

  	
   

  	
  115

  
	
  7.14.

  	
  Reporting

  	
   

  	
  115

  
	
  7.15.

  	
  Rated Note Calculation Agent

  	
   

  	
  116

  
	
  7.16.

  	
  Listing

  	
   

  	
  116

  
	
  7.17.

  	
  Amendment of Certain Documents

  	
   

  	
  117

  
	
  7.18.

  	
  Purchase of Collateral; Information Regarding Collateral;
  Rating
  Confirmation

  	
   

  	
  117

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII Supplemental Indentures

  	
   

  	
  118

  
	
  8.1.

  	
  Supplemental Indentures Without Consent of Rated
  Noteholders

  	
   

  	
  118

  
	
  8.2.

  	
  Supplemental Indentures with Consent of Rated Noteholders

  	
   

  	
  121

  
	
  8.3.

  	
  Execution of Supplemental Indentures

  	
   

  	
  123

  
	
  8.4.

  	
  Effect of Supplemental Indentures

  	
   

  	
  123

  
	
  8.5.

  	
  Reference in Rated Notes to Supplemental Indentures

  	
   

  	
  123

  



 


ii

















 


TABLE OF CONTENTS

(continued)


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX Redemption of Rated Notes

  	
   

  	
  123

  
	
  9.1.

  	
  Redemption of Rated Notes

  	
   

  	
  123

  
	
  9.2.

  	
  Redemption Procedures; Auction

  	
   

  	
  124

  
	
  9.3.

  	
  Record Date; Notice to Trustee of Redemption

  	
   

  	
  126

  
	
  9.4.

  	
  Notice of Redemption

  	
   

  	
  126

  
	
  9.5.

  	
  Notice of Withdrawal

  	
   

  	
  127

  
	
  9.6.

  	
  Rated Notes Payable on Redemption Date

  	
   

  	
  127

  
	
  9.7.

  	
  Special Amortization

  	
   

  	
  127

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X Accounts, Accountings and Releases

  	
   

  	
  128

  
	
  10.1.

  	
  Collection of Funds

  	
   

  	
  128

  
	
  10.2.

  	
  General Provisions Applicable to Accounts

  	
   

  	
  129

  
	
  10.3.

  	
  Collateral Account

  	
   

  	
  129

  
	
  10.4.

  	
  Uninvested Proceeds Account

  	
   

  	
  130

  
	
  10.5.

  	
  Collection Account and CPP Sub-Accounts

  	
   

  	
  130

  
	
  10.6.

  	
  Expense Reserve Account

  	
   

  	
  131

  
	
  10.7.

  	
  Interest Reserve Account

  	
   

  	
  132

  
	
  10.8.

  	
  Payment Account

  	
   

  	
  132

  
	
  10.9.

  	
  Reports by Trustee

  	
   

  	
  132

  
	
  10.10.

  	
  Accountings

  	
   

  	
  133

  
	
  10.11.

  	
  Release of Securities

  	
   

  	
  138

  
	
  10.12.

  	
  Reports by Independent Accountants

  	
   

  	
  138

  
	
  10.13.

  	
  Reports to Rating Agencies

  	
   

  	
  139

  
	
  10.14.

  	
  Tax Matters

  	
   

  	
  140

  
	
  10.15.

  	
  Tax Information

  	
   

  	
  140

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI Application of Monies

  	
   

  	
  140

  
	
  11.1

  	
  Disbursements of Funds from Payment Account; Priority of
  Payments

  	
   

  	
  140

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII Purchase and Sale of Collateral Debt Securities

  	
   

  	
  154

  
	
  12.1.

  	
  Sale of Collateral Debt Securities

  	
   

  	
  154

  
	
  12.2.

  	
  Portfolio Characteristics

  	
   

  	
  158

  
	
  12.3.

  	
  Conditions Applicable to all Transactions Involving Sale or
  Grant

  	
   

  	
  161

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII Secured Parties’ Relations

  	
   

  	
  162

  
	
  13.1.

  	
  Subordination

  	
   

  	
  162

  
	
  13.2.

  	
  Standard of Conduct

  	
   

  	
  166

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV Miscellaneous

  	
   

  	
  166

  
	
  14.1.

  	
  Form of Documents Delivered to Trustee

  	
   

  	
  166

  
	
  14.2.

  	
  Acts of Rated Noteholders

  	
   

  	
  167

  
	
  14.3.

  	
  Notices, Etc., to Trustee, the Co-Issuers and the Rating
  Agencies

  	
   

  	
  167

  
	
  14.4.

  	
  Notices and Reports to Rated Noteholders; Waiver

  	
   

  	
  169

  
	
  14.5.

  	
  Effect of Headings and Table of Contents

  	
   

  	
  169

  
	
  14.6.

  	
  Successors and Assigns

  	
   

  	
  170

  
	
  14.7.

  	
  Severability

  	
   

  	
  170

  
	
  14.8.

  	
  Benefits of Indenture

  	
   

  	
  170

  
	
  14.9.

  	
  Governing Law

  	
   

  	
  170

  
	
  14.10.

  	
  Submission to Jurisdiction

  	
   

  	
  170

  



 


iii

















 


TABLE OF CONTENTS

(continued)


 


	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  14.11.

  	
  Counterparts

  	
   

  	
  170

  
	
  14.12.

  	
  Waiver of Jury Trial

  	
   

  	
  171

  
	
  14.13.

  	
  Judgment Currency

  	
   

  	
  171

  
	
  14.14.

  	
  Confidential Treatment of Documents

  	
   

  	
  171

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV Assignment of Agreements,
  Etc.

  	
   

  	
  172

  
	
  15.1.

  	
  Assignment

  	
   

  	
  172

  
	
  15.2.

  	
  No Impairment

  	
   

  	
  172

  
	
  15.3.

  	
  Termination, Etc.

  	
   

  	
  172

  
	
  15.4.

  	
  Issuer Agreements, Etc.

  	
   

  	
  172

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVI Hedge Agreement

  	
   

  	
  173

  
	
  16.1.

  	
  Hedge Agreement

  	
   

  	
  173

  



 


	
  Schedules

  	
   

  	
   

  
	
  Schedule
  A

  	
   

  	
  Schedule
  of Collateral Debt Securties as of the Closing Date

  
	
  Schedule
  B

  	
   

  	
  LIBOR
  Formula

  
	
  Schedule
  C

  	
   

  	
  Schedule
  of Temporar Ramp-Up Securities

  
	
  Schedule
  D

  	
   

  	
  S&P’s
  Recovery Rate Matrx

  
	
  Schedule
  E

  	
   

  	
  Auction
  Procedures

  
	
  Schedule
  F

  	
   

  	
  S&P’s
  Notching Criteria

  
	
  Schedule
  G

  	
   

  	
  S&P’s
  Types of Asset-Backed Securities ineligible for Notching

  
	
  Schedule
  H

  	
   

  	
  S&P’s
  Industry Classification Groups

  
	
  Schedule
  I

  	
   

  	
  Fitch
  Industry Classification Groups

  



 


	
  Exhibits

  	
   

  	
   

  
	
  Exhibit
  A-1

  	
   

  	
  Form
  of Regulation S Global Note

  
	
  Exhibit
  A-2

  	
   

  	
  Form
  of Rule 144A Global Note

  
	
  Exhibit
  B-1

  	
   

  	
  Form
  of Definitive Class E Note

  
	
  Exhibit
  B-2

  	
   

  	
  Form
  of Definitive Class F Note

  
	
  Exhibit
  C-1

  	
   

  	
  Form
  of Rule 144A Transfer Certificate

  
	
  Exhibit
  C-2

  	
   

  	
  Form
  of Regulation S Transfer Certificate

  
	
  Exhibit
  C-3

  	
   

  	
  Form
  of Definitive Class E Transfer Certificate

  
	
  Exhibit
  C-4

  	
   

  	
  Form
  of Definitive Class F Transfer Certificate

  
	
  Exhibit
  D

  	
   

  	
  Form
  of Funding Certificate

  
	
  Exhibit
  E-1

  	
   

  	
  Form
  of Opinion of Clifford Chance US LLP

  
	
  Exhibit
  E-2

  	
   

  	
  Form
  of Opinion of Walkers

  
	
  Exhibit
  F

  	
   

  	
  Form
  of Opinion of Kennedy Covington Lobdell & Hickman, L.L.P.

  
	
  Exhibit
  G

  	
   

  	
  Form
  of Opinion of Thacher Proffitt & Wood LLP

  
	
  Exhibit
  H

  	
   

  	
  Form
  of Opinion of In-House Counsel to Bank of America, N.A.

  
	
  Exhibit
  I

  	
   

  	
  Rated
  Noteholder’s Certificate

  



 


iv














 


THIS INDENTURE dated as
of September 22, 2005 among:


 


N-STAR REAL ESTATE CDO V LTD., an
exempted company incorporated and existing under the law of the Cayman Islands;


 


N-STAR REAL ESTATE CDO V CORP., a
corporation organized and existing under the law of the State of Delaware; and


 


LASALLE BANK NATIONAL ASSOCIATION, a
national banking association, organized under the law of the United States, as
trustee.


 


PRELIMINARY STATEMENT


 


The Co-Issuers are duly authorized to execute and deliver this
Indenture to provide for the issuance of the Rated Notes as provided in this
Indenture. All covenants and agreements made by the Co-Issuers herein are for
the benefit and security of the Secured Parties. The Co-Issuers are entering
into this Indenture, and the Trustee is accepting the trusts created hereby,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged.


 


All things necessary to make this Indenture a valid agreement of the
Co-Issuers in accordance with its terms have been done.


 


GRANTING CLAUSES


 


The Issuer hereby Grants to the Trustee, for the benefit and security
of the Secured Parties, all of its right, title and interest in, to and under,
in each case, whether now owned or existing, or hereafter acquired or arising,
the following property (other than the Excepted Property) (a) the
Collateral Debt Securities listed on Schedule A, the Temporary Ramp-Up
Securities listed on Schedule C, the Collateral Debt Securities acquired after
the Closing Date and any Equity Securities which, in each case, are delivered
to the Trustee (directly or through a Securities Intermediary) after the
Closing Date pursuant to the terms hereof and all payments thereon or with
respect thereto, (b) the Collection Account (including each Collateral Sub-Account
established therein), the Interest Reserve Account, the Payment Account, the
Expense Reserve Account (including each Collateral Sub-Account), the Collateral
Account, the Uninvested Proceeds Account, all amounts credited to such
accounts, and Eligible Investments purchased with funds credited to such
accounts and all income from the investment of funds therein, (c) the
rights of the Issuer under each of the Transaction Documents to which the
Issuer is a party and all payments to the Issuer thereunder or with respect
thereto, (d) all Cash or other property delivered to the Trustee (directly
or through a Securities Intermediary) and (e) all proceeds, whether
voluntary or involuntary, of and to any of the property of the Issuer described
in the preceding clauses (collectively, the Collateral). Such Grants are made to the
Trustee to hold in trust, to secure the Rated Notes equally and ratably without
prejudice, priority or distinction between any Rated Note and any other Rated
Note by reason of difference in time of issuance or otherwise, except as
expressly provided in this Indenture, and to secure (i) the payment of all
amounts due on the Rated Notes and under the Hedge Agreement and the Collateral
Advisory Agreement in accordance with their respective terms, (ii) the
payment of all other sums payable under this Indenture and (iii) compliance
with the provisions of this Indenture, the Hedge Agreement and the Collateral
Advisory Agreement, all as provided in this Indenture (collectively, the Secured Obligations).


 


Except to the extent otherwise provided in this Indenture, the Issuer
does hereby constitute and irrevocably appoint the Trustee the true and lawful
attorney of the Issuer, with full power (in the name of the Issuer or
otherwise), to exercise all rights of the Issuer with respect to the Collateral
held for the benefit and security of the Secured Parties and to ask, require,
demand, receive, settle, compromise,


 

















 


compound and give acquittance for any and all moneys and claims for
moneys due and to become due under or arising out of any of the Collateral held
for the benefit and security of the Secured Parties, to endorse any checks or
other instruments or orders in connection therewith and to file any claims or
take any action or institute any proceedings which the Trustee may deem to be
necessary or advisable in the premises. The power of attorney granted pursuant
to this Indenture and all authority hereby conferred are granted and conferred
solely to protect the Trustee’s interest in the Collateral held for the benefit
and security of the Secured Parties and shall not impose any duty upon the
Trustee to exercise any power. This power of attorney shall be irrevocable as
one coupled with an interest prior to the payment in full of all the obligations
secured hereby.


 


Except to the extent otherwise provided in this Indenture, this
Indenture shall constitute a security agreement under the law of the State of
New York. Upon the occurrence of any Event of Default and in addition to any
other rights available under this Indenture or any other instruments included
in the Collateral held for the benefit and security of the Secured Parties or
otherwise available at law or in equity, the Trustee shall have all rights and
remedies of a secured party on default under the law of the State of New York
and other applicable law to enforce the assignments and security interests
contained herein and, in addition, shall have the right, subject to compliance
with any mandatory requirements of applicable law, to sell or apply any rights
and other interests assigned or pledged hereby in accordance with the terms
hereof at public or private sale.


 


It is expressly agreed that anything therein contained to the contrary
notwithstanding, the Issuer shall remain liable under any instruments included
in the Collateral to perform all the obligations assumed by it thereunder, all
in accordance with and pursuant to the terms and provisions thereof, and except
as otherwise expressly provided herein, the Trustee shall not have any obligations
or liabilities under such instruments by reason of or arising out of this
Indenture, nor shall the Trustee be required or obligated in any manner to
perform or fulfill any obligations of the Issuer under or pursuant to such
instruments or to make any payment, to make any inquiry as to the nature or
sufficiency of any payment received by it, to present or file any claim, or to
take any action to collect or enforce the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or times.


 


The designation of the Trustee in any transfer document or record is
intended and shall be deemed, first, to refer to the Trustee as custodian on
behalf of the Issuer and second, to refer to the Trustee as secured party on
behalf of the Secured Parties, provided that the Grant
made by the Issuer to the Trustee pursuant to the granting clauses hereof shall
apply to any Collateral bearing such designation.


 


The Trustee acknowledges such Grants, accepts the trust hereunder in
accordance with the provisions hereof, and agrees to perform the duties herein
in accordance with the required standard of care set forth herein such that the
interests of the Secured Parties may be protected.


 


Each of the Secured Parties hereby agrees and acknowledges that it
shall not have any claim on the funds and property from time to time deposited
in or credited to the Income Note Distribution Account and the proceeds
thereof.


 


ARTICLE I


 


DEFINITIONS AND INTERPRETATION


 


1.1.                            DEFINITIONS


 


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


 


2

















 


is made to an amount the determination of which is governed by Section 1.2,
the provisions of Section 1.2 shall be applicable to such determination or
calculation, whether or not reference is specifically made to Section 1.2,
unless some other method of calculation or determination is expressly specified
in the particular provision. In addition, terms defined in Article 9 of
the UCC and used but not capitalized herein have the meanings assigned thereto
in Article 9 of the UCC.


 


Account means
any of the Collection Account (including each Collateral Sub-Account
established therein), the Collateral Account, the Uninvested Proceeds Account,
the Payment Account, the Interest Reserve Account and the Expense Reserve
Account (including each Collateral Sub-Account established therein).


 


Account Control
Agreement means that certain Account Control Agreement,
dated as of the Closing Date, as the same may be amended or supplemented from
time to time, among the Issuer, the Trustee and the Custodian.


 


Accountants’ Report means
a report of a firm of Independent certified public accountants of recognized
national reputation appointed by the Issuer (or the Collateral Advisor on its
behalf) on the Closing Date pursuant to Section 10.12(a), which may be the
firm of Independent accountants that reviews or performs procedures with
respect to the financial reports prepared by the Issuer.


 


Act has
the meanings specified in Section 14.2.


 


Administrative Expenses
means amounts (including any applicable indemnities) due
from, or accrued for, the account of the Co-Issuers with respect to any Payment
Date to (i) the Trustee for Trustee Expenses; (ii) the Income Note
Paying Agent pursuant to the Income Note Paying Agency Agreement; (iii) the
Collateral Administrator pursuant to the Collateral Administration Agreement; (iv) the
independent accountants, agents and counsel of the Co-Issuers for fees and
expenses (including, without limitation, tax reports); (v) the Rating
Agencies for fees and expenses in connection with any Class of Notes rated
by each such Rating Agency (including, without limitation, expenses for credit
estimates and ongoing surveillance of the ratings of the Notes); (vi) the
Administrator pursuant to the Corporate Services Agreement; (vii) the
Collateral Advisor and its counsel for fees, expenses and indemnities under the
Transaction Documents to the extent set forth therein (including, without
limitation, amounts payable under the Collateral Advisory Agreement but
excluding the Collateral Advisory Fee); (viii) any other Person in respect
of any governmental fee, charge or tax (including all filing, registration and
annual return fees payable to the Cayman Islands’ government and registered
office fees); and (ix) any other Person in respect of any other fees or
expenses permitted under the Indenture and the documents delivered pursuant to
or in connection with this Indenture, the Income Note Paying Agency Agreement,
the Collateral Advisory Agreement and the Notes; provided that
Administrative Expenses may not include any amounts due or accrued with respect
to the actions taken on, or prior to, the Closing Date.


 


Administrator means
Walkers SPV Limited and any successor thereto appointed under the Corporate
Services Agreement.


 


Affected Party has
the meaning given to such term in the standard form 1992 ISDA Master Agreement
(Multicurrency-Cross Border).


 


Affiliate means
any person, directly or indirectly through one or more intermediaries,
controlling, controlled by or under common control with the person; provided
that (i) with respect to the Issuer, “Affiliate” shall be
deemed not to include Walkers SPV Limited or any entity which Walkers SPV
Limited controls and (ii) control of a person shall mean the power, direct
or indirect, (a) to vote more than 50% of the securities having ordinary
voting power for the election of directors of such person or (b) to


 


3

















 


direct or cause the direction of the management and policies of such
person whether by contract or otherwise.


 


Agent Members means
members of, or participants in, the Clearing Agencies.


 


Aggregate Fees and
Expenses means, on any Payment Date, the sum of (i) the
Trustee Fee with respect to such Payment Date and any unpaid Trustee Fee
accrued with respect to a previous Payment Date, (ii) the Income Note
Paying Agent Fee with respect to such Payment Date and any unpaid Income Note
Paying Agent Fee accrued with respect to a previous Payment Date (iii) the
Senior Collateral Advisory Fee and all expenses of the Collateral Advisor
payable by the Issuer pursuant to the Collateral Advisory Agreement with
respect to such Payment Date and any unpaid Senior Collateral Advisory Fee and
unpaid expenses of the Collateral Advisor accrued with respect to a previous
Payment Date, (iv) the Trustee Expenses and other expenses (including
other Administrative Expenses) of the Co-Issuer (including the fees to be paid
to the Irish Stock Exchange), (v) taxes payable by the Co-Issuers, if any,
and (vi) all other expenses of the Co-Issuers (including, without
limitation, Administrative Expenses) payable on such Payment Date pursuant to
Sections 11.1(a)(1) and 11.1(b)(1) (in each case to the extent not
included in clauses (i) through (vi) above).


 


Aggregate Outstanding
Amount means, when used with respect to any of the Rated
Notes at any time, the aggregate principal amount of such Rated Notes
Outstanding at such time. Except as otherwise provided herein, (i) the
Aggregate Outstanding Amount of any Class C Notes at any time shall
include the Class C Cumulative Applicable Periodic Interest Shortfall
Amount with respect to such Class C Notes at such time, (ii) the
Aggregate Outstanding Amount of any Class D Notes at any time shall
include the D Cumulative Applicable Periodic Interest Shortfall Amount with
respect to such Class D Notes at such time, (iii) the Aggregate
Outstanding Amount of any Class E Notes at any time shall include the Class E
Cumulative Applicable Periodic Interest Shortfall Amount with respect to such Class E
Notes at such time and (iv) the Aggregate Outstanding Amount of any Class F
Notes at any time shall include the Class F Cumulative Applicable Periodic
Interest Shortfall Amount with respect to such Class F Notes at such time.


 


Applicable Periodic
Interest Rate means, for any Interest Period, (i) with
respect to the Class A Notes, the applicable Class A Note Interest
Rate, (ii) with respect to the Class B Notes, the applicable Class B
Note Interest Rate, (iii) with respect to the Class C Notes, the
applicable Class C Note Interest Rate, (iv) with respect to the Class D
Notes, the applicable Class D Note Interest Rate, (v) with respect to
the Class E Notes, the applicable Class E Note Interest Rate and (vi) with
respect to the Class F Notes, the applicable Class F Note Interest
Rate.


 


Applicable Recovery
Rate means, with respect to any Collateral Debt Security
on any Measurement Date, the applicable S&P Recovery Rate for such
Collateral Debt Security on such date.


 


Approved Replacement
Person means a replacement or additional Key Manager
appointed in accordance with the procedures described in Section 16 of the
Collateral Advisory Agreement.


 


Articles means
the Amended and Restated Memorandum and Articles of Association of the Issuer,
filed under the Companies Law (2004 Revision) of the Cayman Islands, as
modified and supplemented and in effect from time to time.


 


Asset-Backed Securities
are debt securities that entitle the holders thereof to
receive payments that depend primarily on the cash flow from (i) a
specified pool of financial assets, either fixed or revolving, that by their
terms convert into cash within a finite time period, together with rights or
other assets designed to assure the servicing or timely distribution of
proceeds to holders of such securities (including,


 


4

















 


for the avoidance of doubt, leases) or (ii) real estate mortgages,
either fixed or revolving, together with rights or other assets designed to
assure the servicing or timely distribution of proceeds to the holders of such
securities.


 


Assumed Reinvestment
Rate means, with respect to any Account or fund securing
the Rated Notes, the greater of (i) LIBOR minus 0.50% and (ii) zero.


 


Auction has
the meaning specified in Section 9.2.


 


Auction Call Redemption
has the meaning specified in Section 9.1(c).


 


Auction Date has
the meaning specified in Section 9.2; provided that, for the
purposes of Section 5.5, “Auction Date” means the date upon which an
Auction of the Collateral Debt Securities is conducted in connection with an
Event of Default.


 


Auction Procedures has
the meaning specified in Section 9.2.


 


Auction Purchase
Agreement has the meaning specified in Schedule E.


 


Authenticating Agent means,
with respect to the Rated Notes or any Class of the Rated Notes, the
Person designated by the Trustee, if any, to authenticate such Rated Notes on
behalf of the Trustee pursuant to Section 6.4.


 


Authorized Officer means
(i) with respect to the Issuer, any Officer of the Issuer who is
authorized to act for the Issuer in matters relating to, and binding upon, the
Issuer, (ii) with respect to the Co-Issuer, any Officer who is authorized
to act for the Co-Issuer in matters relating to, and binding upon, the
Co-Issuer, (iii) with respect to the Collateral Advisor, any officer of
the Collateral Advisor who is authorized to act for the Collateral Advisor in
matters relating to, and binding upon, the Collateral Advisor, (iv) with
respect to the Trustee or any other bank or trust company acting as trustee of
an express trust or as custodian, a Trust Officer and (v) with respect to
the Income Note Paying Agent, any officer who is authorized to act for the
Income Note Paying Agent in matters relating to, and binding upon, the Income
Note Paying Agent. Each party may receive and accept a certification of the
authority of any other party as conclusive evidence of the authority of any
person to act, and such certification may be considered as in full force and
effect until receipt by such other party of written notice to the contrary.


 


Available Funds means,
with respect to any Payment Date, the amount of any positive balance of Cash or
Eligible Investments in the Collection Account as of the Calculation Date
relating to such Payment Date and, with respect to any other date, such amount
as of that date.


 


Average Life means,
on any Calculation Date with respect to any Collateral Debt Security, the
quotient obtained by the Collateral Advisor by dividing (i) the sum of the
products of (a) the number of years (rounded to the nearest one tenth
thereof) from such Calculation Date to the respective dates of each successive
distribution of principal of such Collateral Debt Security (assuming that (1) no
Collateral Debt Securities default or are sold, (2) any optional
redemption of the Collateral Debt Securities occurs in accordance with their
respective terms and (3) any extension of the Real Estate Interests is
exercised) and (b) the respective amounts of principal of such scheduled
distributions by (ii) the sum of all successive scheduled distributions of
principal on such Collateral Debt Security.


 


Balance means
at any time, with respect to Cash or Eligible Investments in any Account at
such time, the aggregate of the (i) current balance of Cash, demand
deposits, time deposits, certificates of deposit and federal funds; (ii) principal
amount of interest-bearing corporate and government securities, money


 


5

















 


market accounts and repurchase obligations; and (iii) purchase
price (but not greater than the face amount) of non-interest-bearing government
and corporate securities and commercial paper.


 


Bank means
LaSalle Bank National Association, a national banking association organized
under the laws of the United States, in its individual capacity and not as
Trustee.


 


Bankruptcy Code means
the U.S. Bankruptcy Code, Title 11 of the United States Code, as amended or
where the context requires, the applicable insolvency provisions of the laws of
the Cayman Islands.


 


BAS means
Banc of America Securities LLC.


 


Beneficial Owner means,
with respect to any Global Note, each Person that appears on the records of a
Clearing Agency (other than each such Clearing Agency to the extent that it is
an accountholder with the other Clearing Agency for the purpose of operating
the “bridge” between them) as entitled to a particular amount of Rated Notes by
reason of an interest in a Global Note (for all purposes other than with
respect to the payment of principal of and interest on the Rated Notes, the
right to which will be vested, as against the Issuer and the Trustee, solely in
the Person in whose name the Global Note is registered in the Note Register (in
the case of the Rated Notes) or the Income Note Register (in the case of the
Income Notes)); provided that the Trustee and the Income Note
Paying Agent may conclusively rely upon the certificate of a Clearing Agency as
to the identity of such Persons holding an interest in a Global Note.


 


Benefit Plan Investor means
(i) an “employee benefit plan” (as defined in Section 3(3) of
ERISA), whether or not subject to Title I of ERISA, including without
limitation governmental plans, foreign plans and church plans, (ii) a
“plan” (as defined in Section 4975(e)(1) of the Code), whether or not
subject to Section 4975 of the Code, including, without limitation,
individual retirement accounts and Keogh plans or (iii) an entity whose
underlying assets include plan assets by reason of such an employee benefit
plan’s or plan’s investment in such entity, including, without limitation, as
applicable, an insurance company general account.


 


Board of Directors means,
with respect to the Issuer, the directors of the Issuer duly appointed in
accordance with the Articles, and, with respect to the Co-Issuer, the directors
of the Co-Issuer duly appointed by the shareholders of the Co-Issuer.


 


Board Resolution means,
with respect to the Issuer or the Co-Issuer, a resolution of the Board of
Directors of the Issuer or the Co-Issuer, as the case may be.


 


Business Day means
any day that is not a Saturday, Sunday or other day on which commercial banking
institutions in New York, New York, Chicago, Illinois or any other cities in
which the Corporate Trust Office of the Trustee is located are authorized or
obligated by law or executive order to be closed; provided that, if any
action is required of the Irish Paying Agent, solely for purposes of
determining when such action of the Irish Paying Agent is required, days on
which commercial banking institutions in Dublin, Ireland are authorized or
obligated by law or executive order to be closed will also be considered in
determining whether such day is a “Business Day”; provided, further that
if any action is required of the Issuer (or of the Administrator on its
behalf), solely for purposes of determining when such action of the Issuer is
required, days on which commercial banking institutions in the Cayman Islands
are authorized or obligated by law or executive order to be closed will also be
considered in determining whether such day is a “Business Day.”


 


Calculation Date means,
with respect to any Payment Date, the last day of the related Due Period. 


 


Call Period has
the meaning specified in Section 9.1(a) hereof.


 


6

















 


Cash means such funds
denominated with currency of the United States as at the time shall be legal
tender for payment of all public and private debts, including funds credited to
a deposit account or a Securities Account.


 


Cash Release Conditions has
the meaning specified in Section 12.1(c).


 


CDO of CDO Securities means
securities that entitle the Holders thereof to receive payments that depend on
the cash flow from a portfolio of assets, the majority in principal amount of
which are collateralized debt obligations.


 


CDS Principal Balance means,
prior to the Effective Date, not less than U.S.$425,000,000, and thereafter,
the aggregate Principal Balance of (i) Collateral Debt Securities included
in the Collateral (including any Collateral Debt Securities that have become
Defaulted Securities or Written Down Securities) and (ii) Eligible
Investments, in each case, purchased with the proceeds of the issuance of the
Notes or thereafter with Collateral Principal Collections.


 


Certificated Security has
the meaning specified in Section 8-102(a)(4) of the UCC.


 


Certificate of Authentication has
the meaning specified in Section 2.3(f).


 


Class means any
class of the Notes, consisting of the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes,
the Class F Notes and the Income Notes.


 


Class A Note Break-Even Default Rate means
the maximum percentage of defaults that the portfolio of Collateral Debt
Securities can sustain, as determined by S&P by application of the S&P
CDO Monitor, after giving effect to S&P’s assumptions on recoveries,
defaults and timing and to the Priority of Payments such that sufficient funds
will remain for the payment of principal of the Class A Notes in full by
their Stated Maturity Dates and the timely payment of interest on such Class A
Notes.


 


Class A Note Default Differential means,
with respect to any Calculation Date, the rate obtained by subtracting the Class A
Note Scenario Default Rate from the Class A Note Break-Even Default Rate.


 


Class A Note Interest Rate means
the Class A-1 Note Interest Rate or the Class A-2 Note Interest Rate,
as applicable.


 


Class A Note Scenario Default Rate means
an estimate of the cumulative default rate for the portfolio of Collateral Debt
Securities consistent with S&P’s rating of the Class A Notes on the
Closing Date, determined by S&P by application of the S&P CDO Monitor.


 


Class A Notes means
the Class A-1 Notes and the Class A-2 Notes.


 


Class A-1 Note Interest Rate means
LIBOR plus 0.265%.


 


Class A-1 Notes means
the U.S.$339,735,000 aggregate principal amount of Class A-1 Floating Rate
Notes due 2045.


 


Class A-2 Note Interest Rate means
LIBOR plus 0.350%.


 


Class A-2 Notes means
the U.S.$47,000,000 aggregate principal amount of Class A-2 Floating Rate
Notes due 2045.


 


7

















 


Class A/B Coverage
Tests means the Class A/B Interest Coverage Test and
the Class A/B Principal Coverage Test.


 


Class A/B Interest
Coverage Ratio means, on any Measurement Date, the ratio
(expressed as a percentage) of (i) to (ii), where (i) is equal to the
Interest Coverage Amount as of such Measurement Date and where (ii) is the
sum of the Periodic Interest for the Class A Notes and the Class B
Notes for the Payment Date immediately following such Measurement Date; provided that the
Interest Coverage Amount shall be calculated after giving effect to any
scheduled payment to the Interest Reserve Account for the Payment Date
immediately following such Measurement Date.


 


Class A/B Interest
Coverage Test means, for so long as any Class A
Notes or Class B Notes remain Outstanding, a test that is satisfied on any
date of determination if the Class A/B Interest Coverage Ratio as of such
date of determination is equal to or greater than 115.0%.


 


Class A/B
Principal Coverage Ratio means, on any Measurement Date,
the ratio (expressed as a percentage) of (i) to (ii), where (i) is
the Principal Coverage Amount as of such Measurement Date and (ii) is the
sum of the Aggregate Outstanding Amount of the Class A Notes and the Class B
Notes Outstanding as of such Measurement Date.


 


Class A/B
Principal Coverage Test means, for so long as any Class A
Notes or Class B Notes remain Outstanding, a test satisfied on any date of
determination if the Class A/B Principal Coverage Ratio as of such date of
determination is equal to or greater than 106.8%.


 


Class B Note
Break-Even Default Rate means the maximum percentage of
defaults that the portfolio of Collateral Debt Securities can sustain, as
determined by S&P by application of the S&P CDO Monitor, after giving
effect to S&P’s assumptions on recoveries, defaults and timing and to the
Priority of Payments such that sufficient funds will remain for the payment of
principal of the Class B Notes in full by their Stated Maturity Date and
the timely payment of interest on such Class B Notes.


 


Class B Note
Default Differential means, with respect to any
Calculation Date, the rate obtained by subtracting the Class B Note
Scenario Default Rate from the Class B Note Break-Even Default Rate.


 


Class B Note
Interest Rate means LIBOR plus 0.450%.


 


Class B Note
Scenario Default Rate means an estimate of the cumulative
default rate for the portfolio of Collateral Debt Securities consistent with
S&P’s rating of the Class B Notes on the Closing Date, determined by
S&P by application of the S&P CDO Monitor.


 


Class B Notes means
the U.S .$41,400,000 aggregate principal amount of Class B Floating Rate
Notes due 2045.


 


Class C Applicable
Periodic Interest Shortfall Amount means, with respect to
any Interest Period, the amount of unpaid interest for such Interest Period
that will be added to the principal amount of the Class C Notes and paid
thereafter in accordance with the Priority of Payments in the event that any Class A
Notes or Class B Notes are Outstanding and funds are not available in
accordance with the Priority of Payments on any Payment Date to pay the full
amount of Periodic Interest on the Class C Notes.


 


Class C Coverage
Tests means the Class C Interest Coverage Test and
the Class C Principal Coverage Test.


 


8

















 


Class C Cumulative
Applicable Periodic Interest Shortfall Amount means, with
respect to any date of determination, the sum of all Class C Applicable
Periodic Interest Shortfall Amounts with respect to all Payment Dates preceding
such date of determination, less any amounts applied on all preceding Payment
Dates pursuant to the Priority of Payments to reduce such sum.


 


Class C Interest
Coverage Ratio means on any Measurement Date, the ratio
(expressed as a percentage) of (i) to (ii), where (i) is equal to the
Interest Coverage Amount as of such Measurement Date and where (ii) is the
sum of the Periodic Interest for the Class A Notes, the Class B Notes
and the Class C Notes for the Payment Date immediately following such
Measurement Date; provided
that the Interest Coverage Amount shall be calculated after giving
effect to any scheduled payment to the Interest Reserve Account for such
Payment Date immediately following such Measurement Date.


 


Class C Interest
Coverage Test means, for so long as any Class A
Notes, Class B Notes or Class C Notes remain Outstanding, a test that
is satisfied as of any date of determination when the Class C Interest
Coverage Ratio as of such date of determination is equal to or exceeds 110.0%.


 


Class C Note
Break-Even Default Rate means the maximum percentage of
defaults that the portfolio of Collateral Debt Securities can sustain, as
determined by S&P by application of the S&P CDO Monitor, after giving
effect to S&P’s assumptions on recoveries, defaults and timing and to the
Priority of Payments such that sufficient funds will remain for the payment of
principal of the Class C Notes in full by their Stated Maturity Date and
the ultimate payment of interest on such Class C Notes.


 


Class C Note
Default Differential means, with respect to any
Calculation Date, the rate obtained by subtracting the Class C Note
Scenario Default Rate from the Class C Note Break-Even Default Rate.


 


Class C Note
Interest Rate means 5.311%.


 


Class C Note
Scenario Default Rate means an estimate of the cumulative
default rate for the portfolio of Collateral Debt Securities consistent with
S&P’s rating of the Class C Notes on the Closing Date, determined by
S&P by application of the S&P CDO Monitor.


 


Class C Notes means
the U.S.$18,125,000 aggregate principal amount of Class C Deferrable Fixed
Rate Notes due 2045.


 


Class C Principal
Coverage Ratio means, on any Measurement Date, the ratio
(expressed as a percentage) of (i) to (ii), where (i) is the
Principal Coverage Amount as of such Measurement Date and (ii) is the sum
of the Aggregate Outstanding Amount of the Class A Notes, the Class B
Notes and the Class C Notes (including any Class C Cumulative
Applicable Periodic Interest Shortfall Amount and any interest accrued on such
amount) Outstanding as of such Measurement Date.


 


Class C Principal
Coverage Test means, for so long as any Class A
Notes, Class B Notes or Class C Notes remain Outstanding, a test
satisfied on any date of determination if the Class C Principal Coverage
Ratio as of such Date of determination is equal to or greater than 105.0%.


 


Class D Applicable
Periodic Interest Shortfall Amount means, with respect to
any Interest Period, the amount of unpaid interest for such Interest Period
that will be added to the principal amount of the Class D Notes and paid
thereafter in accordance with the Priority of Payments in the event that any Class A
Notes, Class B Notes or Class C Notes are Outstanding and funds are
not available in accordance with the Priority of Payments on any Payment Date
to pay the full amount of Periodic Interest on the Class D Notes.


 


9














 


Class D Coverage
Tests means the Class D Interest Coverage Test and
the Class D Principal Coverage Test.


 


Class D Cumulative
Applicable Periodic Interest Shortfall Amount means, with
respect to any date of determination, the sum of all Class D Applicable Periodic
Interest Shortfall Amounts with respect to all Payment Dates preceding such
date of determination, less any amounts applied on all preceding Payment Dates
pursuant to the Priority of Payments to reduce such sum.


 


Class D Interest
Coverage Ratio means, on any Measurement Date, the ratio
(expressed as a percentage) of (i) to (ii), where (i) is equal to the
Interest Coverage Amount as of such Measurement Date and where (ii) is the
sum of the Periodic Interest for the Class A Notes, the Class B
Notes, the Class C Notes and the Class D Notes for the Payment Date
immediately following such Measurement Date; provided
that the Interest Coverage Amount shall be calculated after giving effect to
any scheduled payment to the Interest Reserve Account for such Payment Date
immediately following such Measurement Date.


 


Class D Interest
Coverage Test means, for so long as any Class A
Notes, Class B Notes, Class C Notes or Class D Notes remain
Outstanding, a test that is satisfied as of any date of determination when the
Class D Interest Coverage Ratio as of such date of determination is equal to or
exceeds 105.0%.


 


Class D Note
Break-Even Default Rate means the maximum percentage of
defaults that the portfolio of Collateral Debt Securities can sustain, as
determined by S&P by application of the S&P CDO Monitor, after giving
effect to S&P’s assumptions on recoveries, defaults and timing and to the
Priority of Payments such that sufficient funds will remain for the payment of
principal of the Class D Notes in full by their Stated Maturity Date and
the ultimate payment of interest on such Class D Notes.


 


Class D Note
Default Differential means, with respect to any
Calculation Date, the rate obtained by subtracting the Class D Note
Scenario Default Rate from the Class D Note Break-Even Default Rate.


 


Class D Note
Interest Rate means 6.205%.


 


Class D Note
Scenario Default Rate means an estimate of the cumulative
default rate for the portfolio of Collateral Debt Securities consistent with
S&P’s rating of the Class D Notes on the Closing Date, determined by
S&P by application of the S&P CDO Monitor.


 


Class D Notes means
the U.S.$15,240,000 aggregate principal amount of Class D Deferrable Fixed
Rate Notes due 2045.


 


Class D Principal
Coverage Ratio means, on any Measurement Date, the ratio
(expressed as a percentage) of (i) to (ii), where (i) is the
Principal Coverage Amount as of such Measurement Date and (ii) is the sum
of the Aggregate Outstanding Amount of the Class A Notes, the Class B
Notes, the Class C Notes (including any Class C Cumulative Applicable
Periodic Interest Shortfall Amount and any interest accrued on such amount) and
the Class D Notes (including any Class D Cumulative Applicable
Periodic Interest Shortfall Amount and any interest accrued on such amount)
Outstanding as of such Measurement Date.


 


Class D Principal
Coverage Test means a test that is satisfied as of any
date of determination when the Class D Principal Coverage Ratio is equal
to or exceeds 103.3%.


 


Class E Applicable
Periodic Interest Shortfall Amount means, with respect to
any Interest Period, the amount of unpaid interest for such Interest Period
that will be added to the principal amount of the Class E Notes and paid
thereafter in accordance with the Priority of Payments in the event that any Class A


 


10

















 


Notes, Class B Notes, Class C Notes or Class D Notes are
Outstanding and funds are not available in accordance with the Priority of
Payments on any Payment Date to pay the full amount of Periodic Interest on the
Class E Notes.


 


Class E Coverage
Tests means the Class E Interest Coverage Test and
the Class E Principal Coverage Test.


 


Class E Cumulative
Applicable Periodic Interest Shortfall Amount means, with
respect to any date of determination, the sum of all Class E Applicable
Periodic Interest Shortfall Amounts with respect to all Payment Dates preceding
such date of determination, less any amounts applied on all preceding Payment
Dates pursuant to the Priority of Payments to reduce such sum.


 


Class E Interest
Coverage Ratio means, on any Measurement Date, the ratio
(expressed as a percentage) of (i) to (ii), where (i) is equal to the
Interest Coverage Amount as of such Measurement Date and where (ii) is the
sum of the Periodic Interest for the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes and the Class E
Notes for the Payment Date immediately following such Measurement Date; provided that the
Interest Coverage Amount shall be calculated after giving effect to any
scheduled payment to the Interest Reserve Account for such Payment Date
immediately following such Measurement Date.


 


Class E Interest
Coverage Test means, for so long as any Class A
Notes, Class B Notes, Class C Notes, Class D Notes or Class E
Notes remain Outstanding, a test that is satisfied as of any date of
determination when the Class E Interest Coverage Ratio as of such date of
determination is equal to or exceeds 104.0%.


 


Class E Note
Break-Even Default Rate means the maximum percentage of
defaults that the portfolio of Collateral Debt Securities can sustain, as
determined by S&P by application of the S&P CDO Monitor, after giving
effect to S&P’s assumptions on recoveries, defaults and timing and to the
Priority of Payments such that sufficient funds will remain for the payment of
principal of the Class E Notes in full by their Stated Maturity Date and
the ultimate payment of interest on such Class E Notes.


 


Class E Note
Default Differential means, with respect to any
Calculation Date, the rate obtained by subtracting the Class E Note
Scenario Default Rate from the Class E Note Break-Even Default Rate.


 


Class E Note
Interest Rate means LIBOR plus 2.100%.


 


Class E Note
Scenario Default Rate means an estimate of the cumulative
default rate for the portfolio of Collateral Debt Securities consistent with
S&P’s rating of the Class E Notes on the Closing Date, determined by
S&P by application of the S&P CDO Monitor.


 


Class E Notes means
the U.S.$5,000,000 aggregate principal amount of Class E Deferrable
Floating Rate Notes due 2045.


 


Class E Principal
Coverage Ratio means, on any Measurement Date, the ratio
(expressed as a percentage) of (i) to (ii), where (i) is the
Principal Coverage Amount as of such Measurement Date and (ii) is the sum
of the Aggregate Outstanding Amount of the Class A Notes, the Class B
Notes, the Class C Notes (including any Class C Cumulative Applicable
Periodic Interest Shortfall Amount and any interest accrued on such amount),
the Class D Notes (including any Class D Cumulative Applicable Periodic
Interest Shortfall Amount and any interest accrued on such amount) and the Class E
Notes (including any Class E Cumulative Applicable Periodic Interest
Shortfall Amount and any interest accrued on such amount) Outstanding as of
such Measurement Date.


 


11

















 


Class E Principal
Coverage Test means a test that is satisfied as of any
date of determination when the Class E Principal Coverage Ratio is equal
to or exceeds 103.1%.


 


Class F Applicable
Periodic Interest Shortfall Amount means, with respect to
any Interest Period, the amount of unpaid interest for such Interest Period
that will be added to the principal amount of the Class F Notes and paid
thereafter in accordance with the Priority of Payments in the event that any Class A
Notes, Class B Notes, Class C Notes, Class D Notes or Class E
Notes are Outstanding and funds are not available in accordance with the
Priority of Payments on any Payment Date to pay the full amount of Periodic
Interest on the Class F Notes.


 


Class F Coverage
Tests means the Class F Interest Coverage Test and
the Class F Principal Coverage Test.


 


Class F Cumulative
Applicable Periodic Interest Shortfall Amount means, with
respect to any date of determination, the sum of all Class F Applicable
Periodic Interest Shortfall Amounts with respect to all Payment Dates preceding
such date of determination, less any amounts applied on all preceding Payment
Dates pursuant to the Priority of Payments to reduce such sum.


 


Class F Interest
Coverage Ratio means, on any Measurement Date, the ratio
(expressed as a percentage) of (i) to (ii), where (i) is equal to the
Interest Coverage Amount as of such Measurement Date and where (ii) is the
sum of the Periodic Interest for the Class A Notes, the Class B Notes,
the Class C Notes, the Class D Notes, the Class E Notes and the Class F
Notes for the Payment Date immediately following such Measurement Date; provided that the
Interest Coverage Amount shall be calculated after giving effect to any
scheduled payment to the Interest Reserve Account for such Payment Date
immediately following such Measurement Date.


 


Class F Interest
Coverage Test means, for so long as any Class A
Notes, Class B Notes, Class C Notes, Class D Notes, Class E
Notes or Class F Notes remain Outstanding, a test that is satisfied as of
any date of determination when the Class E Interest Coverage Ratio as of
such date of determination is equal to or exceeds 102.5%.


 


Class F Note
Break-Even Default Rate means the maximum percentage of
defaults that the portfolio of Collateral Debt Securities can sustain, as
determined by S&P by application of the S&P CDO Monitor, after giving
effect to S&P’s assumptions on recoveries, defaults and timing and to the
Priority of Payments such that sufficient funds will remain for the payment of
principal of the Class F Notes in full by their Stated Maturity Date and
the ultimate payment of interest on such Class F Notes.


 


Class F Note
Default Differential means, with respect to any
Calculation Date, the rate obtained by subtracting the Class F Note
Scenario Default Rate from the Class F Note Break-Even Default Rate.


 


Class F Note
Interest Rate means 8.001%.


 


Class F Note
Scenario Default Rate means an estimate of the cumulative
default rate for the portfolio of Collateral Debt Securities consistent with
S&P’s rating of the Class F Notes on the Closing Date, determined by
S&P by application of the S&P CDO Monitor.


 


Class F Notes means
the U.S.$12,750,000 aggregate principal amount of Class F Deferrable Fixed
Rate Notes due 2045.


 


Class F Principal
Coverage Ratio means, on any Measurement Date, the ratio
(expressed as a percentage) of (i) to (ii), where (i) is the
Principal Coverage Amount as of such Measurement Date and


 


12

















 


(ii) is the sum of the Aggregate Outstanding Amount of the Class A
Notes, the Class B Notes, the Class C Notes (including any Class C
Cumulative Applicable Periodic Interest Shortfall Amount and any interest
accrued on such amount), the Class D Notes (including any Class D
Cumulative Applicable Periodic Interest Shortfall Amount and any interest
accrued on such amount), the Class E Notes (including any Class E
Cumulative Applicable Periodic Interest Shortfall Amount and any interest
accrued on such amount) and the Class F Notes (including any Class F
Cumulative Applicable Periodic Interest Shortfall Amount and any interest
accrued on such amount) Outstanding as of such Measurement Date.


 


Class F Principal
Coverage Test means a test that is satisfied as of any
date of determination when the Class F Principal Coverage Ratio is equal
to or exceeds 101.8%.


 


Clearing Agency means
DTC, Euroclear or Clearstream.


 


Clearing Corporation has
the meaning specified in Section 8-102(a)(5) of the UCC.


 


Clearstream means
Clearstream Banking, société anonyme.


 


Closing Date means
September 22, 2005.


 


CMBS Conduit Securities
means Commercial Mortgage Backed Securities (a) issued
by a single-seller or multi-seller conduit under which the holders of such
Commercial Mortgage Backed Securities have recourse to a specified pool of
assets (but not other assets originated by the conduit that support payments on
other series of securities) and (b) that entitle the holders thereof to
receive payments that depend (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the
Commercial Mortgage Backed Securities) on the cash flow from a pool of
commercial mortgage loans.


 


CMBS Credit Tenant
Lease Securities means CMBS Securities (other than CMBS
Large Loan Securities and CMBS Conduit Securities) that entitle the holders
thereof to receive payments that depend on the cash flow from a pool of
commercial mortgage loans made to finance the acquisition, construction and
improvement of properties leased to corporate tenants (or on the cash flow from
such leases); provided
that such dependence may in addition be conditioned upon rights or
additional assets designed to assure the servicing or timely distribution of
proceeds to holders of the CMBS Securities such as a financial guaranty
insurance policy.


 


CMBS Large Loan
Securities means Commercial Mortgage Backed Securities
(other than CMBS Conduit Securities) that entitle the holders thereof to
receive payments that depend (except for rights or other assets designed to
assure the servicing or timely distribution of proceeds to holders of the
Commercial Mortgage Backed Securities) on the cash flow from a commercial
mortgage loan or a small pool of commercial mortgage loans made to finance the
acquisition or improvement of real properties.


 


CMBS Re-REMIC
Securities means any security that entitles a holder
thereof to receive payments that depend upon the cash flow from a pool of CMBS
Conduit Securities, other CMBS Securities or certificates representing a
beneficial interest therein.


 


CMBS Securities means
CMBS Conduit Securities, CMBS Large Loan Securities, CMBS Single Borrower
Securities, CMBS Re-REMIC Securities or CMBS Credit Tenant Lease Securities, as
the case may be.


 


CMBS Single Borrower
Securities means CMBS Securities (other than CMBS Large
Loan Securities and CMBS Credit Tenant Lease Securities) that entitle the
holders thereof to receive payments that


 


13

















 


depend on the cash flow from one or more loans with a single borrower
or group of affiliated borrowers secured by one or more properties; provided
that such dependence may in addition be conditioned upon rights or
additional assets designed to assure the servicing or timely distribution of
proceeds to holders of the CMBS Securities such as a financial guaranty
insurance policy.


 


Code means
the Internal Revenue Code of 1986, as amended.


 


Co-Issuer means
N-Star Real Estate CDO V Corp., a corporation organized under the law of the
State of Delaware, unless a successor Person shall have become the Co-Issuer
pursuant to the applicable provisions of this Indenture, and thereafter Co-Issuer shall mean such successor Person.


 


Co-Issuers means
the Issuer and Co-Issuer.


 


Collateral has
the meaning specified in the Granting Clauses.


 


Collateral
Administration Agreement means the Collateral
Administration Agreement, dated September 22, 2005, by and among the
Issuer, the Collateral Advisor and the Collateral Administrator, as the same
may be amended and modified from time to time in accordance with its terms.


 


Collateral
Administrator means LaSalle Bank National Association,
solely in its capacity as Collateral Administrator under the Collateral
Administration Agreement, unless a successor Person shall have become the
Collateral Administrator pursuant to the applicable provisions of Collateral
Administration Agreement, in which case Collateral Administrator shall mean
such successor Person.


 


Collateral Advisor means
NS Advisors, LLC, a Delaware limited liability company, unless a successor
Person shall have become Collateral Advisor pursuant to the applicable
provisions of the Collateral Advisory Agreement, in which case Collateral
Advisor shall mean such successor Person.


 


Collateral Advisory
Agreement means the Collateral Advisory Agreement, dated
as of the Closing Date, as the same may be amended or supplemented from time to
time, between the Issuer and the Collateral Advisor.


 


Collateral Advisory Fee
means the Senior Collateral Advisory Fee and the Subordinate
Collateral Advisory Fee.


 


Collateral Assignment
of Hedge Agreement means the collateral assignment of
Hedge Agreement, dated the date that the Issuer enters into the Hedge
Agreement, among the Issuer, the Trustee and the Initial Hedge Counterparty,
and any other Collateral Assignment of the Hedge Agreement in respect of any
Hedge Agreement entered into between the Issuer, the Trustee and a Hedge
Counterparty after the Closing Date.


 


Collateral Debt
Security means an item of Collateral which satisfies the
Eligibility Criteria specified in Section 12.2.


 


Collateral Interest
Collections means, with respect to any Due Period and the
related Payment Date, without duplication, the sum of (i) all cash
payments of interest with respect to any Collateral Debt Securities and
Eligible Investments included in the Collateral (including any Sale Proceeds of
a Collateral Debt Security sold at a price greater than or equal to its
Principal Balance representing unpaid interest accrued thereon to the date of
the sale thereof to the extent not treated as Collateral Principal Collections
at the option of the Collateral Advisor, but excluding all funds received on a
Defaulted Security (including any unpaid interest) and any unpaid interest
accrued on a Deferred Interest PIK Bond or a


 


14

















 


Written Down Security to the date of sale) which are received during
the related Due Period (excluding any Purchased Accrued Interest), (ii) all
payments on Eligible Investments purchased with Collateral Interest
Collections, (iii) payments received or scheduled to be received from a
Hedge Counterparty under any Hedge Agreement (including the initial Hedge
Agreement) on the related Payment Date, excluding any payments received from a
Hedge Counterparty upon reduction of the notional amount and any termination
payments (provided that
so long as the Notes are Outstanding, any termination payments received from a
Hedge Counterparty will be used to enter into a substitute Hedge Agreement to
the extent required to maintain the then-current rating of the Notes by each
Rating Agency), (iv) all amendment and waiver fees, all late payment fees
and all other fees and commissions received during the related Due Period
(other than fees and commissions received in connection with the sale,
restructuring, workout or default of Collateral Debt Securities or in
connection with Defaulted Securities or Written Down Securities) (excluding any
payments representing exit fees, extension fees or prepayment premiums paid in
connection with Real Estate Interests), (v) the Principal Balance of any
Eligible Investments purchased with Collateral Interest Collections, (vi) all
interest accrued on the Closing Date on Collateral Debt Securities included in
the Collateral, (vii) any amounts on deposit in the Interest Reserve
Account, (viii) at the option of the Collateral Advisor, any amount on
deposit in the Expense Reserve Account in excess of U.S.$25,000 and (ix) all
proceeds from the foregoing; provided, however, that Collateral Interest
Collections shall not include the funds and other property (including, without
limitation, the paid-up share capital of the Issuer) with respect to the Income
Notes and the bank account in which such funds and the proceeds thereof are held);
provided, further, that
Collateral Interest Collections shall not include principal of any Collateral
Debt Security representing capitalized interest after the date of purchase
thereof by the Issuer but shall include the funds and other property (including,
without limitation, the paid-up share capital of the Issuer) with respect to
the Income Notes and the bank account in which such funds and the proceeds
thereof are held).


 


Collateral Principal
Collections means, with respect to any Due Period and the
related Payment Date, all amounts received by the Issuer during such Due Period
that do not constitute Collateral Interest Collections; provided, however, that
Collateral Principal Collections shall include (A) principal of any
Collateral Debt Security representing capitalized interest after the date of
purchase thereof by the Issuer and (B) any Uninvested Proceeds which have
not been invested on or prior to the Effective Date.


 


Collateral Principal
Collections Sub-Account has the meaning specified in Section 10.5(a)(1) hereof.


 


Collateral Principal
Payments means, with respect to any Due Period and the
related Payment Date, Collateral Principal Collections other than Sale Proceeds
and any amounts received in respect of Temporary Ramp-Up Securities and Eligible
Investments.


 


Collateral Quality
Tests will be satisfied if, as of any Measurement Date,
the Collateral Debt Securities comply, in the aggregate, with all  of the requirements set forth below
(collectively, the “Collateral Quality Tests”):


 


(1)                                  the
aggregate Principal Balance of all Collateral Debt Securities with an S&P
Rating of below “BBB-” does not exceed the greater of (a) 30% of the CDS
Principal Balance and (b) U.S.$150,000,000;


 


(2)                                  the
aggregate Principal Balance of all Collateral Debt Securities with a rating
from S&P of below “BB-” does not exceed the greater of (a) 7% of the
CDS Principal Balance and (b) U.S.$35,000,000;


 


15

















 


(3)                                  the
aggregate Principal Balance of all Collateral Debt Securities that are PIK
Bonds does not exceed the greater of (a) 5% of the CDS Principal Balance
and (b) U.S.$25,000,000;


 


(4)                                  the
aggregate Principal Balance of all Collateral Debt Securities that are CMBS
Securities does not exceed the greater of (a) 80% of the CDS Principal
Balance and (b) U.S.$400,000,000; provided that (x) the aggregate Principal
Balance of all Collateral Debt Securities that are CMBS Large Loan Securities
does not exceed the greater of (a) 25% of the CDS Principal Balance and (b) U.S.$125,000,000,
(y) the aggregate Principal Balance of all Collateral Debt Securities that
are CMBS Credit Tenant Lease Securities does not exceed the greater of (a) 5%
of the CDS Principal Balance and (b) U.S.$25,000,000, and (z) the aggregate Principal
Balance of all Collateral Debt Securities that are CMBS Single Borrower
Securities does not exceed the greater of (a) 14% of the CDS Principal
Balance and (b) U.S.$70,000,000;


 


(5)                                  the
aggregate Principal Balance of all Collateral Debt Securities that are REIT
Debt Securities does not exceed the greater of (a) 26% of the CDS
Principal Balance and (b) U.S.$130,000,000;


 


(6)                                  the
aggregate Principal Balance of all Collateral Debt Securities that are Real
Estate CDO Securities does not exceed the greater of (a) 6.5% of the CDS
Principal Balance and (b) U.S.$32,500,000;


 


(7)                                  the
aggregate Principal Balance of all Collateral Debt Securities that are Real
Estate Interests does not exceed the greater of (a) 9% of the CDS
Principal Balance and (b) U.S.$45,000,000;


 


(8)                                  with
respect to the particular Issue of the Collateral Debt Security being acquired,


 


(i)                                     the
aggregate Principal Balance of all Collateral Debt Securities that are part of
the same Issue does not exceed the greater of (a) 3% of the CDS Principal
Balance and (b) U.S.$15,000,000 (except for the Collateral Debt Securities
consisting of (1) ARCap 2005-RR5 Resecuritization, Inc. CMBS
Pass-Through Certificates, Series 2005-RR5, with a Principal Balance of
U.S.$25,072,000 and (2) G-FORCE 2005-RR2 Trust CMBS Pass-Through Certificates,
Series 2005-RR2, with a Principal Balance of U.S.$16,182,000); and


 


(ii)                                  the
aggregate Principal Balance of all Collateral Debt Securities that are rated
below “BBB-” by Fitch and below “BBB-” by S&P and are part of the same
Issue does not exceed the greater of (a) 2% of the CDS Principal Balance
and (b) U.S.$10,000,000 (except for the Collateral Debt Security
consisting of Salomon Brothers Mortgage Securities VII, Inc. Commercial
Mortgage Pass-Through Certificates, Series 2000-C2, with a Principal
Balance of U.S.$11,000,000);


 


(9)                                  with
respect to the servicer of the security being acquired, (a) the aggregate
Principal Balance of all Collateral Debt Securities serviced by such servicer
does not exceed the greater of (a) 20% of the CDS Principal Balance and (b) U.S.$100,000,000,
except that the aggregate Principal Balance of all Collateral Debt Securities
serviced by servicers rated “Below Average” by S&P, or if there is no
servicer rating by S&P or Fitch, having long-term unsecured debt securities
rated “BB” or lower, shall not exceed the greater of (a) 5% of the CDS
Principal Balance and (b) U.S.$25,000,000;


 


(10)                            the
aggregate Principal Balance of all Collateral Debt Securities that mature
beyond the Stated Maturity Date does not exceed the greater of (a) 15% of
the CDS Principal Balance and (b) U.S.$75,000,000;


 


16

















 


(11)                            the
aggregate Principal Balance of all Fixed Rate Collateral Debt Securities does
not exceed the greater of (a) 90% of the CDS Principal Balance and (b) U.S.$450,000,000;


 


(12)                            the
Fitch Weighted Average Rating Factor does not exceed 8.00;


 


(13)                            (i) the
Weighted Average Fixed Rate Coupon as of such date equals or exceeds 5.80% and (ii) the
Weighted Average Spread as of such date equals or exceeds 1.60%;


 


(14)                            the
Weighted Average Life Test is satisfied;


 


(15)                            the
S&P CDO Monitor Test is satisfied;


 


(16)                            the
S&P Minimum Average Recovery Rate Test is satisfied;


 


(17)                            the
aggregate Principal Balance of all Collateral Debt Securities that provide for
periodic payments of interest in Cash less frequently than monthly does not
exceed the greater of (a) 32% of the CDS Principal Balance and (b) U.S.$160,000,000;
and


 


(18)                            the
aggregate Principal Balance of all Collateral Debt Securities that are Deemed
Floating Rate Collateral Debt Securities does not exceed the greater of (a) 17.5%
of the CDS Principal Balance and (b) U.S.$87,500,000;


 


provided that Temporary Ramp-Up Securities
will be excluded from the calculation of the Collateral Quality Tests.


 


Collateral Sub-Account means
any sub-account established within an Account.


 


Collateralization Event
means, provided that no Substitution Event has occurred,
any of the following events: (a) if the Hedge Ratings Determining Party’s
short-term rating from Fitch is lower than “F1” or the long-term rating of the
Hedge Ratings Determining Party from Fitch is withdrawn, suspended or
downgraded below “A”, (b) if no short-term rating is available from Fitch,
the long-term rating of the Hedge Ratings Determining Party from Fitch is
withdrawn, suspended or downgraded below “A”, or (c) the short term rating
of the Hedge Ratings Determining Party from S&P is lower than “A-1” or, if
the Hedge Ratings Determining Party does not have a short term rating from
S&P, the long term rating of such Hedge Ratings Determining Party is lower
than “A+”.


 


Collection Account means
the Securities Account designated the “Collection Account” and established in
the name of the Trustee pursuant to Section 10.5, including the Collateral
Principal Collections Sub-Account and each CPP Sub-Account established therein.


 


Collections means,
with respect to any Payment Date, the sum of (i) the Collateral Interest
Collections collected during the applicable Due Period and (ii) the
Collateral Principal Collections collected during the applicable Due Period.


 


Commercial Mortgage
Backed Security means securities backed by obligations
(including certificates of participations in
obligations) that are principally secured by mortgages on real property
or interests therein having a multifamily or commercial use, such as regional
malls, retail space, office buildings, warehouse or industrial properties,
hotels, nursing homes and senior living centers.


 


Commission means
the United States Securities and Exchange Commission.


 


17

















 


Controlling Class means the Class A
Notes voting as a single Class, so long as any Class A Notes are
Outstanding, and then the Class B Notes, so long as any Class B Notes
are Outstanding, and then the Class C Notes, so long as any Class C
Notes are Outstanding, and then the Class D Notes, so long as any Class D
Notes are Outstanding, and then the Class E Notes, so long as any Class E
Notes are Outstanding, and then the Class F Notes, so long as any Class F
Notes are Outstanding, in each case, based on the Aggregate Outstanding Amount
thereof; provided
that if
any Coverage Test is not satisfied on a Calculation Date (i) the
“Controlling Class” shall mean the Class A-1 Notes, so long as any Class A-1
Notes are Outstanding, then, the Class A-2 Notes, so long as any Class A-2
Notes are Outstanding, then, the Class B Notes, so long as any Class B
Notes are Outstanding, then the Class C Notes, so long as any Class C
Notes are Outstanding, and then the Class D Notes, so long as any Class D
Notes are Outstanding, and then the Class E Notes, so long as any Class E
Notes are Outstanding, and then the Class F Notes, so long as any Class F
Notes are Outstanding, in each case, based on the Aggregate Outstanding Amount
thereof and (ii) on any Calculation Date thereafter, the “Controlling
Class” shall remain as specified in (i) above notwithstanding any
subsequent satisfaction of the failed Coverage Test.


 


Controlling Class Objection
means
written notice to the Collateral Advisor by the Holders of a majority in
aggregate principal amount of Outstanding Notes of the Controlling Class objecting
in their reasonable discretion to a proposed replacement Key Manager.


 


Controlling Person any other person (other
than a Benefit Plan Investor) that has discretionary authority or control with
respect to the assets of the Issuer, a person who provides investment advice
for a fee (direct or indirect) with respect to the assets of the Issuer, or any
“affiliate” (within the meaning of 29 C.F.R. Section 2510.3-101(f)(3)) of
any such person.


 


Corporate Services Agreement  means that certain
Corporate Services Agreement, dated as of September 22, 2005, as the same
may be amended or supplemented from time to time, between the Issuer and the
Administrator.


 


Corporate Trust Office  means the designated
corporate trust office of the Trustee, currently located at 135 South LaSalle
Street, Suite 1511, Chicago, Illinois 60603, Attention: CDO Trust Services
Group – N-Star Real Estate CDO V Ltd., telephone number 312-904-7815, fax
number 312-904-0524, or such other address as the Trustee may designate from
time to time by notice to the Rated Noteholders, the Income Noteholders, the
Collateral Advisor and the Co-Issuers or the principal corporate trust office
of any successor Trustee.


 


Coverage Tests  means the Class A/B
Coverage Tests, the Class C Coverage Tests, the Class D Coverage
Tests, the Class E Coverage Tests and the Class F Coverage Tests.


 


CPP Asset Type  means REIT Debt
Securities that are Fixed Rate Securities, REIT Debt Securities that are
Floating Rate Securities, CMBS Securities that are Fixed Rate Securities, CMBS
Securities that are Floating Rate Securities, Real Estate CDO Securities that
are Fixed Rate Securities and Real Estate CDO Securities that are Floating Rate
Securities.


 


CPP Sub-Account  has the meaning specified
in Section 10.5(b).


 


Credit Lease Loans  means mortgage loans
secured by mortgages on commercial real estate properties that are subject to a
lease to a single tenant.


