Exhibit 10.16


 


EXECUTION COPY


 


Dated as of March 17, 2006


 


 


N-STAR REL CDO VI LTD.,

as Issuer


 


N-STAR REL CDO VI LLC,

as Co-Issuer


 


NS ADVISORS, LLC,

as Advancing Agent


 


and


 


WELLS FARGO BANK, NATIONAL
ASSOCIATION

as Trustee


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INDENTURE

  	
   

  
	
   

  	
   

  	
   

  



 

















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  PRELIMINARY STATEMENT

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  GRANTING CLAUSES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE I Definitions and
  Interpretation

  	
   

  	
  3

  
	
  1.1.

  	
  Definitions

  	
   

  	
  3

  
	
  1.2.

  	
  Assumptions as to Collateral Interests,
  Fees, Etc.

  	
   

  	
  60

  
	
  1.3.

  	
  Rules of Construction

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II The Indenture Issued Notes 

  	
   

  	
  62

  
	
  2.1.

  	
  Forms Generally

  	
   

  	
  62

  
	
  2.2.

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

  	
   

  	
  64

  
	
  2.3.

  	
  Execution, Authentication, Delivery and
  Dating

  	
   

  	
  65

  
	
  2.4.

  	
  Registration, Transfer and Exchange of
  Indenture Issued Notes

  	
   

  	
  66

  
	
  2.5.

  	
  Mutilated, Defaced, Destroyed, Lost or
  Stolen Indenture Issued Notes

  	
   

  	
  76

  
	
  2.6.

  	
  Payment of Principal and Interest;
  Rights Preserved

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III Conditions Precedent

  	
   

  	
  84

  
	
  3.1.

  	
  General Provisions

  	
   

  	
  84

  
	
  3.2.

  	
  Security for the Indenture Issued Notes

  	
   

  	
  87

  
	
  3.3.

  	
  Custodianship; Transfer of Collateral
  Interests and Eligible Investments

  	
   

  	
  88

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV Satisfaction and Discharge

  	
   

  	
  91

  
	
  4.1.

  	
  Satisfaction and Discharge of Indenture

  	
   

  	
  91

  
	
  4.2.

  	
  Application of Trust Money

  	
   

  	
  93

  
	
  4.3.

  	
  Repayment of Funds Held by Note Paying
  Agent

  	
   

  	
  93

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V Events of Default; Remedies

  	
   

  	
  93

  
	
  5.1.

  	
  Events of Default

  	
   

  	
  93

  
	
  5.2.

  	
  Acceleration of Maturity; Rescission
  and Annulment

  	
   

  	
  95

  
	
  5.3.

  	
  Collection of Indebtedness and Suits
  for Enforcement by Trustee

  	
   

  	
  96

  
	
  5.4.

  	
  Remedies

  	
   

  	
  98

  
	
  5.5.

  	
  Preservation of Collateral

  	
   

  	
  100

  
	
  5.6.

  	
  Trustee May Enforce Claims Without
  Possession

  	
   

  	
  102

  
	
  5.7.

  	
  Application of Funds Collected

  	
   

  	
  102

  
	
  5.8.

  	
  Limitation on Suits

  	
   

  	
  102

  
	
  5.9.

  	
  Unconditional Rights of Rated
  Noteholders (other than the Class

  	
   

  	
   

  
	
   

  	
  K Noteholders) to Receive Principal and
  Interest

  	
   

  	
  103

  
	
  5.10.

  	
  Restoration of Rights and Remedies

  	
   

  	
  103

  
	
  5.11.

  	
  Rights and Remedies Cumulative

  	
   

  	
  104

  
	
  5.12.

  	
  Delay or Omission Not Waiver

  	
   

  	
  104

  
	
  5.13.

  	
  Control by Majority of Noteholders

  	
   

  	
  104

  
	
  5.14.

  	
  Waiver of Past Defaults

  	
   

  	
  104

  
	
  5.15.

  	
  Undertaking for Costs

  	
   

  	
  105

  
	
  5.16.

  	
  Waiver of Stay or Extension Laws

  	
   

  	
  105

  
	
  5.17.

  	
  Sale of Collateral

  	
   

  	
  106

  
					



 


i

















 


TABLE OF CONTENTS


(continued)


 


	
  Section

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  5.18.

  	
  Action on the Rated Notes

  	
   

  	
  106

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI The Trustee

  	
   

  	
  107

  
	
  6.1.

  	
  Certain Duties and Responsibilities

  	
   

  	
  107

  
	
  6.2.

  	
  Notice of Default

  	
   

  	
  109

  
	
  6.3.

  	
  Certain Rights of Trustee

  	
   

  	
  109

  
	
  6.4.

  	
  Authenticating Agents

  	
   

  	
  111

  
	
  6.5.

  	
  Not Responsible for Recitals or Issuance
  of Rated Notes

  	
   

  	
  111

  
	
  6.6.

  	
  May Hold Rated Notes

  	
   

  	
  111

  
	
  6.7.

  	
  Funds Held in Trust

  	
   

  	
  112

  
	
  6.8.

  	
  Compensation and Reimbursement

  	
   

  	
  112

  
	
  6.9.

  	
  Corporate Trustee Required; Eligibility

  	
   

  	
  113

  
	
  6.10.

  	
  Resignation and Removal; Appointment of
  Successor

  	
   

  	
  114

  
	
  6.11.

  	
  Acceptance of Appointment by Successor

  	
   

  	
  115

  
	
  6.12.

  	
  Merger, Conversion, Consolidation or
  Succession to Business of Trustee

  	
   

  	
  115

  
	
  6.13.

  	
  Co-Trustees

  	
   

  	
  115

  
	
  6.14.

  	
  Certain Duties Related to Delayed
  Payment of Proceeds; Other Notices

  	
   

  	
  116

  
	
  6.15.

  	
  Representations and Warranties of the
  Bank

  	
   

  	
  117

  
	
  6.16.

  	
  Exchange Offers, Proposed Amendments
  etc.

  	
   

  	
  117

  
	
  6.17.

  	
  Fiduciary for Rated Noteholders Only;
  Agent For Other Secured Parties

  	
   

  	
  118

  
	
  6.18.

  	
  Withholding

  	
   

  	
  118

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII Covenants

  	
   

  	
  118

  
	
  7.1.

  	
  Payment of Principal and Interest

  	
   

  	
  118

  
	
  7.2.

  	
  Maintenance of Office or Agency

  	
   

  	
  119

  
	
  7.3.

  	
  Funds for Rated Note Payments to be
  Held in Trust

  	
   

  	
  120

  
	
  7.4.

  	
  Existence of Co-Issuers

  	
   

  	
  121

  
	
  7.5.

  	
  Protection of Collateral

  	
   

  	
  122

  
	
  7.6.

  	
  Opinions as to Collateral

  	
   

  	
  123

  
	
  7.7.

  	
  Performance of Obligations

  	
   

  	
  123

  
	
  7.8.

  	
  Negative Covenants

  	
   

  	
  125

  
	
  7.9.

  	
  Statement as to Compliance

  	
   

  	
  126

  
	
  7.10.

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

  	
   

  	
  126

  
	
  7.11.

  	
  Successor Substituted

  	
   

  	
  129

  
	
  7.12.

  	
  No Other Business

  	
   

  	
  129

  
	
  7.13.

  	
  Change or Withdrawal of Rating

  	
   

  	
  130

  
	
  7.14.

  	
  Reporting

  	
   

  	
  130

  
	
  7.15.

  	
  Rated Note Calculation Agent

  	
   

  	
  130

  
	
  7.16.

  	
  Listing

  	
   

  	
  131

  
	
  7.17.

  	
  Amendment of Certain Documents

  	
   

  	
  131

  
	
  7.18.

  	
  Purchase of Collateral; Information
  Regarding Collateral; Rating Confirmation

  	
   

  	
  131

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII Supplemental Indentures

  	
   

  	
  133

  
	
  8.1.

  	
  Supplemental Indentures Without Consent
  of Rated Noteholders

  	
   

  	
  133

  
	
  8.2.

  	
  Supplemental Indentures with Consent of
  Rated Noteholders

  	
   

  	
  136

  
	
  8.3.

  	
  Execution of Supplemental Indentures

  	
   

  	
  138

  



 


ii

















 


TABLE OF CONTENTS


(continued)


 


	
  Section

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  8.4.

  	
  Effect of Supplemental Indentures

  	
   

  	
  138

  
	
  8.5.

  	
  Reference in Indenture Issued Notes to
  Supplemental Indentures

  	
   

  	
  138

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX Redemption of Rated Notes

  	
   

  	
  139

  
	
  9.1.

  	
  Redemption of Rated Notes

  	
   

  	
  139

  
	
  9.2.

  	
  Redemption Procedures; Auction

  	
   

  	
  139

  
	
  9.3.

  	
  Record Date; Notice to Trustee of
  Redemption

  	
   

  	
  141

  
	
  9.4.

  	
  Notice of Redemption

  	
   

  	
  141

  
	
  9.5.

  	
  Notice of Withdrawal

  	
   

  	
  142

  
	
  9.6.

  	
  Rated Notes Payable on Redemption Date

  	
   

  	
  142

  
	
  9.7.

  	
  Special Amortization

  	
   

  	
  142

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X Accounts, Accountings and
  Releases

  	
   

  	
  143

  
	
  10.1.

  	
  Collection of Funds

  	
   

  	
  143

  
	
  10.2.

  	
  General Provisions Applicable to
  Accounts

  	
   

  	
  144

  
	
  10.3.

  	
  Collateral Account

  	
   

  	
  144

  
	
  10.4.

  	
  Uninvested Proceeds Account

  	
   

  	
  145

  
	
  10.5.

  	
  Collection Account

  	
   

  	
  145

  
	
  10.6.

  	
  Expense Reserve Account

  	
   

  	
  146

  
	
  10.7.

  	
  Interest Reserve Account

  	
   

  	
  147

  
	
  10.8.

  	
  Earn-Out Asset Account

  	
   

  	
  147

  
	
  10.9.

  	
  Payment Account

  	
   

  	
  148

  
	
  10.10.

  	
  Reports by Trustee

  	
   

  	
  148

  
	
  10.11.

  	
  Accountings

  	
   

  	
  149

  
	
  10.12.

  	
  Release of Securities

  	
   

  	
  154

  
	
  10.13.

  	
  Reports by Independent Accountants

  	
   

  	
  155

  
	
  10.14.

  	
  Reports to Rating Agencies

  	
   

  	
  156

  
	
  10.15.

  	
  Tax Matters

  	
   

  	
  156

  
	
  10.16.

  	
  [Reserved]

  	
   

  	
  157

  
	
  10.17.

  	
  Interest Advances

  	
   

  	
  157

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI Application of Monies

  	
   

  	
  160

  
	
  11.1.

  	
  Disbursements of Funds from Payment
  Account; Priority of Payments

  	
   

  	
  160

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII Purchase and Sale of
  Collateral Interests

  	
   

  	
  173

  
	
  12.1.

  	
  Sale of Collateral Interests

  	
   

  	
  173

  
	
  12.2.

  	
  Portfolio Characteristics

  	
   

  	
  175

  
	
  12.3.

  	
  Conditions Applicable to all
  Transactions Involving Sale or Grant

  	
   

  	
  180

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII Secured Parties’ Relations

  	
   

  	
  181

  
	
  13.1.

  	
  Subordination

  	
   

  	
  181

  
	
  13.2.

  	
  Standard of Conduct

  	
   

  	
  186

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV Miscellaneous

  	
   

  	
  186

  
	
  14.1.

  	
  Form of Documents Delivered to
  Trustee

  	
   

  	
  186

  
	
  14.2.

  	
  Acts of Rated Noteholders

  	
   

  	
  187

  
	
  14.3.

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

  	
   

  	
  187

  
	
  14.4.

  	
  Notices and Reports to Rated
  Noteholders; Waiver

  	
   

  	
  189

  
	
  14.5.

  	
  Effect of Headings and Table of
  Contents

  	
   

  	
  190

  



 


iii

















 


TABLE OF CONTENTS


(continued)


 


	
  Section

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  14.6.

  	
  Successors and Assigns

  	
   

  	
  190

  
	
  14.7.

  	
  Severability

  	
   

  	
  190

  
	
  14.8.

  	
  Benefits of Indenture

  	
   

  	
  190

  
	
  14.9.

  	
  Governing Law

  	
   

  	
  190

  
	
  14.10.

  	
  Submission to Jurisdiction

  	
   

  	
  190

  
	
  14.11.

  	
  Counterparts

  	
   

  	
  191

  
	
  14.12.

  	
  Waiver of Jury Trial

  	
   

  	
  191

  
	
  14.13.

  	
  Judgment Currency

  	
   

  	
  191

  
	
  14.14.

  	
  Confidential Treatment of Documents

  	
   

  	
  191

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV

  	
   

  	
  192

  
	
  15.1.

  	
  Assignment

  	
   

  	
  192

  
	
  15.2.

  	
  No Impairment

  	
   

  	
  192

  
	
  15.3.

  	
  Termination, Etc.

  	
   

  	
  192

  
	
  15.4.

  	
  Issuer Agreements, Etc.

  	
   

  	
  192

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVI

  	
   

  	
  193

  
	
   

  	
   

  	
   

  	
   

  
	
  Hedge Agreements

  	
   

  	
  193

  
	
  16.1.

  	
  Hedge Agreements

  	
   

  	
  193

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVII

  	
   

  	
  195

  
	
   

  	
   

  	
   

  	
   

  
	
  Class A-R Notes

  	
   

  	
  195

  
	
  17.1.

  	
  Draws on the Class A-R Notes and
  Class A-R Commitment

  	
   

  	
  195

  
	
  17.2.

  	
  Class A-R Interest and
  Class A-R Commitment Fee

  	
   

  	
  196

  
	
  17.3.

  	
  Prepayments of Class A-R Notes

  	
   

  	
  196

  
	
  17.4.

  	
  Class A-R Rating Criteria

  	
   

  	
  197

  
	
  17.5.

  	
  Class A-R Holder Collateral
  Account

  	
   

  	
  197

  
					



 


	
  Schedules

  
	
  Schedule A

  	
   

  	
  Schedule of Collateral Interests as of the Closing Date

  
	
  Schedule B

  	
   

  	
  LIBOR Formula

  
	
  Schedule C

  	
   

  	
  Moody’s Recovery Rate Matrix

  
	
  Schedule D

  	
   

  	
  S&P’s Recovery Rate Matrix

  
	
  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

  	
   

  	
  S&P’s Shadow Rating Grid

  
	
  Schedule J-1

  	
   

  	
  Form of S&P’s Representations, Warranties and
  Covenants for Commercial Mortgage Loans, Subordinate Mortgage Loan Interests
  And Mezzanine Loans

  
	
  Schedule J-2

  	
   

  	
  Form of S&P’s Representations, Warranties and
  Covenants for Credit Lease Loans and Tenant Lease Loan Interests

  
	
  Schedule J-3

  	
   

  	
  Form of S&P’s Representations, Warranties and
  Covenants for Preferred Equity Securities

  



 


	
  Exhibits

  
	
  Exhibit A-1

  	
   

  	
  Form of Regulation S Global Note

  
	
  Exhibit A-2

  	
   

  	
  Form of Rule 144A Global Note

  
	
  Exhibit B

  	
   

  	
  Form of Certificated Note

  



 


iv

















 


TABLE OF CONTENTS


(continued)


 


	
  Section

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C-1

  	
   

  	
  Form of Rule 144A Transfer Certificate

  	
   

  	
   

  
	
  Exhibit C-2

  	
   

  	
  Form of Regulation S Transfer Certificate

  	
   

  	
   

  
	
  Exhibit C-3

  	
   

  	
  Form of Certificated Note Transfer Certificate

  	
   

  	
   

  
	
  Exhibit C-4

  	
   

  	
  Form of ERISA Restriction Certificate

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Form of Funding Certificate

  	
   

  	
   

  
	
  Exhibit E-1

  	
   

  	
  Form of Opinion of Thacher Proffitt & Wood
  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

  	
   

  	
  Rated Noteholder’ s Certificate

  	
   

  	
   

  
	
  Exhibit I

  	
   

  	
  Form of Class H Note or Class J Note Tax
  Transfer Certificate

  	
   

  	
   

  



 


v














 


THIS INDENTURE dated as of March 17,
2006 among:


 


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


 


N-STAR REL CDO VI LLC, a limited liability
company organized and existing under the law of the State of Delaware;


 


NS ADVISORS, LLC a limited liability
company organized and existing under the law of the State of Delaware; and


 


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


 


PRELIMINARY STATEMENT


 


The Co-Issuers (in the case of the Indenture Issued Notes
other than the Class H Notes and the Class J Notes) and the Issuer
(in the case of the Class H Notes and the Class J Notes) are duly
authorized to execute and deliver this Indenture to provide for the issuance of
the Indenture Issued 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 Interests listed on Schedule A, the Collateral
Interests acquired after the Closing Date and any Equity Interests 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 Sub-Account established therein), the Interest Reserve Account,
the Payment Account, the Expense Reserve Account, the Collateral Account, the
Uninvested Proceeds Account, the Earn-Out Asset Account, the Class A-R
Holder Collateral 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);
provided, that such security
interest shall not extend to (i) any property, cash or other amounts
specifically released from the lien of this Indenture or otherwise to be paid
to the Issuer in accordance with the terms hereof or (ii) any Retained
Rights. Such Grants are made to the Trustee to hold in trust, to secure the
Indenture Issued Notes equally and ratably without prejudice, priority or
distinction between any such Indenture Issued Note and any other such Indenture
Issued 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 Indenture Issued Notes and under any Hedge Agreement and the
Collateral Management 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, any Hedge
Agreement, the Class A-R Note Purchase Agreement and the Collateral
Management 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 as 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.


 


2

















 


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 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 the case of Preferred Equity Securities,
whenever any reference is made to payments of interest with respect to a
Collateral Interest, payments of dividends or other distributions not
attributable to the return of capital by the related Underlying Instruments,
shall be applicable to such determination or calculation. In the case of
Preferred Equity Securities, whenever any reference is made to payments of
principal with respect to a Collateral Interest, distributions attributable to
the return of capital by their Underlying Instruments shall be applicable to
such determination or calculation. 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, the Earn-Out Asset Account, the Class A-R
Holder Collateral 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.


 


Accountant’s Report means a report of a firm
of Independent certified public accountants of recognized national reputation
appointed by the Issuer (or the Collateral Manager on its behalf) on the
Closing Date pursuant to Section 10.13(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 and the Trustee Interest Advance Fee and the Underlying Trustee for
Underlying Trust Expenses; (ii) the PAA Issued Note Paying Agent pursuant
to the 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 Manager
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 Management Agreement but excluding the
Collateral Management Fee); (viii) any other Person in respect of any
governmental fee, charge or tax (including all filing, registration and annual


 


3

















 


return fees payable to the Cayman Islands’ government and
registered office fees); (ix) any servicer of any Collateral Interest
owned directly by the Issuer to the Servicers pursuant to the Servicing
Agreements (to the extent payment of such amounts is not otherwise provided for
in the Servicing Agreements); (x) to the Advancing Agent for the Advancing
Agent Fee; (xi) the Class A-R Note Agent pursuant to the Class A-R
Note Purchase Agreement and (xii) any other Person in respect of any other fees
or expenses permitted under this Indenture and the documents delivered pursuant
to or in connection with this Indenture, the Paying Agency Agreement, the
Collateral Management 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 and any Class A-R Commitment Fees, Class A-R Increased
Costs or Class A-R Breakage Costs.


 


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


 


Advancing Agent means NS Advisors, LLC
and any successor or successors thereto.


 


Advancing Agent Fee means, a per annum fee
payable to the Advancing Agent on each Payment Date in accordance with the
Priority of Payments equal to 0.00125% of the outstanding principal amount of
the Class A Notes (assuming for the purposes of this calculation that the Class A-R
Notes are fully drawn) and Class B Notes immediately prior to such Payment
Date.


 


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


 


Agency MBS Security means obligations of (A) the
Federal National Mortgage Association, (B) the Federal Home Loan Mortgage
Corporation or (C) the Government National Mortgage Association, in each
case with a stated maturity that does not exceed the Stated Maturity Date and a
long-term credit rating of “AAA” by S&P.


 


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


 


Aggregate Class A-R
Undrawn Amount means at any time, the excess, if any, of the aggregate
amount of the Class A-R Commitments over the Aggregate Outstanding Amount
of the Class A-R Notes.


 


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 PAA Issued Note
Paying Agent Fee with respect to such Payment Date and any unpaid PAA Issued
Note Paying Agent Fee accrued with respect to a previous Payment Date, (iii) the
Senior Collateral Management Fee and all expenses of the Collateral Manager
payable by the Issuer pursuant to the Collateral Management Agreement with
respect to such Payment Date and any unpaid Senior Collateral Management Fee
and unpaid expenses of the Collateral Manager 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 Cayman Islands Stock Exchange), (v) taxes payable by


 


4

















 


the Co-Issuers, if any, (vi) the Underlying Trust
Expenses and (vii) 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 (other than the Class A-R
Notes) at any time, the aggregate principal amount of such Rated Notes
Outstanding at such time and, with respect to the Class A-R Notes, the
Average Drawn Class A-R Note Portion of the Class A-R Notes with
respect to the related Interest Period; provided,
that with respect to any action, consent, vote or waiver by any Class or
Classes of Noteholders, the Aggregate Outstanding Amount of the Class A-R
Notes shall include any unfunded Class A-R Commitments (except as provided
in the foregoing sentence and as otherwise provided herein, the Aggregate
Outstanding Amount of the Notes at any time shall not include any unfunded Class A-R
Commitments). 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 Class 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, (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, (v) the
Aggregate Outstanding Amount of any Class G Notes at any time shall
include the Class G Cumulative Applicable Periodic Interest Shortfall
Amount with respect to such Class G Notes at such time, (vi) the
Aggregate Outstanding Amount of any Class H Notes at any time shall
include the Class H Cumulative Applicable Periodic Interest Shortfall
Amount with respect to such Class H Notes at such time, (vii) the
Aggregate Outstanding Amount of any Class J Notes at any time shall
include the Class J Cumulative Applicable Periodic Interest Shortfall
Amount with respect to such Class J Notes at such time and (viii) the
Aggregate Outstanding Amount of any Class K Notes at any time shall
include the Class K Cumulative Applicable Periodic Interest Shortfall
Amount with respect to such Class K Notes at such time.


 


Applicable Periodic
Interest Rate means, for any Interest Period, (i) with respect to
the Class A-1 Notes, the applicable Class A-1 Note Interest Rate, (ii) with
respect to the Class A-R Notes, the applicable Class A-R Note
Interest Rate, (iii) with respect to the Class A-2 Notes, the
applicable Class A-2 Note Interest Rate, (iv) with respect to the Class B
Notes, the applicable Class B Note Interest Rate, (v) with respect to
the Class C Notes, the applicable Class C Note Interest Rate, (vi) with
respect to the Class D Notes, the applicable Class D Note Interest
Rate, (vii) with respect to the Class E Notes, the applicable Class E
Note Interest Rate, (viii) with respect to the Class F Notes, the
applicable Class F Note Interest Rate, (ix) with respect to the Class G
Notes, the applicable Class G Note Interest Rate, (x) with respect to
the Class H Notes, the applicable Class H Note Interest Rate, (xi)
with respect to the Class J Notes, the applicable Class J Note
Interest Rate and (xii) with respect to the Class K Notes, the applicable Class K
Note Interest Rate.


 


Applicable Recovery
Rate means, with respect to any Collateral Interest on any Measurement Date,
the lesser of the Moody’s Recovery Rate, the Fitch Recovery Rate and the
S&P’s Recovery Rate applicable to such Collateral Interest on such date.


 


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.


 


5

















 


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, 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.


 


Asset Transfer
Agreement means either Asset Transfer Agreement, dated as of March 17,
2006, as the same may be amended or supplemented from time to time, among the
related Seller, the Depositor and NorthStar Realty Finance Corp.


 


Assumed Reinvestment
Rate means, with respect to any Account or fund securing the Indenture Issued
Notes, the greater of (i) LIBOR minus 1.0%
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 Interests 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 Indenture Issued Notes or any Class of the Indenture Issued Notes, the
Person designated by the Trustee, if any, to authenticate such Indenture Issued
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 or any duly
appointed attorney-in-fact of 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 Manager, any officer of the Collateral Manager who is authorized to
act for the Collateral Manager in matters relating to, and binding upon, the
Collateral Manager, (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, (v) with respect to the PAA Issued Note Paying Agent, any officer
who is authorized to act for the PAA Issued Note Paying Agent in matters
relating to, and binding upon, the PAA Issued Note Paying Agent and (vi) with
respect to the Advancing Agent, any Officer of the Advancing Agent who is
authorized to act for the Advancing Agent in matters relating to, and binding
upon, the Advancing 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 Aggregate Class A-R
Undrawn Amount means, as of any date, the lesser of (i)(A) the
Aggregate Class A-R Undrawn Amount, less (B) the Total Unfunded
Future Advance Amount, plus (C) the amount on deposit in the Earn-Out
Asset Account and (ii) the Aggregate Class A-R Undrawn Amount.


 


6

















 


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 Drawn Class A-R
Note Portion means, with respect to any Payment Date or Class A-R
Prepayment Date, the average daily Aggregate Outstanding Amount of the Class A-R
Notes during the related Interest Period.


 


Average Life means, on any
Calculation Date with respect to any Collateral Interest, the quotient obtained
by the Collateral Manager 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 Interest (assuming that (1) no Collateral
Interests default or are sold and (2) any optional redemption of the
Collateral Interests occurs in accordance with their respective terms) 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
Interest.


 


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 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 Wells Fargo 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.


 


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 Indenture Issued 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 Indenture Issued
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 PAA Issued Note
Register (in the case of the Class Notes or the Income Notes)); provided that the Trustee and the PAA
Issued 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.


 


Bill of Sale means that certain Bill
of Sale, dated as of March 17, 2006, as the same may be amended or
supplemented from time to time, between the Depositor and the Issuer.


 


7

















 


Board of Directors means, with respect to
the Issuer, the directors of the Issuer duly appointed in accordance with the
Articles.


 


Board Resolution means, with respect to
the Issuer, a resolution of the Board of Directors of the Issuer.


 


Business Day means any day that is not
a Saturday, Sunday or other day on which commercial banking institutions in New
York, New York, Minneapolis, Minnesota, Columbia, Maryland or any other cities
in which the Corporate Trust Office of the Trustee or the Advancing Agent is
located are authorized or obligated by law or executive order to be closed; provided 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.”


 


Buy/Sell Interest means a Collateral
Interest for which one of the participants has exercised its right to purchase
its corresponding participant’s interest, or sell its interest to such
corresponding participant for the same price, in accordance with the related
Underlying Instrument


 


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.


 


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.


 


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


 


Certificated Class A-G
Note has the meaning specified in Section 2.1(c).


 


Certificated Class H
Note has the meaning specified in Section 2.1(d).


 


Certificated Class H
Note Transfer Certificate has the meaning specified in Section 2.4(c)(1).



 


Certificated Class J
Note has the meaning specified in Section 2.1(d).


 


Certificated Class J
Note Transfer Certificate has the meaning specified in Section 2.4(c)(1).


 


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


 


Certificated Note means any Rated Note or
Income Note issued in the form of physical certificates in certificated, fully
registered form.


 


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


 


Class means any class of the
Notes, consisting of the Class A-1 Notes, Class A-R Notes, Class A-2
Notes, Class B Notes, Class C Notes, Class D Notes, Class E
Notes, Class F Notes, Class G Notes, Class H Notes, Class J
Notes, Class K Notes and Income Notes.


 


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


 


8














 


Class A Senior
Note Break-Even Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests 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
Senior Notes in full by their Stated Maturity Dates and the timely payment of
interest on such Class A Senior Notes.


 


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


 


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


 


Class A Senior
Notes means the Class A-1 Notes and the Class A-R Notes.


 


Class A Senior Pro
Rata Allocation means, with respect to any Payment Date, the allocation
based on the Aggregate Outstanding Amount of the Class A-1 Notes and the
aggregate principal amount of the Class A-R Commitments as of the related
Measurement Date, and in the case of a Redemption of the Notes in full or the
acceleration of the Notes following an Event of Default, the allocation based
on the Aggregate Outstanding Amount of the Class A-1 Notes and the aggregate
principal amount of the Class A-R Commitments as of the related
Calculation Date.


 


Class A/B Coverage
Tests means the Interest Coverage Test and the Principal Coverage Test applied
with respect to the Class A Notes and Class B Notes, taken together.


 


Class A-1 Note
Interest Rate means LIBOR plus 0.330%.


 


Class A-1 Notes means the
U.S.$174,800,000 aggregate principal amount of Class A-1 Floating Rate
Notes due 2041.


 


Class A-2 Note
Break-Even Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests 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-2
Notes in full by their Stated Maturity Date and the timely payment of interest
on such Class A-2 Notes.


 


Class A-2 Note
Default Differential means, with respect to any Calculation Date, the rate
obtained by subtracting the Class A-2 Note Scenario Default Rate from the Class A-2
Note Break-Even Default Rate.


 


Class A-2 Note
Interest Rate means LIBOR plus 0.380%.


 


Class A-2 Note
Scenario Default Rate means an estimate of the cumulative default rate
for the portfolio of Collateral Interests consistent with S&P’s rating of
the Class A-2 Notes on the Closing Date, determined by S&P by
application of the S&P CDO Monitor.


 


Class A-2 Notes means the
U.S.$27,225,000 aggregate principal amount of Class A-2 Floating Rate
Notes due 2041.


 


Class A-R Breakage
Costs means, with respect to any Due Period, the amount of “breakage costs” as
set forth in a certificate of a Class A-R Noteholder delivered to the
Issuer and the Trustee on or prior to the


 


9

















 


related Calculation Date, if any, incurred by Class A-R
Noteholders as a result of (a) a prepayment of amounts under the Class A-R
Notes on a day other than a Payment Date and calculated as provided in the Class A-R
Note Purchase Agreement or (b) a failure by the Issuer to effect a Class A-R
Draw on the scheduled date therefor after having submitted a request for a Class A-R
Draw to the Class A-R Note Agent in accordance with the provisions of the Class A-R
Note Purchase Agreement.


 


Class A-R
Commitment means, the maximum aggregate outstanding principal amount
of advances (whether at the time funded or unfunded) that the Holder of such Class A-R
Note (or the related Liquidity Provider) is obligated to make to the Issuer
from time to time under the Class A-R Note Purchase Agreement.


 


Class A-R
Commitment Fee means, in respect of the Class A-R Noteholders and
an Interest Period, the fee payable to such Class A-R Noteholder in
arrears, on each Payment Date, being the amount accrued in respect of that
Interest Period at a rate per annum
equal to 0.16% (calculated on the average daily Aggregate Class A-R
Undrawn Amount during such Interest Period on the basis of a 360-day year and
the actual number of days elapsed).


 


Class A-R
Defaulted Interest Amount means, with respect to the Class A-R Notes as
of each Payment Date, the accrued and unpaid amount due to Holders of the Class A-R
Notes on account of any shortfalls in the payment of the related Periodic
Interest with respect to any preceding Payment Date or Payment Dates, together
with interest accrued thereon (to the extent lawful).


 


Class A-R Draw means an advance by a
Holder of a Class A-R Note made in accordance with Section 17.1(a) hereof.


 


Class A-R Draw
Date has the meaning specified in Section 17.1(a) hereof.


 


Class A-R Eligible
Investments has the meaning specified in Section 17.5(f) hereof.


 


Class A-R Holder
Collateral Account means the Securities Account designated the “Class A-R
Holder Collateral Account” and established in the name of the Trustee pursuant
to Section 17.5.


 


Class A-R
Increased Costs means, with respect to any Payment Date, the amount as
set forth in a certificate of a Class A-R Noteholder delivered to the
Issuer and the Trustee on or prior to the Calculation Date of the related
Payment Date, necessary to compensate such Noteholder or any Funding Entity for
(a) any increase in cost to a Funding Entity of making or maintaining any
loan or asset purchase under the Class A-R Note Purchase Agreement or such
Liquidity Facility (or maintaining its obligation to make any such loan or
asset purchase) resulting from a change in law applicable to such Funding
Entity, (b) any reduction in any amount received or receivable by a
Funding Entity under the Class A-R Note Purchase Agreement or such
Liquidity Facility resulting from a change in law applicable to such Funding
Entity or (c) any reduction in the rate of return on the capital of a
Funding Entity or its parent/holding company resulting from a change in law
applicable to such Funding Entity or parent/holding company to a level below
that which such Funding Entity or parent/holding company could have achieved
but for such change in law. The Class A-R Note Agent, the Issuer, the
Trustee and the Collateral Manager shall in each instance be entitled to rely
conclusively (in the absence of manifest error) on any such certificate and all
calculations and data therein (and the Class A-R Note Agent, the Issuer,
the Trustee and the Collateral Manager shall have no duty or obligation to investigate,
verify or recalculate any information or conclusion set forth therein).


 


Class A-R Interest
Allocation Percentage means, for each Interest Period and with respect
to each Holder of Class A-R Notes, a fraction, expressed as a percentage, (i) the
numerator of which is the


 


10

















 


Average Drawn Class A-R Note Portion of such Holder
and (ii) the denominator of which is the Average Drawn Class A-R Note
Portion of all of the Class A-R Noteholders.


 


Class A-R
Note Agent means Wells Fargo Bank, National Association, and any
successors or assigns. 


 


Class A-R
Note Agent Fee means $10,000 per annum.


 


Class A-R Note
Draw Date has the meaning specified in Section 17.1(a) hereof.


 


Class A-R Note
Interest Rate means LIBOR plus 0.340%.


 


Class A-R Note
Purchase Agreement means the agreement to be dated March 17, 2006,
entered into among the Issuer, the Co-Issuer, the Class A-R Note Agent and
the Holders from time to time of the Class A-R Notes, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.


 


Class A-R Note
Rating Criteria means the criteria set forth below, which if satisfied
with respect to any Holder of Class A-R Notes (or prospective transferee)
at the time such Class A-R Notes are purchased (or transferred), will make
such Holder (or prospective transferee) eligible to purchase (or receive) such Class A-R
Notes, will be satisfied on any date with respect to any Holder of Class A-R
Notes (or prospective transferee) if:


 


(i)                                     either (x) the
short-term debt, deposit or similar obligations of such Class A-R
Noteholder (or prospective transferee) are rated “P-1” by Moody’s and at least
“A-1” by S&P or (y) if such short-term debt, deposit or similar
obligations of such Class A-R Noteholder (or prospective transferee) are
not rated by Moody’s or S&P, the long-term debt, deposit or similar
obligations of such Class A-R Noteholder (or prospective transferee) are
rated “Aa3” by Moody’s and/or at least “A+” by S&P, as applicable;


 


(ii)                                  the obligations of such Class A-R
Noteholder (or prospective transferee) under the Class A-R Note Purchase
Agreement are guaranteed (pursuant to a guarantee which complies with the
then-current S&P criteria regarding guarantees) by an entity meeting the Class A-R
Rating Criteria set forth in (i) above; or


 


(iii)                               such Class A-R
Noteholder (or prospective transferee) is then entitled under a Liquidity
Facility to borrow from, or sell an interest in assets to a Liquidity Provider
so long as:


 


(1)                                     either (x) the
short-term debt, deposit or similar obligations of each such Liquidity Provider
are on such date rated “P-1” by Moody’s, at least “F1” by Fitch and at least
“A-1” by S&P or (y) if such short-term debt, deposit or similar
obligations of each such Liquidity Provider are not rated by Moody’s, Fitch or
S&P, the long-term debt, deposit or similar obligations of each such
Liquidity Provider are rated “Aa3” by Moody’s, at least “A+” by Fitch and/or at
least “A+” by S&P, as applicable; and


 


(2)                                     the aggregate amount of
commitments to make loans or purchase interests in assets under such Liquidity
Facility are held by Liquidity Providers whose either (x) short-term debt,
deposit or similar obligations are on such date rated “P-1” by Moody’s, at
least “F1” by Fitch and at least “A-1” by S&P or (y) if such
short-term debt, deposit or similar obligations are not rated by Moody’s, Fitch
or S&P, the long-term debt, deposit or similar obligations are on such date
rated “Aa3” by Moody’s, at least “A+” by Fitch and/or at least “A+” by S&P,
as applicable, and such amounts are not less than the


 


11

















 


Class A R Commitment in respect of the Class A R
Notes held by such Class A R Noteholder (or prospective transferee).


 


Class A-R Notes means the up to
U.S.$70,000,000 aggregate principal amount of Class A-R Revolving Floating
Rate Notes due 2041.


 


Class A-R
Prepayment means any payment of principal of the Class A-R
Notes prior to the Stated Maturity Date of the Class A-R Notes.


 


Class A-R
Prepayment Date means the date of any Class A-R Prepayment.


 


Class A-R
Proportion is equal to the percentage based on the ratio of (x) the
initial aggregate principal amount of the Class A-R Notes (assuming for
purposes of this calculation that the Class A-R Commitments are fully
drawn) to (y) the initial aggregate principal amount of the Class A-1
Notes.


 


Class B Note
Break-Even Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests 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 Dates 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 0.440%.


 


Class B Note
Scenario Default Rate means an estimate of the cumulative default rate
for the portfolio of Collateral Interests 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.$21,825,000
aggregate principal amount of Class B Floating Rate Notes Due 2041.


 


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 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 Note
Break-Even Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests 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 Dates and the timely payment of interest
on such Class C Notes.


 


12

















 


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 LIBOR plus 0.740%.


 


Class C Note
Scenario Default Rate means an estimate of the cumulative default rate
for the portfolio of Collateral Interests 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.$12,825,000
aggregate principal amount of Class C Floating Rate Deferrable Interest
Notes Due 2041.


 


Class C/D Coverage
Tests means the Interest Coverage Test and the Principal Coverage Test applied
with respect to the Class C Notes and the Class D Notes taken
together.


 


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.


 


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 Note
Break-Even Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests 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 Dates and the timely 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 LIBOR plus 0.940%.


 


Class D Note
Scenario Default Rate means an estimate of the cumulative default rate
for the portfolio of Collateral Interests 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.$13,950,000
aggregate principal amount of Class D Floating Rate Deferrable Interest
Notes Due 2041.


 


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 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.


 


13

















 


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 Note
Break-Even Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests 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 Dates and the timely 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 1.650%.


 


Class E Note
Scenario Default Rate means an estimate of the cumulative default rate
for the portfolio of Collateral Interests 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.$10,125,000
aggregate principal amount of Class E Floating Rate Deferrable Interest
Notes Due 2041.


 


Class E/F/G
Coverage Tests means the Interest Coverage Test and the Principal
Coverage Test applied to the Class E Notes, Class F Notes and Class G
Notes, taken together.


 


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 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 Note
Break-Even Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests 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 Dates and the timely 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 LIBOR plus 1.850%.


 


14

















 


Class F Note
Scenario Default Rate means an estimate of the cumulative default rate
for the portfolio of Collateral Interests 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.$7,650,000
aggregate principal amount of Class F Floating Rate Deferrable Interest
Notes Due 2041.


 


Class G 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 G 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, Class E Notes or Class F
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 G Cumulative
Applicable Periodic Interest Shortfall Amount means, with respect to
any date of determination, the sum of all Class G 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 G Note
Break-Even Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests 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 G
Notes in full by their Stated Maturity Dates and the timely payment of interest
on such Class G Notes.


 


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


 


Class G Note
Interest Rate means LIBOR plus 3.000%.


 


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


 


Class G Notes means the U.S.$9,900,000
aggregate principal amount of Class G Floating Rate Deferrable Interest
Notes Due 2041.


 


Class H 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 H 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, Class E Notes, Class F
Notes or Class G 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 H Notes.


 


Class H Cumulative
Applicable Periodic Interest Shortfall Amount means, with respect to
any date of determination, the sum of all Class H 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 H Note
Break-Even Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests can sustain, as determined by S&P by
application of the S&P CDO Monitor, after


 


15

















 


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 H Notes in full by
their Stated Maturity Date and the ultimate payment of interest on such Class H
Notes.


 


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


 


Class H Note
Interest Rate means LIBOR plus 4.250%.


 


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


 


Class H Note Tax
Transfer Certificate has the meaning specified in Section 2.4(c)(3).


 


Class H Notes means the U.S.$6,075,000
aggregate principal amount of Class H Floating Rate Deferrable Interest
Notes due 2041.


