OR PURSUANT TO THIS AGREEMENT OR THE INDENTURE TO BE
CORRECT IN ANY MATERIAL RESPECT AND (X) SUCH FAILURE HAS (OR COULD REASONABLY BE
EXPECTED TO HAVE) A MATERIAL ADVERSE EFFECT ON THE NOTEHOLDERS, THE ISSUER OR
THE CO-ISSUER AND (Y) IF SUCH FAILURE CAN BE CURED, NO CORRECTION IS MADE FOR
FORTY-FIVE (45) DAYS AFTER THE COLLATERAL MANAGER BECOMES AWARE OF SUCH FAILURE
OR RECEIVES NOTICE THEREOF IN WRITING FROM THE TRUSTEE;
(VI)
THE OCCURRENCE AND CONTINUATION OF ANY OF THE EVENTS OF DEFAULT
DESCRIBED IN SECTIONS 5.1(A) OR 5.1(B) OF THE INDENTURE;
(VII)
SO LONG AS THE CLASS A-1 NOTES AND/OR THE CLASS A-2 NOTES ARE THE
CONTROLLING CLASS, THE CLASS A/B PAR VALUE RATIO IS LESS THAN 92.00% ON ANY
MEASUREMENT DATE; OR
(VIII)
THE COLLATERAL MANAGER CONSOLIDATES OR AMALGAMATES WITH, OR MERGES WITH
OR INTO, OR TRANSFERS ALL OR SUBSTANTIALLY ALL ITS ASSETS TO, ANOTHER PERSON AND
EITHER (A) AT THE TIME OF SUCH CONSOLIDATION, AMALGAMATION, MERGER OR TRANSFER,
THE RESULTING, SURVIVING OR TRANSFEREE PERSON FAILS TO OR CANNOT ASSUME ALL THE
OBLIGATIONS OF THE COLLATERAL MANAGER UNDER THIS AGREEMENT OR (B) THE RESULTING,
SURVIVING OR TRANSFEREE PERSON LACKS
17
THE LEGAL CAPACITY TO PERFORM THE OBLIGATIONS OF THE COLLATERAL MANAGER
HEREUNDER AND UNDER THE INDENTURE.
The Collateral Manager shall notify the Trustee, the Rating Agencies and the
Issuer in writing promptly upon becoming aware of any event that constitutes
cause under this Section 12(b).
In no event shall the Trustee be obligated to
determine if "cause" exists.
(C)
THE COLLATERAL MANAGER MAY RESIGN, UPON THIRTY (30) DAYS PRIOR
WRITTEN NOTICE TO THE ISSUER, THE CO-ISSUER, THE TRUSTEE, EACH RATING AGENCY AND
EACH HEDGE COUNTERPARTY; PROVIDED, HOWEVER, THAT (I) NO SUCH TERMINATION OR
RESIGNATION SHALL BE EFFECTIVE UNTIL THE DATE AS OF WHICH A SUCCESSOR COLLATERAL
MANAGER SHALL HAVE AGREED IN WRITING TO ASSUME ALL OF THE COLLATERAL MANAGER'S
DUTIES AND OBLIGATIONS PURSUANT TO THIS AGREEMENT AND (II) THE ISSUER SHALL USE
ITS BEST EFFORTS TO APPOINT A SUCCESSOR COLLATERAL MANAGER TO ASSUME SUCH DUTIES
AND OBLIGATIONS.
NOTWITHSTANDING THE NOTICE REQUIRED ABOVE, THE COLLATERAL
MANAGER SHALL HAVE THE RIGHT TO RESIGN WITHOUT PRIOR NOTICE IF, DUE TO A CHANGE
IN ANY APPLICABLE LAW OR REGULATION OR INTERPRETATION THEREOF, THE PERFORMANCE
BY THE COLLATERAL MANAGER OF ITS DUTIES UNDER THE COLLATERAL MANAGEMENT
AGREEMENT WOULD (I) ADVERSELY AFFECT (A) GRAMERCY CAPITAL CORP.'S STATUS AS A
REIT, (B) GRAMERCY INVESTMENT TRUST II'S STATUS AS A REIT, (C) SL GREEN REALTY
CORP.'S STATUS AS A REIT OR (D) THE ISSUER'S STATUS AS A QUALIFIED REIT
SUBSIDIARY (WITHIN THE MEANING OF SECTION 856(I)(2) OF THE CODE) OR (II)
CONSTITUTE A VIOLATION OF ANY APPLICABLE LAW OR REGULATION.
(D)
NO REMOVAL, TERMINATION OR RESIGNATION OF THE COLLATERAL MANAGER
OR TERMINATION OF THIS AGREEMENT SHALL BE EFFECTIVE UNLESS (X) A SUCCESSOR
COLLATERAL MANAGER (A "REPLACEMENT MANAGER") HAS BEEN APPOINTED BY THE ISSUER
AND HAS AGREED IN WRITING TO ASSUME ALL OF THE COLLATERAL MANAGER'S DUTIES AND
OBLIGATIONS PURSUANT TO THIS AGREEMENT AND