 


Credit Risk Event  means, with respect to
any Collateral Debt Security, (i) if a Note Downgrade Event shall have
occurred and be continuing, (a) such Collateral Debt Security has been put
on watch for possible downgrade, or has been downgraded, by any Rating Agency
or (b) such Collateral Debt Security


 


18

















 


has experienced an increase in credit spread of 10%  or more (due to credit related
reasons as determined by the Collateral Advisor in its reasonable business
judgment) compared to the credit spread at which such Collateral Debt Security
was purchased by the Issuer, determined by reference to an applicable index
selected by the Collateral Advisor or (ii) if no Note Downgrade Event
shall have occurred and be continuing, there has been an event or circumstance
that constitutes a change in the condition of the issuer of such Collateral
Debt Security (or of available information with respect to such issuer) that
evidences, in the good faith judgment of the Collateral Advisor, (a) a
significant risk of such Collateral Debt Security materially declining in
credit quality, or (b) a significant risk, with a lapse of time, of such
Collateral Debt Security becoming a Defaulted Security or a Written Down
Security.


 


Credit Risk Security means
any Collateral Debt Security with respect to which there shall have occurred a
Credit Risk Event.


 


Credit Support Annex means
an ISDA Credit Support Annex to a Hedge Agreement, if any.


 


Current Portfolio means
the portfolio (measured by Principal Balance) of (a) the Pledged
Collateral Debt Securities and the proceeds of the disposition thereof held as
Cash and (b) Eligible Investments purchased with proceeds of the
disposition of Pledged Collateral Debt Securities, existing immediately prior
to the sale, maturity or other disposition of a Pledged Collateral Debt
Security or immediately prior to the acquisition of a Pledged Collateral Debt
Security, as the case may be.


 


Custodian has
the meaning specified in Section 3.3(a).


 


Daily Official List means
the Daily Official List of the Irish Stock Exchange.


 


Deemed Floating Asset
Hedge means, with respect to a Fixed Rate Collateral Debt
Security, an interest rate swap having (i) a notional schedule equal to
the Principal Balance as it is reduced by expected amortization of such Fixed
Rate Collateral Debt Security over time and (ii) payment dates identical
to the Payment Dates of the Issuer under the Indenture; provided that, (w) at
the time of entry into the Deemed Floating Asset Hedge, (i) the expected
principal payments on the Fixed Rate Collateral Debt Security comprising a
Deemed Floating Rate Collateral Debt Security will not extend beyond 10 years
after the effective date thereof and (ii) the scheduled notional amount of
such Deemed Floating Asset Hedge at any time is equal to the expected principal
amount of the related Fixed Rate Collateral Debt Security (as calculated at
such time), (x) the Rating Agencies and the Trustee are notified prior to
the Issuer’s entry into a Deemed Floating Asset Hedge, and each will be
provided with the identity of the proposed hedge counterparty and copies of the
hedge documentation and notional schedule, (y) such Deemed Floating Asset
Hedge will require Rating Agency Confirmation from S&P to the extent the
applicable master agreement or schedule attached thereto is not a hedge
agreement with respect to which the documentation thereof conforms in all
material respects to a form in respect of which Rating Agency Confirmation was
previously obtained by the Issuer and (z) such Deemed Floating Asset Hedge
is priced at then-current market rates.


 


Deemed Floating Rate
Collateral Debt Security means a Fixed Rate Collateral
Debt Security the interest rate of which is hedged into a Floating Rate
Collateral Debt Security using a Deemed Floating Asset Hedge; provided that at
the time of entry into the Deemed Floating Asset Hedge the Average Life of such
Deemed Floating Rate Collateral Debt Security would not increase or decrease by
more than one year from its expected average life if it were to prepay at
either 50% or 150% of its pricing speed. Pursuant to this Indenture, a Deemed
Floating Rate Collateral Debt Security will be deemed a Floating Rate
Collateral Debt Security with a spread over LIBOR equal to the related Deemed
Floating Spread.


 


19














 


Deemed Floating Spread means
the difference between the stated rate at which interest accrues on each Fixed
Rate Collateral Debt Security that comprises a Deemed Floating Rate Collateral
Debt Security (excluding all Defaulted Securities and Deferred Interest PIK
Bonds) and the fixed rate that the Issuer agrees to pay on the Deemed Floating
Asset Hedge at the time such swap is executed.


 


Default means
any Event of Default or any occurrence that, with notice or the lapse of time
or both, would become an Event of Default.


 


Defaulted Interest means
any interest due and payable in respect of any Class A Note or Class B
Note or, if no Class A Notes or Class B Notes are Outstanding, in
respect of any Class C Note or, if no Class C Notes are Outstanding,
in respect of any Class D Note, or if no Class D Notes are
Outstanding, in respect of any Class E Note, or if no Class E Notes
are Outstanding, in respect of any Class F Note, and any interest on such
Defaulted Interest that (in each case) is not punctually paid or duly provided
for on the applicable Payment Date (including the applicable Stated Maturity
Date) of the applicable Rated Note.


 


Defaulted Securities
Amount means the sum, with respect to each Defaulted
Security in the Collateral, of the lesser of (i) the product of the
Principal Balance of such Defaulted Security and the Applicable Recovery Rate
of such Defaulted Security and (ii) the product of the Principal Balance
of such Defaulted Security and the Market Value of such Defaulted Security.


 


Defaulted Security means
any Collateral Debt Security or any other security included in the Collateral:


 


(i)                                     as
to which (a) the issuer thereof has defaulted in the payment of principal
or interest (without giving effect to any applicable notice or grace period or
waiver, unless the Collateral Advisor certifies to the Trustee that in the
Collateral Advisor’s judgment such default of up to the lesser of (1) three
(3) Business Days and (2) the grace period provided for in the
Underlying Instruments is due to non-credit and non-fraud related reasons and
the Collateral Advisor has so certified in writing to the Trustee or (b) pursuant
to its Underlying Instruments, there has occurred any default or event of
default which entitles the holders thereof, with notice or passage of time or
both, to accelerate the maturity (whether by mandatory prepayments, mandatory
redemption or otherwise) of all or a portion of the outstanding principal
amount of such security, unless (1) in the case of a default or event of
default consisting of a failure of the obligor on such security to make
required interest payments and/or scheduled principal payments, such security
has resumed current payments of interest and scheduled principal in cash
(including all past due interest and scheduled principal) and, in the
Collateral Advisor’s judgment, will continue to make such current payments of
interest in cash (provided that
no restructuring has been effected) or (2) in the case of any other
default or event of default, such default or event of default is no longer
continuing (provided that no event of default
has been waived with respect to (A) a default in the payment of principal
or interest or (B) insolvency in the event that all outstanding amounts
have not been paid) and such security satisfies the criteria for inclusion of
securities in the definition of “Collateral Debt Security”;


 


(ii)                                  that
ranks pari passu with
or subordinate to any other indebtedness for borrowed money owing by the issuer
of such security, if any (for purposes hereof, “Other Indebtedness”; provided,
however, that such Other Indebtedness of such issuer will not
include series of such Other Indebtedness that may be issued or owing by a
separate special purpose entity and is not guaranteed by the issuer) if such
issuer had defaulted in the payment of principal or interest in respect of such
Other Indebtedness (without giving effect to any applicable notice or grace
period or waiver, unless the Collateral Advisor certifies to the Trustee that
in the Collateral Advisor’s judgment such default of up to the lesser of (a) three
(3) Business Days and (b) the grace period provided for in the
Underlying Instruments is due to non-credit and non-fraud related reasons and


 


20

















 


the Collateral Advisor has so certified in writing to the Trustee),
unless, in the case of a default or event of default consisting of a failure of
the obligor on such security to make required interest payments and/or
scheduled principal payments, such Other Indebtedness has resumed current
payments of interest and scheduled principal (including all due interest and
scheduled principal) in cash (whether or not any waiver or restructuring has
been effected) and, in the Collateral Advisor’s judgment, will continue to make
such current payments of interest and scheduled principal in cash; provided that a security shall be considered a Defaulted
Security pursuant to this clause (ii) only if the Collateral Advisor
knows, after due inquiry as required pursuant to the Collateral Advisory
Agreement, that the issuer thereof is (or is reasonably expected by the
Collateral Advisor to be, as of the next scheduled payment distribution date)
in default (without giving effect to any applicable grace period or waiver) as
to payment of principal and/or interest on another obligation (and such default
has not been cured or waived) which is senior or pari passu in right of payment
to such Collateral Debt Security;


 


(iii)                               with
respect to which any bankruptcy, insolvency or receivership proceeding has been
initiated in respect of the issuer of such Collateral Debt Security, or there
has been proposed or effected any distressed exchange or other debt
restructuring where the issuer of such Collateral Debt Security has offered the
debt holders a new security or package of securities that, in the judgment of
the Collateral Advisor either (a) amounts to a diminished financial
obligation or (b) has the purpose of helping the issuer to avoid default.
For the avoidance of doubt in applying and interpreting this definition of
Defaulted Security, the Collateral Advisor shall be deemed to have knowledge of
all information that Authorized Officers of the Collateral Advisor have
actually received, and shall be responsible under the Collateral Advisory
Agreement for obtaining and reviewing information available to it either in its
capacity as an investment manager of national standing or as holder of such
Collateral Debt Security;


 


(iv)                              if
such Collateral Debt Security has been rated “CC” or lower by S&P or Fitch or
if S&P has withdrawn its rating and has not provided the Issuer with a
shadow rating;


 


(v)                                 which
is a Written Down Security unless S&P has affirmed its rating of such
Written Down Security.


 


Defaulting Party has
the meaning given to such term in the standard form 1992 ISDA Master Agreement
(Multicurrency-Cross Border).


 


Deferred Interest PIK
Bond means a PIK Bond with respect to which interest has
been deferred or capitalized or does not pay interest when scheduled (other
than a Defaulted Security) for each consecutive payment date occurring over a
period of the lesser of (i) six months or (ii) two consecutive
payment dates, but only until such time as payment of interest on such PIK Bond
has resumed and all capitalized and deferred interest and any interest thereon
has been paid in cash in accordance with the terms of the Underlying
Instruments.


 


Deferred Interest PIK
Bond Amount means, with respect to each Deferred Interest
PIK Bond in the Collateral, the lesser of (i) the product of the Principal
Balance of such Deferred Interest PIK Bond and the Applicable Recovery Rate of
such Deferred Interest PIK Bond and (ii) the product of the Principal
Balance of such Deferred Interest PIK Bond and the Market Value of such
Deferred Interest PIK Bond.


 


Definitive Class A-D
Note has the meaning specified in Section 2.1(c). 


 


Definitive Class E
Note has the meaning specified in Section 2.1(d).


 


21

















 


Definitive Class E Note Transfer
Certificate has the meaning specified in Section 2.4(d)(1).


 


Definitive Class F Note has
the meaning specified in Section 2.1(d).


 


Definitive Class F Note Transfer
Certificate has the meaning specified in Section 2.4(d)(1).


 


Definitive Income Notes means
Income Notes issued in the form of physical certificates in definitive, fully
registered form.


 


Depositary means,
with respect to the Rated Notes issued in the form of one or more Global Notes,
the Person designated as Depositary pursuant to Section 2.2(e), or any
successor thereto, appointed pursuant to the applicable provisions of this
Indenture.


 


Depositary Participant means
a broker, dealer, bank or other financial institution or other Person for whom
from time to time the Depositary effects book-entry transfers and pledges of
notes deposited with the Depositary.


 


Distribution means
any payment of principal, interest or fee or any dividend or premium payment
made on, or any other distribution in respect of, an obligation or security.


 


Dollar or U.S.$  means currency
of the United States as at the time shall be legal tender for all debts, public
and private.


 


Double B Excess Percentage means,
on any Measurement Date, the greater of (a) zero; and (b) (i) the
aggregate Principal Balance of all Collateral Debt Securities with an S&P
Rating lower than BBB- and higher than B+ (expressed as a percentage of the CDS
Principal Balance) minus (ii) 18%.


 


Double B Principal Coverage Adjustment
Percentage means, on any Measurement Date, the greater of
(a) zero; and (b) (i) the Double B Excess Percentage minus (ii) 5%.


 


DTC means The
Depository Trust Company, a New York corporation, and its nominees and their
respective successors.


 


Due Date means each
date on which a Distribution is due on a Pledged Security.


 


Due Period means,
with respect to each Payment Date, the period beginning on the day following
the last day of the preceding Due Period relating to the preceding Payment Date
(or, in the case of the Due Period that is applicable to the first Payment
Date, beginning on the Closing Date) and ending at the close of business on the
fourth (4th) Business Day preceding such Payment Date.


 


Effective Date means
the date that is the earliest of (i) the 90th day following the Closing
Date, (ii) the date on which the Issuer has purchased Collateral Debt
Securities, excluding Temporary Ramp-Up Securities, having an aggregate par
amount of U.S.$500,000,000 or (iii) such earlier date (if any) that is
designated by the Collateral Advisor by notice to the Trustee under the
Indenture; provided that the Collateral Advisor has received
Rating Agency Confirmation on such date; provided, further, that
in the event that such day does not fall on a Business Day, the Effective Date
shall be the next succeeding Business Day.


 


Eligibility Criteria has
the meaning specified in Section 12.2.


 


22

















 


Eligible Investments means
any U.S. dollar denominated investment that, at the time it is delivered to the
Trustee, is one or more of the following obligations or securities, including,
without limitation, those investments for which the Trustee or an Affiliate of
the Trustee provides services:


 


(i)                                     cash;


 


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


 


(iii)                               demand and time deposits
in, interest bearing trust accounts and certificates of deposit of, bankers’
acceptances issued by, or federal funds sold by any depository institution or
trust company (including the Trustee) incorporated under the laws of the United
States of America or any state thereof and subject to the supervision and
examination by federal and/or state banking authorities so long as the
commercial paper and/or debt obligations of such depository institution or
trust company (or, in the case of the principal depository institution in a
holding company system, the commercial paper or debt obligations of such
holding company) at the time of such investment or contractual commitment
providing for such investment have a credit rating of:


 


(a)                             in
the case of long-term debt obligations, not less than “AA+” by S&P; or


 


(b)                            in
the case of commercial paper and short-term debt obligations including time
deposits, “A-1” by S&P (provided that,
in the case of commercial paper and short-term debt obligations with a maturity
of longer than 91 days, the issuer thereof must also have at the time of such
investment a long-term credit rating of not less than “AA+” by S&P);


 


(iv)                              Registered securities
other than mortgage-backed securities bearing interest or sold at a discount issued
by any corporation under the laws of the United States of America or any state
thereof that have a credit rating of “AA+” by S&P at the time of such
investment or contractual commitment providing for such investment;


 


(v)                                 unleveraged repurchase
obligations (if treated as debt for tax purposes by the issuer) with respect to
any security described in clause (ii) above, entered into with a
depository institution or trust company (acting as principal) described in
clause (iii) or entered into with broker-dealers registered with the Commission
(acting as principal) whose short-term debt has a credit rating of “A-1+” by
S&P at the time of such investment in the case of any repurchase obligation
for a security having a maturity not more than 183 days from the date of its
issuance or whose long-term debt has a credit rating of at least “AA+” by
S&P at the time of such investment in the case of any repurchase obligation
for a security having a maturity more than 183 days from the date of its
issuance;


 


(vi)                              commercial paper or other
short-term obligations having at the time of such investment a credit rating of
(a) (1) “F1” by Fitch and that have a maturity of not more than thirty
(30) days from its date of issuance or (2) “F1+” by Fitch and that have a
maturity of more than thirty (30) days but less than one year from its date of
issuance and (b) “A-1+” by Standard & Poor’s that are registered
and are either bearing interest or are sold at a discount from the face amount
thereof and that have a maturity of not more than 183 days from its date of
issuance; provided that in the case of commercial paper with
a maturity of longer than 91 days, the issuer of such commercial paper (or, in
the case of a principal depository institution in a holding company system, the


 


23

















 


holding company of such system), if rated by the Rating
Agencies, must have at the time of such investment a long-term credit rating of
at least “AA+” by S&P;


 


(vii)                      money market funds with respect to any investments
described in clauses (ii) through (vi) above having, at the time of
such investment, a credit rating of not less than “AAA/AAAm/AAAm-G” by S&P
(if such funds are rated by S&P), respectively (including those for which
the Trustee is investment manager or advisor), provided that such fund or vehicle
is formed and has its principal office outside the United States; and


 


(viii)                   any other investments approved in writing by the
Rating Agencies;


 


provided that (a) Eligible
Investments purchased with funds in the Collection Account will be held until
maturity except as otherwise specifically provided herein and will include only
such obligations or securities as mature no later than the Business Day prior
to the Payment Date next succeeding the date of investment in such obligations
or securities, unless such Eligible Investments are investments of the type
described in clause (i) or (iii) above, in which event such Eligible
Investments may mature on such Payment Date and (b) none of the foregoing
obligations or securities will constitute Eligible Investments if all, or
substantially all, of the remaining amounts payable thereunder will consist of
interest and not principal payments, if such security is purchased at a price
in excess of 100% of par, if such security is subject to substantial non-credit
related risk, as determined by the Collateral Advisor in its judgment, if any
income from or proceeds of disposition of the obligation or security is or will
be subject to deduction or withholding for or on account of any withholding or
similar tax or the acquisition (including the manner of acquisition),
ownership, enforcement or disposition of the obligation or security will
subject the Issuer to net income tax in any jurisdiction outside its
jurisdiction of incorporation, if such security has an assigned rating with an
“r”, “t”, “p”, “pi” or “q” subscript, if such security is a mortgage-backed
security or if such security is subject to an Offer.


 


Eligible SPV Jurisdiction means Bahamas, Bermuda,
the Cayman Islands, the Channel Islands, the Netherlands Antilles, Luxembourg
or any other similar jurisdiction (so long as Rating Agency Confirmation is
obtained in connection with the inclusion of such other jurisdiction) generally
imposing either no or nominal taxes on the income of companies organized under
the laws of such jurisdiction.


 


Emerging Market Issuer means a sovereign or
non-sovereign issuer located in a country that is in .Latin America, Asia,
Africa, Eastern Europe or the Caribbean or in a country the dollar-denominated
sovereign debt obligations of which are rated lower than “AA” by S&P and
lower than “AA” by Fitch; provided that an issuer of Asset-Backed Securities located in any
Eligible SPV Jurisdiction shall not be an Emerging Market Issuer for purposes
hereof if the underlying collateral of such Asset-Backed Securities consists
solely of obligations of obligors located in the United States and Qualifying
Foreign Obligors.


 


Entitlement Holder has the meaning specified
in Section 8-102(a)(7) of the UCC.


 


Entitlement Order has the meaning specified
in Section 8-102(a)(8) of the UCC.


 


Equity Security means any security that
does not entitle the holder thereof to receive periodic payments of interest
and one or more installments of principal acquired by the Issuer as a result of
the exercise or conversion of Collateral Debt Securities, in conjunction with
the purchase of Collateral Debt Securities or in exchange for a Collateral Debt
Security.


 


ERISA means the U.S. Employee
Retirement Income Security Act of 1974, as amended.


 


Euroclear means Euroclear Bank
S.A/N.V., as operator of the Euroclear system.


 


24

















 


Event of Default has
the meaning specified in Section 5.1.


 


Excepted Property means
the U.S.$1,000 of capital contributed to the Issuer in respect of the Issuer’s
Ordinary Shares in accordance with the Articles and U.S.$1,000 representing a
profit fee to the Issuer.


 


Exchange Act means
the United States Securities Exchange Act of 1934, as amended.


 


Expense Reserve Account means
the Securities Account designated the “Expense Reserve Account” and established
in the name of the Trustee pursuant to Section 10.6.


 


Fee Basis Amount means
an amount equal, for any Payment Date, to the average of the aggregate CDS
Principal Balance (excluding the aggregate Principal Balance of Defaulted
Securities) on the first day of the related Due Period and the aggregate CDS
Principal Balance (excluding the aggregate Principal Balance of Defaulted
Securities) on the last day of such Due Period.


 


Financial Asset has
the meaning specified in Section 8-102(a)(9) of the UCC.


 


Financing Statement means
a financing statement relating to the Collateral naming the Issuer as debtor
and the Trustee on behalf of the Secured Parties as secured party.


 


Fitch means Fitch, Inc.
and any successor or successors thereto.


 


Fitch Industry Classification Group means
any of the Fitch industrial classification groups as set forth on Schedule I
and any additional classification groups established by Fitch with respect to
the Collateral Debt Securities and provided, in each case, by the Collateral
Advisor or Fitch to the Trustee.


 


Fitch Rating with
respect to any Collateral Debt Security, for determining the Fitch Rating as of
any date of determination:


 


(i)                                     if
such Collateral Debt Security is rated by Fitch, the Fitch Rating shall be such
rating as published in any publicly available source;


 


(ii)                                  if
such Collateral Debt Security is not rated by Fitch, or the Fitch Rating cannot
be determined by the method in clause (i) above, and a rating is publicly
available from both S&P and Moody’s, the Fitch Rating shall be the lower of
such ratings; and if a rating is publicly available from only one of S&P
and Moody’s, the Fitch Rating shall be the equivalent of such rating by S&P
or Moody’s, as the case may be; and


 


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


 


provided that (a) if
such Collateral Debt Security has been put on rating watch negative for possible
downgrade by any Rating Agency, then the rating used to determine the Fitch
Rating under either of clauses (i) or (ii) above shall be one (1) rating
subcategory below such rating by that Rating Agency, (b) if such
Collateral Debt Security has been put on rating watch positive for possible
upgrade by any Rating Agency, then the rating used to determine the Fitch
Rating under either of clauses (i) or (ii) above shall be one rating
subcategory above such rating by that Rating Agency and (c) notwithstanding
the rating definition described above, Fitch reserves the right to issue a
rating estimate for any Collateral Debt Security at any time.


 


25

















 


Fitch Rating Factor means,
for the purpose of computing the Fitch Weighted Average Rating Factor, with
respect to any Collateral Debt Security or Eligible Investment on any relevant
date, the number set forth in the table below opposite the Fitch Rating of such
Collateral Debt Security or Eligible Investment:


 


	
  Fitch Rating

  	
   

  	
  Fitch Rating Factor

  	
   

  	
  Fitch Rating

  	
   

  	
  Fitch Rating Factor

  	
   

  
	
  AAA

  	
   

  	
  .019

  	
   

  	
  BB

  	
   

  	
  13.53

  	
   

  
	
  AA+

  	
   

  	
  .057

  	
   

  	
  BB-

  	
   

  	
  18.46

  	
   

  
	
  AA

  	
   

  	
  .089

  	
   

  	
  B+

  	
   

  	
  22.84

  	
   

  
	
  AA-

  	
   

  	
  1.15

  	
   

  	
  B

  	
   

  	
  27.67

  	
   

  
	
  A+

  	
   

  	
  1.65

  	
   

  	
  B-

  	
   

  	
  34.98

  	
   

  
	
  A

  	
   

  	
  1.85

  	
   

  	
  CCC+

  	
   

  	
  43.36

  	
   

  
	
  A-

  	
   

  	
  2.44

  	
   

  	
  CCC

  	
   

  	
  48.52

  	
   

  
	
  BBB+

  	
   

  	
  3.13

  	
   

  	
  CC

  	
   

  	
  77.00

  	
   

  
	
  BBB

  	
   

  	
  3.74

  	
   

  	
  C

  	
   

  	
  95.00

  	
   

  
	
  BBB-

  	
   

  	
  7.26

  	
   

  	
  DDD-D

  	
   

  	
  100.00

  	
   

  
	
  BB+

  	
   

  	
  10.18

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Fitch Weighted Average
Rating Factor  means
the number determined on any Calculation Date by dividing (i) the
summation of the series of products obtained (a) for any Collateral Debt
Security that is not a Defaulted Security or Deferred Interest PIK Bond, by
multiplying (1) the Principal Balance on such Calculation Date of each
such Collateral Debt Security by (2) its respective Fitch Rating Factor on
such Calculation Date and (b) for any Defaulted Security or Deferred
Interest PIK Bond,
by multiplying (1) the Applicable Recovery Rate for such Defaulted
Security or Deferred Interest PIK Bond by (2) the Principal Balance on
such Calculation Date of each such Defaulted Security or Deferred Interest PIK Bond by
(3) its respective Fitch Rating Factor on such Calculation Date by
(ii) the sum of (a) the aggregate Principal Balance on such
Calculation Date of all Collateral Debt Securities and Eligible Investments
that are not Defaulted Securities or Deferred Interest PIK Bonds, plus (b) the
summation of the series of products obtained by multiplying (1) the
Applicable Recovery Rate for each Defaulted Security or Deferred Interest PIK
Bond by (2) the Principal Balance on such Calculation Date of such
Defaulted Security or Deferred Interest PIK Bond, and rounding the result up to
the nearest whole number.


 


Five Percent Limit means
the maximum cumulative amount that is allowed to be reinvested in Substitute
Collateral Debt Securities with Sale Proceeds received in the manner specified
in Section 12.1(b) and which amount cannot exceed 5% of the CDS
Principal Balance as of the Effective Date.


 


Fixed Rate Collateral
Debt Security means any Collateral Debt Security which
bears a fixed rate of interest.


 


Fixed Rate Excess means,
as of any Measurement Date, a fraction (expressed as a percentage), the
numerator of which is equal to the product of (a) the greater of zero and
the excess, if any, of the Weighted Average Fixed Rate Coupon for such
Measurement Date over 5.80%, and (b) the aggregate Principal Balance of
all Collateral Debt Securities that are Fixed Rate Collateral Debt Securities
(excluding, in each case, Defaulted Securities, Written Down Securities,
Deferred Interest PIK Bonds and Deemed Floating Rate Collateral Debt
Securities) and the denominator of which is the aggregate Principal Balance of
all Collateral Debt Securities that are Floating Rate Collateral Debt
Securities or Deemed Floating Rate Collateral Debt Securities (excluding, in
each case, Defaulted Securities, Written Down Securities and Deferred Interest PIK  Bonds).


 


Fixed Rate Notes means,
collectively, the Class C Notes, the Class D Notes and the Class F
Notes.


 


26

















 


Floating Rate
Collateral Debt Security means any Collateral Debt
Security that bears interest based upon a floating rate index.


 


Floating Rate Notes means,
collectively, the Class A Notes, the Class B Notes and the Class E
Notes.


 


Form-Approved Hedge
Agreement means a Hedge Agreement relating to a specific
Hedge Counterparty with respect to which (a) the related Collateral Debt
Security could be purchased by the Issuer without any required action by the
Rating Agencies and (b) the documentation of which conforms in all material
respects to a form for such Hedge Counterparty which does not require Rating
Agency Confirmation (as certified to the Trustee by the Collateral Advisor,
following receipt of confirmation by the Collateral Advisor from the Hedge
Counterparty and the Rating Agencies); provided that (i) such Form-Approved Hedge Agreement shall not provide for
any upfront payments to be made to any Hedge Counterparty (other than the
Initial Hedge Counterparty), (ii) any revised Form-Approved Hedge
Agreement with respect to a particular Hedge Counterparty shall be approved by
each of the Rating Agencies at least 10 days prior to the initial use thereof,
(iii) any Rating Agency may withdraw its consent to the use of a
particular Form-Approved Hedge Agreement by written notice to the Trustee, the
Collateral Advisor and the relevant Hedge Counterparty (provided that such withdrawal of
consent shall not affect any existing Hedge Agreement entered into with such
Hedge Counterparty) and (iv) the Issuer (or the Collateral Advisor on its
behalf) shall deliver to the Trustee and each Rating Agency a copy of each
Form-Approved Hedge Agreement specifying the Hedge Counterparty to which it
relates upon receipt of Rating Agency Confirmation with respect thereto, and
the Trustee’s records (when taken together with any correspondence received
from the Rating Agencies pursuant to clause (ii)) shall be conclusive evidence
of such form.


 


Four-Month Period means,
at any time during the Reinvestment Period, the period of four (4) months
following the earliest date as of which the number of Key Managers that are
employed on a substantially full-time basis in the position of managing
director or other management-level employee by the Collateral Advisor (or any
of its successors or assigns permitted pursuant to Section 16 of the
Collateral Advisory Agreement) becomes less than two.


 


GAAP has
the meaning specified in Section 6.3(k).


 


Global Notes means
the Rule 144A Global Notes and the Regulation S Global Notes.


 


Grant means
to grant, bargain, sell, warrant, alienate, remise, demise, release, convey,
assign, transfer, mortgage, pledge, create and grant a security interest in and
right of set-off against, deposit, set over and confirm. A Grant of the Pledged
Securities, or of any other instrument, shall include all rights, powers and
options (but none of the obligations) of the granting party thereunder,
including the immediate continuing right to claim for, collect, receive and
receipt for principal, interest and fee payments in respect of the Pledged
Securities or such other instruments, and all other amounts payable thereunder,
to give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the
name of the granting party or otherwise, and generally to do and receive
anything that the granting party is or may be entitled to do or receive
thereunder or with respect thereto.


 


Hedge Agreement means
the interest rate protection agreement, as amended from time to time, together
with any replacement hedge agreement on substantially identical terms (or that
otherwise satisfies the conditions of Section 16.1(d)), entered into
pursuant to Section 16.1 or a Deemed Floating Asset Hedge. The Hedge
Agreement shall provide that any amount payable to the Hedge Counterparty
thereunder shall be subject to the Priority of Payments and that any amount
payable upon the early termination or liquidation thereof shall be payable only
on a Payment Date in accordance with the Priority of Payments.


 


27

















 


Hedge Counterparty means
(a) with respect to the initial Hedge Agreement entered into on the
Closing Date, the Initial Hedge Counterparty, (b) any hedge counterparty
(or any permitted assignee or successor) under a Hedge Agreement that satisfies
the Hedge Counterparty Ratings Requirement and (c) any substitute or
additional parties therefore appointed in accordance with Section 16.1(d) or
Section 16.1(e).


 


Hedge Counterparty
Collateral Account means each Securities Account
designated the “Hedge Counterparty Collateral Account” and established in the
name of the Trustee pursuant to Section 16.1(f).


 


Hedge Counterparty
Ratings Requirement means, with respect to any Hedge
Ratings Determining Party: (a) either (i) both (x) the
short-term rating of such Hedge Ratings Determining Party by Fitch is not lower
than “Fl” and (y) the long-term rating of such Hedge Ratings Determining
Party by Fitch is not withdrawn, suspended or downgraded below “A” or is “A”
and has been placed and is not remaining on credit watch with negative
implications or (ii) if such Hedge Ratings Determining Party has no
short-term rating from Fitch, the long-term rating by Fitch of such Hedge
Ratings Determining Party is at least “A” and (b) either (i) the
short-term rating of such Hedge Ratings Determining Party is not lower than
“A-1” by S&P or (ii) if such Hedge Ratings Determining Party does not
have a short-term rating from S&P, the long-term rating of such Hedge
Ratings Determining Party by S&P is not lower than “A+”.


 


Hedge Payment Amount means,
with respect to the Hedge Agreement and any Payment Date, the amount, if any,
then payable by the Issuer to the Hedge Counterparty, including any amounts so
payable in respect of a termination of any Hedge Agreement.


 


Hedge Ratings
Determining Party means (a) unless clause (b) applies
with respect to the Hedge Agreement, the Hedge Counterparty or any transferee
thereof or (b) any Affiliate of the Hedge Counterparty or any transferee
thereof that unconditionally and absolutely guarantees (with the form of such
guarantee meeting S&P’s then-current published criteria with respect to
guarantees) the obligations of the Hedge Counterparty or such transferee, as
the case may be, under the Hedge Agreement. For the purpose of this definition,
no direct or indirect recourse against one or more shareholders of the Hedge
Counterparty or any such transferee (or against any Person in control of, or
controlled by, or under common control with, any such shareholder) shall be
deemed to constitute a guarantee, security or support of the obligations of the
Hedge Counterparty or any such transferee.


 


Hedge Receipt Amount means,
with respect to the Hedge Agreement and any Payment Date, the amount, if any,
then payable to the Issuer by the Hedge Counterparty, including any amounts so
payable in respect of a termination of any Hedge Agreement.


 


Highest Auction Price means,
in connection with a Redemption, the bid or bids for the Collateral Debt
Securities resulting in the highest auction price of one or more Subpools of
Collateral Debt Securities.


 


Holder means
(i) with respect to any Rated Note, any Rated Noteholder and (ii) with
respect to any Income Note, any Income Noteholder, as the context may require.


 


Income Note
Distribution Account means the account designated the
“Income Note Distribution Account” and established by the Income Note Paying
Agent in the name of the Income Note Paying Agent for the benefit of the Issuer
pursuant to the Income Note Paying Agency Agreement.


 


Income Note Excess
Funds means all remaining Collateral Interest Collections
and Collateral Principal Collections as set forth in Section 11.1(a)(26)
and 11.1(b)(20).


 


28














 


Income Note Paying
Agency Agreement means that certain Income Note Paying
Agency Agreement, dated as of September 22, 2005, as the same may be
amended or supplemented from time to time, among the Issuer, the Income Note
Paying Agent and the Income Note Registrar.


 


Income Note Paying
Agent means LaSalle Bank National Association, and any
successors or assigns in its capacity as Income Note Paying Agent under the
Income Note Paying Agency Agreement.


 


Income Note Paying
Agent Expenses means, with respect to any Payment Date,
an amount equal to the sum of all expenses or indemnities incurred by, or
otherwise owing to, the Income Note Paying Agent during the preceding Due
Period in accordance with the Income Note Paying Agency Agreement.


 


Income Note Paying Agent
Fee means, with respect to any Payment Date, the fee
payable to the Income Note Paying Agent in an aggregate amount equal to
U.S.$10,000 per annum.


 


Income Note Placement
Agent means Banc of America Securities LLC.


 


Income Note Placement
Agreement means the agreement, dated as of the Closing
Date, among the Co-Issuers and the Income Note Placement Agent relating to the
placement of the Income Notes.


 


Income Note Redemption
Approval Condition means, in connection with a Tax
Redemption at the direction of the Controlling Class and an Auction Call
Redemption, the requirement that, unless and to the extent the Holders of 662/3 %
of the aggregate principal amount of the Outstanding Income Notes have waived
payment in full of the aggregate principal amount of the Income Notes, the
Income Noteholders receive in connection with such Tax Redemption or Auction
Call Redemption an amount equal to (x) the Income Notes Stated Amount
minus (y) the aggregate amount of all cash distributions on the Income
Notes (whether in respect of distributions or redemption payments made to the
Income Note Paying Agent for distribution to the Income Noteholders) on or
prior to the relevant Auction Date.


 


Income Note Register means,
with respect to the Income Notes, the Income Note Register maintained by the
Income Note Registrar.


 


Income Note Registrar means
LaSalle Bank National Association, and any successors or assigns in its
capacity as Income Note Registrar under the Income Note Paying Agency
Agreement.


 


Income Noteholder means,
with respect to any Income Note, the Person in whose name such Income Note is
registered in the Income Note Register.


 


Income Notes means
the U.S.$20,750,000 Income Notes Due 2045. 


 


Income Notes Stated
Amount means U.S.$20,750,000.


 


Indenture means
this instrument and, if from time to time supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, as so supplemented or amended.


 


Independent means,
as to any Person, any other Person (including, in the case of an accountant, or
lawyer, a firm of accountants or lawyers and any member thereof) who (i) does
not have and is not committed to acquire any material direct or any material
indirect financial interest in such Person or in any Affiliate of such Person, (ii) is
not connected with such Person as an Officer, employee, promoter, underwriter,
voting trustee, partner, director or Person performing similar functions and (iii) if
required to deliver an opinion or certificate to the Trustee pursuant to this
Indenture, states in such opinion or


 


29

















 


certificate that the signer has read this definition and that the
signer is Independent within the meaning hereof. “Independent” when used with
respect to any accountant may include an accountant who audits the books of
such Person if in addition to satisfying the criteria set forth above the
accountant is independent with respect to such Person within the meaning of Rule 101
of the Code of Ethics of the American Institute of Certified Public
Accountants.


 


Initial Hedge Counterparty means
Bank of America, N.A. under the initial Hedge Agreement and any of its
successors, assigns or replacements under the initial Hedge Agreement appointed
in accordance with the terms of this Indenture and the initial Hedge Agreement.


 


Initial Payment Date means
the Payment Date occurring in December 2005. 


 


Instrument has the
meaning specified in Section 9-102(a)(47) of the UCC.


 


Interest Coverage Amount means,
as of any Measurement Date, an amount equal to (i) the amount received or
scheduled to be received as Collateral Interest Collections during the related
Due Period, less (ii) the amounts scheduled to be paid on the related
Payment Date pursuant to Section 11.1(a)(1) through (3) and (to
the extent not covered by Section 11.1(a)(1) through (3)) Section 11.1(b)(1) and,
for purposes of calculating the Class A/B Interest Coverage Ratio, the Class C
Interest Coverage Ratio, the Class D Interest Coverage Ratio, the Class E
Interest Coverage Ratio and the Class F Interest Coverage Ratio, any
amounts scheduled to be paid to the Interest Reserve Account on the related
Payment Date pursuant to Section 11.1(a)(8); provided that (a) following the date
on which a Collateral Debt Security becomes a Defaulted Security, scheduled
Collateral Interest Collections shall not include any amount scheduled to be
received on Defaulted Securities or any amount scheduled to be received on
securities that are currently deferring interest until (1) such amounts are actually
received in Cash or (2) the cumulative aggregate amounts actually received
on a Defaulted Security exceed the Principal Balance of such Defaulted
Security, (b) the expected interest income on Floating Rate Collateral
Debt Securities and Eligible Investments shall be calculated using the
then-current interest rate applicable thereto and (c) with respect to any
Written Down Security, the Interest Coverage Amount shall exclude any interest
accrued on any Written Down Amount.


 


Interest Coverage Tests means
the Class A/B Interest Coverage Test, the Class C Interest Coverage
Test, the Class D Interest Coverage Test, the Class E Interest
Coverage Test and the Class F Interest Coverage Test.


 


Interest Only Security means
any security that by its terms provides for periodic payments of interest and
does not provide for the repayment of a stated principal amount.


 


Interest Period means
(i) with respect to the Initial Payment Date, the period from and
including the Closing Date to but excluding the Initial Payment Date and (ii) thereafter
with respect to each Payment Date, the period beginning on the first day
following the end of the preceding Interest Period and ending on (and
including) the day before the next Payment Date.


 


Interest Reserve Account means
the account established by the Trustee, held in the name of the Trustee for the
benefit and on behalf of the Secured Parties and into which the Trustee will
deposit, on each Payment Date, the Interest Reserve Amount, if any, in
accordance with the Priority of Payments.


 


Interest Reserve Amount means,
as of any Calculation Date, the sum of (i) the aggregate Quarterly Pay
Security Interest Reserve Amounts and (ii) the aggregate amount of
Semi-Annual Pay Security Interest Reserve Amounts.


 


30

















 


Investment Advisers Act
means the United States Investment Advisers Act of 1940,
as amended.


 


Investment Company Act means
the U.S. Investment Company Act of 1940, as amended, and the rules thereunder.


 


Irish Listing Agent means
NCB Stockbrokers Limited. 


 


Irish Paying Agent means
NCB Stockbrokers Limited. 


 


Issue means
Collateral Debt Securities issued by the same issuer secured by the same
collateral pool.


 


Issuer means
N-Star Real Estate CDO V Ltd., an exempted company incorporated and existing
under the law of the Cayman Islands, unless a successor Person shall have
become the Issuer pursuant to the applicable provisions of this Indenture, and
thereafter “Issuer” shall mean such successor Person.


 


Issuer Order and
Issuer Request mean, respectively, a
written order or a written request, which may be in the form of a standing
order or request in each case dated and signed in the name of the Issuer (or,
as expressly provided herein, the Collateral Advisor on its behalf) by an
Authorized Officer of the Issuer (or, as expressly provided herein, the
Collateral Advisor) and (if appropriate) the Co-Issuer, as the context may
require or permit.


 


Key Manager means
any of David T. Hamamoto, Jean-Michel (Mitch) Wasterlain, Andrew L. Solomon or
any such other additional person as may be appointed Key Managers in accordance
with the Collateral Advisory Agreement (or if David T. Hamamoto, Jean-Michel
(Mitch) Wasterlain, Andrew L. Solomon or any such additional Key Managers have
been replaced with one or more Approved Replacement Persons, such Approved
Replacement Persons).


 


Key Manager Event means
any of the following: (a) the failure by the Collateral Advisor to propose
a replacement Key Manager within the applicable Four-Month Period, (b) the
failure by the Collateral Advisor, within the Four-Month Period, to propose a
different replacement Key Manager following receipt of a Controlling Class Objection
or (c) the receipt of another Controlling Class Objection within ten (10) Business
Days after delivery of such a proposal for a different replacement Key Manager
to the Holders of the Notes of the Controlling Class.


 


LIBOR means,
with respect to each Interest Period (other than the first Interest Period), a
floating rate equal to the London interbank offered rate for one-month U.S.
Dollar deposits determined in the manner described in Schedule B. LIBOR for the
first Interest Period will be determined on the second London Banking Day prior
to the Closing Date.


 


LIBOR Calculation Date has
the meaning specified in Schedule B. 


 


Listed Bidders has
the meaning specified in Schedule E.


 


London Banking Day has
the meaning specified in Schedule B.


 


Majority means
(a) with respect to any Class or Classes of Rated Notes, the Holders
of more than 50% of the Aggregate Outstanding Amount of the Rated Notes of such
Class or Classes of Rated Notes, as the case may be and (b) with
respect to Income Notes, the Holders of more than 50% Income Notes Stated
Amount.


 


31

















 


Margin Stock means
“margin stock” as defined under Regulation U issued by the Board of Governors
of the Federal Reserve System.


 


Market Value means,
on any date of determination, the average of three or more bid-side prices
expressed as a percentage of the par amount, obtained from independent,
nationally recognized financial institutions in the relevant market for one or
more Collateral Debt Securities, each unaffiliated with each other and the
Collateral Advisor, as certified by the Collateral Advisor (to the extent that
such bid-side prices may be obtained by the Collateral Advisor using its
commercially reasonable efforts and commercially reasonable business judgment).
If three or more bid-side prices cannot be so obtained, then the Market Value
on such date of determination will be the lower of two bid-side prices, if two
bid-side prices are obtained in the manner described above, and the sole
bid-side price if only one bid-side price is obtained in the manner described
above. If no bids can be obtained in the manner described above, the Market
Value will be (1) in respect of an amount equal to not greater than 7.5%
of the Principal Balance of the Proposed Portfolio, the price, expressed as a
percentage of the par amount, determined by the Collateral Advisor in its
commercially reasonable judgment or (2) the S&P Recovery Rate with
respect to such Collateral Debt Security, to the extent not calculated pursuant
to clause (1) above.


 


Measurement Date means
any of the following: (a) the Effective Date; (b) any date after the
Effective Date upon which the Issuer disposes or acquires (which date of
acquisition shall be deemed to be the date on which the Issuer enters into
commitments to acquire such Collateral Debt Security) any Collateral Debt Security;
(c) each Calculation Date; (d) the last Business Day of each calendar
month (other than the calendar month preceding the month in which a Calculation
Date occurs and any calendar month prior to and including the month in which
the Effective Date occurs); and (e) with reasonable notice to the Issuer,
the Collateral Advisor and the Trustee, any other Business Day that any Rating
Agency or Holders of more than 50% of the then Aggregate Outstanding Amount of
any Class of Rated Notes requests to be a “Measurement Date”; provided that if
any such date would otherwise fall on a day that is not a Business Day, the
relevant Measurement Date will be the next succeeding day that is a Business
Day.


 


Mezzanine Loans means
mezzanine loans secured by ownership interests in entities owning commercial
properties.


 


Moneyline Telerate Page 3750 means
the display page so designated on Moneyline Telerate Service (or such
other page as may replace that page on that service, or such other
service as may be nominated as the information vendor, for the purposes of
displaying rates comparable to LIBOR).


 


Monitoring Fee means,
with respect to each Payment Date, an amount equal to 0.10% per annum of the
Fee Basis Amount payable to the Collateral Advisor pursuant to the Collateral
Advisory Agreement.


 


Moody’s means Moody’s
Investors Service, Inc. and any successor or successors thereto. 


 


Morgan Stanley means
Morgan Stanley & Co. Incorporated.


 


Note Downgrade Event means
any (i) reduction of the Fitch Rating of the Class A Notes to one or
more categories below the Fitch Rating assigned to such Notes on the Closing
Date or (ii) reduction of the Fitch Rating of the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes or the Class F Notes
to two or more categories below the Fitch Rating assigned to such Class of
Notes on the Closing Date.


 


Note Paying Agent means
any Person authorized by the Issuer to pay the principal of or interest on any
Rated Notes on behalf of the Issuer as specified in Section 7.2.


 


Note Register and Note
Registrar have the respective meanings specified in Section 2.4(a).


 


32

















 


Note Transfer Agent has
the meaning specified in Section 2.4(a). 


 


Note Valuation Report has
the meaning specified in Section 10.10(a). 


 


Notes means
the Rated Notes and the Income Notes.


 


Offer means,
with respect to any security, (a) any offer by the issuer of such security
or by any other Person made to all of the holders of such security to purchase
or otherwise acquire such security (other than pursuant to any redemption in
accordance with the terms of the related Underlying Instruments) or to convert
or exchange such security into or for Cash, securities or any other type of
consideration or (b) any solicitation by the issuer of such security or
any other Person to amend, modify or waive any provision of such security or
any related Underlying Instrument.


 


Offering means
the offering of the Rated Notes and the Income Notes under the Offering
Circular.


 


Offering Circular means
the Offering Circular, prepared and delivered on or prior to the Closing Date
in connection with the offer and sale of the Rated Notes and the Income Notes,
as amended or supplemented from time to time.


 


Officer means,
(a) with respect to the Issuer, the Co-Issuer and any corporation, the
Chairman of the Board of Directors (or, with respect to the Issuer, any
director), the President, any Vice President, the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer of such entity; and (b) with
respect to any bank or trust company acting as trustee of an express trust or
as custodian, any Trust Officer.


 


Opinion of Counsel means
a written opinion addressed to the Trustee and each Rating Agency (each, a Recipient),  in form and
substance reasonably satisfactory to each Recipient, of an attorney at law
admitted to practice before the highest court of any state of the United States
or the District of Columbia (or the Cayman Islands, in the case of an opinion
relating to the laws of the Cayman Islands), which attorney may, except as
otherwise expressly provided in this Indenture, be inside or outside counsel
for the Issuer or the Co-Issuer, as the case may be, and which attorney shall
be reasonably satisfactory to the Trustee. Whenever an Opinion of Counsel is
required hereunder, such Opinion of Counsel may rely on opinions of other
counsel who are so admitted and so satisfactory which opinions of other counsel
shall accompany such Opinion of Counsel and shall either be addressed to each
Recipient or shall state that each Recipient shall be entitled to rely thereon.


 


Optional Redemption has
the meaning specified in Section 9.1(a).


 


Ordinary Shares means
the 1,000 ordinary shares, par value U.S.$1.00 per share issued by the Issuer.


 


Outstanding means
with respect to the Notes as of any Measurement Date, any and all Notes
theretofore authenticated and delivered under the Indenture and the Income Note
Paying Agency other than Notes cancelled, redeemed, exchanged or replaced in
accordance with the terms of the Indenture or the Income Note Paying Agency
Agreement, as applicable; provided that in determining whether the
Holders of the requisite percentage of Notes have given any direction, notice,
consent, approval or objection, any Notes held or beneficially owned by the
Collateral Advisor or any of its Affiliates or by an account or fund for which
the Collateral Advisor or any of its Affiliates acts as the investment advisor
with discretionary authority will be disregarded with respect to any vote or
consent relating to the removal, termination, substitution or replacement of
the Collateral Advisor or the assignment by the Collateral Advisor of its
rights and obligations under the Collateral Advisory Agreement, except for any
assignments or transfers


 


33

















 


by the Collateral Advisor of its rights and obligations to Affiliates
of the Collateral Advisor, subject to any applicable requirements under the
Investment Advisers Act.


 


Paying Agents means,
collectively, the Note Paying Agent and the Income Note Paying Agent.


 


Payment Account means
the Securities Account designated the “Payment Account” and established in the
name of the Trustee pursuant to Section 10.8.


 


Payment Date means
the 22nd day of each calendar month, or if such day is
not a Business Day, the next succeeding Business Day, commencing in December 2005
and ending in September 2045 or such earlier date upon which all of the
Notes are redeemed as provided herein.


 


Periodic Interest means
the amount of interest payable (i) in respect of each Class of
Floating Rate Notes, calculated with respect to each such Class for the
relevant Interest Period by multiplying the Applicable Periodic Interest Rate
by the Aggregate Outstanding Amount of the related Class at the close of
business on the day immediately preceding the relevant Payment Date,
multiplying the resulting figure by the actual number of days in such Interest
Period, dividing by 360 and rounding the resulting figure to the nearest
U.S.$0.01 (U.S.$0.005 being rounded upwards), and (ii) in respect of each Class of
Fixed Rate Notes, calculated with respect to each such Class for the
relevant Interest Period by multiplying the Applicable Periodic Interest Rate
by the Aggregate Outstanding Amount of the related Class at the close of
the Business Day immediately preceding the relevant Payment Date, multiplying
the resulting figure by (a) for the first Interest Period, ninety-one (91)
days, and (b) for every other Interest Period, 30 days, dividing by 360
and rounding the resulting figure to the nearest U.S.$0.01 (U.S.$0.005 being
rounded upwards).


 


Permitted NS Purchaser means
(i) NS CDO Holdings V, LLC or (ii) NS Advisors, LLC or any
“affiliate” thereof within the meaning of Rule 405 under the Securities
Act that is an “accredited investor” within the meaning of Rule 501(a) under
the Securities Act.


 


Person means any
individual, corporation, partnership, limited liability partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof or any similar entity.


 


PIK Bond means any
security that, pursuant to the terms of the related Underlying Instruments,
permits the payment of interest thereon to be deferred or capitalized as
additional principal thereof or not pay interest when scheduled (but without
being a Defaulted Security) or that issues identical securities in lieu of
payments of interest in Cash.


 


Placement Agents means,
collectively, the Rated Note Placement Agents and the Income Note Placement
Agent.


 


Placement Agreements means,
collectively, the Rated Note Placement Agreement and the Income Note Placement
Agreement.


 


Pledged Collateral Debt Security means
as of any date of determination, any Collateral Debt Security that has been
Granted to the Trustee and has not been released from the lien of this
Indenture pursuant to Section 10.11.


 


Pledged Securities means
on any date of determination, (a) the Collateral Debt Securities,
Temporary Ramp-Up Securities, Equity Securities and the Eligible Investments
that have been Granted to the Trustee


 


34

















 


and (b) all non-Cash proceeds thereof, in each case, to the extent
not released from the lien of this Indenture pursuant hereto.


 


Principal Balance means,
with respect to any Collateral Debt Security or Eligible Investment, as of any
date of determination, the outstanding principal amount of such Collateral Debt
Security or Eligible Investment; provided that the Principal
Balance of (i) any Collateral Debt Security which permits the deferral or
capitalization of interest will not include any outstanding balance of the
deferred and/or capitalized interest, (ii) any Equity Security will be
zero, (iii) any putable Collateral Debt Security which matures after the
Stated Maturity Date will be the lower of the put price and the outstanding
principal amount and (iv) any Collateral Debt Security or Eligible
Investment in which the Trustee does not have a first priority perfected
security interest shall be deemed to be zero.


 


Principal Coverage Amount means,
on any Measurement Date, an amount equal to (i) the aggregate Principal
Balance of all Collateral Debt Securities (other than Defaulted Securities,
Written Down Securities and Deferred Interest PIK Bonds) included in the
Collateral on such date, plus (ii) the aggregate Principal Balance of the
Eligible Investments in the Collateral Account on such date that represent
Collateral Principal Collections, plus (iii) the Defaulted Securities Amount, plus (iv) with
respect to Written Down Securities, the Reduced Principal Balance, plus (v) the
Deferred Interest PIK Bond Amount, minus, if the aggregate Principal Balance of all
Collateral Debt Securities with an S&P Rating lower than “BBB-” and higher
than “CCC+” (expressed as a percentage of the CDS Principal Balance) exceeds
33%, (vi) the product of (a) the aggregate Principal Balance of all
Collateral Debt Securities, (b) the Double B Principal Coverage Adjustment
Percentage and (c) 10%, minus, if the aggregate Principal Balance of all
Collateral Debt Securities with an S&P Rating lower than “BBB-” and higher
than “CCC+” (expressed as a percentage of the CDS Principal Balance) exceeds
33% and (vii) the product of (a) the aggregate Principal Balance of
all Collateral Debt Securities, (b) the Single B Principal Coverage
Adjustment Percentage and (c) 20%; provided that if the aggregate Principal
Balance of all Collateral Debt Securities and Written Down Securities at their
Reduced Principal Balance (other than Defaulted Securities and Deferred
Interest PIK Bonds) that have an S&P Rating lower than “BB-” but greater
than or equal to “B-”, exceeds 7% of the CDS Principal Balance, the aggregate
Principal Balance of such Collateral Debt Securities and Written Down
Securities at their Reduced Principal Balance in excess of 7% of the CDS
Principal Balance shall be included at 70% of such aggregate Principal Balance;
provided further that
any Collateral Debt Security and Written Down Security carried at its Reduced
Principal Balance (other than any Defaulted Security or any Deferred Interest
PIK Bond) that has a Rating of “CCC+” or lower shall be included at 60% of its
Principal Balance.


 


Principal Coverage Ratios means
the Class A/B Principal Coverage Ratio, the Class C Principal
Coverage Ratio, the Class D Principal Coverage Ratio, the Class E
Principal Coverage Ratio and the Class F Principal Coverage Ratio.


 


Principal Coverage Tests means
the Class A/B Principal Coverage Test, the Class C Principal Coverage
Test, the Class D Principal Coverage Test, the Class E Principal
Coverage Test and the Class F Principal Coverage Test.


 


Principal Prepayments means,
following any failure of any Coverage Test as of any Calculation Date, amounts
that would otherwise be used (i) for payments of Income Note Excess Funds,
(ii) for the purchase of additional Collateral Debt Securities, (iii) for
the payment of certain fees and expenses, (iv) in the case of a failure to
satisfy either the Class A/B Interest Coverage Test or the Class A/B
Principal Coverage Test, for interest payments on the Class C Notes, the Class D
Notes, the Class E Notes and the Class F Notes, (v) in the case
of a failure to satisfy either the Class C Interest Coverage Test or the Class C
Principal Coverage Test, for interest payments on the Class D Notes, the Class E
Notes and the Class F Notes, (vi) in the case of a failure to satisfy
either the Class D Interest Coverage Test or the Class D


 


35

















 


Principal Coverage Test, for interest payments on the Class E
Notes and the Class F Notes, (vii) in the case of a failure to
satisfy either the Class E Interest Coverage Test or the Class E
Principal Coverage Test, for interest payments on the Class F Notes, and (viii) in
the case of a failure to satisfy either the Class F Interest Coverage Test
or the Class F Principal Coverage Test, for payments of Income Note Excess
Funds, that are instead applied on the related Payment Date, in each case to
the extent necessary to satisfy such Coverage Test as of the related
Calculation Date, to principal payments on each Class of Notes, starting
with the most senior Class of Notes then Outstanding, until such Coverage
Test is satisfied as of the related Calculation Date or the Notes are paid in
full.


 


Priority of Payments means,
collectively, the priority of payments specified in Section 11.1(a), (b) and
(c) or upon an Event of Default, the priority of payments in connection
therewith.


 


Proceeding means any
suit in equity, action at law or other judicial or administrative proceeding.


 


Prohibited Asset means
any of the following asset types: aircraft lease securities, enhanced equipment
trust certificates, structured settlement securities, tobacco settlement
securities, manufactured housing securities, 12(b)-1 fee securities, future
flow securities, emerging markets securities, sub and re-performing credit card
securities, franchise loan securities, market value collateralized debt
obligations, collateralized loan obligations or CDO of CDO Securities.


 


Proposed Portfolio means
the portfolio (measured by Principal Balance) of (a) the Pledged
Collateral Debt Securities and the proceeds of disposition thereof held as
Cash, (b) Uninvested Proceeds held as Cash and (c) Eligible
Investments purchased with Uninvested Proceeds or the proceeds of disposition
of Pledged Collateral Debt Securities resulting from the sale, maturity or
other disposition of a Pledged Collateral Debt Security or a proposed purchase
of a Collateral Debt Security, as the case may be.


 


Pro Rata Principal Amortization means,
with respect to any Payment Date, any payment by the Issuer in respect of the
principal of the Notes that is made pursuant to Clause (15)(iii) of Section 11.1(b) on
such Payment Date upon compliance with the Special Amortization Pro Rata
Condition, to the extent that the amount applied to such payment of principal
constitutes (i) Sale Proceeds applied in accordance with the Substitution
Criteria or (ii) Collateral Principal Payments applied in accordance with
the Replacement Criteria.


 


Purchased Accrued Interest means
all payments of interest received, or amounts collected that are attributable
to interest received on Collateral Debt Securities and Eligible Investments, to
the extent such payments or amounts constitute accrued interest purchased with
Collateral Principal Collections except for interest accrued on Collateral Debt
Securities prior to the Closing Date.


 


Qualified Bidder List means
a list of not less than three Persons that are Independent from one another and
the Issuer prepared by the Collateral Advisor and delivered to the Trustee
prior to an Auction, as may be amended and supplemented by the Collateral
Advisor from time to time upon written notice to the Trustee; provided that
(i) the Qualified Bidder List may include the Collateral Advisor as a
Qualified Bidder if it is Independent from the other Persons on such list and (ii) any
such notice referred to above shall only be effective on any Auction Date if it
was received by the Trustee at least two Business Days prior to such Auction
Date.


 


Qualified Bidders means
the Persons whose names appear from time to time on the Qualified Bidder List. 


 


Qualified Institutional Buyer has
the meaning given in Rule 144A under the Securities Act.


 


36

















 


Qualified Purchaser means
(i) a “qualified purchaser” as defined in Section 2(a)(51) of the
Investment Company Act and the rules thereunder, (ii) a “knowledgeable
employee” with respect to the Issuer as defined in rule 3c-5 under the
Investment Company Act or (iii) a company beneficially owned exclusively
by one or more “qualified purchasers” and/or “knowledgeable employees” with
respect to the Issuer.


 


Qualifying Foreign
Obligor means a corporation, partnership or other entity
organized or incorporated under the law of any of Australia, Canada, France,
Germany, Ireland, Italy, New Zealand, Sweden, Switzerland or the United
Kingdom, so long as the unguaranteed, unsecured and otherwise unsupported
long-term Dollar sovereign debt obligations of such country are rated “AA” or
better by S&P.


 


Quarterly Pay Security means
a security that provides for periodic payments of interest in cash quarterly.


 


Quarterly Pay Security
Interest Reserve Amount means, with respect to each
Collateral Debt Security that is a Quarterly Pay Security, as of any
Calculation Date, the amount equal to (i) the amount of interest received
by the Issuer on the most recent payment date with respect to such Quarterly
Pay Security multiplied by (ii) (A) three minus the number of months
since the most recent payment date with respect to such Quarterly Pay Security
(rounded up to the nearest whole number) divided by (B) three; provided that for
any Quarterly Pay Security with respect to which no scheduled interest payments
remain, the Quarterly Pay Security Interest Reserve Amount shall be zero.


 


Ramp-Up Collateral Debt
Security means each additional Collateral Debt Security
selected by the Collateral Advisor for purchase by the Issuer and pledged to
the Trustee during the Ramp-Up Period.


 


Ramp-Up Criteria means
the following criteria which must be met by each Ramp-Up Collateral Debt
Security:


 


(i)                                   such
Ramp-Up Collateral Debt Security is not a Real Estate CDO Security;


 


(ii)                                no
more than U.S.$30,000,000 in aggregate Principal Balance of Ramp-Up Collateral
Debt Securities is rated “BB+” or lower by S&P or “BB+” or lower by Fitch;


 


(iii)                            none
of the Ramp-Up Collateral Debt Securities is Rated “B+” or lower by S&P or
“B+” or lower by Fitch;


 


(iv)                            no
more than U.S.$20,000,000 in aggregate Principal Balance of Ramp-Up Collateral
Debt Securities is issued by a single issuer;


 


(v)                               such
Ramp-Up Collateral Debt Security is not on the “credit watch negative” watchlist
of S&P; and


 


(vi)                            such
Ramp-Up Collateral Debt Security is denominated in U.S. Dollars and all cash
flows are to be paid in U.S. Dollars.


 


Ramp-Up Period means
the period commencing on the Closing Date and ending on the Effective Date. 


 


Rated Note Calculation
Agent has the meaning specified in Section 7.15.


 


Rated Note Placement
Agent means each of Banc of America LLC and Morgan
Stanley & Co. Incorporated.


 


37














 


Rated Note Placement Agreement means
the agreement, dated as of the Closing Date, among the Co-Issuers and the Rated
Note Placement Agents relating to the placement of the Rated Notes.


 


Rated Notes means,
collectively, the Class A Notes, the Class B Notes, the Class C Notes, the
Class D Notes, the Class E Notes and the Class F Notes.


 


Rated Noteholder means,
with respect to any Rated Note, the Person in whose name such Note is
registered; provided
that Beneficial Owners or Agent Members will have no rights under
the Indenture with respect to Global Notes, and the Rated Noteholder may be
treated by the Issuer and the Trustee (and any agent of any of the foregoing)
as the owner of such Global Notes for all purposes whatsoever.


 


Rating means, as the
context requires, a Fitch Rating or an S&P Rating.


 


Rating Agency means
each of (i) Fitch, for so long as any of the Outstanding Rated Notes are
rated by Fitch (including any private or confidential rating) and
(ii) S&P, for so long as any of the Outstanding Rated Notes are rated
by S&P (including any private or confidential rating) or, with respect to
Pledged Securities generally, if at any time Fitch or S&P ceases to provide
rating services, any other nationally recognized investment rating agency
selected by the Issuer (upon consultation with the Collateral Advisor) and
reasonably satisfactory to a Majority of each Class of Rated Notes. In the
event that at any time Fitch ceases to be a Rating Agency, references to rating
categories of Fitch in this Indenture shall be deemed instead to be references
to the equivalent categories of such other rating agency as of the most recent
date on which such other rating agency and Fitch’s published ratings for the
type of security in respect of which such alternative rating agency is used. In
the event that at any time S&P ceases to be a Rating Agency, references to
rating categories of S&P in this Indenture shall be deemed instead to be
references to the equivalent categories of such other rating agency as of the
most recent date on which such other rating agency and S&P’s published
ratings for the type of security in respect of which such alternative rating
agency is used.


 


Rating Agency Confirmation means,
with respect to any specified action or determination, for so long as any of
the Rated Notes are Outstanding and rated by S&P or Fitch, the receipt of
written confirmation by each Rating Agency rating any Rated Notes, that such
specified action or determination will not result in the reduction or
withdrawal or other adverse action with respect to their then-current ratings
on the Rated Notes (including any private or confidential rating) unless Rating
Agency Confirmation is specified herein to be required by only S&P or
Fitch, in which case such Rating Agency Confirmation will be sufficient.


 


Rating Confirmation has
the meaning specified in Section 7.18(e).


 


Rating Confirmation Failure has
the meaning specified in Section 7.18(e).


 


Real Estate CDO Securities means
securities that entitle the holders thereof to receive payments that depend on
the cash flow from or the credit exposure to a portfolio consisting primarily
of (i) REIT Debt Securities, (ii) CMBS Securities or (iii) a
combination of the foregoing; provided that such dependence may in addition be
conditioned upon rights or additional assets designed to assure the servicing
or timely distribution of proceeds to holders of the Real Estate CDO Securities
such as a financial guaranty insurance policy.


 


Real Estate Interests means
interests (other than REIT Debt Securities and Real Estate CDO Securities but
including Tenant Lease Loan Interests) that entitle the holders thereof to
receive payments that depend primarily on the cash flow from or sale proceeds
of mortgage loans on commercial and multifamily properties, including senior
and subordinate mortgage loans, participation interests in


 


38

















 


mortgage loans on commercial and multifamily properties, including
subordinate interests, mezzanine loans secured by ownership interests in
entities owning commercial properties, mortgage loans secured by mortgages on
commercial real estate properties that are subject to a lease to a single
tenant or trust certificates representing beneficial ownership interests in the
foregoing.


 


Record Date means the
date on which the Holders of Rated Notes entitled to (i) vote with respect
to any matters under the Indenture are determined, such date being the 15th day (whether or not a Business Day) prior to
the date the Trustee delivers notice with respect to such vote and
(ii) receive a payment in respect of principal or interest on the
succeeding Payment Date or Redemption Date are determined, such date as to any
Payment Date or Redemption Date being the 15th day (whether or not a Business Day) prior to
such Payment Date or Redemption Date.


 


Redemption means an
Optional Redemption, an Auction Call Redemption or a Tax Redemption.


 


Redemption Date means
the Payment Date upon which the Rated Notes are redeemed pursuant to an
Optional Redemption, an Auction Call Redemption or a Tax Redemption.


 


Redemption Date Statement has
the meaning specified in Section 10.10(b).