 


Class J 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 J 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, Class E Notes, Class F
Notes, Class G Notes or Class H 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 J Notes.


 


Class J Cumulative
Applicable Periodic Interest Shortfall Amount means, with respect to
any date of determination, the sum of all Class J 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 J Note Break-Even
Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests 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 J
Notes in full by their Stated Maturity Date and the ultimate payment of
interest on such Class J Notes.


 


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


 


Class J Note
Interest Rate means LIBOR plus 5.500%.


 


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


 


Class J Note Tax
Transfer Certificate has the meaning specified in Section 2.4(c)(3).


 


Class J Notes means the
U.S.$18,000,000 aggregate principal amount of Class J Floating Rate
Deferrable Interest Notes due 2041.


 


16

















 


Class K 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 K 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, Class E Notes, Class F
Notes, Class G Notes, Class H Notes or Class J 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 K Notes.


 


Class K Cumulative
Applicable Periodic Interest Shortfall Amount means, with respect to
any date of determination, the sum of all Class K 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 K Note
Break-Even Default Rate means the maximum percentage of defaults that the
portfolio of Collateral Interests 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 K
Notes in full by their Stated Maturity Date and the ultimate payment of
interest on such Class K Notes.


 


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


 


Class K Note
Interest Rate means LIBOR plus
8.000%.


 


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


 


Class K Notes means the
U.S.$13,950,000 aggregate principal amount of Class K Floating Rate
Deferrable Interest Notes due 2041.


 


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 March 17, 2006.


 


CMBS means commercial
mortgage-backed securities issued pursuant to a transaction in which one or
more classes of such securities have been (and are) rated “AAA” or its
equivalent by one or more of S&P, Moody’s or Fitch (unless Rating
Confirmation is received), which securities are 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.


 


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


 


Co-Issuer means N-Star REL CDO VI
LLC, a limited liability company 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.


 


17














 


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 as of March 17, 2006, by and among the Issuer, the Collateral
Manager and the Collateral Administrator, as the same may be amended and
modified from time to time in accordance with its terms.


 


Collateral
Administrator means Wells Fargo 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 Interest 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 Interests and Eligible Investments
included in the Collateral ((A) including any Sale Proceeds of a
Collateral Interest 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 Manager, but (B) excluding all funds
received on an Impaired Interest (including any unpaid interest) and any unpaid
interest accrued on a Deferred Interest PIK Bond or a Written Down Interest 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 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 Interests or in connection with Impaired
Interests or Written Down Interests) (provided,
further, that Collateral Interest Collections shall not include any
other proceeds related to any Retained Rights), (v) the Principal Balance
of any Eligible Investments purchased with Collateral Interest Collections, (vi) all
interest accrued on the Closing Date on Collateral Interests included in the
Collateral, (vii) any amounts on deposit in the Interest Reserve Account, (viii) at
the option of the Collateral Manager, any amount on deposit in the Expense
Reserve Account in excess of U.S.$25,000, (ix) commitment fees on unfunded
amounts and other similar fees (in each case, net of applicable withholding
taxes) actually received by the Issuer during the related Due Period in respect
of any Earn-Out Assets, (x) any Uninvested Proceeds remaining on deposit
in the Uninvested Proceeds Account on the Effective Date, provided that a Rating Confirmation Failure
has not occurred and (xi) 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 Interest representing
capitalized interest after the date of purchase thereof by the Issuer.


 


Collateral Interest Principal Balance means, prior to the
Effective Date, U.S.$450,000,000, and thereafter, the aggregate Principal
Balance of the sum of (i) Collateral Interests included in the Collateral (including
any Collateral Interests that have become Impaired Interests or Written Down
Interests),


 


18

















 


(ii) Eligible Investments, in each case, purchased
with the proceeds of the issuance of the Notes or thereafter with Collateral
Principal Collections, (iii) Eligible Investments held in the Earn-Out
Asset Account (without duplication) and (iv) the Aggregate Class A-R
Undrawn Amount (without duplication).


 


Collateral Management
Agreement means the Collateral Management 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 Manager.


 


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


 


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


 


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 (including all distributions on
Preferred Equity Securities attributable to the return of capital by their
governing documents) (provided, further,
that Collateral Principal Collections shall not include any other proceeds
related to any Retained Rights); provided,
however, that Collateral Principal
Collections shall include principal of any Collateral Interest representing
capitalized interest after the date of purchase thereof by the Issuer.


 


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 Eligible Investments.


 


Collateral Quality
Tests will be satisfied if, as of any Measurement Date, the Collateral
Interests 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 Interests that are CMBS (other than Rake Bonds) does
not exceed the greater of (A) 15% of the Collateral Interest Principal
Balance and (B) $67,500,000;


 


(2)                             the aggregate Principal
Balance of all Collateral Interests that are Tenant Lease Loan Interests with
an S&P Rating of below “BBB” does not exceed the greater of (A) 7.5%
of the Collateral Interest Principal Balance and (B) $33,750,000;


 


(3)                             the aggregate Principal
Balance of all Collateral Interests that are REIT Debt Securities with an
S&P Rating below “BBB” does not exceed the greater of (A) 7.5% of the
Collateral Interest Principal Balance and (B) $33,750,000;


 


(4)                             the aggregate Principal
Balance of all Collateral Interests that are Real Estate CDO Securities does
not exceed the greater of (A) 15% of the Collateral Interest Principal
Balance and (B) $67,500,000;


 


(5)                             the Moody’s Maximum
Weighted Average Rating Factor Test is satisfied;


 


(6)                             (i) the Weighted
Average Fixed Rate Coupon as of such date equals or exceeds 6.00% and (ii) the
Weighted Average Spread as of such date equals or exceeds 3.00%;


 


19

















 


(7)                        the Weighted Average Life
Test is satisfied;


 


(8)                        the maximum property
concentration limits for Collateral Interests (on a look-through basis), other
than Real Estate CDO Securities and REIT Debt Securities are as follows:


 


(i)                       the aggregate Principal
Balance of such Collateral Interests which relate to Mortgaged Properties which
are office properties may not exceed the greater of (A) 65% of the
Collateral Interest Principal Balance and (B) $292,500,000;


 


(ii)                    the aggregate Principal
Balance of such Collateral Interests which relate to Mortgaged Properties which
are each of retail, multifamily, industrial and hospitality properties may not
exceed the greater of (A) 45% of the Collateral Interest Principal Balance
and (B) $202,500,000;


 


(iii)                 the aggregate Principal
Balance of such Collateral Interests which relate to Mortgaged Properties which
are condominium conversion properties may not exceed the greater of (A) 20%
of the Collateral Interest Principal Balance and (B) $90,000,000;


 


(iv)                the aggregate Principal
Balance of such Collateral Interests which relate to Mortgaged Properties which
are self-storage properties may not exceed the greater of (A) 15% of the
Collateral Interest Principal Balance and (B) $67,500,000;


 


(v)                   the aggregate Principal
Balance of such Collateral Interests which relate to Mortgaged Properties which
are healthcare properties may not exceed the greater of (A) 5% of the
Collateral Interest Principal Balance and (B) $22,500,000; and


 


(vi)                the aggregate Principal
Balance of such Collateral Interests which relate to Mortgaged Properties which
in the aggregate are any property type other than those specified in clauses (i) through
(v) above may not exceed the greater of (A) 10% of the Collateral
Interest Principal Balance and (B) $45,000,000;


 


(9)                        the aggregate Principal
Balance of all Collateral Interests (on a look-through basis), other than Real
Estate CDO Securities and REIT Debt Securities, backed or otherwise invested in
Mortgaged Properties located in any single U.S. state does not exceed the
greater of (A) 25% of the Collateral Interest Principal Balance and (B) $112,500,000,
except that (i) up to the
greater of (A) 60% of the Collateral Interest Principal Balance and (B) $270,000,000
may consist of Collateral Interests backed or otherwise invested in Mortgaged
Properties located in California, (ii) up to the greater of (A) 50%
of the Collateral Interest Principal Balance and (B) $225,000,000 may
consist of Collateral Interests backed or otherwise invested in Mortgaged
Properties located in New York, (iii) up to the greater of (A) 40% of
the Collateral Interest Principal Balance and (B) $180,000,000 may consist
of Collateral Interests backed or otherwise invested in Mortgaged Properties
located in each of Texas and Florida;


 


(10)                  the Herfindahl Score of
the Collateral Interests is at least 22;


 


(11)                  the aggregate Principal
Balance of all Collateral Interests that represent obligations of any single
obligor or group of affiliated obligors does not exceed the greater of (A) 13%
of the Collateral Interest Principal Balance and (B) $58,500,000;


 


(12)                  the aggregate Principal
Balance of all Collateral Interests that consist of CMBS issued in any single
calendar year does not exceed the greater of (A) 75% of the Collateral
Interest Principal Balance and (B) $337,500,000


 


20

















 


(13)                  the aggregate Principal
Balance of all Fixed Rate Collateral Interests does not exceed the greater of (A) 5%
of the Collateral Interest Principal Balance and (B) $22,500,000; provided that no more than the greater of (A) 40%
of the Collateral Interests and (B) $180,000,000 shall consist of Fixed
Rate Collateral Interests if (i) the Issuer enters into corresponding Deemed
Floating Asset Hedges or (ii) Rating Confirmation is obtained with respect
to an additional Fixed Rate Collateral Interest acquired without a
corresponding Deemed Floating Asset Hedge;


 


(14)                  the aggregate Principal
Balance of all Collateral Interests that provide for the payment of interest
less frequently than quarterly does not exceed the greater of (A) 15% of
the Collateral Interest Principal Balance and (B) $67,500,000;


 


(15)                  the aggregate Principal
Balance of all Collateral Interests that are CMBS and Real Estate CDO
Securities that have a stated maturity later than the Stated Maturity Date does
not exceed the greater of (A) 5% of the Collateral Interest Principal
Balance and (B) $22,500,000; provided
that such 5% limitation may be increased after the Closing Date if Rating
Confirmation has been obtained with respect thereto;


 


(16)                  the aggregate Principal
Balance of all Collateral Interests that are CMBS that have a stated maturity
later than the Stated Maturity Date does not exceed the greater of 5% of the
Collateral Interest Principal Balance (B) $22,500,000;


 


(17)                  the aggregate Principal
Balance of all Collateral Interests that are Real Estate CDO Securities that
have a stated maturity later than the Stated Maturity Date does not exceed the
greater of 3% of the Collateral Interest Principal Balance (B) $13,500,000;


 


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


 


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


 


(20)                  the aggregate Principal
Balance of all Collateral Interests that are Undeveloped Real Estate Collateral
Interests does not exceed the greater of (A) 15% of the Collateral
Interest Principal Balance and (B) $67,500,000;


 


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


 


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


 


(23)                  the Fitch Loan Diversity
Index Test is satisfied;


 


(24)                  the Fitch Poolwide
Expected Loss Test is satisfied; and


 


(25)                  the Moody’s Minimum
Average Recovery Rate Test is satisfied.


 


At all times, the dollar amount limitation set forth in
any individual Collateral Quality Test will be disregarded for the purposes of
the Reinvestment Criteria, but each such dollar amount limitation will be taken
into account solely for purposes of any reports to be prepared pursuant to this
Indenture.


 


Collateral Sub-Account means any sub-account
established within a Collection Account.


 


21

















 


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.


 


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
Loans means commercial mortgage loans whether such commercial mortgage loans
are Collateral Interests or underlie or comprise the other types of Collateral
Interests (as the context may require).


 


Commission means the United States
Securities and Exchange Commission.


 


Commitment Termination
Time means the date on which any of the following first occurs: (i) the
date on which the Future Advance Amounts are reduced to zero and the Collateral
Manager has notified the Trustee in writing that it will not cause the Issuer
to acquire any further Earn-Out Assets; (ii) the date on which the
aggregate principal amount of the Class A-1 Notes and the Class A-R
Notes have been paid in full; (iii) the Mandatory Class A-R Draw
Date; or (iv) the Redemption Date.


 


Controlling Class means the Class A
Senior Notes voting as a single Class, so long as any Class A Senior 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 voting as a single Class, so
long as any Class C Notes are Outstanding, then the Class D Notes, so
long as any Class D Notes are Outstanding, then the Class E Notes, so
long as any Class E Notes are Outstanding, then the Class F Notes, so
long as any Class F Notes are Outstanding, then the Class G Notes, so
long as any Class G Notes are Outstanding, then the Class H Notes, so
long as any Class H Notes are Outstanding, then the Class J Notes, so
long as any Class J Notes are Outstanding, and then the Class K
Notes, so long as any Class K Notes are Outstanding, in each case, based
on the aggregate principal amount thereof.


 


Controlling Person any 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 March 17, 2006, 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: (i) for note
transfer purposes, Wells Fargo Center, Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: CDO Trust Services — N-Star REL CDO VI
and (ii) for all other purposes, 9062 Old Annapolis Road, Columbia,
Maryland 21045. Attention: CDO Trust Services — N-Star REL CDO VI, telephone
number 410-884-2000, fax number 410-715-3748, or such other address as the
Trustee may designate from time to time by notice to the Rated Noteholders, the
Income Noteholders, the Collateral Manager, each Hedge Counterparty 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/D Coverage Tests and the Class E/F/G
Coverage Tests.


 


22

















 


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 Interest means any Collateral
Interest which, in the Collateral Manager’s reasonable business judgment, has a
significant risk of declining in credit quality or over time may become an
Impaired Interest.


 


Cumulative Applicable
Periodic Interest Shortfall Amount means the Class C
Cumulative Applicable Periodic Interest Shortfall Amount, Class D
Cumulative Applicable Periodic Interest Shortfall Amount, Class E Cumulative
Applicable Periodic Interest Shortfall Amount, Class F Cumulative
Applicable Periodic Interest Shortfall Amount, Class G Cumulative
Applicable Periodic Interest Shortfall Amount, Class H Cumulative
Applicable Periodic Interest Shortfall Amount, Class J Cumulative
Applicable Periodic Interest Shortfall Amount and Class K Cumulative
Applicable Periodic Interest Shortfall Amount.


 


Cure Advance means, amounts advanced
by a Holder of Income Notes pursuant to the Paying Agency Agreement to permit
the Issuer to exercise its right to cure payment defaults with respect to any
Senior Loan related to a Collateral Interest in accordance with the applicable
Underlying Instrument.


 


Current Pay Future
Advance Amount means as of any Calculation Date, an amount equal to the
Total Unfunded Future Advance Amounts related to the Earn-Out Assets held by
the Issuer that are currently due and payable, or which the applicable servicer
has notified the Collateral Manager and the Trustee in writing that it believes
will be payable within one month of the related Payment Date, and which the
Collateral Manager has notified the Trustee in writing that the Issuer will
fund such Future Advance Amounts.


 


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


 


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


 


Deemed Floating Asset
Hedge means, with respect to a Fixed Rate Collateral Interest, 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 Interest
over time and (ii) payment dates, with respect to termination payments only,
identical to the Payment Dates of the Issuer under this Indenture; provided that, (x) at the time of
entry into the Deemed Floating Asset Hedge, (i) the expected principal
payments on the Fixed Rate Collateral Interest comprising a Deemed Floating Rate
Collateral Interest will not extend beyond 10 years after the effective date of
such Deemed Floating Asset Hedge 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 Interest (as calculated at such
time), (y) 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 and (z) such Deemed Floating Asset
Hedge is priced at then-current market rates; provided,
however, with respect to Agency
MBS Securities, Deemed Floating Asset Hedges may also include put agreements or
other investments that require the related Agency MBS Securities to be
purchased at par plus accrued interest, as provided therein. In the event any
Deemed Floating Asset Hedge is not a Form-Approved Hedge Agreement, the
Collateral Manager will provide prior written notice to S&P and Fitch of
the Issuer’s entry into such Deemed Floating Asset Hedge and


 


23

















 


will obtain Rating Confirmation from S&P with respect
to the entry of the Issuer into such Deemed Floating Asset Hedge.


 


Deemed Floating Rate
Agency MBS Security means a fixed-rate Agency MBS Security, the interest rate
of which is hedged into a floating rate Agency MBS Security using a Deemed
Floating Asset Hedge; provided that,
at the time of entry into the related Deemed Floating Asset Hedge, the Average
Life of such Deemed Floating Rate Agency MBS 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.


 


Deemed Floating Rate
Collateral Interest means a Fixed Rate Collateral Interest the interest rate
of which is hedged into a Floating Rate Collateral Interest using a Deemed
Floating Asset Hedge; provided that,
at the time of entry into the related Deemed Floating Asset Hedge, the Average
Life of such Deemed Floating Rate Collateral Interest 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.


 


Deemed Floating Spread means the difference
between the stated rate at which interest accrues on each Fixed Rate Collateral
Interest that comprises a Deemed Floating Rate Collateral Interest (excluding
all Impaired Interests and Deferred Interest PIK Bonds) and the fixed rate that
the Issuer agrees to pay to the Hedge Counterparty 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.


 


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


 


Defaulted Interest means any interest due
and payable in respect of any Class A Note or any 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, or if no Class F Notes are Outstanding, in respect of any Class G
Note, or if no Class G Notes are Outstanding, in respect of any Class H
Note, or if no Class H Notes are Outstanding, in respect of any Class J
Note, or if no Class J Notes are Outstanding, in respect of any Class K
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.


 


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 an Impaired
Interest) for each consecutive payment date occurring over a period of (a) the
lesser of (i) six months or (ii) three consecutive payment dates (if
such Deferred Interest PIK Bond is rated (or privately rated for purposes of
the issuance of the Notes) below “Baa3” by Moody’s or “BBB-” by S&P or Fitch)
or (b) the lesser of (i) one year or (ii) six consecutive
payment dates (if such Deferred Interest PIK Bond is rated (or privately rated
for purposes of the issuance of the Notes) “Baa3” or higher by Moody’s, and
“BBB-” or higher by S&P and Fitch), 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.


 


24

















 


Depositary means, with respect to
the Indenture Issued 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.


 


Depositor means N-Star REL CDO
Depositor Corp. and any successors or assigns, in its capacity as depositor under
the Master Trust Agreement.


 


Discretionary Sale has the meaning
specified in Section 12.1 (a)(7).


 


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.


 


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.


 


Earn-Out Asset means, a Collateral Interest
that (a) requires the Issuer to make one or more future advances to the
obligor under the Underlying Instruments relating thereto, subject to
satisfaction of conditions precedent therein, (b) specifies a maximum
amount that can be borrowed on one or more fixed borrowing dates and (c) does
not permit the re-borrowing of any amount previously repaid by the obligor
thereof; provided, however, that any such Earn-Out Asset will
be an Earn-Out Asset only until all commitments by the Issuer to make advances
to the obligor thereof expire or are terminated or reduced to zero.


 


Earn-Out Asset Account means the Securities
Account designated the “Earn-Out Asset Account” and established in the name of
the Trustee pursuant to Section 10.8.


 


Effective Date means the date that is
the earliest of (i) the 270th day following the Closing Date, (ii) the
date on which the Issuer has purchased, with amounts on deposit in the
Uninvested Proceeds Account, Collateral Interests having an aggregate Principal
Balance (calculated on the respective purchase date for each such Collateral
Interest) equal to U.S.$450,000,000 (which amount includes all Future Funding
Obligations with respect to Earn-Out Assets) or (iii) such earlier date
(if any) that is designated by the Collateral Manager by notice to the Trustee
pursuant to this Indenture; provided
that the Collateral Manager has received Rating Confirmation within 30 Business
Days after the Effective 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.


 


25

















 


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 “Aa2” by Moody’s, “AA” by Fitch and “AAA” by
S&P; or


 


(b)                                 in the case of commercial
paper and short-term debt obligations including time deposits, P-1 by Moody’s,
“F1+” by Fitch and “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
and a short- and long-term credit rating of not less than “F 1+” and “AA”,
respectively, by Fitch);


 


(iv)                              Registered securities
other than mortgage-backed securities and interest-only 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 “Aa2” by
Moody’s, “AA” by Fitch and “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
“P-1” by Moody’s, “F1+” by Fitch and “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 “Aa2” by Moody’s and “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
“P-1” by Moody’s, “F1+” by Fitch and “A-1+” by S&P 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


 


26

















 


principal depository institution in a holding company
system, the 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
“Aa2” by Moody’s and “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”
by Moody’s, the highest rating possible by Fitch (if such funds are rated by
Fitch) and “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;


 


(viii)                        prior to the Effective
Date, Agency MBS Securities, and on or after the Effective Date, Deemed
Floating Rate Agency MBS Securities; and


 


(ix)                                any other investments for
which Rating Confirmation is received;


 


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 Manager 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, from the time, if any, that the Issuer is no longer a Qualified
REIT Subsidiary, 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.


 


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 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 “Aa2” by Moody’s and
lower than “AA” by S&P; 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 Interest 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 Interests, in conjunction with the
purchase of Collateral Interests or in exchange


 


27

















 


for a Collateral Interest; provided that the term “Equity Interest” will not include any
Preferred Equity Security or any asset-backed security structured as a
certificate or other form of beneficial interest.


 


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


 


ERISA Restriction
Certificate means the ERISA Restriction Certificate substantially in
the form set forth in Exhibit C-4 hereto.


 


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


 


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.


 


Extended Maturity Date means, with respect to
any Collateral Interest, the maturity date of such Collateral Interest,
assuming the exercise of all extension options (if any) that are exercisable at
the option of the related borrower under the terms of such Collateral Interest.


 


Extended Weighted
Average Maturity means, as of any Measurement Date with respect to the
Collateral Interests (other than Impaired Interests), the number obtained by (i) summing
the products obtained by multiplying (a) the remaining term to maturity
(in years, rounded to the nearest one tenth thereof, and based on the Extended
Maturity Date) of each Collateral Interest (other than Impaired Interests) by (b) the
outstanding Principal Balance at such time of such Collateral Interest and (ii) dividing
the sum by the aggregate Principal Balance at such time of all Collateral
Interests (other than Impaired Interests).


 


Fee Basis Amount means an amount equal,
for any Payment Date, to the average of the aggregate Collateral Interest
Principal Balance (including the aggregate Principal Balance of Impaired
Interests) on the first day of the related Due Period and the aggregate
Collateral Interest Principal Balance (including the aggregate Principal
Balance of Impaired Interests) on the last day of such Due Period.


 


Fitch means Fitch Ratings and
any successor or successors thereto.


 


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


 


28

















 


Manager on any Measurement Date, by the sum of the series of
products obtained for each Collateral Interest, by squaring the quotient of (x) the
Principal Balance on such Measurement Date of each such Collateral Interest and
each Cash Security Exposure and (y) the aggregate Principal Balance of all
Collateral Interests and all Cash Security Exposures on such Measurement Date,
multiplied by 10,000.


 


Fitch Loan Diversity
Index Test means a test that will be satisfied if on any Measurement
Date the Fitch Loan Diversity Index Score for the Collateral Interests is less
than 455.


 


Fitch Poolwide Expected
Loss means the output generated using Fitch’s modified CMBS multi-borrower
model (as applied to all Collateral Interests that are Commercial Mortgage
Loans, Subordinate Mortgage Loan Interests, Mezzanine Loans, Participation
Interests and Preferred Equity Securities).


 


Fitch Poolwide Expected
Loss Test means a test that will be satisfied on any Calculation
Date if the Fitch Poolwide Expected Loss of the Collateral Interests is equal
to or less than 44.125%.


 


Fitch Rating of any Collateral
Interest will be determined as follows:


 


(i)                                     if such Collateral
Interest is rated by Fitch, the Fitch Rating shall be such rating;


 


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


 


(iii)                               if the Fitch Rating
cannot be assigned in accordance with clauses (i) and (ii) above, the
Issuer (or the Collateral Manager on behalf of the Issuer) shall apply to Fitch
for a credit assessment which thereafter will be the Fitch Rating.


 


provided that (x) if such
Collateral Interest 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 rating
subcategory below such rating by that Rating Agency, and (y) if such
Collateral Interest 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 (z) notwithstanding the
rating definition described above, Fitch reserves the right to issue a rating
estimate for any Collateral Interest at any time which may differ from the one
determined pursuant to this definition and such rating estimate shall be the
Fitch Rating of such Collateral Interest.


 


Fitch Recovery Rate means, (i) with
respect to any Collateral Interest that is a Commercial Mortgage Loan on any
Measurement Date, the Market Value thereof and (ii) with respect to any
Collateral Interest that is a CMBS or a Real Estate CDO Security on any
Measurement Date, an amount equal to the percentage corresponding to the
domicile, original rating, seniority, and tranche thickness of such Collateral
Interest, as applicable, as currently set forth in “Global Rating Criteria for
Collateralised Debt Obligations” available at www.fitchratings.com. Fitch may,
from time to time, modify or replace this criteria and Fitch may apply the
current criteria which may have modified or replaced this report.


 


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.


 


29














 


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


 


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


 


Floating Rate Notes means, collectively, the
Class A-1 Notes, Class A-R Notes, Class A-2 Notes, Class B
Notes, Class C Notes, Class D Notes, Class E Notes, Class F
Notes, Class G Notes, Class H Notes, Class J Notes and Class K
Notes.


 


Form-Approved Hedge
Agreement means a Hedge Agreement relating to a specific Hedge
Counterparty with respect to which (a) the related Collateral Interest
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 which Rating Confirmation was previously obtained (as
certified to the Trustee by the Collateral Manager) for use of such form by the
Issuer; provided that (i) such
Form-Approved Hedge Agreement shall not provide for any upfront payments to be
made to any 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
as evidenced by Rating Confirmation, (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 Manager 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
Manager 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 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.


 


Funding Entity means, with respect to
any Class A-R Noteholder, any Liquidity Provider party to a Liquidity
Facility entered into by such Holder in connection with the Class A-R Note
Purchase Agreement or a guarantor of such Liquidity Provider.


 


Future Advance means, with respect to
any Earn-Out Asset, the requirement of the Issuer to make one or more future
advances to the obligor under the Underlying Instruments relating thereto,
subject to satisfaction of conditions precedent specified therein.


 


Future Advance Amount means, with respect to
any Earn-Out Asset, the amount of money required to be funded to the borrower
pursuant to the terms of the Earn-Out Asset after the initial funding of the
Earn-Out Asset.


 


Future Funding
Obligation means, with respect to any Earn-Out Asset, the obligation
to make one or more Future Advances retained by the Issuer.


 


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


 


30

















 


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), 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.


 


Hedge Counterparty means (a) any hedge
counterparty (or any permitted assignee or successor) under a Hedge Agreement
that satisfies the Hedge Counterparty Ratings Requirement and (b) any
substitute or additional parties therefore appointed in accordance with Section 16.1.


 


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(d).


 


Hedge Counterparty
Ratings Requirement means, with respect to any Hedge Ratings Determining
Party: (a) either (x) the short-term rating of such Hedge Ratings
Determining Party is not lower than “A-1” by Standard & Poor’s or (y) if
such Hedge Ratings Determining Party does not have a short-term rating from
Standard & Poor’s, the long-term rating of such Hedge Ratings
Determining Party by Standard & Poor’s is not lower than “A+”, (b) (x) a
rating on the short-term unsecured, unsubordinated debt obligations of the
Hedge Ratings Determining Party of “P-1” by Moody’s and a rating on the
long-term unsecured, unsubordinated debt obligations of the Hedge Ratings
Determining Party of at least “A1” by Moody’s or (y) if there is no
short-term rating by Moody’s, a rating on the long-term unsecured,
unsubordinated debt obligations of the Hedge Ratings Determining Party of at
least “Aa3” by Moody’s; provided,
that any rating shall be reduced by one subcategory to the extent it is on credit
watch with negative implications by Moody’s and (c) the short-term credit
rating of such Hedge Counterparty is at least “F1” by Fitch and the long-term
credit rating of such Hedge Counterparty is at least “A” by Fitch, provided that, with respect to clause (c),
if the credit rating falls below either such Fitch rating, then the Hedge
Counterparty shall within 30 days, at its sole option and expense, either (x) cause
an entity whose credit ratings equal or exceed the above criteria to issue in
favor of the Issuer a guaranty acceptable in form and substance to the Issuer
and Fitch; (y) cause an entity with a credit rating that equals or exceeds
the above criteria to enter a replacement Hedge Agreement; or (z) shall
post collateral to the Issuer, acceptable to Fitch, as confirmed in writing by
Fitch. If the credit rating of the then current Hedge Counterparty should fall
below “F2” (short-term) or “BBB+” (long-term) by Fitch, then the Hedge
Counterparty shall within 30 days, at its sole expense cause an entity with a
credit rating that equals or exceeds the above criteria (“F1” and “A”) to enter
a replacement Hedge Agreement.


 


Hedge Payment Amount means, with respect to
any Hedge Agreement and any Payment Date, the amount, if any, then payable by
the Issuer to such 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


 


31

















 


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


 


Herfindahl Index means an index calculated
by the Collateral Manager by dividing (i) one by (ii) the sum of the
series of products obtained for each Collateral Interest, by squaring the
quotient of (x) the principal balance on such Calculation Date of each
such Collateral Interest and (y) the aggregate Principal Balance of all
Collateral Interests on such Calculation Date. For purposes of calculating the
Herfindahl Index, all Collateral Interests from a single issue of CMBS shall be
treated as a single Collateral Interest and each $12,000,000 increment of Cash
in any Account shall be treated as a single Collateral Interest.


 


Herfindahl Score means a measurement of
the diversity of a pool of loans of unequal size calculated in accordance with
the Herfindahl Index.


 


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


 


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


 


Holder Sub-Account has the meaning
specified in Section 17.5(a) hereof.


 


Impaired Interest means any Collateral
Interest or any other security included in the Collateral:


 


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


 


32

















 


and the amount required to be paid in connection with such
redemption or purchase is paid on or before such ext ended redemption or
purchase date, or (2) with respect to which there is known to the Issuer
or the Collateral Manager a default (other than any payment default) which
default entitles the holders thereof to accelerate the maturity of all or a
portion of the principal amount of such obligation and such holders have
actually accelerated such obligation; provided,
however, in each case, if such
default is cured or waived then such asset shall no longer be an Impaired
Interest or (3) with respect to which there is known to the Collateral
Manager (A) any bankruptcy, insolvency or receivership proceeding has been
initiated in connection with the issuer of such Collateral Interest, or (B) there
has been proposed or effected any distressed exchange or other debt
restructuring where the issuer of such Collateral Interest has offered the debt
holders a new security or package of securities that either (x) amounts to
a diminished financial obligation or (y) has the purpose of helping the
issuer to avoid default, or (4) that has been rated “CC”, “D” or “SD” or
below by S&P or “CC” or below from Fitch or (5) there is known to the
Collateral Manager that the issuer thereof is in default (after 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 Interest,
except that a Collateral Interest will not constitute an “Impaired Interest”
under this clause (5) if each of the Rating Agencies has confirmed in
writing that such event shall not result in the reduction, qualification or
withdrawal of any rating of the Notes;


 


(ii)                                           with respect to a
Commercial Mortgage Loan, Subordinate Mortgage Loan Interest, Mezzanine Loan,
Participation Interest, Credit Lease Loan or Tenant Lease Loan, if a
foreclosure or default (whether or not declared) with respect such Commercial
Mortgage Loan (in the case of a Commercial Mortgage Loan) or otherwise in the
case of the related Commercial Mortgage Loan has occurred and is continuing for
sixty days; provided, however, that notwithstanding the
foregoing, a Commercial Mortgage Loan, Subordinate Mortgage Loan Interest,
Mezzanine Loan, Participation Interest, Credit Lease Loan or Tenant Lease Loan
shall not be deemed to be an Impaired Interest as a result of (1) the
related borrower’s failure to pay interest on such Commercial Mortgage Loan,
Subordinate Mortgage Loan Interest, Mezzanine Loan, Participation Interest,
Credit Lease Loan or Tenant Lease Loan or on the related commercial mortgage
loan on the initial due date therefor, if the related lender or holder of such
Commercial Mortgage Loan, Subordinate Mortgage Loan Interest, Mezzanine Loan,
Participation Interest, Credit Lease Loan or Tenant Lease Loan or the related
commercial mortgage loan consents to extend the due date when such interest is
due and payable, and such interest is paid on or before such extended due date
(provided that such interest is
paid not more than 60 days (or if the due date for such interest was previously
so extended, not more than 30 days) after the initial date that it was due), or
(2) the related borrower’s failure to pay principal on such Commercial
Mortgage Loan, Subordinate Mortgage Loan Interest, Mezzanine Loan,
Participation Interest, Credit Lease Loan or Tenant Lease Loan or the related
commercial mortgage loan on the original maturity date thereof (as defined
below), if the related lender or holder of such Commercial Mortgage Loan,
Subordinate Mortgage Loan Interest, Mezzanine Loan, Participation Interest,
Credit Lease Loan or Tenant Lease Loan or the related commercial mortgage loan
consents to extend such maturity date (so long as the Maturity Extension Requirements
are met) and such principal is paid on or before such extended maturity date,
or (3) the occurrence of any default other than a payment default with
respect to such Commercial Mortgage Loan, Subordinate Mortgage Loan Interest,
Mezzanine Loan, Participation Interest, Credit Lease Loan or Tenant Lease Loan
or the related commercial mortgage loan, unless and until the earlier of (A) declaration
of default and acceleration of the maturity of the Commercial Mortgage Loan,
Subordinate Mortgage Loan Interest, Mezzanine Loan, Participation Interest,
Credit Lease Loan or Tenant Lease Loan by the lender or holder thereof and (B) the
continuance of such default uncured for 60 days after such default became known
to the Issuer or the Collateral Manager or, upon receipt of Rating


 


33

















 


Confirmation, such longer period as the Collateral Manager
determines. As used herein, the term “original maturity date” means the
maturity date of a Commercial Mortgage Loan, Subordinate Mortgage Loan
Interest, Mezzanine Loan, Participation Interest, Credit Lease Loan or Tenant
Lease Loan or the related commercial mortgage loan as extended by all
extensions thereof which the related borrower had the right to elect and did
elect under the terms of the instruments and agreements relating to such
Commercial Mortgage Loan, Subordinate Mortgage Loan Interest, Mezzanine Loan,
Participation Interest, Credit Lease Loan or Tenant Lease Loan or the related
commercial mortgage loan, but before taking into account any additional
extensions thereof that are consented to by the lender or holder of such
Commercial Mortgage Loan, Subordinate Mortgage Loan Interest, Mezzanine Loan,
Participation Interest, Credit Lease Loan or Tenant Lease Loan or the related
commercial mortgage loan; and


 


(iii)                                        with respect to a CMBS,
Real Estate CDO Security or REIT Debt Security (1) as to which there has
occurred and is continuing a principal payment default (after giving effect to
any applicable grace period or waiver) or (2) as to which there is known
to the Issuer or the Collateral Manager a default (other than any payment
default) which default entitles the holders thereof to accelerate the maturity
of all or a portion of the principal amount of such obligation and such holders
have actually accelerated such obligation; provided,
however, in the case of clause (1) or
(2), if such default is cured or waived then such asset shall no longer be an
Impaired Interest or (3) as to which there is known to the Collateral Manager
(A) any bankruptcy, insolvency or receivership proceeding has been
initiated in connection with the issuer of such CMBS, Real Estate CDO Security
or REIT Debt Security, or (B) there has been proposed or effected any
distressed exchange or other debt re-structuring where the issuer of such CMBS,
Real Estate CDO Security or REIT Debt Security has offered the debt holders a
new security or package of securities that either (x) amounts to a
diminished financial obligation or (y) has the purpose of helping the
issuer to avoid default, or (4) that has been rated “CC”, “D” or “SD” or
below by S&P, “Ca” or “C” by Moody’s or “CC” or below from Fitch, or with
respect to REIT Debt Securities, the issuer of which has a credit rating of “D”
or “SD” or as to which S&P has withdrawn its rating after being rated “CC”,
“D” or “SD”; or (5) as to which there is known to the Collateral Manager
that the issuer thereof is in default (after giving effect to any applicable
grace period or waiver) as to payment of principal and/or interest on another
obligation (and such default has not been cured or waived) which is senior or
pari passu in right of payment to such CMBS, Real Estate CDO Security or REIT
Debt Security; provided, however, upon receipt of Rating
Confirmation for such CMBS, Real Estate CDO Security or REIT Debt Security, the
Collateral Manager may choose not to treat such a CMBS, Real Estate CDO
Security or REIT Debt Security as an “Impaired Interest” under this clause (iii) or
(B) as to which there has been a failure to pay interest in whole or in
part for the lesser of (x) one year or (y) six consecutive payment
periods (if such CMBS, Real Estate CDO Security or REIT Debt Security is rated
(or privately rated for purposes of the issuance of the Notes) “BBB-” or higher
by S&P or Fitch, or “Baa3” or higher by Moody’s) even if by its terms it
provides for the deferral and capitalization of interest thereon;


 


provided that, for the avoidance
of doubt, any Collateral Interest which has sustained a write down of principal
balance in accordance with its terms will not necessarily be considered an
Impaired Interest solely due to such write-down.


 


For purposes of calculating the Interest Coverage Ratio
and Principal Coverage Ratio, an appraisal reduction of a Collateral Interest
will be assumed to result in an implied reduction of principal balance for such
Collateral Interest only if such appraisal reduction is intended to reduce the
interest payable on such Collateral Interest and only in proportion to such
interest reduction. For purposes of the Interest Coverage Ratio and Principal
Coverage Ratio, any Collateral Interest that has sustained an implied reduction
of principal balance due to an appraisal reduction will not be considered an
Impaired Interest


 


34

















 


solely due to such implied reduction. The Collateral
Manager will notify the Trustee of any appraisal reductions of Collateral
Interests if the Collateral Manager has actual knowledge thereof.


 


For purposes of this definition of “Impaired Interest,”
the Maturity Extension Requirements
will be satisfied with respect to any extension if the maturity date is
extended in the case of Commercial Mortgage Loans, Subordinate Mortgage Loan
Interests, Mezzanine Loans, Participation Interests, Credit Lease Loans and
Tenant Lease Loans, to a new maturity date that is (A) not more than two
years after the original maturity date and (B) not less than 10 years
prior to the Stated Maturity Date; provided,
however, that notwithstanding the
foregoing requirements, “Maturity Extension Requirements” will be deemed
satisfied with respect to any extensions as to which Rating Confirmation has
been received.


 


Impaired Interests
Amount means the sum, with respect to each Impaired Interest in the Collateral,
of the lesser of (i) the product of (A) the Principal Balance of such
Impaired Interest and (B) the Applicable Recovery Rate of such Impaired
Interest and (ii) the product of (A) the Principal Balance of such
Impaired Interest and (B) the Market Value of such Impaired Interest.


 


Income Note
Distribution Account means the account designated the “Income Note
Distribution Account” and established by the PAA Issued Note Paying Agent in
the name of the PAA Issued Note Paying Agent for the benefit of the Issuer
pursuant to the 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)(33) and 11.1
(b)(28).


 


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.$63,675,000
Income Notes Due 2041.


 


Income Notes
Stated Amount means U.S.$63,675,000


 


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.


 


Indenture Issued Notes means, collectively, the
Class A Notes, Class B Notes, Class C Notes, Class D Notes,
Class E Notes, Class F Notes, Class G Notes, Class H Notes
and Class J Notes.


 


Indenture Issued
Noteholder means, with respect to any Indenture Issued Note, the
Person in whose name such Note is registered; provided
that Beneficial Owners or Agent Members will have no rights under this
Indenture with respect to Global Notes, and the Indenture Issued 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.


 


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 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


 


35

















 


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 Wachovia Bank, National Association.


 


Initial Maturity Date means, with respect to
any Collateral Interest, the maturity date of such Collateral Interest without
giving effect to any extension options available under the terms of such
Collateral Interest.


 


Initial Payment Date means the Payment Date
occurring in June 2006.


 


Initial Purchaser means Wachovia Capital
Markets, LLC as initial purchaser of the Class A-1 Notes, Class A-2
Notes, Class B Notes, Class C Notes, Class D Notes, Class E
Notes, Class F Notes and Class G Notes.


 


Initial Weighted
Average Maturity means, as of any Measurement Date with respect to the
Collateral Interests (other than Impaired Interests), the number obtained by (i) summing
the products obtained by multiplying (a) the remaining term to maturity
(in years, rounded to the nearest one tenth thereof, and based on the Initial
Maturity Date) of each Collateral Interest (other than Impaired Interests) by (b) the
outstanding Principal Balance of such Collateral Interest and (ii) dividing
the sum by the aggregate Principal Balance at such time of all Collateral Interests
(other than Impaired Interests).