 


Redemption Premium means
the premium payable to Holders of each Class of Fixed Rate Notes in
connection with an Optional Redemption of such Class of Fixed Rate Notes
in an amount equal to the excess, if any, of (i) the present value
(discounted to the applicable Redemption Date using the Reinvestment Yield on a
monthly basis using a 360-day year of twelve 30-day months as the discount
rate) of the remaining payments of interest and principal due on such
Class of Fixed Rate Notes, assuming that the entire outstanding principal
amount of such Class of Fixed Rate Notes will be paid on the Payment Date
occurring in September 2017 and that each intervening payment of interest
on such Class of Fixed Rate Notes will be made on the related Payment Date
in its entirety (and therefore there is no Defaulted Interest on such
Class of Fixed Rate Notes) over (ii) the outstanding principal amount
of such Class of Fixed Rate Notes on the applicable Redemption Date.


 


Redemption Price means,
(i) with respect to each Class of Rated Notes, (a) their then
Aggregate Outstanding Amount plus (b) accrued interest thereon to the date
of redemption to the extent not already paid (including, without limitation,
any Class C Cumulative Applicable Periodic Interest Shortfall Amount,
Class D Cumulative Applicable Periodic Interest Shortfall Amount,
Class E Cumulative Applicable Periodic Interest Shortfall Amount and
Class F Cumulative Applicable Periodic Interest Shortfall Amount) plus
(c) in the case of an Optional Redemption only and with respect to any
Fixed Rate Notes, the applicable Redemption Premium and (ii) if the Income
Notes are redeemed, the “Redemption Price” for the Income Notes, except to the
extent the Income Note Redemption Approval Condition applies, means an amount
equal to the aggregate of any residual amounts distributable on the Income
Notes in respect of such redemption pursuant to Section 11.1(a) and
(b) and in any instance where the Income Note Redemption Approval
Condition applies, an amount equal to the amounts necessary to satisfy the
Income Note Redemption Approval Condition.


 


Redemption Spread means,
with respect to the Class C Notes, 0.75%, the Class D Notes, 1.65%
and the Class F Notes, 3.50%.


 


Reduced Principal Balance means,
with respect to each Written Down Security, the original Principal Balance of
such Written Down Security minus the Written Down Amount.


 


Reference Banks has
the meaning specified in Schedule B.


 


39

















 


Registered means in
registered form for U.S. federal income tax purposes and issued after
July 18, 1984; provided that a
certificate of interest in a trust that is treated as a grantor trust for U.S.
federal income tax purposes will not be treated as Registered unless each of
the obligations or securities held by the trust was issued after that date.


 


Registered Form has
the meaning specified in Section 8-102(a)(13) of the UCC. 


 


Regulation S means
Regulation S under the Securities Act.


 


Regulation S Definitive Note has
the meaning specified in Section 2.4(c)(1)(vi). 


 


Regulation S Global Note has
the meaning specified in Section 2.1(a). 


 


Regulation S Note has
the meaning specified in Section 2.1(a).


 


Regulation S Transfer Certificate has
the meaning specified in Section 2.4(c)(1)(iii).


 


Regulation U means
Regulation U of the Board of Governors of the Federal Reserve System, 12 C.F.R.
§ 221, or any successor regulation.


 


Reinvestment Criteria means,
with respect to any reinvestment of Collateral Principal Payments, the
following criteria:


 


(i)                                   Each
Collateral Principal Payment must be reinvested in one or more Substitute
Collateral Debt Securities of the same CPP Asset Type as the Collateral Debt
Security on which such Collateral Principal Payment occurred;


 


(ii)                                The
spread from a comparable index or security (Spread) of the
Substitute Collateral Debt Security may not exceed the Spread of the original
Collateral Debt Security on which the applicable Collateral Principal Payment
was received as set forth in a schedule provided to the Trustee; provided that in
the event Collateral Principal Payments for any CPP Asset Type are comprised of
proceeds from multiple Collateral Debt Securities, the Spread of each
Substitute Collateral Debt Security may not exceed the Spread of a single
Collateral Debt Security on which the Collateral Principal Payments being
reinvested were received; and


 


(iii)                             The
lowest explicit rating by either Rating Agency of the Substitute Collateral
Debt Security must be equal to or higher than the lowest explicit rating by
either Rating Agency at purchase by the Issuer of the Collateral Debt Security
on which the applicable Collateral Principal Payment was received; provided that in
the event that Collateral Principal Payments for any CPP Asset Type are
comprised of proceeds from multiple Collateral Debt Securities, the lowest
explicit rating by either Rating Agency of each Substitute Collateral Debt
Security must be no lower than the lowest explicit rating as of the Effective
Date of a single original Collateral Debt Security on which the applicable
Collateral Principal Payment was received (or such earlier date, if any, of
purchase by the Issuer);


 


provided, however, that in determining
whether the Reinvestment Criteria are satisfied, Collateral Principal Payments
on Real Estate Interests bearing interest at a fixed rate shall be treated as
though such amounts were Collateral Principal Payments on CMBS Securities that
are Fixed Rate Securities and Collateral Principal Payments on Real Estate
Interests bearing interest at a floating rate shall be treated as though such
amounts were Collateral Principal Payments on CMBS Securities that are Floating
Rate Securities.


 


40

















 


Reinvestment Period means
the period beginning on the Closing Date and ending and including the Payment
Date in September 2010; provided, however that if (i) a Key Manager
Event occurs and (ii) the Holders of a majority in aggregate principal
amount of the Outstanding Notes of the Controlling Class direct in writing
that the Trustee terminate the Reinvestment Period, then the Reinvestment
Period shall instead end upon the Trustee’s issuance of written notice of such
termination to the Collateral Advisor.


 


Reinvestment Threshold Amount means
an amount that equal or exceeds U.S.$5,000,000; provided that for purposes of determining
whether the Reinvestment Threshold Amount has been met, Collateral Principal
Payments on Real Estate Interests bearing interest at a fixed rate shall be
treated as though such amounts were Collateral Principal Payments on CMBS
Securities that are Fixed Rate Securities and Collateral Principal Payments on
Real Estate Interests bearing interest at a floating rate shall be treated as
though such amounts were Collateral Principal Payments on CMBS Securities that
are Floating Rate Securities.


 


Reinvestment Trigger Date means
any Business Day, prior to the end of the Reinvestment Period, on which the
Collateral Advisor directs the Issuer to reinvest Collateral Principal Payments
in Substitute Collateral Debt Securities in accordance with the Reinvestment
Criteria.


 


Reinvestment Yield means
with respect to either class of the Fixed Rate Notes, the rate equal to the sum
of the Redemption Spread with respect to such Fixed Rate Note and the
applicable yield to maturity implied by (i) the yields reported as of
10:00 a.m. (New York City time) on the tenth Business Day preceding the
related Optional Redemption Date on the display page designated as
“Page 678” on the Telerate Service (or such other display as may replace
Page 678 on the Telerate Service) for actively traded U.S. Treasury
securities having a maturity as nearly as practicable equal to the Payment Date
occurring in September 2017 or (ii) if such yields are not reported
as of such time or the yields reported as of such time are not ascertainable,
the Treasury Constant Maturity Series Yields reported, for the latest day
for which such yields have been so reported as of the tenth Business Day
preceding the Optional Redemption Date, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity as nearly as practicable equal
to the Payment Date occurring in September 2017.


 


REIT Debt Securities means,
collectively, REIT Debt Securities—Diversified, REIT Debt Securities— Health
Care, REIT Debt Securities—Hotel, REIT Debt Securities—Industrial, REIT Debt
Securities—Mortgage, REIT Debt Securities—Multi-Family, REIT Debt
Securities—Office, REIT Debt Securities—Residential, REIT Debt
Securities—Retail and REIT Debt Securities—Storage.


 


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


 


REIT Debt Securities—Health Care means
Collateral Debt Securities issued by a real estate investment trust (as defined
in Section 856 of the Code or any successor provision) whose assets
consist (except for rights or other assets designed to assure the servicing or
timely distribution of proceeds to holders of the Collateral Debt Securities)
of a portfolio of properties including hospitals, clinics, sport clubs, spas
and other health care facilities and other similar real property interests used
in one or more similar businesses.


 


REIT Debt Securities—Hotel means
Collateral Debt Securities issued by a real estate investment trust (as defined
in Section 856 of the Code or any successor provision) whose assets
consist (except for rights


 


41

















 


or
other assets designed to assure the servicing or timely distribution of
proceeds to holders of the Collateral Debt Securities) of a portfolio of
properties including hotels, motels, youth hostels, bed and breakfasts and
other similar real property interests used in one or more similar businesses.


 


REIT Debt Securities—Industrial means Collateral Debt Securities issued by a
real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of a portfolio of properties including
warehouse, industrial and distribution facilities, factories, refinery plants,
breweries and other similar real property interests used in one or more similar
businesses.


 


REIT Debt Securities—Mortgage means Collateral Debt Securities issued by a
real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of mortgages, commercial mortgage-backed
securities, collateralized mortgage obligations and other similar
mortgage-related securities (including Collateral Debt Securities issued by a
hybrid form of such trust that invests in both commercial real estate and
commercial mortgages).


 


REIT Debt Securities—Multi-Family means Collateral Debt Securities issued by a
real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of a portfolio of properties including
multi-family dwellings such as apartment blocks, condominiums and co-operative
owned buildings.


 


REIT Debt Securities—Office means Collateral Debt Securities issued by a
real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of a portfolio of properties including
office buildings, conference facilities and other similar real property
interests used in the commercial real estate business.


 


REIT Debt Securities—Residential means Collateral Debt Securities issued by a
real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of residential mortgages (other than
multi-family dwellings) and other similar real property interests.


 


REIT Debt Securities—Retail means Collateral Debt Securities issued by a
real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) of regional malls, neighborhood shopping
centers, big box centers, retail stores, restaurants, bookstores, clothing
stores and other similar real property interests used in one or more similar
businesses.


 


REIT Debt Securities—Storage means Collateral Debt Securities issued by a
real estate investment trust (as defined in Section 856 of the Code or any
successor provision) whose assets consist (except for rights or other assets
designed to assure the servicing or timely distribution of proceeds to holders
of the Collateral Debt Securities) a portfolio of properties including storage
facilities and other similar real property interests used in one or more
similar businesses.


 


Relevant Jurisdiction means, as to any obligor on any Collateral
Debt Security, any jurisdiction (a) in which the obligor is incorporated,
organized, managed and controlled or considered to have its seat,


 


42

















 


(b) where an office through which the obligor is acting for
purposes of the relevant Collateral Debt Security is located, (c) in which
the obligor executes Underlying Instruments or (d) in relation to any
payment, from or through which such payment is made.


 


Replacement Criteria  means, with
respect to any reinvestment of Sales Proceeds in accordance with
Section 12.1(b) hereof, the following criteria:


 


(i)                                   If
the Collateral Debt Security being replaced was a REIT Debt Security, then the
Substitute Collateral Debt Security must be a REIT Debt Security;


 


(ii)                                If
the Collateral Debt Security being replaced was a CMBS Security or a Real
Estate Interest, then the Substitute Collateral Debt Security must be a CMBS
Security;


 


(iii)                             If
the Collateral Debt Security being replaced was a Real Estate CDO Security,
then the Substitute Collateral Debt Security must be either a CMBS Security or
a REIT Debt Security;


 


(iv)                            The
lowest explicit rating of the Substitute Collateral Debt Security must be as
good or better than the lowest explicit rating at purchase by the Issuer of the
Collateral Debt Security being replaced;


 


(v)                               If
the Collateral Debt Security being replaced was a Fixed Rate Collateral Debt
Security, the Substitute Collateral Debt Security must be a Fixed Rate
Collateral Debt Security;


 


(vi)                            If
the Collateral Debt Security being replaced was a Floating Rate Collateral Debt
Security, the Substitute Collateral Debt Security must be a Floating Rate
Collateral Debt Security;


 


(vii)                         The
price of the Substitute Collateral Debt Security must be between 90% and 110%
of the original issue price of such Substitute Collateral Debt Security (as
determined by the Collateral Advisor), as adjusted to reflect the accretion of
any original issue discount or the amortization of any original issue premium
calculated on a yield-to-maturity basis;


 


(viii)                      The
legal final maturity date of the Substitute Collateral Debt Security must be
earlier than that of the Collateral Debt Security being replaced; and


 


(ix)                              The
Average Life of the Substitute Collateral Debt Security must be the same or
lower than that of the Collateral Debt Security being replaced as of the date
of the Issuer’s sale thereof.


 


Repository  means the internet-based password
protected electronic repository of transaction documents relating to privately
offered and sold collateralized debt obligation securities located at www.cdolibrary.com
and maintained by the Bond Market Association.


 


Requisite Noteholders  means the
Holders of 662/3% or more of the Outstanding
aggregate principal amount of (i) the Class A-1 Notes, so long as any
Class A-1 Notes remain Outstanding, (ii) thereafter the
Class A-2 Notes, so long as any Class A-2 Notes remain Outstanding,
(iii) thereafter the Class B Notes so long as any Class B Notes
remain Outstanding, (iv) thereafter the Class C Notes so long as any
Class C Notes remain Outstanding, (v) thereafter the Class D
Notes so long as any Class D Notes remain Outstanding,
(vi) thereafter the Class E Notes so long as any Class E Notes
remain Outstanding and (vii) thereafter the Class F Notes so long as
any Class F Notes remain Outstanding.


 


Reserved Matters  has the meaning
specified in Section 8.2(j).


 


43

















 


Rule 144A means
Rule 144A under the Securities Act.


 


Rule 144A Definitive Note has
the meaning specified in Section 2.4(c)(1)(vi). 


 


Rule 144A Global Note has
the meaning specified in Section 2.1(b).


 


Rule 144A Information means
such information as is specified pursuant to Rule 144A(d)(4) under
the Securities Act (or any successor provision thereto).


 


Rule 144A Note has
the meaning specified in Section 2.1(b).


 


Rule 144A Transfer Certificate has
the meaning specified in Section 2.4(c)(1)(ii).


 


S&P means
Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.,
and any successor or successors thereto.


 


S&P CDO Monitor means
the dynamic, analytical computer model provided by S&P to the Collateral
Advisor and the Trustee (together with such instructions and assumptions as are
necessary to run such model) on or prior to the Effective Date used to
determine the credit risk of a portfolio of Collateral Debt Securities, as may
be modified by S&P from time to time.


 


S&P CDO Monitor Test means
the test which is satisfied, as of any Calculation Date, if each of the
Class A Note Default Differential, the Class B Note Default
Differential, the Class C Note Default Differential, the Class D Note
Default Differential, the Class E Note Default Differential and the
Class F Note Default Differential of the Current Portfolio or the Proposed
Portfolio, as applicable, is positive. The S&P CDO Monitor Test will be
considered to be improved if the Class A Note Default Differential of the
Proposed Portfolio is greater than the Class A Note Default Differential
of the Current Portfolio, the Class B Note Default Differential of the
Proposed Portfolio is greater than the Class B Note Default Differential
of the Current Portfolio, the Class C Note Default Differential of the
Proposed Portfolio is greater than the Class C Note Default Differential
of the Current Portfolio, the Class D Note Default Differential of the
Proposed Portfolio is greater than the Class D Note Default Differential
of the Current Portfolio, the Class E Note Default Differential of the
Proposed Portfolio is greater than the Class E Note Default Differential
of the Current Portfolio and the Class F Note Default Differential of the
Proposed Portfolio is greater than the Class F Note Default Differential
of the Current Portfolio.


 


S&P Industry Classification Group means
any of the S&P industrial classification groups as set forth on Schedule H
and any additional classification groups established by S&P with respect to
the Collateral Debt Securities and provided, in each case, by the Collateral
Advisor or S&P to the Trustee.


 


S&P Minimum Average Recovery Rate Test means
a test that will be satisfied as of any Measurement Date if the S&P
Weighted Average Recovery Rate is greater than or equal to (i) 28.25% with
respect to the Class A Notes, (ii) 31.79% with respect to the
Class B Notes, (iii) 35.29% with respect to the Class C Notes,
(iv) 38.38% with respect to the Class D Notes, (v) 38.38% with
respect to the Class E Notes and (vi) 42.44% with respect to the
Class F Notes.


 


S&P’s Preferred Format means
an electronic spreadsheet file to be provided to S&P, which file shall
include the following information, if available (to the extent such information
is not confidential) with respect to each Collateral Debt Security:
(a) the name and country of domicile of the issuer thereof and the
particular issue held by the Issuer, (b) the CUS1P or other applicable
identification number associated with such Collateral Debt Security, (c) the
par value of such Collateral Debt Security, (d) the type of issue
(including, by way of example, whether such Collateral Debt Security is a bond,
loan or asset-backed


 


44

















 


security), using such abbreviations as may be selected by the Trustee,
(e) a description of the index or other applicable benchmark upon which
the interest payable on such Collateral Debt Security is based (including, by
way of example, fixed rate, step-up rate, zero coupon and LIBOR), (f) the
coupon (in the case of a Collateral Debt Security which bears interest at a
fixed rate) or the spread over the applicable index (in the case of a
Collateral Debt Security which bears interest at a floating rate), (g) the
S&P Industry Classification Group for such Collateral Debt Security,
(h) the Stated Maturity Date of such Collateral Debt Security,
(i) the S&P Rating of such Collateral Debt Security or the issuer
thereof, as applicable, (j) the Principal Balance in cash and in Eligible
Investments, (k) the priority category assigned by S&P to such
Collateral Debt Security, if available, and (1) such other information as
the Trustee may determine to include in such file.


 


S&P Rating means
the rating by S&P of any Collateral Debt Security determined as follows:


 


(a)                                  if
S&P has assigned a rating to such Collateral Debt Security either publicly
or privately (in the case of a private rating, with the written consent of the
issuer of such Collateral Debt Security for use of such private rating and
provided a copy of such consent has been delivered to S&P), the S&P’s
Rating shall be the rating assigned thereto by S&P; provided that,
solely for purposes of determining compliance with the S&P CDO Monitor
Test, if such Collateral Debt Security is placed on a watch list for possible
upgrade or downgrade by S&P, the S&P Rating applicable to such
Collateral Debt Security shall be one rating subcategory above or below,
respectively, the S&P Rating applicable to such Collateral Debt Security
immediately prior to such Collateral Debt Security being placed on such watch
list;


 


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


 


(c)                                  if
any Collateral Debt Security is a Collateral Debt Security that has not been
assigned a rating by S&P and is not a Collateral Debt Security listed in
Schedule G, as identified by the Collateral Advisor, the S&P Rating of such
Collateral Debt Security shall be the rating determined by reference to
Schedule F; provided
that (i) if any Collateral Debt Security shall, at the time of
its purchase by the Issuer, be listed for a possible upgrade or downgrade on
either Fitch or Fitch then current credit rating watch list, then the S&P
Rating of such Collateral Debt Security shall be one subcategory above or below,
respectively, the rating then assigned to such item as set forth in Schedule A,
(ii) for purposes of determining compliance with S&P CDO Monitor Test,
if the rating assigned to such Collateral Debt Security pursuant to this
subparagraph (c) is placed on a watch list for possible upgrade or
downgrade by any Rating Agency, the S&P Rating applicable to such
Collateral Debt Security shall be one rating subcategory above or below,
respectively, the S&P Rating applicable to such Collateral Debt Security
immediately prior to such Collateral Debt Security being placed on such watch
list and (iii) the aggregate Principal Balance that may be given a rating
based on this subparagraph (c) may not exceed 20% of the aggregate
Principal Balance of all Collateral Debt Securities; provided that if any Collateral Debt
Security has not been assigned a rating by S&P and is a type of Collateral
Debt Security not listed on Schedule G, subsequent to the Closing Date, the
acquisition of any such Collateral Debt Security will require an estimate or
shadow rating from S&P, the assignment of an S&P Recovery Rate to such
Collateral Debt Security and receipt of Rating Agency Confirmation from S&P
prior to the acquisition by the Issuer of such Collateral Debt Security.


 


45

















 


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


 


S&P Recovery Rate means,
with respect to a Collateral Debt Security on any Calculation Date, an amount
equal to the percentage for such Collateral Debt Security set forth in the
S&P Recovery Rate Matrix attached as Schedule D (determined in accordance
with procedures prescribed by S&P for such Collateral Debt Security on such
Calculation Date or, in the case of Defaulted Securities, the S&P Rating
immediately prior to default).


 


S&P Weighted Average Recovery Rate means,
as of any Calculation Date, a rate expressed as a percentage equal to the
number obtained by (i) summing the products obtained by multiplying the
Principal Balance of each Collateral Debt Security by its S&P Recovery Rate
and (ii) dividing such sum by the aggregate Principal Balance of the
Collateral Debt Securities and (iii) rounding up to the first decimal
place. For this purpose, the Principal Balance of a Defaulted Security or
Deferred Interest PIK Bond will be deemed to be equal to its outstanding
principal amount (excluding any capitalized interest thereon).


 


Sale has the meaning
specified in Section 5.17(a).


 


Sale Proceeds means
all proceeds (including accrued interest) received with respect to Collateral
Debt Securities and Equity Securities as a result of sales of such Collateral
Debt Securities and Equity Securities pursuant to the Indenture, net of any
reasonable amounts expended by the Collateral Advisor or the Trustee in their
good faith determination in connection with such sale or disposition.


 


Schedule of Collateral Debt Securities means
the list of Collateral Debt Securities securing the Rated Notes that is
attached as Schedule A.


 


Scheduled Distribution means,
with respect to any Pledged Security, for each Due Date, the scheduled payment
in Cash of principal and/or interest and/or fees due on such Due Date with
respect to such Pledged Security, determined in accordance with the assumptions
specified in Section 1.2.


 


Second Currency has
the meaning specified in Section 14.13.


 


Secured Parties means
the Trustee, for the benefit of the Rated Noteholders, the Collateral Advisor
and the Initial Hedge Counterparty.


 


Securities Account has
the meaning specified in Section 8-501(a) of the UCC. 


 


Securities Act means
the U.S. Securities Act of 1933, as amended.


 


Securities Intermediary has
the meaning specified in Section 8-102(a)(14) of the UCC. 


 


Security has the
meaning specified in Section 8-102(a)(15) of the UCC.


 


Semi-Annual Pay Security means
a security that provides for periodic payments of interest in Cash semi-annually.


 


46














 


Semi-Annual Pay
Security Interest Reserve Amount means, with respect to
each Collateral Debt Security that is a Semi-Annual Pay Security, as of any
Calculation Date, the amount equal to (i) the amount of interest received
by the Issuer on the most recent payment date with respect to such Semi-Annual
Pay Security multiplied by (ii) (A) six (6) minus the number of
months since the most recent payment date with respect to such Semi-Annual Pay
Security (rounded up to the nearest whole number) divided by (B) six
(6); provided that for any
Semi-Annual Pay Security with respect to which no scheduled interest payments
remain, the Semi-Annual Pay Security Interest Reserve Amount shall be zero.


 


Senior Collateral
Advisory Fee means with respect to each Payment Date, a
senior fee equal to the sum of (a) the Monitoring Fee and (b) the
Senior Structuring Fee payable to the Collateral Advisor pursuant to the
Collateral Advisory Agreement; provided that
the Senior Collateral Advisory Fee will be payable on each Payment Date only to
the extent of funds available for such purpose in accordance with the Priority
of Payments. Any unpaid Senior Collateral Advisory Fee will be deferred and
paid on the next succeeding Payment Date to the extent funds are available for
such purpose. Any unpaid Senior Collateral Advisory Fee that is deferred due to
the operation of the Priority of Payments will not accrue interest. Any Senior
Collateral Advisory Fee accrued but not paid prior to the resignation or
removal of the Collateral Advisor shall continue to be payable to the
Collateral Advisor on the Payment Date immediately following the effectiveness
of such resignation or removal.


 


Senior Structuring Fee means,
with respect to each Payment Date, an amount equal to 0.05% per annum of the
Fee Basis Amount payable to the Collateral Advisor pursuant to the Collateral
Advisory Agreement.


 


Single B Excess
Percentage means, on any Measurement Date, the greater of
(a) zero; and (b) (i) the aggregate Principal Balance of all
Collateral Debt Securities with an S&P Rating lower than BB- and higher
than CCC+ (expressed as a percentage of the CDS Principal Balance) minus (ii) 10%.


 


Single B Principal
Coverage Adjustment Percentage means, on any Measurement
Date, the greater of (a) zero; and (b) (i) the Single B Excess
Percentage minus (ii) the
greater of (x) zero; and (y) (A) 5% minus (B) the Double B Excess
Percentage.


 


Sixty-Day Reinvestment
Window means (i) with respect to Sale Proceeds
received in respect of any Credit Risk Security, Defaulted Security, Equity
Security, Withholding Tax Security, Credit-Improved Security or Written Down
Security, the period from (and including) the date of receipt of such Sale
Proceeds by the Issuer to (but including) the sixtieth (60th) calendar day
thereafter and (ii) with respect to Collateral Principal Payments received
in respect of any CPP Asset Type, the period from (and including) the date on
which the cumulative amount of such Collateral Principal Payments for such CPP
Asset Type equals or exceeds the Reinvestment Threshold Amount for such CPP
Asset Type, to (but including) the sixtieth (60th) calendar day thereafter.


 


Special Amortization
Pro Rata Condition means with respect to any Payment Date
that either:


 


(A)                             (I)(x) the
aggregate CDS Principal Balance as of the related Calculation Date is at least
equal to 50% of the aggregate CDS Principal Balance on the Closing Date and (y) the
S&P CDO Monitor Test has been satisfied and (II) the Collateral
Quality Tests (except the items specified in clauses (xiii), (xiv) and (xv) of
the definition thereof) are satisfied; or


 


(B)                               if
clause (A) above is not satisfied, Rating Agency Confirmation has been
provided by S&P with respect to the pro
rata payment of principal of the Rated Notes.


 


47

















 


Specified Currency has
the meaning specified in Section 14.13. 


 


Specified Person has
the meaning specified in Section 2.5(a). 


 


Specified Place has
the meaning specified in Section 14.13.


 


Specified Types means
CMBS Securities, REIT Debt Securities, Real Estate CDO Securities and Real
Estate Interests.


 


Spread has
the meaning specified in the definition of Reinvestment Criteria.


 


Spread Excess means,
as of any Measurement Date, a fraction (expressed as a percentage), the
numerator of which is equal to the product of (a) the greater of zero and
the excess, if any, of the Weighted Average Spread for such date over 1.87%,
and (b) the aggregate Principal Balance of all Floating Rate Collateral
Debt Securities and Deemed Floating Rate Collateral Debt Securities (excluding,
in each case, Defaulted Securities, Written Down Securities or Deferred
Interest PIK Bonds) and the denominator of which is the aggregate Principal
Balance of all Collateral Debt Securities that are Fixed Rate Collateral Debt
Securities (excluding Defaulted Securities, Written Down Securities, Deferred
Interest PIK Bonds and Deemed Floating Rate Collateral Debt Securities).


 


Stated Maturity Date means
the Payment Date occurring in September 2045.


 


Subordinate Collateral
Advisory Fee means the fee payable to the Collateral
Advisor at a per annum rate in arrears on each Payment Date pursuant to the
Collateral Advisory Agreement, in an amount (as certified by the Collateral
Advisor to the Trustee) equal to 0.20% of the Fee Basis Amount for such Payment
Date; provided that
the Subordinate Collateral Advisory Fee will be payable on each Payment Date
only to the extent of funds available for such purpose in accordance with the
Priority of Payments. Any unpaid Subordinate Collateral Advisory Fee will be
deferred and paid on the next succeeding Payment Date to the extent funds are
available for such purpose. Any unpaid Subordinate Collateral Advisory Fee that
is deferred due to the operation of the Priority of Payments will not accrue interest.
Any Subordinate Collateral Advisory Fee accrued but not paid prior to the
resignation or removal of the Collateral Advisor shall continue to be payable
to the Collateral Advisor on the Payment Date immediately following the
effectiveness of such resignation or removal.


 


Subordinate Interests has
the meaning specified in Section 13.1(a), (b), (c), (d), (e) or (f), as applicable.


 


Subpool means
each of the groups of the Collateral Debt Securities designated by the
Collateral Advisor in accordance with the Auction Procedures on which the
Listed Bidders may provide a separate bid in an Auction.


 


Substitute Collateral
Debt Security means a debt obligation meeting the
Eligibility Criteria acquired by or on behalf of the Issuer with Collateral
Principal Proceeds or Sale Proceeds that are reinvested in accordance with the
provisions of the Indenture.


 


Substitute Party has
the meaning specified in Section 16.1(d).


 


Substitution Event means,
in connection with the Initial Hedge Counterparty, any of the following:


 


(i)                                    So
long as any of the Notes are Outstanding and rated by S&P, the short-term
rating from S&P of the Initial Hedge Counterparty is withdrawn, suspended
or downgraded below


 


48

















 


“A-3” or, if no short-term rating is available, the long-term rating
from S&P of the Initial Hedge Counterparty is withdrawn, suspended or
downgraded below “BBB-”; or


 


(ii)                                 The
short-term rating of the Initial Hedge Counterparty from Fitch is withdrawn, suspended
or downgraded below “F2” or, if no short-term rating is available, the long term
rating of the Initial Hedge Counterparty from Fitch is withdrawn, suspended or
downgraded below “BBB+”.


 


Synthetic Security means
any swap transaction, debt security, security issued by a trust or similar
vehicle or other investment, the returns on which (as determined by the
Collateral Advisor) are linked to the credit performance of a reference
obligation, but which may provide for a different maturity, payment date,
interest rate, credit exposure or other credit or non-credit related
characteristics from such reference obligation.


 


Taxed Collateral Debt
Security has the meaning specified in Section 7.7(e).


 


Taxes means
any present or future taxes, duties, assessments or governmental charges of
whatsoever nature imposed, levied, collected, withheld or assessed by any
governmental authority having power to tax.


 


Tax Event means
a new, or change in any, U.S. or foreign tax statute, treaty, regulation, rule,
ruling, practice, procedure or judicial decision or interpretation, occurring
in each case after the Closing Date, which results in (i) any portion of
any payment due from any issuer or obligor under any Collateral Debt Security
becoming properly subject to the imposition of U.S. or foreign withholding tax,
which withholding tax is not compensated for by a “gross up” provision under
the terms of the related Collateral Debt Security, (ii) any jurisdiction
imposing net income, profits, or similar tax on the Issuer, (iii) the
Issuer being required to deduct or withhold from any payment under a Hedge
Agreement for or on account of any tax and the Issuer being obligated to make a
gross up payment (or otherwise pay additional amounts) to the Hedge
Counterparty, or (iv) a Hedge Counterparty being required to deduct or
withhold from any payment under a Hedge Agreement for or on account of any tax
for whatever reason if such Hedge Counterparty is not required to pay to the
Issuer such additional amount as is necessary to ensure that the net amount
actually received by the Issuer (free and clear of taxes, whether assessed
against such obligor or the Issuer) will equal the full amount that the Issuer
would have received had no such deduction or withholding been required, and
where the sum of the amount of (i) such a tax or taxes imposed on the
Issuer or withheld from payments to the Issuer to the extent the Issuer
receives less than the full amount that the Issuer would have received had no
such deduction occurred, and (ii) such gross up payments required to be
made by the Issuer to the extent they exceed the amounts that the Issuer would
have been required to pay had no deduction or withholding been required, in the
aggregate, equals ten percent (10%) or more of the amount of aggregate interest
payments on all of the related Collateral Debt Securities during the related
Due Period.


 


Tax Redemption has
the meaning specified in Section 9.1(b). 


 


Tax Subsidiary has
the meaning specified in Section 7.7(e).


 


Temporary Ramp-Up
Security means each security that is listed on Schedule C
hereto that (i) is a direct unsecured debt obligation of the Federal
National Mortgage Corporation or the Federal Home Loan Mortgage Corporation, (ii) bears
interest at a fixed rate, (iii) is acquired by the Issuer on the Closing
Date in furtherance of interest rate hedging of the Issuer’s portfolio by being
sold on or prior to the Effective Date in conjunction with the acquisition of
one or more Ramp-Up Collateral Debt Securities that are


 


49

















 


Fixed Rate Collateral Debt Securities and (iv) is rated in the
highest rating category by at least one nationally recognized rating agency.


 


Tenant Lease Loan Interests means
securities that entitle the holders thereof to receive payments that depend (except
for rights or other assets designed to assure the servicing or timely
distribution of proceeds to holders of such securities) on the cash flow from a
commercial mortgage loan made to finance the acquisition, construction and
improvement of properties leased to corporate tenants (or on the cash flow from
such leases).


 


Three-Year Period means
the period beginning on the Closing Date and up to and including the Payment
Date in September 2008.


 


Transaction Documents means
the Indenture, the Collateral Advisory Agreement, the Account Control
Agreement, the Hedge Agreement, the Corporate Services Agreement, the
Collateral Administration Agreement, the Income Note Paying Agency Agreement
and the Placement Agreements.


 


Trust Officer means,
when used with respect to the Trustee, any Officer within the CDO Trust
Services Group of the Corporate Trust Office working on the transaction
described in this Indenture and (or any successor group of the Trustee)
authorized to act for and on behalf of the Trustee, including any vice
president, assistant vice president or other Officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such Officers, respectively, or to whom any corporate trust matter is
referred at the CDO Trust Services Group of the Corporate Trust Office because
of such person’s knowledge of and familiarity with the particular subject.


 


Trustee means LaSalle
Bank National Association, and any successors or assigns, in its capacity as
trustee under this Indenture.


 


Trustee Expenses means,
with respect to any Payment Date, an amount equal to the sum of all expenses or
indemnities incurred by or otherwise owing to the Trustee during the preceding
Due Period in accordance with the Indenture, other than the Trustee Fee,
including, without limitation, any expenses or indemnities incurred by the
Trustee (and the Bank) in any of its capacities (including in its capacity as
Collateral Administrator, Calculation Agent, Note Paying Agent, Income Note Paying
Agent and Registrar).


 


Trustee Fee means,
with respect to any Payment Date, the fee payable to the Trustee in an
aggregate amount equal to 0.018% per annum of the CDS Principal Balance as of
the first day of the related Due Period; provided that in no event shall, so long as
any Class of Rated Notes remains Outstanding, such fee be an annual amount
less than U.S.$25,000.


 


UCC  means the Uniform
Commercial Code as in effect in the State of New York.


 


Underlying Instrument means
the agreement pursuant to which a Pledged Security has been issued or created
and each other agreement that governs the terms of or secures the obligations
represented by such Pledged Security or of which the holders of such Pledged
Security are the beneficiaries.


 


Uninvested Proceeds means,
at any time, the net proceeds received by the Issuer on the Closing Date from
the initial issuance of the Rated Notes and Income Notes, to the extent such
proceeds have not theretofore been invested in Collateral Debt Securities.


 


Uninvested Proceeds Account has
the meaning specified in Section 10.4.


 


50

















 


United States or
U.S. means the United States of America,
including the States thereof and the District of Columbia.


 


Unregistered Securities
has the meaning specified in Section 5.17(c).


 


U.S. Person has
the meaning given in Regulation S under the Securities Act.


 


USA PATRIOT Act means
the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56
(2001).


 


Weighted Average Fixed
Rate Coupon means, as of any Measurement Date, the sum
(rounded up to the next 0.001%):


 


(a)                                 obtained
by (i) multiplying the Principal Balance of each Fixed Rate Collateral
Debt Security (except Collateral Debt Securities that are currently deferring
interest) held in the portfolio as of such date by the then-current interest
rate, (ii) summing the amounts determined pursuant to clause (i) for
all Fixed Rate Collateral Debt Securities held in the portfolio as of such date
and (iii) dividing such sum by the aggregate Principal Balance of all
Fixed Rate Collateral Debt Securities held in the portfolio as of such date; provided that for purposes of calculating
the Weighted Average Fixed Rate Coupon of Collateral Debt Securities that are
Defaulted Securities, the Written Down Amount with respect to Written Down
Securities and Equity Securities will be excluded, except for those Defaulted
Securities that at the time of such calculation have fully become current on
all past due interest and scheduled principal and are paying full current
interest in cash pursuant to the terms of their respective Underlying
Instrument; plus


 


(b)                                if the number obtained
pursuant to the calculations in clause (a) is less than 5.80%, the Spread
Excess.


 


Weighted Average Life means,
on any Calculation Date with respect to all Collateral Debt Securities
(excluding any Defaulted Securities), the number obtained by the Collateral
Advisor by (i) summing the products obtained by multiplying (a) the
Average Life at such time of each Collateral Debt Security by (b) the
outstanding Principal Balance of such Collateral Debt Security and (ii) dividing
such sum by the aggregate Principal Balance at such time of all Collateral Debt
Securities.


 


Weighted Average Life
Test means a test that shall be satisfied as of any
Measurement Date during any period set forth below if the Weighted Average Life
of all Collateral Debt Securities as of such Measurement Date is less than or
equal to the number of years set forth in the table below:


 


	
  As of any Calculation Date

  	
   

  	
  Weighted Average Life

  	
   

  
	
  Occurring During the Period Below

  	
   

  	
  (in Years)

  	
   

  
	
  Closing Date – £1.0
  year

  	
   

  	
  10.0 years

  	
   

  
	
  >1.0 years – £2.0
  years

  	
   

  	
  9.0 years

  	
   

  
	
  >2.0 years – £3.0
  years

  	
   

  	
  8.0 years

  	
   

  
	
  >3.0 years – £4.0
  years

  	
   

  	
  7.0 years

  	
   

  
	
  >4.0 years – £5.0
  years

  	
   

  	
  6.0 years

  	
   

  
	
  >5.0 years – Stated Maturity Date

  	
   

  	
  5.0 years

  	
   

  



 


51

















 


Weighted Average Spread
means, as of any Measurement Date, the sum (rounded up to
the next 0.001%) of:


 


(a)                                 the
number obtained by (i) summing the products obtained by multiplying (A) for
each Floating Rate Collateral Debt Security (other than any Defaulted Security,
Written Down Security or Deferred Interest PIK Bond), the stated spread above
LIBOR at which interest accrues on such Collateral Debt Security as of such
date and, for each Deemed Floating Rate Collateral Debt Security (other than
any Defaulted Security, Written Down Security or Deferred Interest PIK Bond),
the Deemed Floating Spread by (B) the Principal Balance of such Collateral
Debt Security as of such date and (ii) dividing such sum by the aggregate
Principal Balance of all Floating Rate Collateral Debt Securities and all
Deemed Floating Rate Collateral Debt Securities (excluding, in each case, all
Defaulted Securities, Written Down Securities and Deferred Interest PIK Bonds,
except for those Defaulted Securities that at the time of such calculation have
fully become current on all past due interest and scheduled principal and are
paying full current interest in cash pursuant to the terms of their respective
Underlying Instrument); plus


 


(b)                                if the number obtained
pursuant to the calculations in clause (a) is less than 1.60%, the Fixed
Rate Excess.


 


Withholding Tax Security
means a Collateral Debt Security if:


 


(i)                                    any payments
thereon to the Issuer are subject to withholding tax imposed by any
jurisdiction (other than U.S. backup withholding tax or other similar
withholding tax); and


 


(ii)                                 under the underlying
documentation with respect to such Collateral Debt Security, the issuer of or
counterparty with respect to such Collateral Debt Security is not required to
make “gross-up” payments to the Issuer that cover the full amount of such
withholding tax on an after-tax basis.


 


Written Down Amount means,
with respect to each Written Down Security, the amount by which the original
Principal Balance of such Written Down Security is reduced as notified by or on
behalf of the related issuer or trustee to the holders of such Written Down
Security (including appraisal reductions on CMBS Securities).


 


Written Down Security means
any Collateral Debt Security as to which the aggregate par amount of such
Collateral Debt Security and all other securities secured by the same pool of
collateral that rank pari passu with or senior in priority of
payment to such Collateral Debt Security exceeds the aggregate par amount
(including reserved interest or other amounts available for
overcollateralization) of all collateral securing such securities (excluding
defaulted collateral); provided that the Issuer shall immediately
send notice to S&P by facsimile and e-mail upon any Collateral Debt
Security becoming a Written Down Security.


 


1.2.                             ASSUMPTIONS
AS TO COLLATERAL DEBT SECURITIES, FEES, ETC.


 


The provisions set forth in this Section 1.2 shall be applied in
connection with all calculations required to be made pursuant to this Indenture
with respect to Scheduled Distributions on any Pledged Security, or any
payments on any other assets included in the Collateral, and with respect to
the income that can be earned on Scheduled Distributions on such Pledged
Securities and on any other amounts that may be received for deposit in the
Collection Account.


 


(a)                                 All
calculations with respect to Scheduled Distributions on the Pledged Securities securing
the Rated Notes shall be made by the Issuer or the Collateral Administrator on


 


52

















 


behalf of the Issuer using (in the case of the Collateral Debt
Securities) the assumptions that (i) no Pledged Security defaults or is
sold, (ii) prepayment of any Pledged Security during any month occurs at a
rate equal to the average rate of prepayment during the period of six
consecutive months immediately preceding the current month (or, with respect to
any Pledged Security that has not been outstanding for at least six consecutive
calendar months, at the rate of prepayment assumed at the time of issuance of
such Pledged Security), (iii) any clean-up call with respect to a Pledged
Security will be exercised when economic to the Person or Persons entitled to
exercise such call and (iv) no other optional redemption of any Pledged
Security will occur except for those that have actually occurred or as to which
irrevocable notice thereof shall have been given.


 


(b)                                For
purposes of determining compliance with the Interest Coverage Tests, except as otherwise
specified in the Interest Coverage Tests, there shall be excluded all payments
in respect of Defaulted Securities and Deferred Interest PIK Bonds unless the
Trustee or Collateral Advisor has actual knowledge such payments will be made
in Cash and will be received on or before the Due Date therefor and all other
scheduled payments (whether of principal, interest, fees or other amounts) including
payments to the Issuer under any Hedge Agreement, as to which the Trustee or
Collateral Advisor has actual knowledge will not be made in Cash or will not be
received when due. For purposes of calculating the Class A/B Interest
Coverage Ratio and the Class C Interest Coverage Ratio:


 


(1)                                 the
expected interest income on Collateral Debt Securities and Eligible Investments
and the expected interest payable on the Rated Notes and amounts, if any,
payable under the Hedge Agreement will be calculated using the interest rates
applicable thereto on the applicable date of determination;


 


(2)                                 accrued
original issue discount on Eligible Investments will be deemed to be a
scheduled interest payment thereon due on the date such original issue discount
is scheduled to be paid; and


 


(3)                                 it
will be assumed that no principal payments are made on the Rated Notes during
the applicable periods.


 


(c)                                 For
each Due Period, the Scheduled Distribution on any Pledged Security (other than
(i) a Defaulted Security, (ii) a Deferred Interest PIK Bond or (iii) an
Equity Security, which, in each case except as otherwise provided herein, shall
be assumed to have a Scheduled Distribution of zero and with respect to any
Written Down Security, the Interest Coverage Amount shall exclude any interest
accrued on any Written Down Amount) shall be the sum of (x) the total
amount of payments and collections in respect of such Pledged Security
(including the proceeds of the sale of such Pledged Security received during
the Due Period) that, if paid as scheduled, will be available in the Collection
Account at the end of the Due Period for payment on the Rated Notes or other
amounts payable pursuant to this Indenture and of certain expenses of the
Issuer and the Co-Issuer plus (y) any such amounts received in
prior Due Periods that were not disbursed on a previous Payment Date (provided that such sum shall be
computed without regard to any amounts excluded from the determination of
compliance with the Coverage Tests pursuant to Section 1.2(b)).


 


(d)                                Subject
to Section 1.2(b), each Scheduled Distribution receivable with respect to
a Pledged Security shall be assumed to be received on the applicable Due Date,
and each such Scheduled Distribution shall be assumed to be immediately
deposited in the


 


53

















 


Collection Account and, except as otherwise specified, to earn interest
at the Assumed Reinvestment Rate. All such funds shall be assumed to continue
to earn interest until the date on which they are required to be available in
the Collection Account for transfer to the Payment Account and application, in
accordance with the terms hereof, to payments of principal of or interest on
the Rated Notes or other amounts payable pursuant to this Indenture.


 


(e)                                 With
respect to any Collateral Debt Security as to which any interest or other
payment thereon is subject to withholding tax of any Relevant Jurisdiction,
each Distribution thereon shall, for purposes of the Coverage Tests and each
Collateral Quality Test, be deemed to be payable net of such withholding tax
unless the issuer thereof or obligor thereon is required to make additional
payments sufficient on an after tax basis to cover any withholding tax imposed
on payments to the Issuer with respect thereto (including in respect of any
such additional payment). On any date of determination, the amount of any
Scheduled Distribution due on any future date shall be assumed to be made net
of any such uncompensated withholding tax based upon withholding tax rates in
effect on such date of determination.


 


(f)                                   For
purpose of determining compliance with the Interest Coverage Tests, it will be
assumed that any amount required to be paid for taxes, filing and registration
fees on the Payment Date immediately following the relevant Due Period shall be
equal to the aggregate amount for which the Trustee has received an invoice or
demand for payment on or prior to the relevant Measurement Date.


 


(g)                                Any
reference in the definition of “Senior Collateral Advisory Fee” or “Subordinate
Collateral Advisory Fee” in Section 1.1(a) to an amount calculated
with respect to a period at a per annum rate shall be computed on the basis of
a 360 day year and the actual number of days elapsed during the applicable Due
Period.


 


(h)                                Unless
otherwise specified, test calculations that evaluate to a percentage will be
rounded to the nearest one-hundredth, and test calculations that evaluate to a
number or decimal will be rounded to the nearest one hundredth.


 


(i)                                    Unless
otherwise specified, all calculations required to be made and all reports which
are to be prepared pursuant to this Indenture with respect to the Collateral
Debt Securities, shall be made on the basis of the date on which the Issuer
makes a commitment to acquire or to sell an asset, as applicable (the trade date),
not the settlement date for such sale.


 


(j)                                    For
the purpose of determining fees constituting Administrative Expenses payable
under the Priority of Payments hereunder, periods longer or shorter than a
one-month period shall be prorated based on the number of days in such period.


 


1.3.                             RULES OF CONSTRUCTION


 


Unless the context otherwise clearly requires:


 


(a)                                 the definitions of
terms herein shall apply equally to the singular and plural forms of the terms
defined;


 


54

















 


(b)                                whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms;


 


(c)                                 the
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”;


 


(d)                                the
word “will” shall be construed to have the same meaning and effect as the word
“shall”;


 


(e)                                 any
definition of or reference to any agreement, statute, instrument or other
document herein shall be construed as referring to such agreement, instrument
or other document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein);


 


(f)                                   any
reference herein to any Person, or to any Person in a specified capacity, shall
be construed to include such Person’s successors and assigns or such Person’s
successors in such capacity, as the case may be;


 


(g)                                all
references in this instrument to designated “Sections”, “clauses” and other
subdivisions are to the designated Sections, clauses and other subdivisions of
this instrument as originally executed, and the words “herein”, “hereof’,
“hereunder” and other words of similar import refer to this Indenture as a
whole and not to any particular Section, clause or other subdivision; and


 


(h)                                unless
otherwise stated to the contrary herein, any payments to be made by the Issuer
(or by the Trustee on behalf of the Issuer) in respect of a Class of Notes
shall be payable pari
passu between any subclasses of such Class of Notes.


 


ARTICLE II


 


THE RATED NOTES


 


2.1.                             FORMS GENERALLY


 


(a)                                 The Class A
Notes, the Class B Notes, the Class C Notes and the Class D
Notes offered and sold in reliance on Regulation S (each, a Regulation S Note)
shall be issued in fully Registered form without interest coupons
substantially in the form of the note attached as Exhibit A-1 (each, a Regulation S Global Note) with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture and such legends as may be applicable thereto, which shall be
deposited with the Trustee at its Corporate Trust Office in Chicago, Illinois,
as custodian for DTC and registered in the name of DTC or a nominee of DTC,
duly executed by the Co-Issuers and authenticated by the Trustee or the
Authenticating Agent as hereinafter provided. The Aggregate Outstanding Amount
of each Regulation S Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
DTC or its nominee, as the case may be.


 


(b)                                The
Class A Notes, the Class B Notes, the Class C Notes and the Class D
Notes offered and sold in the United States pursuant to an exemption from the
registration requirements


 


55

















 


of the Securities Act (Rule 144A Notes)
shall be issued in fully Registered form without interest coupons
substantially in the form of the note attached as Exhibit A-2 (each, a Rule 144A Global Note), with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture and such legends as may be applicable thereto, which shall be
deposited with the Trustee at its Corporate Trust Office, as custodian for DTC
and registered in the name of DTC or a nominee of DTC, duly executed by the
Co-Issuers and authenticated by the Trustee or the Authenticating Agent as
hereinafter provided. The Aggregate Outstanding Amount of each Rule 144A
Global Note may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for DTC or its nominee, as the case
may be.


 


(c)                                 Regulation
S Global Notes and Rule 144A Global Notes may also be exchanged under the
limited circumstances set forth in Section 2.4 for notes in definitive
fully Registered form without interest coupons (each, a Definitive Class A-D Note), which may be either a Regulation S
Definitive Class A-D Note or a Rule 144A Definitive Class A-D
Note, with such legends as may be applicable thereto, which shall be duly
executed by the Issuer and the Co-Issuer and authenticated by the Trustee or
the Authenticating Agent as hereinafter provided.


 


(d)                                The
Class E Notes and the Class F Notes offered or sold in the United
States or to U.S. Persons pursuant to Rule 144A or another applicable
exemption from registration under the Securities Act shall be issued in the
form of physical certificates in definitive fully Registered form without
interest coupons substantially in the form of the certificated note attached as
Exhibit B-1 (each, a Definitive Class E
Note) or as Exhibit B-2
(each, a Definitive Class F Note), as the case may be, with such legends as
may be applicable thereto, which shall be duly executed by the Issuer and the
Co-Issuer and authenticated by the Trustee or the Authenticating Agent as
hereinafter provided.


 


(e)                                 The
Co-Issuers in issuing the Rated Notes may use “CUSIP” or “private placement”
numbers (if then generally in use), and, if so, the Trustee will indicate the
“CUSIP” or “private placement” numbers of the Rated Notes in notices of
redemption and related materials as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Rated Notes or as contained in any notice of redemption and related
materials.


 


2.2.                             AUTHORIZED AMOUNT; APPLICABLE
PERIODIC INTEREST RATE; STATED MATURITY DATE; DENOMINATIONS


 


(a)                                 The
aggregate principal amount of Rated Notes which may be issued under this Indenture
may not exceed U.S.$479,250,000, excluding Rated Notes issued upon registration
of, transfer of, or in exchange for, or in lieu of, other Rated Notes pursuant
to Section 2.4, 2.5 or 8.5.


 


(b)                                Such
Rated Notes shall be divided into nine Classes having designations, original
principal amounts, original Applicable Periodic Interest Rates and Stated
Maturities as follows:


 


56

















 




	
   

  	
   

  	
  Original Principal

  	
   

  	
  Applicable

  Periodic Interest

  	
   

  	
  Rated Note Stated

  	
   

  
	
  Designation

  	
   

  	
  Amount

  	
   

  	
  Rate

  	
   

  	
  Maturity Date

  	
   

  
	
  Class A-1
  Notes

  	
   

  	
  U.S.$339,735,000

  	
   

  	
  LIBOR + 0.265%

  	
   

  	
  2045

  	
   

  
	
  Class A-2
  Notes

  	
   

  	
  U.S.$47,000,000

  	
   

  	
  LIBOR + 0.350%

  	
   

  	
  2045

  	
   

  
	
  Class B
  Notes

  	
   

  	
  U.S.$41,400,000

  	
   

  	
  LIBOR + 0.450%

  	
   

  	
  2045

  	
   

  
	
  Class C
  Notes

  	
   

  	
  U.S.$18,125,000

  	
   

  	
  5.311%

  	
   

  	
  2045

  	
   

  
	
  Class D
  Notes

  	
   

  	
  U.S.$15,240,000

  	
   

  	
  6.205%

  	
   

  	
  2045

  	
   

  
	
  Class E
  Notes

  	
   

  	
  U.S.$5,000,000

  	
   

  	
  LIBOR + 2.100%

  	
   

  	
  2045

  	
   

  
	
  Class F
  Notes

  	
   

  	
  U.S.$12,750,000

  	
   

  	
  8.001%

  	
   

  	
  2045

  	
   

  






 


The Rated Notes will be issuable in minimum denominations of
U.S.$250,000 and, in each case, only in integral multiples of U.S.$1,000 in
excess of such minimum denominations. After issuance, (x) a Rated Note may
fail to be in compliance with the minimum denomination requirement as a result
of the repayment of principal thereon in accordance with the Priority of
Payments and (y) the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes or the Class F Notes may fail to be in an
amount which is an integral multiple of U.S.$1,000 due to the addition to the
principal amount thereof of deferred interest.


 


(c)                                 Interest
shall accrue on the Aggregate Outstanding Amount of each Class of Rated
Notes (determined as of the first day of each Interest Period and after giving
effect to any payment of principal occurring on such day) from the Closing Date
and will be payable in arrears on each Payment Date. Interest on each Class of
Rated Notes and interest on Defaulted Interest will be calculated in accordance
with the definition of Periodic Interest.


 


(d)                                The
Rated Notes shall be redeemable as provided in Section 9.


 


(e)                                 The
Depositary for the Global Notes shall initially be DTC.


 


(f)                                   The
Rated Notes shall be numbered, lettered or otherwise distinguished in such
manner as may be consistent herewith, determined by the Authorized Officers of
the Co-Issuers executing such Rated Notes as evidenced by their execution of
such Rated Notes.


 


2.3.                             EXECUTION, AUTHENTICATION,
DELIVERY AND DATING


 


(a)                                 The
Rated Notes shall be executed on behalf of the Co-Issuers by an Authorized
Officer of each of the Co-Issuers. The signatures of such Authorized Officers
on the Rated Notes may be manual or facsimile (including in counterparts).


 


(b)                                Rated
Notes bearing the manual or facsimile signatures of individuals who were at any
time the Authorized Officers of either of the Co-Issuers shall bind such
Person, notwithstanding the fact that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Rated Notes or did not hold such offices at the date of issuance of such Rated
Notes.


 


57














 


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


 


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


 


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


 


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


 


2.4.                             REGISTRATION, TRANSFER AND
EXCHANGE OF RATED NOTES


 


(a)                                 Registration of Rated Notes.
The Trustee is hereby appointed as the registrar hereunder (the Note Registrar). The Trustee is hereby appointed
as a transfer agent with respect to the Rated Notes (the Note Transfer Agent). The Note Registrar shall (acting
solely for this purpose as agent for the Issuer) keep a register (the Note Register)  at the Corporate Trust Office in
which, subject to such reasonable regulations as it may prescribe, the Note
Registrar shall provide for the registration of Rated Notes and the
registration of transfers of Rated Notes. Upon any resignation or removal of
the Note Registrar, the Issuer (after consultation with the Collateral Advisor)
shall propose a replacement for approval by the Holders of a Majority of the
then Aggregate Outstanding Amount of the Notes of the Controlling Class. The
Co-Issuers may not terminate the appointment of the Note Registrar or any Note
Transfer Agent without the consent of each Holder of Rated Notes.


 


Subject to this Section 2.4, upon surrender for registration of
transfer of any Rated Notes at the office or agency of the Co-Issuers to be
maintained as provided in Section 7.2, the Co-Issuers shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Rated Notes of any authorized
denomination and of a like aggregate principal amount.


 


At the option of the Holder, Rated Notes may be exchanged for Rated
Notes of like terms, in any authorized denominations and of like aggregate
principal amount, upon


 


58

















 


surrender of the Rated Notes to be exchanged at such office or agency.
Whenever any Rated Note is surrendered for exchange, the Co-Issuers shall execute
and the Trustee shall authenticate and deliver the Rated Notes that the Rated
Noteholder making the exchange is entitled to receive.


 


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


 


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


 


No service charge shall be made to a Holder for any registration of
transfer or exchange of Rated Notes, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith and delivery charges, if any, not made by regular mail.


 


(b)                                The initial sale of
each Note may be made in accordance with Section 4(2) of (or another applicable
exemption from registration under) the Securities Act or in accordance with
Regulation S under the Securities Act.


 


(c)                                 Transfers
of Class A Notes, Class B Notes, Class C Notes and Class D
Notes


 


(1)                                 Subject
to Section 2.4(c)(4), exchanges or transfers of beneficial interests in a Global
Note may be made only in accordance with the rules and regulations of the
Depositary and the transfer restrictions contained in the legend on such Global
Note and exchanges or transfers of interests in a Global Note may be made only
in accordance with the following:


 


(i)                                    Subject to Section 2.4(c)(1)(ii) through
(vi), transfers of a Global Note shall be limited to transfers of such Global
Note in whole, but not in part, to nominees of the Depositary or to a successor
of the Depositary or such successor’s nominee.


 


(ii)                               The
Trustee shall cause the exchange or transfer of any beneficial interest in a
Regulation S Global Note for a beneficial interest in a Rule 144A Global Note upon provision to the
Trustee and the Co-Issuers of a written certification in the form of Exhibit C-1
(a  Rule 144A
Transfer Certificate).


 


(iii)                            The
Trustee shall cause the exchange or transfer of any beneficial interest in a Rule 144A
Global Note for a beneficial interest in a Regulation S Global Note upon
provision to the Trustee and the Co-Issuers of a written certification
substantially in the form of Exhibit C-2 (a
Regulation S Transfer Certificate).


 


(iv)                             An owner of a beneficial
interest in a Regulation S Global Note may transfer such interest in the form
of a beneficial interest in such


 


59

















 


Regulation S Global Note without the provision of written
certification; provided that (1) such
transfer is made to a Person who is not a U.S. Person in an offshore
transaction in reliance on an exemption from the registration requirements of
the Securities Act under Regulation S and (2) the transferee, by purchase
of such interest in such Regulation S Global Note, will be deemed to have made
all representations, warranties and acknowledgements set forth in the
Regulation S Transfer Certificate.


 


(v)                                An owner of a
beneficial interest in a Rule 144A Global Note may transfer such interest
in the form of a beneficial interest in such Rule 144A Global Note without
the provision of written certification; provided that
the transferee, by purchase of such interest in such Rule 144A Global Note,
will be deemed to have made all representations, warranties and
acknowledgements set forth in the Rule 144A Transfer Certificate.


 


(vi)                             In the event Definitive Class A-D
Notes are issued pursuant to Section 2.4(c)(5), the Trustee shall cause
the transfer of (i) any beneficial interest in a Global Note for a
Definitive A-D Note that is a Regulation S Note (a Regulation
S Definitive Note),  upon
provision to the Trustee and the Issuer of a Regulation S Transfer Certificate
or (ii) any beneficial interest in a Global Note for a Definitive A-D Note
that is a Rule 144A Note (a Rule 144A Definitive Note),  upon
provision to the Trustee, the Co-Issuers and the Note Registrar of a Rule 144A
Transfer Certificate.


 


(2)                                 Subject to Section 2.4(c)(4),
in the event Definitive Class A-D Notes are issued pursuant to Section 2.4(c)(5),
the Trustee shall cause the transfer of (i) any Definitive A-D Note for a
beneficial interest in a Regulation S Global Note, upon provision to the
Trustee and the Issuer of a Regulation S Transfer Certificate or (ii) any
Definitive A-D Note for a beneficial interest in a Rule 144A Global Note,
upon provision to the Trustee and the Co-Issuers of a Rule 144A Transfer
Certificate.


 


(3)                                 Upon acceptance for
exchange or transfer of a beneficial interest in a Global Note for a Definitive
A-D Note, or upon acceptance for exchange or transfer of a Definitive A-D Note
for a beneficial interest in a Global Note, each as provided herein, the
Trustee shall approve the instruction at the Depositary to adjust the principal
amount of such Global Note on its records to evidence the date of such exchange
or transfer and the change in the principal amount of such Global Note.


 


(4)                                 Subject to the
restrictions on transfer and exchange set forth in this Section 2.4 and to
any additional restrictions on transfer or exchange specified in the Definitive
Class A-D Notes, the Holder of any Definitive A-D Note may transfer or
exchange the same in whole or in part (in a principal amount equal to the
minimum authorized denomination or any larger authorized amount) by
surrendering such Definitive A-D Note at the Corporate Trust Office or at the
office of any Note Transfer Agent, together with (x) in the case of any
transfer, an executed instrument of assignment and (y) in the case of any
exchange, a written request for exchange. Following a proper request for
transfer or exchange, the Trustee shall (provided it has available in its
possession an inventory of Definitive Class A-D Notes), within five
Business Days of such


 


60

















 


request if made at such Corporate Trust Office, or within ten Business
Days if made at the office of a Note Transfer Agent (other than the Trustee),
authenticate and make available at such Corporate Trust Office or at the office
of such Note Transfer Agent, as the case may be, to the transferee (in the case
of transfer) or Rated Noteholder (in the case of exchange) or send by first
class mail (at the risk of the transferee in the case of transfer or Rated
Noteholder in the case of exchange) to such address as the transferee or Rated
Noteholder, as applicable, may request, a Definitive A-D Note or Notes, as the
case may require, for a like aggregate principal amount and in such authorized
denomination or denominations as may be requested. The presentation for
transfer or exchange of any Definitive Note shall not be valid unless made at
the Corporate Trust Office or at the office of a Note Transfer Agent or by a
duly authorized attorney-in-fact. Beneficial interests in Global Notes shall be
exchangeable for Definitive Class A-D Notes only under the limited
circumstances described in Section 2.4(c)(5).


 


(5)                                 Interests in a Global
Note deposited with or on behalf of the Depositary pursuant to Section 2.1
hereunder shall be transferred (A) to the Beneficial Owners thereof in the
form of Definitive Class A-D Notes only if such transfer otherwise
complies with this Section 2.4 (including Section 2.4(c)(1) and (2) and
(1) the Depositary notifies the Issuer that it is unwilling or unable to
continue as Depositary for the Rated Notes, (2) the Depositary ceases to
be a “clearing agency” registered under the Exchange Act and a successor
Depositary is not appointed by the Issuer within 90 days of such notice or (3) as
a result of any amendment to or change in the laws or regulations of the Cayman
Islands, or of any authority therein or thereof having power to tax, or in the
interpretation or administration of such laws or regulations which become
effective on or after the Closing Date, the Issuer, the Trustee or any Note
Paying Agent becomes aware that it is or will be required to make any deduction
or withholding from any payment in respect of the Global Notes which would not
be required if the Global Notes were not represented by a global certificate or
(B) to the purchaser thereof in the form of one or more Definitive Notes
in accordance with the provisions of Section 2.4(c)(1).


 


(6)                                 If interests in any
Global Note are to be transferred to the Beneficial Owners thereof in the form
of Definitive Class A-D Notes pursuant to Section 2.4(c)(5), such
Global Note shall be surrendered by the Depositary, or its custodian on its
behalf, to the Corporate Trust Office or to the Note Transfer Agent located in
Chicago, Illinois and the Trustee shall authenticate and deliver without
charge, upon such transfer of interests in such Global Note, an equal aggregate
principal amount of Definitive Notes of authorized denominations. The
Definitive Class A-D Notes transferred pursuant to this Section 2.4
shall be executed, authenticated and delivered only in the denominations
specified in Section 2.2(b) and registered in such names as the
Depositary shall direct in writing.


 


(7)                                 For so long as one or
more Global Notes are Outstanding:


 


(i)                                    the
Trustee and its directors, officers, employees and agents may deal with the
Depositary for all purposes (including the making of distributions on, and the
giving of notices with respect to, the Global Notes);


 


61

















 


(ii)                                 unless otherwise provided
herein and subject to Section 2.4(c)(7)(i) above, the rights of
Beneficial Owners shall be exercised only through the Depositary and shall be
limited to those established by law and agreements between such Beneficial
Owners and the Depositary;


 


(iii)                              for purposes of
determining the identity of and principal amount of Rated Notes beneficially
owned by a Beneficial Owner, the records of the Depositary shall be conclusive
evidence of such identity and principal amount and the Trustee may conclusively
rely on such records when acting hereunder;


 


(iv)                             the Depositary will make
book-entry transfers among the Depositary Participants of the Depositary and
will receive and transmit distributions of principal of and interest on the
Global Notes to such Depositary Participants; and


 


(v)                                the Depositary
Participants of the Depositary shall have no rights under this Indenture under
or with respect to any of the Global Notes held on their behalf by the
Depositary, and the Depositary may be treated by the Trustee and its agents,
employees, officers and directors as the absolute owner of the Global Notes for
all purposes whatsoever.


 


(d)                               Transfers
of Class E Notes and Class F Notes.


 


(1)                                 If
a holder of a beneficial interest in a Definitive Class E Note or a
Definitive Class F Note wishes at any time to transfer its interest in
such Definitive Class E Note or Definitive Class F Note, such holder
may transfer or cause the transfer of such interest for an equivalent
beneficial interest in one or more such Definitive Class E Notes or
Definitive Class F Notes as provided below. Upon receipt by the Issuer and
the Note Registrar of (A) such holder’s Definitive Class E Note or
Definitive Class F Note properly endorsed for assignment to the transferee
and (B) a certificate in the form of Exhibit C-3 (a Definitive Class E Note Transfer Certificate) or Exhibit C-4 (a Definitive Class F Note Transfer Certificate),  as the case may be, given by the transferee of
such beneficial interest then the Note Registrar shall cancel such Definitive Class E
Note or Definitive Class F Note, record the transfer in the Note Register
and authenticate and deliver one or more Definitive Class E Notes or
Definitive Class F Notes bearing the same designation as the Definitive Class E
Notes or Definitive Class F Notes endorsed for transfer, registered in the
names specified in the assignment described in clause (A) above, in
principal amounts designated by the transferee (the Class and the
aggregate of such amounts being the same as the beneficial interest in the
Definitive Class E Notes or Definitive Class F Notes surrendered by
the transferor), and in the minimum denominations and integral multiples in
excess thereof If any Definitive Class E Notes are upon issuance acquired
and held by a Permitted NS Purchaser, then no such Definitive Class E
Notes may be sold, transferred or otherwise disposed of to a Benefit Plan
Investor unless and until the Co-Issuers have furnished to the Trustee an
opinion of recognized U.S. tax counsel to the effect that the Definitive Class E
Notes will be treated as debt for U.S. federal income tax purposes. Unless and
until such tax opinion is delivered, each investor and transferee of an
interest in a Definitive Class E Note shall


 


62

















 


deliver an ERISA Restriction Letter to the Issuer, the
Trustee and the Rated Note Placement Agents acknowledging the transfer
restrictions applicable to such Definitive Class E Notes and agreeing to
cause any future transferee of such Definitive Class E Notes to deliver a
letter substantially in the form of the ERISA Restriction Letter. In addition,
the Note Registrar shall not register any transfer of Definitive Class F
Notes to a proposed transferee of Definitive Class F Notes that has represented
that it is a Benefit Plan Investor or a Controlling Person if the transfer
would result in Benefit Plan Investors owning 25% or more of the value of the
outstanding Definitive Class F Notes (as determined without regard to
interests held by Controlling Persons, and otherwise contemplated by the
applicable regulations under ERISA) immediately after such transfer, based on
assurances received from investors. Without limiting the generality of the
forgoing, the Note Registrar shall not register any transfer of Definitive Class F
Notes represented by Regulation S Notes to a proposed transferee of such
Definitive Class F Notes that has represented that it is or may become a
Benefit Plan Investor or a Controlling Person. Without limiting the generality of
the foregoing, a transfer of beneficial interests in a Definitive Class F
Note will not be permitted unless an ERISA Restriction Letter is obtained from
each transferee of a Definitive Class F Note, for the benefit of the
Issuer, the Trustee and the Rated Note Placement Agents, (i) in the case
of a Definitive Class F Note not represented by a Regulation S Note,
regarding whether it is, or is not and will not be, a Benefit Plan Investor or
Controlling Person, or (ii) in the case of a Definitive Class F Note
represented by a Regulation S Note, to the effect that it is not and will not
be a Benefit Plan Investor or Controlling Person. Any purported transfer in
violation of the foregoing requirements shall be null and void ab initio, and the Note Registrar shall
not register any such purported transfer and shall not authenticate and deliver
such Definitive Class F Notes.


 


(2)                                 If a holder of a
beneficial interest in one or more Definitive Class E Notes or Definitive Class F
Notes wishes at any time to exchange its interest in such Definitive Class E
Notes or Definitive Class F Notes for an interest in one or more such
Definitive Class E Notes or Definitive Class F Notes of different
principal amounts, such holder may exchange or cause the exchange of such
interest for an equivalent beneficial interest in the Definitive Class E
Notes or Definitive Class F Notes bearing the same designation as the
Definitive Class E Notes or Definitive Class F Notes endorsed for
exchange as provided below. Upon receipt by the Note Registrar of (A) such
holder’s Definitive Class E Notes or Definitive Class F Notes
properly endorsed for such exchange and (B) written instructions from such
holder designating the number and principal amounts of the applicable
Definitive Class E Notes or Definitive Class F Notes to be issued
(the aggregate principal amounts of such Definitive Class E Notes or
Definitive Class F Notes being the same as the Definitive Class E
Notes or Definitive Class F Notes surrendered for exchange), then the Note
Registrar shall cancel such Definitive Class E Notes or Definitive Class F
Notes, record the exchange in the Note Register and authenticate and deliver
one or more Definitive Class E Notes or Definitive Class F Notes
bearing the same designation endorsed for exchange, registered in the same
names as the Definitive Class E Notes or Definitive Class F Notes
surrendered by such holder or such different names as are specified in the
endorsement described in clause (A) above, in different principal amounts
designated by such holder (the Class and the aggregate principal amounts
being the same as the beneficial interest in the Definitive Class E Notes
or Definitive


 


63

















 


Class F Notes surrendered by such holder), and the minimum
denominations and integral multiples in excess.


 


(e)                                 Denominations;
Qualified Purchaser Status. No Person may hold a beneficial interest in any
Rated Note except in a denomination authorized for the Rated Notes of such Class under
Section 2.2(b). In addition, no transfer of a Rated Note (or any interest
therein) may be made to any Person that is a U.S. Person unless such Person is (A) a
Qualified Institutional Buyer (or, with respect to the Class E Notes and
the F Notes only, an Institutional Accredited Investor) or an NS Purchaser and (B) a
Qualified Purchaser. In addition, no transfer of a Rated Note (or any interest
therein) may be made to any Person that is a U.S. Person unless such Person (A) was
not formed for the purpose of investing in either of the Co-Issuers (except
when each beneficial owner of the purchaser is a Qualified Purchaser, (B) has
received the necessary consent from its beneficial owners if it is a private
investment company formed before April 30, 1996, (C) is not a
broker-dealer that owns and invests on a discretionary basis less than
U.S.$25,000,000 in securities of unaffiliated issuers, (D) is not a
pension, profit, sharing or other retirement trust fund or plan in which the
partners, beneficiaries or participants, as applicable, may designate the
particular investments to be made, and in a transaction that may be effected
without loss of any applicable Investment Company Act exemption, (E) will
provide notice to any subsequent transferee of the transfer restrictions
provided in the legend, (F) will hold and transfer in a principal amount
of not less than U.S.$250,000, for it or for each account for which it is
acting and (G) will provide the Issuer from time to time such information
as it may reasonably request in order to ascertain compliance with the
foregoing. Any purported transfer that is not in compliance with this Section 2.4
or the legends on the Rated Notes will be void ab initio, and will
not operate to transfer any rights to the transferee, notwithstanding any
instructions to the contrary to the Co-Issuers, the Trustee or any
intermediary. If any purported transfer of Rated Notes or any beneficial
interest therein to a purported transferee does not comply with the
requirements set forth in this Section 2.4 or the legends on the Rated
Notes, then the purported transferor of such Rated Notes or beneficial interest
therein shall be required to cause the purported transferee to surrender the
Rated Notes or any beneficial interest therein in return for a refund of the
consideration paid therefor by such transferee (together with interest thereon)
or to cause the purported transferee to dispose of such Rated Notes or
beneficial interest promptly in one or more open market sales to one or more
persons each of whom satisfies the requirements of this Section 2.4 and
the legends on the Rated Notes and such purported transferor shall take, and
shall cause such transferee to take, all further action necessary or desirable,
in the judgment of the Trustee, to ensure that such Rated Notes or any
beneficial interest therein are held by persons in compliance therewith.


 


(f)                                   Requirement
to Sell.


 


(1)                                 If, notwithstanding the restrictions
set forth in this Section 2.4, either of the Co-Issuers determines that
any beneficial owner of a Rule 144A Note (A) is a U.S. Person and (B) is not a Qualified
Institutional Buyer and also a Qualified Purchaser, either of the Co-Issuers
may require, by notice to such beneficial owner that such beneficial owner sell
all of its right, title and interest to such Rated Note (or interest therein)
to a Person that is both (1) a Qualified Institutional Buyer and (2) a
Qualified Purchaser, with such sale to be effected within 30 days after notice
of such sale requirement is given. If such beneficial owner fails to effect the
transfer required within such 30-day period, (x) upon


 


64

















 


written direction from the Issuer, the Trustee shall, and is hereby
irrevocably authorized by such beneficial owner to cause its interest in such
Rated Note to be transferred in a commercially reasonable sale (conducted by
the Trustee in accordance with Sections 9-610 and 9-611 of the UCC as applied
to securities that are customarily sold on a recognized market or that may
decline speedily in value) to a Person that certifies to the Trustee, in
connection with such transfer, that such Person is both (1) a Qualified Institutional
Buyer and (2) a Qualified Purchaser and (y) pending such transfer, no
further payments will be made in respect of such Rated Note (or beneficial
interest therein) held by such beneficial owner.


 


(2)                                 If,
notwithstanding the restrictions set forth in this Section 2.4, either of
the Co-Issuers determines that any beneficial owner of a Regulation S Note is (A) a
U.S. Person or (B) a Benefit Plan Investor or a Controlling Person (for
the purposes of ERISA), either of the Co-Issuers may require, by notice to such
beneficial owner that such beneficial owner sell all of its right, title and
interest to such Rated Note (or interest therein) to a Person that is not (1) a
U.S. Person or (2) a Benefit Plan Investor or a Controlling Person (for
the purposes of ERISA), with such sale to be effected within 30 days after
notice of such sale requirement is given. If such beneficial owner fails to
effect the transfer required within such 30-day period, (x) upon written
direction from the Issuer, the Trustee shall, and is hereby irrevocably
authorized by such beneficial owner to cause its interest in such Rated Note to
be transferred in a commercially reasonable sale (conducted by the Trustee in
accordance with Sections 9-610 and 9-611 of the UCC as applied to securities
that are customarily sold on a recognized market or that may decline speedily
in value) to a Person that certifies to the Trustee, in connection with such
transfer, that such Person is neither (1) a U.S. Person nor (2) a
Benefit Plan Investor or a Controlling Person (for the purposes of ERISA) and (y) pending
such transfer, no further payments will be made in respect of such Rated Note
(or beneficial interest therein) held by such beneficial owner.


 


(g)                                Legends. Any Rated Note issued upon the transfer, exchange
or replacement of Rated Notes shall bear such applicable legend set forth in
the relevant Exhibit hereto unless there is delivered to the Trustee, the
Note Registrar, the Issuer and the Co-Issuer such satisfactory evidence, which
may include an Opinion of Counsel, as may be reasonably required by any of the
Trustee, the Note Registrar, the Issuer and the Co-Issuer to the effect that
neither such applicable legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the
provisions of Rule 144A or another exemption from registration under the
Securities Act and to ensure that neither of the Co-Issuers nor the pool of
Collateral becomes an investment company required to be registered under the
Investment Company Act. Upon provision of such satisfactory evidence, the
Trustee, at the direction of the Issuer and the Co-Issuer, shall authenticate
and deliver Rated Notes that do not bear such applicable legend.


 


(h)                                Expenses; Acknowledgment of
Transfer. Transfer, registration and exchange shall be permitted as
provided in this Section 2.4 without any charge to the Rated Noteholder except
for a sum sufficient to cover any tax or other governmental charge payable in
connection therewith or the expenses of delivery (if any) not made by regular
mail and payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith pursuant to Section 2.4(a).
Registration of the transfer of a Rated


 


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Note by the Trustee shall be deemed to be the acknowledgment of such
transfer on behalf of the Co-Issuers.


 


(i)                                    Surrender
upon Final Payment. Upon final payment due on the date on which all
outstanding unpaid principal of a Rated Note becomes due and payable as therein
or herein provided, whether at the Stated Maturity Date or by declaration of
acceleration, call for redemption or otherwise, the Holder thereof shall
present and surrender such Rated Note at the Corporate Trust Office of the
Trustee in Chicago, Illinois.


 


(j)                                    Repurchase
and Cancellation of Rated Notes. The Co-Issuers will not purchase, redeem,
prepay or otherwise acquire, directly or indirectly, any of the Outstanding
Rated Notes except upon the redemption of the Rated Notes in accordance with
the terms of this Indenture and the Rated Notes. The Co-Issuers will promptly
cancel all Rated Notes acquired by them pursuant to any payment, purchase,
redemption, prepayment or other acquisition of Rated Notes pursuant to any
provision of this Indenture and no Rated Notes may be issued in substitution or
exchange for any such Rated Notes.


 


(k)                                 Compliance
with Transfer Restrictions. Notwithstanding anything contained herein to
the contrary, neither the Trustee nor the Note Registrar shall be responsible
for ascertaining whether any transfer complies with the registration provisions
of or exemptions from the Securities Act, applicable state securities laws, the
rules of any Depositary, ERISA, the Code or the Investment Company Act; provided that if a certificate is
specifically required by the express terms of this Section 2.4 to be
delivered to the Trustee or the Note Registrar by a purchaser or transferee of
a Rated Note, the Trustee or the Note Registrar, as the case may be, shall be
under a duty to receive and examine the same to determine whether the transfer
contemplated thereby substantially complies with the express terms of this
Indenture and shall promptly notify the party delivering the same if such
transfer does not comply with such terms. To the extent applicable to the
Issuer, the Issuer shall impose additional restrictions to comply with the USA
PATRIOT Act, and any such transfer restrictions shall be binding on each Holder
or Beneficial Owner of a Rated Note. The Issuer shall notify the Trustee and
the Note Registrar of the imposition of any such transfer restrictions.


 


(1)                                 Physical
Rated Notes. The Co-Issuers will promptly make available to the Trustee without
charge a reasonable supply of Definitive Notes in definitive, fully Registered
Form, without interest coupons.


 


2.5.                           MUTILATED, DEFACED,
DESTROYED, LOST OR STOLEN RATED NOTES


 


If (a) any mutilated or defaced Rated Note is surrendered to a
Note Transfer Agent, or if there shall be delivered to the Co-Issuers or the
Issuer, the Trustee and the Note Transfer Agent (each, a Specified
Person) evidence to their reasonable
satisfaction of the destruction, loss or theft of any Rated Note, and (b) there
is delivered to the Specified Persons such security or indemnity as may
reasonably be required by them to save each of them harmless then, in the
absence of notice to the Specified Persons that such Rated Note has been
acquired by a bona fide purchaser, the Co-Issuers or the Issuer shall execute
and shall direct the Trustee to authenticate, and upon Issuer Request the
Trustee shall authenticate and deliver, in lieu of any such mutilated, defaced,
destroyed, lost or stolen Rated Note, a new Rated Note of the same Class as
such mutilated, defaced, destroyed, lost or stolen Rated Note, of like tenor
(including the same date of issuance) and equal principal amount, registered in
the same manner, dated the date of its authentication, bearing interest from
the date to which interest has been paid on the mutilated, defaced, destroyed,
lost or stolen Rated Note and bearing a number not contemporaneously
outstanding.


 


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


 


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


 


Upon the issuance of any new Rated Note under this Section 2.5,
the Co-Issuers, the Trustee or any Note Transfer Agent may require the payment
by the registered Holder thereof of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.


 


Every new Rated Note issued pursuant to this Section 2.5 in lieu
of any mutilated, defaced, destroyed, lost or stolen Rated Note, shall
constitute an original additional contractual obligation of the Co-Issuers and
such new Rated Note shall be entitled, subject to the second paragraph of this Section 2.5,
to all the benefits of this Indenture equally and proportionately with any and
all other Rated Notes duly issued hereunder.


 


The provisions of this Section 2.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, defaced, destroyed, lost or stolen
Rated Notes.


 


2.6.                              PAYMENT OF PRINCIPAL AND
INTEREST; RIGHTS PRESERVED


 


(a)                                  Each Class of
Rated Notes shall accrue interest during each Interest Period applicable to such
Class in the manner and at the Applicable Periodic Interest Rate specified
in Section 2.2. Interest on each Class of Rated Notes shall be due
and payable on each Payment Date; provided that (i) interest on the Class A-2
Notes is subordinated in right of payment to the prior payment in full on each
Payment Date of the interest due and payable on the Class A-1 Notes
(together with any Defaulted Interest thereon), (ii) interest on the Class B
Notes is subordinated in right of payment to the prior payment in full on each
Payment Date of the interest due and payable on the Class A Notes
(together with any Defaulted Interest thereon), (iii) interest on the Class C
Notes is subordinated in right of payment to the prior payment in full on each
Payment Date of the interest due and payable on the Class A Notes
(together with any Defaulted Interest thereon) and on the Class B Notes
(together with any Defaulted Interest thereon), (iv) interest on the Class D
Notes is subordinated in right of payment to the prior payment in full on each
Payment Date of the interest due and payable on the Class A Notes
(together with any Defaulted Interest thereon), on the Class B Notes
(together with any Defaulted Interest thereon) and on the Class C Notes
(together with any Defaulted Interest thereon), (v) interest on the Class E
Notes is subordinated in right of payment to the prior payment in full on each
Payment Date of the interest due and payable on the Class A Notes
(together with any Defaulted Interest thereon), on the Class B Notes
(together with any Defaulted Interest thereon), on the Class C Notes
(together with any Defaulted Interest thereon) and the Class D Notes
(together with any Defaulted Interest thereon), (vi) interest on the Class F
Notes is subordinated in right of payment to the prior payment in full on each
Payment Date of the interest due and payable on the Class A Notes


 


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(together with any Defaulted Interest thereon), on the Class B
Notes (together with any Defaulted Interest thereon), on the Class C Notes
(together with any Defaulted Interest thereon), on the Class D Notes
(together with any Defaulted Interest thereon) and the Class E Notes
(together with any Defaulted Interest thereon), and (vii) interest on all
Rated Notes is subordinated in right of payment to the prior payment in full on
each Payment Date of other amounts in accordance with Section 11.1. Except
as provided in Section 5.5, no payment shall be made by the Co-Issuers
hereunder other than on a Payment Date.


 


So long as any Class A Notes or Class B Notes are
Outstanding, any Class C Applicable Periodic Interest Shortfall Amount
shall be deferred and added to the then Aggregate Outstanding Amount of the Class C
Notes and shall not be considered “due and payable” for the purposes of Section 5.1(a) until
the Payment Date on which funds are available to pay such Class C
Applicable Periodic Interest Shortfall Amount in accordance with Section 11.1.


 


So long as any Class A Notes, Class B Notes or Class C
Notes are Outstanding, any Class D Applicable Periodic Interest Shortfall
Amount shall be deferred and added to the then Aggregate Outstanding Amount of
the Class D Notes and shall not be considered “due and payable” for the
purposes of Section 5.1(a) until the Payment Date on which funds are
available to pay such Class D Applicable Periodic Interest Shortfall
Amount in accordance with Section 11.1.


 


So long as any Class A Notes, Class B Notes, Class C
Notes or Class D Notes are Outstanding, any Class E Applicable
Periodic Interest Shortfall Amount shall be deferred and added to the then
Aggregate Outstanding Amount of the Class E Notes and shall not be
considered “due and payable” for the purposes of Section 5.1(a) until
the Payment Date on which funds are available to pay such Class E
Applicable Periodic Interest Shortfall Amount in accordance with Section 11.1.


 


So long as any Class A Notes, Class B Notes, Class C
Notes, Class D Notes or Class E Notes are Outstanding, any Class F
Applicable Periodic Interest Shortfall Amount shall be deferred and added to
the then Aggregate Outstanding Amount of the Class F Notes and shall not
be considered “due and payable” for the purposes of Section 5.1(a) until
the Payment Date on which funds are available to pay such Class F
Applicable Periodic Interest Shortfall Amount in accordance with Section 11.1.


 


(b)                                 The principal of each
Rated Note shall be payable no later than the Stated Maturity Date thereof
unless the unpaid principal of such Rated Note becomes due and payable at an
earlier date by declaration of acceleration, call for redemption or otherwise; provided that:


 


(1)                                  so long as any Class A-1
Notes are Outstanding, except as provided in Section 9 and Section 11.1(b)(15)
and (16), the payment of principal of the Class A-2 Notes, the B Notes,
the Class C Notes, the Class D Notes, the Class E Notes and the Class F
Notes (x) may only occur after principal of the Class A Notes has
been paid in full and (y) shall be subordinated to the payment on each
Payment Date of the principal and interest due and payable on the Class A
Notes and other amounts payable in accordance with Section 11.1;


 


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(2)                                  so long as any Class A
Notes are Outstanding, except as provided in Section 9 and Section 11.1(b)(15)
and (16), the payment of principal of the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes and the Class F
Notes (x) may only occur after principal of the Class A Notes has been
paid in full and (y) shall be subordinated to the payment on each Payment Date
of the principal and interest due and payable on the Class A Notes and
other amounts payable in accordance with Section 11.1;


 


(3)                                  so long as any Class A
Notes or Class B Notes are Outstanding, except as provided in Section 11.1(b)(15)
and (16), the payment of principal of the Class C Notes, the Class D
Notes, the Class E Notes and the Class F Notes (x) may only
occur after principal of the Class A Notes and the Class B Notes has
been paid in full and (y) shall be subordinated to the payment on each
Payment Date of the principal and interest due and payable on the Class A
Notes and Class B Notes and other amounts payable in accordance with Section 11.1;


 


(4)                                  so long as any Class A
Notes, Class B Notes or Class C Notes are Outstanding, except as
provided in Section 9 and Section 11.1(b)(15) and (16), the payment
of principal of the Class D Notes, the Class E Notes and the Class F
Notes (x) may only occur after principal of the Class A Notes, the Class B
Notes and the Class C Notes has been paid in full and (y) shall be
subordinated to the payment on each Payment Date of the principal and interest
due and payable on the Class A Notes, the Class B Notes and the Class C
Notes and other amounts payable in accordance with Section 11.1;


 


(5)                                  so long as any Class A
Notes, Class B Notes, Class C Notes or Class D Notes are Outstanding,
except as provided in Section 9 and Section 11.1(b)(15) and (16), the
payment of principal of the Class E Notes and the Class F Notes (x) may
only occur after principal of the Class A Notes, the Class B Notes, the
Class C Notes and the Class D Notes has been paid in full and (y) shall
be subordinated to the payment on each Payment Date of the principal and
interest due and payable on the Class A Notes, the Class B Notes, the
Class C Notes and the Class D Notes and other amounts payable in
accordance with Section 11.1.


 


(6)                                  so long as any Class A
Notes, Class B Notes, Class C Notes, Class D Notes or
Class E Notes are Outstanding, except as provided in Section 9 and Section 11.1(b)(15)
and (16), the payment of principal of the Class F Notes (x) may only
occur after principal of the Class A Notes, the Class B Notes, the
Class C Notes, the Class D Notes and the Class E Notes has been
paid in full and (y) shall be subordinated to the payment on each Payment
Date of the principal and interest due and payable on the Class A Notes,
the Class B Notes, the Class C Notes, the Class D Notes and
the Class E Notes and other amounts payable in accordance with Section 11.1.


 


(c)                                  So long as the
Coverage Tests are satisfied, principal will not be payable on any Class of
Rated Notes except (i) upon the occurrence of a Redemption, (ii) in
the case of any Class B Notes, Class C Notes, Class D Notes, Class E
Notes or Class F Notes, to pay amounts in respect of the Class C
Cumulative Applicable Periodic Interest Shortfall Amount, the Class D
Cumulative Applicable Periodic Interest Shortfall Amount, the Class E
Cumulative Applicable Periodic Interest Shortfall Amount or the Class F
Cumulative


 


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Applicable Periodic Interest Shortfall Amount, as the case may be, in
accordance with Section 11.1 and (iii) on each Payment Date, in
accordance with Section 11.1.


 


(d)                                 As a condition to the
payment of any principal of or interest on any Rated Note without the
imposition of withholding tax, any Note Paying Agent shall require the previous
delivery of properly completed and signed applicable U.S. federal income tax
certifications (generally, an Internal Revenue Service Form W-9 (or
applicable successor form) in the case of a person that is a “United States
person” within the meaning of Section 7701(a)(30) of the Code or an
Internal Revenue Service Form W-8 (or applicable successor form) in the
case of a person that is not a “United States person” within the meaning of Section 7701(a)(30)
of the Code) or other certification acceptable to it to enable the Co-Issuers,
the Trustee and any Note Paying Agent to determine their duties and liabilities
with respect to any taxes or other charges that they may be required to pay,
deduct or withhold in respect of such Rated Note or the Holder of such Rated
Note under any present or future law or regulation of the Cayman Islands or the
United States or any present or future law or regulation of any political
subdivision thereof or taxing authority therein or to comply with any reporting
or other requirements under any such law or regulation.


 


(e)                                  All payments made by
the Issuer under the Rated Notes will be made without any deduction or
withholding for or on the account of any tax unless such deduction or
withholding is required by applicable law, as modified by the practice of any
relevant governmental authority, then in effect. If the Issuer is so required
to deduct or withhold, then neither the Issuer nor the Co-Issuer will be
obligated to pay any additional amounts in respect of such withholding or
deduction.


 


(f)                                    Payments in respect
of principal of and interest on the Rated Notes shall be payable by wire
transfer in immediately Available Funds to a Dollar account maintained by the
Rated Noteholders in accordance with wire transfer instructions received by any
Note Paying Agent on or before the Record Date or, if no wire transfer
instructions are received by a Note Paying Agent, by a Dollar check drawn on a
bank in the United States mailed to the address of such Rated Noteholder as it
appears on the Note Register at the close of business on the Record Date for
such payment.


 


(g)                                 The principal of and
interest on any Rated Note which is payable on a Redemption Date or in
accordance with Section 11.1 on a Payment Date and is punctually paid or
duly provided for on such Redemption Date or Payment Date shall be paid to the
Person in whose name that Rated Note (or one or more predecessor Rated Notes)
is registered at the close of business on the Record Date for such payment. All
such payments that are mailed or wired and returned to the Note Paying Agent
shall be held for payment as herein provided at the office or agency of the Co-Issuers
to be maintained as provided in Section 7.2.


 


Payments to Holders of the Rated Notes of each Class shall be made
in the proportion that the Aggregate Outstanding Amount of the Rated Notes of
such Class registered in the name of each such Holder on the Record Date
for such payment bears to the Aggregate Outstanding Amount of all Rated Notes
of such Class on such Record Date.


 


(h)                                 Payment of any
Defaulted Interest may be made in any other lawful manner in accordance with Section 11.1
if notice of such payment is given by the Trustee to the


 


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Co-Issuers and the Rated Noteholders, and such manner of payment shall
be deemed practicable by the Trustee.


 


(i)                                     All reductions in
the principal amount of a Rated Note (or one or more predecessor Rated Notes)
effected by payments of installments of principal made on any Payment Date or
Redemption Date shall be binding upon all future Holders of such Rated Note and
of any Rated Note issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, whether or not such payment is noted on
such Rated Note.


 


(j)                                     Notwithstanding
anything to the contrary herein, the obligations of the Co-Issuers or the
Issuer, as the case may be, under the Rated Notes or this Indenture or arising
in connection herewith are limited recourse obligations of the Co-Issuers or
the Issuer, as the case may be, payable solely from the Collateral and
following realization of the Collateral, all obligations of and all claims
against the Co-Issuers or the Issuer, as the case may be, hereunder or arising
in connection herewith shall be extinguished and shall not thereafter revive.
No recourse shall be had against any Officer, member, director, employee,
security holder or incorporator of the Co-Issuers or their respective
successors or assigns for the payment of any amounts payable under the Rated
Notes or this Indenture. It is understood that the foregoing provisions of this
Section 2.6(j) shall not (i) prevent recourse to the Collateral
for the sums due or to become due under any security, instrument or agreement
which is part of the Collateral or (ii) constitute a waiver, release or
discharge of any indebtedness or obligation evidenced by the Rated Notes or
secured by this Indenture until such Collateral has been realized, whereupon
any outstanding indebtedness or obligation shall be extinguished. It is further
understood that the foregoing provisions of this Section 2.6(j) shall
not limit the right of any Person to name the Issuer or the Co-Issuer as a
party defendant in any action or suit or in the exercise of any other remedy
under the Rated Notes or this Indenture, so long as no judgment in the nature
of a deficiency judgment or seeking personal liability shall be asked for or
(if obtained) enforced against any such Person or entity.


 


(k)                                  Subject to the
foregoing provisions of this Section 2.6 and the provisions of Sections
2.4 and 2.5, each Rated Note delivered under this Indenture and upon
registration of transfer of or in exchange for or in lieu of any other Rated
Note shall carry the rights of unpaid interest and principal that were carried
by such other Rated Note.


 


ARTICLE III


 


CONDITIONS PRECEDENT


 


3.1.                              GENERAL PROVISIONS


 


The Rated Notes may be executed by the Co-Issuers and delivered to the
Trustee for authentication and thereupon the same shall be authenticated and
delivered by the Trustee (or an Authenticating Agent on its behalf) upon Issuer
Request, upon receipt by the Trustee of the following:


 


(a)                                  (1)                                  an
Officer’s certificate of the Issuer, (A) evidencing the authorization by
Board Resolution of the execution and delivery of, and the performance of the
Issuer’s obligations under, each Transaction Document, in each case as may be
amended on or prior to, and as in effect on, the Closing Date, and the
execution, authentication and delivery of the Rated Notes and specifying the
Stated Maturity Date, the principal amount and the Applicable Periodic Interest
Rate with respect


 


71

















 


to each Class of Rated Notes to be authenticated and delivered,
and (B) certifying that (1) the attached copy of such Board
Resolution is a true and complete copy thereof, (2) such resolutions have
not been rescinded and are in full force and effect on and as of the Closing
Date and (3) the Officers authorized to execute and deliver such documents
hold the offices and have the signatures indicated thereon; and


 


(2)                                  an Officer’s
certificate of the Co-Issuer (A) evidencing the authorization by Board
Resolution of the execution and delivery of, and the performance of the
Co-Issuer’s obligations under, this Indenture, as may be amended on or prior
to, and as in effect on, the Closing Date, and the execution, authentication
and delivery of the Rated Notes and specifying the Stated Maturity Date, the
principal amount and the Applicable Periodic Interest Rate of each Class of
Rated Notes to be authenticated and delivered, and (B) certifying that (1) the
attached copy of such Board Resolution is a true and complete copy thereof, (2) such
resolutions have not been rescinded and are in full force and effect on and as
of the Closing Date and (3) the Officers authorized to execute and deliver
such documents hold the offices and have the signatures indicated thereon;


 


(b)                                 (1)                                  either
(A) a certificate of the Issuer, or other official document evidencing the
due authorization, approval or consent of any governmental body or bodies, at
the time having jurisdiction in the premises, together with an Opinion of
Counsel to the Issuer satisfactory in form and substance to the Trustee and the
Initial Hedge Counterparty on which the Trustee and the Initial Hedge
Counterparty are entitled to rely to the effect that no other authorization,
approval or consent of any governmental body is required for the valid issuance
of the Rated Notes, or (B) an Opinion of Counsel to the Issuer
satisfactory in form and substance to the Trustee and the Initial Hedge
Counterparty to the effect that no such authorization, approval or consent of any
governmental body is required for the valid issuance of the Rated Notes except
as may have been given; and


 


(2)                                  either (A) a
certificate of the Co-Issuer or other official document evidencing the due
authorization, approval or consent of any governmental body or bodies, at the
time having jurisdiction in the premises, together with an Opinion of Counsel
to the Co-Issuer satisfactory in form and substance to the Trustee and the
Initial Hedge Counterparty on which the Trustee and the Initial Hedge Counterparty
are entitled to rely to the effect that no other authorization, approval or
consent of any governmental body is required for the valid issuance of the
Rated Notes, or (B) an Opinion of Counsel to the Co-Issuer satisfactory in
form and substance to the Trustee and the Initial Hedge Counterparty that no
such authorization, approval or consent of any governmental body is required
for the valid issuance of the Rated Notes except as may have been given;


 


(c)                                  (1)                                  an opinion of
Clifford Chance US LLP, special New York counsel to the Co-Issuers, dated the
Closing Date, substantially in the form of Exhibit E-1;


 


(2)                                  an opinion of
Walkers, special Cayman Islands counsel to the Issuer, dated the Closing Date,
substantially in the form of Exhibit E-2;


 


(3)                                  an opinion of Kennedy
Covington Lobdell & Hickman, L.L.P., counsel to the Trustee, dated the
Closing Date, substantially in the form of Exhibit F;


 


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(4)                                  an opinion of Thacher
Proffitt & Wood LLP, counsel to the Collateral Advisor, dated the
Closing Date, substantially in the form of Exhibit G; and


 


(5)                                  an opinion of
in-house counsel to the Initial Hedge Counterparty, dated the Closing Date,
substantially in the form of Exhibit H;


 


(d)                                 an Officer’s
certificate of the Issuer, stating that the Issuer is not in Default under this
Indenture and that the issuance of the Rated Notes will not result in a breach
of any of the terms, conditions or provisions of, or constitute a Default
under, the Articles, any indenture or other agreement or instrument to which
the Issuer is a party or by which it is bound, or any order of any court or
administrative agency entered in any Proceeding to which the Issuer is a party
or by which it may be bound or to which it may be subject; that no Event of
Default shall have occurred and be continuing; that all of the representations
and warranties contained herein are true and correct as of the Closing Date;
that all conditions precedent provided in this Indenture relating to the
authentication and delivery of the Rated Notes applied for (including in Section 3.2)
have been complied with; and that all expenses due or accrued with respect to
the Offering or relating to actions taken on or in connection with the Closing
Date have been paid;


 


(e)                                  an Officer’s
certificate of the Co-Issuer stating that the Co-Issuer is not in Default under
this Indenture and that the issuance of the Rated Notes will not result in a
breach of any of the terms, conditions or provisions of, or constitute a
Default under, the Certificate of Incorporation or By-Laws of the Co-Issuer,
any indenture or other agreement or instrument to which the Co-Issuer is a
party or by which it is bound, or any order of any court or administrative
agency entered in any Proceeding to which the Co-Issuer is a party or by which
it may be bound or to which it may be subject; that no Event of Default shall
have occurred and be continuing; that all of the representations and warranties
contained herein are true and correct as of the Closing Date; that all
conditions precedent provided in this Indenture relating to the authentication
and delivery of the Rated Notes applied for have been complied with; and that
all expenses due or accrued with respect to the Offering or relating to actions
taken on or in connection with the Closing Date have been paid;


 


(f)                                    an Accountants’
Report (A) confirming the information with respect to each Collateral Debt
Security (other than its price) set forth on a schedule setting forth each
Collateral Debt Security and the information provided by the Issuer with
respect to every other asset forming part of the Collateral, by reference to
such sources as shall be specified therein, (B) confirming that, on the
Closing Date, the Collateral Debt Securities set forth on Schedule A meet the
Collateral Quality Tests (with the exception of the S&P CDO Monitor Test), (C) calculating
each of the Coverage Tests as of the Closing Date and (D) specifying the
procedures undertaken by them to review data and computations relating to the foregoing
statement;


 


(g)                                 executed counterparts
of this Indenture, the Account Control Agreement, the Collateral Administration
Agreement, the Collateral Advisory Agreement and the other Transaction
Documents;


 


(h)                                 an executed copy of
the initial Hedge Agreement and an executed copy of the Collateral Assignment
of Hedge Agreement with respect thereto (and all acknowledgments thereto);


 


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(i)                                     execution and
delivery of the Financing Statement for filing against the Issuer with the Recorder
of Deeds in the District of Columbia; and


 


(j)                                     evidence of an
entry having been made in the Issuer’s Register of Mortgages and Charges in
respect of the charge.


 


3.2.                              SECURITY FOR THE RATED NOTES


 


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


 


(a)                                  Grant
of Security Interest; Delivery of Collateral Debt Securities. The Grant
pursuant to the Granting clauses of this Indenture of all of the Issuer’s right,
title and interest in and to the Collateral and the transfer of all Collateral
Debt Securities purchased by the Issuer on the Closing Date (as set forth in
Schedule A) to the Trustee in the manner provided in Section 3.3(b).


 


(b)                                 Certificate
of the Issuer. The delivery to the Trustee of a certificate of an
Authorized Officer of the Issuer or the Collateral Advisor, for and on behalf
of the Issuer, dated as of the Closing Date, to the effect that (x) the
Issuer has no assets other than the Collateral, (y) the Issuer has no
investments that do not qualify as Collateral Debt Securities or Eligible
Investments and (z) in the case of each Collateral Debt Security
identified on Schedule A and pledged to the Trustee for inclusion in the
Collateral on the Closing Date:


 


(1)                                  the
Issuer is the owner of such Collateral Debt Security free and clear of any
liens, claims or encumbrances of any nature whatsoever except for those which
are being released on the Closing Date and except for those Granted pursuant to
this Indenture and encumbrances arising from due bills, if any, with respect to
interest, or a portion thereof, accrued on such Collateral Debt Security prior
to the first Payment Date and owed by the Issuer to the seller of such
Collateral Debt Security;


 


(2)                                  the
Issuer has acquired its ownership in such Collateral Debt Security in good
faith without notice of any adverse claim (within the meaning given to such
term by Section 8-102(a)(1) of the UCC), except as described in
clause (1) above;


 


(3)                                  the
Issuer has not assigned, pledged or otherwise encumbered any interest in such
Collateral Debt Security (or, if any such interest has been assigned, pledged
or otherwise encumbered, it has been released) other than interests Granted
pursuant to this Indenture;


 


(4)                                  the
Issuer has full right to Grant a security interest in and assign and pledge all
of its right, title and interest in such Collateral Debt Security to the
Trustee;


 


(5)                                  the
information set forth with respect to such Collateral Debt Security on Schedule
A is correct and each such Collateral Debt Security is transferred to the
Trustee as required by Section 3.2(a) (or, if any such Collateral
Debt Security is not so transferred to the Trustee on the Closing Date, the
Issuer has entered into a binding agreement to purchase such Collateral Debt
Security for settlement within 10 days after the Closing Date);


 


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(6)                                  each
such Collateral Debt Security satisfies the requirements of the definition of
“Collateral Debt Security” and is not a Defaulted Security; and


 


(7)                                  upon
Grant by the Issuer, the Trustee has a first priority perfected security
interest in the Collateral (assuming that any Clearing Corporation, Securities
Intermediary or other entity not within the control of the Issuer involved in
the Grant of Collateral takes the actions required of it under Section 3.3(b) for
perfection of that interest) and a “securities entitlement” (as defined in the
UCC) with respect to Financial Assets.


 


(c)                                  Rating Letters. The
delivery to the Trustee of an Officer’s certificate of the Issuer, to the
effect that (i) attached thereto are true and correct copies of (A) a
letter signed by Fitch confirming that the Class A Notes have been rated
“AAA”, the Class B Notes have been rated at least “AA”, the Class C
Notes have been rated at least “A”, the Class D Notes have been rated at
least “BBB”, the Class E Notes have been rated at least “BBB-” and the Class F
Notes have been rated at least “BB” by Fitch and (B) a letter signed by
S&P confirming that the Class A Notes have been rated “AAA”, the Class B
Notes have been rated at least “AA”, the Class C Notes have been rated at
least “A”, the Class D Notes have been rated at least “BBB”, the Class E
Notes have been rated at least “BBB-” and the Class F Notes have been
rated at least “BB” by S&P and (ii) each such rating is in full force
and effect on the Closing Date.


 


(d)                                 Accounts. The
delivery by the Trustee of evidence of the establishment of the Payment
Account, the Collection Account (including each Collateral Sub-Account
established therein), the Expense Reserve Account, the Interest Reserve
Account, the Collateral Account and the Uninvested Proceeds Account and, to be
established on the Closing Date.


 


(e)                                  Funding Certificate. The
delivery to the Trustee of a funding certificate (the Funding Certificate), duly
executed by an Authorized Officer of the Issuer, relating to, among other
things, the disposition of the proceeds of the issuance of the Rated Notes,
dated the Closing Date, in substantially the form of Exhibit D hereto.


 


(f)                                    Purchases. The
delivery to the Trustee of a certification of the Issuer that it shall have
entered into one or more agreements to purchase, for settlement on or following
the Closing Date in accordance with customary settlement procedures in the
relevant markets, Collateral Debt Securities having an aggregate Principal
Balance of not less than U.S.$425,000,000.


 


3.3.                              CUSTODIANSHIP; TRANSFER OF COLLATERAL DEBT SECURITIES AND ELIGIBLE
INVESTMENTS


 


(a)                                  The Trustee shall
hold all Certificated Securities and Instruments in physical form at the office
of a custodian appointed by it in Illinois (together with any successor, the Custodian). Initially, such Custodian shall
be LaSalle Bank National Association with its address at 135 South LaSalle
Street, Suite 1511, Chicago, Illinois 60603, Attention: CDO Trust Services
Group – N-Star Real Estate CDO V Ltd. Any successor custodian shall be a state
or national bank or trust company that is not an Affiliate of the Issuer or the
Co-Issuer, has a long-term debt rating of at least “BBB+” by S&P and has a combined
capital and surplus of at least U.S.$250,000,000.


 


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(b)                                 Each
Collateral Debt Security, Equity Security and Eligible Investment shall be
credited to the appropriate Account. Each time that the Issuer shall direct or
cause the acquisition of any Collateral Debt Security, Equity Security or
Eligible Investment, the Trustee (on behalf of the Issuer) shall, if such
Collateral Debt Security, Equity Security or Eligible Investment has not
already been transferred to the Collateral Account and credited thereto, cause
the transfer of such Collateral Debt Security, Equity Security or Eligible
Investment to the Custodian to be held in and credited to the Collateral
Account for the benefit of the Trustee in accordance with the terms of this
Indenture. The security interest of the Trustee in the funds or other property
utilized in connection with such acquisition shall, immediately and without
further action on the part of the Trustee, be released. The security interest
of the Trustee shall nevertheless come into existence and continue in the
Collateral Debt Security, Equity Security or Eligible Investment so acquired,
including all rights of the Issuer in and to any contracts related to and
proceeds of such Collateral Debt Security, Equity Security or Eligible
Investment.


 


(c)                                  On
the Closing Date, on each day thereafter, if any, that any Collateral is
acquired or otherwise becomes subject to the lien of this Indenture and on the
Effective Date, the Issuer represents and warrants to the Trustee as follows:


 


(1)                                  This Indenture
creates a valid and continuing security interest (as defined in the applicable
Uniform Commercial Code) in the Collateral in favor of the Trustee on behalf
and for the benefit of the Secured Parties, which security interest is prior to
all other liens and security interests, and is enforceable as such as against
creditors of and purchasers from the Issuer and, upon delivery of the
Collateral Debt Securities and filing of the appropriate financing statements
in the appropriate filing offices, the lien and security interest created by
this Indenture shall be a perfected first priority security interest in favor
of the Trustee for the benefit of the Secured Parties.


 


(2)                                  The Issuer owns and
has good and marketable title to the Collateral free and clear of any liens,
claims, encumbrances or defects of any nature whatsoever except for those which
are being released on the Closing Date or on the date of purchase by the Issuer
or those created pursuant to or contemplated under this Indenture and
encumbrances arising from due bills, if any, with respect to interest, or a
portion thereof, accrued on any Collateral Debt Security prior to the first
payment date and owed by the Issuer to the seller of such Collateral Debt
Security.


 


(3)                                  The Issuer has
acquired its ownership in each such Collateral Debt Security, or will acquire
in the case of any Collateral Debt Securities which the Issuer has on or before
the Closing Date committed to purchase but which will not have settled on or
before the Closing Date or any additional Collateral Debt Securities or
Substitute Collateral Debt Securities acquired by the Issuer after the Closing
Date, in good faith without notice of any adverse claim, except as described in
clause (2) above.


 


(4)                                  The Issuer (a) has
delivered each such Collateral Debt Security, or will deliver any Collateral
Debt Securities which the Issuer has on or before the Closing Date committed to
purchase but which will not have settled on or before the Closing Date or any
additional Collateral Debt Securities or Substitute Collateral Debt Securities
acquired by the Issuer after the Closing Date, to the Trustee and


 


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(b) has not assigned, pledged, sold, granted a security interest
in or otherwise encumbered any interest in such Collateral Debt Security other
than interests granted pursuant to this Indenture.


 


(5)                                  The Issuer has full
right to grant all security interests granted herein.


 


(6)                                  All Collateral is
comprised of either “securities”, “instruments”, “tangible chattel paper”, “accounts”,
“security entitlements” or “general intangibles”, in each case as defined in
the applicable Uniform Commercial Code.


 


(7)                                  Each of the Accounts,
and all subaccounts thereof, constitute securities accounts as defined in the
applicable Uniform Commercial Code.


 


(8)                                  All items of the
Collateral that constitute security entitlements have been and will have been
credited to one of the securities accounts. The securities intermediary for
each of the Accounts has agreed to treat all assets credited to the securities
accounts as financial assets under the applicable Uniform Commercial Code.


 


(9)                                  Other than the
security interest granted to the Trustee on behalf and for the benefit of the
Secured Parties pursuant to this Indenture, the Issuer has not pledged,
assigned, sold, granted a security interest in or otherwise conveyed any of the
Collateral. The Issuer has not authorized the filing of and is not aware of any
financing statements against the Issuer that include a description of
collateral covering the Collateral other than any financing statement relating
to the security interest granted to the Trustee on behalf and for the benefit
of the Secured Parties hereunder or that has been terminated. The Issuer is not
aware of any judgment, Pension Benefit Guarantee Corporation lien or tax lien
filings against it.


 


(10)                            The Issuer has caused or
will have caused, within ten (10) days of the Closing Date, the filing of
all appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the security
interest in the Collateral granted to the Trustee on behalf and for the benefit
of the Secured Parties hereunder that constitutes chattel paper, instruments,
accounts, securities entitlements or general intangibles under the applicable
Uniform Commercial Code, if any.


 


(11)                            The Trustee or the
Accountholder has in its possession all original copies of the instruments that
constitute or evidence the Collateral, if any. The instruments, loan agreements
and leases that constitute or evidence the Collateral do not have any marks or
notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Trustee on behalf and for the benefit of
the Secured Parties. All financing statements filed or to be filed against the
Issuer in favor of the Trustee on behalf and for the benefit of the Secured
Parties in connection herewith describing the Collateral contain a statement to
the following effect: “A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the Trustee on
behalf and for the benefit of (A) itself and for the benefit of the
Noteholders, (B) the Collateral Advisor and (C) each Hedge
Counterparty.”


 


(12)                            The authoritative copy of
any chattel paper that constitutes or evidences the Collateral, if any, has
been communicated to the Trustee and has no marks or


 


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notations indicating that it has been pledged, assigned or otherwise
conveyed to any Person other than the Trustee on behalf and for the benefit of
the Secured Parties.


 


(13)                            The Issuer has received or
will receive all consents and approvals required by the terms of the underlying
loan agreement, indenture or other underlying documentation, if any, relating
to the Collateral to the transfer to the Trustee on behalf and for the benefit
of the Secured Parties of its interest and rights in the Collateral hereunder.


 


(14)                            The Issuer, the
Accountholder and the Trustee have entered into the Account Control Agreement
pursuant to which the Accountholder has agreed to comply with all instructions
originated by the Trustee relating to the Accounts without further consent by
the Issuer.


 


(15)                            None of the Accounts is in
the name of any person other than the Trustee, held on behalf and for the
benefit of the Secured Parties. The Issuer has not consented to the Trustee or
the Accountholder maintaining any of the Accounts to comply with entitlement
orders or instructions of any Person other than the Trustee.


 


(16)                            Notwithstanding any other
provision of this Indenture or any other related Transaction Document, the
representations in this Section 3.3(c) shall be continuing and deemed
to be updated on any day a new item of Collateral is acquired, and remain in
full force and effect until such time as all obligations under this Indenture
and the Notes have been finally and fully paid and performed and shall survive
the termination of this Indenture for any other reason.


 


(17)                            The parties to this
Indenture (i) shall not, without obtaining a Rating Agency Confirmation,
waive any of the representations in this Section 3.3(c); (ii) shall
provide each of the Rating Agencies with prompt written notice of any breach of
the representations contained in this Section 3.3(c) upon becoming
aware thereof; and (iii) shall not, without obtaining a Rating Agency
Confirmation (as determined after any adjustment or withdrawal of the ratings
following notice of such breach), waive a breach of any of the representations
in this Section 3.3(c).


 


ARTICLE IV


 


SATISFACTION AND DISCHARGE


 


4.1.                            SATISFACTION AND DISCHARGE OF
INDENTURE


 


This Indenture shall be discharged and shall cease to be of further
effect with respect to the Collateral securing the Rated Notes and the Rated
Notes except as to (i) rights of registration of transfer and exchange, (ii) substitution
of mutilated, defaced, destroyed, lost or stolen Rated Notes, (iii) rights
of Rated Noteholders to receive payments of principal thereof and interest
thereon, (iv) the rights, obligations and immunities of the Trustee
hereunder, (v) the rights, obligations and immunities of the Collateral
Advisor hereunder and under the Collateral Advisory Agreement and (vi) the
rights of the Secured Parties as beneficiaries hereof with respect to the
property deposited with the Trustee and payable to all or any of them; and the
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when:


 


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(a)                                  either:


 


(1)                                  all
Rated Notes theretofore authenticated and delivered (other than (A) Rated
Notes which have been mutilated, defaced, destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.5 and (B) Rated
Notes for whose payment funds have theretofore irrevocably been deposited in
trust and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 7.3) have been delivered to the Trustee for
cancellation; or


 


(2)                                  all
Rated Notes not theretofore delivered to the Trustee for cancellation (A) have
become due and payable, or (B) will become due and payable at their Stated
Maturity Date within one year, or (C) are to be called for redemption
pursuant to Section 9.1 under an arrangement satisfactory to the Trustee
for the giving of notice of redemption by the Co-Issuers pursuant to Section 9.3
and the Issuer has irrevocably deposited or caused to be deposited with the
Trustee, in trust for such purpose, Cash or non-callable direct obligations of
the United States in an amount sufficient, according to the Priority of
Payments as verified by a firm of nationally recognized Independent certified
public accountants, to pay and discharge the entire indebtedness on all Rated
Notes not theretofore delivered to the Trustee for cancellation, including all
principal and interest (including Class C Cumulative Applicable Periodic
Interest Shortfall Amount, Class D Cumulative Applicable Periodic Interest
Shortfall Amount, Class E Cumulative Applicable Periodic Interest
Shortfall Amount and Class F Cumulative Applicable Periodic Interest
Shortfall Amount accrued to the date of such deposit) (in the case of Rated
Notes which have become due and payable) or to the Stated Maturity Date or the
Redemption Date, as the case may be; provided that (x) such
obligations are entitled to the full faith and credit of the United States and (y) this
subclause (2) shall not apply if an election to act in accordance with the
provisions of Section 5.5(a) shall have been made and not rescinded;


 


(b)                                 the
Issuer has paid or caused to be paid all other sums payable hereunder
(including amounts payable pursuant to the Hedge Agreement, the Income Note
Paying Agency Agreement, the Corporate Services Agreement, the Collateral
Advisory Agreement and the Collateral Administration Agreement) and no other
amounts will become due and payable by the Issuer; and


 


(c)                                  the Co-Issuers have
delivered to the Trustee and the Initial Hedge Counterparty Officer’s certificates
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.


 


Notwithstanding the satisfaction and discharge of this Indenture, the
rights and obligations of the Co-Issuers, the Trustee and the Hedge
Counterparty and, if applicable, the Rated Noteholders, as the case may be,
under Sections 2.6, 4.1, 4.2, 5.9, 5.18, 6.7, 6.8, 7.1 and 7.3 shall survive.


 


4.2.                            APPLICATION OF TRUST MONEY


 


All funds deposited with the Trustee pursuant to Section 4.1 for
the payment of principal of and interest on the Rated Notes and amounts payable
pursuant to the Hedge Agreement, the Collateral Advisory Agreement, the Income
Note Paying Agency Agreement, the Corporate Services Agreement and the
Collateral Administration Agreement shall be held in trust and applied by it in
accordance with


 


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the provisions of the Rated Notes and this Indenture, including the
Priority of Payments, for the payment either directly or through any Note
Paying Agent, as the Trustee may determine, to the Person entitled thereto of
the respective amounts in respect of which such funds has been deposited with
the Trustee; but such funds need not be segregated from other funds except to
the extent required herein or required by law.


 


4.3.                            REPAYMENT OF
FUNDS HELD BY NOTE PAYING AGENT


 


In connection with the satisfaction and discharge of this Indenture
with respect to the Rated Notes, all funds then held by any Note Paying Agent
other than the Trustee under the provisions of this Indenture shall, upon
demand of the Co-Issuers, be paid to the Trustee to be held and applied
pursuant to Section 7.3 and in accordance with the Priority of Payments
and thereupon such Note Paying Agent shall be released from all further
liability with respect to such funds.


 


ARTICLE V


 


EVENTS OF DEFAULT; REMEDIES


 


5.1.                            EVENTS OF
DEFAULT


 


Event of
Default, is defined as any one of the following wherever
used herein, means any one of the following events as set forth in Section 5.1(a) through
(h) (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):


 


(a)                                  a
default for five (5) Business Days in the payment, when due and payable,
of any interest on any Class A Note or Class B Note or, if there are
no Class A Notes or Class B Notes Outstanding, on any Class C
Note or, if there are no Class A Notes, Class B Notes or Class C
Notes Outstanding, on any Class D Note or, if there are no Class A
Notes, Class B Notes, Class C Notes or Class D Notes
Outstanding, on any Class E Note or, if there are no Class A Notes, Class B
Notes, Class C Notes, Class D Notes or Class E Notes
Outstanding, on any Class F Note;


 


(b)                                 a
default in the payment of any principal, when due and payable of any Rated Note
(or, in the case of a default in payment resulting solely from an
administrative error or omission by the Trustee, the Administrator, any Note
Paying Agent or the Note Registrar, such default continues for a period of five
(5) Business Days);


 


(c)                                  the
failure on any Payment Date to disburse amounts available in accordance with Section 11.1
(except as provided in Section 5.1(a) and (b) above) and a
continuation of such failure for three (3) Business Days (or, in the case
of a default in payment resulting solely from an administrative error or omission
by the Trustee, the Administrator, any Note Paying Agent or the Note Registrar,
such default continues for a period of five (5) Business Days);


 


(d)                                 on
any Measurement Date, the Class A/B Principal Coverage Ratio is less than
100%;


 


(e)                                  either
of the Co-Issuers or the pool of Collateral becomes an investment company
required to be registered under the Investment Company Act;


 


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(f)                                    a default in the
performance, or breach, of any other covenant (it being understood that
non-compliance with any of the Coverage Tests or the Collateral Quality Tests
will not constitute a default or breach) or of any representation or warranty
of either of the Co-Issuers under the Indenture of any representation or if any
certificate or writing delivered pursuant thereto proves to be incorrect when
made, which default or breach has a material adverse effect on the Rated
Noteholders and continues for a period of thirty (30) days (or, in the case of
a default, breach or failure of a representation or warranty regarding the
Collateral, fifteen (15) days) of the earlier of knowledge by the Co-Issuers or
the Collateral Advisor or notice to the Co-Issuers and the Collateral Advisor
by the Trustee or to the Co-Issuers and the Collateral Advisor by the Holders
of at least 25%, of the then Aggregate Outstanding Amount of the Rated Notes of
any Class, specifying such default, breach or failure and requiring it to be
remedied and stating that such notice is a “Notice of Default” under this
Indenture;


 


(g)                                 the entry of a decree or
order by a court having competent jurisdiction adjudging the Issuer or the
Co-Issuer as bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Issuer or the Co-Issuer under the Bankruptcy Code or any other
applicable law, or appointing a receiver, liquidator, assignee, or sequestrator
(or other similar official) of the Issuer or the Co-Issuer or of any
substantial part of its property; ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed and in effect
for a period of ninety (90) consecutive days; or


 


(h)                                 the institution by the
Issuer or the Co-Issuer of proceedings to be adjudicated as bankrupt or
insolvent, or the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under the Bankruptcy Code or any other similar
applicable law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee or sequestrator
(or other similar official) of the Issuer or the Co-Issuer or of any substantial
part of its property, respectively, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due, or the taking of any action by the
Issuer or the Co-Issuer in furtherance of any such action.


 


If either of the Co-Issuers shall obtain actual
knowledge that an Event of Default shall have occurred and be continuing, such
Co-Issuer shall (unless the Trustee shall have provided notice of such Event of
Default pursuant to Section 6.2) promptly notify the Trustee, the Rated
Noteholders, the Hedge Counterparty, the Collateral Advisor and each Rating
Agency in writing of such Event of Default.


 


5.2.                            ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT


 


(a)                                  If an Event of Default
occurs and is continuing, the Trustee may or, if so directed by the Holders of
a Majority in aggregate principal amount of the Outstanding Notes of the
Controlling Class, will declare the principal of and accrued interest on all
Notes to be immediately due and payable (except that in the case of an Event of
Default described in Section 5.1(g) or 5.1(h) above, such an
acceleration will occur automatically).


 


(b)                                 Any Hedge Agreement
existing on or after such acceleration may not be terminated by the Issuer
unless and until liquidation of the Collateral has commenced and annulment of
such acceleration may no longer be affected.


 


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(c)                                  At
any time after such acceleration of maturity has been made and before a
judgment or decree for payment of the amount due has been obtained by the
Trustee as hereinafter provided in this Section 5, the Trustee may reverse
such acceleration and its consequences if the Trustee determines that:


 


(1)                                  the Issuer has paid or
deposited with the Trustee funds sufficient to pay:


 


(i)                                     all
overdue installments of principal of and interest on the Notes (including
interest upon the Class C Cumulative Applicable Periodic Interest
Shortfall Amount, the Class D Cumulative Applicable Periodic Interest
Shortfall Amount, the Class E Cumulative Applicable Periodic Interest
Shortfall Amount and the Class F Cumulative Applicable Periodic Interest
Shortfall Amount, respectively, at the Applicable Periodic Interest Rate and,
to the extent that payment of such interest is lawful, upon Defaulted Interest
at the Applicable Periodic Interest Rate);


 


(ii)                                  any
accrued and unpaid amounts (including termination payments, if any) payable by
the Issuer pursuant to the Hedge Agreement;


 


(iii)                               all
unpaid taxes and Administrative Expenses, any accrued and unpaid Senior
Collateral Advisory Fee, and other sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel; and


 


(2)                                  the Trustee has
determined that all Events of Default of which it has actual knowledge, other
than the nonpayment of the principal of or interest on the Rated Notes that
have become due solely by such acceleration, have been cured; and


 


(3)                                  the Hedge Agreement
in effect immediately prior to such acceleration shall remain in effect,


 


provided that the Trustee shall have
obtained (and shall be entitled to rely upon) a certification of an Independent
accounting firm of national reputation as to the sufficiency of the amounts in Section 5.2(c)(1) above,
which certification shall be conclusive evidence as to such sufficiency. In
addition, the Trustee may, but is not required to, obtain, at the Issuer’s
expense (and may rely upon), an Opinion of Counsel as to the matters in
Sections 5.2(c)(2) and (3) above.


 


At any such time as the Trustee shall reverse such acceleration and its
consequences, the Trustee shall preserve the Collateral in accordance with the
provisions of Section 5.5; provided that, if the conditions for
liquidation of the Collateral are satisfied pursuant to Section 5.5, the
Rated Notes may be accelerated pursuant to Section 5.2(a), notwithstanding
any previous reversal of acceleration pursuant to this Section 5.2(b).


 


No such reversal of acceleration shall affect any subsequent Default or
impair any right consequent thereon.


 


5.3.                            COLLECTION
OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE


 


The Co-Issuers covenant that if a Default shall occur in respect of the
payment of any principal of or interest on any Class A-1 Note, the payment
of principal of or interest on any Class A-2 Note (but with respect to
interest, only after the Class A-1 Notes and all interest
accrued thereon have been paid in full),


 


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the payment of principal of or interest on any Class B Note (but
with respect to interest, only after the Class A Notes and all interest
accrued thereon have been paid in full), the payment of principal of or
interest on any Class C Note (but with respect to interest, only after the
Class A Notes and Class B Notes and all interest accrued thereon have
been paid in full) the payment of principal of or interest on any Class D
Note (but with respect to interest, only after the Class A Notes, the Class B
Notes and the Class C Notes and all interest accrued thereon have been
paid in full), the payment of principal of or interest on any Class E Note
(but with respect to interest, only after the Class A Notes, the Class B
Notes, the Class C Notes and the Class D Notes and all interest
accrued thereon have been paid in full) or the payment of principal of or
interest on any Class F Note (but with respect to interest, only after the
Class A Notes, the Class B Notes, the Class C Notes, the Class D
Notes and the Class E Notes and all interest accrued thereon have been
paid in full), the Co-Issuers will, upon demand of the Trustee or any affected
Rated Noteholder, pay to the Trustee, for the benefit of the Holder of such
Rated Note, the whole amount, if any, then due and payable on such Rated Note
for principal and interest, with interest upon the overdue principal and, to
the extent that payments of such interest shall be legally enforceable, upon
overdue installments of interest, at the Applicable Periodic Interest Rate and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee and such Rated Noteholder
and their respective agents and counsel.


 


If the Issuer or the Co-Issuer fails to pay such amounts forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute a Proceeding for the collection of the sums so due and unpaid,
and may, and shall, upon the direction by a the Holders of Majority of the then
Aggregate Outstanding Amount of the Notes of Controlling Class (and, if
the action of the Issuer or the Co-Issuer pursuant to such direction would have
a material adverse effect on the Hedge Counterparty, the Initial Hedge
Counterparty), prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Co-Issuers or any other obligor upon the Rated
Notes and collect the amounts adjudged or decreed to be payable in the manner
provided by law out of the Collateral; provided that a
Holder of a Rated Note may institute any proceeding if (i) such Holder
previously has given to the Trustee written notice of an Event of Default, (ii) except
in the case of a default in the payment of principal or interest, the Holders
of at least 25% of the then Aggregate Outstanding Amount of the Notes of the
Controlling Class have made a written request upon the Trustee to
institute such proceedings in its own name as Trustee and such Holders have
offered the Trustee reasonable indemnity, (iii) the Trustee has, for
thirty (30) days after receipt of notice, request and offer of such indemnity,
failed to institute any such proceeding and (iv) no direction inconsistent
with such written request has been given to the Trustee during such 30-day
period by the Holders of a Majority of the then Aggregate Outstanding Amount of
the Notes of the Controlling Class.


 


If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Secured Parties by such appropriate Proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Trustee by this Indenture or by law.


 


The Holders of a Majority of the then Aggregate Outstanding Amount of
the Notes of the Controlling Class may, in certain cases, waive any
default with respect to such Notes, except (i) a default for more than
five (5) Business Days in the payment, when due and payable, of any
interest on any Note, (ii) a default in the payment of principal on any
Note at its Stated Maturity Date or Redemption Date, (iii) the failure on
any Payment Date to disburse amounts available in the Collection Account in
accordance with Section 11.1 and continuation of such failure for
a period of three (3) Business Days, (iv) certain events of
bankruptcy or insolvency with respect to the Co-Issuers or (v) a default
in respect of


 


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any provision of the Indenture that cannot be modified or amended
without the waiver or consent of the Holder of each Outstanding Note adversely
affected thereby.


 


In case there shall be pending Proceedings relative to the Issuer or
the Co-Issuer or any other obligor upon the Rated Notes or Hedge Agreement under
the Bankruptcy Code or any other applicable bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer, the Co-Issuer or their
respective property or such other obligor or its property, or in case of any
other comparable Proceedings relative to the Issuer, the Co-Issuer or other
obligor upon the Rated Notes or Hedge Agreement, or the creditors or property
of the Issuer, the Co-Issuer or such other obligor, the Trustee, regardless of
whether the principal of any Rated Notes or Hedge Agreement shall then be due
and payable as therein expressed or by declaration or otherwise and regardless
of whether the Trustee shall have made any demand pursuant to the provisions of
this Section 5.3, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:


 


(a)                                  to
file and prove a claim or claims for the whole amount of principal and interest
owing and unpaid in respect of the Rated Notes or Hedge Agreement upon
direction by a Majority of the Controlling Class, and to file such other papers
or documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for reasonable compensation to the Trustee and
each predecessor Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee) and of the Rated
Noteholders allowed in any Proceedings relative to the Issuer, the Co-Issuer or
other obligor upon the Rated Notes or to the creditors or property of the
Issuer, the Co-Issuer or such other obligor;


 


(b)                                 unless
prohibited by applicable law and regulations, to vote on behalf of the Holders
of the Rated Notes, upon the direction of such Holders, in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency Proceedings or person performing similar
functions in comparable Proceedings; and


 


(c)                                  to
collect and receive any amounts or other property payable to or deliverable on
any such claims, and to distribute all amounts received with respect to the
claims of the Rated Noteholders and of the Trustee on behalf of the Rated
Noteholders and the Trustee; and any trustee, receiver or liquidator, custodian
or other similar official is hereby authorized by each of the Rated Noteholders
to make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to the Rated Noteholders, to pay to
the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other reasonable expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith.


 


Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any Rated
Noteholder or the Initial Hedge Counterparty, any plan of reorganization,
arrangement, adjustment or composition affecting the Rated Notes, the initial
Hedge Agreement or the rights of any Holder thereof or the Initial Hedge
Counterparty, or to authorize the Trustee to vote in respect of the claim of
any Rated Noteholder or the Initial Hedge Counterparty in any such Proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar person.


 


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In
any Proceedings brought by the Trustee on behalf of the Holders, the Trustee
shall be held to represent, subject to Section 6.17, all the Secured
Parties if applicable, pursuant to Section 6.17.


 


Notwithstanding
anything in this Section 5.3 to the contrary, the Trustee may not sell or
liquidate the Collateral or institute Proceedings in furtherance thereof
pursuant to this Section 5.3 except in accordance with Section 5.5(a).