 


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


 


Interest Advance has the meaning
specified in Section 10.17.


 


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,
for purposes of calculating the Interest Coverage Ratios, any amounts scheduled
to be paid to the Interest Reserve Account on the related Payment Date pursuant
to Section 11.1(a)(7); provided that
(a) following the date on which a Collateral Interest becomes an Impaired
Interest, scheduled Collateral Interest Collections shall not include any
amount scheduled to be received on Impaired Interests 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 an Impaired Interest exceed the Principal Balance
of such Impaired Interest, (b) the expected interest income on Floating
Rate Collateral Interests and Eligible Investments shall be calculated using
the then-current interest rate applicable thereto and (c) with respect to
any Written Down Interest, the Interest Coverage Amount shall exclude any
interest accrued on any Written Down Amount.


 


Interest Coverage Ratio
means, on any Measurement Date for any Class of Notes, the ratio
(expressed as a percentage) of (x) to (y), where (x) is equal to the
Interest Coverage Amount as of such Measurement Date and where (y) is (1) in
the case of the Class A/B Coverage Test, the sum of the Class A-R Commitment
Fee and the Periodic Interest for the Class A Notes and Class B Notes
for the Payment Date immediately following such Measurement Date (plus any
Defaulted Interest and interest thereon), (2) in the case of the Class C/D
Coverage Test, the amount determined by the foregoing clause (1) plus the sum of the Periodic Interest for
the Class C Notes and Class D Notes for the Payment Date immediately
following such Measurement Date (plus any Defaulted Interest and interest
thereon) or (3) in the case of the Class E/F/G Coverage Test, the
amount determined by the foregoing clause (2) plus the sum of the Periodic Interest for the Class E
Notes, Class F Notes and Class G Notes for the Payment Date


 


36

















 


immediately following such Measurement Date (plus any
Defaulted Interest and interest thereon); provided,
however, that the Interest
Coverage Amount above shall be calculated after giving effect to any scheduled
payment to the Interest Reserve Account for the Payment Date immediately
following such Measurement Date.


 


Interest Coverage Test means, for any Class of
Notes Outstanding, a test that is satisfied as of any Measurement Date when the
applicable Interest Coverage Ratio is equal to or greater than the applicable
Required Coverage Rates.


 


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 Notes other than the Class A-R Notes, (a) with respect
to the Initial Payment Date, the period from and including the Closing Date to
but excluding the Initial Payment Date and (b) 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 and (ii) with respect to the Class A-R Notes and
any Class A-R Draw, (a) initially the period from and including the
date of any Class A-R Draw to but excluding the earlier of (1) the
first Payment Date immediately following such Class A-R Draw and (2) the
Class A-R Prepayment Date in respect of such Class A-R Draw and (b) thereafter,
each period from and including the immediately preceding Payment Date to but
excluding the earlier of (1) the immediately succeeding Payment Date and (2) the
Class A-R Prepayment 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 aggregate amount of Semi-Annual
Pay Security Interest Reserve Amounts.


 


Interim Payment Date means a Business Day
which is not a Payment Date on which the Class A-R Notes may be prepaid
(in whole or in part) in accordance with Section 17.3 hereof.


 


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.


 


Investment Guidelines
Event means the earlier of (i) the date the Issuer or the Collateral
Manager has actual knowledge of (A) the Owner REIT’s intent to no longer
qualify as a REIT or (B) other event that would cause the circumstances
described in the following clause (ii) of this definition and (ii) the
date on which the Collateral Manager has actual knowledge that the Issuer has
ceased to be disregarded as an entity separate from the Owner REIT for U.S.
federal income tax purposes.


 


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


 


Issuer means N-Star REL CDO VI
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.


 


37

















 


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 Manager on its behalf)
by an Authorized Officer of the Issuer (or, as expressly provided herein, the
Collateral Manager) and (if appropriate) the Co-Issuer, as the context may
require or permit.


 


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 three-month U.S. Dollar deposits
determined in the manner described in Schedule B. LIBOR for the first Interest
Period is 4.91182%.


 


LIBOR Calculation Date has the meaning specified
in Schedule B.


 


Liquidity Facility means a liquidity loan
agreement, credit facility and/or purchase agreement providing for the several
commitments of the Liquidity Providers party thereto in the aggregate to make
loans to, or acquire interests in the assets of, a Holder of Class A-R
Notes in an aggregate principal amount at any one time outstanding at least
equal to the Class A-R Commitments of such Holder.


 


Liquidity Provider means a bank or other
institution or entity that a Holder of a Class A-R Note (or prospective
transferee) is entitled under a Liquidity Facility to borrow from, or sell an
interest in assets to.


 


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.


 


Mandatory Class A-R
Draw Date means the earliest to occur of (i) the last day of
the Reinvestment Period, (ii) the date of an acceleration of the Notes
following the occurrence and continuance of an Event of Default and (iii) the
occurrence and continuance of an Event of Default specified in Section 5.1(d),
(f) or (g).


 


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
Interests, each unaffiliated with each other and the Collateral Manager, as
certified by the Collateral Manager (to the extent that such bid-side prices
may be obtained by the Collateral Manager 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 the price,
expressed as a percentage of the par amount, determined by the Collateral
Manager in its commercially reasonable judgment.


 


38

















 


Master Trust Agreement means that certain Master
Trust Agreement, dated as of March 17, 2006, as the same may be amended or
supplemented from time to time, between the Depositor and the Underlying
Trustee.


 


Maximum Class A-R
Commitment means U.S.$70,000,000.


 


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 Interest) any Collateral Interest; (c) each Calculation
Date; (d) the last Business Day of each March, June, September and
December; and (e) with reasonable notice to the Issuer, the Collateral
Manager and the Trustee, any other Business Day that any Rating Agency or
Holders of more than 50% of the aggregate principal 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 Manager pursuant to the Collateral Management
Agreement.


 


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


 


Moody’s
Estimated Rating has the meanings specified in Section 12.2(c).


 


Moody’s Maximum
Weighted Average Rating Factor Test means a test that will
be satisfied on any Measurement Date if the Moody’s Tranched Weighted Average
Rating Factor of the Collateral Interests is equal to or less than 5600.


 


Moody’s Minimum Average
Recovery Rate means, as of any date or determination, 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 Interest by
its Moody’s Recovery Rate and (ii) dividing such sum by the Collateral
Interest Principal Balance less cash and Eligible Investments representing
Collateral Principal Collections and (iii) rounding up to the first
decimal place.


 


Moody’s Minimum Average
Recovery Rate Test means a test that will be satisfied as of any Measurement
Date if the Moody’s Minimum Average Recovery Rate is greater than or equal to
20%.


 


Moody’s
Post-Acquisition Compliance Test means the test that is satisfied if the Moody’s
Maximum Weighted Average Rating Factor Test, calculated incorporating any
provided Moody’s Estimated Rating, is satisfied, or, if the Moody’s Maximum
Weighted Average Rating Factor Test was not satisfied prior to the purchase of
the related Substitute Collateral Interest, the Moody’s Maximum Weighted Average
Rating Factor Test will be maintained or improved immediately following such
purchase.


 


Moody’s
Post-Acquisition Compliance Test Failure has the meanings
specified in Section 12.2(c).


 


39














 


Moody’s Rating means, with respect to any Collateral
Interest:


 


(i)                                     if such Collateral Interest is rated by
Moody’s, such rating;


 


(ii)                                  if such Collateral Interest is not rated by
Moody’s, then the Moody’s Rating of such Collateral Interest shall be deemed to
be the rating thereof as may be assigned by Moody’s upon the request of the
Issuer or the Collateral Administrator, provided
that the Collateral Administrator may, consistent with Moody’s published
criteria for underwriting and tranching of commercial real estate loans, use
its estimated tranched ratings for Collateral Interests representing up to 20%
of the Collateral Interest Principal Balance represented by Commercial Mortgage
Loans, Subordinate Mortgage Loan Interests, Preferred Equity Securities, and
Mezzanine Loans; provided that the
Collateral Manager shall submit such Collateral Interests to the Collateral
Administrator for a Moody’s estimated rating within 30 days of acquisition;


 


(iii)                            with respect to the CMBS that are CMBS
conduit securities (i.e., CMBS representing interests in a pool of commercial
mortgage loans), if such Collateral Interest is not rated by Moody’s, and no
other security or obligation of the issuer or the obligor is rated by Moody’s
and neither the Issuer nor the Collateral Administrator obtains a Moody’s
Rating for such Collateral Interest pursuant to clause (ii) above, then
the Moody’s Rating of such Collateral Interest may be determined using any one
of the following methods:


 


(a)                                       if such Collateral Interest is rated by both
S&P and Fitch or if such Collateral Interest is only rated by either
S&P or Fitch but Moody’s has rated other classes in the same transaction
then the Moody’s Rating will be 2 subcategories lower than the lowest Moody’s
equivalent rating then outstanding on the Collateral Interest; or


 


(b)                                      if such Collateral Interest is only rated by
one other Rating Agency, then the Issuer or the Collateral Administrator on
behalf of the Issuer may request that Moody’s assign a rating for such
Collateral Interest, which shall be such Collateral Interest’s Moody’s Rating.


 


(iv)                           with respect to the Collateral Interests that
are REIT Debt Securities or other corporate debt securities, if such Collateral
Interest is not rated by Moody’s, and no other security or obligation of the
issuer or the obligor is rated by Moody’s and neither the Issuer nor the
Collateral Administrator obtains a Moody’s Rating for such Collateral Interest
pursuant to clause (ii) above, then the Moody’s Rating of such Collateral
Interest may be determined using any one of the following methods:


 


(a)                                       if such Collateral Interest is rated at least
“BBB” by S&P, then the Moody’s Rating of such Collateral Interest will be
one subcategory below the Moody’s equivalent of the rating assigned by S&P;
or


 


(b)                                      if such Collateral Interest is rated “BB+” or
below by S&P, then the Moody’s Rating of such Collateral Interest will be
two subcategories below the Moody’s equivalent of the rating assigned by
S&P.


 


Notwithstanding
the foregoing, Collateral Interests representing no more that 20% of the
Collateral Interest Principal Balance may be rated pursuant to clauses
(iii) and (iv) above and no single Collateral Interest Principal
Balance that represents more than 5% of the Collateral Interest Principal
Balance can be rated pursuant to clause (iii) or (iv) above.


 


40

















 


Moody’s Rating Factor means with respect to any Collateral
Interest, the number set forth in the table below opposite the Moody’s Rating
of such Collateral Interest.


 


	
  Moody’s Rating

  	
   

  	
  Moody’s Rating Factor

  	
   

  	
  Moody’s Rating

  	
   

  	
  Moody’s Rating Factor

  	
   

  
	
  Aaa

  	
   

  	
  1

  	
   

  	
  Ba1

  	
   

  	
  940

  	
   

  
	
  Aa1

  	
   

  	
  10

  	
   

  	
  Ba2

  	
   

  	
  1,350

  	
   

  
	
  Aa2

  	
   

  	
  20

  	
   

  	
  Ba3

  	
   

  	
  1,766

  	
   

  
	
  Aa3

  	
   

  	
  40

  	
   

  	
  B1

  	
   

  	
  2,220

  	
   

  
	
  A1

  	
   

  	
  70

  	
   

  	
  B2

  	
   

  	
  2,720

  	
   

  
	
  A2

  	
   

  	
  120

  	
   

  	
  B3

  	
   

  	
  3,490

  	
   

  
	
  A3

  	
   

  	
  180

  	
   

  	
  Caa1

  	
   

  	
  4,770

  	
   

  
	
  Baa1

  	
   

  	
  260

  	
   

  	
  Caa2

  	
   

  	
  6,500

  	
   

  
	
  Baa2

  	
   

  	
  360

  	
   

  	
  Caa3

  	
   

  	
  8,070

  	
   

  
	
  Baa3

  	
   

  	
  610

  	
   

  	
  Ca or lower

  	
   

  	
  10,000

  	
   

  



 


Moody’s Recovery Rate means, with respect to a Collateral Interest
on any Measurement Date, an amount equal to the percentage for such Collateral
Interest set forth in the Moody’s Recovery Rate Matrix attached as Schedule C
hereto) in (x) the applicable table and (y) the row in such table
opposite the Moody’s Rating (determined in accordance with procedures
prescribed by Moody’s for such Collateral Interest on the date of its purchase
by the Issuer or, in the case of an Impaired Interest, the Moody’s Rating
immediately prior to default).


 


Moody’s Special Amortization Pro Rata
Condition means a
condition that will be satisfied with respect to any Payment Date if either
(i) (A) the Collateral Quality Tests (other than the Moody’s Weighted
Average Initial Maturity Test, the Moody’s Weighted Average Extended Maturity
Test, the Weighted Average Fixed Rate Coupon, the Weighted Average Spread Test,
the Weighted Average Life Test, the Fitch Poolwide Expected Loss Test, the
Fitch Loan Diversity Index Test and the S&P CDO Monitor Test) and each of
the Coverage Tests are satisfied as of the related Calculation Date and
(B) the aggregate balance of the Collateral Interests as of the related
Calculation Date is greater than an amount equal to 50% of the aggregate
Principal Balance of the Collateral Interests on the Effective Date or
(ii) Rating Confirmation has been provided by Moody’s.


 


Moody’s Tranched Weighted Average Rating
Factor means, on
any Measurement Date the number obtained by dividing (i) the sum of the
series of products obtained for any Collateral Interest that by multiplying
(a) the tranched principal balance on such Measurement Date of each such
Collateral Interest by (b) its respective Moody’s Rating Factor on such
Measurement Date by (ii) the aggregate tranched principal balance on such
Measurement Date of all Collateral Interests and rounding the result up to the
nearest whole number.


 


Moody’s Weighted Average Extended Maturity
Test means a test
that will be satisfied on any Measurement Date if the Extended Weighted Average
Maturity of the Collateral Interests as of such Measurement Date is five years
or less.


 


Moody’s Weighted Average Initial Maturity
Test means a test
that will be satisfied on any Measurement Date if the Initial Weighted Average
Maturity of the Collateral Interest as of such Measurement Date is four years
or less.


 


Mortgaged Property means the multifamily or commercial property
or properties securing the Commercial Mortgage Loans.


 


41

















 


Nonrecoverable Advance means any Interest Advance previously made
or proposed to be made which, in the judgment of the Advancing Agent or the
Trustee, as applicable, will not be ultimately recoverable from subsequent
payments or collections with respect to the Collateral Interests. Any
determination of recoverability by the Advancing Agent or the Trustee, as
applicable, shall be subject to the standard set forth in Section 10.17.


 


NorthStar Subsidiary shall have the meaning ascribed to such term
in the S&P Letter.


 


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


 


Note Payment Sequence means the application of Collections to pay
principal of the Rated Notes in the following order, in each case until paid in
full: (i) Class A Senior Notes, pro
rata, (ii) Class A-2 Notes, (iii) Class B Notes,
(iv) Class C Notes, (v) Class D Notes,
(vi) Class E Notes, (vii) Class F Notes,
(viii) Class G Notes, (ix) Class H Notes,
(x) Class J Notes and (xi) Class K Notes.


 


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


 


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


 


Note Valuation Report has the meaning specified in
Section 10.11(a).


 


Notes means, collectively, 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.


 


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


 


Offering means the offering of the Rated Notes (other
than the Class H Notes, Class J Notes and Class K 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 Offered Notes, as amended or supplemented from time to time.


 


Officer means, (a) with respect to the 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;
(b) with respect to any bank or trust company acting as trustee of an
express trust or as custodian, any Trust Officer; and (c) with respect to
the Co-Issuer, a manager of such entity.


 


Opinion of Counsel means a written opinion addressed to the Trustee,
each Hedge Counterparty 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


 


42

















 


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 this Indenture and the Paying Agency Agreement other than Notes
cancelled, redeemed, exchanged or replaced in accordance with the terms of this
Indenture or the 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, (A) any Notes held or beneficially owned
by the Collateral Manager or any of its Affiliates or by an account or fund for
which the Collateral Manager 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 Manager or the assignment by the Collateral
Manager of its rights and obligations under the Collateral Management
Agreement, except for any assignments or transfers by the Collateral Manager of
its rights and obligations to Affiliates of the Collateral Manager, subject to
any applicable requirements under the Investment Advisers Act and (B) the
Class A-R Notes will be assumed to be fully drawn.


 


Owner REIT means an entity which qualifies as a REIT
for U.S. federal income tax purposes and which owns, directly or indirectly,
through one or more Qualified REIT Subsidiaries thereof or one or more entities
disregarded as entities separate from such REIT or its Qualified REIT
Subsidiaries, 100% of the Class H Notes, the Class J Notes, the
Class K Notes, the Income Notes and the Ordinary Shares (other than any
Class H Notes, Class J Notes or Class K Notes with respect to
which the Issuer has received an Opinion of Counsel rendered by nationally
recognized U.S. tax counsel experienced in such matters to the effect that the
Class H Notes, Class J Notes or Class K Notes, as applicable,
will be treated as indebtedness for U.S. federal income tax purposes).


 


PAA Issued Note Paying Agent means Wells Fargo Bank, National Association,
and any successors or assigns in its capacity as PAA Issued Note Paying Agent
under the Paying Agency Agreement.


 


PAA Issued 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 PAA Issued Note Paying Agent during the preceding Due
Period in accordance with the Paying Agency Agreement.


 


PAA Issued Note Paying Agent Fee means, with respect to any Payment Date, for
so long as any Class K Notes or Income Notes remain Outstanding, the fee
payable to the PAA Issued Note Paying Agent in an aggregate amount equal to
U.S.$10,000 per annum.


 


PAA Issued Note Register means, with respect to the Income Notes and
Class K Notes, the note register maintained by the PAA Issued Note
Registrar.


 


PAA Issued Note Registrar means Wells Fargo Bank, National Association,
and any successors or assigns in its capacity as PAA Issued Note Registrar
under the Paying Agency Agreement.


 


PAA Issued Notes means, together, the Class K Notes and
Income Notes.


 


43

















 


Participation Interests means pari passu participation interests in
commercial mortgage loans, Subordinate Mortgage Loan Interests and Mezzanine
Loans.


 


Paying Agency Agreement means that certain Paying Agency Agreement,
dated as of March 17, 2006, as the same may be amended or supplemented
from time to time, between the Issuer and the PAA Issued Note Paying Agent.


 


Paying Agents means, together, the Note Paying Agent and
the PAA Issued Note Paying Agent.


 


Payment Account means the Securities Account designated the
“Payment Account” and established in the name of the Trustee pursuant to
Section 10.9.


 


Payment Date means June 16, 2006, and, thereafter,
quarterly on each September 16, December 16, March 16 and
June 16, or if such day is not a Business Day, the next succeeding
Business Day, commencing in June 2006 and ending on the applicable Stated
Maturity Date (or in the case of the Class A-R Notes, the related
repayment date, if sooner).


 


Periodic Interest means the amount of interest payable 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 (and in the case of the Class A-R Notes, each
Class A-R Prepayment 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).


 


Permitted NS Purchaser means (i) NorthStar OS VI, 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 an Impaired Interest) or that
issues identical securities in lieu of payments of interest in Cash.


 


Plan Asset Regulation means the U.S. Department of Labor
regulation at 29 C.F.R. Section 2510.3-101.


 


Placement Agent means Wachovia Capital Markets, LLC in its
capacity as placement agent of the Class A-R Notes.


 


Pledged Collateral Interest means as of any date of determination, any
Collateral Interest that has been Granted to the Trustee and has not been
released from the lien of this Indenture pursuant to Section 10.12.


 


Pledged Securities means on any date of determination,
(a) the Collateral Interests, Equity Interests and the Eligible
Investments that have been Granted to the Trustee and (b) all non-Cash
proceeds thereof, in each case, to the extent not released from the lien of
this Indenture pursuant hereto.


 


44

















 


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


 


Principal Balance means, with respect to any Collateral
Interest or Eligible Investment, as of any date of determination, the
outstanding principal amount of such Collateral Interest or Eligible
Investment; provided that the
Principal Balance of (i) any Collateral Interest which permits the
deferral or capitalization of interest will not include any outstanding balance
of the deferred and/or capitalized interest except in the case of Earn-Out
Assets that provide for a Future Advance Amount with respect to debt service,
if the amount has been capitalized prior to the acquisition by the Issuer and
provided the amount did not exceed the amount available for debt service or
other Future Advance Amounts, (ii) any Equity Interest will be zero,
(iii) any putable Collateral Interest which matures after the Stated
Maturity Date will be the lower of the put price and the outstanding principal
amount, (iv) any Collateral Interest or Eligible Investment in which the
Trustee does not have a first priority perfected security interest shall be
deemed to be zero, (v) the Principal Balance of an Earn-Out Asset will be
the outstanding principal balance of such Earn-Out Asset, plus any Future Funding Obligations that
have not been irrevocably reduced with respect to such Earn-Out Asset and
(vi) any Preferred Equity Security will be equal to the component of the
liquidation price that is not attributable to the return of capital by its
governing documents; provided, further, that for purposes of calculating
the Principal Coverage Amount, an appraisal reduction of a Collateral Interest
will be assumed to result in an implied reduction of Principal Balance for such
Collateral Interest only if such appraisal reduction is intended to reduce the
interest payable on such Collateral Interest and only in proportion to such
interest reduction.


 


Principal Coverage Amount means, on any Measurement Date, an amount
equal to (i) the aggregate Principal Balance of all Collateral Interests
(other than Impaired Interests, Written Down Interests 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 Impaired Interests Amount, plus
(iv) with respect to Written Down Interests, the Reduced Principal
Balance, plus (v) the
Deferred Interest PIK Bond Amount, plus
(vi) the Aggregate Class A-R Undrawn Amount (without duplication).
For purposes of calculating the Principal Coverage Amount, any Collateral
Interest that has sustained an implied reduction of Principal Balance due to an
appraisal reduction will not be considered an Impaired Interest solely due to
such implied reduction.


 


Principal Coverage Ratio means, on any Measurement Date for any
Class of Notes, the ratio (expressed as a percentage) based on the ratio
of (x) to (y), where (x) is the Principal Coverage Amount as of such
Measurement Date and (y) is (1) in the case of the Class A/B
Coverage Test, the sum of the aggregate principal amount of the then
Outstanding Class A Notes and Class B Notes (assuming for purposes of
the calculation that the Class A-R Commitments are fully drawn) as of such
Measurement Date, (2) in the case of the Class C/D Coverage Test, the
amount determined by the foregoing clause (1) plus the sum of the aggregate principal amount (including any
Cumulative Applicable Periodic Interest Shortfall Amount and any interest accrued
on such amount) then Outstanding of the Class C Notes and Class D
Notes as of such Measurement Date or (3) in the case of the
Class E/F/G Coverage Test, the amount determined by the foregoing clause
(2) plus the sum of the
aggregate principal amount (including any Cumulative Applicable Periodic
Interest Shortfall Amount and any interest accrued on such amount) then
Outstanding of the Class E Notes, Class F Notes and Class G
Notes as of such Measurement Date.


 


45

















 


Principal Coverage Test means, for any Class of Notes
Outstanding, a test satisfied on any Measurement Date if the applicable
Principal Coverage Ratio as of such Measurement Date is equal to or greater
than the applicable Required Coverage Ratio.


 


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.


 


Pro Rata Principal Coverage Ratio means, as of any Measurement Date, the ratio
(expressed as a percentage) based on the ratio of (x) to (y), where
(x) is the Principal Coverage Amount as of such Measurement Date and
(y) is the sum of the aggregate principal amount then Outstanding of the
Class A Notes and Class B Notes (assuming for purposes of the
calculation that the Class A-R Commitments are fully drawn) as of such
Measurement Date.


 


Pro Rata Principal Coverage Test will be met as of any Measurement Date if
the Pro Rata Principal Coverage Ratio as of such Measurement Date is equal to
or greater than or equal to 139.35%.


 


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


 


Proposed Portfolio means the portfolio (measured by Principal
Balance) of (a) the Pledged Collateral Interests 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 Interests resulting from the
sale, maturity or other disposition of a Pledged Collateral Interest or a
proposed purchase of a Collateral Interest, as the case may be.


 


Purchase and Placement Agreement means the agreement, dated as of the Closing
Date, among the Co-Issuers, the Initial Purchaser and the Placement Agent
relating to the purchase and placement of the Offered Notes.


 


Purchased Accrued Interest means all payments of interest received, or
amounts collected that are attributable to interest received on Collateral
Interests and Eligible Investments, to the extent such payments or amounts
constitute accrued interest purchased with Collateral Principal Collections
except for interest accrued on Collateral Interests 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
Manager and delivered to the Trustee prior to an Auction, as may be amended and
supplemented by the Collateral Manager from time to time upon written notice to
the Trustee; provided that
(i) the Qualified Bidder List may include the Collateral Manager 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.


 


Qualified Institutional Lender means a qualified institutional lender of
the type typically permitted to acquire subordinate interests in commercial
mortgage loans (all or a portion of which will be included in a CMBS transaction)
pursuant to the documents creating such interests.


 


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


 


46

















 


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.


 


Qualified REIT Subsidiary means a “Qualified REIT Subsidiary” within
the meaning of Section 856(i)(2) of the Code.


 


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 “Aa2” or
better by Moody’s and “AA” or better by S&P.


 


Rake Bond means a CMBS backed solely by a single
promissory note secured by a mortgaged property, which promissory note is
subordinate in right of payment to one or more separate promissory notes
secured by the same mortgaged property.


 


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 Notes means, collectively, the Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes, Class H Notes, Class J Notes
and Class K 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 this
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, an S&P
Rating, Fitch Rating or a Moody’s Rating.


 


Rating Agency means each of (i) Moody’s, for so long
as any of the Outstanding Rated Notes are rated by Moody’s (including any
private or confidential rating), (ii) Fitch, for so long as any of the
Outstanding Rated Notes are rated by Fitch (including any private or
confidential rating), and (iii) 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 Moody’s, 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 Manager) and reasonably satisfactory to a
Majority of each Class of Rated Notes. In the event that at any time
Moody’s ceases to be a Rating Agency, references to rating categories of
Moody’s 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 Moody’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 published ratings for the type of
security in respect of which such alternative rating agency is used.


 


Rating Confirmation means, with respect to any specified action
or determination, for so long as any of the Rated Notes are Outstanding and
rated by Moody’s, Fitch or S&P, 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 Confirmation is specified
herein


 


47

















 


to
be required by only Moody’s, Fitch or S&P, in which case such Rating
Confirmation will be sufficient. For the purposes of this definition, “Rating
Agencies” will be deemed to not include Fitch unless the proposed action or
matter relates to the issuance of additional notes, or any amendment or
modification, or any proposed amendment or modification, to any Transaction
Document, and in any such case notification will be made to Fitch within 30
days following such amendment or modification.


 


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) commercial mortgage backed securities, (iii) commercial mortgage
loans or interests therein or (iv) 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.


 


Record Date means the date on which the Holders of Rated
Notes entitled to (i) vote with respect to any matters under this
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 with respect to any Global Note being
the first day (whether or not a Business Day) prior to such Payment Date or
Redemption Date and with respect to any Certificated Note being the fifteenth
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 10.11(b).


 


Redemption Price means, (i) with respect to each
Class of Rated Notes, (a) their then-outstanding aggregate principal
amount plus (b) accrued interest
thereon to the date of redemption to the extent not already paid (including,
without limitation, any Cumulative Applicable Periodic Interest Shortfall
Amount together with interest thereon) plus (c) unreimbursed
Interest Advances plus (d) with
respect to the Class A-R Notes, any accrued and unpaid Class A-R
Increased Costs and Class A-R Commitment Fee and (ii) if the Income
Notes are redeemed, the “Redemption Price” for the Income Notes, 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).


 


Reduced Principal Balance means, with respect to each Written Down
Interest, the original Principal Balance of such Written Down Interest minus the Written Down Amount as notified
by or on behalf of the related issuer or trustee to the holders of such Written
Down Interest (including appraisal reductions on CMBS).


 


Reference Banks has the meaning specified in Schedule B.


 


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.


 


48

















 


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 Certificated Note has the meaning specified in
Section 2.4(b)(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(b)(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.


 


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


 


Reinvestment Asset Information has the meaning specific in
Section 12.2(c).


 


Reinvestment Criteria means, with respect to any reinvestment of
Collateral Principal Payments, Sale Proceeds, Class A-R Draws and amounts
on deposit in the Earn-Out Asset Account, the following criteria:


 


(i)                                          the Collateral Quality Tests are satisfied,
or, if any Collateral Quality Test was not satisfied immediately prior to such
investments, the extent of compliance with such Collateral Quality Test will be
maintained or improved immediately following such reinvestment;


 


(ii)                                       after the Effective Date, the Coverage Tests
are satisfied, or, if any Coverage Test was not satisfied immediately prior to
such investments, such Coverage Test will be maintained or improved following
such reinvestment; and


 


(iii)                                    no Event of Default has occurred and is
continuing.


 


Reinvestment Period means the period beginning on the Closing
Date and ending on and including the Payment Date in June 2011.


 


REIT means a “real estate investment trust” as
defined in Section 856 of the Code.


 


REIT Debt Securities means 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 such
securities) of a portfolio of real property interests.


 


Relevant Jurisdiction means, as to any obligor on any Collateral
Interest, any jurisdiction (a) in which the obligor is incorporated,
organized, managed and controlled or considered to have its seat,
(b) where an office through which the obligor is acting for purposes of the
relevant Collateral Interest 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.


 


49














 


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.


 


Required Coverage Ratio means, with respect to
the specified Classes of Notes and the related Interest Coverage Test or
Principal Coverage Test, as the case may be, as of any Calculation Date, the
applicable percentage indicated below opposite such specified Classes:


 




	
  Class

  	
   

  	
  Principal Coverage Test

  	
   

  	
  Interest Coverage Test

  	
   

  
	
  Class A/B

  	
   

  	
  140.10

  	
  %

  	
  189.20

  	
  %

  
	
  Class C/D

  	
   

  	
  132.40

  	
  %

  	
  179.50

  	
  %

  
	
  Class E/F/G

  	
   

  	
  124.20

  	
  %

  	
  164.20

  	
  %

  






 


Requisite Noteholders means the Holders of 662/3% or more of the then Aggregate Outstanding Amount of the Controlling
Class.


 


Reserved Matters has the meaning
specified in Section 8.2.


 


Retained Rights means with respect to
each initial Collateral Interest (i) that is a Subordinate Mortgage Loan
Interest, Mezzanine Loan or Preferred Equity Security, any right of the holder
thereof to cure payment or other mortgage loan defaults by the borrower of the
related Commercial Mortgage Loan or to exercise any purchase option with
respect to the related Senior Loan, each in accordance with the applicable
Underlying Instrument and (ii) that is a Subordinate Mortgage Loan
Interest, Mezzanine Loan, Commercial Mortgage Loan, Participation Interest,
Credit Lease Loan, Tenant Lease Loan Interest or Preferred Equity Security, any
right of the holder thereof to receive any exit fees, extension fees or
prepayment premiums.


 


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


 


Rule 144A
Certificated Note has the meaning specified in Section 2.4(b)(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(b)(1)(ii).


 


S&P or Standard &
Poor’s means Standard & Poor’s Ratings Services, 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 Manager 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 Interests, 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 Senior Note Default Differential, the Class A-2 Note
Default Differential, the Class B Note Default Differential, the Class C
Note Default Differential, the Class D Note Default Differential, the


 


50

















 


Class E Note Default Differential, the Class F
Note Default Differential, the Class G Note Default Differential, the Class H
Note Default Differential, the Class J Note Default Differential and the Class K
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 Senior Note Default Differential of the
Proposed Portfolio is greater than the Class A Senior Note Default
Differential of the Current Portfolio, the Class A-2 Note Default
Differential of the Proposed Portfolio is greater than the Class A-2 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, the Class F Note Default
Differential of the Proposed Portfolio is greater than the Class F Note
Default Differential of the Current Portfolio, the Class G Note Default
Differential of the Proposed Portfolio is greater than the Class G Note
Default Differential of the Current Portfolio, the Class H Note Default
Differential of the Proposed Portfolio is greater than the Class H Note
Default Differential of the Current Portfolio, the Class J Note Default
Differential of the Proposed Portfolio is greater than the Class J Note
Default Differential of the Current Portfolio, and the Class K Note
Default Differential of the Proposed Portfolio is greater than the Class K
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 Interests and provided, in each case,
by the Collateral Manager or S&P to the Trustee.


 


S&P Letter means that certain letter
dated as of March 17, 2006, from S&P to NorthStar Realty Finance Corp.


 


S&P Minimum Average
Recovery Rate means, as of any date or determination, 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 Interest by
its S&P Recovery Rate and (ii) dividing such sum by the Collateral
Interest Principal Balance less cash and Eligible Investments representing
Collateral Principal Collections and (iii) rounding up to the first
decimal place.


 


S&P Minimum Average
Recovery Rate Test means a test that will be satisfied as of any Measurement
Date if the S&P Minimum Average Recovery Rate is greater than or equal to (i) 35.48%
with respect to the Class A Senior Notes, (ii) 35.48% with respect to
the Class A-2 Notes, (iii) 35.48% with respect to the Class B
Notes, (iv) 35.48% with respect to the Class C Notes, (v) 35.48%
with respect to the Class D Notes, (vi) 36.57% with respect to the Class E
Notes, (vii) 36.57% with respect to the Class F Notes, (viii) 36.57%
with respect to the Class G Notes, (ix) 35.30% with respect to the Class H
Notes, (x) 35.30% with respect to the Class J Notes and (xi) 35.66%
with respect to the Class K 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 Interest: (a) the
name and country of domicile of the issuer thereof and the particular issue
held by the Issuer, (b) the CUSIP or other applicable identification
number associated with such Collateral Interest, (c) the par value of such
Collateral Interest, (d) the type of issue (including, by way of example,
whether such Collateral Interest is a bond, loan or asset-backed 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 Interest 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 Interest which bears interest at a fixed rate) or the
spread over the applicable index (in the case of a


 


51

















 


Collateral Interest which bears interest at a floating rate),
(g) the S&P Industry Classification Group for such Collateral
Interest, (h) the Stated Maturity Date of such Collateral Interest, (i) the
S&P Rating of such Collateral Interest or the issuer thereof, as
applicable, (j) the priority category assigned by S&P to such
Collateral Interest, if available and (k) such other information as the
Trustee may determine to include in such file.


 


S&P Rating means a rating of any
Collateral Interest determined as follows:


 


(a)                                  if S&P has assigned a
rating to such Collateral Interest either publicly or privately (in the case of
a private rating, with the written consent of the issuer of such Collateral
Interest for use of such private rating and delivery of a copy of such consent
to S&P), the S&P 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 Interest is placed on a watch list for possible upgrade or downgrade
by S&P, the S&P Rating applicable to such Collateral Interest shall be
one rating subcategory above or below, respectively, the S&P Rating
applicable to such Collateral Interest immediately prior to such Collateral
Interest being placed on such watch list;


 


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


 


(c)                                  if any Collateral
Interest is a Collateral Interest that has not been assigned a rating by
S&P and is not a Collateral Interest listed in Schedule G hereto, as
identified by the Collateral Manager, refer to Schedule F hereto to determine
the S&P Rating; provided that (i) if
any Collateral Interest shall, at the time of its purchase by the Issuer, be
listed for a possible upgrade or downgrade on either Moody’s or S&P’s then
current credit rating watch list, then the S&P Rating of such Collateral
Interest shall be one subcategory above or below, respectively, the rating then
assigned to such item in accordance with Schedule F hereto; (ii) for
purposes of determining compliance with S&P CDO Monitor Test, if the rating
assigned to such Collateral Interest 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 Interest shall be one rating
subcategory above or below, respectively, the S&P Rating applicable to such
Collateral Interest immediately prior to such Collateral Interest being placed
on such watch list and (iii) the aggregate Principal Balance that may be
given a rating based on this subparagraph (iii) may not exceed 20% of the
aggregate Principal Balance of all Collateral Interests; provided that if any Collateral Interest
has not been assigned a rating by S&P and is a type of Collateral Interest
not listed on Schedule G hereto, subsequent to the Closing Date, (A) the
acquisition of any such Collateral Interest will require an estimate or shadow
rating from S&P prior to the acquisition by the Issuer of such Collateral
Interest or (B) the Collateral Administrator may use the tranched ratings
determined in accordance with Schedule I for Collateral Interests represented
by Commercial Mortgage Loans, Subordinate Mortgage Loan Interests, Preferred
Equity Securities and Mezzanine Loans representing up to 20% of the Collateral
Interests Principal Balance;


 


52

















 


notwithstanding the foregoing, if any Collateral Interest
shall, at the time of its purchase by the Issuer, be listed for a possible
upgrade or downgrade on the then current S&P credit rating watch list, then
the S&P Rating of such Collateral Interest 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 Interest 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 Interest on any Calculation Date, an amount equal to the percentage
for such Collateral Interest set forth in the S&P Recovery Rate Matrix
attached as a Schedule D (determined in accordance with procedures prescribed
by S&P for such Collateral Interest on such Calculation Date or, in the
case of Impaired Interests, the S&P Rating immediately prior to default).


 


S&P Special
Amortization Pro Rata Condition means a condition that will be satisfied with
respect to any Payment Date if either (i) (A) the aggregate Principal
Balance of the Collateral Interests as of the related Calculation Date is
greater than an amount equal to 50% of the aggregate Principal Balance of the
Collateral Interests on the Effective Date and each of the Coverage Tests was
satisfied as of the related Calculation Date and (B) (1) the Pro Rata
Principal Coverage Test has been satisfied on the related and each prior
Calculation Date, or (2) if the Pro Rata Principal Coverage Test has
failed to be satisfied on any previous Calculation Date, subsequent to such
failure, (x) the Pro Rata Principal Coverage Ratio as of the related
Calculation Date equals or exceeds the Pro Rata Principal Coverage Ratio in
existence on the Effective Date or (y) the Pro Rata Principal Coverage
Test is satisfied as of the related Calculation Date without applying
Collateral Principal Collections on any previous Payment Date or (ii) the
Rating Confirmation has been provided by S&P.


 


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


 


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


 


Schedule of Collateral
Interests means the list of Collateral Interests securing the
Indenture Issued 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 (other than the Class K Noteholders),
each Hedge Counterparty and the Collateral Manager.


 


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.


 


53

















 


Seller or Sellers means individually or
together, NRFC WA Holdings, LLC and NRFC WA Holdings II, LLC and their
successors or assigns, in their capacity as sellers under the Asset Transfer
Agreements or any other seller of Collateral Interests acquired by the Issuer
or the Underlying Trustee after the Closing Date.


 


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


 


Semi-Annual Pay
Security Interest Reserve Amount means, with respect to each Collateral Interest
that is a Semi-Annual Pay Security, as of any Calculation Date, the amount
equal to (i) the amount of interest paid by the obligor on the most recent
payment date (or if no payment date has occurred, the estimated interest
payment due on the first payment date) with respect to such Semi-Annual Pay
Security multiplied by (ii) (A) the
number of months until the next payment date with respect to such Semi-Annual
Pay Security minus one (rounded up
to the nearest whole number) divided
by (B) two; 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
Management 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 Manager pursuant to the Collateral
Management Agreement; provided that
the Senior Collateral Management 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 Management 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 Management Fee that is
deferred due to the operation of the Priority of Payments will not accrue
interest. Any Senior Collateral Management Fee accrued but not paid prior to
the resignation or removal of the Collateral Manager shall continue to be
payable to the Collateral Manager on the Payment Date immediately following the
effectiveness of such resignation or removal.


 


Senior Interests means the interests in a
Commercial Mortgage Loan which rank senior in priority to the Subordinate
Mortgage Loan Interests in the same Commercial Mortgage Loan.


 


Senior Loans means the debt in a
Commercial Mortgage Loan which rank senior in priority to the Subordinate
Mortgage Loan Interests in the same Commercial Mortgage Loan.


 


Senior Notes means, with respect any Class of
Notes (other than the Class A Senior Notes), the Class or Classes of
Notes with a prior alphabetical designation.


 


Senior Structuring Fee means, with respect to
each Payment Date, an amount equal to 0.04875% per annum of the Fee Basis
Amount payable to the Collateral Manager pursuant to the Collateral Management
Agreement.


 


Servicers means, Wachovia Bank
and/or one or more additional servicers, each servicing as a servicer pursuant
to the Servicing Agreement.