 


5.4.                              REMEDIES


 


(a)                                  If an Event of Default shall have occurred
and be continuing, and the Notes have been declared due and payable and such
declaration and its consequences have not been rescinded and annulled, the
Co-Issuers agree that, in addition to the requirements of Section 5.5(a),
the Trustee may, after giving notice to the Noteholders, the Collateral
Advisor, the Initial Hedge Counterparty and each Rating Agency, and with the
consent of the Holders of a Majority of the then Aggregate Outstanding Amount
of the Notes of the Controlling Class, and shall, upon written direction by the
Holders of a Majority of the then Aggregate Outstanding Amount of the Notes of
the Controlling Class, to the extent permitted by applicable law, exercise one
or more of the following rights, privileges and remedies:


 


(1)                                  institute Proceedings for the collection of
all amounts then payable on the Notes or otherwise payable under this
Indenture, whether by declaration or otherwise, enforce any judgment obtained,
and collect from the Collateral any amounts adjudged due;


 


(2)                                  institute Proceedings from time to time for
the complete or partial foreclosure of this Indenture with respect to the
Collateral;


 


(3)                                  exercise any remedies of a secured party
under the UCC and take any other appropriate action to protect and enforce the
rights and remedies of the Secured Parties hereunder; and


 


(4)                                  subject to Section 5.4(d) below,
exercise any other rights and remedies that may be available at law or in
equity;


 


provided that the Trustee may not sell or liquidate the Collateral or institute
Proceedings in furtherance thereof pursuant to this Section 5.4 except in
accordance with Section 5.5(a).


 


The
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking firm of national reputation as to the feasibility of any
action proposed to be taken in accordance with this Section 5.4 and as to
the sufficiency of the proceeds and other amounts receivable with respect to
the Collateral to make the required payments of principal of and interest on
the Notes and amounts due to the Initial Hedge Counterparty, which opinion
shall be conclusive evidence as to such feasibility or sufficiency.


 


(b)                                 If an Event of Default as described in Section 5.1(f) shall
have occurred and be continuing, the Trustee may, and at the request of at
least 25% of the Holders of the then Aggregate Outstanding Amount of the Notes
of the Controlling Class shall, institute a Proceeding solely to compel
performance of the covenant or agreement or to cure the


 


85

















 


representation or warranty, the breach of which gave rise to the Event
of Default under such Section, and enforce any equitable decree or order
arising from such proceeding; provided that (i) such request does
not conflict with any provision in the Indenture, (ii) the Trustee
determines that such action will not involve the Trustee incurring any
liability (unless the Trustee is indemnified to its satisfaction against any
such liability) and (iii) the Trustee may take other action deemed proper
by the Trustee, that is not inconsistent with such direction.


 


(c)                                  Upon
any sale of the Collateral, whether made under the power of sale hereby given
or by virtue of judicial proceedings, the Placement Agents, any Hedge
Counterparty, any Noteholder or Noteholders may bid for and purchase the
Collateral or any part thereof and, upon compliance with the terms of sale, may
hold, retain, possess or dispose of such property in its or their own absolute
right without accountability.


 


Upon any sale of the Collateral, whether made under the power of sale
hereby given or by virtue of judicial proceedings, the receipt of the Trustee,
or of the Officer making a sale under judicial proceedings, shall be a
sufficient discharge to the purchaser or purchasers at any sale for its or
their purchase price, and such purchaser or purchasers shall not be obliged to
see to the application thereof.


 


Any such sale, whether under any power of sale hereby given or by
virtue of judicial proceedings, shall bind the Co-Issuers, the Trustee and the
Noteholders, shall operate to divest all right, title and interest whatsoever,
either at law or in equity, of each of them in and to the property sold, and
shall be a perpetual bar, both at law and in equity, against each of them and
their successors and assigns, and against any and all Persons claiming through
or under them.


 


(d)                                 Notwithstanding
any other provision of this Indenture, the Trustee may not, prior to the date
which is one year and one day, or if longer the applicable preference period
then in effect, after the payment in full of all Notes, institute against, or
join any other Person in instituting against, the Issuer or the Co-Issuer any
bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation
proceedings, or other proceedings under federal or state bankruptcy or similar
laws (of any jurisdiction). Nothing in this Section 5.4 shall preclude, or
be deemed to stop, the Trustee (i) from taking any action prior to the
expiration of the aforementioned one year and one day period, or if longer the
applicable preference period then in effect, in (A) any case or proceeding
voluntarily filed or commenced by the Issuer or the Co-Issuer or (B) any
involuntary insolvency proceeding filed or commenced by a Person other than the
Trustee, or (ii) from commencing against the Issuer or the Co-Issuer or
any of its properties any legal action which is not a bankruptcy,
reorganization, arrangement, insolvency, moratorium, liquidation or similar
proceeding.


 


5.5.                              PRESERVATION
OF COLLATERAL


 


(a)                                  If an Event of Default
shall have occurred and be continuing when any Class of Rated Notes is
Outstanding, the Trustee shall retain the Collateral securing the Rated Notes
and the Hedge Agreement intact, collect and cause the collection of the
proceeds thereof and make all payments and deposits and maintain all accounts
in respect of the Collateral and the Rated Notes and the Hedge Agreement in
accordance with Section 11.1 and the provisions of Sections 10, 12 and 13
unless:


 


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(1)                                  the Trustee, pursuant to Section 5.5(c),
determines (such determinations may be based upon a certificate from the
Collateral Advisor) that the anticipated proceeds of a sale or liquidation of
the Collateral (after deducting reasonable expenses relating to such sale or
liquidation) would be sufficient to discharge in full the Redemption Prices
then due on the Rated Notes, any amounts required to be paid under the Hedge
Agreement, all unpaid Administrative Expenses and any accrued and unpaid Senior
Collateral Advisory Fee (to the extent not waived by the Collateral Advisor)
and the Holders of a Majority of the then Aggregate Outstanding Amount of Notes
of the Controlling Class agrees with such determination; or


 


(2)                                  the Holders of at least 662/3% of the Aggregate Outstanding Amount of the
Rated Notes of the Controlling Class (and, unless it will be paid in full
all amounts owing to it by the Issuer, the Initial Hedge Counterparty), subject
to the provisions hereof, and subject to the Trustee determining that such
action will not involve the Trustee incurring any liability, (unless the
Trustee is indemnified to its satisfaction against any such liability) direct
the sale and liquidation of the Collateral.


 


For
purposes of Section 5.5(a)(2), if the Initial Hedge Counterparty shall
fail to vote to direct the sale and liquidation of the Collateral within three
Business Days after written notice from the Issuer or the Trustee requesting a
vote pursuant to such Section 5.5(a)(2), the Initial Hedge Counterparty
shall not be entitled to participate in the vote requested by such notice. The
Trustee shall give written notice of the retention of the Collateral to the
Issuer with a copy to the Co-Issuer, each Holder of the Controlling Class of
Notes and the Initial Hedge Counterparty. So long as such Event of Default is
continuing, any such retention pursuant to this Section 5.5(a) may be
rescinded at any time when the conditions specified in clause Section 5.5(a)(1) or
(2) exist.


 


(b)                                 Nothing contained in Section 5.5(a) shall
be construed to require the Trustee to preserve the Collateral securing the
Rated Notes if prohibited by applicable law.


 


(c)                                  In determining whether the condition
specified in Section 5.5(a)(1) exists, the Trustee shall obtain bid
prices with respect to each security contained in the Collateral from two
nationally recognized dealers (or if it is unable in good faith to obtain such
bid prices from two nationally recognized dealers, one nationally recognized
dealer), as specified by the Collateral Advisor in writing, which are
Independent from each other and the Collateral Advisor, at the time making a
market in such securities and shall compute the anticipated proceeds of sale or
liquidation on the basis of the lower of such bid prices for each such
security. In addition, for the purposes of determining issues relating to the
execution of a sale or liquidation of the Pledged Securities and the execution
of a sale or other liquidation thereof in connection with a determination
whether the condition specified in Section 5.5(a)(1) exists, the
Trustee may retain and rely on an opinion of an Independent investment banking
firm of national reputation.


 


The
Trustee shall deliver to the Noteholders, the Initial Hedge Counterparty, the
Rating Agencies and the Co-Issuers a report stating the results of any
determination required pursuant to Section 5.5(a)(1) no later than
ten (10) days after making such determination but in any event prior to
the sale or liquidation of the Collateral. The Trustee shall make the
determinations required by Section 5.5(a)(1) within thirty (30) days
after an Event of Default and at the request of the Holders of a Majority of
the then Aggregate Outstanding


 


87

















 


Amount of the Notes of the Controlling Class at any time during
which the Trustee retains the Collateral pursuant to Section 5.5(a)(1). In
the case of each calculation made by the Trustee pursuant to Section 5.5(a)(1),
the Trustee shall obtain a letter of an Independent certified public accountant
confirming the accuracy of the computations of the Trustee and certifying their
conformity to the requirements of this Indenture. In determining whether the
Holders of the requisite percentage of any Class of Rated Notes or the
requisite percentage of Income Noteholders have given any direction or notice
or have agreed pursuant to Section 5.5(a), any Holder of a Rated Note of a
Class or Income Notes who is also a Holder of Rated Notes of another Class or
of Income Notes or any Affiliate of any such Holder shall be counted as a
Holder of each such Rated Note and/or Income Note for all purposes.


 


(d)                                 If an Event of Default
shall have occurred and be continuing at a time when no Rated Note is
Outstanding, the Trustee shall retain the Collateral securing the Hedge
Agreements and the Rated Notes intact, collect and cause the collection of the
proceeds thereof and make and apply all payments and deposits and maintain all
accounts in respect of the Collateral and the Rated Notes in accordance with Section 11.1
and the provisions of Section 10 and Section 12 unless a Majority of
the Income Noteholders direct the sale and liquidation of the Collateral.


 


5.6.                              TRUSTEE MAY ENFORCE
CLAIMS WITHOUT POSSESSION


 


All rights of action and of asserting claims under this Indenture, or
under any of the Rated Notes, may be enforced by the Trustee without the
possession of any of Hedge Agreements or the Rated Notes or the production
thereof in any trial or other Proceedings relative thereto, and any action or
Proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the reasonable expenses, disbursements and compensation of the
Trustee, each predecessor trustee and their respective agents and attorneys and
counsel, shall be for the benefit of the Secured Parties and shall be applied
as set forth in Section 5.7.


 


5.7.                              APPLICATION OF FUNDS
COLLECTED


 


Any funds collected by the Trustee with respect to the Hedge Agreements
or the Rated Notes pursuant to this Section 5 and any funds that may then
be held or thereafter received by the Trustee with respect to the Hedge
Agreements or the Rated Notes hereunder shall be applied subject to Section 13.1
and in accordance with the provisions of Section 11.1(c), at the date or
dates fixed by the Trustee.


 


5.8.                              LIMITATION ON SUITS


 


Only the Trustee may pursue remedies available hereunder and no Holder
of any Note shall have any right to institute any Proceedings, judicial or
otherwise, with respect to this Indenture, or its Note or otherwise, for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless:


 


(a)                                  such
Holder has previously given to the Trustee written notice of a continuing Event
of Default;


 


(b)                                 except
in the case of a default in the payment of principal or interest, the Holders
or Holders of at least 25% of the then Aggregate Outstanding Amount of the
Rated Notes of the Controlling Class shall have made a written request to
the Trustee to institute Proceedings in respect of such Event of Default in its
own name as Trustee hereunder and


 


88

















 


such
Holder or Holders have offered to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such request;


 


(c)                                  the Trustee for thirty (30) days after its
receipt of such notice, request and offer of indemnity has failed to institute
any such Proceeding; and


 


(d)                                 no direction inconsistent with such written
request has been given to the Trustee during such 30-day period by the Holders
of a Majority of the then Aggregate Outstanding Amount of the Notes of the
Controlling Class;


 


it
being understood and intended that no one or more Holders of Rated Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders of the Notes of the same Class or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all the Holders of Notes of the same Class. In
addition, any action taken by any one or more of the Holders of Notes shall be
subject to and in accordance with Sections 13.1 and 11.1(d).


 


Notwithstanding
any other provisions of this Indenture but subject to Section 5.8(d), if
the Trustee shall receive conflicting or inconsistent requests and indemnity
from two or more groups of Holders of the Notes of the Controlling Class, each
representing less than a Majority of the then Aggregate Outstanding Amount of
Notes of this Controlling Class, the Trustee shall follow the instructions of
the group representing the higher percentage of aggregate principal amount of
Outstanding Notes of the Controlling Class.


 


5.9.                              UNCONDITIONAL RIGHTS OF RATED NOTEHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST


 


Notwithstanding
any other provision in this Indenture (other than Section 2.6(i)), the
Holder of any Rated Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest (if any) on
such Rated Note as such principal and/or interest become due and payable in
accordance with Sections 13.1 and 11.1(c) and, subject to the provisions
of Section 5.8, to institute proceedings for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder. Holders of the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes shall have no
right to institute proceedings for the enforcement of any such payment until
such time as no Class of Rated Note that is senior to such Class of
them remains Outstanding, which right shall be subject to the provisions of Section 5.8,
and shall not be impaired without the consent of any such Holder.


 


5.10.                        RESTORATION OF RIGHTS AND REMEDIES


 


If
the Trustee or any Rated Noteholder has instituted any Proceeding to enforce
any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Rated Noteholder, then and in every such case the
Co-Issuers, the Trustee and the Rated Noteholder shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Secured Parties shall continue as though no such Proceeding had been
instituted.


 


5.11.                        RIGHTS AND REMEDIES
CUMULATIVE


 


No
right or remedy herein conferred upon or reserved to the Trustee or to the
Rated Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent


 


89

















 


permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing by law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.


 


5.12.                        DELAY OR OMISSION NOT
WAIVER


 


No delay or omission of the Trustee or any Rated Noteholder or the
Initial Hedge Counterparty to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver
of any such Event of Default or an acquiescence therein. Every right and remedy
given by this Section 5 or by law to the Trustee, the Rated Noteholders or
the Initial Hedge Counterparty may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee, the Rated Noteholders or the
Initial Hedge Counterparty, as the case may be.


 


5.13.                        CONTROL BY CONTROLLING CLASS


 


Notwithstanding any other provision of this Indenture (but subject to
the proviso in the definition of “Outstanding” in Section 1.1(a)), the
Holders of a Majority of the then Aggregate Outstanding Amount of the Notes of
the Controlling Class shall have the right to cause the institution of and
direct the time, method and place of conducting any Proceeding for any remedy
available to the Trustee, or of any sale of the Collateral, in whole or in
part, provided that:


 


(a)                                  such
direction shall not conflict with any rule of law or with this Indenture;


 


(b)                                 the
Trustee may take any other action deemed proper by it that is not inconsistent
with such direction; provided that, subject to Section 6.1, the Trustee need
not take any action that it determines might involve it in liability (unless
the Trustee has received an indemnity reasonably satisfactory to it against
such liability as set forth below);


 


(c)                                  the
Trustee shall have been provided with an indemnity reasonably satisfactory to
it; and


 


(d)                                 any
direction to the Trustee to undertake a Sale of the Collateral shall be made
only pursuant to, and in accordance with, Sections 5.4 and 5.5.


 


5.14.                        WAIVER OF PAST DEFAULTS


 


The Holders of a Majority of the then Aggregate Outstanding Amount of
the Notes of the Controlling Class may, in certain cases waive any past
Default and its consequences, except:


 


(a)                                  a
Default for more than five (5) Business Days in the payment, when due and
payable, of any interest on any Rated Note; or


 


(b)                                 a
Default in the payment of principal on any Note at its Stated Maturity Date or
Redemption Date; or


 


(c)                                  the
failure on any Payment Date to disburse amounts available in the Collection
Account in accordance with Section 11.1 and the continuation of such
failure for a period of three (3) Business Days; or


 


(d)                                 a
Default arising under Section 5.1(g) or 5.1(h); or


 


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(e)                                  a Default in respect
of any provision of this Indenture that under Section 8.2 cannot be
modified or amended without the waiver or consent of the Holder of each
Outstanding Note adversely affected thereby.


 


In the case of any such waiver, (i) the Co-Issuers, the Trustee
and the Holders of the Notes shall be restored to their former positions and
rights hereunder, respectively, but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereto, and (ii) the
Trustee shall promptly give written notice of any such waiver to the Collateral
Advisor and each Holder of Rated Notes. The Rating Agencies shall be notified
by the Issuer of any such waiver.


 


Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.


 


5.15.                        UNDERTAKING FOR COSTS


 


All parties to this Indenture agree, and each Holder of any Rated Note
by its acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
or omitted by it as Trustee, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Rated Noteholder, or group of Rated
Noteholders, holding in the aggregate more than 10% in Aggregate Outstanding Amount
of the Controlling Class, or to any suit instituted by any Rated Noteholder for
the enforcement of the payment of the principal of or interest on any Rated
Note on or after the Stated Maturity Date expressed in such Rated Note (or, in
the case of redemption, on or after the applicable Redemption Date).


 


5.16.                        WAIVER OF STAY OR EXTENSION LAWS


 


The Co-Issuers covenant (to
the extent that they may lawfully do so) that they will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force (including but not limited to filing a voluntary petition
under Chapter 11 of the Bankruptcy Code and by the voluntary commencement of a
proceeding or the filing of a petition seeking winding up, liquidation,
reorganization or other relief under any bankruptcy, insolvency, receivership
or similar law now or hereafter in effect), which may affect the covenants, the
performance of or any remedies under this Indenture; and the Co-Issuers (to the
extent that they may lawfully do so) hereby expressly waive all benefit or
advantage of any such law, and covenant that they will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.


 


5.17.                        SALE OF COLLATERAL


 


(a)                                  The power to effect
any sale (a Sale)  of any
portion of the Collateral pursuant to Sections 5.4 and 5.5 shall not be
exhausted by any one or more Sales as to any portion of such Collateral
remaining unsold, but shall continue unimpaired until the entire Collateral
shall have been sold or all amounts secured by the Collateral shall have been
paid. The Trustee hereby expressly waives its rights to any amount fixed by law
as compensation for any Sale; provided that the Trustee shall be authorized to
deduct the reasonable costs,


 


91

















 


charges and expenses incurred by it in connection with such Sale from
the proceeds thereof notwithstanding the provisions of Section 6.7.


 


(b)                                 The
Trustee may bid for and acquire any portion of the Collateral in connection
with a public Sale thereof, by crediting all or part of the net proceeds of such
Sale after deducting the reasonable costs, charges and expenses incurred by the
Trustee in connection with such Sale notwithstanding the provisions of Section 6.7.
The Rated Notes and the Hedge Agreement need not be produced in order to
complete any such Sale, or in order for the net proceeds of such Sale to be
credited against amounts owing on the Rated Notes. The Trustee may hold, lease,
operate, manage or otherwise deal with any property so acquired in any manner
permitted by law in accordance with this Indenture.


 


(c)                                  If
any portion of the Collateral consists of securities not registered under the
Securities Act (Unregistered Securities), the Trustee
may, but shall not be required to, seek an Opinion of Counsel, or, if no such
Opinion of Counsel can be obtained, with the consent of a Majority of the
Controlling Class seek, a no-action position from the Commission or any
other relevant federal or state regulatory authorities, regarding the legality
of a public or private sale of such Unregistered Securities. In no event will
the Trustee be required to register Unregistered Securities under the
Securities Act.


 


(d)                                 The
Trustee shall execute and deliver an appropriate instrument of conveyance
transferring its interest in any portion of the Collateral in connection with a
sale thereof. In addition, the Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Issuer to transfer and convey its interest in
any portion of the Collateral in connection with a sale thereof, and to take
all action necessary to effect such sale. No purchaser or transferee at such a
sale shall be bound to ascertain the Trustee’s authority, to inquire into the
satisfaction of any conditions precedent or see to the application of any
funds.


 


5.18.                        ACTION ON THE RATED NOTES


 


The Trustee’s right to seek and recover judgment on the Rated Notes or
under this Indenture shall not be affected by the seeking or obtaining of or
application for any other relief under or with respect to this Indenture.
Neither the lien of this Indenture nor any rights or remedies of the Secured
Parties shall be impaired by the recovery of any judgment by the Trustee
against the Issuer or by the levy of any execution under such judgment upon any
portion of the Collateral or upon any of the assets of the Issuer or the
Co-Issuer.


 


ARTICLE VI


 


THE TRUSTEE


 


6.1.                              CERTAIN DUTIES AND
RESPONSIBILITIES


 


(a)                                  Except
during the continuance of an Event of Default:


 


(1)                                  the Trustee
undertakes to perform such duties and only such duties as are specifically set forth
in this Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and


 


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(2)                                  in the absence of bad
faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; provided that, in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they substantially conform to the
requirements of this Indenture and shall promptly, but in any event within
three Business Days in the case of an Officer’s certificate furnished by the
Issuer, notify the party delivering the same if such certificate or opinion
does not conform. If a corrected form shall not have been delivered to the
Trustee within 15 days after such notice from the Trustee, the Trustee shall
promptly notify the Rated Noteholders and the Initial Hedge Counterparty.


 


(b)                                 In case an Event of
Default actually known to the Trustee has occurred and is continuing, the Trustee
shall, prior to the receipt of directions, if any, from a Majority of the
Controlling Class, exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.


 


(c)                                  No provision of this
Indenture shall be construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:


 


(1)                                  This
Section 6.1(c) shall not be construed to limit the effect of Section 6.1(a);


 


(2)                                  the
Trustee shall not be liable for any error of judgment made in good faith by a
Trust Officer, unless it shall be proven that the Trustee was negligent in
ascertaining the pertinent facts;


 


(3)                                  the
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Issuer or the
Co-Issuer in accordance with this Indenture and/or a Majority (or such other
percentage as may be required by the terms hereof) of the Aggregate Outstanding
Amount of the Controlling Class (or other Class if required or
permitted by the terms hereof) relating to the time, method and place of
conducting any Proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture;


 


(4)                                  no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers
contemplated hereunder, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it (if the amount of such funds or risk or liability
does not exceed the amount payable to the Trustee pursuant to Section 11.1(a)(1) net
of the amounts specified in Section 6.8(a)(1), the Trustee shall be deemed
to be reasonably assured of such repayment) unless such risk or liability
relates to performance of its ordinary services, including under Section 5,
under this Indenture; and


 


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(5)                                  the Trustee shall not
be liable to the Rated Noteholders for any action taken or omitted by it at the
direction of the Issuer, the Co-Issuer, the Collateral Advisor and/or the
Holders of the Rated Notes under the circumstances in which such direction is
required or permitted by the terms of this Indenture.


 


(d)                                      For
all purposes under this Indenture, the Trustee shall not be deemed to have
notice or knowledge of any Event of Default described in Section 5.1(e),
5.1(f), 5.1(g) or 5.1(h) unless a Trust Officer assigned to and
working in the Corporate Trust Office has actual knowledge thereof or unless
written notice of any event which is in fact such an Event of Default or such a
Default, as the case may be, is received by the Trustee at the Corporate Trust
Office. For purposes of determining the Trustee’s responsibility and liability
hereunder, whenever reference is made in this Indenture to such an Event of
Default or such a Default, as the case may be, such reference shall be
construed to refer only to such an Event of Default or such a Default, as the
case may be, of which the Trustee is deemed to have notice as described in this
Section 6.1(d).


 


(e)                                       Whether
or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section 6.


 


(f)                                         The
Trustee shall, upon receipt of reasonable (but no less than three Business Days’)
prior written notice, permit any representative of a Holder of a Rated Note or
the Initial Hedge Counterparty, during the Trustee’s normal business hours, to
examine all books of account, records, reports and other papers of the Trustee
relating to the Rated Notes or the Hedge Agreement, to make copies and extracts
therefrom (the reasonable out-of- pocket expenses incurred in making any such
copies or extracts to be reimbursed to the Trustee by such Holder) and to
discuss the Trustee’s actions, as such actions relate to the Trustee’s duties
with respect to the Rated Notes or the Hedge Agreement, with the Trustee’s
officers and employees responsible for carrying out the Trustee’s duties with
respect to the Rated Notes; provided that under no circumstances shall the
Initial Hedge Counterparty be permitted to review any documentation containing
the names or other indicia of identity of any of the Noteholders unless any
such information (including the number of shares held by such Noteholder) has
been redacted from such documentation.


 


(g)                                      With
respect to the security interests created hereunder, the Trustee acts as a
fiduciary for the Rated Noteholders only, and serves as a collateral agent for
the other Secured Parties.


 


6.2.                              NOTICE OF DEFAULT


 


Promptly (and in no event later than three Business Days) after the occurrence
of any Default actually known to a Trust Officer of the Trustee or after
acceleration has been made pursuant to Section 5.2, the Trustee shall send
to the Issuer, the Income Note Paying Agent, each Rating Agency (for so long as
any Class of Rated Notes is Outstanding), the Collateral Advisor, the
Initial Hedge Counterparty and to all Holders of Rated Notes, as their names
and addresses appear on the Note Register, notice of all Defaults hereunder
known to the Trustee, unless such Default shall have been cured or waived.


 


6.3.                              CERTAIN RIGHTS OF TRUSTEE


 


Except as
otherwise provided in Sections 6.1 and 8:


 


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(a)                                  the
Trustee may rely and shall be protected in acting or refraining from acting in
good faith and in reliance upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other paper or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties;


 


(b)                                 any
request or direction of the Issuer or the Co-Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request or Issuer Order, as the case may
be;


 


(c)                                  whenever
in the administration of this Indenture the Trustee shall (i) deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely
upon an Officer’s certificate or (ii) be required to determine the value
of any Collateral or funds hereunder or the cashflows projected to be received
therefrom, the Trustee may, in the absence of bad faith on its part, rely on
reports of nationally recognized accountants, investment bankers or other
Persons qualified to provide the information required to make such
determination, including nationally recognized dealers in securities of the
type being valued and securities quotation services;


 


(d)                                 as
a condition to the taking or omitting of any action by it hereunder, the
Trustee may consult with counsel and the advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect
of any action taken or omitted by it hereunder in good faith and in reliance
thereon;


 


(e)                                  the
Trustee shall be under no obligation to exercise or to honor any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Rated Noteholders pursuant to this Indenture, unless such Rated Noteholders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might reasonably be incurred by it in
compliance with such request or direction;


 


(f)                                    the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, note or other paper
documents, but the Trustee, in its discretion, may and, upon the written
direction of the Holders of a Majority of the then Aggregate Outstanding Amount
of the Notes of any Class, the Initial Hedge Counterparty or any Rating Agency
shall make such further inquiry or investigation into such facts or matters as
it may see fit or as it shall be directed, and, the Trustee shall be entitled,
on reasonable prior notice to the Co-Issuers, to examine the books and records
of the Co-Issuers or the Collateral Advisor relating to the Rated Notes and the
Collateral, personally or by agent or attorney at a time acceptable to the
Co-Issuers or the Collateral Advisor in their reasonable judgment during normal
business hours; provided that the Trustee shall, and shall cause
its agents, to hold in confidence all such information, except (i) to the
extent disclosure may be required by law by any regulatory authority and (ii) to
the extent that the Trustee, in its sole judgment, may determine that such
disclosure is consistent with its obligations hereunder;


 


(g)                                 the
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys; provided
that the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent (other


 


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than any Affiliate of the Trustee) appointed and supervised, or
attorney appointed, with due care by it hereunder;


 


(h)                                 the Trustee shall not
be liable for any action it takes or omits to take in good faith that it
reasonably and, after the occurrence and during the continuance of an Event of
Default, prudently believes to be authorized or within its rights or powers
hereunder;


 


(i)                                     nothing
herein shall be construed to impose an obligation on the part of the Trustee to
recalculate, evaluate or verify any report, certificate or information received
from the Issuer or Collateral Advisor (unless and except to the extent
otherwise expressly set forth herein or upon the request of the Initial Hedge
Counterparty, a Rating Agency or a Majority of the then Aggregate Outstanding
Amount of the Notes of the Controlling Class);


 


(j)                                     the
Trustee shall not be responsible or liable for the actions or omissions of, or
any inaccuracies in the records of, any non-Affiliated custodian, clearing
agency, common depository, Euroclear or Clearstream or for the acts or
omissions of the Collateral Advisor or either Co-Issuer;


 


(k)                                  to
the extent any defined term hereunder, or any calculation required to be made
or determined by the Trustee hereunder, is dependent upon or defined by
reference to generally accepted accounting principles in the United States (GAAP), the
Trustee shall be entitled to request and receive (and rely upon) instruction
from the Issuer or the accountants appointed pursuant to 10.13 as to the
application of GAAP in such connection, in any instance;


 


(1)                                  to
the extent permitted by law, the Trustee shall not be required to give any bond
or surety in respect of the execution of this Indenture or otherwise; and


 


(m)                               the
permissive right of the Trustee to take or refrain from taking any actions
enumerated in this Indenture shall not be construed as a duty.


 


6.4.                            AUTHENTICATING AGENTS


 


If the Trustee so chooses the Trustee may appoint one or more
Authenticating Agents with power to act on its behalf and subject to its
direction in the authentication of Rated Notes in connection with issuance,
transfers and exchanges under Sections 2.4, 2.5 and 8.5, as fully to all
intents and purposes as though each such Authenticating Agent had been
expressly authorized by those Sections to authenticate such Rated Notes. For
all purposes of this Indenture, the authentication of Rated Notes by an
Authenticating Agent pursuant to this Section 6.4 shall be deemed to be
the authentication of Rated Notes “by the Trustee”.


 


Any entity into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any entity resulting from
any merger, consolidation or conversion to which any Authenticating Agent shall
be a party, or any entity succeeding to the corporate trust business of any
Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, without the execution or filing of any further act on the part of
the parties hereto or such Authenticating Agent or such successor entity.


 


Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and the Issuer. The Trustee may at any
time terminate the agency of any Authenticating Agent by


 


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giving written notice of termination to such Authenticating Agent and
the Co-Issuers. Upon receiving such notice of resignation or upon such a
termination, the Trustee shall promptly appoint a successor Authenticating
Agent and shall give written notice of such appointment to the Co-Issuers.


 


The Issuer agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services (provided, however, that, so long as
an Authenticating Agent is the Trustee, or an Affiliate thereof, such
compensation shall be payable by the Trustee, rather than by the Issuer), and
reimbursement for its reasonable expenses relating thereto and the Trustee
shall be entitled to be reimbursed for such payments, subject to Section 6.8.
The provisions of Sections 2.8, 6.5 and 6.6 shall be applicable to any
Authenticating Agent.


 


6.5.                            NOT RESPONSIBLE FOR RECITALS OR
ISSUANCE OF RATED NOTES


 


The recitals contained herein and in the Rated Notes, other than the
Certificate of Authentication thereon, shall be taken as the statements of the
Co-Issuers, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representation as to the validity or sufficiency of this
Indenture (except as may be made with respect to the validity of the Trustee’s
obligations hereunder), of the Collateral or of the Rated Notes. The Trustee
shall not be accountable for the use or application by the Co-Issuers of the
Rated Notes or the proceeds thereof or any amounts paid to the Co-Issuers
pursuant to the provisions hereof.


 


6.6.                            MAY HOLD RATED NOTES


 


The Trustee, any Note Paying Agent, the Note Registrar or any other
agent of the Co-Issuers, in its individual or any other capacity, may become
the owner or pledgee of Rated Notes and, may otherwise deal with the Co-Issuers
or any of their Affiliates, with the same rights it would have if it were not
Trustee, Note Paying Agent, Note Registrar or such other agent.


 


6.7.                            FUNDS HELD IN TRUST


 


Funds held by the Trustee hereunder shall be held in trust to the
extent required herein. The Trustee shall be under no liability for interest on
any funds received by it hereunder except as otherwise agreed upon with the
Issuer and except to the extent of income or other gain on investments which
are deposits in or certificates of deposit of the Trustee in its commercial
capacity and income or other gain actually received by the Trustee on Eligible
Investments.


 


6.8.                            COMPENSATION AND
REIMBURSEMENT


 


(a)                                  The
Issuer agrees:


 


(1)                                to pay the Trustee on
each Payment Date the Trustee Fee, the Income Note Paying Agent Fee and
reasonable compensation for all other services, including custodial services,
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);


 


(2)                                except as otherwise
expressly provided herein, to reimburse the Trustee (subject to any written
agreement between the Issuer and the Trustee) in a timely manner upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Indenture or in
the enforcement of any provision hereof and expenses related to


 


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the
maintenance and administration of the Collateral (including securities
transaction charges and the reasonable compensation and expenses and
disbursements of its agents and legal counsel and of any accounting firm or
investment banking firm employed by the Trustee pursuant to Section 5.2,
5.4, 5.5, 6.3(c), 6.3(k), 10.11 or 10.13, except any such expense, disbursement
or advance as may be attributable to its negligence, willful misconduct or bad
faith but only to the extent any such securities transaction charges have not
been waived during a Due Period due to the Trustee’s receipt of a payment from
a financial institution with respect to certain Eligible Investments);


 


(3)                                to indemnify the
Trustee and its Officers, directors, employees and agents for, and to hold them
harmless against, any loss, liability or expense incurred by it without
negligence, willful misconduct or bad faith on their part, arising out of or in
connection with the acceptance or administration of this trust, including the
reasonable costs and expenses (including reasonable counsel fees) of defending
themselves against any claim or liability in connection with the exercise or
performance of any of their powers or duties hereunder; and


 


(4)                                to pay the Trustee
reasonable additional compensation together with its expenses (including
reasonable counsel fees) for any collection action taken pursuant to Section 6.14.


 


(b)                                 The
Issuer may remit payment for such fees and expenses to the Trustee or, in the
absence thereof, the Trustee may from time to time deduct payment of its fees
and expenses hereunder from funds on deposit in the Expense Account pursuant to
Section 11.1.


 


(c)                                  The
Trustee hereby agrees not to cause the filing of a petition in bankruptcy
against the Issuer for the non-payment to the Trustee of any amounts provided
by this Section 6.8 until at least one year and one day, or if longer the
applicable preference period then in effect, after the payment in full of all
Rated Notes issued under this Indenture.


 


(d)                                 The
amounts payable to the Trustee pursuant to Sections 6.8(a)(2) through (4) (other
than amounts received by the Trustee from financial institutions under Section 6.8(a)(2) above)
shall not, except as provided by Section 11.1(a)(23), exceed on any
Payment Date the limitation described in Section 11.1(a)(1) for such
Payment Date; provided that (A) the Trustee
shall not institute any proceeding for enforcement of such lien except in connection
with an action pursuant to Section 5.3 or 5.4 for the enforcement of the
lien of this Indenture for the benefit of the Secured Parties and (B) the
Trustee may only enforce such a lien in conjunction with the enforcement of the
rights of the Secured Parties in the manner set forth in Section 5.4.


 


The Trustee shall, subject to the Priority of Payments, receive amounts
pursuant to this Section 6.8 and Section 11.1 only to the extent that
the payment thereof will not result in an Event of Default and the failure to
pay such amounts to the Trustee will not, by itself, constitute an Event of
Default. Subject to Section 6.10, the Trustee shall continue to serve as
Trustee under this Indenture notwithstanding the fact that the Trustee shall
not have received amounts due it hereunder and hereby agrees not to cause the
filing of a petition in bankruptcy against the Co-Issuers for the nonpayment to
the Trustee of any amounts provided by this Section 6.8 until at least one
year and one day, or, if longer, the applicable preference period then in
effect, after the payment in full of all Rated Notes issued under this
Indenture. No direction by the Holders of a Majority of the then Aggregate
Outstanding Amount of the


 


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Notes of the Controlling Class shall affect the right of the
Trustee to collect amounts owed to it under this Indenture.


 


The indemnifications in favor of the Trustee in this Section 6.8
shall (i) survive any resignation or removal of any Person acting as
Trustee (to the extent of any indemnified liabilities, costs, expenses and
other amounts arising or incurred prior to, or arising out of actions or
omissions occurring prior to, such resignation or removal) and (ii) apply
to the Trustee in its capacities as Custodian, Note Paying Agent, Rated Note
Calculation Agent and Authenticating Agent.


 


6.9.                            CORPORATE TRUSTEE REQUIRED; ELIGIBILITY


 


There shall at all times be a Trustee hereunder which shall be a bank,
corporation or trust company organized and doing business under the laws of the
United States or of any State thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
U.S.$250,000,000, subject to supervision or examination by federal or state
banking authorities, having a rating of at least “BBB+” by S&P and having
an office within the United States. If such entity publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this Section 6.9,
the combined capital and surplus of such entity shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section 6.9, it shall resign
immediately in the manner and with the effect hereinafter specified in this Section 6.


 


6.10.                      RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR


 


(a)                                  No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Section 6 shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.


 


(b)                                 The
Trustee may resign at any time by giving 90 days prior written notice thereof
to the Co-Issuers, the Rated Noteholders, the Initial Hedge Counterparty, the
Collateral Advisor and each Rating Agency. Upon receiving such notice of
resignation, or if the Trustee is removed or becomes incapable of acting, or if
a vacancy shall occur in the office of the Trustee for any reason, the Issuer
shall (after consultation with the Collateral Advisor) promptly propose a
successor trustee for approval by the Holders of 662/3%
of the then Aggregate Outstanding Amount of the Notes of each Class of
Rated Notes. A proposed successor trustee approved in accordance with the
preceding sentence shall be appointed by the Co-Issuers as successor trustee by
written instrument, in duplicate, executed by an Authorized Officer of the
Issuer and an Authorized Officer of the Co-Issuer, one copy of which shall be
delivered to the Trustee so resigning and one copy to the successor trustee or
trustees, together with a copy to each Rated Noteholder. If no successor
trustee shall have been appointed and an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee or any
Holder of a Rated Note or the Initial Hedge Counterparty on behalf of itself
and all others similarly situated, subject to Section 5.15, may petition
any court of competent jurisdiction for the appointment of a successor Trustee.


 


(c)                                  The
Trustee may be removed at any time by an Act of the Holders of at least 662/3% of the then Aggregate Outstanding
Amount of the Notes of each Class of Rated Notes delivered to the Trustee
and to the Co-Issuers.


 


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(d)                                 If at any time:


 


(1)                             the Trustee shall cease
to be eligible under Section 6.9 and shall fail to resign after written
request therefor by any Holder; or


 


(2)                             the Trustee shall become
incapable of acting or shall be adjudged as bankrupt or insolvent or a receiver
or liquidator of the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation,


 


then, in any such case (subject to Section 6.10(a)), (A) the
Co-Issuers, by Issuer Order shall remove the Trustee, or (B) subject to Section 5.15,
any Holder or the Initial Hedge Counterparty may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.


 


(e)                                  The Co-Issuers shall give
prompt notice of each resignation and each removal of the Trustee and each
appointment of a successor Trustee by mailing written notice of such event by
first class mail, postage prepaid, to each Rating Agency, the Initial Hedge
Counterparty, the Collateral Advisor and the Holders as their names and
addresses appear in the Note Register. Each notice shall include the name of
the successor Trustee and the address of its Corporate Trust Office. If the
Co-Issuers fail to mail such notice within ten days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be given at the expense of the Co-Issuers.


 


6.11.                      ACCEPTANCE OF APPOINTMENT BY SUCCESSOR


 


Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Co-Issuers and the retiring Trustee (with copies
to the Initial Hedge Counterparty and the Collateral Advisor) an instrument
accepting such appointment. Upon delivery of the required instruments, the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any other act, deed or conveyance, shall become
vested with all the rights, powers, trusts, duties and obligations of the
retiring Trustee; but, on request of the Co-Issuers or a Majority of the then
Aggregate Outstanding Amount of the Notes of any Class of Notes, the
Initial Hedge Counterparty or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, fees, indemnities and expenses then unpaid,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and funds held by
such retiring Trustee hereunder, subject nevertheless to its lien, if any,
provided for in Section 6.8(d). Upon request of any such successor
Trustee, the Co-Issuers shall execute any and all instruments for more fully
and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.


 


No successor Trustee shall accept its appointment unless (a) at
the time of such acceptance such successor shall be qualified and eligible
under Section 6.9 and the other provisions of this Section 6 and (b) a
Rating Agency Confirmation shall have been obtained with respect to the
appointment of such successor Trustee shall have been satisfied. No appointment
of a successor Trustee shall become effective if the Holders of a Majority of
the then Aggregate Outstanding Amount of the Notes of the Controlling Class objects
to such appointment; and no appointment of a successor Trustee shall become
effective until the date ten days after notice of such appointment has been
given to each Rated Noteholder and each Rating Agency.


 


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6.12.                      MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE


 


Any Person into which the Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any Person succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder; provided such Person shall be
otherwise qualified and eligible under this Section 6, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. The successor Trustee will notify each Rating Agency of any
such merger, conversion or consolidation. In case any of the Rated Notes have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Rated Notes so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Rated Notes.


 


6.13.                      CO-TRUSTEES


 


At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction in which any part of the Collateral may at the
time be located, the Trustee shall have power to appoint one or more Persons to
act as Co-trustee, jointly with the Trustee of all or any part of the
Collateral, with the power to file such proofs of claim and take such other
actions pursuant to Section 5.6 and to make such claims and enforce such
rights of action on behalf of the Holders of the Rated Notes subject to the
other provisions of this Section 6.13.


 


The Co-Issuers shall join with the Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint a Co-trustee. If the Co-Issuers do not join in such
appointment within 15 days after the receipt by them of a request to do so, the
Trustee shall have power to make such appointment.


 


Should any written instrument from the Co-Issuers be
required by any Co-trustee so appointed for more fully confirming to such
Co-trustee such property, title, right or power, any and all such instruments
shall, on request, be executed, acknowledged and delivered by the Co-Issuers.
The Co-Issuers agree to pay (subject to the Priority of Payments) for any
reasonable fees and expenses in connection with such appointment.


 


Every Co-trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms:


 


(a)                                  the Rated Notes shall be
authenticated and delivered and all rights, powers, duties and obligations
hereunder in respect of the custody of securities, funds and other personal
property held by, or required to be deposited or pledged with, the Trustee
hereunder, shall be exercised solely by the Trustee;


 


(b)                                 the rights, powers,
duties and obligations hereby conferred or imposed upon the Trustee in respect
of any property covered by the appointment of a Co-trustee shall be conferred
or imposed upon and exercised or performed by the Trustee or by the Trustee and
such Co-trustee jointly, as shall be provided in the instrument appointing such
Co-trustee, except to the extent that under any law of any jurisdiction in
which any particular act is to be performed, the Trustee shall be incompetent
or unqualified to perform such act, in which event such rights, powers, duties
and obligations shall be exercised and performed by a Co-trustee;


 


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(c)                                  the
Trustee at any time, by an instrument in writing executed by it, may accept the
resignation of or remove any Co-trustee appointed under this Section 6.13.
A successor to any Co-trustee so resigned or removed may be appointed in the
manner provided in this Section 6.13;


 


(d)                                 no
Co-trustee hereunder shall be personally liable by reason of any act or
omission of the Trustee or any other Co-trustee hereunder;


 


(e)                                  the
Trustee shall not be liable by reason of any act or omission of a Co-trustee;


 


(f)                                    any
Act of Rated Noteholders delivered to the Trustee shall be deemed to have been
delivered to each Co-trustee; and


 


(g)                                 each
Co-trustee hereunder shall at the time of such acceptance satisfy the
qualification required of a Trustee under Section 6.9 and the other
provisions of this Section 6.


 


6.14.                      CERTAIN DUTIES RELATED TO DELAYED PAYMENT OF PROCEEDS; OTHER NOTICES


 


In the event that the Trustee shall not have received a payment with
respect to any Pledged Security within two Business Days after its Due Date,
the Trustee shall (i) notify the Issuer and Collateral Advisor in writing
and (ii) promptly request the issuer of such Pledged Security, the trustee
under the related Underlying Instrument or paying agent designated by either of
them, as the case may be, to make such payment as soon as practicable after
such request but in no event later than three Business Days after the date of
such request. In the event that such payment is not made within such time
period, the Trustee, subject to the provisions of Section 6.1(c)(4),
shall, subject to the restrictions on the sale of Collateral Debt Securities
set forth in Section 12.1, take such action as the Collateral Advisor
shall direct in writing. Any such action shall be without prejudice to any
right to claim a Default under this Indenture. The Trustee will promptly notify
the Issuer if the Collateral Advisor has determined that (i) any
Collateral Debt Security has become a Defaulted Security, a Deferred Interest
PIK Bond, a Credit Risk Security or a Written Down Security or (ii) the
Trustee has received an Equity Security in connection with any Collateral Debt
Security.


 


6.15.                      REPRESENTATIONS AND WARRANTIES OF THE BANK


 


(a)                                  Organization.
The Bank has been duly organized and is validly existing as a national
banking association under the laws of the United States and has the power to
conduct its business and affairs as a trustee.


 


(b)                                 Authorization;
Binding Obligations. The Bank has the power and authority to perform the
duties and obligations of Trustee, Note Registrar and Note Transfer Agent or
any other capacity to which it is appointed under this Indenture. The Bank has
taken all necessary action to authorize the execution, delivery and performance
of this Indenture, and all of the documents required to be executed by the Bank
pursuant hereto. This Indenture has been duly executed and delivered by the
Bank. Upon execution and delivery by the Co-Issuers, this Indenture will
constitute the legal, valid and binding obligation of the Bank enforceable in
accordance with its terms.


 


(c)                                  Eligibility.
The Bank is eligible under Section 6.9 to serve as Trustee hereunder.


 


(d)                                 No
Conflict. Neither the execution, delivery and performance of this
Indenture, nor the consummation of the transactions contemplated by this
Indenture, (i) is prohibited by, or


 


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requires the Bank to obtain any consent, authorization, approval or
registration under, any law, statute, rule, regulation, judgment, order, writ,
injunction or decree that is binding upon the Bank or any of its properties or
assets, or (ii) will violate any provision of, result in any default or
acceleration of any obligations under, result in the creation or imposition of
any lien pursuant to, or require any consent under, any agreement to which the
Bank is a party or by which it or any of its property is bound.


 


(e)                                  No Proceedings. There are no proceedings pending, or to the
best knowledge of the Bank, threatened against the Bank before any federal,
state or other governmental agency, authority, administrator or regulatory
body, arbitrator, court or other tribunal, foreign or domestic, that could have
a material adverse effect on the Collateral or any action taken or to be taken
by the Bank under this Indenture.


 


6.16.                      EXCHANGE OFFERS, PROPOSED
AMENDMENTS ETC.


 


The Collateral Advisor may, on behalf of the Issuer, instruct the
Trustee pursuant to an Issuer Order to, and the Trustee shall, take any of the
following actions with respect to a Collateral Debt Security or Equity Security
as to which an Offer has been made or as to which any consent, waiver, vote or
exercise has been requested: (i) exchange such instrument for other
securities or a mixture of securities and other consideration pursuant to such
Offer (and in making a determination whether or not to exchange any security,
none of the restrictions set forth in Section 12 shall be applicable); and
(ii) give consent, grant waiver, vote or exercise any or all other rights
or remedies with respect to any such Collateral Debt Security or Equity
Security. In the event that the Trustee does not receive instruction from the
Collateral Advisor, the Trustee shall have no obligation to take action with respect
to such exchange or such request for consent, waiver, vote or exercise. In the
event that the Trustee receives written notice of any proposed amendment,
consent or waiver under the Underlying Instruments of any Collateral Debt
Securities (before or after any default), the Trustee shall promptly deliver
copies of such notice to the Issuer and the Collateral Advisor. The Collateral
Advisor may, on behalf of the Issuer, instruct the Trustee pursuant to an
Issuer Order to, and the Trustee shall, with respect to a Collateral Debt
Security as to which a consent or waiver under the Underlying Instruments of
such Collateral Debt Security (before or after any default) has been proposed,
give consent, grant waiver, vote or exercise any or all other rights or remedies
with respect to any such Collateral Debt Security only in accordance with such
Issuer Order. In the absence of any instruction from the Collateral Advisor,
the Trustee shall not engage in any vote with respect to such Collateral Debt
Security.


 


6.17.                      FIDUCIARY FOR RATED
NOTEHOLDERS ONLY; AGENT FOR OTHER SECURED PARTIES


 


With respect to the security interests created hereunder, the pledge of
any portion of the Collateral to the Trustee is to the Trustee as
representative of the Rated Noteholders and agent for other Secured Parties. In
furtherance of the foregoing, the possession by the Trustee of any portion of
the Collateral and the endorsement to or registration in the name of the
Trustee of any portion of the Collateral (including without limitation as
entitlement holder of the Collateral Account) are all undertaken by the Trustee
in its capacity as representative of the Rated Noteholders and as agent for the
other Secured Parties. The Trustee shall not by reason of this Indenture be
deemed to be acting as fiduciary for the Initial Hedge Counterparty or the
Collateral Advisor, provided that
the foregoing shall not limit any of the express obligations of the Trustee
under this Indenture.


 


6.18.                      WITHHOLDING


 


If any withholding tax is imposed on the Issuer’s payment (or
allocations of income) under the Rated Notes to any Rated Noteholder, such tax
shall reduce the amount otherwise distributable to such


 


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Rated Noteholder. The Trustee is hereby authorized and directed to
retain from amounts otherwise distributable to any Rated Noteholder sufficient
funds for the payment of any tax that is required to be withheld or deducted by
the Issuer (but such authorization shall not prevent the Trustee from contesting
any such tax in appropriate proceedings and withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings). The amount of any
withholding tax imposed with respect to any Rated Noteholder shall be treated
as Cash distributed to such Rated Noteholder at the time it is withheld by the
Trustee and remitted to the appropriate taxing authority. If there is a
possibility that withholding tax is payable with respect to a distribution, the
Trustee may in its sole discretion withhold such amounts in accordance with
this Section 6.18. If any Rated Noteholder wishes to apply for a refund of
any such withholding tax, the Trustee shall reasonably cooperate with such
Rated Noteholder in making such claim so long as such Rated Noteholder agrees
to reimburse the Trustee for any out-of-pocket expenses incurred. Nothing
herein shall impose an obligation on the part of the Trustee to determine the
amount of any tax or withholding obligation on the part of the Issuer or in
respect of the Income Notes.


 


ARTICLE VII


 


COVENANTS


 


7.1.                            PAYMENT OF PRINCIPAL AND INTEREST


 


The Co-Issuers will duly and punctually pay all principal (including
the Class C Cumulative Periodic Interest Shortfall Amount, the Class D
Cumulative Periodic Interest Shortfall Amount, the Class E Cumulative
Periodic Interest Shortfall Amount and the Class F Cumulative Periodic
Interest Shortfall Amount), interest (including Defaulted Interest and interest
thereon, if any) in accordance with the terms of the Rated Notes and this
Indenture and amounts due under the Hedge Agreement in accordance with this
Indenture. Amounts properly withheld under the Code or other applicable law by
any Person from a payment to any Rated Noteholder of principal and/or interest
shall be considered as having been paid by the Co-Issuers to such Rated
Noteholder for all purposes of this Indenture.


 


The Trustee shall, unless prevented from doing so for reasons beyond
its reasonable control, give notice to each Rated Noteholder and each Rating
Agency of any such withholding requirement no later than ten days prior to the
date of the payment from which amounts are required to be withheld; provided that
despite the failure of the Trustee to give such notice, amounts withheld
pursuant to applicable tax laws shall be considered as having been paid by the
Co-Issuers as provided above.


 


7.2.                            MAINTENANCE OF OFFICE OR AGENCY


 


The Co-Issuers hereby appoint the Trustee as Note Paying Agent for the
payment of principal of and interest on the Rated Notes. Rated Notes may be surrendered
for registration of transfer or exchange at the Corporate Trust Office. The
Issuer hereby appoints NCB Stockbroker Limited, 3 George’s Dock, Dublin 1,
Ireland, as offshore Note Paying Agent and as the Issuer’s agent where notices
and demands to or upon the Issuer in respect of any Rated Notes listed on the
Irish Stock Exchange may be served and where such Rated Notes may be
surrendered for registration of transfer or exchange.


 


The Co-Issuers may at any time and from time to time, terminate the appointment
of any such agent or appoint any additional agents for any or all of such
purposes; provided that (A) the Co-Issuers will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where notices and demands to or upon the Co-Issuers in respect of the Rated
Notes and this Indenture may be served, (B) no Note Paying Agent shall be
appointed in a jurisdiction which subjects payments on the Rated Notes to
withholding tax and (C) the Co-Issuers may not terminate the appointment
of any Note Paying Agent


 


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without the consent of each Income Noteholder. The Co-Issuers shall
give prompt written notice to the Trustee and each Rating Agency and the Rated
Noteholders of the appointment or termination of any such agent and of the
location and any change in the location of any such office or agency.


 


If at any time the Co-Issuers shall fail to maintain any such required
office or agency in the Borough of Manhattan, The City of New York or shall
fail to furnish the Trustee with the address thereof, presentations and
surrenders may be made at and notices and demands may be served on the
Co-Issuers and Rated Notes may be presented and surrendered for payment to the
Note Paying Agent at its office in Illinois (and the Co-Issuers hereby appoint
the same as their agent to receive such respective presentations, surrenders,
notices and demands).


 


For so long as any Class of Rated Notes is listed on the Irish
Stock Exchange and such exchange shall so require, the Co-Issuers shall
maintain a listing agent, a paying agent and an agent where notices and demands
to or upon the Co-Issuers in respect of any Rated Notes listed on the Irish
Stock Exchange may be served and where such Rated Notes may be surrendered for
registration of transfer or exchange.


 


7.3.                            FUNDS FOR RATED NOTE PAYMENTS
TO BE HELD IN TRUST


 


All payments of amounts due and payable with respect to any Rated Notes
that are to be made from amounts withdrawn from the Payment Account shall be
made on behalf of the Co-Issuers by the Trustee or a Note Paying Agent with
respect to payments on the Rated Notes.


 


When the Co-Issuers shall have a Note Paying Agent that is not also the
Note Registrar, they shall direct the Note Registrar to furnish, no later than
the fifth calendar day after each Record Date a list, if necessary, in such
form as such Note Paying Agent may reasonably request, of the names and
addresses of the Holders and of the certificate numbers of individual Rated
Notes held by each such Holder.


 


The initial Note Paying Agent shall be as set forth in Section 7.2.
Any additional or successor Paying Agents shall be appointed by Issuer Order
with written notice thereof to the Trustee and the Rating Agencies; provided that so
long as any Class of Rated Notes is rated by the Rating Agencies and with
respect to any additional or successor Note Paying Agent for the Rated Notes, (a) the
Note Paying Agent for the Rated Notes has a rating of not less than “AA-” and
not less than “A-1+” by S&P or (b) a Rating Agency Confirmation from
S&P shall have been obtained with respect to the appointment of such Note
Paying Agent. In the event that (i) the Co-Issuers have actual knowledge
that such successor Note Paying Agent ceases to have a rating of at least “AA-”
and of “A-1+” by S&P or (ii) a Rating Agency Confirmation from S&P
shall not have been obtained with respect to the appointment of such Note
Paying Agent, the Co-Issuers shall promptly remove such Note Paying Agent and
appoint a successor Note Paying Agent. The Co-Issuers shall not appoint any
Note Paying Agent (other than an initial Note Paying Agent) that is not, at the
time of such appointment, a depository institution or trust company subject to
supervision and examination by federal and/or state and/or national banking
authorities. The Co-Issuers shall cause each Note Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Note
Paying Agent shall agree with the Trustee (and if the Trustee acts as Note Paying
Agent, it hereby so agrees), subject to the provisions of this Section 7.3,
that such Note Paying Agent will:


 


(a)                                  allocate all sums
received for payment to the Holders of Rated Notes for which it acts as Note
Paying Agent on each Payment Date and Redemption Date among such Holders in the
proportion specified in the instructions set forth in the applicable Note
Valuation Report or Redemption Date Statement or as otherwise provided herein,
in each case to the extent permitted by applicable law;


 


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(b)                                 hold all amounts held
by it for the payment of amounts due with respect to the Rated Notes in trust
for the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided and pay such sums
to such Persons as herein provided;


 


(c)                                  if such Note Paying
Agent is not the Trustee, immediately resign as a Note Paying Agent and
forthwith pay to the Trustee all amounts held by it in trust for the payment of
Rated Notes if at any time it ceases to meet the standards set forth above
required to be met by a Note Paying Agent at the time of its appointment;


 


(d)                                 if such Note Paying
Agent is not the Trustee, immediately give the Trustee notice of any Default by
the Issuer or the Co-Issuer (or any other obligor upon the Rated Notes) in the
making of any payment required to be made; and


 


(e)                                  if such Note Paying
Agent is not the Trustee at any time during the continuance of any such
Default, upon the written request of the Trustee, forthwith pay to the Trustee
all amounts so held in trust by such Note Paying Agent.


 


If the Co-Issuers shall have appointed a Note Paying Agent other than
the Trustee, the Trustee shall deposit on or prior to the Business Day next
preceding each Payment Date or Redemption Date, as the case may be, with such
Note Paying Agent, if necessary, an aggregate amount sufficient to pay the
amounts then becoming due (to the extent funds are then available for such
purpose in the Collection Account, as the case may be), such amount to be held
in trust for the benefit of the Persons entitled thereto. Any funds deposited
with a Note Paying Agent (other than the Trustee) in excess of an amount
sufficient to pay the amounts then becoming due on the Rated Notes with respect
to which such deposit was made shall be paid over by such Note Paying Agent to
the Trustee for application in accordance with Section 11.


 


The Co-Issuers may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, direct
any Note Paying Agent to pay, to the Trustee all amounts held in trust by such
Note Paying Agent, such amounts to be held by the Trustee upon the same trusts
as those upon which such amounts were held by such Note Paying Agent; and, upon
such payment by any Note Paying Agent to the Trustee, such Note Paying Agent
shall be released from all further liability with respect to such amounts.


 


Except as otherwise required by applicable law, any funds deposited
with the Trustee or any Note Paying Agent in trust for the payment of the
principal of or interest on any Rated Note and remaining unclaimed for two
years after the same has become due and payable shall be paid to the Co-Issuers
on Issuer Request; and the Holder of such Rated Note shall thereafter, as an
unsecured general creditor, look only to the Issuer or the Co-Issuer for
payment of such amounts and all liability of the Trustee or such Note Paying
Agent with respect to such trust funds (but only to the extent of the amounts
so paid to the Co-Issuers) shall thereupon cease. The Trustee or such Note
Paying Agent, before being required to make any such release of payment, may,
but shall not be required to, adopt and employ, at the expense of the Co-Issuers,
any reasonable means of notification of such release of payment, including
mailing notice of such release to Holders whose Rated Notes have been called
but have not been surrendered for redemption or whose right to or interest in
amounts due and payable but not claimed is determinable from the records of any
Note Paying Agent, at the last address of record of each such Holder.


 


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7.4.                            EXISTENCE OF CO-ISSUERS


 


The Issuer and the Co-Issuer shall maintain in full force and effect
their existence and rights as an exempted company incorporated and registered
under the laws of the Cayman Islands and as a corporation incorporated under the
laws of the State of Delaware, respectively, and shall obtain and preserve
their qualification to do business in each jurisdiction in which such
qualifications are or shall be necessary to protect the validity and
enforceability of this Indenture, the Rated Notes or any of the Collateral.


 


The Issuer and the Co-Issuer shall ensure that all corporate or other
formalities regarding their respective existences (including holding regular
board of directors’ and shareholders’, or other similar, meetings) or registrations
are followed. Neither the Issuer nor the Co-Issuer shall take any action, or
conduct its affairs in a manner, that is likely to result in its separate
existence being ignored or in its assets and liabilities being substantively
consolidated with any other Person in a bankruptcy, reorganization or other
insolvency proceeding. At least one director of the Issuer and of the Co-Issuer
shall be Independent of other parties to the Transaction Documents. Without
limiting the foregoing, (a) the Issuer shall not have any subsidiaries
(other than the Co-Issuer and any Tax Subsidiary), (b) the Co-Issuer shall
not have any subsidiaries and (c) the Issuer and the Co-Issuer shall not (i) have
any employees, (ii) engage in any transaction with any shareholder that
would constitute a conflict of interest or (iii) pay dividends, provided that the foregoing shall not prohibit the Issuer
from entering into the transactions contemplated by the Corporate Services
Agreement with the Administrator.


 


7.5.                            PROTECTION OF COLLATERAL


 


(a)                                 The
Issuer shall from time to time, execute and deliver all such supplements and amendments
hereto and all such Financing Statements, continuation statements, instruments
of further assurance and other instruments, and shall take such other action as
may be necessary or advisable or desirable to secure the rights and remedies of
the Secured Parties hereunder and to:


 


(1)                                 Grant more effectively
all or any portion of the Collateral;


 


(2)                                 maintain, preserve and
perfect the lien (and the first priority nature thereof) of this Indenture or
to carry out more effectively the purposes hereof;


 


(3)                                 perfect, publish
notice of or protect the validity of any Grant made or to be made by this
Indenture (including any and all actions necessary or desirable as a result of
changes in law or regulations);


 


(4)                                 enforce any of the
Pledged Securities or other instruments or property included in the Collateral;


 


(5)                                 preserve and defend
title to the Collateral and the rights therein of the Trustee, the Initial
Hedge Counterparty and the Holders of the Rated Notes against the claims of all
Persons and parties; or


 


(6)                                 pay or cause to be
paid any and all taxes levied or assessed upon all or any part of the
Collateral.


 


The Issuer hereby designates the Trustee its agent and attorney-in-fact
to execute any Financing Statement, continuation statement or other instrument
delivered to it pursuant


 


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to this Section 7.5, and the Trustee, as agent of the Issuer,
agrees to file such continuation statements as are necessary to maintain
perfection of the Collateral perfected by the filing of Financing Statements,
provided that the Issuer retains ultimate responsibility to maintain the
perfection of the Collateral perfected by the filing of Financing Statements
and any failure of the Trustee to file continuation statements pursuant to this
undertaking shall not result in any liability of the Trustee and the Trustee
shall be entitled to indemnification pursuant to Section 6.8(a) with
respect to any claim, loss, liability or expense incurred by the Trustee with
respect to the filing of such continuation statements. The Trustee agrees that
it will from time to time, at the direction of any Secured Party, execute and
cause to be filed Financing Statements and continuation statements. The Issuer
shall otherwise cause the perfection and priority of the security interest in
the Collateral and the maintenance of such security interest at all times.
Notwithstanding anything to the contrary herein, the right of a Secured Party
to provide direction to the Trustee shall not impose upon the Trustee, as
Secured Party, any obligation to provide any such direction. The Issuer agrees
that a carbon, photographic, photostatic or other reproduction of this
Indenture or of a Financing Statement is sufficient as an Indenture or a
Financing Statement as the case may be.


 


(b)                                The
Trustee shall not (i) except in accordance with Section 10.11(a) or
(b), as applicable, remove any portion of the Collateral that consists of Cash
or is evidenced by an Instrument, certificate or other writing (A) from
the jurisdiction in which it was held at the date the most recent Opinion of
Counsel was delivered pursuant to Section 7.6 (or from the jurisdiction in
which it was held as described in the Opinion of Counsel delivered at the
Closing Date pursuant to Section 3.1(c), if no Opinion of Counsel has yet
been delivered pursuant to Section 7.6) or (B) from the possession of
the Person who held it on such date or (ii) cause or permit ownership or
the pledge of any portion of the Collateral that consists of book-entry
securities to be recorded on the books of a Person (A) located in a
different jurisdiction from the jurisdiction in which such ownership or pledge
was recorded at such date or (B) other than the Person on whose books such
ownership or pledge was recorded at such date, unless the Trustee shall have
first received an Opinion of Counsel to the effect that the lien and security
interest created by this Indenture with respect to such property will continue
to be maintained after giving effect to such action or actions.


 


(c)                                 The
Issuer shall pay or cause to be paid taxes, if any, levied on account of the
beneficial ownership by the Issuer of any Pledged Securities that secure the
Rated Notes; provided that the Issuer shall not be required to
pay or discharge or cause to be paid or discharged any such tax whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which disputed amounts or adequate reserves have been made
or the failure of which to pay or discharge could not reasonably be expected to
have a material adverse effect upon the ability of the Issuer to timely and
fully perform any of its payment or other material obligations under this
Indenture or upon the interests of the Rated Noteholders in the Collateral.


 


(d)                                The
Issuer shall enforce all of its material rights and remedies under the
Transaction Documents to which it is a party.


 


(e)                                 Without
at least thirty (30) days’ prior written notice to the Trustee, the Issuer
shall not change its name, or the name under which it does business, from the
name shown on the signature pages hereto.


 


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7.6.                            OPINIONS AS TO COLLATERAL


 


On or before September 15 in each calendar year, commencing in
2006, the Issuer shall furnish to the Trustee and each Rating Agency (with
copies to the Initial Hedge Counterparty) an Opinion of Counsel (which shall
include assumptions and qualifications substantially similar to those set forth
in Exhibit E-1) stating that, in the opinion of such counsel, as of the
date of such opinion, the lien and security interest created by this Indenture
with respect to the Collateral remains a valid and perfected first priority
lien and describing the manner in which such security interest shall remain
perfected.


 


7.7.                            PERFORMANCE OF OBLIGATIONS


 


(a)                                 The
Trustee shall notify the Issuer, the Initial Hedge Counterparty and each Rated Noteholder
of any request for an amendment, waiver or supplement to any Underlying
Instrument included in the Collateral or of any other notice of a vote in
respect of any Collateral Debt Security included in the Collateral. The Issuer
shall not enter into any such amendment, waiver or supplement; provided that,
notwithstanding anything in this Section 7.7(a) to the contrary, the
Issuer may enter into any amendment or waiver of or supplement to any such
Underlying Instrument if such amendment, supplement or waiver:


 


(1)                                 is required by the
provisions of any Underlying Instrument or by applicable law (other than
pursuant to an Underlying Instrument);


 


(2)                                 is necessary to cure
any ambiguity, inconsistency or formal defect or omission in such Underlying
Instrument; or


 


(3)                                 (x) is deemed
necessary by the Issuer or the Collateral Advisor and does not materially and
adversely affect the Secured Parties or (y) is effected pursuant to Section 6.16.