 


Servicing Agreement means a certain Servicing
Agreement, dated as of March 17, 2006, as the same may be amended or
supplemented from time to time, among the Issuer, and the Servicers, each as a
servicer.


 


Specified
Currency has the meaning specified in Section 14.13.


 


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


 


54

















 


Specified Place has the meaning specified
in Section 14.13.


 


Specified Types means any Trust
Certificate, CMBS, Real Estate CDO Security, REIT Debt Security or Collateral
Interest related to (x) developed or undeveloped commercial real estate or
(y) undeveloped real estate intended to be developed into residential
property; provided that no loan
shall be secured by an individual residential property.


 


Stated Maturity Date means the Payment Date
occurring in June 2041.


 


Subordinate Collateral
Management Fee means the fee payable to the Collateral Manager at a per
annum rate in arrears on each Payment Date pursuant to the Collateral
Management Agreement, in an amount (as certified by the Collateral Manager to the
Trustee) equal to 0.25% of the Fee Basis Amount for such Payment Date; provided that the Subordinate Collateral
Management 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 Management 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 Management Fee that is deferred due
to the operation of the Priority of Payments will not accrue interest. Any
Subordinate Collateral Management Fee accrued but not paid prior to the
resignation or removal of the Collateral Manager shall continue to be payable
to the Collateral Manager on the Payment Date immediately following the
effectiveness of such resignation or removal.


 


Subordinate Mortgage
Loan Interests means subordinate interests in commercial mortgage loans
(including subordinate participation interests in commercial mortgage loans)
and subordinate commercial mortgage loans.


 


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


 


Substitute Collateral
Interest means a debt obligation meeting the Eligibility Criteria
acquired by or on behalf of the Issuer with Collateral Principal Proceeds, Sale
Proceeds or Class A-R Draws that are reinvested in accordance with the
provisions of this Indenture.


 


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
Manager) 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.


 


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 an event that will
occur if (x)(1)(i) any obligor or withholding agent is, or on the next
scheduled payment date under any Collateral Interest, will be, required to
deduct or withhold from any payment under any Collateral Interest to the Issuer
(other than any commitment fee with respect to the unfunded portion of any
Earn-Out Assets) for or on account of any tax for whatever reason and such
obligor or withholding agent is not required to pay to the Issuer such
additional amount as is necessary to ensure that the net amount actually
received by the Issuer (free and clear of taxes, whether assessed against such
obligor or the Issuer) will equal the full amount that the Issuer would have
received had no such deduction or withholding been required, (ii) any
jurisdiction imposes net income, profits, or similar


 


55

















 


tax on the Issuer, (iii) the Issuer is required to
deduct or withhold from any payment under any Hedge Agreement for or on account
of any tax and the Issuer is obligated to make a gross up payment (or otherwise
pay additional amounts) to any Hedge Counterparty or (iv) any Hedge
Counterparty is required to deduct or withhold from any payment under any Hedge
Agreement for or on account of any tax for whatever reason and such Hedge
Counterparty is not required to pay to the Issuer such additional amount as is
necessary to ensure that the net amount actually received by the Issuer (free
and clear of taxes, whether assessed against such obligor or the Issuer) will
equal the full amount that the Issuer would have received had no such deduction
or withholding been required and (2) 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
Interests during the related Due Period or (y) the Issuer fails to
maintain its status as a Qualified REIT Subsidiary.


 


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


 


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


 


Taxed Collateral
Interest means any Collateral Interest (including, without
limitation, a Preferred Equity Security) the ownership of which could 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


 


Taxed Property means any property other
than a Collateral Interest but including, without limitation, property acquired
or to be acquired in respect of a Collateral Interest, the ownership of which
could 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.


 


Tenant Lease Loan
Interests means commercial mortgage-backed 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 primarily leased to tenants engaged in a business
(or on the cash flow from such leases), the underwriting of which is dependent
primarily on the creditworthiness of the related tenants; 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 commercial
mortgage-backed securities such as a financial guaranty insurance policy.


 


Total Net Unfunded
Future Advance Amount means, as of any date, the excess, if any, of (i) the
then outstanding Total Unfunded Future Advance Amount over (ii) the amount
then on deposit in the Earn-Out Asset Account.


 


Total Unfunded Future
Advance Amount means for all Earn-Out Assets, the aggregate amount of
the Unfunded Future Advance Amounts.


 


Transaction Documents means this Indenture, the
Collateral Management Agreement, the Account Control Agreement, the Corporate
Services Agreement, the Collateral Administration Agreement, any Hedge
Agreement, the Paying Agency Agreement and the Purchase and Placement
Agreement.


 


Trust Certificate means one or more trust
certificates each of which represents an ownership interest in the Underlying
Trust created pursuant to the Master Trust Agreement, which are secured by
Subordinate


 


56

















 


Mortgage Loan Interests, Mezzanine Loans, Participation
Interests, Commercial Mortgage Loans, Credit Lease Loans, Preferred Equity
Securities and/or Tenant Lease Loan Interests.


 


Trust Officer means, when used with
respect to the Trustee, any Officer within 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 Corporate Trust Office because of such person’s
knowledge of and familiarity with the particular subject.


 


Trustee means Wells Fargo 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 this 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, Class A-R Note Agent,
PAA Issued 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 0.0178% per annum of the Collateral Interest 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.


 


Trustee Interest
Advance Fee means, a per annum fee payable to the Trustee in
accordance with the Priority of Payments on each Payment Date equal to 0.00125%
of the outstanding principal amount of the Class A Notes (assuming for the
purposes of this calculation that the Class A-R Notes are fully drawn) and
Class B Notes immediately prior to such Payment Date.


 


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.


 


Underlying Trust means the newly formed
trust established pursuant to the Master Trust Agreement.


 


Underlying Trust
Expenses means, all reasonable expenses, disbursements and
advances incurred or made by the Underlying Trustee in accordance with any
provision of the Master Trust Agreement or in the administration or the
enforcement of any provision thereof (including the reasonable compensation,
expenses and disbursements of its agents and counsel) including, without limitation,
any amounts in respect of indemnification owed to the Underlying Trustee
pursuant to Section 6.04 of the Master Trust Agreement, but excluding any
overhead or employee expenses of the Underlying Trustee.


 


Underlying Trustee means Wells Fargo Bank,
National Association, in its capacity as underlying trustee pursuant to the
Master Trust Agreement, and any successor or successors thereto.


 


Undeveloped Real Estate
Collateral Interest means a Collateral Interest related to undeveloped real
estate intended to be developed into residential or commercial property.


 


57

















 


Unfunded Future Advance
Amount means, with respect to any Earn-Out Asset and any Calculation Date, any
Future Advance Amount not yet funded (by the Issuer or any other entity)
pursuant to the terms of the Earn-Out Asset.


 


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 Interests.


 


Uninvested Proceeds
Account has the meaning specified in Section 10.4.


 


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).


 


Wachovia Bank means Wachovia Bank,
National Association and/or its affiliates.


 


Weighted Average Fixed
Rate Coupon means, as of any Measurement Date, the sum (rounded up to
the next 0.001%) obtained by (i) multiplying the Principal Balance of each
Fixed Rate Collateral Interest (except Collateral Interests 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 Interests held in the portfolio as of such date and (iii) dividing
such sum by the aggregate Principal Balance of all Fixed Rate Collateral
Interests held in the portfolio as of such date; provided that for purposes of calculating the Weighted Average
Fixed Rate Coupon of Collateral Interests that are Impaired Interests, the
Written Down Amount with respect to Written Down Interests and Equity Interests
will be excluded, except for those Impaired Interests 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.


 


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


 


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
Interests as of such Measurement Date is less than or equal to 7 years.


 


Weighted Average Spread
means, as of any Measurement Date, the sum (rounded up to the next
0.001%) of the number obtained by (i) summing the products obtained by
multiplying (A) for each Floating Rate Collateral Interest (other than any
Impaired Interest, Written Down Amount with respect to a Written Down Interest
or Deferred Interest PIK Bond), the stated spread above LIBOR at which interest
accrues on such Collateral Interest as of such date and, for each Deemed
Floating Rate Collateral Interest (other than any Impaired Interest, Written
Down Amount with respect to a Written Down Interest or Deferred Interest PIK
Bond), the Deemed Floating Spread by (B) the Principal Balance of such
Collateral Interest


 


58

















 


as of such date and (ii) dividing such sum by the
aggregate Principal Balance of all Floating Rate Collateral Interests and all
Deemed Floating Rate Collateral Interests (excluding, in each case, all
Impaired Interests, Written Down Amounts with respect to Written Down Interests
and Deferred Interest PIK Bonds, except for those Impaired Interests 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); provided, that for purposes of calculating
the Weighted Average Spread, each Earn-Out Asset will be deemed to be two
separate Floating Rate Collateral Interests: (I) one with an outstanding
principal balance equal to the funded portion thereof and a stated interest rate
spread equal to the funded spread on such Earn-Out Asset and (II) the
other with an outstanding principal balance equal to the unfunded portion
thereof and an assumed stated interest rate spread equal to the commitment fee
of such Earn-Out Asset, less any withholding tax on such commitment fee.


 


Withholding Tax
Interest means a Collateral Interest if:


 


(i)                                     any payments thereon to
the Issuer (other than any commitment fee with respect to the unfunded portion
of any Earn-Out Assets) 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 Interest, the issuer of or
counterparty with respect to such Collateral Interest 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 Interest, the amount by which the original Principal Balance
of such Written Down Interest is reduced as notified by or on behalf of the
related issuer or trustee to the holders of such Written Down Interest
(including appraisal reductions on CMBS).


 


Written Down Interest means any Collateral
Interest as to which the aggregate par amount of such Collateral Interest 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 Interest 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 and Fitch by facsimile
and electronic mail upon any Collateral Interest becoming a Written Down
Interest.


 


59














 


1.2. ASSUMPTIONS AS TO COLLATERAL INTERESTS, 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 Indenture Issued Notes
shall be made by the Issuer or the Collateral Administrator on behalf of the
Issuer using (in the case of the Collateral Interests) 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 Impaired
Interests and Deferred Interest PIK Bonds unless the Trustee or Collateral
Manager 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
Manager has actual knowledge will not be made in Cash or will not be received
when due. For purposes of calculating the applicable Interest Coverage Ratio:


 


(1)                                  the expected interest income on Collateral
Interests and Eligible Investments and the expected interest payable on the
Rated Notes and amounts, if any, payable under a 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) an Impaired Interest,
(ii) a Deferred Interest PIK Bond or (iii) an Equity Interest, 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 Interest,
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


 


60

















 


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 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 Interest 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 “Trustee
Fee,” “Senior Collateral Management Fee” or “Subordinate Collateral Management
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 of
four 90-day periods.


 


(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 Interests, 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.


 


61

















 


(j)                                     For the purpose of determining fees
constituting Administrative Expenses payable under the Priority of Payments
hereunder, periods longer or shorter than a 90 day period shall be prorated
based on the number of days in such period.


 


(k)                                  With respect to any Collateral Interest that
is a Preferred Equity Security, (i) payments of interest shall mean
payments of dividends or other distributions not attributable to the return of
capital by the related Underlying Instruments and (ii) payments of
principal shall mean distributions attributable to the return of capital by the
Underlying Instruments.


 


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;


 


(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; and


 


(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.


 


ARTICLE II


 


THE INDENTURE ISSUED NOTES


 


2.1. FORMS GENERALLY


 


(a)                                  The Class A Notes (other than the
Class A-R Notes), Class B Notes, Class C Notes, Class D Notes,
Class E Notes, Class F Notes and Class G 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


 


62

















 


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 Minneapolis,
Minnesota, 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 (other than the
Class A-R Notes), Class B Notes, Class C Notes, Class D
Notes, Class E Notes, Class F Notes and Class G Notes and sold
in the United States pursuant to an exemption from the registration
requirements 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 Certificated Class A-G Note),
which may be either a Regulation S Certificated Class A-G Note or a
Rule 144A Certificated Class A-G 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 A-R Notes, the Class H
Notes and the Class J 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
(each, a Certificated Class A-R Note,
or a Certificated Class H Note, or a
Certificated Class J Note, and
together, the Certificated Notes) with such
legends as may be applicable thereto, which shall be duly executed by the
Issuer and authenticated by the Trustee or the Authenticating Agent as
hereinafter provided.


 


(e)                                  The Co-Issuers (in the case of the Indenture
Issued Notes other than the Class H Notes and the Class J Notes) and
the Issuer (in the case of the Class H Notes and the Class J Notes)
in issuing the Indenture Issued 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 Indenture Issued 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 Indenture Issued Notes or as contained in any notice of redemption and
related materials.


 


63

















 


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


 


(a)                                  The aggregate principal amount of Indenture
Issued Notes which may be issued under this Indenture may not exceed
U.S.$450,000,000, excluding Indenture Issued Notes issued upon registration of,
transfer of, or in exchange for, or in lieu of, other Indenture Issued Notes
pursuant to Section 2.4, 2.5 or 8.5.


 


(b)                                 The Rated Notes shall be divided into twelve
Classes having designations, original principal amounts, original Applicable
Periodic Interest Rates and Stated Maturity Dates as follows:


 




	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Indenture Issued

  
	
   

  	
   

  	
  Original Principal

  	
   

  	
  Applicable Periodic

  	
   

  	
  Note Stated

  
	
  Designation

  	
   

  	
  Amount

  	
   

  	
  Interest Rate

  	
   

  	
  Maturity Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class A-1 Notes

  	
   

  	
  U.S.$174,800,000

  	
   

  	
  LIBOR + 0.330%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class A-R Notes

  	
   

  	
  U.S.$70,000,000

  	
   

  	
  LIBOR + 0.340%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class A-2 Notes

  	
   

  	
  U.S.$27,225,000

  	
   

  	
  LIBOR + 0.380%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class B Notes

  	
   

  	
  U.S.$21,825,000

  	
   

  	
  LIBOR + 0.440%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class C Notes

  	
   

  	
  U.S.$12,825,000

  	
   

  	
  LIBOR + 0.740%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class D Notes

  	
   

  	
  U.S.$13,950,000

  	
   

  	
  LIBOR + 0.940%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class E Notes

  	
   

  	
  U.S.$10,125,000

  	
   

  	
  LIBOR + 1.650%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class F Notes

  	
   

  	
  U.S.$7,650,000

  	
   

  	
  LIBOR + 1.850%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class G Notes

  	
   

  	
  U.S.$9,900,000

  	
   

  	
  LIBOR + 3.000%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class H Notes

  	
   

  	
  U.S.$6,075,000

  	
   

  	
  LIBOR + 4.250%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class J Notes

  	
   

  	
  U.S.$18,000,000

  	
   

  	
  LIBOR + 5.500%

  	
   

  	
  June 2041

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Class K Notes

  	
   

  	
  U.S.$13,950,000

  	
   

  	
  LIBOR + 8.000%

  	
   

  	
  June 2041

  






 


The
Indenture Issued Notes will be issuable in minimum denominations of
U.S.$500,000 and, in each case, only in integral multiples of U.S.$1,000 in
excess of such minimum denominations. After issuance, (x) an Indenture
Issued 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 C Notes, Class D
Notes, Class E Notes, Class F Notes, Class G Notes, Class H
Notes, Class J Notes or Class K 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 Indenture Issued 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 (or in the case of the
Class A-R Notes, from the relevant funding date) and will be payable in
arrears on each Payment Date. In addition, interest with respect to any
Class A-R Notes may also be paid on any Interim Payment Date in connection
with a Class A-R Prepayment.


 


64

















 


Interest
on each Class of Indenture Issued Notes and interest on Defaulted Interest
will be calculated in accordance with the definition of Periodic Interest.


 


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


 


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


 


(f)                                    The Indenture Issued 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 (in the case
of the Indenture Issued Notes other than the Class H Notes and the
Class J Notes) and the Issuer (in the case of the Class H Notes and
the Class J Notes) executing such Indenture Issued Notes as evidenced by
their execution of such Indenture Issued Notes.


 


2.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING


 


(a)                                  The Indenture Issued Notes (other than the
Class H Notes and the Class J Notes) shall be executed on behalf of
the Co-Issuers by an Authorized Officer of each of the Co-Issuers. The Class H
Notes and the Class J Notes shall be executed on behalf of the Issuer by
an Authorized Officer of the Issuer. The signatures of such Authorized Officers
on the Indenture Issued Notes may be manual or facsimile (including in
counterparts).


 


(b)                                 Indenture Issued 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 Indenture Issued Notes or did
not hold such offices at the date of issuance of such Indenture Issued Notes.


 


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


 


(d)                                 Each Indenture Issued 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 Indenture
Issued Notes that are authenticated after the Closing Date for any other
purpose under this Indenture shall be dated the date of their authentication.


 


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


 


65

















 


be
the original aggregate principal amount of such subsequently issued Indenture
Issued Notes.


 


(f)                                    No Indenture Issued Note shall be entitled to
any benefit under this Indenture or be valid or obligatory for any purpose,
unless there appears on such Indenture Issued 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
Indenture Issued Note shall be conclusive evidence, and the only evidence, that
such Indenture Issued Note has been duly authenticated and delivered hereunder.


 


2.4. REGISTRATION, TRANSFER AND EXCHANGE OF INDENTURE ISSUED NOTES


 


(a)                                  Registration of Indenture
Issued 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 Indenture Issued Notes, other
than the Class A-R Note, (the Note Transfer Agent), and with respect to the
Class A-R Notes, the Class A-R Note Agent (the Class A-R Note 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 Indenture Issued Notes and the
registration of transfers of Indenture Issued Notes. Upon any resignation or
removal of the Note Registrar, the Issuer (after consultation with the
Collateral Manager) shall propose a replacement for approval by the Holders of
a Majority of the then Aggregate Outstanding Amount of the Notes. The Co-Issuers
may not terminate the appointment of the Note Registrar or any Note Transfer
Agent without the consent of each Holder of Indenture Issued Notes.


 


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


 


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


 


All
Indenture Issued Notes issued and authenticated upon any registration of
transfer or exchange of Indenture Issued Notes shall be the valid obligations
of the Co-Issuers (in the case of the Indenture Issued Notes other than the
Class H Notes and the Class J Notes) or the Issuer (in the case of
the Class H Notes and the Class J Notes), evidencing the same


 


66

















 


debt,
and entitled to the same benefits under this Indenture, as the Indenture Issued
Notes surrendered upon such registration of transfer or exchange.


 


Every
Indenture Issued 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 (in the case of the Indenture
Issued Notes other than the Class H Notes and the Class J Notes) or
the Issuer (in the case of the Class H Notes and the Class J Notes)
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 Indenture Issued 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)                                 Transfers of Class A
Notes (other than the Class A-R Notes), Class B Notes, Class C
Notes, Class D Notes, Class E Notes, Class F Notes and
Class G Notes


 


(1)                                  Subject to Section 2.4(b)(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(b)(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 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.


 


67

















 


(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 Certificated Class A-G
Notes are issued pursuant to Section 2.4(b)(5), the Trustee shall cause
the transfer of (i) any beneficial interest in a Global Note for a
Certificated A-G Note that is a Regulation S Note (a Regulation S Certificated 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
Certificated A-G Note that is a Rule 144A Note (a Rule 144A Certificated 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(b)(4), in the
event Certificated Class A-G Notes are issued pursuant to
Section 2.4(b)(5), the Trustee shall cause the transfer of (i) any
Certificated A-G 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 Certificated A-G 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 Certificated A-G Note, or upon
acceptance for exchange or transfer of a Certificated A-G 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 Certificated Class A-G Notes, the
Holder of any Certificated A-G 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 Certificated A-G 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
Certificated Class A-G Notes), within five Business Days of such 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 Indenture Issued Noteholder (in the case of exchange) or send by first class
mail (at the risk of the transferee in the case of transfer or Indenture Issued
Noteholder in the case of exchange) to such address as the transferee or Indenture
Issued


 


68

















 


Noteholder,
as applicable, may request, a Certificated A-G 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 Certificated 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 Certificated Class A-G Notes only under the limited
circumstances described in Section 2.4(b)(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 Certificated
Class A-G Notes only if such transfer otherwise complies with this
Section 2.4 (including Section 2.4(b)(1) and (2) and
(1) the Depositary notifies the Issuer that it is unwilling or unable to
continue as Depositary for the Indenture Issued 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 Certificated Notes in accordance with the provisions of
Section 2.4(b)(1).


 


(6)                                  If interests in any Global Note are to be
transferred to the Beneficial Owners thereof in the form of Certificated
Class A-G Notes pursuant to Section 2.4(b)(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 Minneapolis,
Minnesota and the Trustee shall authenticate and deliver without charge, upon
such transfer of interests in such Global Note, an equal aggregate principal
amount of Certificated Notes of authorized denominations. The Certificated
Class A-G 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);


 


(ii)                                  unless otherwise provided herein and subject
to Section 2.4(b)(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;


 


69














 


(iii)          for purposes of
determining the identity of and principal amount of Indenture Issued 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.


 


(8)           Each holder of a Class A
Note, Class B Note, Class C Note, Class D Note, Class E Note, Class F
Note and Class G Note (in each case, or an interest therein) shall
represent or shall be deemed to represent that either (A) it is not, and
it is not acquiring such Note or interest therein on behalf of or with “plan
assets” (within the meaning of Plan Asset Regulation) of, any employee benefit
plan (within the meaning of Section 3(3) of the ERISA) or plan
(within the meaning of Section 4975 of the Code) subject to ERISA or Section 4975
of the Code (or any materially similar applicable law (a Similar Law)),
including certain insurance company general accounts (each, a Plan), or (B)(I) such
Note is rated investment grade or better as of the date of acquisition, (II) the
holder believes that the Note is properly treated as indebtedness without
substantial equity features for purposes of the Plan Asset Regulation and
agrees to so treat such Note and (III) the holder’s acquisition, holding
and disposition of such Note will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code (or Similar
Law).


 


(c)           Transfers
of Class A-R Notes, Class H Notes and Class J Notes.


 


(1)           If a holder of a
beneficial interest in a Certificated Class A-R Note, Certificated
Class H Note or Certificated Class J Note wishes at any time to
transfer its interest in such Certificated Note such holder may transfer or
cause the transfer of such interest for an equivalent beneficial interest in
one or more such Certificated Notes, as provided below. Upon receipt by the
Issuer and the Note Registrar of (A) such holder’s Certificated Class A-R
Note, Certificated Class H Note or Certificated Class J Note, as
applicable, properly endorsed for assignment to the transferee and (B) a
certificate in the form of Exhibit C-3 (a Certificated Class A-R Note Transfer Certificate,
Certificated Class H Note Transfer Certificate or Certificated Class J Note
Transfer Certificate, as applicable) given by the transferee of
such beneficial interest, the Note Registrar shall cancel such Certificated
Note, record the transfer in the Note Register and authenticate and deliver one
or more Certificated Class A-R Notes, Certificated Class H Notes or
Certificated Class J Notes, as applicable, bearing the same designation as
the related Certificated Notes endorsed for transfer, registered in the names
specified in the assignment described in clause (A) above, in principal


 


70

















 


amounts designated by the transferee (the aggregate of
such amounts being the same as the beneficial interest in the related Certificated
Notes surrendered by the transferor) and in the minimum denominations and
integral multiples in excess thereof. In addition, the Note Registrar shall not
register any transfer of any Certificated Class H Notes or Certificated Class J
Notes to a proposed transferee 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 related Certificated Notes
outstanding (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 Certificated Class H Notes or Certificated Class J
Notes represented by Regulation S Notes to a proposed transferee of such
Certificated 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 Certificated Class H
Note or Certificated Class J Note will not be permitted unless an ERISA
Restriction Certificate substantially in the form set forth in Exhibit C-4
is obtained from each transferee of the related Certificated Note, for the
benefit of the Issuer, the Trustee and the Initial Purchaser, (i) in the
case of a Certificated Class H Note or Certificated Class J 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 Certificated Class H Note or Certificated Class J Note or
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 Certificated Class A-R Notes,
Certificated Class H Notes or Certificated Class J Notes, as
applicable.


 


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


 


71

















 


Certificated Class A-R Notes, Certificated Class H
Notes or Certificated Class J Notes, as applicable, surrendered by such
holder), and the minimum denominations and integral multiples in excess.


 


(3)           Notwithstanding anything
to the contrary herein, for so long as any Indenture Issued Notes other than
the Class H Notes or the Class J Notes remain outstanding, the Note
Registrar shall not register transfer of any Class H Notes or Class J
Notes, as applicable, unless (i) the proposed transferee shall have
delivered to the Trustee and the Note Registrar an Opinion of Counsel rendered
by nationally recognized U.S. tax counsel experienced in such matters to the
effect that the Class H Notes or the Class J Notes, as applicable,
will be treated as indebtedness for U.S. federal income tax purposes, (ii) the
proposed transferee shall have delivered to the Trustee and the Note Registrar
a certificate in the form of Exhibit I (a Class H Note Tax Transfer Certificate or
a Class J Note Tax
Transfer Certificate, as applicable), or (iii) the proposed
transferee shall have delivered to the Collateral Manager and the Trustee an
Opinion of Counsel described in Section 7(e) of the Collateral
Management Agreement; provided, however, that the Class H Notes and Class J
Notes may be pledged to secure indebtedness and may be the subject of
repurchase agreements treated by the Issuer as secured indebtedness for U.S.
federal income tax purposes, and may be transferred following a default under
such indebtedness or repurchase transaction without regard to the foregoing
limitations (provided that the Issuer gives notice to the Trustee of the
occurrence of such event).


 


(4)           Upon the transfer,
exchange or replacement of a Class A-R Certificated Note bearing a legend,
or upon specific request for removal of the legend on such Class A-R
Certificated Note, the Issuer and the Co-Issuer will deliver only Class A-R
Certificated Notes that bear the legend, or will refuse to remove the legend,
as the case may be, unless there is delivered to the Issuer and Co- Issuer
satisfactory evidence, which may include an opinion of counsel, as may
reasonably be required by the Issuer and the Co-Issuer that neither the legend
nor the restrictions on transfer set forth therein are required to ensure
compliance with the provisions of the Securities Act or the Investment Company
Act.


 


(5)           Each person who becomes a
beneficial owner of the Certificated Class A-R Notes will be required to
represent and agree, among other things, as follows:


 


(i)            the owner is one of the
following:


 


(A)          (I) a Qualified
Purchaser, (II) a Qualified Institutional Buyer, (III) is aware that
the sale of the Certificated Class A-R Notes to it is being made in
reliance on the exemption from registration provided by Rule 144A under
the Securities Act, (IV) is acquiring the Certificated Class A-R
Notes for its own account or for one or more accounts, each of which is a
Qualified Institutional Buyer who is a Qualified Purchaser, and as to each of
which the owner exercises sole investment discretion, and (V) is acquiring
the Certificated Class A-R Notes in a minimum principal amount of not less
than $500,000 for each such account; or


 


72

















 


(B)           (I) is not a U.S.
Person, (II) is aware that the sale of the Certificated Class A-R
Notes to it is being made in reliance on the exemption from registration
provided by Regulation S and (III) understands that the Certificated Class A-R
Notes offered in reliance on Regulation S under the Securities Act will bear
the legend set forth above;


 


(ii)           and in each case the
owner has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of its investment in the
Certificated Class A-R Notes and the owner and any accounts for which it
is acting are each able to bear the economic risk of the investment.


 


(d)           Denominations; Qualified Purchaser Status. No Person may
hold a beneficial interest in any Indenture Issued Note (other than the
Class-A-R Notes) except in a denomination authorized for the Indenture Issued
Notes of such Class under Section 2.2(b). In addition, no transfer of
an Indenture Issued Note (other than the Class-A-R Notes) 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 and (B) a Qualified Purchaser. In addition,
no transfer of an Indenture Issued Note (other than the Class-A-R Notes) 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.$500,000, 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 Indenture Issued 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 (in the case of the
Indenture Issued Notes other than the Class H Notes and the Class J
Notes) or the Issuer (in the case of the Class H Notes and the Class J
Notes), the Trustee or any intermediary. If any purported transfer of Indenture
Issued Notes (other than the Class-A-R 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 Indenture Issued Notes,
then the purported transferor of such Indenture Issued Notes (other than the
Class-A-R Notes) or beneficial interest therein shall be required to cause the
purported transferee to surrender the Indenture Issued Notes (other than the
Class-A-R 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 Indenture
Issued Notes (other than the Class-A-R 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 Indenture
Issued Notes (other than the Class-A-R Notes) and such purported transferor
shall take, and shall cause such


 


73

















 


transferee to take, all further action necessary or
desirable, in the judgment of the Trustee, to ensure that such Indenture Issued
Notes (other than the Class-A-R Notes) or any beneficial interest therein are
held by persons in compliance therewith.


 


(e)           Requirement
to Sell.


 


(1)           If, notwithstanding the
restrictions set forth in this Section 2.4, either of the Co-Issuers (in
the case of the Indenture Issued Notes other than the Class H Notes and
the Class J Notes) or the Issuer (in the case of the Class H Notes
and the Class J Notes) 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 or the Issuer,
as applicable, may require, by notice to such beneficial owner that such
beneficial owner sell all of its right, title and interest to such Indenture
Issued 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 written direction from the Issuer, the Trustee shall, and
is hereby irrevocably authorized by such beneficial owner to cause its interest
in such Indenture Issued 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 Indenture
Issued 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 (in
the case of the Indenture Issued Notes other than the Class H Notes and the
Class J Notes) or the Issuer (in the case of the Class H Notes and
the Class J Notes) 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 (in
the case of the Indenture Issued Notes other than the Class H Notes and
the Class J Notes) or the Issuer (in the case of the Class H Notes
and the Class J Notes) may require, by notice to such beneficial owner
that such beneficial owner sell all of its right, title and interest to such
Indenture Issued 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 Indenture
Issued 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


 


74

















 


will be made in respect of such Indenture Issued Note (or
beneficial interest therein) held by such beneficial owner.


 


(f)            Legends. Any Indenture Issued
Note issued upon the transfer, exchange or replacement of Indenture Issued
Notes shall bear such applicable legend set forth in the relevant Exhibit hereto
unless there is delivered to the Trustee, the Note Registrar and the Co Issuers
(in the case of the Indenture Issued Notes other than the Class H Notes
and the Class J Notes) or the Issuer (in the case of the Class H
Notes and the Class J Notes) such satisfactory evidence, which may include
an Opinion of Counsel, as may be reasonably required by any of the Trustee, the
Note Registrar and the Co Issuers (in the case of the Indenture Issued Notes
other than the Class K Notes) or the Issuer (in the case of the Class K
Notes) 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 and to ensure that neither of the
Co Issuers (in the case of the Indenture Issued Notes other than the Class H
Notes and the Class J Notes) or the Issuer (in the case of the Class H
Notes and the Class J Notes) 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 Co Issuers (in the case of the Indenture Issued Notes other than the Class H
Notes and the Class J Notes) or the Issuer (in the case of the Class H
Notes and the Class J Notes), shall authenticate and deliver Indenture
Issued Notes that do not bear such applicable legend


 


(g)           Expenses; Acknowledgment of Transfer. Transfer,
registration and exchange shall be permitted as provided in this Section 2.4
without any charge to the Indenture Issued 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 Indenture Issued Note by the Trustee shall be deemed to be
the acknowledgment of such transfer on behalf of the Co-Issuers (in the case of
the Indenture Issued Notes other than the Class H Notes and the Class J
Notes) and the Issuer (in the case of the Class H Notes and the Class J
Notes).


 


(h)           Surrender
upon Final Payment. Upon final payment due on the date on which all
outstanding unpaid principal of a Indenture Issued 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 Indenture Issued Note at the Corporate
Trust Office of the Trustee in Minneapolis, Minnesota.


 


(i)            Repurchase
and Cancellation of Indenture Issued Notes. The Co-Issuers (in the case of the Indenture Issued
Notes other than the Class H Notes and the Class J Notes) and the
Issuer (in the case of the Class H Notes and the Class J Notes) will
not purchase, redeem, prepay or otherwise acquire, directly or indirectly, any
of the Outstanding Indenture Issued Notes except upon the redemption of the
Indenture Issued Notes in accordance with the terms of this Indenture and the
Indenture Issued Notes. The Co-Issuers (in the case of the Indenture Issued
Notes other than the Class H Notes and the Class J Notes) and the
Issuer (in the case of the Class H Notes and the Class J Notes) will
promptly cancel all Indenture Issued Notes acquired by them pursuant to any
payment, purchase, redemption, prepayment or other acquisition of Indenture
Issued Notes pursuant to any


 


75

















 


provision of this Indenture and no Indenture Issued Notes
may be issued in substitution or exchange for any such Indenture Issued Notes.


 


(j)            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 Indenture Issued 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 Indenture Issued Note. The Issuer shall notify the
Trustee and the Note Registrar of the imposition of any such transfer
restrictions.


 


(k)           Physical
Indenture Issued Notes. The Issuer will promptly make available to the Trustee
without charge a reasonable supply of Certificated Notes in definitive, fully
Registered Form, without interest coupons.


 


2.5. MUTILATED, DEFACED, DESTROYED, LOST OR STOLEN INDENTURE ISSUED NOTES


 


If (a) any mutilated or defaced Indenture Issued Note
is surrendered to a Note Transfer Agent, or if there shall be delivered to
either of the Co-Issuers (in the case of Indenture Issued Notes other than Class H
Notes and the Class J Notes) or the Issuer (in the case of Class H
Notes and the Class J Notes), the Trustee and the Note Transfer Agent
(each, a Specified
Person) evidence to their reasonable satisfaction of the
destruction, loss or theft of any Indenture Issued 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 Indenture Issued Note has been
acquired by a bona fide purchaser, the Co-Issuers (in the case of the Indenture
Issued Notes other than the Class H Notes and the Class J Notes) and
the Issuer (in the case of the Class H Notes and the Class J Notes)
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 Indenture Issued Note, a new
Indenture Issued Note of the same Class as such mutilated, defaced,
destroyed, lost or stolen Indenture Issued 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 Indenture Issued Note and bearing a number not contemporaneously
outstanding.


 


If, after delivery of such new Indenture Issued Note, a
bona fide purchaser of the predecessor Indenture Issued Note presents for
payment, transfer or exchange such predecessor Indenture Issued Note, the
Specified Persons shall be entitled to recover such new Indenture Issued 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 Indenture Issued Note has become due and payable, the Co-Issuers (in the
case of the Indenture Issued Notes other than the Class H Notes


 


76

















 


and the Class J Notes) and the Issuer (in the case of
the Class H Notes and the Class J Notes) in their or its (as
applicable) discretion may, instead of issuing a new Indenture Issued Note, pay
such Indenture Issued Note without requiring surrender thereof except that any mutilated Indenture Issued
Note shall be surrendered.


 


Upon the issuance of any new Indenture Issued Note under
this Section 2.5, the Co-Issuers (in the case of the Indenture Issued
Notes other than the Class H Notes and the Class J Notes) and the
Issuer (in the case of the Class H Notes and the Class J Notes), 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 Indenture Issued Note issued pursuant to this Section 2.5
in lieu of any mutilated, defaced, destroyed, lost or stolen Indenture Issued
Note, shall constitute an original additional contractual obligation of the
Co-Issuers (in the case of the Indenture Issued Notes other than the Class H
Notes and the Class J Notes) and the Issuer (in the case of the Class H
Notes and the Class J Notes) and such new Indenture Issued 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
Indenture Issued 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 Indenture Issued 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
Senior 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 on 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 (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


 


77

















 


thereon), on the Class D Notes (together with any
Defaulted Interest thereon) and on the Class E Notes (together with any
Defaulted Interest thereon), (vii) interest on the Class G 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), on the Class D Notes (together with any
Defaulted Interest thereon), on the Class E Notes (together with any
Defaulted Interest thereon) and on the Class F Notes (together with any
Defaulted Interest thereon), (viii) interest on the Class H 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), on the Class D Notes (together with any
Defaulted Interest thereon), on the Class E Notes (together with any
Defaulted Interest thereon), on the Class F Notes (together with any
Defaulted Interest thereon) and on the Class G Notes (together with any
Defaulted Interest thereon), (ix) interest on the Class J 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), on the Class D Notes (together with any
Defaulted Interest thereon), on the Class E Notes (together with any
Defaulted Interest thereon), on the Class F Notes (together with any
Defaulted Interest thereon), on the Class G Notes (together with any
Defaulted Interest thereon) and on the Class H Notes (together with any
Defaulted Interest thereon), (x) interest on the Class K 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), on the Class D Notes (together with any
Defaulted Interest thereon), on the Class E Notes (together with any
Defaulted Interest thereon), on the Class F Notes (together with any
Defaulted Interest thereon), on the Class G Notes (together with any
Defaulted Interest thereon), on the Class H Notes (together with any
Defaulted Interest thereon) and on the Class J Notes (together with any
Defaulted Interest thereon) and (xi) 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. Payments of interest on the Class A
Senior Notes (including any Defaulted Interest) and Class A-R Commitment
Fee will be paid on a pro rata
basis between the Class A-1 Notes and the Class A-R Notes based on
amount due. 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


 


78

















 


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.


 


So long as any Class A Notes, Class B Notes, Class C
Notes, Class D Notes, Class E Notes or Class F Notes are
Outstanding, any Class G Applicable Periodic Interest Shortfall Amount
shall be deferred and added to the then Aggregate Outstanding Amount of the Class G
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 G 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, Class E Notes, Class F Notes or Class G
Notes are Outstanding, any Class H Applicable Periodic Interest Shortfall
Amount shall be deferred and added to the then Aggregate Outstanding Amount of
the Class H 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 H 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, Class E Notes, Class F Notes, Class G
Notes or Class H Notes are Outstanding, any Class J Applicable
Periodic Interest Shortfall Amount shall be deferred and added to the then
Aggregate Outstanding Amount of the Class J 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 J
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, Class E Notes, Class F Notes, Class G
Notes, Class H Notes or Class J Notes are Outstanding, any Class K
Applicable Periodic Interest Shortfall Amount shall be deferred and added to
the then Aggregate Outstanding Amount of the Class K 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 K
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


 


79














 


earlier
date by declaration of acceleration, call for redemption or otherwise; provided that:


 


(1)                                  so long as any Class A Senior Notes are
Outstanding, except as provided in Section 9 and Section 11.1(b)(22), the
payment of principal of the Class A-2 Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes,
Class G Notes, Class H Notes, Class J Notes and Class K
Notes (to the PAA Issued Note Paying Agent for payment on the Class K Notes
in accordance with the Paying Agency Agreement) (x) may only occur after
principal of the Class A Senior Notes have 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 Senior Notes and other
amounts payable in accordance with Section 11.1;


 


(2)                                  so long as any Class A Notes are
Outstanding, except as provided in Section 9 and Section 11.1(b)(22), the
payment of principal of the Class B Notes, Class C Notes,
Class D Notes, Class E Notes, Class F Notes, Class G Notes,
Class H Notes, Class J Notes and Class K Notes (to the PAA
Issued Note Paying Agent for payment on the Class K Notes in accordance
with the Paying Agency Agreement) (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 9 and
Section 11.1(b)(22), the payment of principal of the Class C Notes,
Class D Notes, Class E Notes, Class F Notes, Class G Notes,
Class H Notes, Class J Notes and Class K Notes (to the PAA
Issued Note Paying Agent for payment on the Class K Notes in accordance
with the Paying Agency Agreement) (x) may only occur after principal of
the Class A Notes and 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 11.1(b)(22), the payment of principal of the Class D Notes,
Class E Notes, Class F Notes, Class G Notes, Class H Notes,
Class J Notes and Class K Notes (to the PAA Issued Note Paying Agent
for payment on the Class K Notes in accordance with the Paying Agency
Agreement) (x) may only occur after principal of the Class A Notes,
Class B Notes and 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, Class B
Notes and 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 11.1(b)(22), the payment of principal of the
Class E Notes, Class F Notes, Class G Notes, Class H Notes,
Class J Notes and Class K Notes (to the PAA Issued Note Paying Agent
for payment on the Class K Notes in accordance with the Paying Agency
Agreement) (x) may only occur after principal of the Class A Notes,
Class B Notes, Class C Notes and


 


80

















 


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, Class B Notes, Class C Notes and 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 11.1(b)(22), the
payment of principal of the Class F Notes, Class G Notes,
Class H Notes, Class J Notes and Class K Notes (to the PAA
Issued Note Paying Agent for payment on the Class K Notes in accordance
with the Paying Agency Agreement) (x) may only occur after principal of
the Class A Notes, Class B Notes, Class C Notes, Class D
Notes and 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, Class B Notes, Class C
Notes, Class D Notes and Class E 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, Class E Notes
or Class F Notes are Outstanding, except as provided in
Section 11.1(b)(22), the payment of principal of the Class G Notes,
Class H Notes, Class J Notes and Class K Notes (to the PAA
Issued Note Paying Agent for payment on the Class K Notes in accordance
with the Paying Agency Agreement) (x) may only occur after principal of
the Class A Notes, Class B Notes, Class C Notes, Class D
Notes, Class E Notes and Class F 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, Class B Notes,
Class C Notes, Class D Notes, Class E Notes and Class F
Notes and other amounts payable in accordance with Section 11.1;


 


(7)                                  so long as any Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes or Class G Notes are Outstanding, except as provided in
Section 11.1(b)(22), the payment of principal of the Class H Notes,
Class J Notes and Class K Notes (to the PAA Issued Note Paying Agent
for payment on the Class K Notes in accordance with the Paying Agency
Agreement) (x) may only occur after principal of the Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes and Class G 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, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes
and Class G Notes and other amounts payable in accordance with Section 11.1;
and


 


(8)                                  so long as any Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes or Class H Notes are Outstanding,
except as provided in Section 11.1(b)(22), the payment of principal of the
Class J Notes and Class K Notes (to the PAA Issued Note Paying Agent
for payment on the Class K Notes in accordance with the Paying Agency
Agreement) (x) may only occur after principal of the Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes and Class H 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,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes,


 


81

















 


Class G
Notes and Class H Notes and other amounts payable in accordance with
Section 11.1.