 


The Issuer shall be entitled to rely on an Opinion of Counsel as to
material adverse effect and as to whether the entry into an amendment,
supplement or waiver is permitted pursuant to this Indenture.


 


(b)                                The
Issuer or the Co-Issuer may, with the prior written consent of the Holders of a
Majority of the then Aggregate Outstanding Amount of the Notes of each Class of
Rated Notes and the Holders of not less than 662/3%
of the aggregate principal amount of the Outstanding Income Notes and the
Initial Hedge Counterparty, contract with other Persons, including the
Collateral Administrator, the Collateral Advisor and the Bank, for the
performance of actions and obligations to be performed by the Issuer or the
Co-Issuer hereunder by such Persons. Notwithstanding any such arrangement, the
Issuer or the Co-Issuer, as the case may be, shall remain liable for all such
actions and obligations. In the event of such contract, the performance of such
actions and obligations by such Persons shall be deemed to be performance of
such actions and obligations by the Issuer or the Co-Issuer, as the case may
be; and the Issuer or Co-Issuer, as the case may be, will punctually perform,
and use its best efforts to cause such other Person to perform, all of their
obligations and agreements contained in related agreement.


 


(c)                                 The
Co-Issuers shall treat all acquisitions of Collateral Debt Securities as a
“purchase” for tax, accounting and reporting purposes.


 


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(d)                                Each
of the Co-Issuers shall file, or cause to be filed, any tax returns, including
information tax returns, required by any governmental authority.


 


(e)                                 In
the event that (i) the ownership of a Collateral Debt Security or property
acquired in respect of a Collateral Debt Security would result in the Issuer
being or becoming subject to U.S. tax on a net income basis or being or
becoming subject to the U.S. branch profits tax (in either case, such
Collateral Debt Security becoming a “Taxed Collateral Debt Security” and such
property becoming a “Taxed Property”), and (ii) the Issuer does not sell
or otherwise dispose of all or a portion of such Taxed Collateral Debt Security
or Taxed Property in accordance with the provisions of the Indenture, the
Collateral Advisor on behalf of the Issuer shall, prior to such Collateral Debt
Security becoming a Taxed Collateral Debt Security or such property becoming a
Taxed Property, (a) set up a special purpose subsidiary meeting S&P’s
then current published criteria for bankruptcy remote special purpose entities
(a “Tax Subsidiary”) to receive and hold any such Taxed Collateral Debt
Security or Taxed Property or transfer such Taxed Collateral Debt Security or
Taxed Property to the Tax Subsidiary or (b) contribute such taxed
Collateral Debt Security or Taxed Property to a REMIC or other pass-through
entity, unless the Issuer has received an opinion of nationally recognized
counsel to the effect that the Issuer can hold such Taxed Collateral Debt
Security directly without causing the Issuer to be treated as engaged in a
trade or business in the United States for United States federal income tax purposes.
The Issuer shall cause the purposes and permitted activities of any such Tax
Subsidiary to be restricted solely to the acquisition, holding and disposition
of such Taxed Collateral Debt Security or Taxed Property and shall require such
subsidiary to distribute 100% of the proceeds of any sale of such Taxed
Collateral Debt Security or Taxed Property, net of any tax liabilities, to the
Issuer.


 


7.8.                            NEGATIVE COVENANTS


 


(a)                                 The
Issuer will not and, with respect to Section 7.8(a)(3), (4), (5) and
(9), the Co-Issuer will not:


 


(1)                                 intentionally operate
so as to be subject to U.S. federal income taxes on its net income;


 


(2)                                 sell, assign,
participate, transfer, exchange or otherwise dispose of, or pledge, mortgage,
hypothecate or otherwise encumber (or permit such to occur or suffer such to
exist), any part of the Collateral, except as expressly permitted by this
Indenture;


 


(3)                                 claim any credit on,
make any deduction from, or dispute the enforceability of, the payment of the
principal or interest (or any other amount) payable in respect of the Rated
Notes (other than amounts required to be paid, deducted or withheld in
accordance with any applicable law or regulation of any governmental authority)
or assert any claim against any present or future Rated Noteholder by reason of
the payment of any taxes levied or assessed upon any part of the Collateral;


 


(4)                                 (A) incur or
assume or guarantee any indebtedness, other than the Rated Notes and this
Indenture and the transactions contemplated hereby; (B) issue any additional
class of securities other than the Income Notes; or (C) issue any
additional shares of stock;


 


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(5)                                 (A) take any
action that would impair the validity or effectiveness of this Indenture or any
Grant hereunder or the lien of this Indenture, amend hypothecate, subordinate,
terminate, discharge or release any Person from any covenants or obligations
with respect to this Indenture or the Rated Notes, except as may be permitted
hereby, (B) create or extend any lien, charge, adverse claim, security
interest, mortgage or other encumbrance (other than the lien of this Indenture)
on or to the Collateral or any part thereof, any interest therein or the
proceeds thereof, or (C) take any action that would cause the lien of this
Indenture not to constitute a valid first priority security interest in the
Collateral;


 


(6)                                 use any of the
proceeds of the Rated Notes issued hereunder (A) to extend “purpose
credit” within the meaning given to such term in Regulation U or (B) to
purchase or otherwise acquire any Margin Stock;


 


(7)                                 permit the aggregate
book value of all Margin Stock held by the Issuer on any date to exceed the net
worth of the Issuer on such date (excluding any unrealized gains and losses) on
such date;


 


(8)                                 dissolve or liquidate
in whole or in part, except as permitted hereunder; or


 


(9)                                 except for any
agreements involving the purchase and sale of Collateral Debt Securities having
customary purchase or sale terms and documents with customary loan trading
documentation (but not excepting the Hedge Agreement), enter into any
agreements unless such agreements contain “non-petition” and “limited recourse”
provisions with respect to the Issuer, nor shall the Issuer amend any such
“non-petition” or “limited recourse” provisions without first obtaining Rating
Agency Confirmation from S&P.


 


(b)                                Except
as permitted by this Indenture, the Issuer will not do business under any other
name other than the name set forth in the Articles and neither the Issuer nor
the Trustee shall acquire any Collateral after the Closing Date, sell,
transfer, exchange or otherwise dispose of Collateral, or enter into or engage
in any business with respect to any part of the Collateral.


 


(c)                                 The
Co-Issuer will not invest any of its assets in “securities” (as such term is
defined in the Investment Company Act), and will keep all of its assets in
Cash.


 


7.9.                            STATEMENT AS TO COMPLIANCE


 


On or before September 15 in each calendar year commencing in
2006, or immediately if there has been a Default in the fulfillment of an
obligation under this Indenture, the Issuer shall deliver to the Trustee, the
Income Note Paying Agent, each Rated Noteholder making a written request
therefor, the Irish Paying Agent, the Initial Hedge Counterparty, the Collateral
Advisor and each Rating Agency a certificate of the Issuer stating, as to each
signer thereof; that:


 


(a)                                 the
Officer executing such certificate has conducted a review of the activities of
the Issuer and of the Issuer’s performance under this Indenture during the
12-month period ending on December 31 of such year (or from the Closing
Date until December 31, 2005, in the case of the first such certificate)
based on reports and other information delivered to such Officer by the
Trustee, the Collateral Advisor and the Collateral Administrator


 


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and a review of the Accountant’s Reports prepared pursuant
to Section 10.10 and such other materials as such Officer deems
appropriate; and


 


(b)                                to the best of knowledge
of the Issuer, based on such review, the Issuer has fulfilled all of its
material obligations under this Indenture throughout the period, or, if there
has been a Default in the fulfillment of any such obligation, specifying each
such Default known to such Officer and the nature and status thereof, including
actions undertaken to remedy the same.


 


7.10.                      CO-ISSUERS MAY CONSOLIDATE, ETC., ONLY
ON CERTAIN TERMS


 


(a)                                 The Issuer shall not
consolidate or merge with or into any other Person or transfer or convey all or
substantially all of its assets to any Person, unless permitted by Cayman
Islands law and unless:


 


(1)                                 the Issuer shall
be the surviving entity, or the Person (if other than the Issuer) formed by
such consolidation or into which the Issuer is merged or to which all or
substantially all of the assets of the Issuer are transferred or conveyed shall
be an exempted limited liability company organized and existing under the laws
of the Cayman Islands or such other jurisdiction outside the United States as
may be approved by a Majority of each Class and the Initial Hedge
Counterparty, and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, the Initial Hedge Counterparty and each
Rated Noteholder, the due and punctual payment of the principal of and interest
on all Rated Notes and the performance of every covenant of this Indenture and
the Hedge Agreement on the part of the Issuer to be performed or observed, all
as provided herein;


 


(2)                                 each Rating Agency and
the Initial Hedge Counterparty shall have received written notification from
the Issuer of such consolidation, merger, transfer or conveyance and the
identity of the surviving entity and a Rating Agency Confirmation shall have
been obtained with respect to the consummation of such transaction;


 


(3)                                 if the Issuer is not
the surviving entity, the Person formed by such consolidation or into which the
Issuer is merged or to which all or substantially all of the assets of the
Issuer are transferred or conveyed shall have agreed with the Trustee
(A) to observe the same legal requirements for the recognition of such
formed or surviving entity as a legal entity separate and apart from any of its
Affiliates as are applicable to the Issuer with respect to its Affiliates and
(B) not to consolidate or merge with or into any other Person or transfer
or convey the Collateral or all or substantially all of its assets to any other
Person except in accordance with the provisions of this Section 7.10;


 


(4)                                 if the Issuer is not
the surviving entity, the Person formed by such consolidation or into which the
Issuer is merged or to which all or substantially all of the assets of the
Issuer are transferred or conveyed shall have delivered to the Trustee, the
Initial Hedge Counterparty
and each Rating Agency an Officer’s certificate and an Opinion of Counsel each
stating that such Person shall be duly organized, validly existing and (if
applicable) in good standing in the jurisdiction in which such Person is
organized; that such Person has sufficient power and authority to


 


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assume the obligations set forth in Section 7.10(a)(1) above
and to execute and deliver an indenture supplemental hereto for the purpose of
assuming such obligations; that such Person has duly authorized the execution,
delivery and performance of an indenture supplemental hereto for the purpose of
assuming such obligations and that such supplemental indenture is a valid,
legal and binding obligation of such Person, enforceable in accordance with its
terms, subject only to bankruptcy, reorganization, insolvency, moratorium and
other laws affecting the enforcement of creditors’ rights generally and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); that, immediately following
the event which causes such Person to become the successor to the Issuer, (A) such
Person has good and marketable title, free and clear of any lien, security
interest or charge, other than the lien and security interest of this
Indenture, to the Collateral; (B) the Trustee continues to have a valid
perfected first priority security interest in the Collateral securing all of
the Rated Notes; (C) such Person has received an Opinion of Counsel to the
effect that such Person will not be subject to net income tax or be treated as
engaged in a trade or business within the United States for U.S. federal income
tax purposes and such other matters as the Trustee, the Initial Hedge
Counterparty or any Rated Noteholder may reasonably require;


 


(5)                                 immediately after giving effect to such
transaction, no Default shall have occurred and be continuing;


 


(6)                                 the Issuer shall have
delivered to the Trustee, the Initial Hedge Counterparty and each Rated
Noteholder an Officer’s certificate and an Opinion of Counsel each stating
that such consolidation, merger, transfer or conveyance and such supplemental
indenture comply with this Section 7, that all conditions precedent in
this Section 7 provided for relating to such transaction have been
complied with and that no adverse tax consequences will result therefrom to any
Rated Noteholder or the Initial Hedge Counterparty; and


 


(7)                                 the Issuer shall have delivered to the Trustee
an Opinion of Counsel stating that after giving effect to such transaction,
neither of the Co-Issuers will be required to register as an investment company
under the Investment Company Act.


 


(b)                                The Co-Issuer shall not
consolidate or merge with or into any other Person or transfer or convey all or
substantially all of its assets to any Person, unless:


 


(1)                                 the Co-Issuer shall be
the surviving corporation, or the Person (if other than the Co-Issuer) formed
by such consolidation or into which the Co-Issuer is merged or to which all or
substantially all of the assets of the Co-Issuer are transferred or conveyed
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, the due and punctual payment of the principal of and
interest on all Rated Notes and the performance of every covenant of this
Indenture on the part of the Co-Issuer to be performed or observed, all as
provided herein;


 


(2)                                 each Rating Agency shall
have received written notification from the Co-Issuer of such consolidation, merger,
transfer or conveyance and the identity of the surviving entity and a Rating
Agency Confirmation shall have been obtained with respect to the consummation
of such transaction;


 


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(3)                                 if the Co-Issuer is not
the surviving corporation, the Person formed by such consolidation or into
which the Co-Issuer is merged or to which all or substantially all of the
assets of the Co-Issuer are transferred or conveyed shall have agreed with the
Trustee (A) to observe the same legal requirements for the recognition of
such formed or surviving corporation as a legal entity separate and apart from
any of its Affiliates as are applicable to the Co-Issuer with respect to its
Affiliates and (B) not to consolidate or merge with or into any other
Person or transfer or convey all or substantially all of its assets to any
other Person except in accordance with the provisions of this Section 7.10;


 


(4)                                 if the Co-Issuer is not
the surviving corporation, the Person formed by such consolidation or into
which the Co-Issuer is merged or to which all or substantially all of the
assets of the Co-Issuer are transferred or conveyed shall have delivered to the
Trustee and each Rating Agency an Officer’s certificate and an Opinion of Counsel
each stating that such Person shall be duly organized, validly existing and (if
applicable) in good standing in the jurisdiction in which such Person is
organized; that such Person has sufficient power and authority to assume the
obligations set forth in Section 7.10(b)(1) above and to execute and
deliver an indenture supplemental hereto for the purpose of assuming such
obligations; that such Person has duly authorized the execution, delivery and
performance of an indenture supplemental hereto for the purpose of assuming
such obligations and that such supplemental indenture is a valid, legal and
binding obligation of such Person, enforceable in accordance with its terms,
subject only to bankruptcy, reorganization, insolvency, moratorium and other
laws affecting the enforcement of creditors’ rights generally and to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law); and such other matters as the Trustee or
any Rated Noteholder may reasonably require;


 


(5)                                 immediately after giving
effect to such transaction, no Default shall have occurred and be continuing;


 


(6)                                 the Co-Issuer shall have
delivered to the Trustee and each Rated Noteholder an Officer’s certificate and
an Opinion of Counsel each stating that such consolidation, merger, conveyance
or transfer and such supplemental indenture comply with this Section 7 and
that all conditions precedent in this Section 7 provided for relating to
such transaction have been complied with and that no adverse tax consequences
will result therefrom to any Rated Noteholder;


 


(7)                                 after giving effect to
such transaction, neither of the Co-Issuers will be required to register as an
investment company under the Investment Company Act; and


 


(8)                                 after giving effect to
such transaction, the outstanding stock of the Co-Issuer will not be
beneficially owned by any Person other than the Issuer.


 


7.11.                      SUCCESSOR SUBSTITUTED


 


Upon any consolidation or merger, or transfer or
conveyance of all or substantially all of the assets of the Issuer or the
Co-Issuer, in accordance with Section 7.10, the Person formed by or
surviving such consolidation or merger (if other than the Issuer or the
Co-Issuer), or, the Person to which such transfer or conveyance is made, shall
succeed to, and be substituted for, and may exercise every right and


 


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power of, and shall be bound by each obligation or covenant of, the
Issuer or the Co-Issuer, as the case may be, under this Indenture with the same
effect as if such Person had been named as the Issuer or the Co-Issuer, as the
case may be, herein. In the event of any such consolidation, merger, transfer
or conveyance, the Person named as the “Issuer” or the “Co-Issuer” in the first
paragraph of this Indenture or any successor which shall theretofore have
become such in the manner prescribed in this Section 7 may be dissolved,
wound-up and liquidated at any time thereafter, and such Person thereafter
shall be released from its liabilities as obligor and maker on all the Rated
Notes and from its obligations under this Indenture.


 


7.12.                      NO OTHER BUSINESS


 


The Issuer shall not engage in any business or activity other than (i) issuing
and selling the Rated Notes pursuant to this Indenture, (ii) issuing and
selling the Income Notes in accordance with the Income Note Paying Agency
Agreement (iii) issuing the Ordinary Shares pursuant to the Issuer
Charter, (iv) acquiring, pledging, holding and disposing of, solely for
its own account, Collateral Debt Securities, Eligible Investments and other
Collateral described in clauses (a) to (e) of the granting clauses
hereof, (vi) holding the capital stock of the Co-Issuer and (vi) such
other activities that are incidental thereto and connected therewith. The Co-Issuer
shall not engage in any business or activity other than issuing and selling the
Rated Notes pursuant to this Indenture and such other activities incidental
thereto or connected therewith. The Issuer shall not hold itself out as a
derivatives dealer willing to enter into either side of, or to offer to enter
into, assume, offset, assign or otherwise terminate positions in (i) interest
rate, currency, equity or commodity swaps or caps or (ii) derivative
financial instruments (including options, forward contracts, short positions
and similar instruments) in any commodity, currency, share of stock,
partnership or trust, note, bond, debenture or other evidence of indebtedness,
swap or cap. The foregoing shall not limit the ability of the Issuer to enter into
Hedge Agreements. Furthermore, the Issuer shall not hold itself out, whether
through advertising or otherwise, as a bank, insurance company or finance
company, or as originating loans, lending funds, making a market in loans or
other assets or selling loans or other assets to customers. The Issuer will not
amend the Issuer Charter and the Co-Issuer will not amend its Certificate of
Incorporation or By-Laws, if such amendment would result in the rating
(including any private or confidential rating) of any Class of Rated Notes
being reduced or withdrawn. The Issuer shall not engage in any business or
activity or hold any asset that would cause the Issuer to be engaged in a U.S.
trade or business for U.S. federal income tax purposes, except as the result of
ownership of Equity Securities or securities received in an Offer in accordance
with the provisions of this Indenture.


 


7.13.                      CHANGE OR WITHDRAWAL OF
RATING


 


The Issuer shall promptly notify the Trustee in writing and upon
receipt of such notice the Trustee shall promptly notify the Rated Noteholders
and the Initial Hedge Counterparty if at any time the rating of any Class of
Rated Notes has been, or is known will be, changed or withdrawn.


 


7.14.                      REPORTING


 


At any time when the Co-Issuers are not subject to Section 13 or
15(d) of the Exchange Act and are not exempt from reporting pursuant to Rule 12g3-2(b) under
the Exchange Act, upon the request of a Holder or Beneficial Owner of a Rated
Note or Income Note, the Co-Issuers shall promptly furnish or cause to be
furnished Rule 144A Information to such Holder or Beneficial Owner, to a
prospective purchaser of such Rated Note or Income Note designated by such
Holder or Beneficial Owner or to the Trustee for delivery to such Holder or
Beneficial Owner or a prospective purchaser designated by such Holder or
Beneficial Owner, as the case may be, in order to permit compliance by such
Holder or Beneficial Owner with Rule 144A in connection with the resale of
such Rated Note or Income Note by such Holder or Beneficial Owner.


 


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7.15.                      RATED NOTE CALCULATION AGENT


 


(a)                                 The Issuer hereby
agrees that for so long as any of the Rated Notes remain Outstanding the Issuer
will at all times cause there to be an agent appointed to calculate LIBOR in
respect of each Interest Period in accordance with the terms of Schedule B (the
Rated Note Calculation Agent), which
agent shall be a financial institution, subject to supervision or examination
by federal or state authority, having a rating of at least “BBB+” by S&P
and having an office within the United States. Whenever the Note Calculation
Agent is required to act or exercise judgment, it will do so in good faith and
in a commercially reasonable manner. The Issuer has initially appointed the
Trustee as Rated Note Calculation Agent for purposes of determining LIBOR for
each Interest Period. If the Rated Note Calculation Agent is unable or
unwilling to act as such or is removed by the Issuer, the Issuer (after
consultation with the Collateral Advisor) will propose a leading bank which is
engaged in transactions in Dollar deposits in the international Eurodollar
market and which does not control or is not controlled by or under common
control with the Co-Issuers or any of their Affiliates as a replacement Rated
Note Calculation Agent for approval by Holders of not less than 662/3%
of the aggregate principal amount of the Outstanding Income Notes. The Rated
Note Calculation Agent may not resign its duties without a successor having
been duly appointed.


 


(b)                                As soon as possible
after 11:00 a.m. (London time) on each LIBOR Calculation Date, but in no
event later than 11:00 a.m. (New York time) on the London Banking Day
immediately following each LIBOR Calculation Date, the Rated Note Calculation
Agent will calculate LIBOR for the next Interest Period and the Periodic
Interest payable for such Interest Period in respect of the Outstanding Rated
Notes, rounded to the nearest cent, with half a cent being rounded upward, on
the related Payment Date to be given to the Co-Issuers, the Trustee, the
Collateral Advisor, the Depositary, Euroclear, Clearstream, the Note Paying
Agent and the Irish Paying Agent. The Rated Note Calculation Agent will also
specify to the Co-Issuers and the Collateral Advisor the quotations upon which
the Applicable Periodic Interest Rate for each Class of Rated Notes is
based, and in any event the Rated Note Calculation Agent must notify the
Co-Issuers and the Collateral Advisor before 5:00 p.m. (New York time) on
each applicable LIBOR Calculation Date if it has not determined and is not in
the process of determining LIBOR with respect to the Rated Notes and the
Periodic Interest with respect to each Class of Rated Notes, together with
its reasons for the delay. The Irish Paying Agent also will cause the
Applicable Periodic Interest Rate for each Interest Period for each Class of
Rated Notes listed on the Irish Stock Exchange, the amount of interest payable
in respect of each Class of Rated Notes listed on the Irish Stock Exchange
and each Payment Date to be delivered to the Company Announcements Office of
the Irish Stock Exchange as soon as possible after the Irish Paying Agent has
received notice from the Rated Note Calculation Agent of such Applicable
Periodic Interest Rates and amounts.


 


7.16.                      LISTING


 


The Issuer will use its commercially reasonable efforts to obtain and
maintain the listing of each Class of Rated Notes on the Irish Stock
Exchange.


 


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7.17.                      AMENDMENT OF CERTAIN DOCUMENTS


 


The Issuer will not agree to any amendment to or modification of the
Corporate Services Agreement, the Collateral Advisory Agreement, the Account
Control Agreement or the Hedge Agreement at any time without obtaining Rating
Agency Confirmation with respect to any such modification and will not amend,
modify or waive any “non-petition” or “limited recourse” provisions of any
Transaction Document to which it is a party without obtaining a Rating Agency
Confirmation with respect to such modification. The Trustee shall provide each
of the Initial Hedge Counterparty, the Holders of Rated Notes of the
Controlling Class, the Collateral Advisor and the Rating Agencies with a copy
of any such amendment or modification within 10 Business Days before effecting
such amendment or modification. Prior to entering into any waiver in respect of
the any of the foregoing agreements, the Issuer will provide to each Rating
Agency and the Trustee with written notice of such waiver.


 


7.18.                      PURCHASE OF COLLATERAL; INFORMATION REGARDING COLLATERAL; RATING
CONFIRMATION


 


(a)                                 The Issuer will use
reasonable efforts to purchase or enter into agreements to purchase, on or
before the Effective Date, Collateral Debt Securities having an aggregate
Principal Balance, together with the aggregate Principal Balance of all
Eligible Investments purchased with Collateral Principal Collections, of not
less than U.S.$500,000,000 (assuming, for these purposes, settlement (in
accordance with customary settlement procedures in the relevant markets) of all
agreements entered into by the Issuer to acquire Collateral Debt Securities
scheduled to settle on or following the Effective Date).


 


(b)                                The Issuer (or the
Collateral Advisor on behalf of the Issuer) shall cause to be delivered to the
Trustee on the Effective Date an amended Schedule A listing all Collateral Debt
Securities purchased on or before the Effective Date, which schedule will
supersede any prior Schedule A delivered to the Trustee.


 


(c)                                 On or before the
Effective Date, the Issuer (or the Collateral Advisor on its behalf) shall
deliver an Officer’s certificate to the Trustee, the Holders of Rated Notes of
the Controlling Class, the Initial Hedge Counterparty and each Rating Agency
(in addition to any such Officer’s Certificate, the information set forth in
such Officer’s Certificate shall also be provided to S&P in a form that
complies with and includes the information required by S&P’s Preferred
Format) demonstrating compliance by the Issuer with its obligations under Section 7.18(a) and
satisfaction of each applicable Collateral Quality Test (with the exception of
S&P’s CDO Monitor Test), and Coverage Test or, if on the Effective Date,
the Issuer shall be in default in the performance of its obligations under this
Section 7.18 or any of the Collateral Quality Tests (with the exception of
S&P’s CDO Monitor Test) or the specified Coverage Tests shall fail to be
satisfied, the Issuer (or the Collateral Advisor on its behalf) shall deliver
an Officer’s certificate to the Trustee, the Holders of Rated Notes of the
Controlling Class, the Initial Hedge Counterparty and each Rating Agency
specifying the details of such default or failure; provided that the failure to satisfy any of
the Collateral Quality Tests or Coverage Tests does not constitute an Event of
Default but such failure may result in a Rating Confirmation Failure.


 


(d)                                No later than fifteen
(15) Business Days after the Effective Date, the Issuer (or the Collateral
Advisor on its behalf) shall deliver or cause to be delivered to the Trustee an
accountant’s certificate (the Accountant’s Certificate) (i) confirming
the information with respect to each Collateral Debt Security set forth on the
amended schedule delivered pursuant to Section 7.18(b) as of the
Effective Date, and the information provided by the


 


117

















 


Issuer with respect to every other asset included in the Collateral, (ii) certifying
as of the Effective Date the procedures applied and their associated findings
with respect to the Coverage Tests and the Collateral Quality Tests and (iii) specifying
the procedures undertaken to review data and computations relating to the
foregoing clause (ii) held by the Issuer on the Effective Date.


 


(e)                                 The Issuer (or the
Collateral Advisor on its behalf) shall request in writing that each of the Rating
Agencies confirm in writing (a Rating Confirmation),  within
thirty (30) Business Days after the Effective Date, the ratings (including any
private or confidential ratings) assigned by it on the Closing Date to the
Rated Notes. In the event that the Issuer fails to obtain a Rating Confirmation
within 30 days after the Effective Date (a Rating
Confirmation Failure), Collateral
Interest Collections and, to the extent Collateral Interest Collections are
insufficient therefor, Collateral Principal Collections shall be applied on the
first Payment Date and any succeeding Payment Dates, as applicable as provided
in Section 11.1 to the extent necessary for each of the Rating Agencies to
provide a Rating Confirmation.


 


(f)                                   No later than
fifteen (15) Business Days following the Effective Date, the Trustee shall (i) run
the S&P CDO Monitor and report to S&P whether or not the S&P CDO
Monitor Test has been satisfied and (ii) report the S&P scenario
default and break-even default rate for each Class of Notes.


 


ARTICLE VIII


 


SUPPLEMENTAL INDENTURES


 


8.1.                            SUPPLEMENTAL INDENTURES
WITHOUT CONSENT OF RATED NOTEHOLDERS


 


Without the consent of the Holders of any Rated Notes, the Initial
Hedge Counterparty (except as specified below) or the Income Noteholders, but
with Rating Agency Confirmation for so long as any Class of Notes are
rated as such time by any Rating Agency, the Co-Issuers, when authorized by
Board Resolutions, and the Trustee, at any time and from time to time subject
to the requirement provided below in this Section 8.1 with respect to the
ratings of the Rated Notes and subject to Section 8.3, may enter into one
or more indentures supplemental hereto, in form satisfactory to the Trustee,
for certain limited purposes including, inter alia, to:


 


(a)                                 evidence the succession
of another Person to the Issuer or the Co-Issuer and the assumption by any such
successor Person of the covenants of the Issuer or the Co-Issuer herein and in
the Rated Notes pursuant to Section 7.10 or 7.11;


 


(b)                                add to the covenants of
the Co-Issuers or the Trustee for the benefit of the Holders of all of the
Rated Notes;


 


(c)                                 pledge any additional
property to the Trustee;


 


(d)                                add to the conditions,
limitations or restrictions on the authorized amount, terms and purposes of the
issue, authentication and delivery of the Rated Notes;


 


(e)                                 effect the appointment
of a successor;


 


(f)                                   reduce the permitted
minimum denomination of the Rated Notes;


 


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(g)                                take any action necessary
or advisable to prevent the Issuer, any Note Paying Agent or the Trustee from
being subject to withholding or other taxes, fees or assessments, to
prevent the Issuer (without adverse effect to the Issuer) from failing to
qualify as a Qualified REIT Subsidiary or to prevent the Issuer from being
treated as engaged in a U.S. trade or business or otherwise being subjected to
U.S. federal, state or local income tax on a net income tax basis; provided that such action will not cause the Noteholders to
experience any material change to the timing, character or source of income
from the Notes and will not be considered a significant modification resulting
in an exchange for purposes of section 1.1001-3 of the U.S. Treasury
regulations;


 


(h)                                modify the restrictions
on and procedures for resale and other transfer of the Rated Notes in
accordance with any change in any applicable law or regulation (or the
interpretation thereof) or to enable the Co-Issuers to rely upon any less
restrictive exemption from registration under the Securities Act or the
Investment Company Act (in addition to that provided under
Section 3(c)(7) thereunder) or to remove restrictions on resale and
transfer to the extent not required thereunder;


 


(i)                                    grant, convey,
transfer, assign, mortgage or pledge any property to or with the Trustee for
the benefit of the Secured Parties;


 


(j)                                    correct or amplify
the description of any property at any time subject to the lien of this
Indenture, or to better assure, convey and confirm unto the Trustee any
property subject or required to be subjected to the lien of this Indenture
(including any and all actions necessary or desirable as a result of changes in
law or regulations) or to subject to the lien of this Indenture any additional
property;


 


(k)                                 make any change
required by the stock exchange on which any Class of Rated Note is listed,
if any, in order to permit or maintain such listing;


 


(1)                                 correct, amend, cure
any manifest error, inconsistency, defect or ambiguity or correct any
typographical error in this Indenture;


 


(m)                              modify this Indenture to
conform the terms herein to the terms set forth in the then current Offering
Circular;


 


(n)                                modify any provision
(other than in respect of a Reserved Matter), with respect to restrictions upon
the Issuer’s rights to acquire and dispose of Collateral Debt Securities and
other assets, that the Issuer or the Collateral Advisor determines to be
necessary or desirable in order for the Issuer to maintain any desired
exemption from registration of the Issuer under the Investment Company Act or of
the Notes under the Securities Act;


 


(o)                                with the consent of the
Collateral Advisor, modify the calculation of the Collateral Quality Tests and
the definitions applicable thereto to correspond with published or written
changes in the guidelines, methodology or standards established by the Rating
Agencies;


 


(p)                                agree to any
modification of the Indenture or any other Transaction Document (other than in
respect of a Reserved Matter), which is, in the opinion of the Trustee, proper
to make if, in the opinion of the Trustee (based upon an opinion of counsel), such modification will
not have a material adverse effect on the interests of Holders of any Class or
Classes


 


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of Notes or the Initial Hedge Counterparty and which is of a formal,
minor or technical nature or is to correct a manifest error.


 


In addition, the Trustee may, but is not obligated to, without the
consent of the Rated Noteholders or of the Holders of any relevant Class or
Classes of Rated Notes, agree to any modification of any other Transaction
Document which is of a formal, minor or technical nature or is to correct a
manifest error and which is, in the opinion of the Trustee, proper to make, in
the opinion of the Trustee (based upon an opinion of counsel); provided such
modification will not have a material adverse effect on the interests of the
Initial Hedge Counterparty or the Holders of any Class or Classes of
Notes. For so long as any Rated Notes are Outstanding, no such supplemental
indenture shall be effective unless and until Rating Agency Confirmation has
been received.


 


The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture which affects the
Trustee’s own rights, duties, liabilities or indemnities under this Indenture
or otherwise, except to the extent required by law.


 


No modification to the Indenture will be effective until the Collateral
Advisor has received written notice of such amendment and, if such amendment
affects the rights, obligations or compensation of the Collateral Advisor, the
Collateral Advisor has consented in writing to the terms of the proposed
amendment. In addition, the consent of any predecessor Collateral Advisor will
be required to implement any such supplemental indenture that would change any
provision of the Indenture entitling such predecessor Collateral Advisor to any
fee or other amount payable to it under the Indenture or to reduce or delay the
right of such predecessor to such payment.


 


Without obtaining the requisite consents of the applicable parties
pursuant to this Section 8.1, the Trustee shall not enter into any such
supplemental indenture if, as a result of such supplemental indenture, the
interests of the Initial Hedge Counterparty, any Holder of Rated Notes or the
Income Notes would be materially and adversely affected thereby. In determining
whether or not the interests of any Holder of Rated Notes or Income Notes will
be materially and adversely affected, the Trustee shall be entitled to rely
upon an Opinion of Counsel as to whether the interests of any Holder of Rated
Notes or of Income Notes would be materially and adversely affected by any such
supplemental indenture (after giving notice of such change to the Income Note
Paying Agent). The Collateral Advisor will not be bound by any supplemental
indenture that affects the obligations of the Collateral Advisor unless the
Collateral Advisor has consented thereto (which consent will not be
unreasonably withheld). The Co-Issuers will not consent to any supplemental
indenture that would have a material adverse effect on the Initial Hedge
Counterparty without the consent of the Initial Hedge Counterparty.


 


At the cost of the Co-Issuers, the Trustee shall provide to the Rated
Noteholders, the Income Note Paying Agent, the Initial Hedge Counterparty and
each Rating Agency a copy of any proposed supplemental indenture at least 10
days prior to the execution thereof by the Trustee and, for so long as any
Rated Notes are Outstanding, request a Rating Agency Confirmation from each
Rating Agency with respect to such supplemental indenture. As soon as
practicable after the execution by the Trustee and the Issuer of any such
supplemental indenture, the Trustee shall provide to the Rated Noteholders, the
Income Note Paying Agent, the Initial Hedge Counterparty and each Rating Agency
a copy of the executed supplemental indenture. For so long as any Rated Notes
are Outstanding and rated by either of the Rating Agencies, no supplemental
indenture shall be effective unless and until a Rating Agency Confirmation from
each Rating Agency has been received.


 


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8.2.                            SUPPLEMENTAL INDENTURES WITH
CONSENT OF RATED NOTEHOLDERS


 


Except as provided below, with the prior written consent of the Initial
Hedge Counterparty (but only if the right of the Initial Hedge Counterparty to
payments in accordance with the Priority of Payments is adversely affected),
the Holders of not less than a majority of the aggregate principal amount of
the Outstanding Rated Notes of each Class (in principal amount) adversely
affected thereby and the written consent of Holders of not less than 662/3% of the aggregate principal amount of
the Outstanding Income Notes (if materially and adversely affected thereby),
the Trustee and the Co-Issuers may execute a supplemental indenture to add
provisions to, or change in any manner or eliminate any provisions of, the
Indenture or modify in any manner the rights of the Holders of the Rated Notes
of such Class or of the Income Notes or the Hedge Counterparty under the
Indenture.


 


With the written consent of the Holders of not less than 75% of the
then Aggregate Outstanding Amount of each adversely affected Class of
Rated Notes and the written consent of 75% of the Holders of the aggregate
principal amount of the Outstanding Income Notes if materially and adversely
affected thereby (which consent shall be evidenced by an Officer’s certificate
of the Issuer certifying that such consent has been obtained), Rating Agency
Confirmation and the written consent of the Initial Hedge Counterparty (which
shall be required only if the right of the Initial Hedge Counterparty to
payments in accordance with the Priority of Payments is adversely affected),
the Trustee and Co-Issuers may, subject to Section 8.3, enter into one or
more indentures supplemental hereto in order to:


 


(a)                                 change the applicable
Stated Maturity Date of the Rated Notes or scheduled redemption of the
principal of or the due date of any installment of interest on the Rated Notes,
reduce the principal amount thereof or the rate of interest thereon, or the
Redemption Price with respect thereto, or change the earliest date on which
Rated Notes may be redeemed, change the provisions of the Indenture relating to
the application of proceeds of any Collateral to the payment of principal of or
interest on the Rated Notes or change any place where, or the coin or currency
in which, Rated Notes or the principal thereof or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity Date thereof (or, in the case of redemption, on
or after the Redemption Date);


 


(b)                                reduce the percentage,
in principal amount, of Holders of Rated Notes of each Class, or the percentage
of Income Noteholders, whose consent is required for the authorization of any
supplemental indenture or for any waiver of compliance with certain provisions
of the Indenture or certain defaults thereunder or their consequences;


 


(c)                                 impair or adversely
affect the Collateral other than as permitted by the Indenture;


 


(d)                                permit the creation of
any security interest ranking prior to or on a parity with the security
interest of the Indenture with respect to any part of the Collateral or
terminate such security interest on any property at any time subject thereto
(other than in accordance with the Indenture) or deprive the Holder of any
Rated Note or the Initial Hedge Counterparty of the security afforded by the
security interest of the Indenture;


 


(e)                                 reduce the percentage
of the aggregate principal amount of Holders of Rated Notes of each Class whose
consent is required to request the Trustee to preserve the Collateral or
rescind the Trustee’s election to preserve the Collateral pursuant to Section 5.5
or to sell or liquidate the Collateral pursuant to Section 5.4 or 5.5;


 


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(f)                                   modify any of the
provisions of this Section 8.2, except to increase the percentage of the
aggregate principal amount of Outstanding Rated Notes of each Class whose
Holders’ consent is required for any such action or to provide that other
provisions of the Indenture cannot be modified or waived without the written
consent of the Holders of 75% of the then Aggregate Outstanding Amount of each
affected Class of Rated Notes Outstanding or the Initial Hedge Counterparty;


 


(g)                                modify the definition
of the term “Outstanding” or Section 11.1;


 


(h)                                modify any of the
provisions of the Indenture in such a manner as to affect the calculation of
the amount of any payment of interest or principal of any Rated Note on any
Payment Date or to affect the right of the Holders of Rated Notes or the
Initial Hedge Counterparty to the benefit of any provisions for the redemption
of such Rated Notes contained therein;


 


(i)                                    modify provisions
related to the bankruptcy or insolvency of the Co-Issuers; or


 


(j)                                    modify
provisions stating that the obligations of the Co-Issuers are joint and several
limited recourse obligations of the Co-Issuers payable solely from the
Collateral in accordance with the terms of the Indenture (Section 8.2(a) through
(j) collectively, the Reserved Matters).


 


The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture which affects the
Trustee’s own rights, duties, liabilities or indemnities under this Indenture
or otherwise, except to the extent required by law.


 


Not later than 15 Business Days prior to the execution of any proposed
supplemental indenture pursuant to this Section 8.2, the Trustee, at the
expense of the Co-Issuers, shall mail to the Rated Noteholders, Income Note
Paying Agent, the Initial Hedge Counterparty, the Collateral Advisor and each Rating
Agency a copy of such proposed supplemental indenture (or a description of the
substance thereof) and shall request Rating Agency Confirmation with respect to
such supplemental indenture. If any Class of Rated Notes is then rated by
any Rating Agency, the Trustee shall not enter into any such supplemental
indenture if, as a result of such supplemental indenture, Rating Agency
Confirmation would not be received with respect to such supplemental indenture,
unless each Holder of Rated Notes of each Class whose rating will be
reduced or withdrawn has, after notice that the proposed supplemental indenture
would result in such reduction or withdrawal of the rating of the Class of
Rated Notes held by such Holder, consented to such supplemental indenture. Without
having obtained the consent of the applicable parties pursuant to this Section 8.2,
the Trustee shall not enter into any such supplemental indenture if, as a
result of such supplemental indenture, the interests of the Initial Hedge
Counterparty, any Holder of Rated Notes or of the Income Noteholders would be
materially and adversely affected thereby. Unless notified by (i) the
Holders of a Majority of the then Aggregate Outstanding Amount of any Class of
Rated Notes that such Class will be materially and adversely affected or (ii) the
Holders of a Majority of aggregate principal amount of the Income Notes that
the Income Noteholders will be materially and adversely affected, the Trustee
shall be entitled to rely upon an Opinion of Counsel as to whether the
interests of any Holder of Rated Notes or of the Income Noteholders would be
materially and adversely affected by any such supplemental indenture (after
giving notice of such change to the Income Note Paying Agent).


 


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It shall not be necessary for any Act of Rated Noteholders or any
consent of Income Noteholders under this Section 8.2 to approve the
particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act or consent shall approve the substance thereof.


 


Promptly after the execution by the Co-Issuers and the Trustee of any
supplemental indenture pursuant to this Section 8.2, the Trustee, at the
expense of the Co-Issuers, shall mail or make available to the Rated Noteholders,
the Income Note Paying Agent (for forwarding to the Income Noteholders), the
Initial Hedge Counterparty, the Collateral Advisor and each Rating Agency a
copy thereof. Any failure of the Trustee to publish or mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture. In addition, the Issuer shall cause to be
delivered a copy of the executed supplemental indenture to the Repository for
posting on the Repository in the manner described in Section 14.3.


 


8.3.                            EXECUTION OF SUPPLEMENTAL
INDENTURES


 


In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Section 8 or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in
relying in good faith upon an Opinion of Counsel, stating that the execution of
such supplemental indenture is authorized, or permitted by this Indenture and
that all conditions precedent thereto have been complied with. The Trustee may,
but shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee’s own rights, duties or indemnities under this Indenture or
otherwise. Such supplemental indenture will not be binding on the Collateral
Advisor to the extent that it reduces the rights or increases the obligations
of the Collateral Advisor, unless such supplemental indenture is consented to
in writing by the Collateral Advisor.


 


8.4.                            EFFECT OF SUPPLEMENTAL
INDENTURES


 


Upon the execution of any supplemental indenture under this Section 8,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Rated Notes theretofore and thereafter authenticated and delivered
hereunder shall be bound thereby.


 


8.5.                            REFERENCE IN RATED NOTES TO
SUPPLEMENTAL INDENTURES


 


Rated Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Section 8 may, and if required by
the Trustee shall, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Co-Issuers shall so
determine, new Rated Notes, so modified as to conform in the opinion of the
Trustee and the Co-Issuers to any such supplemental indenture, may be prepared
and executed by the Co-Issuers and authenticated and delivered by the Trustee
in exchange for Outstanding Rated Notes.


 


ARTICLE IX


 


REDEMPTION OF RATED NOTES


 


9.1.                            REDEMPTION OF RATED NOTES


 


The Rated Notes will be subject to redemption in whole but not in part
at their respective Redemption Prices, in each case, in accordance with the
procedures, and subject to the satisfaction of the conditions, in Section 9.2
below, in the following circumstances:


 


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(a)                                 on or after the Payment
Date occurring in September 2010 and continuing until the Stated Maturity
Date (the Call Period), at the direction of the
Holders of not less than 662/3% of the aggregate principal amount of the
Outstanding Income Notes (an Optional Redemption);


 


(b)                                on any Payment Date
following the occurrence and during the continuation of a Tax Event, (i) at
the direction of the Holders of not less than 662/3% of the aggregate
principal amount of the Outstanding Income Notes or (ii) subject to the
satisfaction of the Income Note Redemption Approval Condition, at the direction
of the Holders of a Majority of the then Aggregate Outstanding Amount of the
Controlling Class (such a redemption, a Tax Redemption);  and


 


(c)                                 automatically and without
any direction by any Person, (i) if the Notes have not been redeemed in
full on or after the Payment Date occurring in September 2017, and (ii) if
any of the conditions set forth in Sections 9.2(a) through (d) below
have not been met or if the highest bidder fails to pay the purchase price
within six (6) Business Days following such Payment Date, the Payment Date
thereafter, unless the Notes are redeemed in full prior to the next Auction
Date (such a redemption, an Auction Call Redemption).


 


9.2.                            REDEMPTION PROCEDURES; AUCTION


 


In connection with any Redemption, the Trustee and the
Collateral Advisor will, in accordance with the procedures set forth in
Schedule E (the Auction Procedures)  and at the expense of the
Issuer, conduct an auction (an Auction)  of the Collateral Debt
Securities included in the Collateral on a date (each such date, an Auction Date)  occurring no later than ten (10) Business Days
prior to any scheduled Redemption Date. Any of the Placement Agents, the
Collateral Advisor, the Income Noteholders, the Trustee or their respective
Affiliates may, but will not be required to, bid at the Auction.


 


(a)                                 Any Redemption will be
subject to the satisfaction of each of the following conditions:


 


(1)                                 the related Auction has
been conducted in accordance with the Auction Procedures;


 


(2)                                 the Trustee has received
bids for the Collateral Debt Securities (or for each of the related Subpools)
from at least two Qualified Bidders (including the winning Qualified Bidder)
identified on a list of qualified bidders provided by the Collateral Advisor to
the Trustee;


 


(3)                                 the Collateral Advisor
certifies that the Highest Auction Price would result in the Sale Proceeds from
the Collateral Debt Securities (or the related Subpools) for a purchase price
(paid in cash) plus the Balance of all Eligible
Investments and cash held by the Issuer plus any
termination payments payable by a Hedge Counterparty to the Issuer (in excess
of any amounts payable by the Issuer to a Hedge Counterparty) resulting from
the termination of the Hedge Agreement pursuant to the Redemption being at
least equal to the sum of (i) the aggregate Redemption Prices of the Notes
plus (ii) any accrued but unpaid
fees and expenses of the Issuer pursuant to Section 11.1(b)(1) and
(17) through (19) (including any termination payments payable by the Issuer
resulting from the termination of the Hedge Agreement pursuant to the
Redemption) plus (iii) (a) in
connection with a Tax Redemption at the direction of the Controlling Class and


 


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(b) an Auction Call Redemption, any additional amounts necessary
to satisfy the Income Note Redemption Approval Condition; and


 


(4)                                 the bidder(s) who
offered the Highest Auction Price for the Collateral Debt Securities (or the
related Subpools) enter(s) into a written agreement with the Issuer (which
the Issuer will execute if the conditions set forth above and in the Indenture
are satisfied, which execution will constitute certification by the Issuer that
such conditions have been satisfied) that obligates the highest bidder(s) (or
the highest bidder for each Subpool) to purchase all of the Collateral Debt
Securities (or the relevant Subpool) and provides for payment in full (in Cash)
of the purchase price to the Trustee on or prior to the sixth Business Day
following the relevant Auction Date.


 


(b)                                In addition, any
Optional Redemption requires the occurrence of the following:


 


(1)                                 at least four (4) Business
Days before the scheduled Redemption Date, the Collateral Advisor has furnished
to the Trustee evidence, in form satisfactory to the Trustee, that the
Collateral Advisor on behalf of the Issuer has entered into a binding agreement
or agreements with an institution or institutions (or guarantor or guarantors
of the obligations): (A) with regard to which Rating Agency Confirmation
has been received; or (B) whose long-term unsecured debt obligations
(other than such obligations whose rating is based on the credit of a person
other than such institution) have a credit rating from Fitch, if rated by
Fitch, of “F 1” and of at least “A-1” from S&P; and in each case, to sell,
not later than the Business Day immediately preceding the scheduled Redemption
Date, in immediately available funds, all or part of the Collateral Debt
Securities at a purchase price (paid in Cash) which together with the Balance
of all Eligible Investments and Cash held by the Issuer will be at least equal
to the sum of (i) the aggregate Redemption Prices of the Notes plus (ii) any
accrued but unpaid fees and expenses of the Issuer pursuant to Section 11.1(b)(1) and
(17) through (19) (including any termination payments payable by the Issuer
resulting from the termination of the Hedge Agreement pursuant to the
Redemption); or


 


(2)                                 prior to selling any
Collateral Debt Securities or any other collateral, the Collateral Advisor
certifies that the expected proceeds from such sale will, in the aggregate, equal
or exceed, in each case, the sum of (A) any amounts payable in connection
with an Optional Redemption pursuant to Section 9.2 of the Notes plus (B) all
expenses of such redemption and all other administrative fees and expenses
payable on the related Redemption Date.


 


Provided that all of the conditions set forth in Section 9.2(a) through
(d) have been met, the Trustee will sell and transfer the Collateral Debt
Securities (or each related Subpool), without representation, warranty or
recourse, to the bidder(s) who offered the Highest Auction Price for the
Collateral Debt Securities (or the related Subpools) in accordance with and
upon completion of the Auction Procedures. If any of the conditions set forth
in Section 9.2(a) through (d) are not met, (i) the
Redemption will not occur on the Payment Date following the relevant Auction
Date, (ii) the Trustee will give notice of the withdrawal of the
Redemption, (iii) subject to clause (iv) below, the Trustee will
decline to consummate such sale and may not solicit any further bids or
otherwise negotiate any further sale of Collateral Debt Securities in relation
to such Auction and (iv) unless the Rated Notes are redeemed in full prior
to the next succeeding Auction Date, the Trustee will conduct another Auction
on the next succeeding Auction Date.


 


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The Trustee will deposit the purchase price for the Collateral Debt
Securities in the Collection Account, and the Rated Notes and, to the extent
funds are available therefor, the Income Notes, will be redeemed on the Payment
Date immediately following the relevant Auction Date in the order of priorities
set forth in Section 11.1. Any Redemption will only be effected on a
Payment Date. Installments of principal and interest due on or prior to a
Redemption Date shall continue to be payable to the Holders of such Rated Notes
as of the relevant Record Dates according to their terms.


 


9.3.                            RECORD DATE; NOTICE TO
TRUSTEE OF REDEMPTION


 


(a)                                 The Issuer shall set
the Redemption Date and the applicable Record Date and give notice thereof to
the Trustee pursuant to Section 9.3(b) below and shall issue an
Issuer Request to the Trustee for the provision of the information necessary
for the Issuer to compile the Redemption Date Statement in accordance with Section 10.10(b).


 


(b)                                In the event of any
Redemption, the Issuer shall, at least 45 days (but not more than 90 days)
prior to the Redemption Date, notify the Trustee and the Initial Hedge
Counterparty of such Redemption Date, the applicable Record Date, the principal
amount of each Class of Notes to be redeemed on such Redemption Date and
the Redemption Price of such Notes.


 


9.4.                            NOTICE OF REDEMPTION


 


Notice of Redemption will be given by first-class mail, postage
prepaid, mailed not less than eight (8) Business Days prior to the
applicable Redemption Date, to the Initial Hedge Counterparty, each Rating
Agency and each Holder of Rated Notes at such Holder’s address in the Note
Register maintained by the Note Registrar in accordance with the provisions of
this Indenture and to the Collateral Advisor. Rated Notes called for Redemption
must be surrendered at the office of any Note Paying Agent appointed pursuant
to this Indenture in order to receive the Redemption Price. The Issuer will
also deliver notice of Redemption to the Irish Paying Agent if and so long as
any Class of Rated Notes to be redeemed is listed on the Irish Stock
Exchange.


 


All notices of redemption shall state:


 


(a)                                  the applicable
Redemption Date;


 


(b)                                 the
applicable Record Date;


 


(c)                                  the
Redemption Price;


 


(d)                                 that
all the Notes of the relevant Class are being redeemed in full and that
interest on the applicable principal amount of Notes shall cease to accrue on
the date specified in the notice; and


 


(e)                                  the
place or places where such Rated Notes are to be surrendered for payment of the
Redemption Price, which shall be the office or agency of the Note Paying Agent
to be maintained as provided in Section 7.2.


 


Notice of redemption shall be given by the Co-Issuers or, at the
Co-Issuers’ request, by the Trustee in the name and at the expense of the
Co-Issuers. Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Notes.


 


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9.5.                            NOTICE OF WITHDRAWAL


 


With regard to an Optional Redemption or a Tax Redemption, any notice
of redemption may be withdrawn by the Issuer up to the fourth Business Day
prior to the Redemption Date by written notice to the Trustee and the
Collateral Advisor only if the Collateral Advisor is unable to deliver such
sale agreement or agreements or certifications, as the case may be, in form
satisfactory to the Trustee. With regard to any Redemption, notice of any
withdrawal pursuant to Section 9.2 shall be given by the Trustee to each
Holder of Rated Notes at such Holder’s address in the Note Register maintained
by the Note Registrar by overnight courier guaranteeing next day delivery (or
second day delivery outside the United States) sent not later than the third
Business Day prior to such Redemption Date. In addition, the Trustee will, if any Class of Rated Notes to
have been redeemed is listed on the Irish Stock Exchange, deliver a notice of
such withdrawal to the Irish Stock Exchange not less than three (3) Business
Days prior to such Redemption Date.


 


9.6.                            RATED NOTES PAYABLE ON
REDEMPTION DATE


 


Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after the Redemption Date
(unless the Issuer shall default in the payment of the Redemption Price) such
Rated Notes shall cease to bear interest. Upon final payment on a Note to be
redeemed, the Holder shall present and surrender such Note at the place
specified in the notice of redemption on or prior to such Redemption Date; provided that if there is delivered to the
Co-Issuers (i) such security or indemnity as may be required by them to
save each of them harmless and (ii) an undertaking thereafter to surrender
such Note, then, in the absence of notice to the Co-Issuers that the applicable
Note has been acquired by a bona fide purchaser, such final payment shall be
made without presentation or surrender. Installments of interest on Rated Notes
of a Class so to be redeemed whose Stated Maturity Date is on or prior to
the Redemption Date shall be payable to the Holders of such Rated Notes, or one
or more predecessor Rated Notes, registered as such at the close of business on
the relevant Record Date according to the terms and provisions of Section 2.6(e).


 


If any Rated Note called for redemption shall not be paid upon
surrender thereof for redemption, the principal thereof shall, until paid, bear
interest from the Redemption Date at the Applicable Periodic Interest Rate for
each successive Interest Period the Rated Note remains Outstanding.


 


9.7.                            SPECIAL AMORTIZATION


 


Amounts constituting Collateral Principal Collections that are Sale
Proceeds not reinvested in Substitute Collateral Debt Securities during the
applicable Sixty-Day Reinvestment Window (“Unreinvested Sale Proceeds”) shall,
in each case, be applied to the payment of principal on the Notes on the next
succeeding Payment Date in accordance with Section 11.1(b)(15)(iii)(B)(2) hereof.
Amounts constituting Collateral Principal Collections that are (i) Collateral
Principal Payments not reinvested in Substitute Collateral Debt Securities
during the applicable Sixty-Day Reinvestment Window (“Unreinvested Collateral
Principal Payments”), or (ii) Collateral Principal Payments for any CPP
Asset Type that are below the Reinvestment Threshold Amount and as to which the
Cash Release Conditions are satisfied (“Unaccumulated Collateral Principal
Payments”) shall, in each case, be applied to the payment of principal on the
Notes on the next succeeding Payment Date in accordance with Section 11.1(b)(15)(iii) hereof.


 


If on any Payment Date the Issuer is obligated to make payments of
principal on the Notes pursuant to Section 11.1(b)(15)(iii), then such payments of principal shall be made:


 


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(i)                                     pro
rata to the respective Classes of the Rated Notes pursuant to Section 11.1(b)(15)(iii)(A) of
the Priority of Principal Payments (a “Special Amortization”) if the Special
Amortization Pro Rata Condition is satisfied, a Special Amortization Notice is
delivered by the Collateral Advisor to the Issuer and the Trustee and certain
other criteria specified in the Indenture are complied with; or


 


(ii)                                  sequentially
to the respective Classes of the Rated Notes pursuant to Section 11.1(b)(15)(iii)(B)
of the Priority of Principal Payments if the criteria for a Special
Amortization are not satisfied or with respect to Collateral Principal
Collections consisting of Unreinvested Sale Proceeds.


 


In order for amounts to be applied for a Special Amortization on any
Payment Date, the Collateral Advisor is required to deliver, to each of the
Trustee and each Rating Agency, advance written notice (which may be included
in the related Note Report) (each, a “Special Amortization Notice”) specifying
the identity and principal amount of each Class of Rated Notes to be paid
pursuant to such Special Amortization and (i) in the case of Unreinvested
Collateral Principal Payments, that the Collateral Advisor has been unable to
identify for purchase by the Issuer Substitute Collateral Debt Securities that
comply with the Reinvestment Criteria and the other applicable requirements of
the Indenture, and (ii) in the case of Unaccumulated Collateral Principal
Payments, that the Collateral Advisor has determined that identification of
Substitute Collateral Debt Securities of the required CPP Asset Type for
purchase by the Issuer, assuming that such Collateral Principal Payments were to
accumulate to the level of the Reinvestment Trigger Amount, would not be
practicable, that the Cash Release Conditions are satisfied and that all other
Indenture requirements for such Special Amortization are complied with.


 


On each Payment Date on which a Special Amortization occurs, each
related Hedge Agreement will be terminated in part in accordance with the terms
and conditions thereof, including compliance with any applicable requirement
that the Issuer receive Rating Agency Confirmation from S&P, and any
amounts due and payable pursuant to such Hedge Agreement in connection with
such termination thereof will be paid on such Payment Date in accordance with
the terms thereof subject to this Indenture.


 


ARTICLE X


 


ACCOUNTS, ACCOUNTINGS AND RELEASES


 


10.1.                      COLLECTION OF FUNDS


 


(a)                                 Except as otherwise
expressly provided herein, the Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all funds and other property payable to
or receivable by the Trustee pursuant to this Indenture, including all payments
due on the Pledged Securities, in accordance with the terms and conditions of
such Pledged Securities. The Trustee shall segregate and hold all such funds
and property received by it in trust for the Secured Parties and shall apply
such funds as provided in this Indenture.


 


(b)                                Each of the parties
hereto hereby agrees to cause the Custodian or any other Securities
Intermediary that holds any funds or other property for the Issuer or the
Co-Issuer in an Account to agree with the parties hereto that (1) each
Account is a Securities Account in respect of which the Trustee is the
Entitlement Holder, (2) each Account is held by a financial institution
that has a combined capital and surplus of at least U.S.$250,000,000 and being
subject to supervision or examination by federal or state banking authority, (3) the
Cash, Securities and other property credited to any Account is to be treated as
a


 


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Financial Asset under Article 8 of the UCC and (4) the securities
intermediary’s jurisdiction  (within the meaning of Section 8-110
of the UCC) for that purpose will be the State of New York. In no event may any
Financial Asset held in any Account be registered in the name of, payable to
the order of, or specially Indorsed to, the Issuer unless such Financial Asset
has also been Indorsed in blank or to the Custodian or other Securities
Intermediary that holds such Financial Asset in such Account. Each Account
shall be held and maintained at an office located in Chicago, Illinois.


 


10.2.                      GENERAL PROVISIONS APPLICABLE TO ACCOUNTS


 


The Payment Account, Collateral Account, Uninvested Proceeds Account,
Collection Account (including each Collateral Sub-Account therein), Expense
Reserve Account, each Hedge Counterparty Collateral Account and Interest
Reserve Account shall remain at all times with a financial institution having a
long-term debt rating of at least “BBB+” by S&P.


 


(a)                                 The Trustee agrees to
give the Issuer prompt notice (with a copy to the Hedge Counterparty, the
Collateral Advisor, each Rating Agency and the Income Note Paying Agent) if any
Account or any funds on deposit therein, or otherwise standing to the credit of
any Account, shall become subject to any writ, order, judgment, warrant of
attachment, execution or similar process.


 


(b)                                The Collateral Advisor
shall direct the Trustee to invest and reinvest any funds on deposit in any of
the Accounts (other than the Payment Account). In the event that the Collateral
Advisor has not delivered investment instructions to the Trustee or after the
occurrence of an Event of Default, the Trustee shall invest and reinvest any
funds on deposit in any Account (other than the Payment Account) as fully as
practicable in investments described in clause (iii) of the definition of
Eligible Investments maturing not later than the earlier of (i) 30 days
after the date of such investment or (ii) the Business Day immediately
preceding the next Payment Date. With respect to each Account, all interest and
other income from Eligible Investments purchased with funds on deposit in such
Account shall be deposited in such Account, any gain realized from such
investments shall be credited to such Account, and any loss resulting from such
investments shall be charged to such Account. Any gain or loss with respect to
an Eligible Investment shall be allocated in such a manner as to increase or
decrease, respectively, Collateral Principal Collections and/or Collateral
Interest Collections in the proportion that the amount of Collateral Principal
Collections and/or Collateral Interest Collections used to acquire such
Eligible Investment bears to the purchase price thereof. The Trustee shall not
in any way be held liable by reason of any insufficiency of any such Account
resulting from any loss relating to any such investment. Nothing herein shall
be deemed to relieve the Bank or its Affiliates from any duties or liabilities
with respect to investments in obligations of the Bank or any Affiliate
thereof.


 


(c)                                 All funds deposited
from time to time in the Collection Account, the Expense Reserve Account or the
Interest Reserve Account pursuant to this Indenture shall be held by the
Trustee as part of the Collateral and shall be applied to the purposes herein
provided.


 


10.3.                      COLLATERAL ACCOUNT


 


The Trustee shall, prior to the Closing Date, cause the Custodian to
establish a Securities Account which shall be designated as the “Collateral
Account”, which shall be in the name of the Trustee as Entitlement Holder in
trust for the benefit of the Secured Parties and into which the Trustee shall
from


 


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time to time deposit Collateral. All Collateral from time to time
deposited in, or otherwise standing to the credit of, the Collateral Account
pursuant to this Indenture shall be held by the Trustee as part of the
Collateral and shall be applied to the purposes herein provided. The Co-Issuers
shall not have any legal, equitable or beneficial interest in the Collateral
Account other than in accordance with the Priority of Payments.


 


10.4.                      UNINVESTED PROCEEDS ACCOUNT


 


The Trustee shall, prior to the Closing Date, cause to be established a
Securities Account which shall be designated as the “Uninvested Proceeds
Account”, which shall be held in the name of the Trustee as Entitlement Holder
in trust for the benefit of the Secured Parties, into which the Trustee shall
deposit all Uninvested Proceeds (other than the organizational and structuring
fees and expenses of the Co-Issuers (including, without limitation, the legal
fees and expenses of counsel to the Co-Issuers, the Placement Agents and the
Collateral Advisor), the expenses of offering the Rated Notes and the Income Notes
and amounts deposited in the Expense Reserve Account on such date). On or prior
to the Effective Date, the Collateral Advisor on behalf of the Issuer may
direct the Trustee to, and upon such direction the Trustee shall, apply funds
in the Uninvested Proceeds Account to purchase additional Collateral Debt
Securities and, pending such investment in additional Collateral Debt
Securities, such funds will be invested in Eligible Investments, as directed by
the Collateral Advisor, with stated maturities no later than the Business Day
immediately preceding the next Payment Date. The Trustee shall transfer any
Uninvested Proceeds remaining on deposit in the Uninvested Proceeds Account on
the Effective Date to the Collection Account to be treated as Collateral Principal
Collections on the first Payment Date and distributed in accordance with the
Priority of Payments.


 


10.5.                      COLLECTION ACCOUNT AND CPP SUB-ACCOUNTS 


 


(a)                                 Collection
Account


 


(1)                                 The
Trustee shall, prior to the Closing Date, cause to be established a Securities
Account which shall be designated as the “Collection Account”, which shall be
held in the name of the Trustee as Entitlement Holder in trust for the benefit
of the Secured Parties. The Trustee shall cause to be established two
sub-accounts of the Collection Account. The Trustee shall deposit Collateral
Principal Collections into one sub-account (the Collateral Principal Collections Sub-Account)  and Collateral Interest
Collections into the other sub-account. The Trustee shall cause to be established
within the Collateral Principal Collections Sub-Account seven further
sub-accounts, six of which shall constitute the “CPP Sub-Accounts”. At the
direction of the Issuer (or the Collateral Advisor on behalf of the Issuer),
the Trustee shall invest all funds on deposit in the Collection Account
(including the Collateral Principal Collection Sub-Account and each CPP
Sub-Account) in Eligible Investments or Substitute Collateral Debt Securities
in accordance with the requirements and limitations contained in Section 12.1(c).


 


(2)                                 The
Trustee, within one Business Day after receipt of any Distribution or other
proceeds that are not Cash shall so notify the Issuer and the Issuer shall sell
such Distribution or other proceeds for Cash in accordance with Section 12.1.


 


(3)                                 The
Trustee shall transfer to the Payment Account for application pursuant to Section 11.1(a) and
in accordance with the calculations and the instructions contained in the Note
Valuation Report prepared by the Issuer pursuant to


 


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Section 10.10(a), on or prior to the Business Day prior to each
Payment Date, funds on deposit in the Collection Account (including
reinvestment income) other than Collections received after the end of the Due
Period with respect to such Payment Date.


 


(4)                                 The
Trustee shall withdraw and apply amounts on deposit in the Collection Account
in accordance with any Redemption Date Statement delivered to the Trustee in
connection with the redemption of Rated Notes pursuant to Section 9.1.