 


(9)                                  so long as any Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes, Class H Notes or Class J
Notes are Outstanding, except as provided in Section 11.1(b)(22), the
payment of principal of the Class K Notes (to the PAA Issued Note Paying
Agent for payment on the Class K Notes in accordance with the Paying
Agency Agreement) (x) may only occur after principal of the Class A
Notes, Class B Notes, Class C Notes, Class D Notes, Class E
Notes, Class F Notes, Class G Notes, Class H Notes and
Class J 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, Class B Notes, Class C Notes, Class D
Notes, Class E Notes, Class F Notes, Class G Notes, Class H
Notes and Class J Notes and other amounts payable in accordance with
Section 11.1.


 


Provided that, payments of principal of the Class A Senior Notes will be
made pro rata based on their
respective outstanding principal amounts; however,
during the Reinvestment Period, the draws under Class A-R Notes may be
prepaid prior to any payments of principal of the Class A-1 Notes. No
payments of principal will be distributable in respect of any Class of
Notes junior to the Class A-R Notes so long as any Class A-R
Commitments remain outstanding, except to the extent described herein in
connection with a Special Amortization as provided in Section 11.1(b)(22).


 


(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) if a Rating
Confirmation Failure occurs, (iii) in the case of any Class C Notes,
Class D Notes, Class E Notes, Class F Notes, Class G Notes,
Class H Notes, Class J Notes or Class K Notes, 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, the Class F Cumulative Applicable Periodic Interest Shortfall
Amount, the Class G Cumulative Applicable Periodic Interest Shortfall
Amount, the Class H Cumulative Applicable Periodic Interest Shortfall
Amount, the Class J Cumulative Applicable Periodic Interest Shortfall
Amount or the Class K Cumulative Applicable Periodic Interest Shortfall
Amount, as the case may be, in accordance with Section 11.1 and
(iv) 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 the applicable 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 (in the case of the Indenture Issued Notes other than
the Class H Notes and the Class J Notes) or the Issuer (in the case
of the Class H Notes and the Class J Notes), 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


 


82

















 


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 or specified 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.
Such wire instructions may direct that any such payments may be paid to a
Dollar account of an assignee or designee of any Rated Noteholder and may be
irrevocable to the effect set forth therein.


 


(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 (in
the case of the Rated Notes other than the Class H Notes, Class J
Notes and Class K Notes) or the Issuer (in the case of the Class H
Notes, Class J Notes and Class K Notes) 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 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 under the Rated Notes (other than the
Class H Notes, Class J Notes and Class K Notes), the


 


83

















 


Issuer
under the Class H Notes, Class J Notes and Class K Notes or the
Co-Issuers under 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
(in the case of the Rated Notes other than the Class H Notes, Class J
Notes and Class K Notes) or the Issuer (in the case of the Class H
Notes, Class J Notes and Class K Notes) 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 either of the Co-Issuers (in the case of the Rated
Notes other than the Class H Notes, Class J Notes and Class K
Notes) or the Issuer (in the case of the Class H Notes, Class J Notes
and Class K Notes) 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
Indenture Issued Notes (other than the Class H Notes and the Class J
Notes) may be executed by the Co-Issuers, or the Issuer in the case of the
Class H Notes and the Class J Notes, 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 Indenture Issued Notes and specifying the Stated Maturity Date, the
principal amount and the Applicable Periodic Interest Rate with respect to each
Class of Indenture Issued 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


 


84

















 


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)                                  a certificate of the Co-Issuer
(A) evidencing the authorization by the Co-Issuer by action by written
consent of the limited liability company manager 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 Indenture Issued Notes (other
than the Class H Notes and the Class J Notes) and specifying the
Stated Maturity Date, the principal amount and the Applicable Periodic Interest
Rate of each Class of Indenture Issued Notes (other than the Class H
Notes and the Class J Notes) to be authenticated and delivered, and
(B) certifying that (1) the attached copy of such consent of the
limited liability company manager 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 on which the Trustee is 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 Indenture Issued Notes, or
(B) an Opinion of Counsel to the Issuer satisfactory in form and substance
to the Trustee to the effect that no such authorization, approval or consent of
any governmental body is required for the valid issuance of the Indenture
Issued 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 on which the Trustee is
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 Indenture
Issued Notes (other than the Class H Notes and the Class J Notes), or
(B) an Opinion of Counsel to the Co-Issuer satisfactory in form and
substance to the Trustee that no such authorization, approval or consent of any
governmental body is required for the valid issuance of the Indenture Issued
Notes (other than the Class H Notes and the Class J Notes) except as
may have been given;


 


(c)                                  (1)           an opinion of Thacher Proffitt &
Wood 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; and


 


85

















 


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


 


(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 Indenture Issued 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 Indenture Issued 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 Indenture Issued Notes will not result in a breach of any of
the terms, conditions or provisions of, or constitute a Default under, the
Certificate of Formation or Limited Liability Company Operating Agreement 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 Indenture Issued 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 Accountant’s Report (A) confirming
the information with respect to each Collateral Interest (other than its price)
set forth on a schedule setting forth each Collateral Interest 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 Interests 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 Management Agreement and the other Transaction Documents;


 


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


 


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


 


86














 


3.2. SECURITY FOR THE INDENTURE ISSUED NOTES


 


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


 


(a)                                  Grant of Security Interest; Delivery
of Collateral Interests. 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 Interests 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 Manager, 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 Interests or
Eligible Investments and (z) in the case of each Collateral Interest
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
Interest 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 Interest prior to the first Payment Date and owed by the Issuer
to the seller of such Collateral Interest;


 


(2)                                  the Issuer has acquired its ownership in such
Collateral Interest 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 Interest (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 Interest to the Trustee;


 


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


 


(6)                                  each such Collateral Interest satisfies the
requirements of the definition of “Collateral Interest” and is not an Impaired
Interest; 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


 


87

















 


perfection
of that interest) and a “security 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 S&P confirming that
the Class A-1 Notes have been rated “AAA”, Class A-R Notes have been
rated “AAA”, Class A-2 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 “A-”, the Class E
Notes have been rated at least “BBB+”, the Class F Notes have been rated
at least “BBB”, the Class G Notes have been rated at least “BBB-”, each of
the Class H Notes and Class J Notes have been rated at least “BB” and
the Class K Notes have been rated at least “B” by S&P, (B) a
letter signed by Moody’s confirming that the Class A-1 Notes have been
rated “Aaa”, Class A-R Notes have been rated “Aaa”, Class A-2 Notes
have been rated “Aaa”, the Class B Notes have been rated at least “Aa2”,
the Class C Notes have been rated at least “A1”, the Class D Notes
have been rated at least “A3”, the Class E Notes have been rated at least
“Baa1”, the Class F Notes have been rated at least “Baa2”, the
Class G Notes have been rated at least “Baa3”, the Class H Notes have
been rated at least “Ba2”, the Class J Notes have been rated at least
“Ba3” and the Class K Notes have been rated at least “B2” by Moody’s and
(C) a letter signed by Fitch confirming that the Class A-1 Notes have
been rated “AAA”, Class A-R Notes have been rated “AAA”, Class A-2
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 “A-”, the Class E Notes have been rated at
least “BBB+”, the Class F Notes have been rated at least “BBB”, the
Class G Notes have been rated at least “BBB-”, each of the Class H
Notes and the Class J Notes have been rated at least “BB” and the
Class K Notes have been rated at least “B” by Fitch 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, the Earn-Out Asset
Account, the Class A-R Holder 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 Indenture Issued
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 purchased Collateral Interests
having an aggregate Principal Balance as of the related Reference Dates of not
less than U.S.$398,422,758.


 


3.3. CUSTODIANSHIP; TRANSFER OF COLLATERAL INTERESTS 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 Minnesota (together with any successor, the Custodian). Initially,
such Custodian shall be Wells Fargo Bank, National Association with its address
at Wells Fargo Center, Sixth Street and Marquette Avenue, Minneapolis,
Minnesota 55479, Attention: CDO Trust Services—N-Star REL CDO VI. Any successor
custodian shall be a state or national bank or trust company that is not an


 


88

















 


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.


 


(b)                                 Each Collateral Interest, Equity Interest and
Eligible Investment shall be credited to the appropriate Account. Each time
that the Issuer shall direct or cause the acquisition of any Collateral
Interest, Equity Interest or Eligible Investment, the Trustee (on behalf of the
Issuer) shall, if such Collateral Interest, Equity Interest or Eligible
Investment has not already been transferred to the Collateral Account and
credited thereto, cause the transfer of such Collateral Interest, Equity
Interest 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 Interest, Equity Interest or Eligible Investment so
acquired, including all rights of the Issuer in and to any contracts related to
and proceeds of such Collateral Interest, Equity Interest 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 Interests 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 Interest prior to the first payment date and owed by the Issuer
to the seller of such Collateral Interest.


 


(3)                                  The Issuer has acquired its ownership in each
such Collateral Interest, or will acquire in the case of any Collateral
Interests 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 Interests or Substitute Collateral Interests 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 Interest, or will deliver any Collateral Interests 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
Interests or Substitute Collateral Interests acquired by the


 


89

















 


Issuer
after the Closing Date, to the Trustee and (b) has not assigned, pledged,
sold, granted a security interest in or otherwise encumbered any interest in
such Collateral Interest 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 sub-accounts
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 Custodian 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 Manager 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


 


90

















 


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 Custodian and the Trustee
have entered into the Account Control Agreement pursuant to which the Custodian
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 Custodian
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 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 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 Indenture Issued Notes and the Indenture
Issued Notes except as to (i) rights of registration of transfer and
exchange, (ii) substitution of mutilated, defaced, destroyed, lost or
stolen Indenture Issued 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 Manager hereunder and under the
Collateral Management 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


 


91

















 


expense
of the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:


 


(a)                                      either:


 


(1)                                  all Indenture Issued Notes theretofore
authenticated and delivered (other than (A) Indenture Issued 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) Indenture Issued
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 or the PAA Issued Note Paying Agent, as applicable, 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 or the PAA Issued Note Paying Agent, as applicable, 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, Class F Cumulative
Applicable Periodic Interest Shortfall Amount, Class G Cumulative
Applicable Periodic Interest Shortfall Amount, Class H Cumulative
Applicable Periodic Interest Shortfall Amount, Class J Cumulative
Applicable Periodic Interest Shortfall Amount and Class K 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 Paying
Agency Agreement, the Corporate Services Agreement, the Collateral Management
Agreement, any Hedge 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
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.


 


92

















 


Notwithstanding
the satisfaction and discharge of this Indenture, the rights and obligations of
the Co-Issuers, the Trustee and any 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
any Hedge Agreement, the Collateral Management Agreement, the Paying Agency
Agreement, the Corporate Services Agreement and the Collateral Administration
Agreement shall be held in trust and applied by it in accordance with 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 (g) (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 Business Days in the
payment, when due and payable, of any interest on any Class A Note or any
Class B Note or any Class A-R Commitment Fee, or if there are no
Class A Notes or Class B Notes Outstanding, of any interest on any
Class C Note, or if there are no Class A Notes, Class B Notes or
Class C Notes Outstanding, of any interest on any Class D Note, or if
there are no Class A Notes, Class B Notes, Class C Notes or
Class D Notes Outstanding, of any interest 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, of any interest on any
Class F Note, or if there are no Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes or Class F
Notes Outstanding, of any interest on any Class G Note, or if there are no
Class A Notes, Class B Notes, Class C Notes, Class D Notes,
Class E Notes, Class F Notes or Class G Notes Outstanding, of
any interest on any Class H Note, or if there are no Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes or Class H Notes Outstanding, of
any interest on any Class J Note, or if there are no Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F


 


93

















 


Notes,
Class G Notes, Class H Notes or Class J Notes Outstanding, of
any interest on any Class K Note;


 


(b)                                 a default in the payment of any principal,
when due and payable of any Rated Note other than a Class K 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, the Note
Registrar or the PAA Issued Note Registrar, such default continues for a period
of five 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 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, the Note Registrar or the PAA Issued Note
Registrar, such default continues for a period of five Business Days);


 


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


 


(e)                                  a default in the performance, or breach, of
any other covenant (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 a representation or warranty of either of the Co-Issuers under
this Indenture, 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 days) of the earlier of knowledge by
the Co-Issuers or the Collateral Manager or notice to the Co-Issuers and the
Collateral Manager by the Trustee or to the Co-Issuers and the Collateral
Manager 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;


 


(f)                                    the entry of a decree or order by a court
having competent jurisdiction adjudging the Issuer or the Co-Issuer as bankrupt
or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Issuer or the
Co-Issuer under the Bankruptcy Code or any other applicable law, or appointing
a receiver, liquidator, assignee, or sequestrator (or other similar official)
of the Issuer or the Co-Issuer or of any substantial part of its property;
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


 


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


 


94

















 


voluntary
winding up of the Issuer by its shareholders, 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, any Hedge
Counterparty, the Collateral Manager 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 Rated Notes, 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(f) or 5.1(g) 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.


 


(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, the Class F Cumulative Applicable
Periodic Interest Shortfall Amount, the Class G Cumulative Applicable
Periodic Interest Shortfall Amount, the Class H Cumulative Applicable
Periodic Interest Shortfall Amount, the Class J Cumulative Applicable
Periodic Interest Shortfall Amount and the Class K 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 any Hedge
Agreement;


 


(iii)                               all unpaid taxes and Administrative Expenses,
any accrued and unpaid Senior Collateral Management 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;


 


(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


 


95

















 


(3)                                  any 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).


 


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 (or, with respect to the Class H Notes, Class J Notes and
Class K Notes, the Issuer only) covenant that if a Default shall occur in
respect of the payment of any principal of or interest on any Class A
Senior Note, the payment of principal of or interest on any Class A-2 Note
(but with respect to interest, only after the Class A Senior Notes and all
interest accrued thereon have been paid in full), 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, Class B Notes and
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, Class B Notes,
Class C Notes and Class D Notes and all interest accrued thereon have
been paid in full), the payment of principal of or interest on any Class F
Note (but with respect to interest, only after the Class A Notes,
Class B Notes, Class C Notes, Class D Notes and Class E
Notes and all interest accrued thereon have been paid in full), the payment of
principal of or interest on any Class G Note (but with respect to
interest, only after the Class A Notes, Class B Notes, Class C
Notes, Class D Notes, Class E Notes and Class F Notes and all
interest accrued thereon have been paid in full), the payment of principal of
or interest on any Class H Note (but with respect to interest, only after
the Class A Notes, Class B Notes, Class C Notes, Class D
Notes, Class E Notes, Class F Notes and Class G Notes and all
interest accrued thereon have been paid in full), the payment of principal of
or interest on any Class J Note (but with respect to interest, only after
the Class A Notes, Class B Notes, Class C Notes, Class D
Notes, Class E Notes, Class F Notes, Class G Notes and
Class H Notes and all interest accrued thereon have been paid in full) or
the payment of principal of or interest on any Class K Note (but with
respect to interest, only after the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes,
Class G Notes, Class H Notes and Class J Notes and all interest
accrued thereon have been paid in full), the Co-Issuers (or, with respect to
the Class H Notes and Class J Notes, the Issuer only) 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


 


96

















 


compensation,
expenses, disbursements and advances of the Trustee and such Rated Noteholder
and their respective agents and counsel.


 


If
either of the Co-Issuers (or, in the case of the Class H Notes,
Class J Notes and Class K Notes, the Issuer only), 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 the Holders of
Majority of the then Aggregate Outstanding Amount of the Notes (and, if the
action of the Issuer or the Co-Issuer pursuant to such direction would have a
material adverse effect on the Initial Hedge Counterparty, the Initial Hedge
Counterparty), prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or the Co-Issuers, as applicable, 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 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 then Aggregate
Outstanding Amount of the Notes.


 


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 may
(with the consent of the Initial Hedge Counterparty), 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, in the case of the Class H
Notes, Class J Notes and Class K Notes, the Issuer only) or
(v) a default in respect of any provision of this 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 any 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:


 


97














 


(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 any Hedge Agreement upon direction by a Majority
of the then Aggregate Outstanding Amount of the Notes, and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for reasonable compensation to the
Trustee and each predecessor Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee) 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 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.


 


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
Manager, each 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


 


98

















 


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, which opinion shall be conclusive evidence as to such
feasibility or sufficiency.


 


(b)                                 If an Event of Default as
described in Section 5.1(e) 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 shall, institute a Proceeding solely
to compel performance of the covenant or agreement or to cure the
representation or warranty, the breach of which gave rise to the Event of
Default under such Section, and enforce any equitable decree or order arising
from such proceeding; provided
that (i) such request does not conflict with any provision in this
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 Initial Purchaser, 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


 


99

















 


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 Indenture
Issued Notes and any 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, the Rated Notes and any Hedge Agreement
in accordance with Section 11.1 and the provisions of Sections 10, 12 and
13 unless:


 


(1)                                  the Trustee, pursuant to Section 5.5(c),
determines (such determinations may be based upon a certificate from the
Collateral Manager) 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 (including the Class A-R Commitment Fees and Class A-R
Breakage Costs), any amounts required to be paid under any Hedge Agreement, all
unreimbursed Interest Advances together with interest thereon, all unpaid
Administrative Expenses and any accrued and unpaid Senior Collateral Management
Fee (to the extent not waived by the Collateral Manager) and the Holders of a
Majority of the then Aggregate Outstanding Amount of Rated Notes agrees with
such determination; or


 


(2)                                  the Holders of at least
662/3% of the Aggregate Outstanding Amount of the Rated Notes (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


 


100

















 


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 Rated 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
Indenture Issued 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 Manager in
writing, which are Independent from each other and the Collateral Manager, 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, each 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 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 Indenture
Issued Notes and any Hedge Agreement intact, collect and cause the collection
of the proceeds thereof and make and apply all payments and deposits and
maintain all accounts in


 


101

















 


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.


 


(e)                                  If an Event of Default
occurs and is continuing and prior to the Mandatory Class A-R Draw Date,
no Class A-R Draw may be made except with respect to Class A-R Draws
to be applied to fund Future Advance Amounts related to Earn-Out Assets; provided, however,
if an Event of Default specified in clauses Sections 5.1(d), (f) or (g) above
occurs, the undrawn Class A-R Commitments will terminate automatically
without need for further action after the Class A-R Draw on the related
Mandatory Class A-R Draw Date.


 


(f)                                    On the Mandatory Class A-R
Draw Date, which will occur if the Notes are accelerated following an Event of
Default, the Issuer (or the Collateral Manager on behalf of the Issuer) will
draw on the Class A-R Notes, in an amount equal to the Aggregate Class A-R
Undrawn Amount, and will deposit such amount into the Earn-Out Asset Account
and/or Collection Account in accordance with Section 17.1(c). Immediately
following such draw, the Class A-R Commitments will terminate. The amounts
on deposit in the Earn-Out Asset Account may only be applied to fund Future
Advance Amounts or on the date on which the Notes are redeemed in full, shall
be transferred to the Collateral Principal Collection sub-account of the
Collection Account and distributed pursuant to the Priority of Payments; provided, that to the extent that the
amounts then on deposit in the Earn-Out Asset Account exceed the Total Unfunded
Future Advance Amount, the Collateral Manager may direct the Trustee to
transfer such excess to the Collection Account as Collateral Principal
Collections in accordance with the Priority of Payments.


 


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 the 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 any
Hedge Agreement 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 any 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;


 


102

















 


(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 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 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 Rated Notes;


 


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
Rated Notes, each representing less than a Majority of the then Aggregate
Outstanding Amount of Rated Notes, the Trustee shall follow the instructions of
the group representing the higher percentage of aggregate principal amount of
Outstanding Rated Notes.


 


5.9. UNCONDITIONAL
RIGHTS OF RATED NOTEHOLDERS
(OTHER THAN THE CLASS K  NOTEHOLDERS) TO RECEIVE PRINCIPAL
AND INTEREST


 


Notwithstanding any other provision in this Indenture
(other than Section 2.6(i)), the Holder of any Indenture Issued Note shall
have the right, which is absolute and unconditional, to receive payment of the
principal of and interest (if any) on such Indenture Issued 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, Class C Notes, Class D Notes, Class E Notes, Class F
Notes, Class G Notes, Class H Notes, Class J Notes and Class K
Notes shall have no right to institute proceedings for the enforcement of any
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.


 


103

















 


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
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, 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 MAJORITY
OF NOTEHOLDERS


 


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 Rated
Notes 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 may (with the consent of the Initial Hedge
Counterparty), 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


 


104

















 


(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(f) or
5.1(g); or


 


(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
Manager, each Hedge Counterparty 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 Rated Notes, 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.


 


105

















 


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, 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 any 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 then Aggregate Outstanding Amount of Rated Notes 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.


 


106














 


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


 


(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 Hedge Counterparties.


 


(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 Aggregate Outstanding Amount 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;


 


107

















 


(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


 


(5)           the Trustee shall not be liable to the Rated Noteholders for any action
taken or omitted by it at the direction of the Co-Issuers (in the case of the
Rated Notes other than the Class H Notes, Class J Notes and
Class K Notes), the Issuer (in the case of the Class H Notes,
Class J Notes and Class K Notes), the Collateral Manager 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(d), 5.1(e), 5.1(f) or 5.1(g) 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 a 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, 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, 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 a 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.


 


108

















 


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 PAA Issued Note Paying Agent, each Rating Agency,
(for so long as any Class of Rated Notes is Outstanding), the Collateral
Manager, each 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:


 


(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


 


109

















 


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 Manager 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 Manager 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 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
Manager (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 Rated Notes);


 


(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 Manager 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 10.14 as to the application of
GAAP in such connection, in any instance;


 


(l)            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.


 


(n)           The Trustee shall be entitled to conclusively rely upon the Collateral
Manager’s determination that the representations and warranties provided in
connection with the acquisition of a Mezzanine Loan, a Subordinate Mortgage
Loan Interest, a Credit Lease Loan, a Tenant Lease Loan Interest, a
Participation Interest or a Commercial Mortgage Loan comply with the
requirements of Sections 12.2(u) and (v).


 


110

















 


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 Indenture Issued 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 Indenture Issued
Notes. For all purposes of this Indenture, the authentication of Indenture
Issued Notes by an Authenticating Agent pursuant to this Section 6.4 shall
be deemed to be the authentication of Indenture Issued 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 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 (with respect to the Rated Notes other than the Class H Notes,
Class J Notes and Class K Notes) and the Issuer (with respect to the
Class H Notes, Class J Notes and Class K Notes), 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
(other than the Class H Notes, Class J Notes or the Class K
Notes), by the Issuer of the Class H Notes, Class J Notes or the
Class K Notes or the proceeds thereof or any amounts paid to either of 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.


 


111

















 


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 PAA Issued
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 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), 10.12 or 10.14, 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.


 


112

















 


(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.


 


(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)(30) or Section 11.1(b)(25),
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. No direction by the
Holders of a Majority of the then Aggregate Outstanding Amount of the Rated
Notes 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.$100,000,000,
subject to supervision or examination by federal or state banking authorities,
and insured by the Federal Deposit Insurance Corporation, whose long-term
senior unsecured debt is rated “AA-” by S&P (or “A+” by S&P, if the
Trustee’s short-term unsecured debt rating is at least “A-1” by S&P), or an
entity with respect to which Rating Confirmation has been received. 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.


 


113

















 


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 Collateral
Manager, each Hedge Counterparty 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 Manager)
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 any 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.


 


(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 any 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, each Hedge Counterparty, the Collateral Manager 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


 


114

















 


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
Collateral Manager) 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 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 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 unless approved by the Holders of
not less than 66 2/3% of the Aggregate Outstanding Amount of the Notes; 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.


 


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 Indenture Issued 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 Indenture Issued Notes so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Indenture Issued 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.


 


115














 


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 Indenture Issued
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;


 


(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 Manager
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


 


116

















 


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 Interests set
forth in Section 12.1, take such action as the Collateral Manager 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 Manager has determined that (i) any Collateral
Interest has become an Impaired Interest, a Deferred Interest PIK Bond, a
Credit Risk Interest or a Written Down Interest or (ii) the Trustee has
received an Equity Interest in connection with any Collateral Interest.


 


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 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 Manager 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 Interest or
Equity Interest 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 Interest or
Equity Interest. In the event that the Trustee does not receive instruction
from the Collateral Manager, the Trustee shall have no obligation to take
action with respect to such exchange or such request for consent,


 


117

















 


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 Interests (before or after any
default), the Trustee shall promptly deliver copies of such notice to the
Issuer and the Collateral Manager. The Collateral Manager may, on behalf of the
Issuer, instruct the Trustee pursuant to an Issuer Order to, and the Trustee
shall, with respect to a Collateral Interest as to which a consent or waiver
under the Underlying Instruments of such Collateral Interest (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
Interest only in accordance with such Issuer Order. In the absence of any
instruction from the Collateral Manager, the Trustee shall not engage in any
vote with respect to such Collateral Interest.


 


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 any Hedge Counterparty or the Collateral
Manager, 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 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, the Class F Cumulative Periodic
Interest Shortfall Amount and the Class G Cumulative Periodic Interest
Shortfall Amount), interest (including Defaulted


 


118

















 


Interest and interest thereon, if any) in accordance with
the terms of the Rated Notes (other than the Class H Notes, Class J
Notes and Class K Notes) and this Indenture and amounts due under any
Hedge Agreement in accordance with this Indenture. The Issuer will duly and
punctually pay all principal (including the Class H Cumulative Periodic
Interest Shortfall Amount, the Class J Cumulative Periodic Interest
Shortfall Amount and the Class K Cumulative Periodic Interest Shortfall
Amount), interest (including Defaulted Interest and interest thereon, if any)
in accordance with the terms of the Class H Notes, Class J Notes and Class K
Notes and this Indenture and amounts due under any 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 (in the case of Rated Notes other than the Class H Notes, Class J
Notes and Class K Notes) or the Issuer (in the case of the Class H
Notes, the Class J Notes or the Class K Notes) 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
or the Issuer 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. The Co-Issuers
hereby appoint Wells Fargo Bank, National Association with an address at 9062
Old Annapolis Road, Columbia, Maryland 21045, Attn: CDO Trust Services—N-Star
REL CDO VI, as the Co-Issuers’ agent where notices and demands to or upon the
Co-Issuers in respect of the Rated Notes or this Indenture (except service of
any and all process in any action or proceeding) may be served. Rated Notes may
be surrendered for registration of transfer or exchange at the Corporate Trust
Office of the Trustee in Minnesota.


 


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 without the consent of each
Income Noteholder. The Co-Issuers shall give prompt written notice to the
Trustee, each Hedge Counterparty 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 Minnesota (and the Co-Issuers
hereby appoint the same as their agent to receive such respective
presentations, surrenders, notices and demands).


 


119

















 


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 or the Issuer, as applicable, 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
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 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;


 


(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.


 


120

















 


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 Co-Issuers (in the case of the Rated Notes other
than the Class H Notes, Class J Notes and Class K Notes) or the
Issuer (in the case of the Class H Notes, the Class J Notes or the
Class K Notes) 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.


 


7.4. EXISTENCE
OF CO-ISSUERS


 


The Issuer and
the Co-Issuer shall (to the extent they are able) 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 limited liability
company formed 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 (in the case of the Issuer),
the Rated Notes other than the Class H Notes, Class J Notes and
Class K Notes (in the case of the Co-Issuer) 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’,
members’ 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 at least one member 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


 


121

















 


(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 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 file any
Financing Statement, continuation statement or other instrument delivered to it
pursuant 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, 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.


 


122

















 


(b)           The Trustee shall not (i) except in accordance with
Section 10.12(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,
reincorporate or reorganize under the laws of another jurisdiction, or
establish an office in the United States.


 


7.6. OPINIONS
AS TO COLLATERAL


 


On or before
May 31 in each calendar year, commencing in 2007, the Issuer shall furnish
to the Trustee, each Hedge Counterparty and each Rating Agency 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, each 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
Interest included in the Collateral. The Issuer may only enter into any such
amendment, waiver or supplement to any such Underlying Instrument if such
amendment, supplement or waiver:


 


123

















 


(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 Manager 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 or Officer’s certificate of
the Collateral Manager 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 Manager
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 Interests as a “purchase” for tax, accounting and reporting
purposes.


 


(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)           If the Issuer ceases to be disregarded as an entity
separate from the Owner REIT, in the event that (i) a Collateral Interest
would become a Taxed Collateral Interest or property acquired in respect of a
Collateral Interest would become Taxed Property (in either case excluding, for
the avoidance of doubt, any Taxed Collateral Interests or Taxed Property
required to be disposed of as described in Section 12.1(a)(2)), and
(ii) the Issuer does not sell or otherwise dispose of all or a portion of
such Taxed Collateral Interest or Taxed Property in accordance with the
provisions of Section 12.1(a)(3), the Collateral Manager on behalf of the
Issuer shall, prior to such Collateral Interest becoming a Taxed Collateral
Interest 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 Interest or Taxed Property and transfer such Taxed
Collateral Interest or Taxed Property to the Tax Subsidiary or
(b) contribute such Taxed Collateral Interest or Taxed Property to a REMIC
or other pass-through entity, unless the Issuer has received an Opinion of
Counsel rendered by nationally recognized tax counsel that the Issuer can hold
such Taxed Collateral Interest or Taxed Property directly without causing the
Issuer to be treated as engaged in a trade or business in the United States for
U.S. federal income tax


 


124

















 


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 Interest or Taxed Property and shall require such
subsidiary to distribute 100% of any payments or distributions received with
respect to such taxed Collateral Interest, together with the proceeds of any
sale of such Taxed Collateral Interest 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;


 


(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;


 


125














 


(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 Interests having
customary purchase or sale terms and documents with customary loan trading
documentation (but not excepting any Hedge Agreement), enter into any
agreements unless such agreements contain “non-petition” and “limited recourse”
provisions with respect to the Issuer.


 


(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.


 


7.9. STATEMENT AS TO COMPLIANCE


 


On or before May 31 in each calendar year commencing in 2007, 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 PAA Issued
Note Paying Agent, each Rated Noteholder making a written request therefor, the
Initial Hedge Counterparty, the Collateral Manager 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, 2006, in the case of the first such certificate) based on
reports and other information delivered to such Officer by the Trustee, the
Collateral Manager and the Collateral Administrator and a review of the
Accountant’s Reports prepared pursuant to Section 10.11 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 each Hedge Counterparty, and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, each
Hedge Counterparty and each Rated Noteholder, the due and punctual payment of
the principal of and interest on all Rated Notes and the


 


126

















 


performance of every covenant of this Indenture and any Hedge Agreement
on  the part of the Issuer
to be performed or observed, all as provided herein;


 


(2)           each Rating Agency and
each 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 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, each
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 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 (i) (x) such Person
has been organized in conformity with the requirements for qualification as a
real estate investment trust under the Code, and such Person’s actual method of
operation has (for the time period specified in such Opinion of Counsel)
enabled, and its proposed method of operation will enable, such Person to
satisfy the requirements for qualification and taxation as a real estate
investment trust under the Code or (y) 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 (ii) such other
matters as the Trustee, the Initial Hedge Counterparty or any Rated Noteholder
may reasonably require;


 


127

















 


(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, each 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 any 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 entity, or the Person (if other than the Co-Issuer) formed by
such consolidation or into which the Co-Issuer is merged or to which all or
substantially all of the assets of the Co-Issuer are transferred 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 Confirmation shall have been obtained with respect to the
consummation of such transaction;


 


(3)           if the Co-Issuer is
not the surviving entity, the Person formed by such consolidation or into which
the Co-Issuer is merged or to which all or substantially all of the assets of
the Co-Issuer are transferred 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 entity, the Person formed by such consolidation or into which
the Co-Issuer is merged or to which all or substantially all of the assets of
the Co-Issuer are transferred 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


 


128

















 


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 membership interest in 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 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 Indenture Issued Notes pursuant to this
Indenture, (ii) issuing and selling the PAA Issued Notes in accordance
with the 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 Interests, Eligible
Investments and other Collateral described in clauses (a) to (e) of
the granting clauses hereof, (v) holding the membership interest in 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 Indenture Issued Notes (other than the
Class K Notes) pursuant to this


 


129

















 


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; provided, however, that the foregoing
shall not limit the ability of the Issuer to enter into any 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 Formation or
the Limited Liability Company Operating Agreement, if such amendment would
result in the rating (including any private or confidential rating) of any
Class of Rated Notes being reduced or withdrawn. Except as provided in the
Transaction Documents, at any time at which the Issuer is not a Qualified REIT
Subsidiary, 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
Interests 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 each 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 under the Securities Act
in connection with the resale of such Rated Note or Income Note by such Holder
or Beneficial Owner.


 


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 Rated 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 Manager) 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


 


130

















 


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 Manager, the Depositary, Euroclear,
Clearstream and the Note Paying Agent. The Rated Note Calculation Agent will
also specify to the Co-Issuers and the Collateral Manager 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 Manager 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.


 


7.16.       LISTING


 


The Issuer will use its commercially reasonable efforts to obtain and
maintain the listing of each Class of Rated Notes (other than the
Class A-R Notes) on the Cayman Islands Stock Exchange.


 


7.17.       AMENDMENT OF CERTAIN DOCUMENTS


 


The Issuer will not agree to any amendment to or modification,
substitution or replacement of the Corporate Services Agreement, the Collateral
Management Agreement, the Account Control Agreement or any Hedge Agreement at
any time without obtaining Rating Confirmation with respect to any such
amendment, modification, substitution or replacement 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 Confirmation with
respect to such modification. The Trustee shall provide each of the Holders of
Rated Notes, the Collateral Manager, each Hedge Counterparty 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, on or before the Effective Date (with
amounts on deposit in the Uninvested Proceeds),
Collateral Interests having an aggregate Principal Balance of not less than
U.S.$450,000,000 (which amount includes all Future Funding Obligations with
respect to Earn-Out Assets) (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 Interests scheduled
to settle on or following the Effective Date).


 


131

















 


(b)           The Issuer (or the
Collateral Manager on behalf of the Issuer) shall cause to be delivered to the
Trustee on the Effective Date an amended Schedule A listing all Collateral
Interests 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 Manager on its behalf) shall
deliver an Officer’s certificate to the Trustee, the Holders of Rated Notes,
each 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 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 the S&P 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 the S&P CDO Monitor Test)
or the specified Coverage Tests shall fail to be satisfied, the Issuer (or the
Collateral Manager on its behalf) shall deliver an Officer’s certificate to the
Trustee, the Holders of Rated Notes, each 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
Manager 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 Interest set forth on the
amended schedule delivered pursuant to Section 7.18(b) as of the
Effective Date, and the information provided by the 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 (with the
exception of the S&P CDO Monitor Test) 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 Manager 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 thirty
(30) days after the Effective Date (a Rating
Confirmation Failure), on the next and
succeeding Payment Dates, the Issuer will be required to pay principal, to the
extent of Available Funds in the Collection Account and as provided in Section 11.1,
of the Notes in the order of the Note Payment Sequence, to the extent necessary
for each of the Rating Agencies to provide a Rating Confirmation or until each
Class of Notes is paid in full (and the Class A-R Commitments are
simultaneously reduced in accordance with Section 17.1(e)); provided  that, to the extent the principal amount of the
Class A-R Notes is reduced to zero, any remaining principal payments
allocable thereto will be deposited as follows: (i) an amount up to the
Total Net Unfunded Future Advance Amount will be deposited in the Earn-Out
Asset Account, and (ii) any remainder will be deposited in the Collection
Account as Collateral Principal Collections.


 


Notwithstanding the foregoing, if (i) the Issuer (or the
Collateral Manager on its behalf) has requested in writing that each of the
Rating Agencies provide Rating Confirmation


 


132

















 


within five (5) Business Days after the Effective Date,
(ii) the Issuer (or the Collateral Manager on its behalf) has obtained
confirmation by electronic mail, facsimile or telephone that each of the Rating
Agencies has received such request and has promptly delivered to the applicable
Rating Agency any additional information reasonably requested by such Rating Agency,
and (iii) any of the Rating Agencies fails to respond to such request
within thirty (30) Business Days after the Effective Date, then such failure to
respond will not immediately constitute a Rating Confirmation Failure but shall
not constitute receipt of Rating Confirmation; provided that Rating Confirmation Failure shall thereafter
occur immediately upon receipt from the Rating Agencies of an actual notice of
Rating Confirmation Failure.


 


(f)            Not later than fifteen
(15) Business Days following the end of each 3-month period, the Collateral
Manager on behalf of the Issuer shall provide to S&P a report containing
the representations and warranties made with respect to any Commercial Mortgage
Loans, Mezzanine Loans, Subordinate Mortgage Loan Interests, Participation
Interests, Credit Lease Loans and Tenant Lease Loan Interests purchased by the
Issuer during the preceding 3-month period, including any exceptions and
qualifications thereto.


 


(g)           On each Payment Date
on which a Rating Confirmation Failure occurs, each related Hedge Agreement
(other than Deemed Floating Asset Hedges) will be terminated in part in
accordance with the terms and conditions thereof, including compliance with any
applicable requirement that the Issuer receive Rating 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 Section 11.1.


 


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, the
Co-Issuers, when authorized by Board Resolutions or by action by written consent
of the limited liability company manager, as applicable, 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 herein and in the
Rated Notes and the assumption by any such successor Person of the covenants of
the Co-Issuer herein and in the Rated Notes (other than the Class H Notes,
Class J Notes and Class K Notes) pursuant to Section 7.10 or
7.11;


 


(b)           add to the covenants
of the Co-Issuers (in the case of the Rated Notes other than the Class H
Notes, Class J Notes or the Class K Notes) or the Issuer (in the case
of the Class H Notes, the Class J Notes or the Class K Notes) or
the Trustee for the benefit of the Holders of all of the Rated Notes;


 


(c)           pledge any additional
property to the Trustee;


 


133

















 


(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;


 


(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 from failing to qualify as a Qualified REIT Subsidiary
or, at any time at which the Issuer is not a Qualified REIT Subsidiary, 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;


 


(l)            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 Interests and other assets, that the Issuer
or the Collateral Manager 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 Manager, modify the Collateral Quality Tests and Coverage Tests
and the definitions applicable thereto;


 


134














 


(p)                                 agree to any
modification of this 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 of Notes or the Initial Hedge Counterparty
and which is of a formal, minor or technical nature or is to correct a manifest
error.


 


The Trustee shall not enter into any such
supplemental indenture unless the Trustee has been provided with an Opinion of
Counsel from nationally recognized U.S. tax counsel experienced in such matters
to the effect that either (A) at any time at which the Issuer is a Qualified
REIT Subsidiary the proposed supplemental indenture will not cause the Issuer
to fail to be treated as a Qualified REIT Subsidiary or (B) at any other
time, the proposed supplemental indenture will not otherwise cause the Issuer
to be subject to U.S. federal income tax on a net income basis.


 


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 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.


 


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 of the Income Noteholders would be materially and adversely affected
thereby. Unless notified by (i) a Majority of the then Aggregate Outstanding
Amount of any Class of Rated Notes that such Class will be materially
and adversely affected, (ii) a Majority of the aggregate principal amount
of Income Notes Outstanding that the Income Noteholders will be materially and
adversely affected or (iii) the Initial Hedge Counterparty that the
Initial Hedge Counterparty will be materially and adversely affected, the
Trustee shall be entitled to rely upon an Officer’s certificate of the
Collateral Manager or the Issuer 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 PAA
Issued Note Paying Agent). The Collateral Manager will not be bound by any
supplemental indenture that affects the obligations of the Collateral Manager
unless the Collateral Manager has consented thereto (which consent will not be unreasonably
withheld). The Co-Issuers shall 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 PAA Issued Note Paying Agent, each
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 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


 


135

















 


any such supplemental indenture, the Trustee shall provide to the Rated
Noteholders, the PAA Issued Note Paying Agent, each Hedge Counterparty and each
Rating Agency a copy of the executed supplemental indenture. For so long as any
Rated Notes are Outstanding, no supplemental indenture shall be effective
unless and until a Rating Confirmation from each Rating Agency has been
received.


 


8.2. SUPPLEMENTAL
INDENTURES WITH CONSENT OF
RATED NOTEHOLDERS


 


With the written consent of the Holders of
not less than a majority of the then Aggregate Outstanding Amount of each
adversely affected Class of Rated Notes, the written consent of 66 2/3% 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), the Class A-R Note Agent if it is materially and adversely
affected thereby, the prior written consent of the Initial Hedge Counterparty
if it is materially and adversely affected thereby, and Rating Confirmation
and, 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
or the Class A-R Commitment Fee, 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 this 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 this Indenture or certain defaults thereunder or
their consequences;


 


(c)                                  impair or adversely
affect the Collateral other than as permitted by this Indenture;


 


(d)                                 permit the creation
of any security interest ranking prior to or on a parity with the security
interest of this 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 this Indenture) or deprive the Holder of any
Rated Note or the Initial Hedge Counterparty of the security afforded by the
security interest of this 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;


 


(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 this Indenture cannot be modified or waived without the written
consent of the Holders of 66 2/3% of the then Aggregate Outstanding Amount of
each affected Class of Rated Notes Outstanding and the Initial Hedge
Counterparty;


 


136

















 


(g)                                 modify the definition
of the term “Outstanding” or Section 11.1;


 


(h)                                 modify any of the
provisions of this Indenture in such a manner as to affect the calculation of
the amount of any payment of interest or principal 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 this 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, PAA Issued Note Paying Agent, the Class A-R Note
Agent, each Hedge Counterparty, the Collateral Manager and each Rating Agency a
copy of such proposed supplemental indenture (or a description of the substance
thereof) and shall request Rating 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 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 any Holder of Rated Notes, the Initial Hedge
Counterparty 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 balance of the Income Notes that the
Income Noteholders will be materially and adversely affected, the Trustee shall
be entitled to rely upon an Officer’s certificate of the Collateral Manager or
the Issuer 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 PAA Issued
Note Paying Agent).


 


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


 


137

















 


the Rated Noteholders, each Hedge Counterparty, the PAA Issued Note
Paying Agent (for forwarding to the Income Noteholders), the Class A-R
Note Agent, the Collateral Manager 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 Manager to the extent that it reduces the
rights or increases the obligations of the Collateral Manager, unless such
supplemental indenture is consented to in writing by the Collateral Manager.


 


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 or under the Paying Agency
Agreement shall be bound thereby.


 


Notwithstanding anything to the contrary
herein, no amendment or modification of or supplement to this Indenture will be
effective until the Collateral Manager has received written notice of such
amendment, modification or supplement and, if such amendment, modification or
supplement affects the rights, obligations or compensation of the Collateral
Manager, the Collateral Manager has consented in writing to the terms of the
proposed amendment. In addition, the consent of any predecessor Collateral
Manager will be required to implement any such amendment, modification or
supplemental that would change any provision of this Indenture entitling such
predecessor Collateral Manager to any fee or other amount payable to it under
this Indenture or to reduce or delay the right of such predecessor to such
payment.


 


8.5. REFERENCE
IN INDENTURE ISSUED NOTES TO SUPPLEMENTAL
INDENTURES


 


Indenture Issued 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 Indenture Issued 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
Indenture Issued Notes.


 


138

















 


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:


 


(a)                                  on or after the
Payment Date occurring in June 2008 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 Income Notes Outstanding (an Optional Redemption);


 


(b)                                 on any Payment Date
following the occurrence and during the continuation of a Tax Event, at the
direction of the Holders of not less than 662/3% of the aggregate
principal amount of the Income Notes Outstanding (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 June 2018, 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 Manager 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 Interests 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 Initial Purchaser, the Collateral Manager, 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 Interests (or for each of the related Subpools)
from at least two Qualified Bidders (including the winning Qualified Bidder,
and which may include the Collateral Manager) identified on a list of qualified
bidders provided by the Collateral Manager to the Trustee;


 


(3)                                  the Collateral
Manager certifies that the Highest Auction Price would result in the Sale
Proceeds from the Collateral Interests (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
related Hedge


 


139

















 


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 (24) through (27) (including any termination
payments payable by the Issuer resulting from the termination of any Hedge
Agreement pursuant to the Redemption) plus (iii) any
Outstanding Interest Advances, together with interest thereon; and


 


(4)                                  the
bidder(s) who offered the Highest Auction Price for the Collateral Interests
(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 this 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 Interests
(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.


 


Provided that all of the
conditions set forth in this Section 9.2(a)(1) through (4) have
been met, the Trustee will sell and transfer the Collateral Interests (or each
related Subpool), without representation, warranty or recourse, to the
bidder(s) who offered the Highest Auction Price for the Collateral
Interests (or the related Subpools) in accordance with and upon completion of
the Auction Procedures. If any of the conditions set forth in this
Section 9.2(a)(1) through (4) 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 will not terminate any Hedge Agreements and
may not solicit any further bids or otherwise negotiate any further sale of
Collateral Interests 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.


 


(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
Manager has furnished to the Trustee evidence, in form satisfactory to the
Trustee, that the Collateral Manager 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 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 Moody’s, if
rated by Moody’s, of “P-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 Interests 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 (24) through (27)
(including any termination payments payable by the Issuer resulting from the
termination of any Hedge Agreement pursuant to the Redemption); or


 


(2)                                  prior to selling any
Collateral Interests or any other collateral, the Collateral Manager certifies
that the expected proceeds from such sale will, in the


 


140

















 


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.


 


The Trustee will deposit the purchase price
for the Collateral Interests 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 10.11(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 each 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 each Hedge Counterparty, the
Class A-R Note Agent, 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 Manager.
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.


 


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


 


141

















 


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.


 


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, each Hedge Counterparty and the Collateral Manager only if the
Collateral Manager 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.


 


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


 


If the Collateral Manager notifies the
Trustee in writing that it has determined, in its sole discretion, that
investments in additional Collateral Interests would either be impractical or
not beneficial, the amount of such Collateral Principal Collections available
pursuant to Section 11.1(b)(22), as determined by the Collateral Manager
(the Special Amortization
Amount) shall be applied to the payment of principal of the
Notes on the next succeeding Payment Date (a Special Amortization) in accordance with
Section 11.1(b)(22)(ii) hereof.


 


Payments of principal of the Notes pursuant
to Section 11.1 (b)(22)(ii) shall be made:


 


(a)                                  if each of the
S&P Special Amortization Pro Rata Condition and the Moody’s Special
Amortization
Pro Rata Condition is satisfied with respect to the related Payment Date, pro rata to the respective
Classes of the Rated Notes (for purposes of the pro rata  allocation to the
Class A Senior Notes based on the Class A Senior Pro Rata Allocation)
pursuant to Section 11.1(b)(22)(i) of the Priority of Principal
Payments provided that a


 


142

















 


Special
Amortization Notice is delivered by the Collateral Manager to the Issuer and
the Trustee; or


 


(b)                                 if the criteria for
either the S&P Special Amortization Pro Rata Condition or the Moody’s
Special Amortization
Pro Rata Condition are not satisfied, sequentially to the respective Classes of
the Rated Notes pursuant to Section 11.1(b)(22)(ii)(2) of the
Priority of Principal Payments.


 


If the Collateral Manager elects to initiate
a Special Amortization, the Collateral Manager shall deliver on or prior to the
related Calculation Date, 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
that the Collateral Manager has been unable to identify for purchase by the
Issuer Substitute Collateral Interests that comply with the Reinvestment
Criteria and the other applicable requirements of this Indenture, and that the
other applicable requirements of this Indenture, 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 (other than Deemed Floating
Asset Hedges) will be terminated in part in accordance with the terms and
conditions thereof, including compliance with any applicable requirement that
the Issuer receive Rating 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 Section 11.1.


 


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 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


 


143

















 


shall be held
and maintained at an office located in Minneapolis, Minnesota or Columbia,
Maryland.


 


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 (if any), Earn-Out Asset Account, Interest Reserve Account and
Class A-R Holder Collateral 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 each Hedge Counterparty, the Collateral
Manager, each Rating Agency, the Class A-R Note Agent and the PAA Issued
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 Issuer (or the
Collateral Manager on behalf of the Issuer) shall direct the Trustee to invest
and reinvest any funds on deposit in any of the Accounts (other than the
Payment Account) in Eligible Investments. In the event that the Collateral
Manager 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 (vii) 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 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,


 


144

















 


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, Wachovia Capital Markets, LLC and the Collateral
Manager), the expenses of offering the Rated Notes and the Income Notes
(including placement fees and structuring fees) and amounts deposited in the
Expense Reserve Account on such date). On or prior to the Effective Date, the
Collateral Manager 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 Interests and, pending such
investment in additional Collateral Interests, such funds will be invested in
Eligible Investments, as directed by the Collateral Manager, with stated
maturities no later than the Business Day immediately preceding the next
Payment Date; provided, however that during the
Ramp-Up Period, Substitute Collateral Interests shall be purchased with amounts
in the Uninvested Proceeds Account, if sufficient amounts are available in the
Uninvested Proceeds Account, and only if sufficient amounts are not available
in the Uninvested Proceeds Account, with any Collateral Principal Collections.
The Trustee shall transfer any Uninvested Proceeds remaining on deposit in the
Uninvested Proceeds Account on the Effective Date to the Collection Account, at
the direction of the Collateral Manager, to be treated as either
(i) Collateral Interest Collections deposited in the Collateral Interest
Collections Sub-Account, provided that a Rating
Confirmation Failure has not occurred, or (ii) if a Rating Confirmation
Failure occurs, as Collateral Principal Collections deposited in the Collateral
Principal Collections Sub-Account.


 


10.5.    COLLECTION
ACCOUNT


 


(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 Collateral Interest Collections Sub-Account). At the direction
of the Issuer (or the Collateral Manager on behalf of the Issuer), the Trustee
shall invest all funds on deposit in the Collection Account (including the
Collateral Principal Collection Sub-Account) in Eligible Investments or
Substitute Collateral Interests 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
and in accordance with the calculations and the instructions contained in the
Note Valuation Report prepared by the Issuer pursuant to


 


145














 


Section 10.11(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. An Authorized Officer of the Issuer
or the Collateral Manager’s approval of the Note Valuation Report shall
constitute direction to the Trustee to, and upon such approval, the Trustee
shall, transfer to the Payment Account, for application pursuant to Section 11.1
no later than the Business Day prior to each Payment Date, all Interest
Advances made to or by the Trustee pursuant to Section 10.17 and any
amounts then held in the Collection Account other than proceeds 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.


 


(5)                                  Payments due to any Hedge Counterparty shall be
paid, in accordance with Section 11.1 pro rata with all other Hedge Agreement payments on the
applicable Payment Date; provided that the Issuer’s
payment obligations under any Deemed Floating Asset Hedges payable on a date
other than a Payment Date shall only be paid to the extent Collateral Interest
Collections are then available in the Collateral Interest Collections
Sub-Account. With respect to Hedge Agreements paid during the related Due Period,
the Trustee, in accordance with this Section 10.5(a)(5), shall transfer
Collateral Interest Collections to the Payment Account for payment to the
related Hedge Counterparty on the payment date required pursuant to the related
Hedge Agreement.


 


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 Manager 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 10.11(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


 


146

















 


Collections Account as Collateral Interest Collections and will be
distributed in accordance with the Section 11 on the immediately
succeeding Payment Date.


 


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 Manager 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.    EARN-OUT ASSET ACCOUNT


 


With respect to any Earn-Out Asset except as set forth in the last
sentence of this paragraph, the Trustee, if so directed by the Collateral
Manager, at the time of purchase thereof shall withdraw from the Collateral
Principal Collections Sub-Account and deposit into the Earn-Out Asset Account
the amount of funds equal to or greater than the combined aggregate Future
Funding Obligations under such Earn-Out Asset included in the Collateral
Interests less the amount of any previous Future Advances, as specified in such
direction. Upon initial purchase of an Earn-Out Asset, such Future Funding
Obligation shall be treated as part of the purchase price for such Collateral
Interest. A deposit into the Earn-Out Asset Account is not required to be made
in connection with the purchase of an Earn-Out Asset to the extent that the
Total Unfunded Future Advance Amounts, including the Unfunded Future Advance
Amounts with respect to such Earn-Out Asset, are less than the Available
Aggregate Class A-R Undrawn Amount. The Issuer (at the direction of the
Collateral Manager) will deposit any Class A-R Draws into the Earn- Out
Asset Account.


 


As directed by the Collateral Manager in writing and in accordance with
this Indenture, amounts on deposit in the Earn-Out Asset Account shall be
invested in overnight funds that are Eligible Investments. On the Business Day
immediately preceding each Payment Date, the income received on amounts
contained in the Earn-Out Asset Account during the related Due Period shall be
withdrawn from such account and deposited in the Collection Account as
Collateral Interest Collections.


 


The amounts on deposit in the Earn-Out Asset Account may only be
applied to fund Future Advance Amounts or on the date on which the Notes are redeemed
in full, shall be transferred to the Collateral Principal Collection
Sub-Account and distributed pursuant to the Priority of Payments; provided, that to the extent that the amounts then on
deposit in the Earn-Out Asset Account exceed the Total Unfunded Future Advance
Amount, the Collateral Manager may direct the Trustee to transfer such excess
to the Collection Account as Collateral Principal Collections for distribution
in accordance with Section 11.1. After the Commitment Termination Time,
the amounts on deposit in the Earn-Out Asset Account will in no event be less
than the Total Unfunded Future Advance Amount.


 


Funds in the Earn-Out Asset Account shall be available for application
at the direction of the Collateral Manager (i) to fund any Future Advance
Amounts, (ii) during the Reinvestment Period, to


 


147

















 


make Class A-R Prepayments and (iii) to the Collateral
Principal Collection Sub-Account as Collateral Principal Collections for
application on the next Payment Date (provided that such direction is delivered on or before the
related Calculation Date); provided, however, that the Collateral Manager may elect, rather
than to fund such Future Advance with a withdrawal from the Earn-Out Asset
Account, to instead fund such Future Advance with a Class A-R Draw; provided, further, that no application
pursuant to clause (ii) or (iii) above shall exceed the excess of
(a) the sum of (1) amounts on deposit in the Earn-Out Asset Account
and (2) the Available Aggregate Class A-R Undrawn Amount over
(b) the Total Unfunded Future Advance Amount. Upon (i) the sale or
maturity of an Earn-Out Asset or (ii) the occurrence of an event of
default with respect to an Earn-Out Asset or any other event or circumstance
which results in the irrevocable reduction of the undrawn commitments under
such Earn-Out Asset, any funds in the Earn-Out Asset Account in excess of the
amount needed to cover any drawdowns on all remaining Earn-Out Assets will be
transferred, at the direction of the Collateral Manager, to the Collection
Account as Collateral Principal Collections and will be distributed in
accordance with Section 11.1 on the immediately succeeding Payment Date.


 


10.9.    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, amounts due to the Advancing
Agent or the Trustee in connection with the reimbursement of Interest Advances
and interest thereon 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.


 


10.10.    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), each Hedge
Counterparty, the Holders of Rated Notes, the Collateral Manager, the PAA
Issued Note Paying Agent, the Initial Purchaser, the Placement Agent, the
Issuer and the Advancing Agent 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 10.11.


 


The Trustee shall forward to the Collateral Manager, the Holders of
Rated Notes of the Controlling Class, the Advancing Agent, or upon request
therefor, any Holder of a Rated Note shown on the Note Register, the Initial
Purchaser, each Hedge Counterparty or the PAA Issued Note Paying Agent, copies
of notices and other writings received by it from the issuer of any Collateral
Interest or from any Clearing Agency with respect to any Collateral Interest
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
Interest without the prior consent of S&P.


 


148

















 


As promptly as possible following the delivery of each Note Valuation
Report to the Trustee pursuant to Section 10.11(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.


 


In the event that a Distribution on any Collateral Interest is not paid
to the Trustee on the Due Date therefor, the Trustee shall provide the
Advancing Agent with notice of such default on the Business Day immediately
following such default. In addition, (i) the Trustee shall provide the
Advancing Agent (either electronically or in hard-copy format) with copies of
all reports received from any trustee, trust administrator, master servicer or
similar administrative entity with respect to the Collateral Interests and
(ii) upon request, the Trustee shall promptly make available to the
Advancing Agent any other information reasonably available to the Trustee by
reason of its acting as Trustee hereunder to permit the Advancing Agent to make
a determination of recoverability with respect to any Interest Advance and to
otherwise perform its advancing obligations hereunder.


 


10.11.    ACCOUNTINGS


 


(a)                                  Accounting. Not later than five Business Days (or, in the
case of the first report, not  later than eight Business Days) following the last
Business Day of each calendar month (other than a month in which a Payment Date
occurs), commencing in April 2006, the Issuer shall deliver an accounting
(each, a Monthly Report), determined as of the last Business Day of such
month, and the Issuer shall deliver, not later than the related Payment Date
and after the reconciliation process described in this Section 10.11, an
accounting (each, a Remittance Report and, together with the Monthly Reports, the Note
Valuation Reports), determined as of
each Calculation Date, to each Rating Agency, the Trustee, the Collateral
Manager, the Issuer and the Advancing Agent and make available via the
Trustee’s internet website, initially located at www.cdolink.com to the
Trustee, each Hedge Counterparty, the PAA Issued Note Paying Agent, each Note
Transfer Agent, Wachovia Capital Markets, LLC, the Advancing Agent, the Issuer
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 S&P’s Preferred Format)
determined, unless otherwise specified below, as of the related Calculation
Date; provided, however, that the Monthly Reports shall not contain the
information described in clauses (3), (8), (9), (10), (11), (15) and (16):


 


(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 Indenture 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 Interests, 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 Moody’s Maximum Weighted Average Rating Factor Test,
the Weighted Average Fixed Rate Coupon, the Weighted Average Spread, the
Weighted Average Life, the S&P Minimum Average Recovery Rate and the


 


149

















 


Moody’s Minimum Average Recovery Rate and, if applicable, the Moody’s
Post- Acquisition Compliance Test;


 


(2)           the estimated remaining Average Life of each of the
Collateral Interests;


 


(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);


 


(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
and the Collateral Principal Collections Sub-Account at the end of the related
Due Period;


 


(ii)           the nature and source of any Collections in the
Collection Account and the Collateral Principal Collections Sub-Account,
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.


 


(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


 


150

















 


(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


 


(ii)           the Balance remaining in the Expense Reserve
Account immediately after all payments and deposits to be made on such Payment
Date;


 


(11)         for the Earn-Out Asset Account:


 


(i)            the balance on deposit in the Earn-Out Asset
Account at the end of the related Due Period;


 


(ii)           the amount, if any, payable from the Earn-Out Asset
Account;


 


(iii)          the amount, if any, to be paid into the Earn-Out
Asset Account on the next Payment Date; and


 


(iv)          the Balance remaining in the Earn-Out Asset Account
immediately after all payments and deposits to be made on such Payment Date;


 


(12)         for the Class A-R Holder Collateral Account,
the Balance remaining in the Class  A-R Holder Collateral Account immediately after all
payments and deposits to be made on such Payment Date;


 


(13)         any Hedge Receipt Amount or Hedge Payment Amount
for the related Payment Date, and for each Hedge Agreement (if any), 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;


 


(14)         the aggregate amount of outstanding Interest
Advances;


 


(15)         the amount of Income Note Excess Funds on the
related Payment Date;


 


(16)         the amount of the Senior Collateral Management Fee
and the amount of the Subordinate Collateral Management Fee;


 


(17)         such other information as the Collateral Manager,
the Initial Purchaser, the  Trustee, any Rating Agency or any Hedge
Counterparty may reasonably request;


 


(18)         with respect to each Collateral Interest, 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 Moody’s Recovery
Rate, the S&P Recovery Rate, the S&P Rating and the Moody’s Rating (provided that if any Moody’s


 


151

















 


Rating for any Collateral Interest is an “estimated” or “shadow”
rating, such rating shall be identified as “estimated” or “shadow rated,” shall
be disclosed with an asterisk (or any such other marking designed to indicate
an estimated or shadow rating) in the place of the applicable estimated or
shadow rating and shall include the date as of which such rating was first
provided by Moody’s 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.”


 


(19)         the Principal Balance, the maturity date, the
S&P Rating, the Moody’s Rating and the issuer of each Eligible Investment
included in the Collateral;


 


(20)         (A) the identity and Principal Balance of each
Collateral Interest that became a Credit Risk Interest, an Impaired Interest,
an Equity Interest, a Written Down Interest, a Withholding Tax Interest, a
Deferred Interest PIK Bond, a Buy/Sell Interest, a Taxed Collateral Interest or
a Taxed Property, (B) the date, as provided by the Collateral Manager, on
which any Collateral Interest became a Credit Risk Interest, an Impaired
Interest, an Equity Interest, a Written Down Interest, a Buy/Sell Interest, a
Withholding Tax Interest, a Taxed Collateral Interest or a Taxed Property,
(C) whether the Collateral Manager has directed the Issuer to sell or not
to sell such Collateral Interest, and (D) the date by which any such sale
occurs;


 


(21)         the identity of each Collateral Interest 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;


 


(22)         the Principal Balance and identity of each
Collateral Interest that was released for sale indicating the reason for such
sale and the amount and identity of each Collateral Interest that was granted
since the date of the last Note Valuation Report;


 


(23)         the identity and Principal Balance of each
Collateral Interest that was a Credit Risk Interest, an Impaired Interest, an
Equity Interest, a Written Down Interest, a Buy/Sell Interest, a Withholding
Tax Interest, a Buy/Sell Interest, a Deferred Interest PIK Bond, a Taxed
Collateral Interest, a Taxed Property or a Discretionary Sale;


 


(24)         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 Interest, an Eligible Investment or proceeds in the Collection
Account;


 


(25)         the amount of Purchased Accrued Interest;


 


(26)         a description of any transactions with the
Collateral Manager, the Issuer, the Collateral Administrator and the Trustee
and any Affiliates thereof;


 


(27)         the Herfindahl Score;


 


152

















 


(28)         the components of the S&P CDO Monitor Test;


 


(29)         the Fitch Recovery for each Class of Notes;


 


(30)         the components of the Fitch Poolwide Expected Loss
Test; and


 


(31)         the amount of any Class A-R Draws, remaining
Class A-R Commitments, the Total Net Unfunded Future Advance Amount, the
Total Unfunded Future Advance Amount and Future Funding Obligations.


 


Upon receipt of each Note Valuation Report, the Trustee and the
Collateral Manager 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 Collateral Manager, the
Trustee, each Hedge Counterparty, Moody’s, S&P and Fitch if the information
contained in the Note Valuation Report does not conform to the information
maintained by the Trustee or the Collateral Manager 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 Manager 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 Manager’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 Manager, 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 Indenture, the Trustee shall be entitled
to rely on the information supplied by the Collateral Manager 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.


 


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) or (B) solely
with respect to the Income Notes, any of NorthStar OS VI, 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) and (ii) 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 this 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 this 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 this


 


153

















 


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 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 10.11  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 10.11 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 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.cdolink.com. All information made available on
the Trustee’s website will be restricted and the Trustee will only provide
access to such reports to those parties entitled thereto pursuant to this
Indenture. In connection with providing access to its website, the Trustee may
require registration and the acceptance of a disclaimer. Questions regarding
the Trustee’s website can be directed to the Trustee’s customer service desk at
phone number 301-815-6600.


 


10.12.    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


 


154

















 


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, 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.


 


(d)                                 The Issuer may retain agents (including the
Collateral Manager) to assist the Issuer in preparing any notice or other
report required under Section 10.12 and this Section 10.13.


 


10.13.    REPORTS BY INDEPENDENT ACCOUNTANTS


 


(a)                                  At the Closing Date the Issuer (or the Collateral
Manager 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 Manager) 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, each Hedge Counterparty, the Collateral Manager 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
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 May 31 of each year (commencing
with May 31, 2007), the Issuer shall cause to be delivered to the Trustee,
the PAA Issued Note Paying Agent and each Rating Agency an Accountant’s 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 May 2007
(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 each Hedge Counterparty, the Rating Agencies, the PAA Issued Note
Paying Agent and each Holder of Class A Senior Notes (or, if no
Class A Senior Notes are Outstanding, each Holder of Class A-2 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
or, if no Class F Notes are Outstanding, each Holder of Class G Notes
or, if no Class G Notes are Outstanding, each Holder of Class H Notes
or, if no Class H Notes are Outstanding, each Holder of Class J Notes
or, if no Class J Notes are Outstanding, each Holder of Class K
Notes), at the address shown on the Note Register. The Issuer shall not approve
the institution of


 


155

















 


such procedures if a Majority of the Controlling Class or the
Collateral Manager, 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 10.13(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.


 


10.14.    REPORTS TO RATING AGENCIES


 


In addition to the information and reports specifically required to be
provided to the Rating Agencies, the PAA Issued Note Paying Agent, the Holders
of Rated Notes and each Hedge Counterparty pursuant to the terms of this Indenture
or the Paying Agency Agreement (as the case may be), the Issuer shall provide
or procure to provide the Rating Agencies and each Hedge Counterparty with
(a) all information or reports delivered to the Trustee hereunder and
(b) such additional information as the Rating Agencies, each Hedge
Counterparty or the PAA Issued Note Paying Agent may from time to time
reasonably request, provided that such information
may be obtained and provided without unreasonable burden or expense. The Issuer
shall promptly notify the Trustee, the PAA Issued Note Paying Agent 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 and each Hedge Counterparty 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.


 


10.15.    TAX MATTERS


 


The Issuer and the Co-Issuer agree to treat, and hereby notify the
Trustee to treat, and, by accepting a Certificated Class A-G Note, a
Class H Note or Class J Note, each Holder of a Certificated
Class A-G Note, a Class H Note or Class J Note agrees to treat,
for U.S. federal income, state and local income and franchise tax and any other
income tax purposes, for so long as an Owner REIT qualifies for U.S. federal
income tax purposes as a REIT and 100% of the Class H Notes, Class J
Notes, Class K Notes, Income Notes, and Ordinary Shares (other than any
Class H Notes, Class J Notes or Class K Notes with respect to
which the Issuer has received an Opinion of Counsel rendered by nationally
recognized U.S. tax counsel experienced in such matters to the effect that the
Class H Notes, Class J Notes or Class K Notes, as applicable,
will be treated as indebtedness for U.S. federal income tax purposes) are owned
by the Owner REIT, directly or indirectly through one or more Qualified REIT
Subsidiaries thereof or one or more entities disregarded as entities separate
from the Owner REIT or its Qualified REIT Subsidiaries, (i) the
Certificated Class A-G Notes as indebtedness solely of the Owner REIT, and
not as indebtedness of the Issuer or the Co-Issuer, and at any other time, as
indebtedness solely of the Issuer and not the Co- Issuer, (ii) the
Class H Notes, Class J Notes, Class K Notes and Income Notes as
indebtedness of the Issuer for legal purposes and for certain tax purposes, and
at any other time, as indebtedness solely of the Issuer and not the Co-Issuer,
and (iii) the Income Notes as not issued or outstanding for tax purposes,
and at any other time, as equity in the Issuer. The Issuer (and, with respect
to the Certificated Class A-G Notes, the Co-Issuer) agree, and, by
accepting a Certificated Class A-G Note, Class H Note or Class J
Note, each Holder of a Certificated Class A-G Note or Class H Note
agrees, 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 that,
for purposes of U.S. federal income taxes, for so long as an Owner REIT
qualifies for U.S. federal income tax purposes as a REIT and 100% of the
Class H Notes, Class J Notes, Class K Notes, Income Notes, and
Ordinary Shares (other than any Class H Notes, Class J Notes or
Class K Notes with respect to which the Issuer has received an Opinion of
Counsel rendered by nationally recognized U.S. tax counsel experienced in such


 


156

















 


matters to the effect that the Class H Notes, Class J Notes
or Class K Notes, as applicable, will be treated as indebtedness for U.S.
federal income tax purposes) are owned by the Owner REIT, directly or
indirectly through one or more Qualified REIT Subsidiaries thereof or one or
more entities disregarded as entities separate from the Owner REIT or its
Qualified REIT Subsidiaries, the Issuer will be treated as a Qualified REIT
Subsidiary of the Owner REIT, and at any other time, the Issuer agrees not to
elect to be treated as other than an association taxable as a corporation for
U.S. federal income tax purposes.


 


The Class A-R Commitment Fee will be includible as ordinary income
by a U.S. Holder of a Class A-R Note in accordance with its regular method
of tax accounting.


 


10.16.    [RESERVED]


 


10.17.    INTEREST ADVANCES


 


(a)                                  With respect to each Payment Date for which the sum
of (i) Collateral Interest  Collections collected during the related Due Period
and (ii) funds on deposit in the Collection Account, are insufficient to
remit the interest due and payable with respect to the Class A Notes and
Class B Notes on the following Payment Date (the amount of such
insufficiency, an Interest Shortfall), so long as that no Event of Default is occurring
(except an Event of Default with respect to the non-payment of interest on the
Class A Notes or the Class B Notes), the Trustee shall provide the
Advancing Agent with written notice of such Interest Shortfall no later than
12:00 noon (New York time) on the Business Day immediately preceding such
Payment Date. The Trustee shall provide the Advancing Agent with notice, prior
to any funding of an Interest Advance (as defined below) by the Advancing
Agent, of any additional interest remittances received by the Trustee after
deliver of such initial notice that reduce such Interest Shortfall. No later
than 5:00 p.m. (New York time) on the Business Day immediately preceding
the related Payment Date, the Advancing Agent shall advance the difference
between such amounts (each such advance, an Interest
Advance) by deposit of an
amount equal to such Interest Shortfall in the Payment Account, subject to a determination
of recoverability by the Advancing Agent as described in Section 10.17(b).
Any Interest Advance made by the Advancing Agent with respect to a Payment Date
that is in excess of the actual Interest Shortfall for such Payment Date shall
be refunded to the Advancing Agent by the Trustee on the same Business Day that
such Interest Advance was made (or, if such Interest Advance is made prior to
final determination by the Trustee of such Interest Shortfall, on the Business
Day of such final determination). The Advancing Agent shall provide the Trustee
written notice of a determination by the Advancing Agent that a proposed
Interest Advance would constitute a Nonrecoverable Advance no later than the
close of business on the Business Day immediately preceding the related Payment
Date. If the Advancing Agent does not make any required Interest Advance at or
prior to the time at which distributions are to be made pursuant to
Section 11.1, the Trustee shall be required to make such Interest Advance,
subject to a determination of recoverability by the Trustee as described in
Section 10.17(b). The Trustee shall be entitled to conclusively rely on
any determination by the Advancing Agent that an Interest Advance, if made,
would constitute a Nonrecoverable Advance. Notwithstanding the foregoing, to
the extent the Advancing Agent fails to make an Interest Advance it was
required to make, the Advancing Agent shall not be entitled to make a
recoverability determination affecting the Trustee’s obligation to provide an
Interest Advance and any such determination shall not be binding on the
Trustee.


 


157














 


Notwithstanding
anything herein to the contrary, neither the Advancing Agent nor the Trustee
shall be required to make any Interest Advance unless such Person determines,
in its sole discretion, exercised in good faith and, with respect to any such
determination made by the Advancing Agent, in accordance with the Advancing
Standards (as defined below), that such Interest Advance, plus interest expected to
accrue thereon at the Reimbursement Rate, will be recoverable from subsequent
payments or collections with respect to all Collateral Interests. Such interest
on any Interest Advance will be payable to the Advancing Agent or the Trustee,
as the case may be, out of default charges collected in respect of the
Collateral Interests for the related period or, in connection with the
reimbursement of such Interest Advance, out of Collateral Interest Collections,
and to the extent not reimbursed in full by Collateral Interest Collections,
out of Collateral Principal Collections then on deposit in the Collection Account
or any collection account established in favor of the Underlying Trust (provided that interest on
Nonrecoverable Advances will be payable first from Collateral Principal
Collections, and to the extent not reimbursed in full from Collateral Principal
Collections, from Collateral Interest Collections then on deposit in the
Collection Account or any collection account established in favor of the
Underlying Trust). To the extent interest on any outstanding Interest Advance
cannot be offset by such default charges, such interest accrued on outstanding
Interest Advances made in respect thereof will result in a reduction in amounts
payable on the Collateral Interests. In determining whether any proposed
Interest Advance will be, or whether any Interest Advance previously made is, a
Nonrecoverable Advance, the Advancing Agent or the Trustee, as applicable, will
take into account:


 


(1)           amounts that may be
realized on each Mortgaged Property in its “as is” or then current condition
and occupancy;


 


(2)           that such Interest
Advances, together with interest accruing thereon, may only be recovered from
subsequent payments or collections on the Collateral Interests, as allocable
thereto from recoveries on the related Mortgage Properties pursuant to the
related participation agreement, intercreditor agreement or other similar
agreement;


 


(3)           that the related
Senior Interests may be required to be fully paid and any advances (and
interest thereon) made in respect of such Senior Interests may be required to
be fully reimbursed, prior to any amounts recovered in respect of the Mortgaged
Properties being allocated or otherwise made available to the Collateral
Interests;


 


(4)           the possibility and
effects of future adverse change with respect to the Mortgaged Properties, the
potential length of time before such Interest Advance may be reimbursed and the
resulting degree of uncertainty with respect to such reimbursement; and


 


(5)           the fact that
Interest Advances are intended to provide liquidity only and not credit support
to the Noteholders.


 


For purposes
of any such determination of whether an Interest Advance constitutes or would
constitute a Nonrecoverable Advance, an Interest Advance will be deemed to be
nonrecoverable if the Advancing Agent or the Trustee, as applicable, determines
that future payments or collections on the Collateral Interests may be
insufficient to fully reimburse such Interest Advance, plus interest thereon at
the Reimbursement Rate, within a reasonable period of time. Absent bad faith,
the determination by the Advancing


 


158

















 


Agent or the
Trustee, as applicable, as to the nonrecoverability of any Interest Advance
shall be conclusive and binding on the Noteholders. The Trustee shall be
entitled to conclusively rely on any determination by the Advancing Agent that
an Interest Advance, if made, would constitute a Nonrecoverable Advance. The
Collateral Manager and the Advancing Agent shall provide any information
regarding the Collateral reasonably requested by the Trustee in connection with
the Trustee’s determination of whether any Interest Advance would be
recoverable.


 


(b)           The Advancing Agent
and the Trustee will each be entitled to recover any previously unreimbursed
Interest Advance made by it (including any Nonrecoverable Advance), together
with interest thereon, in accordance with the Section 11.1(k).


 


(c)           The Advancing Agent
and the Trustee will each be entitled with respect to any Interest Advance made
by it (including Nonrecoverable Advances) to interest accrued on the amount of
such Interest Advance for so long as it is outstanding at the Reimbursement
Rate.


 


(d)           The Advancing Agent’s
obligations to make Interest Advances in respect of the Class A Notes and
Class B Notes will continue through the date on which the outstanding
principal amount of such Notes is paid in full or redeemed.


 


(e)           In no event will the
Advancing Agent or the Trustee be required to advance any payments in respect
of interest on any Notes other than the Class A Notes and Class B
Notes or any payments in respect of principal on any Notes.


 


(f)            In consideration of
the performance of its obligations hereunder, the Trustee shall be entitled to
receive, in its capacity as backup advancing agent, at the times set forth
herein and subject to the conditions and the priority of distribution
provisions hereof, to the extent funds are available therefor, the Trustee
Interest Advance Fee. In addition, to the extent that the Trustee makes an
Interest Advance on any Payment Date that the Advancing Agent was required, but
failed to make, the Trustee shall be entitled to receive the Advancing Agent
Fee (in addition to the Trustee Interest Advance Fee) for such Payment Date and
any future Payment Dates upon which such Interest Advance remains outstanding.


 


(g)           In consideration of
the performance of its obligations hereunder, the Advancing Agent shall be
entitled to receive, at the times set forth herein and subject to the
conditions and the priority of distribution provisions hereof, to the extent
funds are available therefor, the Advancing Agent Fee (except to the extent the
Advancing Agent Fee is being paid to the Trustee as described in clause (f),
above).


 


(h)           The determination by
the Advancing Agent or the Trustee, as applicable, (i) that it has made a
Nonrecoverable Advance or (ii) that any proposed Interest Advance, if
made, would constitute a Nonrecoverable Advance, shall be evidenced by an
Officer’s certificate delivered promptly to the Trustee (or, if applicable,
retained thereby) and the Issuer, setting forth the basis for such
determination; provided, that failure to
give such notice, or any defect therein, shall not impair or affect the
validity of, or the Advancing Agent’s or the Trustee’s entitlement to
reimbursement with respect to, any Interest Advance.


 


159

















 


(i)            The Advancing Agent,
in such capacity, shall act in the best interests of the Class A
Noteholders and
the Class B Noteholders (taking into account the interests of the
Class A Noteholders and the Class B Noteholders collectively), as
determined by the Advancing Agent, in its good faith judgment and in accordance
with this Indenture and applicable law, and in all cases without regard to:
(i) any relationship that the Advancing Agent may have with any obligor
under a Collateral Interest or any Affiliate of such obligor, any seller or any
other parties to this Indenture; (ii) the ownership of any Note by the
Advancing Agent or any of its Affiliates; (iii) the adequacy of the Advancing
Agent’s right to receive compensation for its services and reimbursement for
its costs hereunder; (iv) the ownership or management of any interests in
any mortgage loans, mortgaged properties, mezzanine loans or Collateral
Interests by the Advancing Agent; (v) any obligation of the Advancing
Agent or any of its Affiliates to cure a breach of a representation or warranty
or document defect with respect to, or repurchase or substitute for any
Collateral Interest; and (vi) any other debt the Advancing Agent or any of
its Affiliates has extended to any obligor under any Collateral Interest or any
of its Affiliates (the criteria specified in this Section 10.17(i),
collectively referred to as the Advancing
Standards).