 


(b)                                CPP Sub-Accounts. The
Trustee shall, prior to the Closing Date, cause to be established, within the
Collateral Principal Collections Sub-Account (and as sub-sub-accounts of the
Collection Account) six Securities Accounts to be designated each individually
as a “CPP Sub-Account” and all collectively as the “CPP Sub-Accounts”. Each CPP
Sub-Account shall be established in the name of the Trustee as Entitlement
Holder and held in trust for the benefit of the Secured Parties. Each CPP
Sub-Account shall contain Collateral Principal Payments received from time to
time with respect to the Collateral Debt Securities of one particular CPP Asset
Type. The CPP Sub-Accounts shall be named respectively as follows: (i) “CPP
Sub-Account — REIT Debt Securities- Fixed Rate”, (ii) “CPP Sub-Account —
REIT Debt Securities - Floating Rate”, (iii) “CPP Sub-Account — CMBS
Securities - Fixed Rate”, (iv) “CPP Sub-Account — CMBS Securities —
Floating Rate”, (v) “CPP Sub-Account — Real Estate CDO Securities - Fixed
Rate”, and (vi) “CPP Sub-Account — Real Estate CDO Securities - Floating
Rate”. During the Reinvestment Period, the Trustee will deposit the Collateral
Principal Payments received by it with respect to all Collateral Debt
Securities of a particular CPP Asset Type into the CPP Sub-Account for such CPP
Asset Type.


 


10.6.                      EXPENSE RESERVE ACCOUNT


 


The Trustee shall, prior to the Closing Date, cause to be established a
Securities Account which shall be designated as the “Expense Reserve Account”,
which shall be held in the name of the Trustee as Entitlement Holder in trust
for the benefit of the Secured Parties. Any and all funds at any time on
deposit in, or otherwise standing to the credit of, the Expense Reserve Account
shall be held in trust by the Trustee for the benefit of the Secured Parties.
On the Closing Date, the Trustee shall deposit into the Expense Reserve Account
an amount equal to U.S.$25,000 together with an amount sufficient to pay any
outstanding fees and expenses of the Issuer in relation to the offering of the
Rated Notes and the Income Notes which are not paid on the Closing Date. At the
direction of the Issuer (or the Collateral Advisor on behalf of the Issuer),
the Trustee shall invest all funds on deposit in the Expense Reserve Account in
Eligible Investments. Any amounts held in the Expense Reserve Account in excess
of U.S.$25,000 on the day which is 60 days following the Closing Date (or,
if such day is not a Business Day, the next following Business Day) shall be
transferred by the Trustee into the Uninvested Proceeds Account. Thereafter,
the Trustee shall transfer to the Expense Reserve Account from the Payment
Account amounts required to be deposited therein pursuant to Section 11.1(a) and
in accordance with the calculations and the instruction contained in the Note
Valuation Report prepared by the Issuer pursuant to Section 10.10(a).
Except as provided in Section 11.1, the only permitted withdrawal
from or application of funds on deposit in, or otherwise standing to the credit
of, the Expense Reserve Account shall be to pay (on any day other than a
Payment Date) accrued and unpaid Administrative Expenses of the Co-Issuers; provided that the
Trustee shall deposit all amounts remaining on deposit in the Expense Reserve
Account at the time when substantially all of the Issuer’s assets have been
sold or otherwise disposed of into the Collections Account for application as
Collateral Interest Collections on the immediately succeeding Payment Date.


 


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10.7.                      INTEREST RESERVE ACCOUNT


 


The Trustee shall, prior to the Closing Date, cause to be established a
Securities Account which shall be designated as the “Interest Reserve Account”,
which shall be held in the name of the Trustee as Entitlement Holder in trust
for the benefit of the Secured Parties. Any and all funds at any time on
deposit in, or otherwise standing to the credit of, the Interest Reserve
Account shall be held in trust by the Trustee for the benefit of the Secured
Parties. At the direction of the Issuer (or the Collateral Advisor on behalf of
the Issuer), the Trustee shall invest all funds on deposit in the Interest
Reserve Account in Eligible Investments. On each Payment Date, in accordance
with the Priority of Payments, the Trustee will deposit the Interest Reserve
Amount, if any, into the Interest Reserve Account. The only permitted
withdrawal from or application of funds on deposit in, or otherwise standing to
the credit of, the Interest Reserve Account shall be to deposit into the Payment
Account, on the Business Day prior to each Payment Date, the Balance of the
Interest Reserve Account (including reinvestment income) for distribution as
Collateral Interest Collections in accordance with the Priority of Payments on
the related Payment Date.


 


10.8.                      PAYMENT ACCOUNT


 


The Trustee shall, prior to the Closing Date, establish a Securities
Account which shall be designated as the “Payment Account”, which shall be held
in the name of the Trustee as Entitlement Holder in trust for the benefit of the
Secured Parties. Any and all funds at any time on deposit in, or otherwise
standing to the credit of, the Payment Account shall be held in trust by the
Trustee for the benefit of the Secured Parties. Except as provided in Section 11.1,  the only permitted withdrawal from
or application of funds on deposit in, or otherwise standing to the credit of,
the Payment Account shall be to pay the interest on and the principal of the
Rated Notes in accordance with their terms and the provisions of this Indenture
and, upon Issuer Order, to pay Administrative Expenses and other amounts
specified therein, each in accordance with the Priority of Payments. The
Co-Issuers shall not have any legal, equitable or beneficial interest in the
Payment Account other than in accordance with the Priority of Payments.


 


10.9.                      REPORTS BY TRUSTEE


 


The Trustee shall supply, in a timely fashion to each Rating Agency (so
long as any Rated Notes are rated by such Rating Agency), the Initial Hedge
Counterparty, the Holders of Rated Notes of the Controlling Class, the
Collateral Advisor, the Income Note Paying Agent, the Placement Agents and the
Issuer any information regularly maintained by the Trustee that each such
Person may from time to time request with respect to the Pledged Securities or
the Accounts reasonably needed to complete the Note Valuation Report or to
provide any other information reasonably available to the Trustee by reason of
its acting as Trustee hereunder and required to be provided by Section 10.10.


 


The Trustee shall forward to the Collateral Advisor, the Holders of
Rated Notes of the Controlling Class, or upon request therefor, any Holder of a
Rated Note shown on the Note Register, the Placement Agents, the Initial Hedge
Counterparty or the Income Note Paying Agent, copies of notices and other
writings received by it from the issuer of any Collateral Debt Security or from
any Clearing Agency with respect to any Collateral Debt Security advising the
holders of such security of any rights that the holders might have with respect
thereto (including notices of calls and redemptions of securities) as well as
all periodic financial reports received from such issuer and Clearing Agencies
with respect to such issuer; provided that the Trustee shall not
disclose any unpublished S&P Rating assigned by S&P with respect to any
Collateral Debt Security without the prior consent of S&P.


 


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So long as any Class of Rated Notes is listed on the Irish Stock
Exchange, the Irish Paying Agent shall notify the Irish Stock Exchange not
later than the Business Day preceding each Payment Date of the amount of
principal payments to be made on the Rated Notes of each Class on such
Payment Date, any Class C Cumulative Periodic Interest Shortfall Amount,
any Class D Cumulative Periodic Interest Shortfall Amount, any Class E
Cumulative Periodic Interest Shortfall Amount, any Class F Cumulative
Periodic Interest Shortfall Amount and the Aggregate Outstanding Amount of the
Rated Notes of each Class and as a percentage of the original Aggregate
Outstanding Amount of the Rated Notes of such Class after giving effect to
the principal payments, if any, on such Payment Date.


 


As promptly as possible following the delivery of each Note Valuation
Report to the Trustee pursuant to Section 10.10(a) or (b), as
applicable, the Issuer shall cause a copy of such report to be delivered the
Repository for posting on the Repository in the manner described in Section 14.3.
In connection therewith, each of the Co-Issuers acknowledges and agrees that
each Note Valuation Report shall be posted to the Repository for use in the
manner described in the section headed “Terms of Use” on the Repository.


 


10.10.                ACCOUNTINGS


 


(a)                                 Payment
Date Accounting. The Issuer shall, not later than the related
Payment Date and after the reconciliation process described in this Section 10.10,
render an accounting (a Note Valuation Report),  determined
as of each Calculation Date, and deliver the Note Valuation Report to each
Rating Agency, the Trustee and the Collateral Advisor and make available via
the Trustee’s internet website, initially located at www.cdotrustee.net to the
Trustee, the Irish Paying Agent, the Initial Hedge Counterparty, the Income
Note Paying Agent, each Note Transfer Agent, the Placement Agents and, upon
written request therefor, any Holder of a Rated Note shown on the Note
Register. The Note Valuation Report shall contain the following information
(which shall, in the case of any Note Valuation Report delivered to S&P, be
presented in a form that complies with and includes the information required by
S&P’s Preferred Format) determined, unless otherwise specified below, as of
the related Calculation Date:


 


(1)                                 the calculation
showing compliance with each of the Coverage Tests, accompanied by a list
setting forth the applicable maximum or minimum value, percentage or ratio
which must be maintained pursuant to this Agreement with respect to each of the
Coverage Tests and a list setting forth the results of the calculation of each
of the Coverage Tests with respect to the Collateral Debt Securities, the
calculation showing whether the S&P CDO Monitor Test is satisfied
(including the weighted average rating, the default measure, variability
measure and correlation measure, the scenario default rate and/or such other
information required to be computed with respect to the S&P CDO Monitor
Test), and the calculation showing the Fitch Weighted Average Rating Factor,
the Weighted Average Fixed Rate Coupon, the Weighted Average Spread, the Weighted
Average Life and the S&P Weighted Average Recovery Rate;


 


(2)                                 the estimated
remaining Average Life of each of the Collateral Debt Securities;


 


(3)                                 the Applicable
Periodic Interest Rate in respect of each Class of Notes and the amount of
Periodic Interest payable to the Holders of the Notes for such Payment Date (in
the aggregate and by Class);


 


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(4)                                 the
amount (if any) payable to each Hedge Counterparty pursuant to the related Hedge
Agreement;


 


(5)                                 the amount (if any)
payable by each Hedge Counterparty pursuant to the related Hedge Agreement:


 


(6)                                 the Aggregate Fees and
Expenses payable on the next Payment Date on an itemized basis;


 


(7)                                 the Aggregate Fees and
Expenses paid during a period of twelve (12) months ending on the next Payment
Date on an itemized basis;


 


(8)                                 for
the Collection Account:


 


(i)                                   the Balance on
deposit in the Collection Account, the Collateral Principal Collections
Sub-Account and each of the respective CPP Sub-Accounts at the end of the
related Due Period;


 


(ii)                                the nature and source
of any Collections in the Collection Account, the Collateral Principal
Collections Sub-Account and each of the respective CPP Sub-Accounts, including
Collections received since the date of the last Note Valuation Report;


 


(iii)                             the amounts payable from
the Collection Account in accordance with the priority set forth in Section 11.1
on the next Payment Date; and


 


(iv)                            the Balance remaining in
the Collection Account immediately after all payments and deposits to be made
on such Payment Date;


 


(v)                               the Balance on deposit
in the Collateral Principal Collections Sub-Account and each of the respective
CPP Sub-Accounts.


 


(9)                                 for the Interest
Reserve Account:


 


(i)                                   the balance on
deposit in the Interest Reserve Account at the end of the related Due Period;


 


(ii)                                the amount payable from
the Interest Reserve Account pursuant to the Priority of Payments on the next
Payment Date;


 


(iii)                             the Interest Reserve
Amount to be paid into the Interest Reserve Account on the next Payment Date;
and


 


(iv)                            the Balance remaining in
the Interest Reserve Account immediately after all payments and deposits to be
made on such Payment Date;


 


(10)                           for the
Expense Reserve Account:


 


(i)                                   the
amount to be paid into the Expense Reserve Account on the next Payment Date;
and


 


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(ii)                                the Balance remaining
in the Expense Reserve Account immediately after all payments and deposits to
be made on such Payment Date;


 


(11)                           the Hedge Receipt Amount or
the Hedge Payment Amount for the related Payment Date, and for each Hedge
Agreement, the outstanding notional amount of such Hedge Agreement and the
amounts, if any, scheduled to be received or paid, as the case may be, by the
Issuer pursuant to such Hedge Agreement for the related Payment Date,
separately stating the portion payable in accordance with Section 11.1;


 


(12)                           the amount of Income Note
Excess Funds on the related Payment Date;


 


(13)                           the amount of the Senior
Collateral Advisory Fee and the amount of the Subordinate Collateral Advisory
Fee;


 


(14)                           such other information as
the Collateral Advisor, the Placement Agents, the Trustee, S&P, Fitch or
any Hedge Counterparty may reasonably request;


 


(15)                           with respect to each
Collateral Debt Security, the Principal Balance, the annual coupon rate or
spread to the relevant floating rate index, the frequency of coupon payments,
the amount of principal payments received, the maturity date, the issuer, the
country in which the issuer is incorporated or organized, the S&P Industry
Classification Group, the Fitch Industry Classification Group, the S&P
Recovery Rate, the S&P Rating and the Fitch Rating (provided that
if any Fitch Rating for any Collateral Debt Security is an “estimated” or
“shadow” rating, such rating shall be identified as “estimated” or “shadow
rated”, shall be disclosed with an asterisk in the place of the applicable
estimated or shadow rating and shall include the date as of which such rating
was first provided by Fitch to the Issuer); and any S&P Rating which is
determined from an implied rating, a credit estimate, a confidential rating or
another non-public rating, shall not be distinguished and shall either (i) be
reported in a single column with the public ratings of S&P (without
distinguishing the source) or (ii) be reported in a separate column
labeled “Non-public and Implied S&P Rating.”


 


(16)                           the Principal Balance, the
maturity date, the S&P Rating, the Fitch Rating and the issuer of each
Eligible Investment included in the Collateral;


 


(17)                           (A) the identity and
Principal Balance of each Collateral Debt Security that became a Credit Risk
Security, a Defaulted Security, an Equity Security, a Written Down Security, a
Withholding Tax Security, a Deferred Interest PIK Bond, (B) the date, as
provided by the Collateral Advisor, on which any Collateral Debt Security
became a Credit Risk Security, a Defaulted Security, an Equity Security, a
Written Down Security or a Withholding Tax Security, (C) the date by which
the Issuer or the Collateral Advisor is required to declare its intention to
sell or to hold such Collateral Debt Security, (D) whether the Collateral
Advisor has directed the Issuer to sell or not to sell such Collateral Debt
Security, and (E) the date by which any such sale must occur;


 


(18)                           the identity of each
Collateral Debt Security that was upgraded or downgraded or placed on watch for
upgrade or downgrade by any Rating Agency since the date of the last Note
Valuation Report;


 


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(19)                           the Principal Balance and
identity of each Collateral Debt Security that was released for sale indicating
the reason for such sale and the amount and identity of each Collateral Debt
Security that was granted since the date of the last Note Valuation Report;


 


(20)                           the identity and Principal
Balance of each Collateral Debt Security that was a Credit Risk Security, a
Defaulted Security, an Equity Security, a Written Down Security, a Withholding
Tax Security or a Deferred Interest PIK Bond;


 


(21)                           the purchase price of each
Pledged Security granted and the sale price of each Pledged Security subject to
a sale since the date of the last Note Valuation Report; and whether such
Pledged Security is a Collateral Debt Security, an Eligible Investment or
proceeds in the Collection Account;


 


(22)                           the amount of Purchased
Accrued Interest;


 


(23)                           a description of any
transactions with the Collateral Advisor, the Issuer, the Collateral
Administrator and the Trustee and any Affiliates thereof;


 


(24)                           the Class A Note
Break-Even Default Rate, the Class B Note Break-Even Default Rate, the Class C
Note Break-Even Default Rate, the Class D Note Break-Even Default Rate,
the Class E Note Break-Even Default Rate and the Class F Note
Break-Even Default Rate;


 


(25)                           the Class A Note
Default Differential, the Class B Note Default Differential, the Class C
Note Default Differential, the Class D Note Default Differential, the Class E
Note Default Differential and the Class F Note Default Differential; and


 


(26)                           the Class A Note
Scenario Default Rate, the Class B Note Scenario Default Rate, the Class C
Note Scenario Default Rate, the Class D Note Scenario Default Rate, the Class E
Note Scenario Default Rate and the Class F Note Scenario Default Rate.


 


Upon receipt of each Note Valuation Report, the Trustee and the
Collateral Advisor shall compare the information contained therein to the
information contained in their respective records with respect to the
Collateral and shall, within two (2) Business Days after receipt of such
Note Valuation Report, notify each of the Issuer, the Initial Hedge
Counterparty, the Collateral Advisor, the Trustee, Fitch and S&P if the
information contained in the Note Valuation Report does not conform to the
information maintained by the Trustee or the Collateral Advisor as applicable,
with respect to the Collateral, and detail any discrepancies. In the event that
any discrepancy exists, the Trustee and the Issuer, or the Collateral Advisor
shall attempt to promptly resolve the discrepancy. If such discrepancy cannot
be promptly resolved, the Trustee shall within five (5) Business Days
after discovery of such discrepancy cause the Independent Accountants of
recognized international reputation to review such Note Valuation Report and
the Trustee’s and the Collateral Advisor’s records to determine the cause of
such discrepancy. If such review reveals an error in the Note Valuation Report
or the records of the Trustee or the Collateral Advisor, as the case may be,
such item shall be revised accordingly and, as so revised, shall be utilized in
making further calculations.


 


Subject to the terms of this Agreement, the Trustee shall be entitled
to rely on the information supplied by the Collateral Advisor in relation to
the preparation of the Note Valuation Report and shall not be liable for the
accuracy or completeness of such information or the lack thereof


 


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In addition to the foregoing information, each Note Valuation Report
shall include a statement to the following effect:


 


“The Notes have not been and will not be registered under the United
States Securities Act of 1933, as amended (the Securities Act), or under any state securities
laws, and the Co-Issuers have not been and will not be registered under the
United States Investment Company Act of 1940, as amended (the 1940 Act).  Each
Holder of the Notes, other than those Holders that are not “U.S. persons” (U.S. Person)  within the meaning of Regulation S (Regulation S)  under the Securities Act and have acquired their
Notes outside the United States pursuant to Regulation S, is required to be
both (i) (A) with respect to any Rated Note, a “qualified institutional
buyer” as defined in Rule 144A under the Securities Act (Qualified Institutional
Buyer), (B) solely
with respect to the Class E Notes and the Class F Notes, either (1) an
“accredited investor” as defined in paragraphs (1), (2), (3) or (7) of Rule 501(A) under
the Securities Act (each an Institutional
Accredited Investor)  or (2) any
of NS CDO Holdings V, LLC, NS Advisors, LLC or any “affiliate” thereof within
the meaning of Rule 405 under the Securities Act that is an “accredited
investor” within the meaning of Rule 501(A) under the Securities Act
(each of the foregoing, a Permitted NS Purchaser)  or (C) solely with respect to the Income
Notes, a Permitted NS Purchaser and a “qualified purchaser” (Qualified Purchaser)  within the meaning of Section 3(c)(7) of
the 1940 Act, purchasing for its own account or for the account of another
Qualified Purchaser, that can make all of the representations in the Indenture
applicable to a holder that is a U.S. Person. The beneficial interest in the
Notes may be transferred only to a transferee that meets both of the criteria
in clauses (i) and (ii) above and can make all of the representations
in the Indenture applicable to a Holder that is a U.S. Person, except that any
such transfer in reliance on Regulation S can be made only to a transferee that
is not a U.S. Person. The Issuer has the right to compel any Holder that does
not meet the qualifications and the transfer restrictions set forth in the
Indenture to sell its interest in the Notes, or may sell such interest on
behalf of such owner, pursuant to the Indenture.”


 


(b)                                 Redemption Date
Instructions. Not less than five (5) Business Days after
receiving an Issuer Request requesting information regarding a redemption
pursuant to Section 9.1 of the Rated Notes of a Class as of a
proposed Redemption Date set forth in such Issuer Request, the Trustee shall
provide the necessary information (to the extent it is available to the
Trustee) to the Issuer, and the Issuer shall compute the following information
and provide such information in a statement (the Redemption Date
Statement)  delivered to the Trustee:


 


(1)                                the Aggregate
Outstanding Amount of the Rated Notes of the Class or Classes to be
redeemed as of such Redemption Date;


 


(2)                                the amount of accrued
interest due on such Rated Notes as of the last day of the Interest Period
immediately preceding such Redemption Date; and


 


(3)                                the amount in the
Collection Account available for application to the redemption of such Rated
Notes.


 


(c)                                  If
the Trustee shall not have received any accounting provided for in this Section 10.10
on the first Business Day after the date on which such accounting is due to the
Trustee, the Trustee shall use reasonable efforts to cause such accounting to
be made by the applicable Payment Date or Redemption Date. To the extent the
Trustee is required to provide any information or reports pursuant to this Section 10.10
as a result of the failure of the Issuer to provide such information or
reports, the Trustee shall be entitled to retain an Independent certified
public accountant in connection therewith and the reasonable


 


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costs incurred by the Trustee for such Independent certified public
accountant shall be reimbursed pursuant to Section 6.8.


 


The Trustee will make the Note Valuation Report available via its
internet website initially located at www.cdotrustee.net. All information made
available on the Trustee’s website will be restricted and the Trustee will only
provide access to such reports to those parties entitled thereto pursuant to
the Indenture. In connection with providing access to its website, the Trustee
may require registration and the acceptance of a disclaimer.


 


10.11.               RELEASE OF SECURITIES


 


(a)                                  If
no Event of Default has occurred and is continuing and subject to Section 12,
the Issuer shall, in connection with any sale required pursuant to Section 12.1,
by Issuer Order executed by an Authorized Officer of the Issuer and delivered
to the Trustee at least two Business Days prior to the settlement date for any
sale of a security certifying that the conditions set forth in Section 12.1
are satisfied, direct the Trustee to release such security from the lien of
this Indenture against receipt of payment therefor.


 


(b)                                 The
Issuer shall, if notified that the issuer of the Pledged Security requires
delivery of such Pledged Security as a condition to redemption or payment in
full, by Issuer Order executed by an Authorized Officer of the Issuer and
delivered to the Trustee at least two Business Days prior to the date set for
redemption or payment in full of a Pledged Security, certifying that such
security is being redeemed or paid in full, direct the Trustee or, at the
Trustee’s instructions, the Custodian, to deliver such security, if in physical
form, duly endorsed, or, if such security is a Clearing Corporation Security,
to cause it to be presented, to the appropriate paying agent therefor on or
before the date set for redemption or payment, in each case against receipt of
the redemption price or payment in full thereof.


 


(c)                                  The
Trustee shall deposit any proceeds received by it from the disposition of a
Pledged Security in the appropriate CPP Sub-Account.


 


(d)                                 The
Trustee shall, upon receipt of an Issuer Order at such time as there are no
Rated Notes Outstanding and all obligations of the Co-Issuers hereunder have
been satisfied, release the Collateral from the lien of this Indenture.


 


(e)                                  The
Issuer may retain agents (including the Collateral Advisor) to assist the
Issuer in preparing any notice or other report required under Section 10.11
and this Section 10.12.


 


10.12.              REPORTS BY INDEPENDENT
ACCOUNTANTS


 


(a)                                 At the Closing Date
the Issuer (or the Collateral Advisor on its behalf) shall appoint a firm of
Independent certified public accountants of recognized national reputation for
purposes of preparing and delivering the reports or certificates of such
accountants required by this Indenture. Upon any resignation by such firm, the
Issuer shall (after consultation with the Collateral Advisor) propose a
replacement firm meeting the criteria set forth in the preceding sentence for
approval by a Majority of the Controlling Class. Upon approval by a Majority of
the Controlling Class, the Issuer shall promptly appoint such firm by Issuer
Order delivered to the Trustee, the Initial Hedge Counterparty, the Collateral
Advisor and each Rating Agency. If the Issuer shall fail to appoint a successor
to a firm of Independent certified public accountants which has resigned within
30 days


 


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after such resignation, the Issuer shall promptly notify the Trustee of
such failure in writing. The fees of such Independent certified public
accountants and its successor shall be payable by the Issuer as provided in Section 11.1.


 


(b)                                On or before September 15
of each year (commencing with September 15, 2006), the Issuer shall cause
to be delivered to the Trustee, the Income Note Paying Agent and each Rating
Agency an Accountants’ Report specifying the procedures applied and their
associated findings with respect to the Note Valuation Reports and any
Redemption Date Statements prepared in the preceding year. At least 60 days
prior to the Payment Date in September 2006 (and, if at any time a
successor firm of Independent certified public accountants is appointed, prior
to the Payment Date in August following the date of such appointment), the
Issuer shall deliver to the Trustee an Accountant’s Report specifying in
advance the procedures that such firm will apply in making the aforementioned
findings throughout the term of its service as accountants to the Issuer. The
Trustee shall promptly forward a copy of such Accountant’s Report to the
Initial Hedge Counterparty, the Rating Agencies, the Income Note Paying Agent
and each Holder of Class A Notes (or, if no Class A Notes are
Outstanding, each Holder of Class B Notes or, if no Class B Notes are
Outstanding, each Holder of Class C Notes or, if no Class C Notes are
Outstanding, each Holder of Class D Notes or, if no Class D Notes are
Outstanding, each Holder of Class E Notes or, if no Class E Notes are
Outstanding, each Holder of Class F Notes), at the address shown on the
Note Register. The Issuer shall not approve the institution of such procedures
if a Majority of the Controlling Class or the Collateral Advisor, by
notice to the Issuer and the Trustee within 30 days after the date of the
related notice to the Trustee, object thereto.


 


(c)                                 Any statement
delivered to the Trustee pursuant to Section 10.12(b) above shall be
made available by the Trustee to any Holder of a Rated Note shown on the Note
Register upon written request therefor.


 


10.13.              REPORTS TO
RATING AGENCIES


 


In addition to the information and reports specifically required to be
provided to the Rating Agencies, the Income Note Paying Agent, the Holders of
Rated Notes of the Controlling Class, and the Initial Hedge Counterparty
pursuant to the terms of this Indenture, the Income Note Paying Agency
Agreement or the Hedge Agreement (as the case may be), the Issuer shall provide
or procure to provide the Rating Agencies and the Initial Hedge Counterparty
with (a) all information or reports delivered to the Trustee hereunder and
(b) such additional information as the Rating Agencies, the Income Note
Paying Agent or the Initial Hedge Counterparty may from time to time reasonably
request and such information may be obtained and provided without unreasonable
burden or expense. The Issuer shall promptly notify the Trustee, the Income
Note Paying Agent and the Initial Hedge Counterparty if the rating of any Class of
Rated Notes has been, or it is known by the Issuer that such rating will be,
changed or withdrawn. The Issuer shall notify each Rating Agency in the case of
(i) termination or amendment of any Transaction Document or organizational
document of the Issuer or Co-Issuer, (ii) termination or change of party
to any of the Transaction Documents or (iii) material breach of any of the
Transaction Documents by any party thereto. From time to time Fitch may request
information or reports from the Collateral Advisor on the properties underlying
the Collateral, including, without limitation, information on underwritten cash
flow and occupancy.


 


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10.14.              TAX MATTERS


 


The Issuer and the Co-Issuer agree to treat, and hereby notify the
Trustee to treat, and, by accepting a Rated Note, each Holder of the Rated
Notes agrees to treat, the Rated Notes, for U.S. federal, state and local
income tax purposes, as indebtedness of the Issuer (and not as obligations of
the Co-Issuer), to report all income (or loss) in accordance with such
treatment and not to take any action inconsistent with such treatment except as
otherwise required by any taxing authority under applicable law. The Issuer
agrees not to elect to be treated as other than a corporation for U.S. federal
income tax purposes.


 


10.15.              TAX INFORMATION


 


The Issuer will furnish to any Holder of Rule 144A Definitive
Notes (or its designee), Rule 144A Global Notes (or its designees),
Definitive Class E Notes (or its designees) and Definitive Class F
Notes (or its designee), upon the request of any such Holder, the necessary
information, and will permit such Holder reasonable access to its books of
account, in order to allow such Holder to make a “qualifying electing fund”
election pursuant to Section 1295 of the Code.


 


The Issuer shall provide on a timely basis to any holder of a
beneficial interest in Rule 144A Definitive Notes (or its designee), Rule 144A
Global Notes (or its designee), Definitive Class E Notes (or its designee)
and Definitive Class F Notes (or its designee), upon written request
therefor certifying that it is such a holder, (i) all information that a
U.S. shareholder making a “qualified electing fund” election (as defined in the
Code) is required to obtain for U.S. federal income tax purposes and (ii) a
“PFIC Annual Information Statement” as described in Treasury Regulation
1.1295-1 (or any successor Internal Revenue Service release or Treasury
Regulation), including all representations and statements required by such
statement, and will take any other steps necessary to facilitate such election
by a holder of a beneficial interest in any Rule 144A Definitive Notes, Rule 144A
Global Notes, Definitive Class E Notes and Definitive Class F Notes.
The Issuer shall also provide, upon request of a Holder of, or a holder of a
beneficial interest in, any Rule 144A Definitive Notes, Rule 144A
Global Notes, Definitive Class E Notes and Definitive Class F Notes,
any information that such Holder or holder of a beneficial interest reasonably
requests to assist such Holder or holder of a beneficial interest with regard
to any filing requirements the Holder or holder of a beneficial interest may
have as a result of the controlled foreign corporation rules under the
Code. The cost and expense of the preparation and delivery of the PFIC Annual
Information Statement shall be at the expense of the Issuer.


 


ARTICLE XI


 


APPLICATION OF MONIES


 


11.1.                    DISBURSEMENTS OF FUNDS FROM
PAYMENT ACCOUNT; PRIORITY OF PAYMENTS


 


(a)                                 Collateral Interest
Collections. On any Payment Date that is not a Redemption Date or a
Payment Date following the occurrence and continuation of an acceleration of
the Rated Notes in connection with an Event of Default, in accordance with a Note
Valuation Report prepared by the Collateral Administrator as of the last day of
the Due Period preceding such Payment Date, Collateral Interest Collections, to
the extent of Available Funds in the Collection Account, will be applied by the
Trustee in the following order of priority:


 


(1)                                  to
pay, in the following order:


 


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(i)                                    taxes and filing
fees and registration fees (including, without limitation, annual return fees)
payable by the Co-Issuers, if any; and then,


 


(ii)                                 pro
rata the amount of any due and unpaid Trustee Fee and Income Note Paying
Agent Fee; and then,


 


(iii)                              the amount of any due and
unpaid fees to the Administrator; and then,


 


(iv)                             the amount of any due and
unpaid Trustee Expenses; and then,


 


(v)                                the amount of any due
and unpaid fees and expenses of the Rating Agencies; and then,


 


(vi)                             the amount of any due and
unpaid expenses of the Administrator and any due and unpaid Administrative
Expenses not included in (iii), (iv) and (v) above, including amounts
payable to the Collateral Advisor under the Collateral Advisory Agreement but
excluding the Collateral Advisory Fee; and then,


 


(vii)                          to deposit to the Expense
Reserve Account the amount needed to bring the amount on deposit therein to
U.S.$25,000 (unless the Collateral Advisor directs that a lesser amount be
deposited to the Expense Reserve Account);


 


provided that the
cumulative amount paid under (iii) through (vii) above (excluding any
Administrative Expenses due or accrued with respect to the actions taken on or
prior to the Closing Date and accounting fees that the Trustee is required to
pay (other than certain accountants’ fees related to annual reviews) and fees
the Trustee pays in connection with any Event of Default and any default of the
Collateral Debt Securities) may not exceed U.S.$250,000 in the aggregate in any
consecutive 12-month period;


 


(2)                                  to
pay the Senior Collateral Advisory Fee with respect to such Payment Date and
any Senior Collateral Advisory Fee with respect to a previous Payment Date that
was not paid on a previous Payment Date;


 


(3)                                  to
pay any Hedge Counterparty, any amounts due to such Hedge Counterparty under
any Hedge Agreement, pro rata, including
any termination payments other than any termination payments payable under Section 11.1(a)(22)
below;


 


(4)                                  to
pay Periodic Interest on the Class A-1 Notes and any Defaulted Interest;


 


(5)                                  to
pay Periodic Interest on the Class A-2 Notes and any Defaulted Interest;


 


(6)                                  to
pay Periodic Interest on the Class B Notes and any Defaulted Interest;


 


(7)                                  if
either of the Class A/B Coverage Tests is not satisfied as of the
preceding Calculation Date, to pay principal of the most senior Class of
Notes then Outstanding until such Class A/B Coverage Test is satisfied as
of such Calculation Date or until such most senior Class of Notes is paid
in full, and then to pay principal of the next most senior Class of Notes
Outstanding until such


 


141

















 


Class A/B
Coverage Test is satisfied as of such Calculation Date or until such next most
senior Class of Notes is paid in full and so on, until such Class A/B
Coverage Test is satisfied or until the Class B Notes are paid in full; provided that for purposes of determining if the Class A/B
Principal Coverage Test is satisfied after giving effect to any payments under
this Section 11.1(a)(7), the denominator of the Class A/B Principal
Coverage Ratio shall be calculated after giving effect to any payments of
principal on the Notes made pursuant to any of the clauses above and pursuant
to this Section 11.1(a)(7) on the related Payment Date;


 


(8)                                to pay an amount equal to the Interest
Reserve Amount for deposit into the Interest Reserve Account;


 


(9)                                if a Ratings Confirmation Failure occurs, on
each Payment Date commencing with the Payment Date immediately following the
Effective Date, to pay principal on the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes
and the Class F Notes, in that order, in the amounts necessary for each
Rating Agency to confirm its respective ratings of the Notes assigned on the
Closing Date or until each Class of Notes is paid in full;


 


(10)                          to pay Periodic Interest on the Class C
Notes and, if no Class A Notes and no Class B Notes are Outstanding,
any Defaulted Interest on the Class C Notes;


 


(11)                          if either of the Class C Coverage Tests
is not satisfied as of the preceding Calculation Date to pay principal
(including any Class C Cumulative Applicable Periodic Interest Shortfall
Amount) of the most senior Class of Notes then Outstanding until such Class C
Coverage Test is satisfied as of such Calculation Date or until such most
senior Class of Notes is paid in full, and then to pay principal of the
next most senior Class of Notes Outstanding until such Class C
Coverage Test is satisfied as of such Calculation Date or until such next most
senior Class of Notes is paid in full and so on, until such Class C
Coverage Test is satisfied or until the Class C Notes, are paid in full; provided that for purposes of determining if the Class C
Principal Coverage Test is satisfied after giving effect to any payments under
this Section 11.1(a)(11), the denominator of the Class C Principal
Coverage Ratio shall be determined after giving effect to any payments of
principal on the Notes pursuant to any of the clauses above and pursuant to
this Section 11.1(a)(11) on the related Payment Date; provided, further, that with respect to the Class C Notes,
payment of principal not constituting Class C Cumulative Applicable
Periodic Interest Shortfall Amount shall be paid before principal constituting
the Class C Cumulative Applicable Periodic Interest Shortfall Amount, if
any;


 


(12)                          to pay the Class C Cumulative Applicable
Periodic Interest Shortfall Amount and interest thereon, if any;


 


(13)                          to pay Periodic Interest on the Class D
Notes and, if no Class A Notes, no Class B Notes and no Class C
Notes are Outstanding, any Defaulted Interest on the Class D Notes;


 


(14)                          if either of the Class D  Coverage Tests is not satisfied as of the preceding Calculation Date to
pay principal (including any Class C Cumulative Applicable


 


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Periodic
Interest Shortfall Amount or Class D Cumulative Applicable Periodic
Interest Shortfall Amount, as applicable) of the most senior Class of
Notes then Outstanding until such Class D Coverage Test is satisfied as of
such Calculation Date or until such most senior Class of Notes is paid in
full, and then to pay principal of the next most senior Class of Notes
Outstanding until such Class D Coverage Test is satisfied as of such
Calculation Date or until such next most senior Class of Notes is paid in
full and so on, until such Class D Coverage Test is satisfied or until the
Class D Notes are paid in full; provided that for purposes of determining if the Class D
Principal Coverage Test is satisfied after giving effect to any payments under
this Section 11.1(a)(14), the denominator of the Class D Principal
Coverage Ratio shall be determined after giving effect to any payments of
principal on the Notes pursuant to any of the clauses above and pursuant to
this Section 11.1(a)(14) on the related Payment Date; provided, further, that
with respect to (i) the Class C Notes, payment of principal not
constituting the Class C Cumulative Applicable Periodic Interest Shortfall
Amount shall be paid before principal constituting the Class C Cumulative
Applicable Periodic Interest Shortfall Amount, if any; and (ii) the Class D
Notes, payment of principal not constituting the Class D Cumulative
Applicable Periodic Interest Shortfall Amount shall be paid before principal
constituting the Class D Cumulative Applicable Periodic Interest Shortfall
Amount, if any;


 


(15)                          to pay the Class D Cumulative Applicable
Periodic Interest Shortfall Amount and interest thereon, if any;


 


(16)                          to pay Periodic Interest on the Class E
Notes and, if no Class A Notes, no Class B Notes, no Class C
Notes and no Class D Notes are Outstanding, any Defaulted Interest on the Class E
Notes;


 


(17)                          if either of the Class E Coverage Tests
is not satisfied as of the preceding Calculation Date to pay principal
(including any Class C Cumulative Applicable Periodic Interest Shortfall
Amount, Class D Cumulative Applicable Periodic Interest Shortfall Amount
or Class E Cumulative Applicable Periodic Interest Shortfall Amount, as
applicable) of the most senior Class of Notes then Outstanding until such Class E
Coverage Test is satisfied as of such Calculation Date or until such most
senior Class of Notes is paid in full, and then to pay principal of the
next most senior Class of Notes Outstanding until such Class E
Coverage Test is satisfied as of such Calculation Date or until such next most
senior Class of Notes is paid in full and so on, until such Class E
Coverage Test is satisfied or until the Class E Notes are paid in full; provided that for
purposes of determining if the Class E Principal Coverage Test is
satisfied after giving effect to any payments under this Section 11.1(a)(17),
the denominator of the Class E Principal Coverage Ratio shall be
determined after giving effect to any payments of principal on the Notes
pursuant to any of the clauses above and pursuant to this Section 11.1(a)(17)
on the related Payment Date; provided, further, that with respect to (i) the Class C
Notes, payment of principal not constituting the Class C Cumulative
Applicable Periodic Interest Shortfall Amount shall be paid before principal
constituting the Class C Cumulative Applicable Periodic Interest Shortfall
Amount, if any; (ii) the Class D Notes, payment of principal not
constituting the Class D Cumulative Applicable Periodic Interest Shortfall
Amount shall be paid before principal constituting the Class D Cumulative
Applicable Periodic Interest Shortfall Amount, if any; and


 


143

















 


(iii)  the Class E Notes, payment of principal not
constituting the Class E Cumulative Applicable Periodic Interest Shortfall
Amount shall be paid before principal constituting the Class E Cumulative
Applicable Periodic Interest Shortfall Amount, if any;


 


(18)                          to pay the Class E
Cumulative Applicable Periodic Interest Shortfall Amount and interest thereon,
if any;


 


(19)                          to pay Periodic Interest
on the Class F  Notes and, if no Class A
Notes, no Class B Notes, no Class C Notes, no Class D Notes and
no Class E Notes are Outstanding, any Defaulted Interest on the Class F
Notes;


 


(20)                          if either of the Class F
Coverage Tests is not satisfied as of the preceding Calculation Date to pay
principal (including any Class C Cumulative Applicable Periodic Interest
Shortfall Amount, Class D Cumulative Applicable Periodic Interest
Shortfall Amount, Class E Cumulative Applicable Periodic Interest
Shortfall Amount or Class F Cumulative Applicable Periodic Interest
Shortfall Amount, as applicable) of the most senior Class of Notes then
Outstanding until such Class F Coverage Test is satisfied as of such
Calculation Date or until such most senior Class of Notes is paid in full,
and then to pay principal of the next most senior Class of Notes
Outstanding until such Class F Coverage Test is satisfied as of such
Calculation Date or until such next most senior Class of Notes is paid in
full and so on, until such Class F Coverage Test is satisfied or until the
Class F Notes are paid in full; provided
that for purposes of determining if the Class F Principal
Coverage Test is satisfied after giving effect to any payments under this Section 11.1(a)(20),
the denominator of the Class F Principal Coverage Ratio shall be
determined after giving effect to any payments of principal on the Notes
pursuant to any of the clauses above and pursuant to this Section 11.1(a)(20)
on the related Payment Date; provided,
further, that with respect to (i) the Class C Notes,
payment of principal not constituting the Class C Cumulative Applicable
Periodic Interest Shortfall Amount shall be paid before principal constituting
the Class C Cumulative Applicable Periodic Interest Shortfall Amount, if
any; (ii) the Class D Notes, payment of principal not constituting the
Class D Cumulative Applicable Periodic Interest Shortfall Amount shall be
paid before principal constituting the Class D Cumulative Applicable
Periodic Interest Shortfall Amount, if any; (iii) the Class E Notes,
payment of principal not constituting the Class E Cumulative Applicable
Periodic Interest Shortfall Amount shall be paid before principal constituting
the Class E Cumulative Applicable Periodic Interest Shortfall Amount, if
any; and (iv) the Class F Notes, payment of principal not
constituting the Class F Cumulative Applicable Periodic Interest Shortfall
Amount shall be paid before principal constituting the Class F Cumulative
Applicable Periodic Interest Shortfall Amount, if any;


 


(21)                          to pay the Class F
Cumulative Applicable Periodic Interest Shortfall Amount and interest thereon,
if any;


 


(22)                          to pay termination
payments payable to any Hedge Counterparty upon the termination of the related
Hedge Agreement, pro rata, if such
termination occurred solely as the result of an event of default or a termination
event with


 


144

















 


respect to any Hedge Counterparty as Defaulting Party or sole Affected
Party, as the case may be;


 


(23)                          to pay,
in the following order:


 


(i)                                     any
due and unpaid Trustee Fee, Trustee Expenses and any due Income Note Paying
Agent Fee and unpaid Administrative Expenses, including amounts payable to the
Collateral Advisor under the Collateral Advisory Agreement but excluding the
Collateral Advisory Fee, in each case, in the same order of priority as
provided in Section 11.1(a)(1) above and to the extent not paid in
full under Section 11.1(a)(1) above without regard to any limitation
on any maximum amounts payable on such date contained therein; and


 


(ii)                                  on
a pro rata basis,
any due and unpaid expenses and other liabilities of the Co-Issuers to the
extent not paid under clause (1) above,
whether as a result of an amount limitation imposed thereunder or otherwise;


 


(24)                          to pay the Subordinate
Collateral Advisory Fee with respect to such Payment Date and any due and
unpaid Subordinate Collateral Advisory Fee with respect to a previous Payment
Date that was not paid on a previous Payment Date;


 


(25)                          after the Payment Date
occurring in September 2017, to pay from remaining Collateral Interest Collections
on any Payment Date the principal on the Class F Notes, until paid in
full, then the principal on the Class E Notes, until paid in full, then
the principal on the Class D Notes, until paid in full, then the principal
of the Class C Notes, until paid in full, then the principal on the Class B
Notes, until paid in full, then the principal on the Class A-2 Notes,
until paid in full, and then the principal on the Class A-1 Notes until
paid in full; and


 


(26)                          all Income Note Excess Funds
to the Income Note Paying Agent, on behalf of the Issuer, for distributions on
the Income Notes in accordance with the Income Note Paying Agency Agreement.


 


(b)                                Collateral Principal
Collections. On any Payment Date that is not a Redemption Date or a
Payment Date following the occurrence and continuation of an acceleration of
the Rated Notes in connection with an Event of Default, in accordance with a
Note Valuation Report prepared by the Collateral Administrator as of the last
day of the Due Period preceding such Payment Date, Collateral Principal
Collections, to the extent of Available Funds in the Collection Account, will
be applied by the Trustee in the following order of priority:


 


(1)                                to the payment of the
amounts referred to in Section 11.1(a)(1) through (6), in the same
order of priority specified therein, but only to the extent not paid in full
thereunder;


 


(2)                                if either of the Class A/B
Coverage Tests is not satisfied as of the preceding Calculation Date and to the
extent that the amounts paid pursuant to Section 11.1(a)(7) are
insufficient to cause the Class A/B Coverage Tests to be satisfied, to pay
principal of the most senior Class of Notes then Outstanding until such Class A/B
Coverage Test is satisfied as of such Calculation Date or


 


145

















 


until such most senior Class of Notes is paid in full, and then to
pay principal of the next most senior Class of Notes Outstanding until
such Class A/B Coverage Test is satisfied as of such Calculation Date or
until such next most senior Class of Notes is paid in full and so on,
until such Class A/B Coverage Test is satisfied or until the Class B
Notes are paid in full; provided that for
purposes of determining if the Class A/B Principal Coverage Test is
satisfied after giving effect to any payments under this Section 11.1(b)(2),
the denominator of the Class A/B Principal Coverage Ratio shall be
calculated after giving effect to any payments of principal on the Notes made
pursuant to any clause or subclause of Section 11.1(a) on the related
Payment Date and pursuant to Section 11.1(b)(1) above and this clause
(2); provided, further, that the numerator of the Class A/B
Principal Coverage Ratio shall be calculated after giving effect to any
Collateral Principal Collections applied pursuant to any of the clauses above
and pursuant to this Section 11.1(b)(2) on the related Payment Date;


 


(3)                                If the Class A
Notes and the Class B  Notes
are no longer Outstanding, to pay Periodic Interest on the Class C Notes
and any Defaulted Interest on the Class C Notes, to the extent that the
amounts paid pursuant to Section 11.1(a)(10) are insufficient to pay
such amounts in full thereunder;


 


(4)                                if either of the Class C
Coverage Tests is not satisfied as of the preceding Calculation Date and to the
extent that the amounts paid pursuant to Section 11.1(a)(11) are
insufficient to cause the Class C Coverage Tests to be satisfied, to pay
principal (including any Class C Cumulative Applicable Periodic Interest
Shortfall Amount) of the most senior Class of Notes then Outstanding until
such Class C Coverage Test is satisfied as of such Calculation Date or
until such most senior Class of Notes is paid in full, and then to pay
principal of the next most senior Class of Notes Outstanding until such Class C
Coverage Test is satisfied as of such Calculation Date or until such next most
senior Class of Notes is paid in full and so on, until such Class C
Coverage Test is satisfied or until the Class C Notes are paid in full; provided
that for purposes of determining if the Class C Principal
Coverage Test is satisfied after giving effect to any payments under this Section 11.1(b)(4),
the denominator of the Class C Principal Coverage Ratio shall be
determined after giving effect to any payments of principal on the Notes made
pursuant to any clause or subclause of Section 11.1(a) on the related
Payment Date and pursuant to any clause above and this Section 11.1(b)(4);
provided,
further, that for purposes of determining if the Class C
Principal Coverage Test is satisfied, the numerator of the Class C
Principal Coverage Ratio shall be calculated after giving effect to any
Collateral Principal Collections to be applied pursuant to any clause above and
this Section 11.1(b)(4) on the related Payment Date; and provided,
further, that with respect to the Class C Notes, payment of
principal not constituting Class C Cumulative Applicable Periodic Interest
Shortfall Amount shall be paid before principal constituting the Class C
Cumulative Applicable Periodic Interest Shortfall Amount, if any;


 


(5)                                If the Class A
Notes and the Class B Notes are no longer Outstanding, to pay the Class C
Cumulative Applicable Periodic Interest Shortfall Amount, to the extent that
the amounts paid pursuant to Section 11.1(a)(12) are insufficient to pay
such amounts in full thereunder;


 


146














 


(6)           If
the Class A Notes, the Class B Notes and the Class C Notes are
no longer Outstanding, to pay Periodic Interest on the Class D Notes and
any Defaulted Interest on the Class D Notes, to the extent that the
amounts paid pursuant to Section 11.1(a)(13)  are
insufficient to pay such amounts in full thereunder;


 


(7)           If
either of the Class D Coverage Tests is not satisfied as of the preceding
Calculation Date and to the extent that amounts paid pursuant to Section 11.1(a)(14)
are insufficient to cause the Class D Coverage Tests to be satisfied, to
pay principal (including any Class C Cumulative Applicable Periodic
Interest Shortfall Amount or Class D Cumulative Applicable Periodic
Interest Shortfall Amount, as applicable) of the most senior Class of
Notes then Outstanding until such Class D Coverage Test is satisfied as of
such Calculation Date or until such next most senior Class of Notes is
paid in full and so on, until such Class D Coverage Test is satisfied or
until the Class D Notes are paid in full; provided that for purposes of determining
if the Class D Principal Coverage Test is satisfied after giving effect to
any payments under this Section 11.1(b)(7), the denominator of the Class D
Principal Coverage Ratio shall be determined after giving effect to any payment
of principal on the Notes made pursuant to any clause or subclause of Section 11.1(a) on
the related Payment Date and pursuant to any clause or subclause above and this
Section 11.1(b)(7); provided, further, that for purposes of determining if the Class D
Principal Coverage Test is satisfied, the numerator of the Class D
Principal Coverage Ratio shall be calculated after giving effect to any
Collateral Principal Collections to be applied pursuant to any clause or
subclause above and this Section 11.1(b)(7) on the related Payment
Date; and provided,
further, that with respect to (i) the Class C Notes,
payment of principal not constituting Class C Cumulative Applicable
Periodic Interest Shortfall Amount shall be paid before principal constituting the
Class C Cumulative Applicable Periodic Interest Shortfall Amount, if any;
and (ii) the Class D Notes, payment of principal not constituting Class D Cumulative
Applicable Periodic Interest Shortfall Amount shall be paid before principal
constituting the Class D Cumulative Applicable Periodic Interest Shortfall
Amount, if any;


 


(8)           if
the Class A Notes, the Class B Notes, and the Class C Notes are
no longer Outstanding, to pay the Class D Cumulative Applicable Periodic
Interest Shortfall Amount, to the extent that amounts paid pursuant to Section 11.1(a)(15)
are insufficient to pay such amounts in full thereunder;


 


(9)           If
the Class A Notes, the Class B Notes, the Class C Notes and the Class D
Notes are no longer Outstanding, to pay Periodic Interest on the Class E
Notes and any Defaulted Interest on the Class E Notes, to the extent that
the amounts paid pursuant to Section 11.1(a)(16) are insufficient to pay
such amounts in full thereunder;


 


(10)         If
either of the Class E Coverage Tests is not satisfied as of the preceding
Calculation Date and to the extent that amounts paid pursuant to Section 11.1(a)(17)
are insufficient to cause the Class E Coverage Tests to be satisfied, to
pay principal (including any Class C Cumulative Applicable Periodic
Interest Shortfall Amount, Class D Cumulative Applicable Periodic Interest
Shortfall Amount or Class E Cumulative Applicable Period Interest
Shortfall Amount, as applicable) of the most senior Class of Notes then
Outstanding until


 


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such Class E Coverage Test is satisfied as of such Calculation
Date or until such next most senior Class of Notes is paid in full and so
on, until such Class E Coverage Test is satisfied or until the Class E
Notes are paid in full; provided that for purposes of determining
if the Class E Principal Coverage Test is satisfied after giving effect to
any payments under this Section 11.1(b)(10), the denominator of the Class E
Principal Coverage Ratio shall be determined after giving effect to any payment
of principal on the Notes made pursuant to any clause or subclause of Section 11.1(a) on
the related Payment Date and pursuant to any clause or subclause above and this
Section 11.1(b)(10); provided, further, that for purposes of determining if the Class D
Principal Coverage Test is satisfied, the numerator of the Class E
Principal Coverage Ratio shall be calculated after giving effect to any
Collateral Principal Collections to be applied pursuant to any clause or
subclause above and this Section 11.1(b)(10) on the related Payment
Date; and provided,
further, that with respect to (i) the Class C Notes,
payment of principal not constituting Class C Cumulative Applicable
Periodic Interest Shortfall Amount shall be paid before principal constituting
the Class C Cumulative Applicable Periodic Interest Shortfall Amount, if
any; (ii) the Class D Notes, payment of principal not constituting Class D
Cumulative Applicable Periodic Interest Shortfall Amount shall be paid before
principal constituting the Class D Cumulative Applicable Periodic Interest
Shortfall Amount, if any; and (iii) the Class E Notes, payment of
principal not constituting Class E Cumulative Applicable Periodic Interest
Shortfall Amount shall be paid before principal constituting the Class E
Cumulative Applicable Periodic Interest Shortfall Amount, if any;


 


(11)         if
the Class A Notes, the Class B Notes, the Class C Notes and the Class D
Notes are no longer Outstanding, to pay the Class E Cumulative Applicable
Periodic Interest Shortfall Amount, to the extent that amounts paid pursuant to
Section 11.1(a)(18) are insufficient to pay such amounts in full
thereunder;


 


(12)         If
the Class A Notes, the Class B Notes, the Class C Notes, the Class D
Notes and the Class E Notes are no longer Outstanding, to pay Periodic
Interest on the Class F Notes and any Defaulted Interest on the Class F
Notes, to the extent that the amounts paid pursuant to Section 11.1(a)(19)
are insufficient to pay such amounts in full thereunder;


 


(13)         If
either of the Class F Coverage Tests is not satisfied as of the preceding
Calculation Date and to the extent that amounts paid pursuant to Section 11.1(a)(20)
are insufficient to cause the Class F Coverage Tests to be satisfied, to
pay principal (including any Class C Cumulative Applicable Periodic
Interest Shortfall Amount, Class D Cumulative Applicable Periodic Interest
Shortfall Amount, Class E Cumulative Applicable Period Interest Shortfall
Amount or Class F Cumulative Applicable Period Interest Shortfall Amount,
as applicable) of the most senior Class of Notes then Outstanding until
such Class F Coverage Test is satisfied as of such Calculation Date or
until such next most senior Class of Notes is paid in full and so on,
until such Class F Coverage Test is satisfied or until the Class F
Notes are paid in full; provided that for purposes of determining if the Class F
Principal Coverage Test is satisfied after giving effect to any payments under
this Section 11.1(b)(13), the denominator of the Class F Principal
Coverage Ratio shall be determined after giving effect to any payment of
principal on the Notes made pursuant to any clause or subclause of


 


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Section 11.1(a) on the related Payment Date and pursuant to
any clause or subclause above and this Section 11.1(b)(13); provided, further, that for purposes of
determining if the Class F Principal Coverage Test is satisfied, the
numerator of the Class F Principal Coverage Ratio shall be calculated
after giving effect to any Collateral Principal Collections to be applied
pursuant to any clause or subclause above and this Section 11.1(b)(13) on
the related Payment Date; and provided,
further, that with respect to (i) the Class C Notes,
payment of principal not constituting Class C Cumulative Applicable
Periodic Interest Shortfall Amount shall be paid before principal constituting
the Class C Cumulative Applicable Periodic Interest Shortfall Amount, if
any; (ii) the Class D Notes, payment of principal not constituting Class D
Cumulative Applicable Periodic Interest Shortfall Amount shall be paid before
principal constituting the Class D Cumulative Applicable Periodic Interest
Shortfall Amount, if any; (iii) the Class E Notes, payment of
principal not constituting Class E Cumulative Applicable Periodic Interest
Shortfall Amount shall be paid before principal constituting the Class E
Cumulative Applicable Periodic Interest Shortfall Amount, if any; and (iv) the
Class F Notes, payment of principal not constituting Class F
Cumulative Applicable Periodic Interest Shortfall Amount shall be paid before
principal constituting the Class F Cumulative Applicable Periodic Interest
Shortfall Amount, if any;


 


(14)         if
the Class A Notes, the Class B Notes, the Class C Notes, the Class D
Notes and the Class E Notes are no longer Outstanding, to pay the Class F
Cumulative Applicable Periodic Interest Shortfall Amount, to the extent that
amounts paid pursuant to Section 11.1(a)(21) are insufficient to pay such
amounts in full thereunder;


 


(15)         to
pay, in the following order:


 


(i)            on each Payment Date through and including
the last Payment Date during the Reinvestment Period, to pay to the Collection
Account:


 


(A)          to
the extent the accumulated Collateral Principal Payments for a CPP Asset Type
have not reached an aggregate amount that is equal to or greater than the
Reinvestment Threshold Amount, (x) if the Issuer, acting through the
Collateral Advisor, delivers notice that the Cash Release Conditions are
satisfied with respect to such Collateral Principal Payments for such CPP Asset
Type, then to apply all such Collateral Principal Payments in accordance with
subclause (iii) below or (y) in the absence of such notice, then to
hold such amounts for further accumulation and eventual reinvestment or
application hereunder on a later Payment Date; and


 


(B)           to
the extent the accumulated Collateral Principal Payments for a CPP Asset Type
have reached an aggregate amount that is equal to or greater than the
Reinvestment Threshold Amount with respect to such CPP Asset Type;


 


1)             during the Sixty-Day Reinvestment Window
applicable to such Collateral Principal Payments for such CPP


 


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Asset Type, to remain available in the applicable CPP Sub-Account for
application to the purchase of one or more Substitute Collateral Debt
Securities in an aggregate amount equal to the lesser of (x) the amount of
such Collateral Principal Payments and (y) the amount of such funds
available in the Collection Account; or


 


2)             after the Sixty-Day Reinvestment Window
applicable to such Collateral Principal Payments for such CPP Asset Type, then
to apply any remaining amount of such Collateral Principal Payments in
accordance with subclause (iii) below;


 


(ii)           on each Payment Date through and including the
last Payment Date during the Three-Year Period, with respect to the Sale
Proceeds received in respect of any Credit Risk Security, Defaulted Security,
Equity Security, Withholding Tax Security or Written Down Security, to pay to
the Collection Account,


 


(A)          during
the Sixty-Day Reinvestment Window applicable to such Sale Proceeds, to remain
available for application to the purchase of one or more Substitute Collateral
Debt Securities, an aggregate amount equal to the lesser of (x) such Sale
Proceeds and (y) the amount of such funds available in the Collection
Account, or


 


(B)           after
the Sixty-Day Reinvestment Window applicable to such Sale Proceeds, to apply
any remaining amount of such Sale Proceeds in accordance with subclause (iii) below;


 


(iii)          (A)          on
each Payment Date through and including the last Payment Date during the
Reinvestment Period, to pay each Class of Rated Notes in full, pro rata, if the Special Amortization Pro
Rata Condition is satisfied; and


 


(B)           otherwise, (1) if
the Special Amortization Pro Rata Condition is not satisfied or (2) with
respect to Collateral Principal Collections consisting of Unreinvested Sale
Proceeds (regardless of whether the Special Amortization Pro Rata Condition is
satisfied), to pay:


 


1)             first to the Class A-1
Notes, until the Class A-1 Notes have been paid in full;


 


2)             second, to the Class A-2
Notes, until the Class A-2 Notes have been paid in full;


 


3)             third, to the Class B
Notes, until the Class B Notes have been paid in full;


 


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4)             fourth, to the Class C
Notes, until the Class C Notes have been paid in full;


 


5)             fifth, to the Class D
Notes, until the Class D Notes have been paid in full;


 


6)             sixth, to the Class E
Notes, until the Class E Notes have been paid in full; and


 


7)             seventh, to the Class F
Notes, until the Class F Notes have been paid in full;


 


(16)         after the end of the Reinvestment Period, to
pay each Class of Rated Notes:


 


(i)            first, to the Class A-1
Notes, until the Class A-1 Notes have been paid in full;


 


(ii)           second, to the Class A-2
Notes, until the Class A-2 Notes have been paid in full;


 


(iii)          third, to the Class B
Notes, until the Class B Notes have been paid in full;


 


(iv)          fourth, to the Class C
Notes, until the Class C Notes have been paid in full;


 


(v)           fifth, to the Class D
Notes, until the Class D Notes have been paid in full;


 


(vi)          sixth, to the Class E
Notes, until the Class E Notes have been paid in full; and


 


(vii)         seventh, to the Class F
Notes, until the Class F Notes have been paid in full;


 


(17)         to pay termination payments payable to any
Hedge Counterparty upon the termination of the related Hedge Agreement, pro rata,  if such termination
occurred solely as the result of an event of default or a termination event
with respect to any Hedge Counterparty as Defaulting Party or sole Affected
Party, as the case may be, to the extent that the amounts paid pursuant to Section 11.1(a)(22)
are insufficient to pay such amounts in full thereunder;


 


(18)         to pay, in the following order:


 


(i)            any
due and unpaid Trustee Fee, Trustee Expenses, and any due Income Note Paying
Agent Fee and any other unpaid Administrative Expenses, including amounts
payable to the Collateral Advisor under the Collateral Advisory Agreement but
excluding the Collateral Advisory Fee, in each case, in the same order of
priority as provided in Section 11.1(b)(1) above and to the extent
not paid in full under clause (1) above and to the


 


151

















 


extent that the amounts paid pursuant to Section 11.1(a)(1) and
(23) are insufficient to pay such amounts in full thereunder; and


 


(ii)           on a pro rata basis, any due and unpaid
expenses and other liabilities of the Co-Issuers to the extent not paid under Section 11.1(b)(1) above
and to the extent that the amounts paid pursuant to Section 11.1(a)(1) and
(23) are insufficient to pay such amounts in full thereunder, whether as a
result of an amount limitation imposed thereunder or otherwise;


 


(19)         to
pay the Subordinate Collateral Advisory Fee with respect to such Payment Date
and any due and unpaid Subordinate Collateral Advisory Fee with respect to a
previous Payment Date that was not paid on a previous Payment Date, to the
extent that the amounts paid pursuant to Section 11.1(a)(24) are
insufficient to pay such amounts in full thereunder; and


 


(20)         all
Income Note Excess Funds to the Income Note Paying Agent, on behalf of the
Issuer, for distributions on the Income Notes in accordance with the Income
Note Paying Agency Agreement.


 


(c)           If an Event of Default has occurred and is
continuing, on the date or dates determined by the Trustee, the Trustee will
pay, from all collections from, and proceeds of the sale or liquidation of, the
Collateral, in the following order:


 


(1)           amounts
corresponding to the amounts set forth in clauses Section 11.1(a)(1) through
(3), and (to the extent not covered by Section 11.1(a)(1) through
(3)) Section 11.1(b)(1);


 


(2)           the
Periodic Interest on the Class A-1 Notes (including Defaulted Interest on
such Class A-1 Notes, if any);


 


(3)           outstanding
principal on the Class A-1 Notes until paid in full;


 


(4)           the
Periodic Interest on the Class A-2 Notes (including Defaulted Interest on
such Class A-2 Notes, if any);


 


(5)           outstanding
principal on the Class A-2 Notes until paid in full;


 


(6)           the
Periodic Interest on the Class B Notes
(including Defaulted Interest on the Class B Notes, if any) and then outstanding principal on the Class B Notes until paid in full;


 


(7)           the
Periodic Interest on the Class C Notes (including Defaulted Interest on
the Class C Notes, if any) and then outstanding principal on the Class C
Notes (including Class C Cumulative Applicable Periodic Interest Shortfall
Amount, if any) until paid in full;


 


(8)           the
Periodic Interest on the Class D Notes (including Defaulted Interest on
the Class D Notes, if any) and then outstanding principal on the Class D
Notes (including Class D Cumulative Applicable Periodic Interest Shortfall
Amount, if any) until paid in full;


 


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(9)           the
Periodic Interest on the Class E Notes (including Defaulted Interest on
the Class E Notes, if any) and then outstanding principal on the Class E
Notes (including Class E Cumulative Applicable Periodic Interest Shortfall
Amount, if any) until paid in full;


 


(10)         the
Periodic Interest on the Class F Notes (including Defaulted Interest on
the Class F Notes, if any) and then outstanding principal on the Class F
Notes (including Class F Cumulative Applicable Periodic Interest Shortfall
Amount, if any) until paid in full;


 


(11)         amounts
corresponding to the amounts set forth in Section 11.1(a)(22) through
(24), and Section 11.1(b)(17) through (19); and


 


(12)         to
the Income Note Paying Agent, any remaining amounts for distributions on the
Income Notes as set forth in Section 11.1(a)(26) and Section 11.1(b)(20).


 


(d)           Not
later than 12:00 p.m., New York time, on or before the Business Day
preceding each Payment Date, the Issuer shall, pursuant to Section 10,
remit or cause to be remitted to the Trustee for deposit in the Payment Account
an amount of Cash sufficient to pay the amounts described in Section 11.1(a) and
11.1(b) required to be paid on such Payment Date.


 


(e)           If,
on any Payment Date, the amount available in the Payment Account from amounts
received in the related Due Period is insufficient to make the full amount of
the disbursements required by the statements furnished by the Issuer pursuant
to Section 10.11(b), the Trustee shall make the disbursements called for
in the order and according to the priority set forth under Section 11.1(a) and
11.1(b), subject to Section 13.1, to the extent funds are available
therefor.


 


(f)            Except
as otherwise expressly provided in this Section 11.1, if on any Payment
Date the amount of funds is insufficient to make the full amount of the
disbursements required by any clause or subclause of Section 11.1(a) or
11.1(b) to different Persons, the Trustee shall make the disbursements
called for by such clause or subclause ratably in accordance with the
respective amounts of such disbursements then due and payable to the extent
funds are available therefor.


 


(g)           With
respect to principal payments of the Class C Notes in connection with a
mandatory redemption pursuant to Section 11.1(a)(7), (11), (14), (17) or
(20) and pursuant to Section 11.1(b)(2), (4), (7), (10) or (13), payment
of principal not constituting the Class C Cumulative Applicable Periodic
Interest Shortfall Amount shall be paid before principal constituting the Class C
Cumulative Applicable Periodic Interest Shortfall Amount, if any.


 


(h)           Any
amounts to be paid to the Income Note Paying Agent pursuant to Section 11.1(a)(26)
or to Section 11.1(b)(20) will be released from the lien of this
Indenture.