 


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 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 Payment Account, together with any Interest Advances
applied for such Payment Date, less any amounts applied to reimburse any
outstanding Interest Advances, together with interest thereon, as described in
Section 10.17, less any amounts applied to pay any Hedge Counterparties
during the applicable Due Period (other than any termination payments payable
under clause (28) below), as described in Section 10.5(a)(5), will be
applied by the Trustee in the following order of priority:


 


(1)           to pay, in the
following order:


 


(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, Trustee Interest Advance Fee,
Class A-R Note Agent Fee and PAA Issued Note Paying Agent Fee; and then,


 


(iii)          the amount of any due and unpaid fees to the
Administrator; and then,


 


(iv)          pro rata
the
amount of any due and unpaid Trustee Expenses and Underlying Trust Expenses;
and then,


 


160

















 


(v)           the amount of any due
and unpaid fees of any Servicer owed directly by the Issuer; and then


 


(vi)          the amount of any due
and unpaid fees and expenses of the Rating Agencies; and then,


 


(vii)         pro
rata the amount of any due and unpaid Advancing Agent Fee,
expenses of the Administrator and Administrative Expenses not included in
(iii), (iv), (v) and (vi) above, including amounts payable to the
Collateral Manager under the Collateral Management Agreement but excluding the
Collateral Management Fee; and then,


 


(viii)        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 Manager directs that a lesser
amount be deposited to the Expense Reserve Account);


 


provided that the cumulative
amount paid under (iii) through (viii) 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 Interests) may not exceed U.S.$225,000 in the aggregate in any
consecutive 12-month period;


 


(2)           to pay the Senior
Collateral Management Fee with respect to such Payment Date and any Senior
Collateral Management 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 to the extent not paid during the related Due Period pursuant to
Section 10.5(a)(5), pro rata, including any
termination payments other than any termination payments payable under
Section 11.1(a)(28), below;


 


(4)           to pay
(a) Periodic Interest on the Class A Senior Notes and any Defaulted
Interest on the Class A Senior Notes (and interest thereon), and
(b) the Class A-R Commitment Fee in each case pro rata, based on amounts
due;


 


(5)           to pay Periodic
Interest on the Class A-2 Notes and any Defaulted Interest on the
Class A-2 Notes (and interest thereon);


 


(6)           to pay Periodic
Interest on the Class B Notes and any Defaulted Interest on the
Class B Notes (and interest thereon);


 


(7)           to pay an amount
equal to the Interest Reserve Amount for deposit into the Interest Reserve
Account;


 


(8)           if a Rating
Confirmation Failure occurs, on each Payment Date commencing with the Payment
Date immediately following the Effective Date, to pay principal of the Notes in
accordance with the Note Payment Sequence, in the amounts


 


161

















 


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;


 


(9)           if either of the
Class A/B Coverage Tests is not satisfied as of the preceding Calculation
Date, first, to pay principal of the Class A-1 Notes and Class A-R
Notes then Outstanding, pro rata, based
on the Class A Senior Pro Rata Allocation, until such Class A/B
Coverage Test is satisfied as of such Calculation Date or until the
Class A Senior Notes are paid in full; provided
that, to the extent the principal amount of the Class A-R Notes is reduced
to zero, any remaining principal payments allocable thereto will be deposited
as follows: (a) an amount up to the Total Net Unfunded Future Advance
Amount will be deposited in the Earn-Out Asset Account, and (b) any
remainder will be deposited in the Collection Account as Collateral Principal Collections,
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;


 


(10)         to pay Periodic
Interest on the Class C Notes and, if no Senior Notes are Outstanding, any
Defaulted Interest on the Class C Notes (and interest thereon);


 


(11)         to pay the
Class C Cumulative Applicable Periodic Interest Shortfall Amount (and
interest thereon), if any;


 


(12)         to pay Periodic
Interest on the Class D Notes and, if no Senior Notes are Outstanding, any
Defaulted Interest on the Class D Notes (and interest thereon);


 


(13)         to pay the
Class D Cumulative Applicable Periodic Interest Shortfall Amount (and
interest thereon), if any


 


(14)         if either of the
Class C/D Coverage Tests is not satisfied as of the preceding Calculation
Date, to pay principal of the most Senior Class of Notes then Outstanding,
first, with respect to the Class A Senior Notes, to pay principal of the
Class A-1 Notes and Class A-R Notes then Outstanding, pro rata, based on the Class A Senior Pro Rata
Allocation, until such Class C/D Coverage Test is satisfied as of such
Calculation Date or until the Class A Senior Notes are paid in full; provided that, to the extent the principal amount of the
Class A-R Notes is reduced to zero, any remaining principal payments
allocable thereto will be deposited as follows: (a) an amount up to the
Total Net Unfunded Future Advance Amount will be deposited in the Earn-Out
Asset Account, and (b) any remainder will be deposited in the Collection
Account as Collateral Principal Collections, and then to pay principal of the
next most Senior Class of Notes Outstanding until such Class C/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 C/D
Coverage Test is satisfied or until the Class D Notes are paid in full;


 


(15)         to pay Periodic
Interest on the Class E Notes and, if no Senior Notes are  Outstanding, any
Defaulted Interest on the Class E Notes (and interest thereon);


 


162

















 


(16)         to pay the
Class E Cumulative Applicable Periodic Interest Shortfall Amount (and
interest thereon), if any;


 


(17)         to pay Periodic
Interest on the Class F Notes and, if no Senior Notes are Outstanding, any
Defaulted Interest on the Class F Notes (and interest thereon);


 


(18)         to pay the
Class F Cumulative Applicable Periodic Interest Shortfall Amount (and
interest thereon), if any;


 


(19)         to pay Periodic
Interest on the Class G Notes and, if no Senior Notes are Outstanding, any
Defaulted Interest on the Class G Notes (and interest thereon);


 


(20)         to pay the
Class G Cumulative Applicable Periodic Interest Shortfall Amount (and
interest thereon), if any;


 


(21)         if either of the
Class E/F/G Coverage Tests is not satisfied as of the preceding
Calculation Date, to pay principal of the most Senior Class of Notes then
Outstanding, first, with respect to the Class A Senior Notes, to pay
principal of the Class A-1 Notes and Class A-R Notes then
Outstanding, pro rata, based on the
Class A Senior Pro Rata Allocation, until such Class E/F/G Coverage
Test is satisfied as of such Calculation Date or until the Class A Senior
Notes are paid in full; provided that,
to the extent the principal amount of the Class A-R Notes is reduced to
zero, any remaining principal payments allocable thereto will be deposited as
follows: (a) an amount up to the Total Net Unfunded Future Advance Amount
will be deposited in the Earn-Out Asset Account, and (b) any remainder
will be deposited in the Collection Account as Collateral Principal
Collections, and then to pay principal of the next most Senior Class of
Notes Outstanding until such Class E/F/G 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/F/G Coverage Test is satisfied
or until the Class G Notes are paid in full;


 


(22)         to pay Periodic
Interest on the Class H Notes and, if no Senior Notes are Outstanding, any
Defaulted Interest on the Class H Notes (and interest thereon);


 


(23)         to pay the
Class H Cumulative Applicable Periodic Interest Shortfall Amount (and
interest thereon), if any;


 


(24)         to pay Periodic
Interest on the Class J Notes and, if no Senior Notes are Outstanding, any
Defaulted Interest on the Class J Notes (and interest thereon);


 


(25)         to pay the
Class J Cumulative Applicable Periodic Interest Shortfall Amount (and
interest thereon), if any;


 


(26)         to pay Periodic
Interest on the Class K Notes and, if no Senior Notes are Outstanding, any
Defaulted Interest on the Class K Notes (and interest thereon), to the PAA
Issued Note Paying Agent for payment on the Class K Notes in accordance
with the Paying Agency Agreement


 


163

















 


(27)         to pay the
Class K Cumulative Applicable Periodic Interest Shortfall Amount (and
interest thereon), if any, to the PAA Issued Note Paying Agent for payment on
the Class K Notes in accordance with the Paying Agency Agreement;


 


(28)         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
(other than Illegality or Tax Event, each as defined in the related Hedge
Agreement) with respect to the Hedge Counterparty as Defaulting Party or sole
Affected Party, as the case may be;


 


(29)         to the Class A-R
Noteholders, any accrued and unpaid Class A-R Increased Costs and
Class A-R Breakage Costs and, in the event the Collateral Manager requires
any Class A-R Noteholder to transfer or assign its interest in the
Class A-R Notes as a result of such Noteholder claiming any Class A-R
Increased Costs, to the applicable Class A-R Noteholder, any reasonable
costs incurred by such Noteholder in effecting such transfer or assignment,
including any Class A-R Breakage Costs related thereto;


 


(30)         to pay, in the
following order:


 


(i)            any due and unpaid
Trustee Fee, Trustee Interest Advance Fee, Underlying Trust Expenses,
Class A-R Note Agent Fee, PAA Issued Note Paying Agent Fee, Trustee
Expenses, Advancing Agent Fee and other Administrative Expenses, including
amounts payable to the Collateral Manager under the Collateral Management
Agreement but excluding the Collateral Management 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 Section 11.1(a)(1) above, whether as a result of an amount
limitation imposed thereunder or otherwise;


 


(31)         to pay the
Subordinate Collateral Management Fee with respect to such Payment Date and any
due and unpaid Subordinate Collateral Management Fee with respect to a previous
Payment Date that was not paid on a previous Payment Date;


 


(32)         to repay, pro rata, the amount of any outstanding Cure Advances, if
any;


 


(33)         all Income Note
Excess Funds to the PAA Issued Note Paying Agent, on behalf of the Issuer, for
distributions on the Income Notes in accordance with the Paying Agency
Agreement;


 


Provided, however, with respect to
this Section 11.1(a), for purposes of determining if any Principal
Coverage Test is satisfied after giving effect to payments of principal, the
denominator of such Principal Coverage Test shall be determined after giving
effect to any principal of the


 


164

















 


Notes paid
pursuant to any clauses prior to such clause and such clause on the related
Payment Date


 


(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 Payment Account, less any amounts applied to reimburse Interest
Advances together with interest thereon, as described in Section 10.17,
will be applied by the Trustee in the following order of priority:


 


(1)           to the payment of the
amounts referred to in Sections 11.1(a)(1) through (8), 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 clause (9) of
the Priority of Payments—Collateral Interest Collections are insufficient to
cause the Class A/B Coverage Tests to be satisfied, first, to pay
principal of the Class A-1 Senior Notes and Class A-R Notes then Outstanding,
pro rata, based on the Class A Senior Pro Rata Allocation,
until such Class A/B Coverage Test is satisfied as of such Calculation
Date or until the Class A Senior Notes are paid in full; provided that, to the extent
the principal amount of the Class A-R Notes is reduced to zero, any
remaining principal payments allocable thereto will be deposited as follows:
(a) an amount up to the Total Net Unfunded Future Advance Amount will be
deposited in the Earn-Out Asset Account, and (b) any remainder will be
deposited in the Collection Account as Collateral Principal Collections, 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;


 


(3)           if the Class A
Notes and 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 (and interest thereon), 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 the Class A
Notes and Class B Notes are no longer Outstanding, to pay the Class C
Cumulative Applicable Periodic Interest Shortfall Amount (and interest
thereon), to the extent that the amounts paid pursuant to
Section 11.1(a)(11) are insufficient to pay such amounts in full
thereunder;


 


(5)           if the Class A Notes,
Class B Notes and 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 (and interest thereon), to the extent that the amounts paid
pursuant to Section 11.1(a)(12) are insufficient to pay such amounts in
full thereunder;


 


165














 


(6)           if the Class A Notes, Class B Notes, and
Class C Notes are no longer Outstanding, to pay the Class D
Cumulative Applicable Periodic Interest Shortfall Amount (and interest
thereon), to the extent that amounts paid pursuant to Section 11.1(a)(13)
are insufficient to pay such amounts in full thereunder;


 


(7)           if either of the Class C/D Coverage Tests is
not satisfied as of the preceding Calculation Date, and to the extent that the
amounts paid pursuant to clause (14) of the Priority of Payments—Collateral
Interest Collections are insufficient to cause the Class C/D Coverage
Tests to be satisfied, to pay principal of the most Senior Class of Notes
then Outstanding, first, with respect to the Class A Senior Notes, to pay
principal of the Class A-1 Notes and Class A-R Notes then
Outstanding, pro rata, based on the
Class A Senior Pro Rata Allocation, until such Class C/D Coverage
Test is satisfied as of such Calculation Date or until the Class A Senior
Notes are paid in full; provided that,
to the extent the principal amount of the Class A-R Notes is reduced to
zero, any remaining principal payments allocable thereto will be deposited as
follows: (a) an amount up to the Total Net Unfunded Future Advance Amount
will be deposited in the Earn-Out Asset Account, and (b) any remainder
will be deposited in the Collection Account as Collateral Principal
Collections, and then to pay principal of the next most Senior Class of
Notes Outstanding until such Class C/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 C/D Coverage Test is satisfied or
until the Class D Notes are paid in full;


 


(8)           if the Class A Notes, Class B Notes,
Class C Notes and 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 (and interest thereon), to the extent that the amounts paid
pursuant to Section 11.1(a)(15) are insufficient to pay such amounts in
full thereunder;


 


(9)           if the Class A Notes, Class B Notes,
Class C Notes and Class D Notes are no longer Outstanding, to pay the
Class E Cumulative Applicable Periodic Interest Shortfall Amount (and
interest thereon), 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 the Class A Notes, Class B Notes,
Class C Notes, Class D Notes and 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 (and interest thereon), to the
extent that the amounts paid pursuant to Section 11.1(a)(17) are
insufficient to pay such amounts in full thereunder;


 


(11)         if the Class A Notes, Class B Notes,
Class C Notes, Class D Notes and Class E Notes are no longer
Outstanding, to pay the Class F Cumulative Applicable Periodic Interest
Shortfall Amount (and interest thereon), to the extent that the amounts paid
pursuant to Section 11.1(a)(18) are insufficient to pay such amounts in
full thereunder;


 


(12)         if the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes and Class F
Notes are no longer Outstanding, to pay Periodic Interest on the Class G
Notes and any Defaulted Interest on the Class G Notes (and interest


 


166

















 


thereon), 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 the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes and Class F
Notes are no longer Outstanding, to pay the Class G Cumulative Applicable
Periodic Interest Shortfall Amount (and interest thereon), to the extent that
the amounts paid pursuant to Section 11.1(a)(20) are insufficient to pay
such amounts in full thereunder;


 


(14)         if either of the Class E/F/G Coverage Tests is
not satisfied as of the preceding Calculation Date, and to the extent that the
amounts paid pursuant to clause (21) of the Priority of Payments—Collateral
Interest Collections are insufficient to cause the Class E/F/G Coverage
Tests to be satisfied, to pay principal of the most Senior Class of Notes
then Outstanding, first, with respect to the Class A Senior Notes, to pay
principal of the Class A-1 Notes and Class A-R Notes then Outstanding,
pro rata, based on the Class A
Senior Pro Rata Allocation, until such Class E/F/G Coverage Test is
satisfied as of such Calculation Date or until the Class A Senior Notes
are paid in full; provided that,
to the extent the principal amount of the Class A-R Notes is reduced to
zero, any remaining principal payments allocable thereto will be deposited as
follows: (a) an amount up to the Total Net Unfunded Future Advance Amount
will be deposited in the Earn-Out Asset Account, and (b) any remainder
will be deposited in the Collection Account as Collateral Principal
Collections, and then to pay principal of the next most Senior Class of
Notes Outstanding until such Class E/F/G 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/F/G Coverage Test is satisfied
or until the Class G Notes are paid in full;


 


(15)         if the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes
and Class G Notes are no longer Outstanding, to pay Periodic Interest on
the Class H Notes and any Defaulted Interest on the Class H Notes
(and interest thereon), to the extent that the amounts paid pursuant to
Section 11.1(a)(22) are insufficient to pay such amounts in full
thereunder;


 


(16)         if the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes
and Class G Notes are no longer Outstanding, to pay the Class H
Cumulative Applicable Periodic Interest Shortfall Amount (and interest
thereon), to the extent that the amounts paid pursuant to
Section 11.1(a)(23) are insufficient to pay such amounts in full
thereunder;


 


(17)         if the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes,
Class G Notes and Class H Notes are no longer Outstanding, to pay
Periodic Interest on the Class J Notes and any Defaulted Interest on the
Class J Notes (and interest thereon), to the extent that the amounts paid
pursuant to Section 11.1(a)(24) are insufficient to pay such amounts in
full thereunder;


 


(18)         if the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes,
Class G Notes and Class H Notes are no longer Outstanding, to pay the
Class J Cumulative Applicable Periodic Interest Shortfall


 


167

















 


Amount (and interest thereon), to the extent that the amounts paid
pursuant to  Section 11.1(a)(25)
are insufficient to pay such amounts in full thereunder;


 


(19)         if the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes,
Class G Notes, Class H Notes and Class J Notes are no longer
Outstanding, to pay Periodic Interest on the Class K Notes and any
Defaulted Interest on the Class K Notes (and interest thereon) to the PAA
Issued Note Paying Agent for payment on the Class K Notes in accordance
with the Paying Agency Agreement, to the extent that the amounts paid pursuant
to Section 11.1(a)(26) are insufficient to pay such amounts in full
thereunder;


 


(20)         if the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes,
Class G Notes, Class H Notes and Class J Notes are no longer
Outstanding, to pay the Class K Cumulative Applicable Periodic Interest
Shortfall Amount (and interest thereon) to the PAA Issued Note Paying Agent for
payment on the Class K Notes in accordance with the Paying Agency
Agreement, to the extent that the amounts paid pursuant to
Section 11.1(a)(27) are insufficient to pay such amounts in full
thereunder;


 


(21)         in such amounts pursuant to written instructions to
the Trustee from the Collateral Manager no later than the related Calculation
Date, in the Collateral Manager’s discretion and in the priority directed by
the Collateral Manager prior to the last day of the Reinvestment Period,
(a) to the Class A-R Notes, as Class A-R Note Prepayments and
(b) to the Earn-Out Asset Account, up to the Current Pay Future Advance
Amount (including amounts already on deposit therein);


 


(22)         on or prior to the last day of the Reinvestment
Period to pay, in the following order:


 


(i)            to be retained in the
Collection Account (a) to invest in Eligible Investments pending
reinvestment in Substitute Collateral Interests at a later date, (b) to
reinvest in Substitute Collateral Interests subject to the Reinvestment
Criteria and (c) for payment of a Special Amortization in accordance with
clause (ii) below (to the extent of available Collateral Principal
Collections determined by the Collateral Manager);


 


(ii)           on each Payment Date
through and including the last Payment Date during the Reinvestment Period, if
the Collateral Manager notifies the Trustee in writing that it has decided to
declare a Special Amortization, the amount of available Collateral Principal
Collections determined by the Collateral Manager, (a) if each of the
S&P Special Amortization Pro Rata Condition and the Moody’s Special
Amortization Pro Rata Condition is satisfied, to pay each Class of Rated
Notes, pro rata based on their
respective aggregate outstanding principal amounts (for purposes of the pro rata allocation to the Class A Senior Notes based
on the Class A Senior Pro Rata Allocation; provided that, to the extent the principal amount of the
Class A-R Notes is reduced to zero, any remaining principal payments
allocable thereto will be deposited as follows: (1) an amount up to the
Total Net Unfunded Future Advance Amount will be deposited in the Earn-Out
Asset Account, and (2) any remainder will be deposited in the Collection
Account as Collateral Principal Collections)


 


168

















 


and (b) if the S&P Special Amortization Pro Rata Condition or
the Moody’s Special Amortization Pro Rata Condition is not satisfied, to pay
principal of each Class of Rated Notes in accordance with the Note Payment
Sequence until each such Class of Rated Notes have been paid in full;


 


(23)         after the end of the Reinvestment Period, to pay
principal of each Class of Rated  Notes in accordance with the Note Payment Sequence
until each such Class of Rated Notes have been paid in full;


 


(24)         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 (other than Illegality or Tax
Event, each as defined in the related Hedge Agreement) with respect to the
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)(28)
are insufficient to pay such amounts in full thereunder;


 


(25)         to pay, in the following order:


 


(i)            any due and unpaid Trustee Fee, Trustee Interest
Advance Fee, Underlying Trust Expenses, Class A-R Note Agent Fee, PAA
Issued Note Paying Agent Fee, Trustee Expenses, Advancing Agent Fee and other
Administrative Expenses, including amounts payable to the Collateral Manager
under the Collateral Management Agreement but excluding the Collateral
Management 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
Section 11.1(b)(1) above and to the extent that the amounts paid
pursuant to Section 11.1(a)(1) and (30) 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 (28) are insufficient to pay such
amounts in full thereunder, whether as a result of an amount limitation imposed
thereunder or otherwise;


 


(26)         to pay the Subordinate Collateral Management Fee
with respect to such Payment Date and any due and unpaid Subordinate Collateral
Management 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)(31) are insufficient to pay such amounts in full
thereunder;


 


(27)         to repay, pro rata, the
amount of any outstanding Cure Advances, if any to the extent that the amounts
paid pursuant to clause (30) of the Priority of Payments—Collateral Interest
Collections are insufficient to pay such amounts in full thereunder; and


 


(28)         all Income Note Excess Funds to the PAA Issued Note
Paying Agent, on behalf of the Issuer, for distributions on the Income Notes in
accordance with the Paying Agency Agreement.


 


169

















 


Provided, however, with respect to with respect to this
Section 11.1(b), for purposes of determining if any Principal Coverage
Test is satisfied after giving effect to payments of principal, the denominator
of such Principal Coverage Test shall be determined after giving effect to any
principal of the Notes paid pursuant to any clauses prior to such clause and
such clause on the related Payment Date.


 


(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
(excluding any amounts necessary to reimburse any unpaid Interest Advances,
together with interest thereon), 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 Senior
Notes (including Defaulted Interest on such Class A Notes, if any) and
then outstanding principal of the Class A Senior Notes, (provided that payments of interest on the Class A
Senior Notes and the Class A-R Commitment Fee in respect of the
Class A-R Notes will be paid pro rata between the Class A-1 Notes and the
Class A-R Notes based on amounts due) and then principal of the
Class A Senior Notes (provided that payments of
principal of the Class A Senior Notes will be made pro rata based on their respective outstanding principal
amounts) until paid in full until paid in full;


 


(3)           the Periodic Interest on the Class A-2 Notes
(including Defaulted Interest on such Class A-2 Notes, if any) and then
outstanding principal of the Class A-2 Notes until paid in full;


 


(4)           the Periodic Interest on the Class B Notes
(including Defaulted Interest on such Class B Notes, if any) and then
outstanding principal of the Class B Notes until paid in full;


 


(5)           the Periodic Interest on the Class C Notes
(including Defaulted Interest on the Class C Notes, if any) and then
outstanding principal of the Class C Notes (including the Class C
Cumulative Applicable Periodic Interest Shortfall Amount, if any) until paid in
full;


 


(6)           the Periodic Interest on the Class D Notes
(including Defaulted Interest on the Class D Notes, if any) and then
outstanding principal of the Class D Notes (including Class D Cumulative
Applicable Periodic Interest Shortfall Amount, if any) until paid in full;


 


(7)           the Periodic Interest on the Class E Notes
(including Defaulted Interest on the Class E Notes, if any) and then
outstanding principal of the Class E Notes (including Class E
Cumulative Applicable Periodic Interest Shortfall Amount, if any) until paid in
full;


 


(8)           the Periodic Interest on the Class F Notes
(including Defaulted Interest on the Class F Notes, if any) and then
outstanding principal of the Class F Notes (including Class F
Cumulative Applicable Periodic Interest Shortfall Amount, if any) until paid in
full;


 


170

















 


(9)           the
Periodic Interest on the Class G Notes (including Defaulted Interest on
the Class G Notes, if any) and then outstanding principal of the
Class G Notes (including Class G Cumulative Applicable Periodic
Interest Shortfall Amount, if any) until paid in full;


 


(10)         the
Periodic Interest on the Class H Notes (including Defaulted Interest on
the Class H Notes, if any) and then outstanding principal of the
Class H Notes (including Class H Cumulative Applicable Periodic
Interest Shortfall Amount, if any) until paid in full;


 


(11)         the
Periodic Interest on the Class J Notes (including Defaulted Interest on
the Class J Notes, if any) and then outstanding principal of the
Class J Notes (including Class J Cumulative Applicable Periodic
Interest Shortfall Amount, if any) until paid in full;


 


(12)         to
the PAA Issued Note Paying Agent, the Periodic Interest on the Class K
Notes (including Defaulted Interest on the Class K Notes, if any) and then
outstanding principal of the Class K Notes (including Class K
Cumulative Applicable Periodic Interest Shortfall Amount, if any) until paid in
full;


 


(13)         amounts
corresponding to the amounts set forth in Section 11.1(a)(28) through (33)
and Section 11.1(b)(21) through (28); and


 


(14)         to
the PAA Issued Note Paying Agent, any remaining amounts for distributions on
the Income Notes.


 


(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 10.12(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)           [Reserved].


 


(h)           Any amounts to be paid to the PAA Issued Note Paying Agent
pursuant to Section 11.1(a)(26), (27) and (33) or
Section 11.1(b)(19), (20) and (28) will be released from the lien of this
Indenture.


 


171

















 


(i)            If directed by the Holder of not less than 100% of the
Income Notes, the Trustee shall withhold distributions to the PAA Issued Note
Paying Agent that would otherwise be paid pursuant to Section 11.1(a)(33)
and Section 11.1(b)(28) in respect of distributions on the Income Notes.
Further, any Holder of Income Notes may elect at any time to make additional
capital contributions to the Issuer, which contributions will be pledged to the
Trustee as Collateral pursuant to this Indenture. Any such retained distribution
or additional capital contribution will be deemed to be Collateral Principal
Collections received in the Due Period following the Due Period relating to the
Payment Date on which the option is exercised. Any Holder who makes an
additional capital contribution will not be entitled to interest or additional
return thereon.


 


(j)            The Advancing Agent and the Trustee shall be entitled to
receive the Advancing Agent Fee and the Trustee Interest Advance Fee,
respectively, in each case payable in accordance with the Priority of Payments.
In addition, the Advancing Agent and the Trustee shall each be entitled on each
Payment Date to reimbursement of any previously unreimbursed Interest Advance
made by it, together with interest thereon, from Collateral Interest
Collections, and to the extent not reimbursed in full by Collateral Interest
Collections, from Collateral Principal Collections, prior to application of
Collections in accordance with Section 11.1(a), (b) and (c); provided that (i) reimbursement of
Interest Advances (other than Nonrecoverable Advances) shall not cause an
additional Interest Shortfall, (ii) reimbursement of Nonrecoverable
Advances, together with interest thereon, will be made first from Collateral
Principal Collections, and to the extent not reimbursed in full from Collateral
Principal Collections, from Collateral Interest Collections and
(iii) reimbursement of Nonrecoverable Advances shall be made regardless of
whether such reimbursement causes an additional Interest Shortfall. Prior to an
Interest Advance becoming a Nonrecoverable Advance, such reimbursement shall
not be payable to the extent it would trigger an additional Interest Shortfall
and shall be junior in priority to the payment of interest due on the
Class A Notes and Class B Notes on such Payment Date, but shall be
senior in priority to payment of interest on any other Class of Notes. For
purposes of the foregoing, an Interest Advance shall be deemed to be a
Nonrecoverable Advance if the Advancing Agent or the Trustee, as applicable,
determines that future payments or collections on the Collateral Interests
could reasonably be expected to be insufficient to fully reimburse such
Interest Advance, plus interest
thereon. Amounts used for the reimbursement of Interest Advances and interest
thereon shall not be included in the Available Funds for any Payment Date.
Notwithstanding the foregoing, the Advancing Agent or the Trustee, as
applicable, may opt, in their sole discretion, to defer the reimbursement for
Nonrecoverable Advances to a subsequent Payment Date or Payment Dates if such
reimbursement would trigger an additional Interest Shortfall. Notwithstanding
the foregoing, the Advancing Agent will be permitted (but not obligated) to
defer or otherwise structure the timing of recoveries of Nonrecoverable
Advances in such manner as the Advancing Agent determines is in the best
interest of the holders of the Class A Notes and the Class B Notes,
as a collective whole, which may include being reimbursed for Nonrecoverable
Advances in installments. In addition, based upon information available at such
time, the Advancing Agent or the Trustee, as applicable, shall provide 15 days
prior notice to the Collateral Manager, the Trustee and each Rating Agency if
an Interest Advance is determined to be a Nonrecoverable Advance and whether or
not reimbursement thereof shall be deferred; provided,
that the failure to provide such notice shall in no way limit the rights of
either of the Trustee or the Advancing Agent to reimburse itself for
Nonrecoverable Advances on any Payment Date.


 


172














 


ARTICLE XII


 


PURCHASE AND SALE OF COLLATERAL INTERESTS


 


12.1.                        SALE OF COLLATERAL INTERESTS


 


(a)                                  Sale of Collateral Interests.


 


(1)                                  Subject to the satisfaction of the conditions
specified in Section 10.12 as applicable, if the Collateral Manager, on
behalf of the Issuer, pursuant to this Article 12, shall direct the
Trustee to sell any Impaired Interest, Credit Risk Interest, Written Down
Interest, Buy/Sell Interest, Withholding Tax Interest, CMBS, Real Estate CDO
Security, Taxed Collateral Interest, Taxed Property, REIT Debt Security or
Participation Interest, the Trustee shall sell in the manner directed by the
Collateral Manager, such Impaired Interest, Equity Interest, Credit Risk
Interest, Written Down Interest, Buy/Sell Interest, Taxed Collateral Interest,
Taxed Property, Withholding Tax Interest, CMBS, Real Estate CDO Security, Taxed
Collateral Interest, Taxed Property, REIT Debt Security or Participation
Interest.


 


(2)                                  Upon the occurrence of an Investment
Guidelines Event, the Collateral Manager shall direct the Issuer to sell any
Taxed Collateral Interest or Taxed Property within 90 days after such
Investment Guidelines Event (or such shorter time period as provided in the
Collateral Management Agreement) in accordance with the provisions of the Collateral
Management Agreement.


 


(3)                                  The Collateral Manager may, in its reasonable
discretion, direct the Issuer to sell or otherwise dispose of any Impaired
Interest, Credit Risk Interest, Written Down Interest, Buy/Sell Interest, Taxed
Collateral Interest, Taxed Property or Withholding Tax Interest. The Collateral
Manager shall direct the Issuer to sell or otherwise dispose of any Collateral
Interest that is an Equity Interest as soon as practicable after such
Collateral Interest becomes an Equity Interest.


 


(4)                                  The Collateral Manager may direct the Issuer
to (i) sell any Buy/Sell Interest at any time if the Sales Proceeds
thereof are at least equal to its Principal Balance (adjusted for any
Collateral Principal Payments received thereon) or (ii) purchase the corresponding
pari passu participation from the related participant at any time, regardless
of whether such purchase would occur during the Reinvestment Period or whether
Reinvestment Criteria would be satisfied thereafter, so long as the Issuer
entered into a binding agreement with the Collateral Manager, any of its
Affiliates or any other person qualified in accordance with this Indenture to
purchase such corresponding pari passu participation from the Issuer at a
purchase price equal to that paid by the Issuer to such participant and such
purchaser thereof either (A) has a long term rating by S&P of “A-” or
a short term rating by S&P of “A-1”, (B) is a Qualified Institutional
Lender or (C) Rating Confirmation from S&P has been received; provided that Rating Confirmation shall be
deemed to have been received with respect to the Sellers and any NorthStar
Subsidiary, as described in and subject to the terms of, the S&P Letter or
with respect to any entities described in any amendments to or renewals of the
S&P Letter.


 


173

















 


(5)                                  In the event of a Redemption, the Collateral
Manager shall direct the Trustee to sell Collateral Interests 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 Manager shall sell any
Collateral Interest pursuant to this Section 12 only at a price that, in
its judgment, is not substantially less than the market value of such Collateral
Interest at the time of such sale.


 


(7)                                  So long as no Event of Default has occurred
and is continuing, the Collateral Manager, on behalf of the Issuer, may, at any
time prior to the end of the Reinvestment Period, direct the Trustee to sell,
and the Trustee will sell in the manner directed by the Collateral Manager,
(a) any Collateral Interest that is a CMBS, a Real Estate CDO Security, or
a REIT Debt Security and in each case is not an Impaired Interest or a Credit
Risk Interest and (b) any Participation Interest that is not an Impaired
Interest or a Credit Risk Interest (each such sale, a Discretionary Sale) provided that: (i) the aggregate
principal balance of such Collateral Interests sold pursuant to such
Discretionary Sales for a given calendar year does not exceed 15% of the
Collateral Interest Principal Balance at the beginning of that year,
(ii) the Collateral Manager believes in good faith that Sale Proceeds from
such Discretionary Sale can be reinvested within 30 Business Days after the sale
of such Collateral Interest in one or more Substitute Collateral Interests
having an aggregate Principal Balance of not less than 100% of the Principal
Balance of the Collateral Interest being sold, (iii) after giving effect
to such sale and to the purchase of Substitute Collateral Interests with the
Sale Proceeds thereof, the Reinvestment Criteria will be met and (iv) such
Collateral Manager has not been removed, or voted to be removed, for “cause” as
provided under the Collateral Management Agreement.


 


(b)                                 Reinvestment of Sale
Proceeds and Replacement of Collateral Interests. Subject to Section 9.7 above, following
the Closing Date and during the Reinvestment Period, subject to the
satisfaction of the Eligibility Criteria and the Reinvestment Criteria, the
Collateral Manager, acting on behalf of the Issuer, shall use reasonable
efforts to cause the Trustee to reinvest Sale Proceeds received at any time
from the sale of Collateral Interests that are Impaired Interests, Equity
Interests, Credit Risk Interests, Written Down Interests, Buy/Sell Interests,
Taxed Collateral Interests, Taxed Properties or Withholding Tax Interests in
Substitute Collateral Interests with an aggregate purchase price up to the
amount of the Sale Proceeds, and to reinvest Collateral Principal Payments,
transfers from the Earn-Out Asset Account and proceeds of Class A-R Draws
in Substitute Collateral Interests; provided,
however, that prior to any such acquisition of Substitute Collateral
Interests by or on behalf of the Issuer in the manner described above, the
Reinvestment Criteria are satisfied on the date of such acquisition. Under no
circumstances shall Collateral Principal Collections (including Sale Proceeds)
be reinvested following the Reinvestment Period, and amounts on deposit in the
Earn-Out Asset Account will only be applied to fund Future Advances and for
transfer to the Collateral Principal Collection Sub-Account in accordance with
Section 10.8. During the Reinvestment Period, Class A-R Draws (and at
any time, the amounts on deposit in the


 


174

















 


Earn-Out
Asset Account) may be applied to fund Future Advance Amounts prior to making
payments on the Notes.


 


(c)                                  After the Effective Date, within 10 Business
Days of purchasing any Substitute Collateral Interest that is not rated by
Moody’s, the Collateral Manager shall deliver to Moody’s a set of asset and
underwriting materials in form and substance reasonably acceptable to Moody’s
(the Reinvestment Asset Information)
describing such Substitute Collateral Interest. After receiving the
Reinvestment Asset Information, Moody’s may provide an estimated rating (a Moody’s Estimated Rating) to the Collateral
Manager with respect to such Substitute Collateral Interest. If the Collateral
Manager receives a Moody’s Estimated Rating that is lower than the estimated
tranched rating permitted pursuant to clause (ii) of the definition of
Moody’s Rating, then the Collateral Manager shall calculate the Moody’s Maximum
Weighted Average Rating Factor Test using such Moody’s Estimated Rating. For
all other purposes, the Moody’s Maximum Weighted Average Rating Factor Test
will be calculated using the Moody’s Rating.


 


In
the event that such calculation (using the Moody’s Estimated Rating) indicates
that the purchase of the related Substitute Collateral Interest caused the
Moody’s Post-Acquisition Compliance Test to not be satisfied (a Moody’s Post-Acquisition Compliance Test Failure),
the Collateral Manager is permitted to take any of the following actions to
cause the Moody’s Post-Acquisition Compliance Test to be satisfied:
(i) direct the Trustee to sell such Substitute Collateral Interest (or a
Participation Interest therein) that caused the Moody’s Post-Acquisition
Compliance Test Failure, at a price at least equal to the price paid by the
Issuer for the Substitute Collateral Interest, plus any fees and expenses
attributable to such sale, (ii) instruct the Trustee to sell any other
Collateral Interest (or a Participation Interest therein) (provided that such
sale price may only be less than the principal balance thereof if the aggregate
net discount for such sale and all prior sales pursuant to this
Section 12.2(c) does not exceed the aggregate principal balance of
the Income Notes and any outstanding Class H Notes, Class J Notes and
Class K Notes) and/or (iii) instruct the Trustee to purchase
additional Substitute Collateral Interests (or a Participation Interest
therein), subject to the Reinvestment Criteria, that would result in satisfaction
of the Moody’s Post-Acquisition Compliance Test. If the Moody’s
Post-Acquisition Compliance Test is not satisfied within 135 days of a finding
of a Moody’s Post-Acquisition Compliance Test Failure, then until such time as
the Moody’s Post-Acquisition Compliance Test is satisfied, the Issuer may only
purchase a subsequent Substitute Collateral Interest if it is rated by Moody’s.
For the avoidance of doubt, any Collateral Interest sold pursuant to clauses
(i) or (ii) above will not be considered an Impaired Interest, Written
Down Interest, Withholding Tax Interest, Buy/Sell Interest, Taxed Collateral
Interest, Taxed Property, Credit Risk Interest or Discretionary Sale.


 


Notwithstanding
anything described in this Indenture to the contrary, the Issuer will have the
right to effect any transaction which has been consented to in writing by
holders of Rated Notes evidencing 100% of the aggregate outstanding principal
amount of each Class of Notes and of which each Rating Agency has been
notified.


 


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 Interest only if, as evidenced by an
Officer’s certificate from the Collateral Manager


 


175

















 


to
the Trustee, each of the following eligibility criteria is satisfied
immediately after the Issuer Grants such Collateral Interest 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;


 


(b)                                 it is U.S. Dollar-denominated and all cash
flows thereunder are to be paid in U.S. Dollars, and it is not convertible
into, or payable in, any other currency; provided, however,
the requirements of this Section (b) will not be applicable if Rating
Confirmation is obtained;


 


(c)                                  it is one of the Specified Types of
Collateral Interests;


 


(d)                                 it has an S&P Rating (which rating does
not include a “p”, “pi”, “q”, “t” or “r” subscript) and a Moody’s Rating;


 


(e)                                  either (A) the Issuer is a Qualified
REIT Subsidiary and its acquisition would not cause the Owner REIT to fail to
qualify as a REIT under the Code or (B) 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);


 


(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 (for the avoidance
of doubt, this clause will not apply to any commitment fees with respect to the
unfunded portion of any Earn-Out Assets);


 


(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 an obligation that is ineligible
under its Underlying Instruments to be purchased by the Issuer and pledged to
the Trustee, and in the case of a Mezzanine Loan, a Subordinate Mortgage Loan
Interest, a Credit Lease Loan, a Tenant Lease Loan Interest, a Participation
Interest or a Commercial Mortgage Loan (not including and Commercial Mortgage
Loan underlying or comprising a Collateral Interest), it is not ineligible
under its Underlying Instruments to be purchased by the Underlying Trust;


 


(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 (or,
in the case of Preferred Equity Securities, distributions attributable to the
return of capital by their governing documents) at not less than par upon
maturity;


 


(k)                                  (A) its Underlying Instruments do not
obligate the Issuer to make any future advances or any other payment except the
purchase price thereof (except for obligations to provide for Future Advance
Amounts in the case of Earn-Out Assets) and (B) in the case of an Earn-Out



 


176

















 


Asset,
the sum of (1) amounts on deposit in the Earn-Out Asset Account at such
time (after giving effect to any deposit by the Issuer with respect to such
Earn-Out Asset) and (2) the Aggregate Class A-R Undrawn Amount shall
equal at all times an amount sufficient to meet the Total Unfunded Future
Advance Amount (including the Future Funding Obligations related to such
Earn-Out Asset) in full;


 


(l)                                     it is not an obligation with respect to
which, in the reasonable judgment of the Collateral Manager, 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 an obligation issued by an Emerging
Market Issuer;


 


(o)                                 it is not an obligation that has, at the time
of purchase, any deferred or capitalized interest unless by its terms it was
scheduled to defer or capitalize interest;


 


(p)                                 it is not an obligation that, at the time it
is purchased, is a Credit Risk Interest, an Impaired Interest, a Written Down
Interest or a Deferred Interest PIK Bond;


 


(q)                                 it is not a Synthetic Security;


 


(r)                                    If it is a Participation Interest in a
Commercial Mortgage Loan, the entity that created such participation interest
is either (A) a special purpose entity meeting S&P’s then current
published criteria for bankruptcy-remote special purpose entities, (B) a
Qualified Institutional Lender or (C) an entity with respect to which
Rating Confirmation has been received; provided
that Rating Confirmation shall be deemed to have been received with respect to
the Sellers and any NorthStar Subsidiary, as described in, and subject to the
terms of, the S&P Letter or with respect to any entities described in any
amendments to or renewals of the S&P Letter, provided further that a securitization trust, a CDO issuer or
a similar securitization vehicle shall be deemed to be a special purpose entity
for purposes of this section (r) of the Eligibility Criteria;


 


(s)                                  at the time the obligation is purchased by
the Issuer:


 


(1)                                  it is not an obligation 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 obligation or by any other person made to all of the
holders of such obligation to purchase or


 


177

















 


otherwise
acquire such obligation (other than pursuant to any redemption in accordance
with the terms of the related Underlying Instruments) or to convert or exchange
such obligation into or for cash, securities or any other type of consideration
or (2) any solicitation by an issuer of such obligation or any other
person to amend, modify or waive any provision of such obligation or any
related Underlying Instrument, and has not been called for redemption;


 


(5)                                  it is not an Equity Interest;


 


(6)                                  except with respect to Preferred Equity
Securities, it is not an obligation 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 (a) an S&P Rating (as defined in
clause (i) of the definition of S&P Rating) or (b) a Moody’s
Rating (as defined in clause (i) of the definition of Moody’s Rating),
that in either case addresses the obligation of the obligor (or guarantor, if
applicable) to pay principal of and interest on the relevant Collateral
Interest in full, which ratings are monitored on an ongoing basis by the
relevant Rating Agency;


 


(9)                                  it is not an obligation that provides for the
payment of interest (or, in the case of Preferred Equity Securities, dividends
or other distributions) in cash less frequently than semi-annually;


 


(10)                            (A) if it is a Commercial Mortgage Loan, a Mezzanine Loan, a
Subordinate Mortgage Loan Interest, a Credit Lease Loan or a Tenant Lease Loan
Interest, no commercial mortgage loan underlying, securing or constituting such
Collateral Interest has a maturity date (including any extension option) that
is later than 10 years prior to the Stated Maturity Date; and (B) if it is
a CMBS, such CMBS (without regard to the maturities of any collateral
underlying such CMBS) does not have a rated final maturity date later than five
years after the Stated Maturity Date; provided
that, with respect to any such CMBS that has a stated maturity or a rated final
distribution date scheduled to occur later than the Stated Maturity Date, such
CMBS is rated at least “A3” by Moody’s (and, if rated “A3”, it is not on credit
watch with negative implications); (C) if it is a REIT Debt Security, such
REIT Debt Security does not have a rated final maturity date later than the
Stated Maturity Date; (D) if it is a Preferred Equity Security, the date
(after giving effect to all permissible extensions thereof) by which
distributions on such Preferred Equity Security attributable to the return of
capital by its governing documents are required to be made is not later than
the Stated Maturity Date (after giving effect to all anticipated settlement concerns
in connection with such return of capital); and (E) if it is a Real Estate
CDO Security, it does not have a stated maturity later than five years after
the Stated Maturity Date; provided
that, with respect to any such Real Estate CDO Security that has a stated
maturity or a rated final distribution date scheduled to occur later than the
Stated Maturity Date, such Real Estate CDO Security is rated at least “Aa2” by
Moody’s (and, if rated “Aa2”, it is not on credit watch with negative
implications); except that, up to
3% of the aggregate Principal Balance of all initial Collateral Interests may


 


178

















 


consist
of Real Estate CDO Securities with a Moody’s Rating of below “Aa2” and with a
stated maturity not more than five years after the Stated Maturity Date; and


 


(11)                            if it is a Deemed Floating Rate Collateral Interest, the Deemed
Floating Asset Hedge entered into with respect to such Deemed Floating Rate
Collateral Interest conforms to all requirements set forth in the definition of
“Deemed Floating Asset Hedge;”


 


(t)          if it is a (1) Subordinate
Mortgage Loan Interest and the related senior mortgage loan is not otherwise
serviced in connection with a commercial mortgage backed securitization
transaction, it is serviced in accordance with the related participation
agreement, intercreditor agreement or servicing agreement the terms of which
are substantially similar to the terms of servicing agreements entered into in
connection with CMBS transactions rated by S&P or a servicing agreement
with respect to which Rating Confirmation from S&P has been received and
(2) Credit Lease Loan, a Tenant Lease Loan Interest, a Preferred Equity
Security, a Mezzanine Loan or a Commercial Mortgage Loan (not including any
Commercial Mortgage Loan underlying or comprising a Collateral Interest), or a
Participation Interest therein, it is serviced (or in the case of a Mezzanine
Loan, a Preferred Equity Security or a Commercial Mortgage Loan acquired by the
Issuer on the Closing Date or within 60 days thereafter, will be serviced
within 60 days of the Closing Date) in accordance with a servicing agreement
the terms of which are substantially similar to the terms of servicing
agreements entered into in connection with CMBS transactions rated by S&P
or a servicing agreement with respect to which Rating Confirmation from S&P
has been received;


 


(u)         if it is a Mezzanine Loan, a
Subordinate Mortgage Loan Interest, a Commercial Mortgage Loan (other than a
Credit Lease Loan or a Tenant Lease Loan Interest), or a Participation Interest
therein, such Collateral Interest shall have the benefit of (i) either
(A) representations and warranties made by the related Seller of such
Collateral Interest (with such exceptions, qualifications and omissions as the
Collateral Manager shall reasonably determine) substantially similar to either
(x) the representations and warranties set forth on Schedule J- 1 hereto
or (y) in the case of a Mezzanine Loan or a Subordinate Mortgage Loan
Interest, the representations and warranties made by the related Seller of such
Collateral Interest in connection with the CMBS transaction including the
related senior interest in such Collateral Interest (provided that such CMBS transaction is rated by S&P) or
(B) representations and warranties with respect to which Rating
Confirmation from S&P has been received and (ii) remedies for the
breach of such representations and warranties or the existence of document
defects that are either (A) substantially similar to the remedies provided
in the Asset Transfer Agreements or (B) with respect to which Rating
Confirmation from S&P has been received;


 


(v)         if it is a Credit Lease Loan or a
Tenant Lease Loan Interest or a Participation Interest therein, such Collateral
Interest shall have the benefit of (i) either (A) representations and
warranties made by the related Seller of such Collateral Interest (with such
exceptions, qualifications and omissions as the Collateral Manager shall
reasonably determine) substantially similar to the representations and
warranties set forth on Schedule J-1 (to the extent such representations and
warranties are applicable to Credit Lease Loans and Tenant Lease Loan
Interests) and Schedule J-2 hereto or (B) representations and warranties with
respect to which Rating Confirmation from S&P has been received and
(ii) remedies for the breach of representations and warranties or the
existence of document defects that are either (A) substantially similar to
the remedies provided in the Asset Transfer Agreements or (B) with respect to
which Rating Confirmation from S&P has been received;


 


179














 


(w)          if it is a Preferred Equity Security, such Collateral Interest shall
have the benefit of (i) either (A) representations and warranties
made by the related Seller of such Collateral Interest (with such exceptions,
qualifications and omissions as the Collateral Manager shall reasonably
determine) substantially similar to the representations and warranties set
forth on Schedule J-3 hereto or (B) representations and warranties with
respect to which Rating Confirmation from S&P has been received and
(ii) remedies for the breach of representations and warranties or the
existence of document defects that are either (A) substantially similar to
the remedies provided in the Asset Transfer Agreements or (B) with respect
to which Rating Confirmation from S&P has been received; and


 


(x)            if it is a Collateral Interest acquired after
the Closing Date, it will be transferred (i) from a Seller to the
Depositor pursuant to an agreement substantially similar to the Asset Transfer
Agreements and (ii) from the Depositor (in the case of a CMBS, Real Estate
CDO Security or REIT Debt Security) or the Underlying Trustee (in the case of a
Trust Certificate) to the Issuer pursuant to an agreement substantially similar
to the Bill of Sale;


 


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.


 


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 arm’s length basis and if effected with the Issuer, the
Trustee, the Collateral Manager 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 Interest 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
Manager certifying (1) compliance with the Reinvestment Criteria in
accordance with Section 12.1(b), (2) that the Collateral Interest to
be sold constitutes an Impaired Interest, Credit Risk Interest, Written Down
Interest, Buy/Sell Interest, Taxed Collateral Interest, Taxed Property or
Withholding Tax Interest, or upon the occurrence of an Investment Guidelines
Event, Preferred Equity Security and (3) that any security to be purchased
satisfies the definition of Collateral Interest and (b) an Officer’s
certificate of the Collateral Manager on behalf of the Issuer containing the
statements set forth in Section 3.2(b)(2) through (4), (6) and
(7).


 


(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, Holders of Rated Notes evidencing 100% of the
Aggregate


 


180

















 


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, at any time at which the Issuer is not a Qualified REIT Subsidiary,
the Issuer may not (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.


 


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
Class A-2 Notes, Class B Notes, Class C Notes, Class D
Notes, Class E Notes, Class F Notes, Class G Notes, Class H
Notes, Class J Notes and Class K Notes agree for the benefit of the
Holders of the Class A Senior Notes that the Class A-2 Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes, Class H Notes, Class J Notes
and Class K Notes and the Issuer’s rights in and to the Collateral (with
respect to the Class A Senior Notes, the Subordinate Interests) shall be
subordinate and junior to the Class A Senior 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(f) or (g))
has occurred and has not been cured or waived, the Class A Senior Notes
shall be paid in full in Cash or, to the extent a Majority of the Class A
Senior 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 Senior 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 Senior 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.


 


(b)                                 Anything in this Indenture or the Rated Notes
to the contrary notwithstanding, the Issuer and the Holders of the Class B
Notes, Class C Notes, Class D Notes, Class E Notes, Class F
Notes, Class G Notes, Class H Notes, Class J Notes and
Class K Notes agree for the benefit of the Holders of the Class A
Notes that the Class B Notes, Class C Notes, Class D Notes,
Class E Notes, Class F Notes, Class G Notes, Class H Notes,
Class J Notes and Class K 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(f) or (g))
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


 


181

















 


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.


 


(c)                                  Anything in this Indenture or the Rated Notes
to the contrary notwithstanding, the Issuer and the Holders of the Class C
Notes, Class D Notes, Class E Notes, Class F Notes, Class G
Notes, Class H Notes, Class J Notes and Class K Notes agree for
the benefit of the Holders of the Class A Notes and Class B Notes
that the Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes, Class H Notes, Class J Notes
and Class K Notes and the Issuer’s rights in and to the Collateral (with
respect to the Class A Notes and Class B Notes the Subordinate Interests)
shall be subordinate and junior to the Class A Notes and 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(f) or (g)) has occurred and has not been cured or waived,
the Class A Notes and Class B Notes shall be paid in full in Cash or,
to the extent a Majority of the Class A Notes and 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
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 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.


 


(d)                                 Anything in this Indenture or the Rated Notes
to the contrary notwithstanding, the Issuer and the Holders of the Class D
Notes, Class E Notes, Class F Notes, Class G Notes, Class H
Notes, Class J Notes and Class K Notes agree for the benefit of the
Holders of the Class A Notes, Class B Notes and Class C Notes
that the Class D Notes, Class E Notes, Class F Notes,
Class G Notes, Class H Notes, Class J Notes and Class K
Notes and the Issuer’s rights in and to the Collateral (with respect to the
Class A Notes, Class B Notes and Class C Notes, the Subordinate Interests)
shall be subordinate and junior to the Class A Notes, Class B Notes
and 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(f) or (g)) has occurred and has not been cured or waived
the Class A Notes, Class B Notes and Class C Notes shall be paid
in full in Cash or, to the extent a Majority of the Class A Notes,
Class B Notes and 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, Class B Notes and 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, Class B


 


182

















 


Notes
and 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.


 


(e)                                  Anything in this Indenture or the Rated Notes
to the contrary notwithstanding, the Issuer and the Holders of the Class E
Notes, Class F Notes, Class G Notes, Class H Notes, Class J
Notes and Class K Notes agree for the benefit of the Holders of the
Class A Notes, Class B Notes, Class C Notes and Class D
Notes that the Class E Notes, Class F Notes, Class G Notes,
Class H Notes, Class J Notes and Class K Notes and the Issuer’s
rights in and to the Collateral (with respect to the Class A Notes,
Class B Notes, Class C Notes and Class D Notes, the Subordinate Interests)
shall be subordinate and junior to the Class A Notes, Class B Notes,
Class C Notes and 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(f) or (g)) has occurred and has not been
cured or waived the Class A Notes, Class B Notes, Class C Notes
and Class D Notes shall be paid in full in Cash or, to the extent a
Majority of each of the Class A Notes, Class B Notes, Class C
Notes and 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, Class B Notes, Class C Notes and 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, Class B Notes, Class C Notes and 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.


 


(f)                                    Anything in this Indenture or the Rated Notes
to the contrary notwithstanding, the Issuer and the Holders of the Class F
Notes, Class G Notes, Class H Notes, Class J Notes and Class K
Notes agree for the benefit of the Holders of the Class A Notes,
Class B Notes, Class C Notes, Class D Notes and Class E
Notes that the Class F Notes, Class G Notes, Class H Notes,
Class J Notes and Class K Notes and the Issuer’s rights in and to the
Collateral (with respect to the Class A Notes, Class B Notes,
Class C Notes, Class D Notes and Class E Notes, the Subordinate Interests)
shall be subordinate and junior to the Class A Notes, Class B Notes,
Class C Notes, Class D Notes and Class E Notes to the extent and
in the manner set forth in this Indenture including as set forth in
Section 11.1(a) and hereinafter provided. If any Event of Default
(including an Event of Default specified in Section 5.1(f) or (g))
has occurred and has not been cured or waived the Class A Notes,
Class B Notes, Class C Notes, Class D Notes and Class E
Notes shall be paid in full in Cash or, to the extent a Majority of each of
Class A Notes, Class B Notes, Class C Notes, Class D Notes
and 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, Class B Notes, Class C Notes, Class D Notes
and 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, Class B Notes, Class C
Notes, Class D Notes and Class E Notes and not before one year and
one day has elapsed since


 


183

















 


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 G
Notes, Class H Notes, Class J Notes and Class K Notes agree for
the benefit of the Holders of the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes and Class F
Notes that the Class G Notes, Class H Notes, Class J Notes and
Class K Notes and the Issuer’s rights in and to the Collateral (with
respect to the Class A Notes, Class B Notes, Class C Notes,
Class D Notes, Class E Notes and Class F Notes, the Subordinate Interests)
shall be subordinate and junior to the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes and Class F
Notes to the extent and in the manner set forth in this Indenture including as
set forth in Section 11.1(a) and hereinafter provided. If any Event
of Default (including an Event of Default specified in
Section 5.1(f) or (g)) has occurred and has not been cured or waived
the Class A Notes, Class B Notes, Class C Notes, Class D
Notes, Class E Notes and Class F Notes shall be paid in full in Cash
or, to the extent a Majority of each of the Class A Notes, Class B
Notes, Class C Notes, Class D Notes, Class E Notes and
Class F 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, Class B Notes, Class C Notes, Class D Notes,
Class E Notes and Class F 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, Class B
Notes, Class C Notes, Class D Notes, Class E Notes and
Class F 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)                                 Anything in this Indenture or the Rated Notes
to the contrary notwithstanding, the Issuer and the Holders of the Class H
Notes, Class J Notes and Class K Notes agree for the benefit of the
Holders of the Class A Notes, Class B Notes, Class C Notes,
Class D Notes, Class E Notes, Class F Notes and Class G
Notes that the Class H Notes, Class J Notes and Class K Notes
and the Issuer’s rights in and to the Collateral (with respect to the
Class A Notes, Class B Notes, Class C Notes, Class D Notes,
Class E Notes, Class F Notes and Class G Notes, the Subordinate Interests)
shall be subordinate and junior to the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes
and Class G Notes to the extent and in the manner set forth in this
Indenture including as set forth in Section 11.1(a) and hereinafter
provided. If any Event of Default (including an Event of Default specified in
Section 5.1(f) or (g)) has occurred and has not been cured or waived
the Class A Notes, Class B Notes, Class C Notes, Class D
Notes, Class E Notes, Class F Notes and Class G Notes shall be
paid in full in Cash or, to the extent a Majority of each of the Class A
Notes, Class B Notes, Class C Notes, Class D Notes, Class E
Notes, Class F Notes and Class G 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, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes
and Class G 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, Class B


 


184

















 


Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes
and Class G 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.


 


(i)                                     Anything in this Indenture or the Rated Notes
to the contrary notwithstanding, the Issuer and the Holders of the Class J
Notes and Class K Notes agree for the benefit of the Holders of the
Class A Notes, Class B Notes, Class C Notes, Class D Notes,
Class E Notes, Class F Notes, Class G Notes and Class H
Notes that the Class J Notes and the Class K Notes and the Issuer’s
rights in and to the Collateral (with respect to the Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes and Class H Notes, the Subordinate Interests)
shall be subordinate and junior to the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes,
Class G Notes and Class H Notes to the extent and in the manner set
forth in this Indenture including as set forth in Section 11.1(a) and
hereinafter provided. If any Event of Default (including an Event of Default
specified in Section 5.1(f) or (g)) has occurred and has not been
cured or waived the Class A Notes, Class B Notes, Class C Notes,
Class D Notes, Class E Notes, Class F Notes, Class G Notes
and Class H Notes shall be paid in full in Cash or, to the extent a
Majority of each of the Class A Notes, Class B Notes, Class C
Notes, Class D Notes, Class E Notes, Class F Notes, Class G
Notes and Class H 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, Class B Notes, Class C Notes, Class D
Notes, Class E Notes, Class F Notes, Class G Notes and
Class H 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, Class B Notes, Class C
Notes, Class D Notes, Class E Notes, Class F Notes, Class G
Notes and Class H 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.


 


(j)                                     Anything in this Indenture or the Rated Notes
to the contrary notwithstanding, the Issuer and the Holders of the Class K
Notes agree for the benefit of the Holders of the Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes, Class H Notes and Class J Notes
that the Class K Notes and the Issuer’s rights in and to the Collateral
(with respect to the Class A Notes, Class B Notes, Class C
Notes, Class D Notes, Class E Notes, Class F Notes, Class G
Notes, Class H Notes and Class J Notes, the Subordinate Interests)
shall be subordinate and junior to the Class A Notes, Class B Notes,
Class C Notes, Class D Notes, Class E Notes, Class F Notes,
Class G Notes, Class H Notes and Class J Notes to the extent and
in the manner set forth in this Indenture including as set forth in
Section 11.1(a) and hereinafter provided. If any Event of Default
(including an Event of Default specified in Section 5.1(f) or (g))
has occurred and has not been cured or waived the Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes, Class H Notes and Class J
Notes shall be paid in full in Cash or, to the extent a Majority of each of the
Class A Notes, Class B Notes, Class C Notes, Class D Notes,
Class E Notes, Class F Notes, Class G Notes, Class H Notes
and Class J 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


 


185

















 


the
Co-Issuer agree, for the benefit of the Holders of the Class A Notes,
Class B Notes, Class C Notes, Class D Notes, Class E Notes,
Class F Notes, Class G Notes, Class H Notes and Class J
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, Class B Notes, Class C Notes, Class D
Notes, Class E Notes, Class F Notes, Class G Notes, Class H
Notes and Class J 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.


 


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 Manager 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 Manager 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 Manager or any
other Person, stating that the information with respect to such factual matters
is in the possession of the Issuer, the Co-Issuer, the Collateral Manager or such
other Person, unless such Authorized Officer of the Issuer, the Co-Issuer or
the Collateral Manager 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 Manager, stating that the information
with respect to such matters is in the possession of the Issuer, the Co-Issuer
or the Collateral Manager, unless such counsel knows that the certificate or
opinion or representations with respect to such matters are erroneous.


 


186

















 


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).


 


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, the PAA Issued Note Paying Agent, the Class A-R Note 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 PAA Issued Note Paying Agent addressed to it at 9062 Old Annapolis
Road, Columbia, Maryland 21045, Attn: CDO Trust Services—N-Star REL CDO VI,
telephone number 410-884-2000, fax


 


187

















 


number
410-715-3748, with a copy to P.O. Box 98, Columbia Maryland 21046 or at
any other address previously furnished in writing to the Co-Issuers or Rated
Noteholder by the Trustee, PAA Issued Note Paying Agent or the Class A-R
Note 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 908GT, 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;


 


(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;
or


 


(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 Moody’s, addressed to Moody’s Investors
Service, Inc., 99 Church Street, New York, New York 10007 facsimile no.
(212) 553-7820, Attention: NorthStar REL CDO VI CBO CLO Monitoring (e-mail:
cdomonitoring@moody’s.com); (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; and (iii) in the case of
Fitch, addressed to Fitch, Inc., One State Street Plaza, New York, New
York 10004, telecopy No. (212) 908-0500, Attention: Commercial Real Estate
Loan CDOs, Performance Analytics (or by electronic mail at
cdo.surveillance@fitchratings.com and Karen.trebach@fitchratings.com) or such
other address that Fitch shall designate in the future;


 


(e)                                  the Collateral Manager by the Co-Issuers or
by the Trustee or a Majority of the Rated Notes, 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 Manager
addressed to it at the address specified in the Collateral Management Agreement
or at any other address previously furnished in writing to the Co-Issuers or
the Trustee by the Collateral Manager;


 


(f)                                    the PAA Issued Note Paying Agent by the
Trustee in writing sent by facsimile confirmed by overnight courier guaranteed
next day delivery;


 


(g)                                 Wachovia Capital Markets, LLC by the
Co-Issuers, the Collateral Manager or the Trustee shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, hand delivered, sent by overnight
courier service or by telecopy in legible form, to Wachovia Capital Markets,


 


188

















 


LLC
addressed to Wachovia Capital Markets, LLC., 375 Park Avenue, New York, New
York 10152, Attention: Structured Credit Products Group;


 


(h)                                 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; and


 


(i)                                     each Hedge Counterparty by the Co-Issuers,
the Collateral Manager or the Trustee shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, hand delivered, sent by overnight courier
service or by telecopy in legible form, to the address set forth in the related
Hedge Agreement.


 


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.


 


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.


 


189














 


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.


 


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 Holders of
Rated Notes, each Hedge Counterparty 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 construed in accordance with, and this
Indenture and each Rated Note and all matters arising out of or relating in any
way whatsoever (whether in contract, tort or otherwise) to this Indenture or
any Rated Note shall be governed by, 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


 


190

















 


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.


 


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, this Indenture
and any Hedge Agreement shall be treated by the Trustee and the Collateral
Manager as confidential. The Trustee shall provide a copy of this Indenture to
the PAA Issued 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.


 


191

















 


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 Management Agreement, the Asset
Transfer Agreements and any Hedge Agreement into which the Issuer may enter,
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 Manager pursuant to the Collateral Management Agreement. For
the avoidance of doubt, in no event shall the Trustee be required to perform
the obligations of the Collateral Manager under the Collateral Management
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 or, the
Collateral Management 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 and the Collateral Management 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 or the Collateral Management 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.


 


192

















 


ARTICLE XVI


 


HEDGE AGREEMENTS


 


16.1.                     HEDGE AGREEMENTS


 


(a)                                  The Issuer may, after the Closing Date, enter
into one or more Hedge Agreements (including one or more Deemed Floating Asset
Hedges) with Hedge Counterparties as the Issuer may elect in its sole
discretion, in each case (i) subject to Rating Confirmation and
(ii) with the delivery to the Issuer of an Opinion of Counsel to the Hedge
Counterparty; provided that the
Issuer will not be required to obtain Rating 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.


 


(b)                                 The Issuer shall assign such Hedge Agreement
to the Trustee pursuant to Article 15 hereof.


 


(c)                                  The Trustee shall, on behalf of the Issuer
and in accordance with the Note Valuation Report, pay amounts due to any Hedge
Counterparty under any Hedge Agreement on any Payment Date in accordance with
Section 11.1 and Section 10.5(a)(5).


 


(d)                                 Upon the entry of the Issuer into a Hedge
Agreement, the Trustee shall 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 related 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 subject to the rights and interests of the
related Hedge Counterparty under the related Hedge Agreement. 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 related 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
related Hedge Counterparty when and as required by the related 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 or
any Redemption 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.


 


(e)                                  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.


 


193

















 


(f)                                    If at any time any 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 related Hedge Agreement), the
Issuer and the Trustee shall take such actions, if any, (following the
expiration of any applicable grace period) to enforce the rights of the Issuer
and the Trustee thereunder 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 related 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 Confirmation with a substitute
Hedge Counterparty with respect to which the Hedge Counterparty Ratings
Requirement is satisfied and each Rating Agency shall have provided a Rating
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 Manager) obtain
quotations with respect to such replacement Hedge Agreement from five
prospective counterparties Independent from the Issuer, the Collateral Manager
and each other that satisfy the Hedge Counterparty Ratings Requirement and with
respect to which a Rating 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).


 


(g)                                 The Issuer shall notify each Rating Agency if
at any time any Hedge Counterparty is required to post collateral or assign its
rights and obligations in and under the related Hedge Agreement.


 


(h)                                 No Hedge Agreement may 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 unless the Issuer has
obtained Rating Confirmation with respect to such amendment or modification.
The Trustee shall provide the Collateral Manager and the Rating Agencies with a
copy of any such amendment or modification within 10 Business Days before
effecting such modification.


 


(i)                                     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 related Hedge Counterparty shall be required in
accordance with the terms of the related Hedge Agreement to pay additional
amounts to the Issuer sufficient to cover any withholding tax due on payments
made by such Hedge Counterparty to the Issuer under such Hedge Agreement,
subject to the Issuer making customary payee tax representations and providing
customary tax documentation. At any time at which the Issuer is not a Qualified
REIT Subsidiary, 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.


 


(j)                                     The Issuer will not terminate any Hedge
Agreement without receiving Rating Confirmation with respect to such
termination except to the extent otherwise specified herein.


 


194














 


ARTICLE XVII


 


CLASS A-R NOTES


 


17.1.                     DRAWS ON THE CLASS A-R NOTES AND CLASS A-R COMMITMENT


 


(a)                                  Pursuant to the Class A-R Note Purchase
Agreement and subject to compliance with the conditions set forth therein and
herein, the Issuer (or the Collateral Manager on behalf of the Issuer) may
request, and the Holders of the Class A-R Notes (or any Liquidity Provider
with respect to such Holders) shall be obligated to make, advances under the
Class A-R Notes (each such advance, a Class A-R Draw) to fund, during both the
Ramp- Up Period and the Reinvestment Period, Future Advance Amounts relating to
Earn-Out Assets and to acquire Substitute Collateral Interests. After the
Reinvestment Period and/or the occurrence of an Event of Default, the Issuer
will fund Future Advance Amounts relating to Earn-Out Assets from amounts on
deposit in the Earn-Out Asset Account. Class A-R Draws may be made on any
Business Day from and including the Closing Date to but excluding the
Commitment Termination Time (the date of such Class A-R Draw, the Class A-R Draw Date).


 


(b)                                 Draws may be made from time to time in
accordance with the Class A-R Note Purchase Agreement. The Issuer shall
duly and punctually perform each of its obligations under the Class A-R
Note Purchase Agreement. The Issuer shall not be required to borrow any amount
under the Class A-R Notes at any time unless the applicable servicer or
the Collateral Manager, as applicable, has determined that a Future Advance is
required under the related Underlying Instruments and the amounts on deposit in
the Earn-Out Asset Account, if any, are insufficient to make sure Future
Advance. The obligation of the Issuer to make any such Class A-R Draw is
subject to the conditions to make a Class A-R Draw in Sections 4.01 and
4.02 of the Note Purchase Agreement.


 


(c)                                  On the Mandatory Class A-R Draw Date,
the Issuer (or the Collateral Manager on behalf of the Issuer) shall make a
Class A-R Draw in an amount equal to the Aggregate Class AR Undrawn
Amount, the proceeds of which will be deposited as follows: (i) an amount
equal to the Total Net Unfunded Future Advance Amount will be deposited in the
Earn- Out Asset Account, and (ii) any remainder will be deposited in the
Collection Account as Collateral Principal Collections. Immediately following
such draw, the Class A-R Commitments will terminate.


 


(d)                                 The Trustee shall (at the direction of the
Collateral Manager) upon receipt of the proceeds of any Class A-R Draw,
deposit such proceeds into the Earn-Out Asset Account where such amounts shall
be applied in accordance with Section 10.8.


 


(e)                                  The aggregate Class A-R Commitments
shall not exceed the Maximum Class A-R Commitment. To the extent that the
principal amount of the Class A-1 Notes is reduced pursuant to a Mandatory
Redemption, Special Amortization or redemption in connection with a Rating
Confirmation Failure, then Class A-R Commitments will be reduced so that
the Class A-R Commitments equal the Class A-R Proportion of the
outstanding principal amount of the Class A-1 Notes. The portion of each
such reduction of the Class A-R Commitment applicable to each
Class A-R Note shall be the pro rata
share of the unfunded Class A-R Commitments represented by such
Class A-R Note. Thus, the Class A-R Commitments will be reduced by
the total amount of principal payments allocable to the Class A-R Notes
which are paid to the Class A-R Notes and the remainder deposited


 


195

















 


as
follows: (i) an amount equal to the Total Net Unfunded Future Advance
Amount will be deposited in the Earn-Out Asset Account, and (ii) any
remainder will be deposited in the Collection Account as Collateral Principal
Collections.


 


(f)                                    Prior to the Commitment Termination Time, the
Aggregate Class A-R Undrawn Amount must be at least equal to the Total Net
Unfunded Future Advance Amount.


 


17.2.                     CLASS A-R INTEREST AND CLASS A-R COMMITMENT FEE.


 


(a)                                  With respect to any Payment Date or
Class A-R Prepayment Date, interest on the Class A-R Notes will be
payable in arrears in an amount equal to (i) the product of (1) the
Average Drawn Class A-R Note Portion during the Interest Period with
respect to such Payment Date, (2) the Class A-R Note Interest Rate,
and (3) the actual number of days elapsed in such Interest Period, divided
by (ii) 360; provided, that
interest accrued in respect of amounts borrowed under the Class A-R Notes
during the period following the Calculation Date through such Payment Date will
be payable (without penalty interest thereon) on the next succeeding Payment
Date. Interest on the Class A-R Notes will be computed on the basis of a
360-day year and the actual number of days elapsed. Interest will be payable to
the Holders of the Class A-R Notes, pro rata, based on their
Class A-R Interest Allocation Percentage.


 


(b)                                 The Class A-R Commitment Fee will be
payable in arrears on each Payment Date and will rank pari passu with the payment of interest on
the Class A Senior Notes. Interest at the Class A-R Note Interest
Rate will accrue on any portion of the Class A-R Commitment Fee that is
not paid when due.


 


17.3.                     PREPAYMENTS OF CLASS A-R NOTES.


 


(a)                                  During the Reinvestment Period, the
Class A-R Notes may be prepaid (in whole or in part) without payment of
premium, at the option of the Issuer (at the direction of the Collateral Manager)
(i) prior to any payments on any other Class of Rated Notes, on any
Payment Date from Collateral Principal Collections to the extent Collateral
Principal Collections are available for such application pursuant to the
Priority of Payments and from amounts on deposit in the Earn-Out Asset Account
or (ii) from excess amounts on deposit in the Collateral Principal
Collection Sub-Account and the Earn-Out Asset Account on an Interim Payment
Date, but subject to the payment by the Issuer of Class A-R Breakage
Costs, if any. The Collateral Manager (on behalf of the Issuer) must provide
not less than two Business Days’ notice to the Class A-R Note Agent (with
a copy to the Trustee) in connection with any Class A-R Prepayment to be
made on an Interim Payment Date. Any Class A-R Breakage Costs shall be
paid in accordance with the Priority of Payments on the Payment Date following
the applicable Class A-R Prepayment Date.


 


(b)                                 If any Class A-R Prepayment is made on a
day other than a Payment Date, the Trustee shall pay the Class A-R
Noteholders (i) accrued and unpaid interest in respect of the amount of
such Class A-R Prepayment on such date and (ii) any Class A-R
Breakage Costs resulting from such Class A-R Prepayment in accordance with
the Priority of Payments on the first Payment Date following the Due Period in
which such Class A-R Prepayment is made.


 


196

















 


(c)                                  The aggregate principal amount of any partial
voluntary Class A-R Prepayment, in respect of the Class A-R Notes
(taken as a whole) will be at least $500,000 (and integral multiples of $1 in
excess thereof) or, if the aggregate outstanding amount under the
Class A-R Notes is less than $500,000, such lesser amount. Any
Class A-R Draw will be made by the Collateral Manager on behalf of the
Issuer, pro rata, according to the
unused portion of the Class A-R Commitment of each Class A-R
Noteholder. The Issuer shall make all Class A-R Prepayments pro rata based on the Aggregate Outstanding
Amount of the Class A-R Notes at the time such prepayment is made. Subject
to compliance with certain draw conditions specified in the Class A-R Note
Purchase Agreement and herein, all such prepaid amounts may be re-borrowed
until the Commitment Termination Time.


 


17.4.                     CLASS A-R RATING CRITERIA


 


At
the time of its purchase of a Class A-R Note and prior to the Commitment
Termination Time, each Holder of a Class A-R Note must satisfy the
Class A-R Rating Criteria. If any Holder of Class A-R Notes at any
required time fails to satisfy the Class A-R Rating Criteria and such
Holder shall not have deposited cash in a Holder Sub-Account in such amount and
at such time as required by the Class A-R Note Purchase Agreement to which
such Holder is a party, the Collateral Manager on behalf of the Issuer shall
use reasonable efforts promptly to replace such Holder with another entity that
meets the Class A-R Rating Criteria (by requiring the replaced Holder to
transfer all of its rights and obligations in respect of the Class A-R
Notes to the transferee entity). The purchase of Class A-R Notes (whether
in connection with the initial placement or in a subsequent transfer) by any
purchaser who does not satisfy the Class AR Rating Criteria set forth in
clause (i) of the definition thereof at the time of such purchase but who
is then entitled to the benefits of a Liquidity Facility described in clause
(iii) of such definition shall not be permitted unless Rating Confirmation
is obtained with respect to the acquisition of Class A-R Notes by such
purchaser.


 


17.5.                     CLASS A-R HOLDER COLLATERAL ACCOUNT


 


(a)                                  The Trustee shall, prior to the Closing Date,
establish a Securities Account which shall be designated as the Class A-R Holder Collateral
Account, which shall be held in trust for the benefit of the
Holders of the Class A-R Notes (and, to the extent of amounts applied in
accordance with the Class A-R Note Purchase Agreement for such purpose,
for the benefit of the Holders of the Notes) and each Liquidity Provider and
over which the Trustee shall have exclusive control and the sole right of
withdrawal. Any and all funds at any time on deposit in, or otherwise to the
credit of, the Class A-R Holder Collateral Account shall be held in trust
by the Trustee for the benefit of the Holders of the Class AR Notes. If at
any time any Holder of a Class A-R Note shall be required to deposit funds
into the Class A-R Holder Collateral Account pursuant to the terms of the
Class A-R Note Purchase Agreement, then (i) the Collateral Manager
shall direct the Trustee to and the Trustee shall create a segregated
sub-account of the Class A-R Holder Collateral Account for such
Class A-R Holder (each, a Holder Sub-Account) and (ii) the Class A-R
Note Agent shall deposit all funds received from such Holder into such Holder
Sub- Account. All payments of principal of the Class A-R Notes otherwise
payable to such Holder shall be deposited in such Holder Sub-Account to the
extent provided in the Class A-R Note Purchase Agreement. The only
permitted withdrawal from or application of funds credited to a Holder
Sub-Account shall, notwithstanding the occurrence of any Event of Default, be
to satisfy such Holder’s obligations under the Class A-R Note Purchase
Agreement, as specified in this Section 17.5 and to return such amounts to
such Holder in accordance with Sections 17.5(c) and (d).


 


197

















 


(b)                                 The deposit of funds into a Holder
Sub-Account pursuant to Section 17.5 by any Holder of a Class A-R
Note shall not constitute a Draw by the Issuer and shall not constitute a
utilization of the Class A-R Commitment of such Holder, and the funds so
deposited shall not constitute principal outstanding under such Class A-R
Note. However, from and after the establishment of a Holder Sub-Account with
respect to any Holder of Class A-R Notes until otherwise provided below,
(i) the obligation of such Holder to advance funds under its
Class A-R Notes as part of any Class A-R Draw under this Indenture
and the Class A-R Note Purchase Agreement shall be satisfied by the
Trustee, acting at the direction of the Collateral Manager, withdrawing funds
from such Holder Sub-Account in the amount of such Holder’s share of such
Class A-R Draw (determined in accordance with the Class A-R Note
Purchase Agreement), and (ii) all payments of principal with respect to
advances made by such Holder under its Class A-R Notes (whether or not
originally funded from such Holder Sub-Account) (and, in the case of any
defaulting Holder, all payments of interest thereon) shall be satisfied by the
Trustee depositing or causing the deposit of the related funds into such Holder
Sub-Account in the amount of such Holder’s share of such Class A-R Draw
(determined in accordance with the Class A-R Note Purchase Agreement),
with notice of such deposit to the Class A-R Note Agent. The Trustee
acting at the direction of the Collateral Manager shall have full power and
authority to withdraw funds (with notice of any such withdrawal to the
Class A-R Note Agent) from each such Holder Sub-Account at the time of,
and in connection with, the making of any such Class A-R Draw and to
deposit funds (with notice of any such deposit to the Class A-R Note
Agent) into each such Holder Sub-Account, all in accordance with the terms of
and for the purposes set forth in this Indenture and the related Class A-R
Note Purchase Agreement.


 


(c)                                  If at any time the amount of funds on deposit
in the Holder Sub-Account relating to any Holder of Class A-R Notes, net
of any reinvestment earnings in respect of Class A-R Eligible Investments,
exceeds the undrawn amount of the Class A-R Commitment of such Holder
(whether due to a reduction in the Class A-R Commitment or otherwise),
then the Collateral Manager on behalf of the Issuer shall instruct the Trustee
to remit to such Holder a specified portion of such funds then held in the
related Holder Sub- Account in an amount equal to such excess.


 


(d)                                 If at any time a Holder of Class A-R
Notes is no longer required to deposit or maintain funds in the Class A-R
Holder Collateral Account pursuant to the terms of its Class A-R Note
Purchase Agreement to which such Holder is a party, then the Collateral Manager
shall notify the Trustee of such fact and direct the Trustee to remit all funds
then held in the relevant Holder Sub-Account (after giving effect to any
Class A-R Draw in respect of such Class A-R Notes to be made on such
date) (other than reinvestment earnings in respect of Class A-R Eligible
Investments which shall be remitted to such Holder as provided in
Section 17.5(c)) to such Holder (with notice thereof to the Class A-R
Note Agent), and thereafter all payments of principal and interest with respect
to advances made by such Holder shall be paid directly to such Holder in
accordance with the terms of this Indenture and the Class A-R Note Purchase
Agreement.


 


(e)                                  The Trustee agrees to give the Collateral
Manager, the Issuer and the related Holder immediate notice if it becomes aware
that the Class A-R Holder Collateral Account or any funds on deposit
therein, or otherwise to the credit of the Class A-R Holder Collateral
Account, shall become subject to any writ, order, judgment, warrant of
attachment, execution or similar process. The Issuer shall not have any legal,
equitable or beneficial interest in the Class A-R Holder Collateral
Account.


 


198

















 


(f)                                    For so long as any amounts are on deposit in
a Holder Sub-Account, the Trustee shall, at the written direction of the
related Class A-R Noteholder (which may be in the form of standing
instructions), invest and reinvest such funds in investments which satisfy the
definition of the term Eligible Investments but which mature not later than the
day following the date of acquisition thereof (collectively, Class A-R Eligible Investments).
Investment earnings received during each Due Period in respect of
Class A-R Eligible Investments in the Holder Sub-Account of a Holder of
Class A-R Notes will (so long as such Holder is not a Defaulting Holder)
be paid to such Holder on the related Payment Date. In the absence of such
instructions, such funds will remain uninvested.


 


199

















 


In Witness Whereof, we have set our hands as of the date first above written.


 


	
  Executed
  as a Deed by

  	
   

  
	
  N-STAR REL CDO VI LTD.,

  	
   

  
	
   

  	
  as
  Issuer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Derrie Boggess

  	
   

  
	
   

  	
  Name:
  Derrie Boggess

  	
   

  
	
   

  	
  Title:
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  N-STAR REL CDO VI LLC,

  	
   

  
	
   

  	
  as
  Co-Issuer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Donald J. Puglisi

  	
   

  
	
   

  	
  Name:
  Donald J. Puglisi

  	
   

  
	
   

  	
  Title:
  Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  WELLS FARGO BANK, NATIONAL ASSOCIATION,

  	
   

  
	
   

  	
  as
  Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Karen J. Ridgeway

  	
   

  
	
   

  	
  Name:
  Karen J. Ridgeway

  	
   

  
	
   

  	
  Title:
  Vice President

  	
   

  



 


200

















 


	
  CONFIRMED AND ACCEPTED,

  	
   

  
	
   

  	
  as
  of the date first above written:

  	
   

  
	
   

  	
   

  	
   

  
	
  NS ADVISORS, LLC,

  	
   

  
	
   

  	
  as
  Advancing Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Mark E. Chertok

  	
   

  
	
   

  	
  Name:
  Mark E. Chertok

  	
   

  
	
   

  	
  Title:
  CFO

  	
   

  



 


201