 


(i)            No
Collateral Principal Collections will be paid to a Class of Rated Notes in
accordance with the Priority of Payments on a Payment Date if, after giving
effect to such payment, any Principal Coverage Test for a more Senior Class of
Rated Notes would have failed.


 


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ARTICLE XII


 


PURCHASE AND SALE OF COLLATERAL DEBT
SECURITIES


 


12.1.        SALE OF COLLATERAL DEBT
SECURITIES 


 


(a)           Sale of
Collateral Debt Securities.


 


(1)           Subject to the satisfaction of the
conditions specified in Section 10.11 as applicable, if the Collateral
Advisor, on behalf of the Issuer, pursuant to this Article 12, shall
direct the Trustee to sell any Temporary Ramp-Up Security, Defaulted Security,
Equity Security, Credit Risk Security, Written Down Security or Withholding Tax
Security, the Trustee shall sell in the manner directed by the Collateral
Advisor, any Temporary Ramp-Up Security, Defaulted Security, Equity Security,
Credit Risk Security, Written Down Security or Withholding Tax Security.


 


(2)           During the Ramp-Up Period, and in any event,
no later than the Effective Date, the Collateral Advisor shall direct the
Issuer to sell or otherwise dispose of all Temporary Ramp-Up Securities. Sale
Proceeds received with respect to Temporary Ramp-Up Securities shall be
reinvested only in Ramp-Up Collateral Debt Securities that are Fixed Rate
Collateral Debt Securities, provided that any Sale Proceeds received with
respect to Temporary Ramp-Up Securities that are not reinvested in Fixed Rate
Collateral Debt Securities, other than not more than U.S.$500,000 of such Sale
Proceeds that may be reinvested in Substitute Collateral Debt Securities that
are not Fixed Rate Collateral Debt Securities, shall be treated as Collateral
Principal Collections and shall be applied by the Issuer to the making of
payments on the Notes, subject to and in accordance with the Priority of
Payments, on the Payment Date immediately following the Effective Date.


 


(3)           The Collateral Advisor shall direct the
Issuer to sell or otherwise dispose of any Collateral Debt Security that is an
Equity Security as soon as practicable after such Collateral Debt Security
becomes an Equity Security. The Collateral Advisor may direct the Issuer to
sell or otherwise dispose of all or a portion of any Collateral Debt Security
that is a Defaulted Security, a Written Down Security or a Withholding Tax
Security; provided that the Collateral Advisor shall have (i) certified
that such Collateral Debt Security is a Defaulted Security, a Written Down
Security or a Withholding Tax Security and (ii) declared within five (5) Business
Days following such Collateral Debt Security becoming a Defaulted Security, a
Written Down Security or a Withholding Tax Security whether it has elected to
direct the Issuer to sell or otherwise dispose of all or a specified portion of
such Collateral Debt Security. No such sale or other disposition is permitted
for the primary purpose of recognizing gains or decreasing losses resulting
from market value changes, or if the Issuer or the Collateral Advisor believes
that any such sale or other disposition would result, and no such sale or
disposition does result, in the reduction or withdrawal of the then-current
rating on any Class of Rated Notes by any Rating Agency. If the Collateral
Advisor elects to direct the Issuer to sell or otherwise dispose of any
Defaulted Security, Written Down Security or Withholding Tax Security as
described above, such Collateral Debt Security (or specified portion thereof)
is


 


154

















 


required
to be sold or otherwise disposed of within twelve (12) months following such
election. If the Collateral Advisor does not elect within such five (5) Business
Days to direct the Issuer to sell or otherwise dispose of any Defaulted Security, Written Down Security or Withholding Tax
Security, such Collateral Debt Security shall not be sold or otherwise disposed
of and shall remain part of the Collateral. Any decision by the Collateral Advisor to sell or not to
sell any Collateral Debt Security within five (5) Business Days of such
Collateral Debt Security first becoming either a Defaulted Security or a
Written Down Security or a Withholding Tax Security shall not thereafter be
changed by the Collateral Advisor or the Issuer for any reason.


 


(4)           The
Collateral Advisor may direct the Issuer to sell or otherwise dispose of all or
any portion of any Collateral Debt Security that is a Credit Risk Security; provided that the Collateral Advisor shall have (i) certified
that a Credit Risk Event has occurred and (ii) declared within five (5) Business
Days following the occurrence of any such Credit Risk Event that it has elected
to direct the Issuer to sell or otherwise dispose of all or a portion of such
Collateral Debt Security. No such sale or other disposition is permitted for
the primary purpose of recognizing gains or decreasing losses resulting from
market value changes, or if the Issuer or the Collateral Advisor believes that
any such sale or other disposition would result, and no such sale or
disposition does result, in the reduction or withdrawal of the then-current
rating on any Class of Rated Notes by any Rating Agency. If the Collateral
Advisor elects to direct the Issuer to sell or otherwise dispose of any Credit
Risk Security as described above, such Collateral Debt Security is required to
be sold or otherwise disposed of as soon as reasonably practicable and in any
event within 30 days following such election. If the Collateral Advisor does
not elect within such five (5) Business Days following any Credit Risk
Event to direct the Issuer to sell or otherwise dispose of any Collateral Debt
Security, such Credit Risk Security shall not be sold or otherwise disposed of
and shall remain part of the Collateral, unless a subsequent Credit Risk Event
occurs with respect to such Collateral Debt Security (or such Collateral Debt
Security subsequently becomes a Defaulted Security, Written Down Security or
Withholding Tax Security) and the Collateral Advisor shall have made the
certifications and declarations described above.


 


(5)           In
the event of a Redemption, the Collateral Advisor shall direct the Trustee to
sell Collateral Debt Securities without regard to the foregoing limitations; provided that the Sale Proceeds therefrom and other
amounts available therefor will be at least sufficient to pay certain expenses,
including all amounts due under any Hedge Agreements, and redeem, in whole but
not in part, the Notes at the applicable Redemption Prices; and provided, further, that such Sale Proceeds are used to make such
a Redemption.


 


(6)           The
Collateral Advisor shall sell any Collateral Debt Security pursuant to this Section 12
only at a price that, in its judgment, is not substantially less than the
market value of such Collateral Debt Security at the time of such sale.


 


(b)           Reinvestment of Sale Proceeds and
Replacement of Collateral Debt Securities. Following the Closing Date and during (i) the Ramp-Up Period,
subject to the Ramp-Up Criteria, and (ii) the Three-Year Period, and
subject to the satisfaction of the Eligibility Criteria and the Replacement
Criteria in all cases during the periods set forth in (i) and


 


155

















 


(ii) above, the Collateral Advisor, acting on behalf of the Issuer
shall be required, on a best efforts basis, to instruct the Trustee, within the
Sixty-Day Reinvestment Window, to reinvest Sale Proceeds received at any time
from the sale of Collateral Debt Securities that are Defaulted Securities,
Equity Securities, Credit Risk Securities, Written Down Securities or
Withholding Tax Securities in Substitute Collateral Debt Securities with an
aggregate purchase price up to the amount of the Sale Proceeds; provided, however, that
prior to any such acquisition of Substitute Collateral Debt Securities by or on
behalf of the Issuer in the manner described above, the following conditions
are satisfied on the date of such acquisition:


 


(1)           the
cumulative amount reinvested in Substitute Collateral Debt Securities with Sale
Proceeds received in the manner specified above does not exceed the Five
Percent Limit;


 


(2)           any
such acquisition is not for the primary purpose of recognizing gains or
decreasing losses resulting from market value changes;


 


(3)           neither
the Issuer nor the Collateral Advisor believes that any such acquisition will
result, and no such acquisition does result, in a reduction or withdrawal of
the then-current rating on any Class of Rated Notes by any Rating Agency;


 


(4)           the
rating by any Rating Agency on (A) the Class A Notes is one or more
notches below the rating assigned to the Class A Notes by such Rating
Agency on the Closing Date; or (B) any other Class of Rated Notes is
two or more notches below the rating assigned to such Class of Rated Notes
by such Rating Agency on the Closing Date; and


 


(5)           the
Replacement Criteria are satisfied;


 


In addition, on each date of purchase of a Substitute Collateral Debt
Security, each of the Coverage Tests and the Collateral Quality Tests will be
required to remain satisfied after giving effect to the purchase of such
Substitute Collateral Debt Security (which date of purchase shall be deemed to
be the date on which the Issuer enters into commitments to purchase such
Substitute Collateral Debt Security), or, if immediately prior to giving effect
to such purchase any of the foregoing tests was not satisfied, no such tests
that were not satisfied shall be made worse after giving effect to such
proposed purchase and no such Coverage Tests or Collateral Quality Tests that
were satisfied shall fail to be satisfied after giving effect to such purchase.


 


If all such Sale Proceeds related to the sale of any Defaulted
Securities, Equity Securities, Credit Risk Securities, Written Down Securities
or Withholding Tax Securities are not reinvested in Substitute Collateral Debt
Securities as described above for any reason within the Sixty Day Reinvestment
Window, the Issuer will be obligated to reinvest such Sale Proceeds in Eligible
Investments until the next succeeding Payment Date, at which time the Trustee
on behalf of the Issuer will distribute such Sale Proceeds in accordance with Section 11.1
of this Indenture.


 


(c)           Collateral
Debt Security Principal Payments and Reinvestment Criteria. Prior to
the end of the Reinvestment Period, the Issuer will use its best efforts to
reinvest the Collateral Principal Payments in the applicable CPP Sub-Account
which were in such CPP Sub-Account at the time the Reinvestment Threshold
Amount was satisfied for any


 


156

















 


particular CPP Asset Type in accordance with the Reinvestment Criteria
during the Sixty-Day Reinvestment Window following any date on which the amount
of Collateral Principal Payments in such CPP Sub-Account becomes equal to or
greater than the Reinvestment Threshold Amount.


 


To the extent accumulated Collateral Principal Payments for any CPP
Asset Type that are on deposit with the Trustee and as to which the
Reinvestment Trigger Date has not occurred are below the Reinvestment Threshold
Amount, within five (5) Business Days subsequent to receipt of any
Collateral Principal Payment for such CPP Asset Type, in the event the
Collateral Advisor on behalf of the Issuer determines that any reinvestment in
Substitute Collateral Debt Securities of the same CPP Asset Type (i) would
not at such time be practicable on commercially reasonably terms or (ii) would
decrease compliance with any of the Coverage Tests or the Collateral Quality
Tests of the portfolio of the Collateral Debt Securities ((i) and (ii) collectively,
the Cash Release Conditions), the Issuer will have the right to elect that
all (but not less than all) of such Collateral Principal Payments not be
accumulated for reinvestment in Substitute Collateral Debt Securities and
instead be reinvested in Eligible Investments until the next succeeding Payment
Date, whereupon the Issuer will distribute such Collateral Principal Payments
in accordance with the Priority of Payments. Where the Cash Release Conditions
are not satisfied, such Collateral Principal Payments will be held in the
applicable CPP Sub- Account corresponding to such CPP Asset Type until the
Reinvestment Threshold Amount for the applicable CPP Asset Type is satisfied,
and prior to such time will not be distributed.


 


If accumulated Collateral Principal Payments exceed the Reinvestment
Threshold Amount for a CPP Asset Type, the Collateral Advisor will be required
to use its best efforts to direct the Issuer to reinvest, within 60 calendar
days of the Reinvestment Trigger Date, such Collateral Principal Payments in
Substitute Collateral Debt Securities (which shall in all cases satisfy the
Eligibility Criteria) in accordance with the Reinvestment Criteria; provided, however, that
Collateral Principal Payments comprised of Collateral Principal Collections
from Substitute Collateral Debt Securities may not be invested further in
Substitute Collateral Debt Securities and must instead be reinvested in
Eligible Investments until the next succeeding Payment Date, whereupon the
Issuer will distribute such Collateral Principal Payments as Collateral
Principal Collections in accordance with Section 11.1 hereof; and provided, further, that
(i) Collateral Principal Payments may not be reinvested in any Substitute
Collateral Debt Securities to the extent that on any date the cumulative amount
of proceeds from Collateral Principal Payments that have been reinvested
through such date would exceed an amount equal to 35% of the CDS Principal
Balance as of the Effective Date, in which case the Issuer will distribute such
excess of Collateral Principal Payments (and any subsequent Collateral
Principal Payments) in accordance with Section 11.1(b), and (ii) a
reinvestment of any Collateral Principal Payment in any Substitute Collateral
Debt Security is only permitted to occur on any date if (A) any such
acquisition is not for the primary purpose of recognizing gains or decreasing
losses resulting from market value changes and (B) neither the Issuer nor the
Collateral Advisor believes that any such acquisition will result, and no such
acquisition does result, in a reduction or withdrawal of the then-current
rating on any Class of Rated Notes by any Rating Agency. Unless otherwise
notified by the Collateral Advisor, the Trustee will be entitled to act on the
basis that no such acquisition will result in a reduction or withdrawal of the then-current
rating on any Class of Rated Note by any Rating Agency.


 


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In addition, on each date of purchase of a Substitute Collateral Debt
Security, each of the Coverage Tests and the Collateral Quality Tests will be
required to remain satisfied after giving effect to the purchase of such
Substitute Collateral Debt Security (which date of purchase shall be deemed to
be the date on which the Issuer enters into commitments to purchase such
Substitute Collateral Debt Security), or if immediately prior to giving effect
to such purchase any of the foregoing tests was not satisfied, no such tests
that were not satisfied shall be made worse after giving effect to such
proposed purchase and no such Coverage Tests or Collateral Quality Tests that
were satisfied shall fail to be satisfied after giving effect to such purchase.


 


If all Collateral Principal Payments for which the Reinvestment Trigger
Date has occurred are not reinvested in Substitute Collateral Debt Securities
as described above for any reason within the Sixty-Day Reinvestment Window,
then such Collateral Principal Payments will be required to be reinvested in
Eligible Investments until the Business Day immediately preceding the next
succeeding Payment Date, whereupon the Issuer will be required to transfer such
amounts to the Payment Account (which amounts will at such time become fungible
with all other amounts contained in the Payment Account) and distribute such
amounts in accordance with Section 11.1(b).


 


In the event of an Optional Redemption, Auction Call Redemption or Tax
Redemption of the Notes in whole, but not in part, the Collateral Advisor will
direct the Trustee to sell Collateral Debt Securities without regard to the
foregoing limitations; provided that such sales
are conducted in accordance with the Auction Procedures and Section 9.2.


 


12.2.        PORTFOLIO
CHARACTERISTICS


 


Except as provided in Section 12.3(c), a security will be eligible
for inclusion in the Collateral as a Pledged Collateral Debt Security only if,
as evidenced by an Officer’s certificate from the Collateral Advisor to the
Trustee, each of the following eligibility criteria is satisfied immediately
after the Issuer Grants such Collateral Debt Security to the Trustee (collectively,
the Eligibility Criteria):


 


(a)           it
is issued by an issuer incorporated or organized under the laws of the United
States, the Bahamas, Bermuda, the Cayman Islands, the British Virgin Islands,
the Netherlands Antilles, Jersey, Guernsey or Luxembourg or, it is issued by a
Qualifying Foreign Obligor;


 


(b)           it
is U.S. Dollar-denominated, and it is not convertible into, or payable in, any
other currency;


 


(c)           it
is one of the Specified Types of Collateral Debt Securities;


 


(d)           it
has an S&P Rating (which rating does not include a “p”, “pi”, “q”, “t” or
“r” subscript) and a Fitch Rating;


 


(e)           the
acquisition, ownership, enforcement and disposition of such security will not
cause the Issuer to be treated as engaged in a U.S. trade or business for U.S.
federal income tax purposes or otherwise to be subject to tax on a net income
basis in any jurisdiction outside the Issuer’s jurisdiction of incorporation
(other than as attributable to property received in connection with a
foreclosure, as permitted under the Transaction Documents);


 


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(f)            the
payments on such security are not subject to withholding tax unless the issuer
thereof or the obligor thereon is required to make additional payments
sufficient to cover any withholding tax imposed at any time on payments made to
the Issuer with respect thereto;


 


(g)           its
acquisition would not cause the Issuer or the pool of Collateral to be required
to register as an investment company under the Investment Company Act;


 


(h)           it
is not a security that is ineligible under its Underlying Instruments to be
purchased by the Issuer and pledged to the Trustee;


 


(i)            it
is not an insurance-linked debt instrument containing a provision pursuant to
which the issuer’s obligation to pay interest or principal is deferred or
forgiven in the event of loss due to certain natural catastrophes specified in
the Underlying Instruments;


 


(j)            it
provides for the payment of principal at not less than par upon maturity;


 


(k)           its
Underlying Instruments do not obligate the Issuer to make any future advances
or any other payment except the purchase price thereof;


 


(1)            it is not a security
with respect to which, in the reasonable judgment of the Collateral Advisor,
the timely repayment of principal and interest is subject to substantial
non-credit related risks;


 


(m)          it
is not an Interest Only Security;


 


(n)           it
is not a security issued by an Emerging Market Issuer;


 


(o)           it
is not a security that has an S&P Rating lower than “B-” or a Fitch Rating
lower than “B-” at the time of purchase;


 


(p)           it
is not a security that has, at the time of purchase, any deferred or
capitalized interest;


 


(q)           it
is not a security that, at the time it is purchased, is a Credit Risk Security,
a Defaulted Security, a Written Down Security or a Deferred Interest PIK Bond;


 


(r)            it
is not a Synthetic Security;


 


(s)           it
is not a Real Estate Interest with a loan-to-value ratio of greater than 85% on
the underlying collateral; provided that, if such Real Estate Interest is a
Mezzanine Loan, it will have a Rating of at least “B-”(or its equivalent) from
a Rating Agency; provided further that all such Mezzanine Loans with a Rating
of less than “BB-” (or its equivalent) from a Rating Agency will not exceed 5%
of the CDS Principal Balance;


 


(t)            it
is not a REIT Debt Security that has an S&P Rating lower than “BB-” or a
Fitch Rating lower than “BB-” at the time of purchase;


 


(u)           it
is not a Real Estate CDO Security that has an S&P Rating lower than “BB-” or
a Fitch Rating lower than “BB-” at the time of purchase;


 


(v)           it
is not a CMBS Credit Tenant Lease Security that has an S&P Rating lower
than “BB-” or a Fitch Rating lower than “BB-” at the time of purchase;


 


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(w)          at
the time the security is purchased by the Issuer:


 


(1)           it
is not a security issued by an issuer located in a country that imposes foreign
exchange controls that effectively limit the availability or use of U.S.
Dollars to make when due the scheduled payments of principal and interest on such
security;


 


(2)           it
is not, and does not provide for conversion or exchange into, Margin Stock at
any time over its life;


 


(3)           it
is not an obligation which (1) was incurred in connection with a merger,
acquisition, consolidation or sale of all or substantially all of the assets of
a person or entity or similar transaction and (2) by its terms is required
to be repaid within one year of the incurrence thereof with proceeds from
additional borrowings or other refinancing;


 


(4)           it
is not the subject of (1) any offer by the issuer of such security or by
any other person made to all of the holders of such security to purchase or
otherwise acquire such security (other than pursuant to any redemption in
accordance with the terms of the related underlying instruments) or to convert
or exchange such security into or for cash, securities or any other type of
consideration or (2) any solicitation by an issuer of such security or any
other person to amend, modify or waive any provision of such security or any
related underlying instrument, and has not been called for redemption;


 


(5)           it
is not an Equity Security;


 


(6)           it
is not a security that by the terms of its underlying instruments provides for
conversion or exchange (whether mandatory or at the option of the issuer or the
holder thereof) into equity capital at any time prior to its maturity;


 


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


 


(8)           it
is not a first loss tranche of any securitization that does not have an S&P
Rating (as defined in clause (i) of the definition of S&P Rating) that
addresses the obligation of the obligor (or guarantor, if applicable) to pay
principal of and interest on the relevant Collateral Debt Security in full,
which ratings are monitored on an ongoing basis by the relevant Rating Agency;


 


(9)           it
is not a security that provides for the payment of interest in cash less
frequently than semi-annually;


 


(10)         if
it is a Mezzanine Loan, (a) the Mezzanine Loan is subject to servicing,
custodial and/or similar arrangements customary for Mezzanine Loans as
determined by the Collateral Advisor in its reasonable discretion, (b) the
requirements set forth in the Indenture regarding the representations and
warranties with respect to the underlying mortgaged property and the Mezzanine
Loan have been met and the terms of the Underlying Instruments are consistent
with the terms of similar Underlying Instruments with respect to Mezzanine
Loans as determined by the Collateral Advisor in its reasonable discretion; and


 


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(11)         if
it is a Deemed Floating Rate Collateral Debt Security, the Deemed Floating Asset
Hedge entered into with respect to such Deemed Floating Rate Collateral Debt
Security conforms to all requirements set forth in the definition of “Deemed
Floating Asset Hedge”; and


 


(x)            it
is not a Prohibited Asset;


 


provided that  notwithstanding
anything to the contrary herein, the Issuer may, while attempting to dispose of
property acquired in foreclosure or similar circumstances, make an election
under Section 882(d) of the Code to treat the income related to real
property located in the United States as income that is effectively connected
with a U.S. trade or business; provided
further that except for property acquired by the Issuer in
foreclosure or similar circumstances and for property expressly permitted to be
acquired by the Issuer, the Issuer may not purchase, acquire or hold (whether
as part of a unit with a Collateral Debt Security, in exchange for a Collateral
Debt Security or otherwise) any asset unless the underlying documents for such
asset specify, or the Issuer has received advice of tax counsel of nationally
recognized standing in the United States experienced in such matters to the
effect that, under the relevant facts and circumstances with respect to such
transaction, for U.S. federal income tax purposes, (i) the obligation or
security is indebtedness, (ii) all obligors and issuers of asset are
classified as corporations (and no elections have been made to the contrary), (iii) no
obligor on or issuer of the asset is engaged in the conduct of a trade or
business within the United States, or (iv) all obligors and issuers of the
asset qualify as “grantor trusts”, and all of the assets of the obligors and issuers
of the asset consist of obligations or securities that the Issuer could have
directly acquired and held as assets (but for restrictions related to
withholding taxes) and, notwithstanding anything to the contrary herein, the
Issuer shall not purchase, acquire or hold any asset the gain from the
disposition of which will be subject to U.S. federal income or withholding tax
under Section 897 or Section 1445 of the Code and the Treasury
regulations promulgated thereunder.


 


12.3.        CONDITIONS APPLICABLE TO ALL
TRANSACTIONS INVOLVING SALE OR GRANT


 


(a)           Any
transaction effected under Section 5, Section 9, Section 10.2 or
Section 12.1 shall be conducted on an arms’ length basis and if effected
with the Issuer, the Trustee, the Collateral Advisor or any Affiliate of any of
the foregoing, shall be effected in a secondary market transaction on terms at
least as favorable to the Rated Noteholders as would be the case if such Person
were not so Affiliated; provided that
any disposition of a Collateral Debt Security in accordance with Section 12.1
shall be deemed to comply with this Section 12.3(a). The Trustee shall
have no responsibility to oversee compliance with this clause by the other
parties.


 


(b)           Upon
any purchase or substitution pursuant to this Section 12, all of the Issuer’s
right, title and interest to the Pledged Security or Securities shall be, and
hereby is, Granted to the Trustee pursuant to this Indenture, such Pledged
Security or Securities shall be registered in the name of the Trustee, and, if
applicable, the Trustee shall receive such Pledged Security or Securities. The
Trustee shall receive, not later than the date of delivery of any Pledged
Security pursuant to a purchase under this Section 12, (a) an Officer’s
Certificate of the Collateral Advisor certifying (1) compliance with the
Reinvestment Criteria in accordance with Section 12.1(d), (2) that the
Collateral Debt Security to be sold constitutes an Equity Security, a Defaulted
Security, a Credit Risk Security, a Withholding Tax Security or a Written Down
Security and (3) that any security to be purchased satisfies the definition of Collateral
Debt Security and (b) an Officer’s Certificate of the Collateral Advisor on
behalf of the Issuer containing the statements set forth in Section 3.2(b)(2) through
(4), (6) and (7).


 


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(c)                                  Notwithstanding
anything contained in this Section 12 to the contrary, the Issuer shall,
subject to Section 12.3(d), have the right to effect any transaction to
which the Initial Hedge Counterparty and Holders of Rated Notes evidencing 100%
of the Aggregate Outstanding Amount of each Class of Rated Notes, and each
Income Noteholder has consented, and of which each Rating Agency has been
notified in advance.


 


(d)                                 Except
as specifically provided in this Indenture, in no event may the Issuer (i) engage
in any business or activity that would cause the Issuer to be treated as
engaged in a U.S. trade or business for U.S. federal income tax purposes or (ii) acquire
or hold any asset that is an equity interest in an entity that is treated as a
partnership engaged in a U.S. trade or business for U.S. federal income tax
purposes or the acquisition or ownership of which otherwise would subject the
Issuer to net income tax in any jurisdiction outside its jurisdiction of
incorporation. The foregoing shall not, however, preclude the Issuer from
holding Equity Securities or securities received in an Offer pending their sale
in accordance with Section 12.1(a)(1).


 


ARTICLE XIII


 


SECURED PARTIES’ RELATIONS


 


13.1.                      SUBORDINATION


 


(a)                                  Anything
in this Indenture or the Rated Notes to the contrary notwithstanding, the
Issuer and the Holders of the Rated Notes agree for the benefit of the Initial
Hedge Counterparty that the Rated Notes and the Issuer’s rights in and to the
Collateral (solely with respect to all amounts payable to such Initial Hedge
Counterparty pursuant to Section 11.1(a)(3)), the Subordinate Interests)  shall be
subordinate and junior to the rights of such Hedge Counterparty with respect to
payments to be made to such Initial Hedge Counterparty pursuant to the initial
Hedge Agreement to the extent and in the manner set forth in Section 11.1(a)(3) and
hereinafter provided. If any Event of Default (including an Event of Default
specified in Section 5.1(g) or (h)) has occurred and has not been
cured or waived all amounts payable to the Initial Hedge Counterparty pursuant
to Section 11.1(a)(3) shall be paid in Cash or, to the extent the
Initial Hedge Counterparty consents, other than in Cash, before any further
payment or distribution is made on account of the Subordinate Interests.


 


(b)                                 Anything
in this Indenture or the Rated Notes to the contrary notwithstanding, the
Issuer and the Holders of the Class A-2 Notes, the Class B Notes, the
Class C Notes, the Class D Notes, the Class E Notes and the Class F
Notes agree for the benefit of the Holders of the Class A-1 Notes that 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 the Issuer’s
rights in and to the Collateral (with respect to the Class A-1 Notes, the
Subordinate Interests) shall be subordinate and junior to the Class A-1
Notes to the extent and in the manner set forth in this Indenture, including as
set forth in Section 11.1(a) and hereinafter provided. If any Event
of Default (including an Event of Default specified in Section 5.1(g) or
(h)) has occurred and has not been cured or waived, the Class A-1 Notes
shall be paid in full in Cash or, to the extent a Majority of the Class A-1
Notes consent, other than in Cash, before any further payment or distribution
is made on account of the Subordinate Interests. The Holders of Rated Notes
evidencing Subordinate Interests and the holders of equity in the Issuer and
the Co-Issuer agree, for the benefit of the Holders of the Class A-1
Notes, not to cause the filing of a petition in bankruptcy against the Issuer
or the Co-Issuer


 


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for failure to pay to them amounts due under the Rated Notes evidencing
such Subordinate Interests or hereunder until the payment in full of the Class A-1
Notes and not before one year and one day has elapsed since such payment or, if
longer, the applicable preference period then in effect, including any period
established pursuant to the laws of the Cayman Islands.


 


(c)                                  Anything
in this Indenture or the Rated Notes to the contrary notwithstanding, the
Issuer and the Holders of the Class B Notes, the Class C Notes, the Class D
Notes, the Class E Notes and the Class F Notes agree for the benefit
of the Holders of the Class A Notes that the Class B  Notes, the Class C Notes, the Class D
Notes, the Class E Notes and the Class F Notes and the Issuer’s
rights in and to the Collateral (with respect to the Class A Notes, the
Subordinate Interests) shall be subordinate and junior to the Class A
Notes to the extent and in the manner set forth in this Indenture, including as
set forth in Section 11.1(a) and hereinafter provided. If any Event
of Default (including an Event of Default specified in Section 5.1(g) or
(h)) has occurred and has not been cured or waived, the Class A Notes
shall be paid in full in Cash or, to the extent a Majority of the Class A
Notes consent, other than in Cash, before any further payment or distribution
is made on account of the Subordinate Interests. The Holders of Rated Notes
evidencing Subordinate Interests and the holders of equity in the Issuer and
the Co-Issuer agree, for the benefit of the Holders of the Class A Notes,
not to cause the filing of a petition in bankruptcy against the Issuer or the
Co-Issuer for failure to pay to them amounts due under the Rated Notes
evidencing such Subordinate Interests or hereunder until the payment in full of
the Class A Notes and not before one year and one day has elapsed since
such payment or, if longer, the applicable preference period then in effect,
including any period established pursuant to the laws of the Cayman Islands.


 


(d)                                 Anything
in this Indenture or the Rated Notes to the contrary notwithstanding, the
Issuer and the Holders of the Class C Notes, the Class D Notes, the Class E
Notes and the Class F Notes agree for the benefit of the Holders of the Class A
Notes and the Class B Notes that the Class C Notes, the Class D
Notes, the Class E Notes and the Class F Notes and the Issuer’s
rights in and to the Collateral (with respect to the Class A Notes and the
Class B Notes, the Subordinate Interests)  shall be subordinate and junior to the Class A
Notes and the Class B Notes to the extent and in the manner set forth in
this Indenture, including as set forth in Section 11.1(a) and
hereinafter provided. If any Event of Default (including an Event of Default
specified in Section 5.1(g) or (h)) has occurred and has not been
cured or waived, the Class A Notes and the Class B Notes shall be
paid in full in Cash or, to the extent a Majority of the Class A Notes and
the Class B Notes consent, other than in Cash, before any further payment
or distribution is made on account of the Subordinate Interests. The Holders of
Rated Notes evidencing Subordinate Interests and the holders of equity in the
Issuer and the Co-Issuer agree, for the benefit of the Holders of the Class A
Notes and the Class B Notes, not to cause the filing of a petition in
bankruptcy against the Issuer or the Co-Issuer for failure to pay to them
amounts due under the Rated Notes evidencing such Subordinate Interests or
hereunder until the payment in full of the Class A Notes and the Class B
Notes and not before one year and one day has elapsed since such payment or, if
longer, the applicable preference period then in effect, including any period
established pursuant to the laws of the Cayman Islands.


 


(e)                                  Anything
in this Indenture or the Rated Notes to the contrary notwithstanding, the
Issuer and the Holders of the Class D Notes, the Class E Notes and
the Class F Notes agree for the benefit of the Holders of the Class A
Notes, the Class B Notes and the Class C Notes


 


163

















 


that the Class D Notes, the Class E Notes and the Class F
Notes and the Issuer’s rights in and to the Collateral (with respect to the Class A
Notes, the Class B Notes and the Class C Notes, the Subordinate
Interests) shall be subordinate and junior to the Class A Notes, the Class B
Notes and the Class C Notes to the extent and in the manner set forth in
this Indenture including as set forth in Section 11.1(a) and
hereinafter provided. If any Event of Default (including an Event of Default
specified in Section 5.1(g) or (h)) has occurred and has not been
cured or waived the Class A Notes, the Class B Notes and the Class C
Notes shall be paid in full in Cash or, to the extent a Majority of each of the
Class A Notes, the Class B Notes and the Class C Notes consent,
other than in Cash, before any further payment or distribution is made on
account of the Subordinate Interests. The Holders of Rated Notes evidencing
Subordinate Interests and the holders of equity in the Issuer and the Co-Issuer
agree, for the benefit of the Holders of the Class A Notes, the Class B
Notes and the Class C Notes, not to cause the filing of a petition in
bankruptcy against the Issuer or the Co-Issuer for failure to pay to them
amounts due under the Rated Notes evidencing such Subordinate Interests or
hereunder until the payment in full of the Class A Notes, the Class B
Notes and the Class C Notes and not before one year and one day has
elapsed since such payment or, if longer, the applicable preference period then
in effect, including any period established pursuant to the laws of the Cayman
Islands.


 


(f)                                    Anything
in this Indenture or the Rated Notes to the contrary notwithstanding, the
Issuer and the Holders of the Class E Notes and the Class F Notes
agree for the benefit of the Holders of the Class A Notes, the Class B
Notes, the Class C Notes and the Class D Notes that the Class E
Notes and the Class F Notes and the Issuer’s rights in and to the
Collateral (with respect to the Class A Notes, the Class B Notes, the
Class C Notes and the Class D Notes, the Subordinate Interests)  shall be
subordinate and junior to the Class A Notes, the Class B Notes, the Class C
Notes and the Class D Notes to the extent and in the manner set forth in
this Indenture including as set forth in Section 11.1(a) and
hereinafter provided. If any Event of Default (including an Event of Default
specified in Section 5.1(g) or (h)) has occurred and has not been
cured or waived the Class A Notes, the Class B Notes, the Class C
Notes and the Class D Notes shall be paid in full in Cash or, to the
extent a Majority of each of Class A Notes, the Class B Notes, the Class C
Notes and the Class D Notes consent, other than in Cash, before any
further payment or distribution is made on account of the Subordinate
Interests. The Holders of Rated Notes evidencing Subordinate Interests and the
holders of equity in the Issuer and the Co-Issuer agree, for the benefit of the
Holders of the Class A Notes, the Class B Notes, the Class C
Notes and the Class D Notes, not to cause the filing of a petition in
bankruptcy against the Issuer or the Co-Issuer for failure to pay to them amounts
due under the Rated Notes evidencing such Subordinate Interests or hereunder
until the payment in full of the Class A Notes, the Class B Notes,
the Class C Notes and the Class D Notes and not before one year and
one day has elapsed since such payment or, if longer, the applicable preference
period then in effect, including any period established pursuant to the laws of
the Cayman Islands.


 


(g)                                 Anything
in this Indenture or the Rated Notes to the contrary notwithstanding, the
Issuer and the Holders of the Class F Notes agree for the benefit of the
Holders of the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes and the Class E Notes that the Class F
Notes and the Issuer’s rights in and to the Collateral (with respect to the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes
and the Class E Notes, the Subordinate Interests)  shall be subordinate and junior to the Class A
Notes, the Class B  Notes, the Class C
Notes, the Class D Notes and the Class E Notes to the extent and in
the manner set forth in this Indenture including as set forth in


 


164

















 


Section 11.1(a) and hereinafter provided. If any
Event of Default (including an Event of Default specified in Section 5.1(g) or
(h)) has occurred and has not been cured or waived the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes and the Class E
Notes shall be paid in full in Cash or, to the extent a Majority of each of Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes
and the Class E Notes consent, other than in Cash, before any further
payment or distribution is made on account of the Subordinate Interests. The
Holders of Rated Notes evidencing Subordinate Interests and the holders of equity
in the Issuer and the Co-Issuer agree, for the benefit of the Holders of the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes
and the Class E Notes, not to cause the filing of a petition in bankruptcy
against the Issuer or the Co-Issuer for failure to pay to them amounts due
under the Rated Notes evidencing such Subordinate Interests or hereunder until
the payment in full of the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes and the Class E Notes and not before one
year and one day has elapsed since such payment or, if longer, the applicable
preference period then in effect, including any period established pursuant to
the laws of the Cayman Islands.


 


(h)                                 In the event that
notwithstanding the provisions of this Indenture, any Holder of any Subordinate
Interests shall have received any payment or distribution in respect of such
Subordinate Interests contrary to the provisions of this Indenture, then,
unless and until all amounts payable to the Initial Hedge Counterparty pursuant
to Section 11.1(a)(3) or to the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes
or the Class F Notes as the case may be, shall have been paid in full in
Cash or, to the extent the Initial Hedge Counterparty or a Majority of the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes,
the Class E Notes or the Class F Notes, as the case may be, consent,
other than in Cash in accordance with this Indenture, such payment or
distribution shall be received and held in trust for the benefit of, and shall
forthwith be paid over and delivered to, the Trustee, which shall pay and
deliver the same to such Initial Hedge Counterparty or the Holders of the Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes,
the Class E Notes or the Class F Notes, as the case may be, in
accordance with this Indenture; provided that, if any such payment or
distribution is made other than in Cash, it shall be held by the Trustee as
part of the Collateral and subject in all respects to the provisions of this
Indenture, including this Section 13.1.


 


(i)                                   Each Holder of
Subordinate Interests agrees with the Initial Hedge Counterparty and all
Holders of the Class A Notes, the Class B Notes, the Class C Notes,
the Class D Notes, the Class E Notes or the Class F Notes, as
the case may be, that such Holder of Subordinate Interests shall not demand,
accept, or receive any payment or distribution in respect of such Subordinate
Interests in violation of the provisions of this Indenture including this Section 13.1;
provided that after all amounts payable pursuant to Section 11.1(a)(3) and
all amounts payable in respect of the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes
or the Class F Notes, as the case may be, have been paid in full, the
Holders of Subordinate Interests shall be fully subrogated to the rights of the
Initial Hedge Counterparty or the Holders of the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes
or the Class F Notes, as the case may be. Nothing in this Section 13.1
shall affect the obligation of the Issuer to pay Holders of Subordinate
Interests.


 


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13.2.                      STANDARD OF CONDUCT


 


In
exercising any of its or their voting rights, rights to direct and consent or
any other rights as a Secured Party under this Indenture, subject to the terms
and conditions of this Indenture, including Section 5.9, a Secured Party
or Secured Parties shall not have any obligation or duty to any Person or to
consider or take into account the interests of any Person and shall not be
liable to any Person for any action taken by it or them or at its or their
direction or any failure by it or them to act or to direct that an action be
taken, without regard to whether such action or inaction benefits or adversely
affects any Secured Party, the Issuer, or any other Person.


 


ARTICLE XIV


 


MISCELLANEOUS


 


14.1.                      FORM OF DOCUMENTS DELIVERED TO
TRUSTEE


 


In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.


 


Any
certificate or opinion of an Authorized Officer of the Issuer, the Co-Issuer or
the Collateral Advisor may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel, unless such
Authorized Officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate of an Authorized Officer of the Issuer, the Co-Issuer or the
Collateral Advisor or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
Authorized Officer of the Issuer, the Co-Issuer, the Collateral Advisor or any
other Person, stating that the information with respect to such factual matters
is in the possession of the Issuer, the Co-Issuer, the Collateral Advisor or
such other Person, unless such Authorized Officer of the Issuer, the Co-Issuer
or the Collateral Advisor or such counsel knows that the certificate or opinion
or representations with respect to such matters are erroneous. Any Opinion of
Counsel may also be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an Authorized Officer of the
Issuer, the Co-Issuer or the Collateral Advisor, stating that the information
with respect to such matters is in the possession of the Issuer, the Co-Issuer
or the Collateral Advisor, unless such counsel knows that the certificate or
opinion or representations with respect to such matters are erroneous.


 


Where
any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.


 


Whenever
in this Indenture it is provided that the absence of the occurrence and
continuation of a Default is a condition precedent to the taking of any action
by the Trustee at the request or direction of the Issuer or the Co-Issuer, then
notwithstanding that the satisfaction of such condition is a condition
precedent to the Co-Issuers’ rights to make such request or direction, the
Trustee shall be protected in acting in accordance with such request or
direction if it does not have actual knowledge of the occurrence and
continuation of such Default as provided in Section 6.1(d).


 


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14.2.                      ACTS OF RATED NOTEHOLDERS


 


(a)                                  Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Rated Noteholders may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Rated Noteholders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee, and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action or actions embodied therein and
evidenced thereby) are herein sometimes referred to as the Act  of the Rated Noteholders, signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Co-Issuers, if made in
the manner provided in this Section 14.2.


 


(b)                                 The
fact and date of the execution by any Person of any such instrument or writing
may be proved in any manner which the Trustee deems sufficient.


 


(c)                                  The
principal amount and registered numbers of Rated Notes held by any Person, and
the date of his holding the same, shall be proved by the Note Register.


 


(d)                                 Any
request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Rated Notes shall bind the Holder (and any
transferee thereof) of such Rated Note and of every Rated Note issued upon the
registration thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Trustee or the Co-Issuers
in reliance thereon, whether or not notation of such action is made upon such Rated
Note.


 


14.3.                      NOTICES, ETC., TO TRUSTEE,
THE CO-ISSUERS AND THE RATING AGENCIES


 


Any request, demand, authorization, direction, notice, consent, waiver
or Act of Rated Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:


 


(a)                                  the
Trustee or the Income Note Paying Agent by any Rated Noteholder or by the
Issuer or the Co-Issuer shall be sufficient for every purpose hereunder if in
writing and sent by facsimile in legible form and confirmed by overnight
courier service guaranteed next day delivery to the Trustee or the Income Note
Paying Agent addressed to it at 135 South LaSalle Street, Suite 1511,
Chicago, Illinois 60603, Attention: CDO Trust Services Group – N-Star Real
Estate CDO V Ltd., telephone number 312-904-7815, fax number 312-904-0524 or at
any other address previously furnished in writing to the Co-Issuers or Rated
Noteholder by the Trustee or Income Note Paying Agent;


 


(b)                                 the
Issuer by the Trustee or by any Rated Noteholder shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in writing
and mailed, first class postage prepaid, hand delivered, sent by overnight
courier service or by facsimile in legible form, to the Issuer addressed to it
at c/o Walkers SPV Limited, P.O. Box 908 GT, Walker House, Mary Street,
George Town, Grand Cayman, Cayman Islands, Attention: The Directors, or at any
other address previously furnished in writing to the Trustee by the Issuer;


 


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(c)                                  the Co-Issuer by the Trustee or by any Rated
Noteholder shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, hand delivered, sent by overnight courier service or by facsimile in
legible form, to the Co-Issuer addressed to it at c/o Puglisi &
Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19711,
Attention: Donald Puglisi, Esq., facsimile no. 302-738-7210, or at any other
address previously furnished in writing to the Trustee by the Co-Issuer;


 


(d)                                 the Rating Agencies by the Co-Issuers or the
Trustee shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, hand delivered, sent by overnight courier service or by facsimile in
legible form, (i) in the case of Fitch, addressed to Fitch Ratings, One
State Street Plaza, New York, New York 10041, facsimile no. 212-558-2618,
Attention: CDO Surveillance (e-mail: cdo.surveillance@fitchratings.com); and (ii) in
the case of S&P, addressed to S&P, 55 Water Street, 41st Floor, New
York, New York, 10041, Attention: CDO Surveillance and all Note Valuation
Reports shall be sent to S&P electronically at cdo_surveillance@sandp.com;
or


 


(e)                                  the Initial Hedge Counterparty by the
Co-Issuers or the Trustee shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing and mailed, first
class postage prepaid, hand delivered or sent by overnight courier service or
by facsimile in legible form to the Initial Hedge Counterparty addressed to it
at the address specified in the initial Hedge Agreement or at any other address
previously furnished in writing to the Issuer or the Trustee by the Initial
Hedge Counterparty;


 


(f)                                    the Collateral Advisor by the Co-Issuers or
by the Trustee or a Majority of the Controlling Class, or by the Collateral
Administrator shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and sent by facsimile in legible form
and confirmed by overnight courier service guaranteed next day delivery, or by
electronic mail (where expressly provided herein) to the Collateral Advisor
addressed to it at the address specified in the Collateral Advisory Agreement
or at any other address previously furnished in writing to the Co-Issuers or
the Trustee by the Collateral Advisor;


 


(g)                                 the Income Note Paying Agent by the Trustee
in writing sent by facsimile confirmed by overnight courier guaranteed next day
delivery;


 


(h)                                 the Placement Agents by the Co-Issuers, the
Collateral Advisor or the Trustee shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, hand delivered, sent by overnight courier
service or by telecopy in legible form, (i) to BAS addressed to Banc of
America Securities LLC, 214 North Tryon Street, 14th Floor, Charlotte, North Carolina 28255,
telecopy no. 704-386-0688, Attention: Global Structured Products and (ii) to
Morgan Stanley addressed to Morgan Stanley & Co. Incorporated, 1585
Broadway, New York, New York 10036, telecopy no. 212-507-4011, Attention:
Securitized Products Group; and


 


(i)                                   to the Repository by the Issuer pursuant to
this Indenture shall be made available to the Repository by electronic mail as
a pdf (portable document format) file to CDO Library, c/o The Bond Market
Association, 360 Madison Avenue (18th Floor), New York, NY 10017; Electronic mail
address: admin@cdolibrary.com.


 


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Delivery of any request, demand, authorization, direction, notice,
consent, waiver or Act of Rated Noteholders or other documents made as provided
above will be deemed effective: (i) if in writing and delivered in person
or by overnight courier service, on the date it is delivered; (ii) if sent
by facsimile transmission, on the date that transmission is received by the
recipient in legible form (as evidenced by the sender’s written record of a
telephone call to the recipient in which the recipient acknowledged receipt of
such facsimile transmission); and (iii) if sent by mail, on the date that
mail is delivered or its delivery is attempted; in each case, unless the date
of that delivery (or attempted delivery) or that receipt, as applicable, is not
a Business Day or that communication is delivered (or attempted) or received,
as applicable, after the close of business on a Business Day, in which case
that communication shall be deemed given and effective on the first following
day that is a Business Day.


 


14.4.                      NOTICES AND REPORTS TO RATED
NOTEHOLDERS; WAIVER


 


Except as otherwise expressly provided herein, where this Indenture
provides for a report to Holders or for a notice to Holders of Rated Notes of
any event, such notice shall be sufficiently given to Holders of Rated Notes if
in writing and mailed, first-class postage prepaid, to each Holder of a Rated
Note affected by such event, at the address of such Holder as it appears in the
Note Register, not earlier than the earliest date and not later than the latest
date, prescribed for the giving of such report or notice and such report or
notice shall be in the English language. Notwithstanding any provision to the
contrary contained herein or in any agreement or document related hereto, any
report, statement or other information to be provided by the Trustee may be
provided by providing access to the Trustee’s website containing such
information. Such reports and notices will be deemed to have been given on the
date of such mailing.


 


The Trustee will deliver to the Holder of any Rated Note shown on the
Note Register any readily available information or notice requested to be so
delivered, at the expense of the Issuer. In addition, for so long as any Class of
Rated Notes is listed on the Irish Stock Exchange and so long as the rules of
such exchange so require, notices to the Holders of such Rated Notes shall also
be given by the Trustee to the Irish Paying Agent for delivery to the Company
Announcements Office of the Irish Stock Exchange.


 


Neither the failure to mail any notice, nor any defect in any notice so
mailed, to any particular Holder of a Rated Note shall affect the sufficiency
of such notice with respect to other Holders of Rated Notes.


 


Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Rated Noteholders shall be filed with the Trustee
but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.


 


In the event that, by reason of the suspension of the regular mail
service as a result of a strike, work stoppage or similar activity, it
shall be impractical to mail notice of any event to Rated Noteholders when such
notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving such notice as shall be satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice.


 


14.5.                      EFFECT OF HEADINGS AND TABLE
OF CONTENTS


 


The Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.


 


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14.6.                    SUCCESSORS AND ASSIGNS


 


All covenants and agreements in this Indenture by the Co-Issuers shall
bind their respective successors and assigns, whether so expressed or not.
Written notice of any assignment shall be promptly provided by the Issuer to
the Initial Hedge Counterparty, the Holders of Notes of the Controlling Class and
each Rating Agency.


 


14.7.                    SEVERABILITY


 


In case any provision in this Indenture or in the Rated Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.


 


14.8.                    BENEFITS OF INDENTURE


 


The Rated Noteholders, the Initial Hedge Counterparty and each Income
Noteholder is an express third-party beneficiary of this Indenture. Nothing in
this Indenture or in the Rated Notes, expressed or implied, shall give to any
Person, other than the parties hereto and their successors hereunder, the Rated
Noteholders, the Initial Hedge Counterparty and each Income Noteholder, any
benefit or any legal or equitable right, remedy or claim under this Indenture.


 


14.9.                    GOVERNING LAW


 


This Indenture and each Rated Note shall be governed by, and construed
in accordance with, the law of the State of New York.


 


14.10.              SUBMISSION TO JURISDICTION


 


The Co-Issuers hereby irrevocably submit to the non-exclusive
jurisdiction of the Supreme Court of the State of New York sitting in Manhattan
and the U.S. District Court for the Southern District of New York, and any
court of appeal therefrom, in any action or proceeding arising out of or
relating to the Rated Notes or this Indenture, and the Co-Issuers hereby
irrevocably agree that all claims in respect of such action or proceeding may
be heard and determined in such New York State or federal court. The Co-Issuers
hereby irrevocably waive, to the fullest extent that they may legally do so,
the defense of an inconvenient forum to the maintenance of such action or
proceeding. The Co-Issuers hereby irrevocably appoint and designate CT
Corporation, 111 Eighth Avenue, 13th Floor, New York, New York 10011, or any other
Person having and maintaining a place of business in the State of New York whom
the Co-Issuers may from time to time hereafter designate as the true and lawful
attorney and duly authorized agent for acceptance of service of legal process
of the Co-Issuers. The Co-Issuers agree that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.


 


14.11.              COUNTERPARTS


 


This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.


 


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14.12.              WAIVER OF JURY TRIAL


 


EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
PROCEEDING. Each party hereby (i) certifies that no representative, agent
or attorney of the other has represented, expressly or otherwise, that the
other would not, in the event of a Proceeding, seek to enforce the foregoing
waiver and (ii) acknowledges that it has been induced to enter into this
Indenture by, among other things, the mutual waivers and certifications in this
paragraph.


 


14.13.              JUDGMENT CURRENCY


 


This is an international financing transaction in which the
specification of Dollars (the Specified Currency),  and the specification of the place
of payment, as the case may be (the Specified Place),  is
of the essence, and the Specified Currency shall be the currency of account in
all events relating to payments of or on the Rated Notes. The payment
obligations of the Co-Issuers under this Indenture and the Rated Notes shall
not be discharged by an amount paid in another currency or in another place,
whether pursuant to a judgment or otherwise, to the extent that the amount so paid
on conversion to the Specified Currency and transfer to the Specified Place
under normal banking procedures does not yield the amount of the Specified
Currency at the Specified Place. If for the purpose of obtaining judgment in
any court it is necessary to convert a sum due hereunder or the Rated Notes in
the Specified Currency into another currency (the Second Currency),  the
rate of exchange which shall be applied shall be that at which in accordance
with normal banking procedures the Trustee could purchase the Specified
Currency with the Second Currency on the Business Day next preceding that on
which such judgment is rendered. The obligation of the Co-Issuers in respect of
any such sum due from the Co-Issuers hereunder shall, notwithstanding the rate
of exchange actually applied in rendering such judgment, be discharged only to
the extent that on the Business Day following receipt by the Trustee of any sum
adjudged to be due hereunder or under the Rated Notes in the Second Currency
the Trustee may in accordance with normal banking procedures purchase and
transfer to the Specified Place the Specified Currency with the amount of the
Second Currency so adjudged to be due; and the Co-Issuers hereby, as a separate
obligation and notwithstanding any such judgment (but subject to the Priority
of Payments as if such separate obligation in respect of each Class of
Rated Notes constituted additional principal owing in respect of such Class of
Rated Notes), agree to indemnify the Trustee and each Rated Noteholder against,
and to pay the Trustee or such Rated Noteholder, as the case may be, on demand
in the Specified Currency, any difference between the sum originally due to the
Trustee or such Rated Noteholder, as the case may be, in the Specified Currency
and the amount of the Specified Currency so purchased and transferred.


 


14.14.              CONFIDENTIAL TREATMENT OF DOCUMENTS


 


Except as otherwise provided in this Indenture or as required by law or
as required to maintain the listing of the Class A Notes, Class B
Notes, the Class C Notes, the Class D Notes and the Class E
Notes on the Irish Stock Exchange, this Indenture and the Hedge Agreement shall
be treated by the Trustee and the Collateral Advisor as confidential. The
Trustee shall provide a copy of this Indenture to the Income Note Paying Agent
and to any Holder of a beneficial interest in any Rated Note upon written
request therefor certifying that it is such a Holder.


 


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ARTICLE XV


 


ASSIGNMENT OF AGREEMENTS, ETC.


 


15.1.                      ASSIGNMENT


 


The Issuer, in furtherance of the covenants of this Indenture and as
security for the Rated Notes and amounts payable to the Rated Noteholders
hereunder and the performance and observance of the provisions hereof, hereby
assigns, transfers, conveys and sets over to the Trustee, for the benefit of
the Secured Parties, all of the Issuer’s estate, right, title and interest in,
to and under the Corporate Services Agreement, the Collateral Advisory Agreement
and the Hedge Agreement, including (i) the right to give all notices,
consents and releases thereunder, (ii) the right to give all notices of
termination, including the commencement, conduct and consummation of
proceedings at law or in equity, (iii) the right to receive all notices,
accountings, consents, releases and statements thereunder and (iv) the
right to do any and all other things whatsoever that the Issuer is or may be
entitled to do thereunder; provided that nothing
herein shall obligate the Trustee to determine independently whether “cause”
exists for the removal of the Collateral Advisor pursuant to the Collateral
Advisory Agreement. For the avoidance of doubt, in no event shall the Trustee
be required to perform the obligations of the Collateral Advisor under the
Collateral Advisory Agreement.


 


15.2.                      No IMPAIRMENT


 


The assignment made hereby is executed as collateral security, and the
execution and delivery hereby shall not in any way impair or diminish the
obligations of the Issuer under the provisions of the Corporate Services
Agreement, the Collateral Advisory Agreement or the Hedge Agreement.


 


15.3.                      TERMINATION, ETC.


 


Upon the redemption and cancellation of the Rated Notes and the payment
of all other Secured Obligations and the release of the Collateral from the
lien of this Indenture, this assignment and all rights herein assigned to the
Trustee for the benefit of the Secured Parties shall cease and terminate and
all the estate, right, title and interest of the Trustee in, to and under the
Corporate Services Agreement, the Collateral Advisory Agreement and the Hedge
Agreement shall revert to the Issuer and no further instrument or act shall be
necessary to evidence such termination and reversion.


 


15.4.                      ISSUER AGREEMENTS, ETC


 


The Issuer represents that it has not executed any other assignment of
the Collateral Administration Agreement, the Collateral Advisory Agreement or
any Hedge Agreement. The Issuer agrees that this assignment is irrevocable, and
that it will not take any action which is inconsistent with this assignment or
make any other assignment inconsistent herewith. The Issuer will, from time to
time upon the request of the Trustee, execute all instruments of further
assurance and all such supplemental instruments with respect to this assignment
as the Trustee may reasonably specify.


 


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ARTICLE XVI


 


HEDGE AGREEMENT


 


16.1.                      HEDGE AGREEMENT


 


On the Closing Date (or any date on which the Issuer enters into a
replacement Hedge Agreement), (i) the Hedge Counterparty entering into
such Hedge Agreement shall satisfy the Hedge Counterparty Ratings Requirement
and (ii) the Issuer shall assign such Hedge Agreement to the Trustee
pursuant to this Indenture and the Collateral Assignment of Hedge Agreement.


 


(a)                                 The Trustee shall, on
behalf of the Issuer and in accordance with the Note Valuation Report, pay
amounts due to the Hedge Counterparty under the Hedge Agreement on any Payment
Date in accordance with Section 11.1.


 


(b)                                If a Collateralization
Event occurs, the Hedge Counterparty shall within 30 days of the occurrence of
such Collateralization Event either (i) enter into a Credit Support Annex
and post collateral of such types, in such amounts and at such times as are
sufficient to maintain the then-current rating of each Class of Rated
Notes by each Rating Agency, (ii) find a replacement Hedge Counterparty as
permitted under the Hedge Agreement that satisfies the Hedge Counterparty
Ratings Requirement, (iii) obtain a guarantor with such form of guarantee
meeting S&P’s then-current published criteria with respect to guarantees
for the obligations of the Hedge Counterparty under the Hedge Agreement with a
long-term issuer credit rating from S&P of at least “A+” or a short term
issuer credit rating from S&P of at least “A-1” and with a long-term
unsecured debt rating from Fitch of at least “A” and a short-term unsecured
debt rating from Fitch of at least “Fl” or (iv) take such other steps as
each Rating Agency that has downgraded the Hedge Counterparty may require (as
confirmed to the Collateral Advisor in writing) to ensure that the then-current
ratings on the Rated Notes by either Rating Agency are not reduced or
withdrawn. If the Hedge Counterparty has not, within 30 days of the occurrence
of such Collateralization Event, taken any of the actions required above, an
additional termination event with respect to which the Hedge Counterparty shall
be the sole “affected party” will be deemed to have occurred and the Issuer
shall have the right to terminate the Hedge Agreement (with all costs and
expenses in connection with any such termination to be paid by the Hedge
Counterparty).


 


(c)                                 If at any time a
Substitution Event has occurred and is continuing, then the Hedge Counterparty
will, (x) in the case of a Substitution Event referred to in sub-clause (b) of
the definition thereof, within thirty (30) days following such Substitution
Event or (y) in the case of a Substitution Event referred to in sub-clause
(a) of the definition thereof, within ten (10) Business Days
following such Substitution Event, assign its rights and obligations under the
Hedge Agreement, at no cost to the Issuer, to a party (the Substitute
Party) selected by the Hedge Counterparty
that (i) satisfies the Hedge Counterparty Ratings Requirement, (ii) with
respect to which a Rating Agency Confirmation has been obtained and (iii) that
assumes all of the Hedge Counterparty’s obligations under the Hedge Agreement
pursuant to an agreement satisfactory to the Issuer. If the Hedge Counterparty
fails to assign its rights and obligations under the Hedge Agreement to a
Substitute Party within 30 days following such Substitution Event (in the case
of a Substitution Event referred to in sub-clauses (b) of the definition
thereof) or within ten (10) Business Days following such Substitution
Event (in the case of a Substitution Event referred to in sub-clause (a) of
the definition thereof), then (x) the Hedge Counterparty


 


173

















 


shall, while it continues in good faith to search for an eligible
Substitute Party, post and maintain, or continue to maintain, as the case may
be, collateral in accordance with a Credit Support Annex of such types, in such
amounts and at such times as are sufficient to maintain the then-current rating
of each Class of Rated Notes by each Rating Agency, and (y) the
Issuer shall have the right to terminate the Hedge Agreement with all costs of
such termination to be paid by the Hedge Counterparty.


 


(d)                                The Issuer may, after the
Closing Date, enter into additional Hedge Agreements (including one or more
Deemed Floating Asset Hedges) with additional Hedge Counterparties as the
Issuer may elect in its sole discretion, in each case (i) subject to
Rating Agency Confirmation, (ii) in the event a proposed additional Hedge
Agreement has an initial notional amount which exceeds U.S.$25,000,000, with
the prior consent of Bank of America, N.A. (so long as it continues to act as
the Initial Hedge Counterparty), and (iii) in the case of additional Hedge
Counterparties, with the delivery to the Issuer of an Opinion of Counsel to the
additional Hedge Counterparty; provided that the Issuer will
not be required to obtain Rating Agency Confirmation in connection with
entering into any Deemed Floating Asset Hedges which are Form-Approved Hedge
Agreements with a Hedge Counterparty that satisfies the Hedge Counterparty
Ratings Requirement.


 


(e)                                 The Trustee shall,
prior to the Closing Date in respect of the initial Hedge Agreement, cause the
Custodian to establish a segregated, non-interest bearing Securities Account
which shall be designated as a “Hedge Counterparty Collateral Account” with
respect to the Hedge Counterparty in respect of which the Trustee shall be the
Entitlement Holder and which the Trustee shall hold in trust for the benefit of
the Secured Parties. The Trustee shall deposit all collateral received from
such Hedge Counterparty under the Hedge Agreement in such Hedge Counterparty
Collateral Account. Any and all funds at any time on deposit in, or otherwise
standing to the credit of, each Hedge Counterparty Collateral Account shall be
held in trust by the Trustee for the benefit of the Secured Parties. The only
permitted withdrawal from or application of funds on deposit in, or otherwise
standing to the credit of, each Hedge Counterparty Collateral Account shall be (i) for
application to obligations of the Hedge Counterparty to the Issuer under the
Hedge Agreement that are not paid when due (whether when scheduled or upon
early termination) or (ii) to return collateral to the Hedge Counterparty
when and as required by the Hedge Agreement in each case upon the direction of
the Issuer pursuant to an Issuer Order. No assets credited to any Hedge
Counterparty Collateral Account shall be considered an asset of the Issuer for
purposes of any of the Coverage Tests unless and until the Issuer or the
Trustee on its behalf is entitled to foreclose on such assets in accordance
with the terms of the Hedge Agreement.


 


(f)                                   Upon its receipt of
notice that the Hedge Counterparty has defaulted in the payment when due of its
obligations to the Issuer under any Hedge Agreement (or, if earlier, when the
Trustee becomes aware of such default) the Trustee shall make a demand on such
Hedge Counterparty, or any guarantor, if applicable, demanding payment
forthwith. The Trustee shall give notice to the Rated Noteholders and each
Rating Agency upon the continuance of the failure by such Hedge Counterparty to
perform its obligations for two Business Days following a demand made by the
Trustee on such Hedge Counterparty.


 


(g)                                If at any time the
Hedge Agreement becomes subject to early termination due to the occurrence of
an “event of default” or a “termination event” (each as defined in the Hedge
Agreement) solely attributable to the Hedge Counterparty or other comparable
event, the Issuer and the Trustee shall take such actions (following the
expiration of any applicable


 


174

















 


grace period) to enforce the rights of the Issuer and the Trustee
thereunder and under the Collateral Assignment of Hedge Agreement as may be
permitted by the terms of such Hedge Agreement and consistent with the terms
hereof, and shall apply any proceeds of any such actions (including the
proceeds of the liquidation of any collateral pledged by the Hedge
Counterparty) to enter into a replacement Hedge Agreement on substantially
identical terms or on such other terms as to which each Rating Agency shall
have provided a Rating Agency Confirmation with a Substitute Party with respect
to which the Hedge Counterparty Ratings Requirement is satisfied and each
Rating Agency shall have provided a Rating Agency Confirmation. If the Issuer
is the sole non-Affected Party or the sole non-Defaulting Party with respect to
such “event of default” or “termination event”, the Issuer will (with the
assistance of the Collateral Advisor) obtain quotations with respect to such
replacement Hedge Agreement from five prospective counterparties Independent
from the Issuer, the Collateral Advisor and each other that satisfy the Hedge
Counterparty Ratings Requirement and with respect to which a Rating Agency
Confirmation shall have been obtained and enter into a replacement Hedge
Agreement with the prospective counterparty that provides the lowest quotation
(if the Issuer is required to make a payment to such replacement counterparty)
or the highest quotation (if such replacement counterparty is required to make
a payment to the Issuer).


 


(h)                                The
Issuer shall notify each Rating Agency if at any time the Hedge Counterparty is
required to post collateral or assign its rights and obligations in and under
the Hedge Agreement.


 


(i)                                    The
Hedge Agreement may not be amended or modified at any time other than to effect
the appointment of a substitute Hedge Counterparty or to effect a modification
which is of a formal, minor or technical nature or is to correct a manifest
error and which, in the opinion of the Trustee (based upon an Opinion of
Counsel) would not have a material adverse effect on the interests of Holders
of the Rated Notes or of Holders of any Class or Classes of Rated Notes or
the Holders of the Income Notes; provided that
the Issuer has obtained Rating Agency Confirmation with respect to any such
modification. The Trustee shall provide the Collateral Advisor and the Rating
Agencies with a copy of any such modification within 10 Business Days before
effecting such modification.


 


(j)                                    The
Issuer shall enter into a Hedge Agreement only if the payments from the Hedge
Counterparty thereunder are not subject to withholding tax or if the Hedge
Counterparty shall be required in accordance with the terms of the Hedge
Agreement to pay additional amounts to the Issuer sufficient to cover any
withholding tax due on payments made by the Hedge Counterparty to the Issuer
under such Hedge Agreement, subject to the Issuer making customary payee tax
representations and providing customary tax documentation. The Issuer shall not
enter into any Hedge Agreement the acquisition (including the manner of acquisition),
ownership, enforcement or disposition of which would subject the Issuer to tax
on a net income basis in any jurisdiction outside the Issuer’s jurisdiction of
incorporation.


 


(k)                                 The
Issuer will not terminate or amend any Hedge Agreement without receiving Rating
Agency Confirmation with respect to such termination or amendment.


 


175

















 


IN
WITNESS WHEREOF, we
have set our hands as of the date first above written.


 


 


Executed
as a Deed by


N-STAR REAL ESTATE CDO V LTD.,


as
Issuer


 


 


	
  By:

  	
  /s/ Derrie Boggess

  	
   

  
	
   

  	
  Name:      Derrie Boggess

  	
   

  
	
   

  	
  Title:        Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  N-STAR REAL ESTATE CDO V CORP.,

  	
   

  
	
  as
  Co-Issuer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Donald J. Puglisi

  	
   

  
	
   

  	
  Name:      Donald J. Puglisi

  	
   

  
	
   

  	
  Title:       
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  LASALLE BANK NATIONAL ASSOCIATION,

  	
   

  
	
  as
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Koren Sumser

  	
   

  
	
   

  	
  Name:      Koren Sumser

  	
   

  
	
   

  	
  Title:       
  First Vice President

  	
   

  



 


 


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